Interesting reading for a Tuesday afternoon:

Excess liquidity thesis gains traction as financial markets soar (Telegraph)

Wall Street’s B-List Firms Trade on Bigger Rivals’ Woes (WSJ)

New York Fed in hiring spree (FT)

Foreclosure wave gathers momentum (OC Register)

• An Auto Two-fer:

-Trucks win in Cash for Clunkers game (CNN/Money)
-Chevrolet Volt Said to Get 230 Miles Per Gallon in City Driving (Bloomberg)

Stimulus Funds Bring Relief to States, but What About 2010? (Washington Post)

CNBC slides as viewers get crunched (Guardian)

Frank Langella set for ‘Wall Street 2′ (Variety)

Radio host Don Imus in talks with Fox Business Network (LA Times)

Have I missed anything worthwhile ?

Category: Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

39 Responses to “10 For Tuesday”

  1. dead hobo says:

    BR selected:

    • Excess liquidity thesis gains traction as financial markets soar (Telegraph)

    reply:
    ————
    Nothing like recognizing the obvious months after first effect. Perhaps they will figure out that rising equities was one intended effect, as a means to “assist recovering financial markets” and pad 401k accounts with temporary asset inflation. Thank God the Fed can’t identify asset inflation or have to deal with non-core inflation, or this might otherwise be a problem, given it’s mandate to maintain stable prices.

  2. SINGER says:

    The interviews with prechter on tech ticker are interesting… he was definately saying buy equities in late Feb….

  3. JustinTheSkeptic says:

    The system is rigged to produce more propaganda reporting than you get in politics. Where is the real hammer ahead that no one can bull-shit there way out of – deflation and a strong dollar. (It is the worse case senario that everyone is trying to talk themselves out of, but there is no traction taking place in the banking sector and by propping them up it only will take longer for that sector to gain its sea-legs.) If they are so strong why do they rob us through bogus fees?

  4. wunsacon says:

    willid3, you provided some nice links there. (I read the spiegel and baseline links so far.)

    Money quotes, IMO:

    - “The orders for new container ships now on the shipyards’ books represent a total capacity of 5.3 million TEUs, or about 50 percent more than the current worldwide fleet capacity.”

    - Finance is rent-seeking. The sector has devoted great resources to tilting all playing fields in its direction. … Finance in its modern American form is not productive. It is not conducive to further sustained economic growth. The GDP accruing from these activities is illusory – most of finance is simply a tax on what is done by more productive members of society and a diversion of talent away from genuinely productivity-enhancing activities.

  5. karen says:

    The OC Register’s mortgage blog (Padilla) and housing blog (Lansner) are excellent.. altho i generally find the comments section unbearable to read.

  6. Mannwich says:

    @JustinTheSkeptic: Can is in point. Got a mailing from AMEX today saying they are raising our interest rates AND late fees. If they are doing so great, why would they risk antagonizing their customers with this crap? Wonder if all customers are getting this mailing? We’ve never been late on a single payment and pay our balance off every month on all of our cards for many years now. I’m pretty close to calling and cancelling the card.

  7. Mannwich says:

    Not “Can is in point”, CASE in point. Good grief. My mind is obviously still on vacation…..or my fingers are…..

  8. jpm says:

    CNBC slides as viewers get crunched (Guardian)

    That and the complete asskicking from Jon Stewart. It woke up quite a few people.

  9. dead hobo says:

    willid3 Says:
    August 11th, 2009 at 3:06 pm

    oil demand falling still

    shipping collapse

    ship maker bailing on business

    reply:
    ————
    Sounds like solid support for oil to go past $90 soon.

  10. beaufou says:

    The stimulus for broke States article should serve as a real economic indicator rather than all the bs floating around about recovery.
    As BR posted a little while ago, the private sector created no employment in the last ten years, all the positives were in government jobs.
    Now government jobs are going to get cut by the thousands, where the hell are we going with this?
    Army jobs?

  11. WaveCatcher says:

    Excess liquidity may be a factor driving equities north…

    but a bigger factor IMO is the “forced buying” by funds bringing their equities into line with target allocations. This driver has put a bid under the market.

  12. amaclean says:

    Good article by Herbert today on the big picture behind the unemployment numbers: http://www.nytimes.com/2009/08/11/opinion/11herbert.html?ref=global-home.

  13. mobiaxis says:

    CR switches ubiquitous chart from “Four Bad Bears” to “Road to Recovery”

    http://www.calculatedriskblog.com/2009/08/new-market-graph.html

    …contrary indicator?

  14. JustinTheSkeptic says:

    WaveCatcher, good read about the big girls/boys not always getting it right.

    http://www.pensionpulse.blogspot.com/2009/06/big-money-suffering-performance-anxiety.html

  15. CapComp says:

    Mannwich – I received the same form letter from AMEX regarding our Costco Rebate Card. This is after they slashed the credit limits in June on our family and small business cards (Never late, never miss payments, no where near the card limit, etc.).

    The funniest line in the letter has to be, “In addition, we are pleased to let you know that we will not charge you a fee if you go over your credit limit.” which appears after they tell you they are jacking APR and increasing late fees.

    End result for me. No more AMEX, won’t use it and won’t accept it.

    CapComp

  16. Onlooker from Troy says:

    “Finance in its modern American form is not productive. It is not conducive to further sustained economic growth. The GDP accruing from these activities is illusory – most of finance is simply a tax on what is done by more productive members of society and a diversion of talent away from genuinely productivity-enhancing activities.”

    AMEN to that wunsacon. That’s one of my basic talking points of late. The finance industry has been a leech on our economy and it’s only getting worse. And they’ve (i.e. the Fed and Treasury) rigged all the factors toward funneling every bit of money they can into the banks to prop them up and get them back to a “healthy” state, at the expense of the savers and other prudential folks.

  17. willid3 says:

    dh, well of course! oil will go to $100 as soon as more money piles into it!
    and that just demonstrates that oil is in short supply! it always a supply and demand problem. speculators have nothing at all to do with it. ever

  18. mobiaxis says:

    @willid3

    >>speculators have nothing at all to do with it

    In the long run, of course you are correct…in the short run, speculators have EVERYTHING to do with it.

    …and if it goes to $100, $200 won’t be far behind

  19. Christopher says:

    Faux News = Imus = Shit
    Perfect match.

  20. MRegan says:

    http://www.google.com/hostednews/ap/article/ALeqM5ggJLvfhq53pAp9qB_JK7_7Vs3uAAD9A0CCI00

    Drug cartels diversify. US Oil executives see an opportunity.

  21. Outlier says:

    Man this “excess liquidity” thing is sort of nasty. I mean it’s spot on for the most part, except that is misses the huge gaping elephant in the room. The problem is not that there is an “excess” of liquidity, it’s that the liquidity coming in is going to the completely wrong places. Inequal distribution of liquidity you could say….

  22. ben22 says:

    I find the CFC article on what is selling interesting. My understanding is that to qualify for CFC your car/truck/suv needed to get 18 mpg aggregate or less. The top selling car is the ford escape which gets, according to what I could find on-line 27 mpg on the hgwy, 22 mpg city, the number 3 car, Jeep Patriot, gets 28 mpg on highway and is hyped on the Jeep site as “best in class” for mpg.

    Now, lets just say that the government plan works, do any of us really think if that happens that we are NOT going to have terrible inflation, or do some actually believe the Fed will start increasing rates at just the right time to stop it. Point being, oil will rise with that inflation, as will gas costs making the new purchases net effect for the vast majority of buyers of the vehicles above that they have acquired a new vehicle that has saved them absolutely 0 money on a monthly basis, probably fast forwarded demand for a car for most of the households taking advantage taking away from future demand and that they are now watching the vehicle depreciate while interest compounds on the auto loan. how is this a good idea unless you absolutely must get a new vehicle?

  23. willid3 says:

    ben22, not sure we brought any demand forward, current replacement rate on the current fleet is 25 years (even in the GD it never was more than 15). i suspect its more of a case that those who never would have bought a car (or new) or never have, are the ones buying, with rare exceptions.

    and depending on what you believe about peak oil (coming soon…or not for 20 plus years!), or how much the speculators will drive the price up (again). and they won’t care about inflation in either of these cases as either its near impossible to get or the price has been jacked up so much that we get European prices for gas (6$ or more). and we have already seen the speculators do their part.

    but are they better off? thats more of an individual by individual call, and considering how gun shy the banks and captives have been in doing car loans, they weren’t giving away notes like they were before (on houses or vehicles).
    most of these were trucks (from what I have seen as trade ins, which makes sense because most cars in the last 25 years with a few exceptions wouldn’t qualify.

  24. Onlooker from Troy says:

    CFC is a completely B.S. program, just as all the govt efforts to monkey around in the markets are. They’re distorting things and contributing to more misallocation of resources and capital. People will buy cars when they need to, if they have the money to. Why do we need to subsidize car purchases? Hasn’t the govt already done enough damage in our economy by providing subsidies and incentives to buy houses and cars, producing a glut in inventory and capacity in both industries?

    It’s purely another case of politicians throwing around money we don’t have to get a little sugar rush in our GDP numbers so they can say the economy is improving. Even though it does nothing for us in the longer run at all, and distorts the market, sending false and confusing signals about demand.

  25. VennData says:

    Looks like GE needs to re-direct some of those TLG proceeds to their media division, starting with more ads for Kudlow.

    Alternatively they might see that their viewers are the ones that have been buying in March, ignored the “Obama is a Socialist” clap trap, and are sitting on big gains. So maybe they should turn off the anti-Obama rhetoric and become a mouthpiece for the left-of-center.

  26. call me ahab says:

    onlooker @ 7:54-

    excellent points

  27. Pat G. says:

    I can get a his and her Prius for the same price as a Volt. Can’t wait to see what the factory incentives on that baby will eventually get to, in order for them to sell it. Here’s some things I found interesting.

    Small banks are in trouble. Let’s see if the USG offers them the same support that it did their larger brethren.

    http://www.reuters.com/article/newsOne/idUSTRE57A0JO20090811

    I guess they will.

    http://247wallst.com/2009/08/08/administration-wants-to-raise-12-1-trillion-national-debt-ceiling/

    Good news! No crash in CRE. Why? The stock market is signaling it won’t happen. That’s all about excess liquidity you dumb***. Where do they get these clowns?

    http://online.barrons.com/article/SB124987654611518761.html#mod=BOL_hpp_dc

  28. ben22 says:

    willid,

    I don’t mean anything by this but I have a little trouble following the 7:32, I need things spelled out a bit more sometimes. All I was trying to get at is that I think it time this will be exposed as a bad deal, with all the folks “cashing in” on it.

  29. beaufou says:

    @Onlooker
    Put this way, I can only agree.

  30. Thor says:

    @Troy – Hasn’t the govt already done enough damage in our economy by providing subsidies and incentives to buy houses and cars”

    Am I the only one who took this statement and applied it to Rome with it’s endless circuses and holidays, or “Let them eat Cake”?

  31. Mannwich says:

    This one gave me a good hearty chuckle. Seems like one dedicated CEO and strong leader of a company in duress. But what’s the problem? It’s not like AIG needs to perform or anything. They have an implicit promise of neverending support from the Feds…..but CEO’s aren’t overpaid at all in this country. No way.

    Benmosche Said to Start AIG Tenure With Croatian Trip

    Aug. 11 (Bloomberg) — Robert Benmosche, the chief executive officer of American International Group Inc., plans to spend part of his first month leading the insurer in Croatia on vacation, according to two people familiar with the situation.

    http://www.bloomberg.com/apps/news?pid=20601109&sid=azMHBdRR5d8Y

  32. Bill in SF says:

    Looks like CNBC has really “Jumped the Shark” now.

    Regis Philbin: The Fast Money Trader

    http://www.cnbc.com/id/32379365/site/14081545?__source=yahoo|headline|quote|text|&par=yahoo

  33. DiggidyDan says:

    been a while. . . on vacation in the Black Mountains region of NC for 2 weeks and reformatted, reinstalled my system. Last 4 days i was just trying to play catch up! Now, pulling numbers completely out of my ass. . . market goes down to 979 back up to 1062 for top-eventual slide down to ultimate bottom of 474 beginning October *with usually marketish and waveish fits and starts in between. Three quotes I reread on vacay that are apt to the times:

    The truest happiness he said, lay in working hard and living fugally. Somehow it seemed as though the farm had grown richer without making the animals themselves any richer–except, of course, for the pigs and the dogs.

    “Comrades!” cried an eager youthful voice, “attention, comrades! We have glorious news for you. We have won the battle for production! Returns now completed of the output of all classes of consumption goods show that the standard of living has risen by no less than twenty per cent over the past year.. . .”

    “Under the spreading chesnut tree
    I sold you and you sold me:
    There lie they, and here lie we
    Under the spreading Chestnut Tree.”