shortpaulsonbernanke

Taking a Lesson from the Great Depression

China......really? You think someone in China making $200 a month is going to bail out the world? most of that going to basic necessities and the rest going to savings? Consider the fact that the $200 a month they make is from selling stuff they maufacture around the globe. Exports are collapsing down 22.6% in April www.nytimes.com/2009/0....
I think too many pundits think China is some kind of magical place that can avoid this financial mess where in....it's just a bunch of commies that will crush the populace if they get out of line. Not getting my investment dollars, and shouldn't get yours.

Economy-Wise, The Great Experiment Seems to Be Working

If we can agree that the Housing Market is what caused this mess, then I must disagree that anything is working. I sell Structured MBS, look at deals all day long....nothing is getting better in housing on any measure when it comes to delinquencies (you know those things that turn into foreclosures and destroy bank balance sheets).
Some data points, over 32% off all Alt-A mortgages are 60+ days delinquent, Option Arms are around the same, Banks are so overwhelmed with foreclosed houses, some have stopped foreclosing on owners in some cases, www.washingtonpost.com....
Home Equity loans are a special case, it is NOT UNCOMMON to look at structured deals and see delinquencies 60+ days of 60% and more (Trillions of this paper has been securitized and sits on banks balance sheets, pension funds, bond funds) .
Our Government has managed to transfer Hundreds of Billions of Taxpayer wealth to the people that caused this mess, yet has done virtually nothing to address the problem.
All of your data is noise since the cause of this problem is growing and getting worse, just getting less notice in the media.

Fed Balance Sheet Update

Treasury prints money, the Fed buys Treasuries (taxpayer pays the interest, another hidden tax) in an effort to keep rates down, now the market tells Ben "stick it". Every basis point on the Ten Year Tsy is worth $612, since his quant easing how much is the fed losing? 85 bps per million?
And how about those Fannie and Freddie 4% Ben owns, now trading below $94....he's down $60,000 per million on that little purchase of hundreds of Billions.
Didn't he tell congress last week we're making money? LIAR LIAR BALANCE SHEET ON FIRE.

Bernanke Has Lost Control

Great work Karl. Mr. Bernanke's lowering of mortgage rates is in opposition the Obama's plan to redistribute wealth. The rich are the only one's with high enough credit scores and enough cash to take advantage of the Fed's subsidised mortgage rates. The people in trouble with their mortgages can't qualify for the artifical low rates.
In discussions with Mortage Originators the refi wave died with the sell off in Treasury bonds last week. Good thing the Treasury will print money for the Fed, cause their balance sheet is getting destroyed!

Rising Yields Fight the Fed

Bernanke and his Quantative Easing, another policy failure. Back of the envelope calculation, I fugure the Fed's purchases are about $500 million underwater and rates are back right about where they were when he started. Bend over US Taxpayer!

Bear Stearns Looking Decidedly Cheap

You must be a jerk recommending a stock facing a mutitude of civil and criminal lawsuits, as well as more than $20 billion of Level3 assets that they don't put a price on. Are you long the stock and looking to get out? Maybe your a schill for the firm as insiders look for any buyers to take them out before this goes belly up?