Ice

U.S. Strategy for G20 Doesn't Work

I truly hope Friedman nails it in his quote - because that would mean we get a race for Green Energy technology - a technology race as you never have seen.

The technology race will be motivated by the wish to become/stay a world leader for the upcoming century.

Eliot Spitzer coming up now on CNBC to talk about the state of Wall Street. Could be interesting.

HH - very much under the belt - I presume you never did anything which you regret.

Government's New Credit Approach: Does the End Justify the Means?

We don't need consumption from people who can't afford it - we need healthy consumption from people who can pay their bills. Forcing lower interest on CC will force credit card lenders to be more prudent on who they give credit.
Don't forget that every default on CC is paid by us - the clients who do pay their bills.
So for me the get cheaper credit it is important that credit is given to people who can carried it - not to someone who is juggling more CC-debt than their annual income is high.

The free market has made a mess from the cc system - it is the most expensive payment system around (compared to other alternatives). Effectively it is a sales-tax on every item I buy of 5%. The difference with Europe is that here I pay the sales tax to a bank while in Europe it goes to a government.

Will the Stress Test Seal Ken Lewis's Fate?

What about this rumor; John Thain is asked to prepare himself to step in and take over

Rupert Murdoch Interview: 'Economy Weak; Danger of Inflation Great'

I find it a very limited view to blame fanny mae for all of the current problem. Yes, the are part of it. But come on - How can the Fed, and government and Fannie Mae be responsible for Citi, Lehman, AIG and Merril, COF, CFC.
It was not government or it agencies forcing big finance in these constructions. If was not government forcing them to use off balance sheet assets, it was not government forcing them to use 30* leverage.

As long as we make a very limited analyze of the real causes - how can we think we are able to find the correct solution to future prevention.

Long live partisan obstruction of truth (and now I am sarcastic)

Alcoa's Quarterly Results: Mixed Bag

great stock to "play" with a mix of calendars, double diagonals etc. since it will not go nowhere for the foreseeable future.
Front month IV is high - eoy IV is lower reducing the risks for longer term calendars.

Will the G20 Crack Down on the FASB?

Mark to Fantasy as in Fantasy Accounting Standard Board.

I have no real objects to M2F.

They only comment is shame to the bank teams and regulators who let this happen on their watch. For me this includes Greenspan - however many letters he gets posted in FT - shame on him.

What the Fed's Announcement Means for Gold

[quote]Buying up your own debt is no more useful than swapping one credit card for another. It is nothing close to sound finance. It is the last act of desperation when there is nothing else left to do.[quote]

agree

A bond is an IOU for a fix time period for which interest is being paid. A bond is a less liquid equity, at least compared to US dollar bill. A Dollar bill is an IOU - but it has an indefinite time period, no interest and is extreme liquid.

So the question is who is selling their treasuries to the FED and what are they going to do with the enhanced liquidity.
Here is my bet;
a. foreign holder will line up to sell to the FED
b. the liquid dollars will be exchanged for another currency.

If I am right then Wednesday we heard the FOMC announcing that the Chinese pressure had accumulated to the point that they need a sign of 'good will'. One phone call from China to Washington - get us out off some of these long term IOUs.

Obama's Speech: The 'Vision Thing' vs. The Devil in the Details

Great article - happy you wrote it a time were we all seem to be name calling. I am amazed by the low level of analyze and syntheses in most of the media.
But then as a Dutchman in NY I can be amazed everyday.

Santelli's Rant: A Watershed Moment?

Again - my topic - why did we give the caddy a non - recourse loan.

Those loans have a free embedded put - a put which the American banks and families are paying for.
With out the non recourse walking away would not have been an option.

a. Starting today we need to end non recourse loans
b. loan which gets renegotiated needs to end being non recourse.

Obama's Housing Plan: Legislating Conflicting Goals

What I find missing in the all these discussion is why are those mortgages non-recourse/ limited liability.
Why do we give home owner a premium free put on their house prices. Especially why do we give these puts to second homes and investment real estate.

For me components of coherent plan should be

- starting today no more non recourse loans.
- people who pay more than x% of income to mortgage can extend the mortgage to 60yrs but the loan will not be non recourse anymore.

More is necessary but I think step 1 is to deal with the non recourse aspect since this fueled the home price even more than cheap money.

The Shedlock-Schiff Affair: A Chronicle

There are many other who were on the right track

Jeremy Grantham
John Mauldin
Steve Roach

Just to name three - In Mauldin's case he was on the subject at as early as Jan 2007.

Apple and Google: Changing My Mind

Fred: if your interested in GooG under 300 why don't you sell some goog feb 290 puts for $4.90. If goog goes up you made 490 per 1 lot. If goog comes down you effectively bought at 285.10 - which should be a good price for someone who says he want to buy under 300.
Furthermore if you do not get assigned after expiry you sell the March 290.

Exclusive Interview with Jim Rogers: Inflation Is Coming

Indeed China will stop one day buy US treasuries or and this is possibly worse connect political condition to participation in a treasury auction.

conditions like - We China don't mind Iran to have a atomic weapon, so US stop interfering - condition met? We china will buy in the next year 300 billion of treasuries.

Why would China do this - because in the international tick for tack they will get compensate.

What If the Economic Model Is Wrong?

I think Fred has a point;

Erecting a second Brooklyn bridge, while it will give jobs for the short run, will do nothing to the financial infrastructure of NY. It will not improve NYC possibilities to compete with other financial centers.

I admit, am a strong supporter of OB, but I am a but afraid that by default moving investments in 1900-2000 era infrastructure is not going to help us compete.

We do need a better educational system - as for now it tends to favor 'old wealth' above keeping the best students as long as possible in the system.
We need a more flexible educational system, the thought that we study till 25 and are done - is so 1900's.
We will need to abandon traditional classroom and traditional one-to-many teaching.

We will need to sit back and blow some smoke to the ceiling and consider in which areas the USA should be leading in 50yrs time.
for me those area should include; energy generation and distribution, medical prevention, robotics, democracy and forward thinking regulations, management style in a global collaborative world. (i am sure there is more).

Selecting these topic is the essential - because the 1Trillion investments will need to support the development of the USA2050.

Be aware not to create a better USA1950 - because then Disney can sell tickets to a very large Open Air Museum.