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

U.S. Week Ahead: Jobs and Car Sales Ahead

A short week will be marked by a rush of economic data. The headline number will be June unemployment, which is expected to improve a bit from a month ago. Car sales and a few earnings reports are also due. (June 26)

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Europe’s Week Ahead: ECB Meeting In Focus

Food giant Nestle and Europe’s largest retailer Carrefour will hold investor days. Investors will also be watching for rate and economic news from the European Central Bank, which holds a meeting on Thursday. (June 26)

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Asia’s Week Ahead: Economic Data Spotlighted

Frank Yao of Neuberger Berman gives his outlook for Chinese economic data due next week. He also discusses attractive sectors of the Chinese equity markets. (June 26)

The Banker magazine released the Top 1000 world banks for 2009 based on their Tier 1 capital.

“For the first time in the Top 1000’s 39-year history, the top 25 banks – which account for almost 40% of the Top 1000’s Tier 1 capital and almost 45% of its total assets – recorded a loss, which totalled $32.37bn (-28.1% of Top 1000 profits). Stripping out the profits of the lower reaches of the Top 25 means that the top five banks fared even worse. Representing 13.4% of total Tier 1 capital and 12.3% of total assets, the top five banks lost a staggering $95.8bn (-83.3% of total profits).

The worst losses are at the UK’s Royal Bank of Scotland, with $59.3bn (including losses attributable to minority interests), followed by the US’s Citigroup, with $53bn, and Wells Fargo, which lost $47.7bn. The UK’s HBOS produced the sixth worst losses in the world (see table of worst losses).”

Astonishing.  Here’s the Top 25 from the rankings:

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Source: TheBanker.com

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Source:
Top 1000 world banks 2009
Geraldine Lambe
The Banker, 24 June, 2009

http://www.thebanker.com/news/fullstory.php/aid/6703/Top_1000_world_banks_2009.html

Brian Caplen, editor of The Banker and Geraldine Lambe discuss the results of this year’s Top 1000

I mentioned The Great American Bubble Machine, Matt Taibbi’s brilliant savaging of Goldman Sachs last week.

Saw it, read it, posted on it — see Goldman Sachs: The Great American Bubble Machine.

That hasn’t stopped 100s of you from emailing it to me:

I would like to bring to your attention the article “The great American bubble machine” by Matt Taibbi in Rolling Stone where he discusses the Goldman Sach’s market manipulation. Please point your readers to this fantastic article. I always enjoy reading your analysis of the US financial system, a matter of fact, your blog is my primary source of financial news. Keep up good work.

(You mean its not The Daily Show? )

OK, I give, here it is a 2nd time: Goldman Sachs: The Great American Bubble Machine.

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I did an extensive interview with Kate Welling this week:

Barry Ritholtz, author of the recently published, “Bailout Nation, How Greed and Easy Money Corrupted Wall Street and Shook the World Economy,”is not a man to mince words. For one thing, he doesn’t have time. Writing is a sideline to his day job as CEO and research director of FusionIQ, an online quantitative research firm and money manager, running about $100 million, long and short, mainly for high net worth individuals. Besides, as the proprietor of a popular financial blog, The Big Picture, he has been chronicling the foibles and follies of financial man for a number of years now and well, just doesn’t suffer fools. His readers know him for clear explorations of even the densest of topics and for honest vitriol when he comes across self-dealing and worse.

There is plenty of both clear prose and pungent language in “Bailout Nation,” as it explores, in gory detail, where we’ve gone wrong in finance and in society. Not to mention, who done it.

My time between its pages left little doubt that Barry, whose legal training at New York’s Benjamin N. Cardozo School of Law focused on economics, anti-trust and corporate law, has more than a few ideas about what should be done.

So when the unveiling of the Obama Administration’s regulatory reform proposals left me asking, “Is that all there is?” I immediately put in a call to Barry.

I wasn’t disappointed. Listen in.
-KMW

Words from the (investment) wise for the week that was (June 22 – 28, 2009)

“Words from the Wise” this week comes to you in a shortened format as I do not have access to my normal research resources while on the road in Europe (also see my post “Gone A.W.O.L. – to Slovenia and Switzerland“). Although very little commentary is provided, a full dose of excerpts from interesting news items and quotes from market commentators is included.

While investors’ hopes of an economic recovery might have got ahead of reality, the cartoonists continually reminded us of worrisome issues …

Source: Signe Wilkinson, Philadelphia Daily News, dist. by The Washington Post Writers Group
The past week’s performance of the major asset classes is summarized by the chart below – a mixed bag so to speak.

Source: StockCharts.com

A summary of the movements of major stock markets for the past week, as well as various other measurement periods, is given below. Although many indices saw little change, some short-term swings occurred in between.

Click here or on the table below for a larger image.

Stock market returns for the week ranged from top performers Côte d’Ivoire (+7.5%), Hong Kong (+3.8%), Taiwan (+3.5%), Argentina (+3.3%) and Bangladesh (+3.0%), to Ghana (-12.7%), Egypt (-11.1%), Nigeria (-10.7%), Cyprus (-6.6%) and the United Arab Emirates (-6.1%) at the other end of the scale. (Click here to access a complete list of global stock market movements, as supplied by Emerginvest.)

John Nyaradi (Wall Street Sector Selector) reports that as far as exchange-traded funds (ETFs) are concerned, the leaders for the week included iShares MSCI Taiwan Index (EWT) (+6.6%), Market Vectors Gold Miners (GDX) (+5.9%) and iShares MSCI Hong Kong (EWH) (+4.4%). On the other side of the performance spectrum, laggards were centered in the energy sector, including United States Gasoline (UGA) (-5.9%) and iShares Dow Jones US Oil and Gas Exploration (IEO) (-5.2%).

Read the rest of this entry »

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Source:
Toyota Tops Quality Study
CHERYL JENSEN
NYT, June 26, 2009

http://www.nytimes.com/2009/06/28/automobiles/28QUALITY.html

I met Richard Bookstaber at an event recently — very nice guy — and we briefly discussed A Demon of Our Own Design (excerpted here).

This week, he discussed The 7 Habits of Highly Suspicious Hedge Funds (The Journal of Investment Management), which he posted on his own blog as a preview.

Here’s the overview:

1. No independent risk reporting.
2. A change for the worse in the critical risk numbers.
3. Increased use of derivatives.
4. High level of secrecy.
5. Growth in headcount and lifestyle.
6. Decline in assets under management.
7. Lackluster performance in recent years.

Details are at his site . . .

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Source:
The 7 Habits of Highly Suspicious Hedge Funds
Richard Bookstaber
June 22, 2009

http://rick.bookstaber.com/2009/06/7-habits-of-highly-suspicious-funds.html

Jess Bachman, who did the terrific centerfold graphic for Bailout Nation, has another killer graphic: The Descent into Credit Card Debt

It loses something here — click thru to see it in full size:

click for ginormous skyscraper graphic

Source: Mint

* Sunday, June 28th at 3pm (ET)
* Monday, June 29th at 2am (ET)

Set your TIVOs for Book TV

I actually thought the presentation went better in the B&N in NYC — crisper, better narrative, less detailed — but the clips I saw of this were fine . . .