Tuesday 10 Spot
Here are your first 10 quick picks of the Bernanke era, part II:
• Volcker Says Money-Market Funds Weaken U.S. Financial System (Bloomberg) Paul Volcker, the former Federal Reserve chairman who is an adviser to President Barack Obama, said money-market mutual funds undermine the strength of the U.S. financial system and should be regulated more like banks.
• Fannie, Freddie Shares Soar, Puzzling Analysts (Washington Post)
• Remember me? Wall Street repackages toxic debt (Associated Press) Wall Street may have discovered a way out from under the bad debt and risky mortgages that have clogged the financial markets. The would-be solution probably sounds familiar: It’s a lot like what got banks in trouble in the first place. See also The Next Credit Bubble Is Now
• The Real Reasons for China’s Real Estate Boom (China Knowledge) Despite the existence of rigid demand for housing, two of the real reasons for the current boom in the real estate market are speculation and “land financing.” provided by the local authorities.
• Many Hedge Fund Managers Still Under Water, Data Show (WSJ)
• Healthcare insurers get upper hand (LA Times) Lashed by liberals and threatened with more government regulation, the insurance industry nevertheless rallied its lobbying and grass-roots resources so successfully in the early stages of the healthcare overhaul deliberations that it is poised to reap a financial windfall. “It’s a bonanza,” said Robert Laszewski, a health insurance executive for 20 years who now tracks reform legislation as president of the consulting firm Health Policy and Strategy Associates Inc.
• Data Mining Isn’t a Good Bet For Stock-Market Predictions (WSJ) The stock market generates such vast quantities of information that, if you plow through enough of it for long enough, you can always find some relationship that appears to generate spectacular returns — by coincidence alone. This sham is known as “data mining.”
• Steve Jobs: The man who polished Apple (Sunday UK Times Online) Apple Inc is worth around $140 billion. But is it worth anything without Jobs? It is a company formed around his personality and inspiration. It is also the most watched, envied, admired and adored company in the world. So how, you may wonder, was it possible for Jobs to put out such a statement four months before a liver transplant? And how was it possible for consumer capitalism’s greatest hero to pull off the Memphis Liver Caper in absolute secrecy?
• Why Craigslist Is Such a Mess (Wired) The Internet’s great promise is to make the world’s information universally accessible and useful. So how come when you arrive at the most popular dating site in the US you find a stream of anonymous come-ons intermixed with insults, ads for prostitutes, naked pictures, and obvious scams? In a design straight from the earliest days of the Web, miscellaneous posts compete for attention on page after page of blue links, undifferentiated by tags or ratings or even usernames. Millions of people apparently believe that love awaits here, but it is well hidden. Is this really the best we can do?
Anything else worth mentioning?
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August 25th, 2009 at 2:36 pm
Smartphones drive language learning innovation
August 25th, 2009 at 2:43 pm
Here’s a joke for all you skywatchers out there:
What would happen if you brought two black holes close together?
It would really suck!
August 25th, 2009 at 2:52 pm
Observations on the Groundhog Day Market
Another great post by Trader Mark. He sums up my thoughts and says it better than I could.
excerpts:
“Let’s go over some observations on what has now become a fully subsidized economy and stock market – taking from the future to push up economic activity and stock market values today.”
“Last Friday 40% of ALL volume was in 4 stocks: AIG, FANNIE MAE, FREDDIE MAC, and CITIGROUP. My gosh – look at those names. What sort of developed 1st world country has 40% of its volume in those stocks?”
“Turning back to the economy and it’s subsidization I have no idea what is going on anymore since every economic report has been bastardized by massive waterfalls of money.”
“Since we brought in many months of demand into a 4 week orgy. I can almost hear the drumbeats (circa Thanksgiving) demanding a new cash for clunkers program because dealers are suffering.”
“It’s the subsidized economy and let me tell you Wall Street loves it… Wall Street could care less about long term costs; it just wants the “awesome” gains today from layering on more debt onto the future generations.”
“Wall Street should be thrilled it has a bigger, badder version of Greenspan now – a person who promised 2 years ago almost to the day he would not bail out institutions from bad decisions. Then spent the next 2 years furiously doing the opposite. Reward that man.”
For the saver, “…Ben Bernanke and his institution … so lauded by Wall Street for the speculative fervor they constantly fund, is quite possibly your worst enemy.”
August 25th, 2009 at 2:55 pm
BR-
you may as well remove LA Times article on insurance lobby’s getting the upper hand on health care reform becasue it will encourage debate- debate that you have been deleting-
but I must repeat- and as I have been saying for weeks- if reform mean empowering the insurance companies w/ guaranteed new business and more profits- hen reform must be-
rejected, rejected, rejected-
the costs cannot be wrung out of the system w/ insurers there to profit from the good health of most Americans- and cutting thier losses on the people that actually need health care-
a sham
better nothing than a stronger and more powerful insurance lobby
August 25th, 2009 at 3:00 pm
onlooker-
thx for the link and quotes-
I could not agree more-a travesty- greed will destroy the whole country-
Bernanke is the normal man’s worst nightmare- and Obama has demonstrated he is no populist and will only defer to the powerful special interests-
what a colossal joke on the American people
August 25th, 2009 at 3:02 pm
From the WaPo article on FNM and FRE trading: “The beauty of the stock market, according to a prevailing theory, is that the price of a company’s shares should reflect all known information about the firm.”
Bwaahahaha! Hasn’t the EMH been discredited yet? To even refer to it as if it still has credibility is ridiculous. And the conclusion that isn’t reached in this article is that this is a clear sign and symptom of an unhealthy market that has come detached from any kind of fundamental basis.
Instead we get this:
“Paul Miller, an analyst at FBR Capital Markets, speculated that investors may see a way to amass a lot of shares in a very cheap stock. While the upside is unlimited, Fannie Mae and Freddie Mac can only fall to zero. ”
What a moron. This idea that you have some kind of limited downside because a stock price is low is intellectually deficient, of course. Percentages are all that matter. Losing 50-90% of your money feels the same whether the stock started at 100 or at 5. Duh.
August 25th, 2009 at 3:04 pm
Just to enliven things, here’s a link from Fortune :)
Apple’s Animal Farm
http://brainstormtech.blogs.fortune.cnn.com/2009/08/24/apples-animal-farm/
August 25th, 2009 at 3:07 pm
ahab
Yep, Mark is spot on with his commentary. He’s really very good at that and his forecasting record is quite impressive too.
August 25th, 2009 at 3:09 pm
but onlooker-
you only buy one share and hope it gets to Berkshire Hathaway levels-
sheeesh:)
August 25th, 2009 at 3:12 pm
And on Health Care Reform, Mr. Change has struck another blow for the same old same old
Obama opposes mandatory reporting of medical errors
http://www.chron.com/disp/story.mpl/health/6585559.html
Many of these deaths are simply giving the wrong meds or the wrong dosage through carelessness, like these kids:
http://current.com/items/89096628_twin-babies-die-after-hospital-gives-wrong-dose-12-more-affected.htm
But they can’t be tracked?
I have to say that, being paranoid, I watched the nurses carefully on the meds and they were very compulsive about matching the wrist band with the meds during my recent stay. Now if we could just get the doctors to wash their hands when they make rounds. I wound up having to ask my wife to bring me some hand disenfectant. (not talking about your Bruce)
August 25th, 2009 at 3:12 pm
FYI, for what it’s worth, YMMV, caveat emptor, etc. …but both FNM and FRE are casting off ‘sell’ signals today.
August 25th, 2009 at 3:17 pm
That’s a funny article about Craigslist…… easiest way to clean up internet standards is to use real names and email addresses for posters and commentators.
August 25th, 2009 at 3:35 pm
http://www.federalbudget.com/
Excerpts:
——————-
n Fiscal Year 2008 (FY08), the U. S. Government spent $412 Billion of your money on interest payments to the holders of the National Debt. Compare that to NASA at $15 Billion, Education at $61 Billion, and Department of Transportation at $56 Billion. — As of July 2009, the interest expense so far this fiscal year (FY09) is $340 Billion
…
The U. S. Dollar is being replaced as the international trade standard. Our large national debt is the main reason. The “Economic Stimulus” will shift us from an “economic crisis” to a debt crisis! If businesses could print their own money and give it away to customers so they could buy the products, many folks would be happy for a while; but the businesses would go bankrupt. Well, that’s what our government is currently doing, printing and giving away money.
*********************************************
for more details:
http://www.fms.treas.gov/mts/index.html
——————————————————
The deficit for the coming years will be $1trillion+ annually. For each 1% of interest on that debt, the interest expense is $10,000,000,000 annually until it gets paid.
August 25th, 2009 at 3:40 pm
Currency market analysts seem unanimous in their ardor for the Euro. Kathy Lien was on Bloomberg last night, saying the Euro was going to new highs. She is such a mo-mo that she is my favorite contrarian indicator for FX. Kind of the Abby Jo of currencies.
http://www.bloomberg.com/apps/news?pid=20603037&sid=amyXrqpfP1X8
August 25th, 2009 at 3:44 pm
Thinking about the national debt and interest expense: The only analogy I can come up with is a large dam, like Hoover Dam, that has a crack that leaks. The crack is getting bigger and nobody is doing anything about it. The crack will continue to grow and, at some point, the pressure will no longer be containable.
At some point in the not too distant future, the annual interest expense of the national debt will exceed $500billion. Probably next year. If nothing changes or if rates rise, the annual bill for interest only will approach $1trillion. This will be within a decade. It’s easily foreseeable.
How will this be paid for? More deficits? Taxes? Hyperinflation? Republican tax cuts that boost revenues (as in Voodoo economics).
August 25th, 2009 at 3:44 pm
LB,
Interesting that, despite all the $ bashing, the rate on treasuries is holding steady from last week and even declining a little, despite Bernanke’s reappointment. My theory is that the more sophisticated investors can see the avalanche coming, while Joe Retail only knows long equities.
August 25th, 2009 at 3:48 pm
Carrying the interest debt idea further: I wonder if Ben the Bubble will be known in history as the desperate chairman who tried to save the country by monetizing the debt, because the alternative of paying interest using borrowed money was even worse.
August 25th, 2009 at 3:51 pm
Mike in Nola: you got it!
The warning shots have been fired in the last 2 weeks to get out.
August 25th, 2009 at 3:52 pm
Mike in Nola Says:
August 25th, 2009 at 3:44 pm
Interesting that, despite all the $ bashing, the rate on treasuries is holding steady from last week and even declining a little, despite Bernanke’s reappointment. My theory is that the more sophisticated investors can see the avalanche coming, while Joe Retail only knows long equities.
reply:
———
Ben the Bubble has been applying a well advertised program to buy down the interest rates on UST debt using $300b of electron money. Every few days he buys a little more and rates decrease. Immediately afterward, rates rise again. Then he buys more and rates fall for a few more days. This program ends in October. At that point things will get interesting.
August 25th, 2009 at 3:52 pm
“The “Economic Stimulus” will shift us from an “economic crisis” to a debt crisis”
= insolvent
August 25th, 2009 at 3:58 pm
@Mike
There’s been several days where treasury yields have been down in the fact of market advances. It takes a good advance to move the yield on the 10-year up marginally. Peter Boockvar’s been discussing this disconnect recently. I agree with you tho, i’m siding with the bond market on this one.
August 25th, 2009 at 4:01 pm
dh Says-
“This program ends in October. At that point things will get interesting.”
that was what was communicated- but really- do you think so? what other choice does he have but to continue- massive monetization and $ crash might be the only path for ‘ol Ben- unless we default outright- or sell something- like a state or two
August 25th, 2009 at 4:02 pm
Last post on the interest expense time bomb:
In my mind, I see an analogy. Remember the scene in Independence Day where Jeff Goldblum watched the time clock on his laptop computer count down …. and the drama of when it hit -0- … and what happened next after the dramatic silence?
August 25th, 2009 at 4:05 pm
This program will NOT end in October or any time soon. The only way the Fed stops is if/when they are stopped by some exogenous event. By then, our royals will have made off with everything and moved it offshore to “safer” havens while “We the Sheeple” remain blissfully ignorant.
August 25th, 2009 at 4:05 pm
call me ahab Says:
August 25th, 2009 at 4:01 pm
what other choice does he have but to continue- massive monetization and $ crash might be the only path for ‘ol Ben- unless we default outright- or sell something- like a state or two
reply:
——-
OK … 1 more. I think he will announce a $150b follow on to buy time. Then cross his fingers and maybe get religion. As they say, if you are falling off a cliff you might as well flap your arms. It might work and it doesn’t hurt to try.
August 25th, 2009 at 4:26 pm
The case against Bernanke
Stephen Roach
“While America’s head central banker deserves credit for being creative and courageous in orchestrating an unusually aggressive monetary easing programme, it is important to remember that his pre-crisis actions played an equally critical role in setting the stage for the most wrenching recession since the 1930s. It is as if a doctor guilty of malpractice is being given credit for inventing a miracle cure. Maybe the patient needs a new doctor.”
August 25th, 2009 at 4:28 pm
you people are makin’ me hurl all over my keyboard.
Do you know how much work that is to clean up?
Now start printing more green shoots stories, so I can sleep at night.
It’s such a nice day outside … sunny skies, moderate temps, low humidity … and then I come in here to check out the financial weather report, and while the short-term forecast mirrors the weather out in the Big Blue Room, the longer-term forecast seems to be one of unending firestorms, with intermittent anvil-and-chainsaw hail.
The one that upset me the most was the first link I opened (big mistake) — the one on Wall Street repackaging toxic debt. Uh-oh, I think I’m gonna …
Damn. gotta clean the keyboard … AGAIN.
August 25th, 2009 at 4:29 pm
~~~~~~~~~~~~
leftback Says:
August 25th, 2009 at 3:40 pm
Currency market analysts seem unanimous in their ardor for the Euro. Kathy Lien was on Bloomberg last night, saying the Euro was going to new highs. She is such a mo-mo that she is my favorite contrarian indicator for FX. Kind of the Abby Jo of currencies.
~~~~~~~~~~~~
Funny you mentioned that, I was looking at headline very early this morning in re: the Bernanke announcement and I had to bookmark this headline from CNBC and it was a big lettered Headline:
~~~~~~~~~~~~
Bernanke’s Reappointment = Weaker Dollar: Analysts
Published: Tuesday, 25 Aug 2009 | 7:00 AM ET Text Size
By: Antonia Oprita
A weaker dollar at least until next year and government intervention in the markets are to be expected as President Barack Obama reappointed Ben Bernanke as Federal Reserve chairman, analysts and investment strategists told CNBC Tuesday.
~~~~~~~~~~~~~~~~~~~~~~~~~
It seems unanimous…there’s only one way for the Dollar to go and that is down! Well, then it must be true if almost everyone believes it! (snicker, snicker)
I have a feeling the events of the last few days will be cited on charts in the future as inflection points…
August 25th, 2009 at 4:31 pm
dh-
we are bankrupt- we may be the largest economy in the world- but who cares- we are in debt beyond our ability to recover-
what excatly does Bernanke think he can accomplish- wave the white flag already- admit failure- admit we will default or monetize- admit that we will have to retrench- admit that as a people we will have to figure out what this country is all about- and it’s never been about world conquest-
i am not saddened- let’s remake ourselves
August 25th, 2009 at 4:36 pm
@AT: Great point. I do think we’re getting much closer to a turn. The action lately has the feel of a short term top setting in. Wouldn’t be surprised if we went sideways/rangebound for a while first though.
August 25th, 2009 at 4:43 pm
Proof positive that Geithner is a man of the people, it just happens to be the people at GS.
http://www.zerohedge.com/article/giethner-fed-audit-would-be-problematic-country
August 25th, 2009 at 4:50 pm
@Mannwich
Agreed re: getting closer to a turn. While there are issues to point out in today’s data, especially home prices, i’d say its some of the least “fly in the ointment” data released recently and it wasn’t able to generate a big move up. Of course, there’s also the treasury yields moving down as well.
August 25th, 2009 at 4:53 pm
geithner is fucking idiot-
“The true test of the Fed is the market”
wow- guess we don’t even need know anyhting else- akin to saying- “of course the banks know what they are doing, the DOW is 14,000″
what a rube
August 25th, 2009 at 4:53 pm
As an aside, this triangle on the Gold daily chart sure is taking it’s time to resolve. It must resolve very soon if this is to be a “normal” contracting triangle. It should end 20-40% before the apex….if it keeps going on like this, it may turn out not to be a triangle at all, or it may become a very dangerous “non-limiting” triangle, meaning there is no limit to the “thrust” that will occur after the triangle concludes. “Non-limiting” triangles can congest all the way to the apex point. The action coming out of such patterns can be quite dramatic and sort of scary.
August 25th, 2009 at 4:54 pm
BR,
Surprised the announcement of the President of the AFL-CIO in New York as the new Chairman of the New York Fed didn’t make your list. An abomination indeed. Talk about the inmates running the asylum.
August 25th, 2009 at 5:20 pm
Things you always knew but are still truly frightening in any case:
http://globaleconomicanalysis.blogspot.com/2009/08/34-percent-of-workers-have-one-week-or.html
August 25th, 2009 at 5:26 pm
“The action coming out of such patterns can be quite dramatic and sort of scary.”
Interesting, and perhaps we are getting similar congestion in the $, before it breaks sharply to the….. ???
(If you are watching carefully you know the answer, but don’t tell JOHNNY, he’s holding the equities bag now).
“The true test of the Fed is the market”
It really depends on the market you are talking about. Treasury secretaries aren’t paid to mind the stock market*.
Timmy may really mean: “look, we are f***ing insolvent as a country and we haven’t blown up the bond market”.
Now does it make more sense?
August 25th, 2009 at 5:37 pm
Has anyone else seen this?
http://www.dgs.ca.gov/GarageSale
Look for the picture of Arnold signing the visors off the vehicles. Hilarious. They will get back much less than the cost to set this up. WOW!
August 25th, 2009 at 5:38 pm
So, Volcker wants money market mutual funds to be regulated like banks. Not sure what Volcker means by this. Until Mr. Volcker is willing to clarify his stance, I will have to assume he wants regulations in place which are then completely ignored by the entities charged with regulatory oversight and enforcement.
August 25th, 2009 at 5:49 pm
I tend to think BB/FED will ease off Treasuries come October in a coordinated effort to crash equities/commodities and to keep rates low.
People can say/believe what they want about the USD but the reality is when markets are volatile and/or crash most scurry to the dollar as a safe haven. This will surely happen again once the dollar rallies significantly (does this sound a little like equities now vs. March????) as no one right now believes the dollar is a safe haven. In my estimation, the ultimate dagger to the dollar will be Stimulus: Part Deux coming to a cineplex near you February, 2010!
August 25th, 2009 at 6:00 pm
“… we’re getting much to a turn.”"
The journey of a thousand miles begins with a single step.
And then another step, and another, and another.
No telling how far off the eventual “turn” lies. We still have TARP II, Stimulus II, clunkers 2, 3, 4, … the support MUST last past the mid-term elections, if the Congressional perps are to be re-elected. Every resource available will be bent toward that end.
There are a lot of circus clowns in that tiny car. Do not be deceived. This show can (and will) go on longer than any sane person believes is possible. (barring a black swan event that the ringleaders did not anticipate — and by definition, these things are unexpected by nearly everyone)
August 25th, 2009 at 6:01 pm
“we’re getting much CLOSER to a turn”
and I’m getting much closer to severe dementia
August 25th, 2009 at 6:10 pm
@mcHappy
They can’t crash the equity markets until the NFL season officially kicks off (or, for the others, the new fall lineup of TV shows begins)… The Romans need their bread and gladiator games…
Didn’t you notice that the markets did their final swoon (into the March lows), the month after the Superbowl ended? Oil hit it’s low on February 18th.
When “the games” begin again, then people will find other distractions besides the stock market, and then BB can get to engineering us a bright new economy for Uncle Boss.
August 25th, 2009 at 6:12 pm
@cvienne:
Sorry, I’m Canadian. The CFL is currently in season, my bad :D
August 25th, 2009 at 6:18 pm
“I tend to think BB/FED will ease off Treasuries come October in a coordinated effort to crash equities/commodities and to keep rates low.”
mcHAPPY has this right, we think. The critical commodity is of course oil, which feeds into inflation, via delivery costs for everything we consume. If oil gets anywhere near $100 the recovery goose is cooked. They had to run oil back up again since the winter – in order to curtail the threat of a deflationary spiral. Now that they have pumped a little inflation back into the goods pipeline, they can let it fall closer to its natural level. Lower, a lot lower. The resulting rally in the dollar will achieve the transfer of funds from equity to Treasury markets mcHAPPY refers to.
Macroeconomics of Debt Deflation Management 101 seminar complete, LB needs a drink. G’night all…
August 25th, 2009 at 6:22 pm
OK – who’s bright idea was the Cash for Fridges program? Apparently someone up top was listening. . .
http://www.reuters.com/article/mnEnergy/idUS225779891520090825
August 25th, 2009 at 6:30 pm
call me ahab Says:
August 25th, 2009 at 4:53 pm
geithner is fucking idiot-
“The true test of the Fed is the market”
reply:
———–
It would appear that Ben the Bubble and his collaborator, Tim, think the financial markets are the opiate of the people. No, just the business media.
I was right when I noticed Ben The Bubble’s frequent references to ‘the market’ in his recent testimony to Congress. This is their distraction. “look at the markets, not the insolvency of the government and the gimmicks we are using to delay the declaration of bankruptcy of the United States.”
All they now have to do is issue more electron money and sell repackaged toxic mortgage debt with newly appraised AAA ratings. I’m not kidding. It looks like this is now a work in progress. Tim Geithner belongs in jail as a financial criminal.
August 25th, 2009 at 6:31 pm
@crazyjerrygarcialover:
Money market funds made up a substantial part of the Shadow Banking System.
August 25th, 2009 at 6:31 pm
Lefty:
Read your mish post….2/3 of all American workers have less than 2 months savings….if they lost their job tomorrow, they’d be flat broke in 8 weeks.
Can’t be possible.
August 25th, 2009 at 6:33 pm
Bruce – I’ve been hearing that statistic since I was in high school (back in the 80′s). Unless I remember correctly that’s actually an improvement. Used to be that the average American was a paycheck away from homelessness.
August 25th, 2009 at 6:42 pm
Me-thinks that today’s panic-buying knife-catchers are going to vastly regret not waiting a bit longer on purchasing that new home…
http://www.calculatedriskblog.com/2009/08/misc-possible-1991-house-price-headline.html
August 25th, 2009 at 6:46 pm
Thor:
That is just mind-boggling. Truly.
And with our private/public debt and record unemployment, people think we’re on our way up?
Still from Missouri….
August 25th, 2009 at 6:48 pm
AUGUST 25, 2009, 5:10 P.M. ET.Postal Service to Offer Buyouts to as Many as 30,000 Workers
http://online.wsj.com/article/SB125122901758157941.html?mod=googlenews_wsj
But, no, really, the economy has turned the corner. Seriously.
August 25th, 2009 at 6:49 pm
@Bruce,
I think this means less than 2 months savings without liquidating one of the cars and selling a bunch of crap. Remember they will dial up the credit cards first. Have you seen all the yard sales going on? You’ll see more.
August 25th, 2009 at 6:53 pm
@Bruce & lefty: I believe those numbers are probably close. Remember, it’s a monster.com poll, so not scientific or evenly distributed in any way, but the sample size (over 16K) is pretty good. I’m sure that most of the respondents are rank in file workers though, considering the demographics of the people who use job boards to find work.
August 25th, 2009 at 6:53 pm
Bruce – yes it is. I’ve usually heard that statistic in reference to homelessness (we have a lot in LA). Obviously those “two months” don’t't include any kind of unemployment, 401k payouts, food stamps, etc. Frankly I’m impressed it’s as high as two months now. Certainly not the six months everyone is supposed to have, but a far cry from one or two paychecks . . .
August 25th, 2009 at 7:40 pm
as a vet, i’m sure the VA is full of well-meaning folk. just not for me.
http://news.yahoo.com/s/ap/20090825/ap_on_re_us/us_disease_error_veterans
August 25th, 2009 at 7:41 pm
Bruce
I frankly don’t believe it’s as high as two months either. For one thing I don’t think that many people are financially literate enough to really know how much money they need to live on and therefore can’t answer that question reliably. You can’t have a reliable poll if the people can’t answer the question reliably; instead basically guessing and probably putting a relatively optimistic spin on it.
What percentage do you think actually know what their cash flow situation really is and how much they spend on the essentials? In other words, how many have a real budget? I’m not optimistic about the answer to those questions. But I’m pretty cynical these days after the last decade of the debt pigfest.
Way too many people have been living a sloppy financial life and depending on debt to get through, not even aware of how it’s piling up. They have no clue.
August 25th, 2009 at 7:53 pm
Many people plan/planned to use credit (cards or HELOC) as their emergency fund. That’s how far this debt binge went. They didn’t feel like there was any need to save money. It would only be going to waste! All the stuff that could be bought with it! What could go wrong?!
August 25th, 2009 at 7:56 pm
Well Cramer is again off the rocker. Let’s go through the checklist:
1) Dressed up like a fool. Check.
2) Excessive patting himself on the back. Check.
3) Illogical argument based on emotions. Check.
Here’s a preview: Bernanke is the best ever and because housing has bottomed “where foreclosure prices are going up, demand is so high and inventories are so low” you have to buy banks because they own the most houses through REOs. You can’t make this shit up. I’m starting to get more concerned on the long side.
http://www.cnbc.com/id/32558234/site/14081545?__source=yahoo|headline|quote|text|&par=yahoo
August 25th, 2009 at 8:07 pm
OT :
SPY after hours. Down 0.4%. No idea why.
August 25th, 2009 at 8:38 pm
idiotinvestor-
could it be this?
“Most red ink ever: $9 trillion over next decade”
“more than the sum of all previous deficits since America’s founding.”
http://finance.yahoo.com/news/Most-red-ink-ever-9-trillion-apf-2714959279.html?x=0&sec=topStories&pos=main&asset=&ccode=
Bernanke is trying to do the exact opposite of all the bullshit analysis of the GD- so he is cranking it up- caution to the wind- but let’s think for a moment-
weren’t we the biggest creditor nation in the world during the GD- does the same prognosis work when you are the biggest debtor?
I am thinking we are going to implode.
August 25th, 2009 at 8:49 pm
Re: the Bernanke era, part II…
Perhaps CBS (Columbia Business School) could make an update on this gem.
http://www.youtube.com/watch?v=ipJTqCbETog
August 25th, 2009 at 8:52 pm
dh says-
“Tim Geithner belongs in jail as a financial criminal.”
agreed- it is a cabal of connected financiers trying to suck the last vestiges of wealth out of the country before the game is up-
the USA- who cares about that- it’s market gains and bonuses that count- timmy himself cared so little that he purposely did not pay his taxes-
a sure sign of disregard
August 25th, 2009 at 9:22 pm
ahab
Nahhh. Investors don’t give a damn about the national debt. That’s just more juice (i.e. leverage) for the market to leap ahead on. All that debt is for our children’s children (and theirs) to worry about. You know that!
August 25th, 2009 at 10:00 pm
we’re getting much CLOSER to a turn
Today we got one day closer, and that’s about all you can say. Remember time=money. The market can kill you with time as well as price.
People forget just how powerful excess liquidity can be for the market, and how long easing can take to work, and how powerful and long lasting it is once it gets going. Remember that stocks continued to rise for over 2 years after housing started down. And the endless end of FED hike speculation of the last 05-08 ramp. That market would rally on the rumor, and then when the rumor proved false, stocks rallied again. There were a lot of smart people shorting after the housing turn.
August 25th, 2009 at 10:09 pm
@etanman
You’re right but I’m just noticing more and more things that make me cautious. First it was decreasing volume. Then treasury yields sinking into this last push higher. XRT didn’t make a new high with the SP5s. BKX goes up marginally bc its mostly being pushed by the loser companies like C and BAC. It’s one day closer but tells are mounting. Stay tuned….
August 25th, 2009 at 11:34 pm
A twofer for everyone…..1) All the consumers who traded in their clunkers for cash never realized that the 4500 dollar rebate was a TAXABLE event and 2) Lenders who are in the Making Homes Affordable Obama plan are getting huge subsidies to do so, including BAC, JP Morgan, and Wells.
http://contraryriches.blogspot.com/2009/08/united-subsidy-of-america-part-2and.html
August 26th, 2009 at 8:04 am
@emmanuel117:
Thank you for your reply. I should have stated my point more clearly in my original post. Namely, that Mr. Volcker is arguing for “bank-like” regulation for money funds. Fair enough. Is he also arguing for whatever agency that is charged with that regulatory authority to perform their duties as the bank industry’s regulators have performed theirs (poorly, in my opinion)?
As one example, Colonial Bank in Alabama was rumored for months to be, at least technically, insolvent. Yet the FDIC, OTC and OTS failed to take prompt corrective action. It even appears that from Colonial’s Q2 SEC filing that they were insolvent (they were probably insolvent long before that). And yet, it took in excess of a month for them to be shut down and sold off. The point can be argued that this put the taxpayers on the hook for more losses than necessary, since the FDIC entered into a pretty crazily structured loss sharing agreement with BB&T. I say pretty crazily structured because, on its face, it appears the FDIC is taking most of the losses on the assets. As a taxpayer, I find this troubling at least, upsetting at most.
Again, fair enough that Mr. Volcker is arguing for “bank-like” regulation of money funds. Is he also calling for exercising of regulatory authority (once granted) similar to that exercised in the case of Colonial Bank?