BerkeleyBob

Wall Street Breakfast: Must-Know News

I have been ranting about socialism for the rich, capitalism for the poor for a while now. Why should top rated insurers need TARP funding? Perhaps the relationship of state v. federal regulation for adequacy reserve, etc. needs re-examination. If they have taken a hit on their annuities or got involved on the wrong side of a CDS or other derivative transaction, what does that say about their fiduciary relationship to their policy holders (and in the case of a mutual, owners)? What does it say about their ability to manage risk? The huge loss in a substantial position in B of A is a resounding loss of no confidence--the financials benefitted from the easing of mark to market, but this sector is a long way from home free. It is possible, just very difficult, to make money in this market.

Wall Street Breakfast: Must-Know News

I am not concerned too much by federal bailout funds used by AIG to unwind CDO's etc., the so-called "external" payments. The risk was drastically mis-calculated but leaving foreign central banks and institutional investors (pension funds, etc.) to take the loss would ruin our standing in the international marketplace. The financial crisis is global in scope, and we are all interdependant in ways we don't fully understand. The "internal" payments to the geniuses who created the mispriced trades (not insurance, not regulated) are another matter. Why wouldn't any taxpayer have standing to block the payments? It is our money. AIG executives are dancing on the rim of a volcano.

Wall Street Breakfast: Must-Know News

Thought it interesting that some pundits see oil between $50 and $80, link between oil & NG seems frayed. True, some nat gas producers are slowing down extraction, true PBR has a major oil field find which will ultimately increase supply, but I personally doubt the pundit's crystal balls. Decrease in US dependence on foreign oil, much of it coming from unfriendly nations, is going to be painful and not come overnight, but I strongly doubt we will see oil at $50 or even $80 and remain long PBR, WMB, EWZ and CHK with gradual add to these positions with what is left of my money.