lavalyn

Wells Fargo (WFC -4.8%) - the subject of swirling rumors today regarding a secondary offering, amid swelling put volume - says it now plans to repay TARP by year-end without raising equity.

Convenient timing... 2 minutes before the bell.

If the recovery seems patchy so far, it may be because there is a big and growing divide between credit-haves and credit-have-nots. The market's new willingness to make risky loans doesn't apply to everyone - and some firms are going on a buying spree while they can.

Mad_Max: if my competitors can't afford to give insurance, why would I give them a pay raise? Keep profits to myself. They need medical help, they can go mortgage their house. They die, there's plenty of other warm bodies to take his place.

Tax cuts give more incentive for business owners to cut costs (as they retain more of those cost-cutting benefits) more.

Microsoft (MSFT) saw its U.S. search share jump to 11.1% from 9.1% in the week following the public release of Bing, comScore says. Tire kicking, or is Microsoft on to something?

Ugh... self reply.

Either they don't mark them, or they do still screw up badly at times. Bizrate should never be the top relevant link. ("Hard drive comparison")


On Jun 09 08:27 PM lavalyn wrote:

> Bing has come a long way versus Live Search; its results are very
> good, even facing Google. Of course, I still won't switch over for
> regular searches, but that's because Bing doesn't mark sponsored
> links as such.

Microsoft (MSFT) saw its U.S. search share jump to 11.1% from 9.1% in the week following the public release of Bing, comScore says. Tire kicking, or is Microsoft on to something?

Bing has come a long way versus Live Search; its results are very good, even facing Google. Of course, I still won't switch over for regular searches, but that's because Bing doesn't mark sponsored links as such.

A massive and methodical study of financial media's success in anticipating - and warning us about - the impending disaster. The bottom line? "The business press did everything but take on the institutions that brought down the financial system."

Oil needs to be at much higher than $10 a barrel, and cetin really needs to be banned from here. I mean, seriously...

The Fed's Busy Monetizing Debt

FE812 - "on the run" are the most recently issued sets of paper, which is more liquid. "off the run" paper carries a liquidity discount compared to "on the run."

Leveraged ETFs: Is Tracking Error Really So Troublesome?

WorkerOnWallStreet and cvhaus: interesting points about the tracking errors and the theoretical 0.5x index tracker.

You'd actually expect the 0.5x tracker to consistently slightly outperform half the index, on "interest" for the other half. Similarly, a 2x tracker should consistently slightly underperform on "interest."

Canadian Banking System: An Oasis of Financial Calm

To jerbare: the Canadian bank "bailout" of buying Canadian mortgages from the banks... I see little issue with the government buying the mortgages of homeowners whose risk against default is insured by... the Canadian Mortgage and Housing Corporation, the wholly government-owned mortgage insurance company. If the taxpayer is already bearing the default risk because of the government-backed insurance, where's the bailout from buying them from the banks?

Yet Another Bank Behaving Badly

Do you really think the TARP money will be repaid? Like how accounting "future tax liabilities" will ever really be paid?

Nixing 'Mark to Market' Won't Solve the Problem

Look back six months ago to see what happens when firms don't mark to market (correctly). Einhorn made his now prophetic position that Lehman Brothers didn't mark to market correctly in Q1 2008. The mad rush down for them wasn't mark to market based, it was distrust of the balance sheet that got the vultures circling overhead.

When you have the public distrusting the balance sheet, no amount of mark to model numbers will help you. See also: Enron.

Next Victim, Please!

No, it's all the short sellers' fault! Wait...

Another Day Without Precedent

Fed rates mean nothing. What does matter are LIBOR-OIS spreads (unsecured lending versus effectively pure interest rate risk consideration) and TED spread (Treasury versus real lending rates).

You could have 0% Fed rate and still have frozen credit if nobody in the banking system trusts anybody else.

Bernanke Gives Up on Reverse Auction Idea

143167: unfortunately, that will take more time to fix. As you can probably tell, the US can't just inflate itself back into having real world value. Which cuts into a bigger problem, that the US has lost its ability to "produce stuff" to the likes of China and India, and is now desperately trying to cling to whatever "wealth" it can via technological measures like DRM and legislative measures like copyright/patent law extensions.

The major consumer manufacturing that's done in the US is now itself on the verge of collapse, as Americans are finally moving towards higher fuel efficiency vehicles over ridiculous and unnecessarily gas-guzzling behemoths.

Bernanke Gives Up on Reverse Auction Idea

I don't understand why the focus is on the banks, when you can resolve the banks' issues by flooring the underlying mortgage payments.

For those here that say there are no "concrete" alternatives, I would say "analyze this:"

Using Case-Schiller data, we can see how much a home is worth in various locales... we can use that calculate how much a 30-year mortgage costs per month for a conforming loan on an average home in that locale. Proposal: the government guarantees mortgage payments for mortgages issued from (reasonable periods, Q2 2005 to Q2 2007?) equal to 80% of that payment size for prime mortgages, 45% for subprime. The resulting setting of a floor price for the mortgage paper immediately sets a bottom value for the papers in question.

This is very expensive, to be sure, but so is the $700 billion being used to currently bail out only the banks with no help to Main Street. Lower income homes are less likely to be foreclosed, keeping the average Joe in their homes, as the return on foreclosure (with certainty in payments from the government versus the uncertainty of home prices today) is lower. Prime mortgages are also less likely to foreclose for the same reason.

It's a truly Keynesian school of thinking, but I'd rather help both Main Street and Wall Street than just the fat bankers.

Short Selling: Myths and Facts

glassbox: institutional investors allow the borrowing of shares because it generates additional revenue. "Yes, you may use these shares in this pension trust to be lent for short selling, in exchange for a fixed fee per month." The brokerages make money on the lend too, of course. There's apparently some interesting tax ramifications as well, as dividends paid by shorts are not treated the same as dividends received... I am unfortunately not a tax expert.