Barron’s Up & Down Wall Street Column
Me Media: Nice comments in Barron’s this weekend by Alan Abelson, quoting David Rosenberg, Chris Whalen, Albert Edwards, Philippa Dunne, Doug Henwood, oh, and yours truly:
“While gratification at what the stress tests showed evoked widespread relief, touching on giddiness, not everyone was satisfied, much less elated. Ah well; there are always some chronic doubters in every crowd, we suppose.
Just by way of example, Barry Ritholtz, chief of [Fusion IQ] seems more than a tad aghast at the idea that Messrs. Geithner and Bernanke, after duly weighing the results of their not-exactly-stressful tests, have concluded that banks will be fine in the future with 25-to-l leverage (Tier 1 capital equal to 4% of risk-weighted assets).
And while 25-to-l leverage may have been appropriate for depository banks in the relatively sedate days before the Glass-Steagall Act was dismantled, it seems more than a little much to Barry in “today’s toxic-asset-laden banks.” As to the cause of the seemingly generous standard, he suggests it may have something to do with the Treasury’s new role as “shareholder and cheerleader for bank profitability.” That explains at least why Tim and Ben never leave home without their pom-poms.”
I first stated doing these media excerpts years ago to keep track of them for compliance dept.
Now, well its just for fun . . .
>
Source:
A Surge in Botanists
ALAN ABELSON
UP AND DOWN WALL STREET
Barrons May 11, 2009
http://online.barrons.com/article/SB124182262250602213.html
May 9th, 2009 at 1:22 pm
love that last line Barry- so true too- what other choice do they have but to cheerlead- they can’t just say- “well . . . party’s over- it was fun while it lasted- maybe in a generation or two- after we work through all this debt- we call roll out the kegs again and party likes its 1999″
May 9th, 2009 at 1:35 pm
I do not pretend to understand these things in depth. I know what Barry and others explain, but 25-1 leverage.
Wasn’t the 30-1 leverage a major cause of this whole thing?
Looks like I will have to stock up on FAZ and SKF in the near future?
May 9th, 2009 at 2:05 pm
Love the title, “A Surge in Botanists”. I must point out though that usually floral sales surge in lock-step with the undertaker’s business. Seems people have a habit of remembering the departed with flowers…
May 9th, 2009 at 2:08 pm
Speaking of the departed, what did COF do to shorts this past week? Up 80% in five days?!? The faith in the 2nd derivative trade & the Fed’s ability to stash securities of questionable value under the rug seems euphoric to say the least.
May 9th, 2009 at 3:05 pm
Barry, while voicing a clear opinion about the quality of the stress test, I haven’t gotten a read on your “Big Picture” with respect to current market action. Perhaps you’d like to clue us in on you’re thinking about the current rally, especially with respect to the financials (which have been leading the way). Are you long? Have you participated? Do you think the “V” in the stock market is predicting a “V” in the recovery… or is it simply a greater fool moment in a long, tough road ahead?
May 9th, 2009 at 3:25 pm
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May 9th, 2009 at 4:10 pm
I just finished a shopping trip. Extrapolating from my observations, I discovered that the inventory run down CNBC is so giggly about is probably an inventory adjustment motivated by a desire to hold far less inventory on retail shelves. Retailers have less and its spread out wider to make the stores look full. BTW, the stores were nearly empty. Borders followed this pattern too (sorry BR).
Thus, we can expect less in retail sales, less inventory for retail by design, and lowered consumer spending in general. Things looked dismal. Garden nurseries were empty as was Marshalls and other places.
In a couple of months, I suspect S&P 685 will be challenged. The fantasy rally of late will be exposed soon.
May 9th, 2009 at 4:20 pm
Additionally, Best Buy was empty. It was easy to find good parking spaces everywhere I stopped. The roads were not busy (if people aren’t going out for recreational shopping, then how does that bode for recreational driving for anything else … hint big future gas sales are a fantasy and/or a investment sales pitch)
May 9th, 2009 at 4:50 pm
dead hobo @ 4:10
“…we can expect less in retail sales, less inventory for retail by design, and lowered consumer spending in general. Things looked dismal”.
All true.
But it’s “better than expected”.
May 9th, 2009 at 5:12 pm
DL Says:
May 9th, 2009 at 4:50 pm
But it’s “better than expected”.
reply:
——————-
Please pardon my projectile and high velocity vomit. It has something to do with what you said.
May 9th, 2009 at 5:56 pm
“I first stated doing these media excerpts years ago to keep track of them for compliance dept.
Now, well its just for fun . . .”
BR,
with more and more “data” moving to the Digi-realm, it’s a good thing to have your own dB of ‘mentions’/'attributions’
this URL: http://www.thememoryhole.org/ pays due homage to the potential outcome of what too many take for granted–Data persistance on an impermanent media..
“…In the novel, the memory hole is a slot into which government officials deposit politically inconvenient documents and records to be destroyed. Nineteen Eighty-Four’s protagonist Winston Smith, who works in the Ministry of Truth, is routinely assigned the task of revising old newspaper articles in order to serve the propaganda interests of the government. For example, if the government had pledged that the chocolate ration would not fall below the current 30 grams per week, but in fact the ration is reduced to 20 grams per week, the historical record (e.g. an article from a back issue of the Times newspaper) is revised to contain an announcement that a reduction to 20 grams might soon prove necessary, or that the ration, then 15 grams, would soon be increased to that number. The original copies of the historical record are deposited into the memory hole. A document placed in the memory hole is supposedly transported to an incinerator from which “not even the ash remains”…”
http://en.wikipedia.org/wiki/Memory_hole –wikipedia does get this correct..
past that, Alan Abelson, seems, more and more, the last redeeming Virtue of what was, once, a RFG weekly, Barron’s..
May 9th, 2009 at 6:41 pm
Leave Benny alone!
May 10th, 2009 at 12:18 am
Let’s see a show of hands among Big Picture readers. Who here believes that the next head of the New York Fed will be from Goldman?……..WOW!…..that’s a LOT of hands! Franklin! You are the only person in the room without your hand up! Get in line there man!
May 10th, 2009 at 12:37 am
I’ll bet the NYFed choice would make for an interesting InTrade market