Harry Tuttle

It's Hard to Make a Case for the Whole Financial Rescue

The price for saving the large banks, whose executives are now rewarding themselves for a great year, will be measured in terms of the future credibility (or lack thereof) of the American government.

Sources say AIG (AIG +5%) has canned preparations to IPO its Chartis property-casualty unit after CEO Robert Benmosche decided the business is a core AIG holding. Sandler O'Neill's Paul Newsome explains: "Public valuations for property-casualty companies are very low by historic standards, so anybody thinking about doing a public offering right now would really have to think twice about that."

Benmosche has a cash carry of $3mm/year plus any upside on a stock which trades on his comments.

The conclusion is obvious.

A Bad Sign for the Fed as We Know It

Next step: Fed dropping every pretense of (not) looking at the stock market and buying futures directly?

The Volcker Inspired Financial Reform Bill

Is the conclusion that the FED would do the "right thing" and recognize that it is unfair for Citi to trade when the taxpayer is unwillingly backstopping their losses?

Good luck with that illusion!

The latest AAII measures of investor sentiment are indicating the fewest bears since May 2008 - and the highest bull-to-bear ratio since summer.

Perhaps those bulls are fully invested?


On Dec 17 12:50 PM Stone Fox Capital wrote:

> then why aren't they putting money into the market. Thats the problem
> with these surveys. Being bullish and making bullish moves are completely
> different.

Hidden Truths from Citibank

yep. Still the idiots on CNBC continue to talk about the upside of the stock which could one day reach $50.

I believe C will be to its all time high at around $6. But don't tell that to the "story" crowd.

Uptick in Holiday Spending Leads to a Blowout Win for Amazon

They better be doing great. Amazon discounted a blow-out holiday season at around $80 per share.

Time Magazine's Richard Stengel explains his choice: "We've rarely had such a perfect revision of the cliché that those who do not learn from history are doomed to repeat it. Bernanke didn't just learn from history; he wrote it himself and was damned if he was going to repeat it. Bernanke decided to do the opposite of what the Fed did back in the '30s: he would loosen the money supply as far as it would go, he would save as many banks as he could, and he wasn't going to hector the American public about pulling up their socks."

Looks like a double-down on the "Committee To Save The World" cover.

House Majority Leader Steny Hoyer says the body is discussing reviving Glass-Steagall, the law repealed in 1999 that barred bank holding companies from owning other financial firms. Hoyer voted for repeal in '99 and "maybe that was a mistake."

Now we'll see the Clinton democrats vs. the Clinton democrats. It should be fun.

Why Merrill Lynch Is Bullish on 2010: Foreseeing a Burst of the Pessimism Bubble

The "pessimism bubble" that is rich.

How much leverage is invested in pessimism assets?

No leverage, no bubble.

The sad thing is they get paid a lot of money for this "analysis."

Merrill Lynch is bullish on 2010: "We believe the global economy will gather momentum in 2010. We think that the unprecedented mix of near-zero interest rates and high budget deficits will engineer an economic recovery that is real and sustainable... We believe that the world economy will perform far better than the economic consensus would indicate."

Merrill Lynch is bullish on 20xx.

Most brokers are always bullish.

Thoughts on Fed's Exit Strategy: Stephen Roach vs. Mish

Nice intellectual exercise. I would, however, not hold my breath while waiting for changes in Washington. Elected politicians are risk-averse by nature.

Wall Street's most accurate forecasters - this year, anyway - are calling for an 11% rally in the S&P 500 next year. JPMorgan Chase's Thomas Lee expects the index to go to 1300, and Goldman Sachs' (GS) David Kostin expects 1,250, on low rates and profit growth of more than 26%.

Do you think the issue is symmetrical? Who pays the pessimists? certainly not the banks and/or "investment" houses.


On Dec 14 12:21 PM Tack wrote:

> And, the pessimists all think the world's going to end....endlessly.
>

After just short of 1.5M personal bankruptcy filings in 2009, a best guess for 2010 sees 1.5M-2M filings, with the amount of consumer credit continuing to decline - keeping consumers from being able to borrow to put off the day of reckoning.

Be careful. If people notice you may be putting most "analysts" out of business.

We need to keep the prognosticators employed.


On Dec 14 01:00 PM Tack wrote:

> This "guesstimate" is merely an extrapolation of current trends.
> If that were the metric for all forecasts, all things trending down
> would perpetually trend down, and all things trending ip would perpetually
> trend up.
>
> Somehow, it never seems to work that way.

Wall Street's most accurate forecasters - this year, anyway - are calling for an 11% rally in the S&P 500 next year. JPMorgan Chase's Thomas Lee expects the index to go to 1300, and Goldman Sachs' (GS) David Kostin expects 1,250, on low rates and profit growth of more than 26%.

In other words, those who were bullish are still bullish.

No much of an insight.

Wall St. strategists are always bullish. I bet Abby Cohen still sees +20% upside (she always does)