September 2009
64 posts
Nonprofit Idea for Hippie Jerks
I was just reading CNBC.com’s Carbon Trading May Dwarf Crude Oil and I thought I’d share an idea. I’m the special kind of jerk that looks at any system and thinks, “How can I game this?” Sometimes I think about personal gain, and sometimes I just think about throwing a wrench in the gears. This is in the latter category.
Some poorly researched background info:...
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Report: CIT Preparing Plan to Hand Control to... →
I really thought they could delay this until April. A little more information here.
The previous rumor about hedge fund guru John Paulson negotiating a merger between CIT and Indymac looks to have been discredited. This is a good thing, because the idea was really stupid.
I remind everyone that the death of CIT will likely have some pretty terrible consequences, particularly for jobs, as many...
Obama Stock Advance Persists on Money Fund... →
Even after reducing money-market accounts by 11 percent this year, investors have cash equal to 73 percent of Standard & Poor’s 500 Index companies’ net assets, according to data compiled by the Investment Company Institute and Bloomberg. At the peak of the bull market in 2007, the measure of buying power was 62 percent.
I’ve never really understood the “money on the...
S&P cuts MBIA bond-insurance unit to junk →
Once again, the ratings agencies show just how ahead of the curve they are. MBIA, who made their earnings by insuring mortgage-backed securities, requires a solid credit rating to generate any new business. Let’s see how the runoff business works out for them.
In other news, Unprecedented U.S. corporate default seen for ‘09. I hope none of those bonds are insured by MBIA.
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Bank Failure Friday
I’ll be honest, I was a little surprised that only a single bank was added to the FDIC Failed Bank List. Georgian Bank, of Atlanta, GA failed. From the press release:
As of July 24, 2009, Georgian Bank had total assets of $2 billion and total deposits of approximately $2 billion. In addition to assuming all of the deposits of the failed bank, First Citizens Bank agreed to purchase...
Declassified State Dept Data Highlights Global... →
I have a dilemma. I’m not certain whether it is more fun to live in a time when conspiracy theories are rampant or to live in a time when the government admits to conspiracy theories of decades past.
There’s much less reason to manipulate the gold market today than in 1968. Our currency has no pretense of gold convertibility today.
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Unemployment Stabilizing?
This week’s Unemployment Insurance Weekly Claims Report is one of those reports that should have more explanation behind the statistics. There’s one bit of bad news sandwiched between to bits of good news. Starting with the good news, initial claims dropped to 530K, which was the low of the Bloomberg consensus range (530K to 555K). Last week’s number was revised up 6,000 to 551K. From...
Moody’s: Iceland, Latvia and Hungary in “fragile... →
It appears as if patient zero still has a pulse. In a way, I’m rather disappointed. If Latvia brought on the financial apocalypse, at least we’d see it coming. I wonder if it is now more likely that instability in Western European economies will lead to Latvia’s resumed downfall rather than the other way around.
California sells $8.8 bln to record retail demand →
The advertisements worked. The bid was significantly better than my 4.5%:
Aided by a record $6.64 billion in orders from retail investors, which amounted to 75.4% of the total, California sold the revenue anticipation notes at yields of 1.25% to 1.5%. They mature in May and June of next year.
Deflation? →
This is the best summary of the various deflation arguments written in quite a while. My favorite, however, was back in May at Zero Hedge. I highly recommend reading both.
Of course, the dollar carry trade is a favorite right now, and it helps keep the correlation between a weaker dollar and a stronger stock market. Trying to guess when both trades will go out of style would require an...
Landmark Decision Promises Massive Relief for... →
gilmoure:
Uh, smaller words this time?
So, if your mortgage company bundled your loan and sold it as a CDO, does that mean that the loan has been paid off as far as the mortgage company is concerned? But they’re still collecting payments from you? I’m confused.
First things first. According to the article, this is a Kansas thing right now. Also, I can only really discuss things as they...
Landmark Decision Promises Massive Relief for... →
MERS as straw man lacks standing to foreclose, but so does the original lender, although it was a signatory to the deal. The lender lacks standing because title had to pass to the secured parties for the arrangement to legally qualify as a “security.” The lender has been paid in full and has no further legal interest in the claim. Only the securities holders have skin in the game;...
Comparing Treasury Market Analysis
First, let’s take a look at Bloomberg’s China Can’t Buy Enough Bonds as Dollar No Deterrent:
International investors are increasing purchases of Treasuries on a bet U.S. inflation will remain subdued, even as the dollar falls to the lowest levels of the year and the budget deficit tops $1 trillion.
Investors outside the U.S. bought 43.1 percent of the $1.41 trillion of notes...
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Bank Failure Friday
Two new banks were added to the FDIC Failed Bank List. They issued a single press release for both banks:
Irwin Union Bank and Trust Company, Columbus, Indiana, was closed by the Indiana Department of Financial Institutions. As of August 31, 2009, it had total assets of $2.7 billion and total deposits of approximately $2.1 billion. Irwin Union Bank, F.S.B., Louisville, Kentucky, was closed by...
Iowa Attorney General: "Option ARMs are about to... →
I’m willing to bet that the Option ARM problem will be just as bad as the subprime meltdown. Negative reactions to the news will likely be more widespread, perhaps faster, as fewer people are going to believe the “it’s contained,” line a second time around. However, I don’t think the crisis has begun. Just like the subprime crisis, some place in California, Nevada,...
WaMu Part II? (Wells Fargo) →
This makes a lot of assumptions about information nobody outside Wells Fargo has thanks to completely opaque accounting, but it’s an enjoyable read.
Quitters Prosper
I know nobody on tumblr cares about this, but I did start this blog for a different audience. The fact that my tumblr audience is larger than the intended audience does not escape me, though.
I once again liquidated my equity positions. Since an epileptic monkey choosing stocks by throwing darts could have made money in this rally, it’s not surprising that I sold for a profit. This is not...
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Unemployment Genuinely Stabilizing
The Unemployment Insurance Weekly Claims Report has been released. Initial claims dropped to 545K, which was below the Bloomberg consensus range (550K to 590K). Last week’s number was revised up 7,000 to 557K. From the report:
In the week ending Sept. 12, the advance figure for seasonally adjusted initial claims was 545,000, a decrease of 12,000 from the previous week’s revised figure of...
New Chrysler Boss Says September Auto Sales A... →
At least the US factories are working to restock that inventory.
California hoping mom and pops buy notes next week →
The state is selling revenue anticipation notes maturing in June 2010 to meet its cash-flow needs throughout its fiscal 2009-2010 year. These notes are considered far less risky than typical municipal bonds because they are so short-term and payable from available money in the state’s general fund.
Here’s the deal, everyone: we totally blew each and every budget forecast over the...
Dan Solin: Wall Street Packages Luck and Sells It... →
I believe that a majority, though not all, active managers are snake-oil salesman. The problem is that there’s very little that can be done to draw distinctions for investors.
As far as reliably beating the market, laddering CDs empirically beats nearly everything. With FDIC insurance, there’s no downside for most investors. Unfortunately, this is a lousy time to start that strategy...
Ron Paul: Healthcare Reform is More Corporate... →
via hilker (note, this quote contributes to the commentary below and was substituted for the one hilker had):
While the President’s concern for the uninsured is no doubt sincere, his plan amounts to a magnanimous gift to the health insurance industry, despite any implications to the contrary.
For decades the insurance industry has been lobbying for mandated coverage for everyone. Imagine if...
Spending Up, Paying Down
The retail report today was unexpected good news (see here). Retail sales ex-auto increased 1.1 percent, beating the best of the Bloomberg estimate range (0.8 percent). Even sales ex-auto and ex-gas were up, by 0.6 percent. This is particularly impressive because the three times that auto sales experienced such a noticeable jump, ex-auto sales actually contracted. Can this continue?
Probably...
Toys R Us amps up for holidays with more stores →
Even if retail craters this holiday, this is likely to prove a winning strategy. Well… I’m assuming huge discounts on rent and intelligent inventory levels. Too bad the toys will all be manufactured in China.
Plans for Irish Bad Bank Draw Near →
There are so many ways to do the bad bank wrong that it will be guaranteed that there will be lessons to be learned from this.
There is something right at the core of this: bad debts must be liquidated.
China to Probe Alleged ‘Dumping’ of U.S. Auto,... →
China announced a probe into the alleged dumping of American auto and chicken products, two days after U.S. President Barack Obama imposed tariffs on imports of tires from the Asian nation.
Trade wars are fun.
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She Said Yes
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Bank Failure Friday Continued
Venture Bank of Lacey, WA was added to the FDIC Failed Bank List sometime tonight. They had total deposits of approximately $903 million and an estimated hit to the FDIC fund of $298 million. This involves another one of those loss share agreements that are the ultimate sign of FDIC desperation. This one was with First-Citizens Bank & Trust Company of Raleigh, North Carolina on approximately...
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Bank Failure Friday
Only two banks have been added to the FDIC Failed Bank List. The first is the one we’ve been waiting for:
Corus Bank, N.A., Chicago, IL — Total deposits of approximately $7 billion and an estimated hit to the FDIC fund of $1.7 billion.
Brickwell Community Bank, Woodbury, MN — Total deposits of approximately $63 million and an estimated hit to the FDIC fund of $22 million....
Headline Pair: Consoles and Video Games
Sony, Microsoft Boost Their U.S. Game Console Sales in August
Video game sales fell 16% in August from a year earlier
Russell pays $115M for JP Morgan Chase building in... →
That’s the Russell of the Russell 2000 index. The building was valued at $350 million in 2006. That’s quite a discount. Russell’s move from Tacoma to Seattle will end a longstanding rivalry between the two cities. Tacoma has lost.
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Unemployment Dips Due to Seasonal Adjustment
The Unemployment Insurance Weekly Claims Report has been released. Initial claims dropped to 550K, which was at the low end of the Bloomberg consensus range (550K to 570K). Last week’s number was revised up 6,000 to 576K. From the report:
In the week ending Sept. 5, the advance figure for seasonally adjusted initial claims was 550,000, a decrease of 26,000 from the previous week’s...
“I place economy among the first and most important virtues, and public debt as...”
– Thomas Jefferson, quoted in Boom2Bust.com » Blog Archive » Washington Explores Idea Of Taxing Soda, Sugary Drinks
That’s awesome.
Kudos to Obama. Will Congress Listen?
For those who haven’t read the Obama Health Care Plan page (h/t continuum, abbyjean), I’d like to draw your attention to the following:
Won’t add a dime to the deficit and is paid for upfront. The President’s plan will not add one dime to the deficit today or in the future and is paid for in a fiscally responsible way. It begins the process of reforming the health care system...
What System Does the US Have?
robot-heart-politics:
Also, perhaps a better question to ask than, “Are you satisfied with your current health care system?” would be, “Would you rather have a fully privatized health care system like the one they have in America?” Thinking your system needs improvement is very different from thinking your system should be like the American one or thinking the American system is preferable....
“Of the $189 billion securitized Option ARM loans outstanding, 88% have yet to...”
– Some Fitch Analysts, quoted in Calculated Risk: Fitch on Option ARM Recasts
Warning, current recession may have an evil twin hiding just out of sight.
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The end of news. Again.
benkraal:
Newspapers are, if not dead, in palliative care. The model is broken and can’t be fixed. Bits, not atoms, etc.
Newspaper websites are also broken. Splitting up 500 or even 1000 word articles over two or more pages is inexcusable. Chairman Gruber has pointed out that newpaper websites know that most people don’t read past the first page but that the tenth of a cent that they get for...
Immigrants Stealing American Jobs
My boss happens to not be an American citizen. He is also a professor at UCSB (though his field happens to be unrelated to my dissertation research. Sad trumpet). Apparently he was approached at a party. This was by a wife of a friend of a friend of his. She asked him what the US could do to help Italy so that he wouldn’t have had to come to the US and steal an American job. He mentioned...
U.S. Consumer Credit Falls by a Record $21.6... →
I actually had more to say about this, but looked for some supporting evidence and realized it was better said elsewhere.
I believe I’ve made the case that the growth in the base money supply is not inflation. If you look at the graphs of M1, M2, and MZM, you’ll see that a contraction has started.
If this trend continues, we are in for an unhappy ride. If you want a pretty graph of...
AIG Upgraded, Crisis Over →
Wait… no. AIG was downgraded to “underperform” by Credit Suisse. The same analyst also came out and said that the Steelers are a good bet in Super Bowl XLIII.
That’s some timely investment advice. Thanks, Credit Suisse!
“Depending on the specific measures taken, we could see a controlled deleveraging...”
– Cornelius in Rock, Chinese Economy, Hard Place — zero hedge
I’ve mentioned that a difference between the US and China is that while both governments are capable of magically creating money, only China has the power to force banks to lend (so far). Consider the unwind if such forced...
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Bank Failure Friday
There are 5 new additions to the FDIC Failed Bank List:
First State Bank, Flagstaff, AZ — Total deposits of approximately $95 million and an estimated hit to the FDIC fund of $47 million.
Platinum Community Bank, Rolling Meadows, IL — Total deposits of $305.0 million and an estimated hit to the FDIC fund of $114.3 million. This is a closure, so people get checks for their insured...
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Unemployment: 9.7%
The monthly employment situation report came out this morning. Payrolls declined by 216,000, after a 247,000 drop in July (note, June and July losses were revised up 49,000 combined). The unemployment rate moved from 9.4% to 9.7%. The Bloomberg consensus range for payrolls was -365,000 to -115,000, with the consensus coming in at -200,000. It looks like the people surveyed by Bloomberg are...
Student Debt up 25% from a year ago, while 33% of... →