Off to an appointment, but before I head out, I had to share these eye catchers:

Volcker whacks Goldman Sachs (CNN)

Banks’ Size, Trading Would Be Limited in Obama Plan to Reduce Risk-Taking (Bloomberg)

China growth quickens, points to tighter policy (Reuters)

• Bad loan twofer:

-Banks See a Leveling Off in Bad Consumer Loans (NYT)
-Loan Troubles Bedevil Banks (WSJ)

Homebuilders Turn to Private Equity for Financing (Bloomberg)

Better Off Deadbeat: Craig Cunningham Has a Simple Solution for Getting Bill Collectors Off His Back. He Sues Them. (Dallas Observer)

Direct Bids Creep In To 4-Week Treasury Auction (MarketBeat)

• Apple iSlate two-fer

-Apple Sees New Money in Old Media (WSJ)
-Apple Courts Publishers, While Kindle Adds Apps (NYT)

What are you reading?

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.

44 Responses to “Thursday reads”

  1. hgordon says:

    The “Volcker Plan” has a nice ring to it. I wonder why we didn’t see Summers, Bernanke or Geithner at the Obama press conference ?

  2. Scott E says:

    Why are business sites not covering this Supreme Court ruling? It is absolutely huge for corporations. I have seen firsthand how unregulated independent expenditure money can overwhelm candidates and it will change politics, and especially regulations, significantly.

    The way it works is that a huge special interest finds a candidate amenable to its issue on both the Democratic and Republican sides in the primary, then runs negative campaigns against the opponents and positive messages for their favored candidates – and on issues unrelated to their real agenda, and determine the primary. Because so few people vote in primaries, most voters, and the press, have no idea this goes on. Then in the general election, it doesn’t matter who wins. This will be unbelievably huge for companies that want to roll back regulations, create loopholes or change priorities.

    If your goal as a corporation is to get a corporate tax rate cut, you support a candidate that shares that position, but hype instead their position on making America energy independent or some other nonsense you don’t care about and you win. These primaries are happening now, this year, and the spending floodgates will open wide.

    This will be much bigger than the bank regulations that has everyone’s attention right now.

  3. switchtoamac says:

    I simply don’t get Amazon’s actions to roll out Kindle-based apps. Amazon’s action is too late in my view because it should have made changes to the Kindle platform long ago.

    Kindle is a two-sided platform that serves both content creators (authors, publishers, etc …) and consumers. The platform as a whole and each side of the platform is subject to positive network effects. Amazon should have tried to build the content side earlier such that network effects would have kicked in to a greater degree by now … more content, and more Kindle consumers.

    To take action NOW by revising royalties to a 70/30 split and now the release of an SDK to allow developers to create apps is too late. This is especially true given the timing of the Apple event next week.

    Amazon, I simply don’t understand why it took you so long. Apple is going to change the game once again with a better product, end-to-end user experience, ease of use, and content that will result in an overall better platform relative to the Kindle.

    In my view, the beginning of the end for the Kindle is now underway.

  4. hgordon says:

    @switchtoamac: further, Amazon complete abandoned Kindle 1 (I have two of them) – there hasn’t been a firmware upgrade in 2 years – not a good signal to developers or customers

  5. franklin411 says:

    For about 5 seconds, I was watching Cramer try to blame Obama’s new bank policy for the fact that he predicted Brown’s victory would produce a market rally, and instead the market is swooning.

    Then I changed the channel to MSNBC.

  6. VennData says:

    The White House bank plan is exactly what was proposed byt he Group 30. This was already in the cards and a non-issue, however, a serious alternative to breaking the trading desk off banks because “we don’t want to backstop risk taking” is to privatize the FDIC so we’re not backstopping anything…. like banks making loans to wild-eyed consumers.

    And if the Obama agenda is so radical, why isn’t the market way, way up since the Brown Senate victory? Answer, it’s not.

  7. Moss says:

    This should not be surprising to anyone paying attention.

    http://www.brookings.edu/papers/2010/0120_poverty_kneebone.aspx

  8. Mannwich says:

    @f411: Your first problem was that you tuned into CNBC. Your second problem was that you switched it to MSNBC.

  9. ifish says:

    Look.

    The market hasn’t corrected by more than 7% since June.

    I think our host Herr Rithotz is off in his calculations.

    Currently:

    SP (-2.95%)
    DJI (-3.1%)
    NAS (-2.4%)
    RUS2000 (-3.0%)

    From peak of 1/19 through 1/21.

    Most of the prior mini setbacks were in the vicinity of 4.3% {9/22-10/2} or 5.6% {6/12-7/10} – not anywhere close to 10%. Plus, they lasted about a week and a half to two weeks.

    This time, I think we go over 8% to 10% and it lasts through mid February or about when earnings wrap up.

    Herr Ritholtz?

    Ifish(so you won’t lose your shirt)

  10. Mike in Nola says:

    Apple tablet from a little more experienced and realistic reporter. This guy has been covering computer for 20 years. He mostly writes about Windows, but he loves his iPhone and ipod and got his wife a Mac so he doesn’t have to keep helping her like I do my wife. As you can see from the right sidebar, he has written his share of reviews of Apple products:

    http://www.winsupersite.com/alt/apple_tablet.asp

    I don’t think it’s so much about the media. While that’s part of hte package, it’s more about replacing other devices, like all those laptops that are used on the sofa but never leave the house. If Apple can get a $200 subsidy from Verizon or someone else as is rumored it might be able to put it at a price point that will work.

  11. Mike in Nola says:

    Has Albert Edwards gone ballistic? ZH published the article linked below and it is spreading across the net. While he’s pretty perceptive and skeptical and I could easily believe that he thinks such things, I have a little trouble believing that he wrote the article.

    Would appreciate it if Barry or someone with more sources could check it out.

    http://www.zerohedge.com/article/scandal-albert-edwards-alleges-central-banks-were-complicit-robbing-middle-classes

  12. hgordon says:

    Today’s WSJ – “Obama v. Wall Street – The President gets serious about moral hazard.”

    http://online.wsj.com/article/SB10001424052748703699204575017341468635052.html

    Doesn’t say who wrote it, but appears to be WSJ editorial staff.

    “If we are going to have a Fed and a political class as reckless as we have, then we need a more comprehensive answer to financial risk. Bankruptcy for risk-takers who bet wrong is the best option. Barring that, strict limits on margin and leverage, especially for holders of insured deposits, can be helpful. Mr. Obama’s suggestion yesterday of limits on the size of financial firms—with the limits still to be determined—deserves a hearing but would seem more problematic.

    Still, we’re encouraged by yesterday’s announcement. The Democrats appear to finally realize that too-big-to-fail is a problem to be solved, not the foundation of a modern banking system.”

  13. bsneath says:

    Another good article on Volcker’s return to the inner sanctum.

    Volcker’s days in the cold are over
    http://www.politico.com/news/stories/0110/31831_Page2.html

  14. bsneath says:

    Volcker and Goolsbee are in, Geithner and Summers are out. It is about damned time!!!

    Geithner, Summers Eclipsed As White House Changes Posture
    http://www.huffingtonpost.com/2010/01/21/geithner-summers-eclipsed_n_432129.html

  15. Greg0658 says:

    FL Representative Grayson mis-spoke .. or announced to soon on Keith Olbermann moments ago .. the website he mentioned is not up and running and opens a gate of possible copy-clones
    http://grayson.house.gov/2010/01/grayson-save-our-democracy.shtml

    on Supreme Court decision – Super-Corps have the unlimited purse* and free speech
    http://www.pbs.org/nbr/blog/2010/01/supreme_court_ruling_means_ton.html
    http://www.ritholtz.com/blog/2010/01/bloomberg-taking-stock/#comment-249286

    * ability to screw up – file bankruptcy – re-organize – live again

  16. The Geek Clock

    This is one of a kind clock which is perfect for geeks and those who had paid attention during their math classes because when you show this Geek clock to your friends, they will possibly keep on staring at it and wonder what this magnificent device is used for while you will stand and laugh at them. This Math clock is perfect for showing off your math’s skills as it has almost every calculation in it

  17. It’s unclear who is behind the increase, since neither the Treasury nor the Fed, which runs the auctions on behalf of the U.S. government, reveal the identities of investors involved in the auctions.

    Hmm, maybe it’s the PPT

    Indeed, recent Treasury auctions have gone well with the help of the rise in direct bids

    It certainly fulfills their desired direct outcomes. Especially since people have been chirping of late on the collapse in the bond market

  18. alfred e says:

    Someplace today, think, AOL, there were two great items, I and was not fast enough to capture them. Sometimes it takes them a while for their Indian contributors to get overridden by their American MSM editors.

    The first was the GS CFO commenting that the prop desk and other non-banking areas only account for 10% of their revenue. How do they define revenue there? He did not say it only contributed 10% of their profit. Huge difference.

    What a great deflection. Yeah, the profit margin there is the best by a factor of 100. What’s the return on capital? When you can borrow from the fed for free.

    How very sad that so few will pick up on that one.

    The other item was the chimp that did better than writing a Shakespearean play. He had something like a 300% return on his stock portfolio.

    Where’s Cramer when you need him. Oops Jim. Looks like you’ve been beaten by a chimp.

    Wonder if CNBC will put him on the staff.

  19. johnborchers says:

    So here’s the real plan as I’ve laid it out.

    The gov’t needs to sell massive amount of gov’t debt this year. At first I though maybe the Fed would manipulate futures to get this done. But perhaps, a more direct approach is needed. I find it very interesting the administration is coming after the banks. It totally surprised the market didn’t it? And where did the money go? Well a good amount made it into treasuries today.

    There are two things going on that people need to be aware of. The first is massive civilian debt. The only way to fix this is to let people refinance at a lower rate. They can’t do this when banks are increasing interest rates on credit cards and the like. The second is the gov’t needs to sell it’s own debt at a lower interest rate. Something that is affordable to our typical 3-5% GDP level.

    The banks aren’t going to lend when they can make 10%+ by investing in risky assets. So, the solution is to cripple them so they are forced to compete with each other on a massive scale. Something that could force average credit card rates to let’s target 8% instead of 20%. This would give the US consumer 100% more buying power.

    Would this actually hold long term? So far no. People are way to used to spending all the money they have and saving nothing. It will actually take this depression for them to change their minds about how they spend. So I think the long term holds a combination of all these things; the low interest rate and actually saving something for a rainy day.

    My current positions are GLD long Jun $175 options (really dead money LOL), short $93 Febs (who knows might be good), Long ROST $40 May Call @ $6.20, Short GLW $22.50 Put @ 3.30, Short BAC $10 May put (prolly dead money but 300% better than yesterday, lol), Short ANF $20 May put (maybe good), Short TOL $10 June Put, Long TLT $95 Jun call @$1.40, Long TLT $106 Jun call @ 0.20, Short AMZN $95 July put @ $4.20. I plan to add more deep money calls on ROST, TLT, Cosco, Walmart, Autozone on dips of 2% ,4%, 10% down from here.

  20. There are two things going on that people need to be aware of. The first is massive civilian debt. The only way to fix this is to let people refinance at a lower rate.

    They could write it down John

  21. Mannwich says:

    @Common: LOL. Such talk is blasphemy, you know. That would mean the banks would get crushed yet again. We can’t have anyone talking a haircut on any bad “investments” or choices in this country.

  22. Steve Barry says:

    “I find it very interesting the administration is coming after the banks. It totally surprised the market didn’t it?”

    This is 100% exactly as I expected. Here’s why…as I have stated over and over, the massive, possibly terminal, debt bubble we are under has been 50 years in the making, with the Fed providing the fuel (easy money) and looking the other way (nonfeasance of banking regulation). The banks actually acted as you would expect. It would be like parents going away for a week and leaving their teenagers home with access to the liquor cabinet and telling them to invite some friends over and have a party. Imagine that story on the nightly news after something goes wrong…they would lambaste the PARENTS, not the teenagers.

    Well in order to deflect the spotlight off the true culprits here (the Fed), the gov’t must, must, must blame the banks. It’s the no brainer of the century. It will work too.

    In the meantime, we are absolutely in a deflationary spiral. There is a $50 Trillion (minimum) global excess in credit which dwarfs the quantity of liquidity they can provide. As Prechter wrote in Conquer The Crash:

    “For the Fed, the mass of credit that it has nursed into the world is like having raised King Kong from babyhood as a pet. He might behave, but only if you can figure out what he wants and keep him satisfied.”

    Well, King Kong is over Tokyo right now (down 3%) and Hong Kong is also down about that much (I said two nights ago Asia would be triggering the next leg down VERY soon.)

  23. Mannwich says:

    @Steve: I agree with you, although I don’t think this will take the heat off the Fed as much as they would like.

    By the way, did you ever unload QID or are you still holding it?

  24. johnborchers says:

    Steve, I think the solution is to fix it by writing it all off. But who does it, Fannie Freddie? I actually look at it as a 30 year credit bubble but I guess for the sake of it all that’s close enough to what you are saying in 50 yrs.

    But the bottom line is someone is going to be taken out with all the bad debt and it ain’t going to be the Fed or the gov’t. They will use every trick in the book to prevent that.

  25. Steve Barry says:

    I’m reading this from Mish…and asking again, why are investors at near record bullish levels?

    http://globaleconomicanalysis.blogspot.com/2010/01/25-state-unemployment-funds-bankrupt.html

  26. Mannwich says:

    @Steve: Hope? Change? Delusion?

  27. wunsacon says:

    >> Well, King Kong is over Tokyo right now (down 3%)

    What if it’s not “King Kong” but “Godzilla”? Let’s reconsider your theories in light of this change to one of your key working assumptions.

    …And here’s my investment forecast:
    http://www.youtube.com/watch?v=_Nziu_8m-AU

    Ouch…all that CRE…

    This is inflationary, right?

  28. alfred e says:

    Ah, the other news item today I forgot was the comment Newt made about BSO.

    Incredibly credible. Spelled it out. With history.

    BSO fucked up. The elite that he is. And now he gets to pay. Maybe.

    I really really still can’t accept the fact the elites were really, really that out of touch and stupid. Except for the fact they own the military and live in gated communities and don’t get out that much.

    Well, he did get elected president. Guess that makes him pretty much in touch.

    Except for the old P T Barnum quote about fooling people.

    Takes me back to the Rev. Wright statement when the truth was almost out: “What do you expect? He’s a politician.”

    He left out the arrogant elite part.

    And so he’s about to do a reversal and fix it. Right. Let’s ask Wright about that one.

    BSO lost me when he promised to filibuster the Telecom immunity act, and then rolled over and actually voted for it.

    Spelled it out for me completely. Once and for all.

    Nothing he will ever say will ever be trustworthy. Period.

  29. johnborchers says:

    It’s not inflationary when you look at the fact that money is disappearing in thin air as people made bets on value of something which did not exist. These include homes, stocks and the like.

  30. Steve, I think the solution is to fix it by writing it all off.

    Not meaning to pick on you tonight John but I don’t think you can do that either. If you do that then the clowns that created this mess in the first place get a free pass to start again.

    I think you should write enough down to get them productive. Any more and they will just start doing what they were doing again and we’ll just end up in the same mess all over

  31. wunsacon says:

    After we give up our homes (in foreclosure) and sell our gold (to cash4gold), then we hock their belongings:

    http://shine.yahoo.com/channel/life/fiscal-fitness-get-cash-for-your-castoffs-573268/

    F****** sad.

  32. Transor Z says:

    After the Mass. election and the last two days I have this feeling that something went into motion that the pols aren’t going to be able to stop/b.s. around. Something’s out of the barn now but I’m not sure what it is. But today is different from the way things were on Monday. Anybody else feel that way?

  33. wunsacon says:

    Er, meant “then we hock [our] belongings”.

    Quote from that article:
    “So in our mission to dig up $2,000 in savings opportunities this month, let’s clean out our closets, wallets, and anywhere else we’re stashing stuff and make some money.”

    How about furniture, too??

  34. wunsacon says:

    Transor Z, I’m not sure. I think so. But, I’m something of a broken clock for a while now.

  35. Not sure either TZ. I’ll have to agree with wunsacon. My meter has been on max for so long that these things don’t even register any more. I did notice a lot of articles on the election. It is definitely all over the place. So it is definitely on the minds of people. Whether or not it trickles down to actual change remains to be seen. If so then count this one of the first down payments on things turning around and going in the right direction

  36. Transor Z says:

    I know what you mean. I’ve been trying not to feel sure that *I know* anything beyond, “Shit, at some point they’re going to have to do something with this Mt. Everest of cash that’s piling up in the monetary base.” And for a year and a half we’ve been at these bankers like they’re our teenage kids:

    “Just admit that you smashed the car!”
    “I was driving it, okay, but I don’t know what happened. Get off my case, Dad.”
    “What do you mean you don’t know what happened???”
    “I don’t know. I don’t know how to explain I don’t know.”
    “That was MY car. How did the left side get ripped off?”
    “I don’t know. Ben and I did a two-wheel thing. We made a ramp and it tilted. It was cool.”
    “Do you even understand responsibility???”

    And on and on. I don’t know. We’ll see, I guess.

  37. flipspiceland says:

    Reading:

    “Conspiracy of Paper”, by D. Liss

    About an intrigue and the early 1700s ‘stock-jobbers’ in London. Good historical fiction of how stock markets began in coffeeshops. Kinda like smokey Starbucks, without WiFi.

  38. [...] noticed this and pointed to a China article in Reads; Tom Petruno at the LA Times pointed out the relationship between the change in China policy to the [...]

  39. Greg0658 says:

    Is America its laws its people or its business?
    Government So@lism .. growing/educating/future plants(people) .. Business Corporatism
    Everyday People caught in the middle and presently over-numbered to needs*

    * little known fact – a commodity that is over-produced has less value

    Everyday People – Sly and the Family Stone
    http://www.youtube.com/watch?v=kjX2MKaZ-rg

    2nd little known fact – people tribe-up and/or herd for protection