The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

Great interactive chart, via Tom Gonzales:

Hat tip Paul

via the UK Telegraph

Sorry about today — it was (according to an emailer) all my fault. (Never mind that the futures were down 140 earlier this morning, and its an expiry) it was my bad.

Actually, this headline references this morning’s Bloomberg radio interview, and it was in the context of Nationalization — common shareholders get wiped out, the stock goes to zero, and owners become the taxpayers and bond holders.

Yesterday, we looked at ECB and BoE balance sheets. Let’s update the chart for the Fed’s books:
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via David Kotok, Cumberland Advisors

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Previously:
Reserves and Off Balance Sheet Securities Lending (June 27th, 2008)

http://www.ritholtz.com/blog/2008/06/reserves-and-off-balance-sheet-securities-lending/

ECB, BoE Assets (February 19th, 2009)

http://www.ritholtz.com/blog/2009/02/ecb-boe-assets/

If there was any doubt that Senator Christopher Dodd (D-CT) is a complete idiot, his gratuitous comments about the big banks today puts the issues to rest.

Dodd Says Short-Term Bank Nationalization Might Be Necessary

BTW, did you see the stories about Dodd donating the political contributions from Stanford to charity?

Dodd says he’s giving Stanford contributions to charity

This guy deserves censure, but for some reason the people of CT keep sending him back to Washington.  The White House had to make a statement to try — emphasis try — to deflect Dodd’s remarks.

As Jim Crammer just said on CNBC: “Geithner has vannished.”

The Dow put in its record high of 14,164.53 back on October 9, 2007, and on February 19, closed at 7,465.95 – down 47.3% from its peak made 499 calendar days ago.

For some perspective on the magnitude of the current bear market, today’s chart compares the current, 499 calendar day old Dow correction to that of all other Dow corrections, 499 calendar days after their respective peak (and that were still ongoing).

Today’s chart illustrates that, at this stage, the current correction has been by far the most severe correction in the post-World War II era and the second most severe correction since 1900. The only correction that was down more at this stage was the correction that began in 1929.

via Chart of the Day

One last chart showing the ratio of Home Prices and Median Income:

ISI via Comstock Funds

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Previously:
Homes: Still Too Pricey to Stabilize (February 18th 2008)

http://www.ritholtz.com/blog/2009/02/homes-still-too-pricey-to-stabilize/

via NYT

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Source:
Breaking a Barrier to Lending
NYT, February 20, 2009

http://www.nytimes.com/interactive/2009/02/20/business/20090220-lend-graphic.html

Video-o-rama: Stocks between a rock and a hard place

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Stock markets remain caught between the actions of central banks frantically trying to fend off a total economic meltdown on the one hand, and a worsening economic and corporate picture on the other.

Meanwhile, the Dow Jones Industrial Index has fallen to its lowest level since October 2002. It is noteworthy that it took five years for the Index to increase from 7,500 to 14,000, but only 16 months to wipe out the entire 2002-2007 advance.

I have just returned from a business visit to a rather morbid Europe, with the sight of thousands of people queuing for unemployment benefits in Ireland still foremost in my mind. The fact that a number of this week’s video clips refer to the dire situation in Europe, and specifically the crisis in a few Eastern European countries, therefore comes as no surprise.

But although gloom prevails, money-making opportunities do exist as highlighted by John Murphy (StockCharts.com) and Dennis Gartman (The Gartman Letter) who expect gold bullion to keep shining.

CNBC: McCulley & Leuthold – investment strategies for a volatile market
“Paul McCulley, managing director at PIMCO, and Steven Leuthold, chairman of Leuthold Weeden Capital Management, share their best strategies for this market environment.”

Source: CNBC, February 18, 2009.

Bloomberg: Obama pledges $275 billion to stem mortgage foreclosures

Click here for the article.

Source: Bloomberg, February 18, 2009.

CNBC: Dimon – housing plan “well designed”
“President Obama’s housing plan is very elegant and well-designed, according to JPMorgan Chase CEO Jamie Dimon.”

Source: CNBC, February 18, 2009.

Yahoo Tech Ticker: Whalen – “nationalization” of Citi and BofA inevitable
“In the past few months, an increasing number of economists have become convinced that the best ‘fix’ for the banking system is a government takeover and restructuring of companies like Citigroup. And some voices in the government are finally supporting this idea. Over the weekend, Senator Lindsey Graham said he thought ‘nationalization’ has to be considered, because he doesn’t want to throw good money after bad.

“What would this mean, exactly? The government running our banks for the next decade? No, says our guest Chris Whalen of Institutional Risk Analytics. ‘Nationalization’ is a poor word to describe the process. ‘Receivership and restructuring’, along the lines of what the FDIC did with WaMu, is the right way to think about it.”

Source: Yahoo Tech Ticker, February 18, 2009.

TheStreet.com: Peter Schiff slams TARP 2
“Peter Schiff, president of Euro Pacific Capital, takes on Treasury Secretary Tim Geithner’s banking relief plan in a special ‘lightning round’ session.”

Source: TheStreet.com, February 15, 2009.

CNN: Stimulus plan irks Ron Paul
“Former presidential candidate Ron Paul is angered at being left in the dark about the details of the stimulus plan.”

Source: CNN, February 16, 2009.

CNBC: Greenspan on the financial crisis
“Former Federal Reserve Chairman Alan Greenspan delivers a speech on the financial crisis at The Economic Club of New York.”

Source: CNBC, February 18, 2009.

CNBC: Whitney on the banking sector
“Banking stocks are all lower today as the outlook for the industry fails to brighten. Meredith Whitney, CEO of the Meredith Whitney Advisory Group, has been on point with her outlook for financials and tells CNBC what’s next for the sector.”

Source: CNBC, February 19, 2009.

Bloomberg: Ross says investors will wait for bank writedowns

Click here for the article.

Source: Jason Kelly and Carol Massar, Bloomberg, February 12, 2009.

Charlie Rose: A conversation with IMF’s Dominique Strauss-Kahn

Source: Charlie Rose, February 13, 2009.

Charlie Rose: Miskin, Roubini, Zandi & Easton – a discussion about the economy

Source: Charlie Rose, February 18, 2009.

Financial Times: Martin Wolf – the slow path to recovery
“Martin Wolf on how countries will extricate themselves from the global financials crisis.”

Source: , Financial Times, February 17, 2009.

Bloomberg: Bernanke speaks on the economy
Fed Chairman Ben Bernanke reveals the Fed’s long-term economic forecast to the National Press Club in Washington.

Click here for Part 2 of Bernanke’s speech.

Source: Bloomberg (via YouTube), February 18, 2009.

Bloomberg: In-depth look – the housing crunch
“Analysis and discussion with Nicolas Retsinas of Harvard University.”

Click here for Part 2 of the discussion.

Source: Bloomberg (via YouTube), February 18, 2009.

Bloomberg: Biggs bullish on US stocks
“US stocks are poised to rise because economic indicators are starting to improve, said Barton Biggs, managing partner at Traxis Partners LLC in New York. ‘There’s too much bearishness and the market is poised for a big, big rally,’ said Biggs.”

Click here for the article.

Source: Bloomberg, February 18, 2009.

Bloomberg: StockCharts’ John Murphy – gold to outshine

Source: Bloomberg (via YouTube), February 14, 2009.

Bloomberg: Gartman sees gold as world’s “second reserve currency”“Dennis Gartman, economist and editor of the Gartman Letter, talks with Bloomberg’s Erik Schatzker and Deirdre Bolton about the outlook for gold prices. Gartman also discusses the state of the Japanese economy and why he favors selling the yen.”

Source: Bloomberg, February 17, 2009.

The Wall Street Journal: China’s billion-dollar hunger for resources
“WSJ’s Rebecca Blumenstein and Andrew Browne discuss China’s recent investment in natural resources, including a $25 billion deal with Russia for oil.”

Source: The Wall Street Journal, February 18, 2009.

Financial Times: Austria’s central banker on the EU economic crisis“Austria’s central bank governor Ewald Nowotny talks to economics editor Chris Giles about possible ‘unconventional measures’ by the European Central Bank, how EU states are more united on policy, and the need to help eastern European countries outside the EU.”

Source: Financial Times, February 17, 2009.

The Wall Street Journal: A grim forecast for Eastern Europe
“Is Eastern Europe on the brink of economic collapse? WSJ’s Nik Deogun and Joanna Slater discuss the reasons for worry amid the slump in Eastern European currencies.”

Source: The Wall Street Journal, February 18, 2009.

Bloomberg: Faber says Germany, France may have to bail out nations
“Marc Faber, publisher of the ‘Gloom, Boom & Doom Report’, talks with Bloomberg’s Deirdre Bolton about the possibility that France and Germany may have to bail out entire nations as European government budgets buckle under the weight of recession. Faber also discusses the outlook for the US stock market.”

Source: Bloomberg, February 18, 2009.

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The list of those people in favor of nationalization, our longstanding recommendation for the biggest banks in the financial sector, continues to grow.

Aside from myself, here are the folks who are in favor of temporarily Nationalizing the banks, and then spinning them back out:

Alan Greenspan
Gordon Brown, UK PM
Senate Banking Committee Chairman Christopher Dodd
Senator Chuck Schumer
Sen. Lindsey Graham
House Speaker Nancy Pelosi
Republicans (some)
Joseph Stiglitz
Paul Krugman
Alan S. Blinder, Princeton
Nassim Taleb
Nouriel Roubini
Greg Mankiw
J. Bradford DeLong
Elizabeth Warren, TARP Oversight Panel
Dennis Gartman
Chris Whalen
Josh Rosner
Jeff Matthews
John Mauldin
Jack McHugh
Bill King
Matthew Richardson
Dylan Ratigan (CNBC, Daily Beast)
Jesse Eisinger, Conde Nast Portfolio
Martin Wolf, FT
Aaron Task (Yahoo Tech Ticker)
Paul Kedrosky (Infectious Greed, CNBC)
Nicholas Kristof (New York Times)
Mark Gongloff (WSJ)
Richard Parker (Newsweek)
Michael Hirsh (Newsweek)
David Reilly (Bloomberg)
Paul Vigna (Dow Jones)
Henry Blodget (Silicon Alley)
Willem Buiter (FT)
Adam Posen (Peterson Institute for International Economics)
Jeff Macke
Todd Harrison
Calculated Risk (Preprivatize the Banks)
Mark Thoma (Economistsview)
Karl Denninger
naked capitalism
Eddy Elfenbein (Crossing Wall Street)
Bronte Capital
Aaron Krowne Mortgage Lender Implode-O-Meter
Prieur du Plessis (investmentpostcards)
Roger Ehrenberg, Information Arbitrage
Felix Salmon
Interfluidity (Nationalize Like Real Capitalists)
Urban Digs

Baseline Scenario

And those opposed:

Ben Bernanke
President Obama
Tim Geithner
Lawrence H. Summers
Financial Services Committee Chairman Barney Frank
Republican Senator Jon Kyl
George Soros
Meredith Whitney, Oppenheimer
Deroy Murdock (NRO)
Larry Kudlow
James Cramer
Hale Stewart
Tyler Cowen

If I missed anyone Pro or Con, please let me know in comments and I will add them to the growing list . . .

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Previously:
Why Are Banks So Different From Autos? (December 9th, 2008)

http://www.ritholtz.com/blog/2008/12/why-are-banks-so-different-from-autos/

Time to Get Swedish (January 23rd, 2009)

http://www.ritholtz.com/blog/2009/01/time-to-get-swedish/

Nationalize Now (January 26th, 2009)

http://www.ritholtz.com/blog/2009/01/nationalize-now/

Why Not Nationalization? (February 4th, 2009)

http://www.ritholtz.com/blog/2009/02/why-not-nationalization/