If China fears are crippling the Fed and preventing it from mopping up enough Treasurys to drive mortgage rates down then it's time to get a grip, Ambrose Evans-Pritchard says. "The Obama team should let it be known... that any country playing games with the U.S. bond market in this crisis will be treated as an enemy and pay a crushing price." [View news story]
Yeah! You know what we're going to do to them? Huh? Huh!
Pension bombs going off: "Barring a reprieve from Congress, companies may be forced to make more layoffs or curb capital investments to divert cash to shore up pensions." (scary chart) [View news story]
Economic Forecasts: Why Is There No Bottom? [View article]
As many of us well know, the media is not in business to even try to be accurate or truthful, they are in business to generate maximum revenue. This usually involves telling the masses what they are receptive to hearing and/or whipping up the kinds of emotions that will generate more usership, subscriptions or whatever else it is that drives their revenue -- fear is a very effective one.
I'm coming down on the side - which is out of favor and much dismissed - that there was massive fraud in the U.S. economy, Portfolio's Jesse Eisinger writes. "Just because there was a Big Lie doesn't mean there weren't a lot of little liars." [View news story]
I fully expect for it to emerge later that there were large organized rings to create a lot of fraudulent subprime loans
Three Reasons Why Investors Should Worry About Bank Nationalization [View article]
Author wrote -- "A further 25% drop in house prices is a very severe assumption; house prices are already close to their long-term equilibrium in terms of their ratio to earnings, so a 25% further drop would imply a “bear market” similar to that in stocks. That seems unlikely; the traditional level of U.S. house prices was a rather smaller multiple of earnings than in most other industrial economies, so a sustained drop below that level should meet with an upsurge of new demand from renters who could now afford homes"
Although the US may not have gotten as overblown as Spain or Ireland, it was still quite overblown and still has a ways to go in falling back to levels that match up with income affordability (endangered income, at that) . Let's also recognize that overshoots happen frequently when corrections take place. Predictions are a fools errand, but I'll venture in anyway. Based on the data I've been seeing (i.e., Case Shiller), I'd say a further 10% drop is almost a no-brainer, 15% drop probable, 20% drop possible, and 25% certainly not implausible.
JPMorgan estimates that the average recovery rate for super-senior tranches of debt - the stuff that was supposed to be so ultra-safe that it carries the AAA tag - has been just 32%. "No wonder so many investors are now so utterly cynical about anything that bankers or rating agencies might say these days." [View news story]
If true, holy cow. But I used to create (far simpler) MBS back in the day and I am trying to wrap my head around how this is mathematically possible. I can't help but wonder if there aren't some rapacious middleman fees involved. But even still, these recovery rates imply gigantic default rates. IF this is representative, this just might be the scariest factoid that I've seen come out throughout this whole crisis.
CA has -- in the words of The Economist -- pretty much made itself ungovernable. It goes through these throes in every budget cycle because of many self-inflicted wounds including the most egregious gerrymandering in the country. To be fair, it isn't just the Hollywood/SF liberals contributing, but also the wild eyed conservatives. The difference is that it used to have to find a way to resolve (well, fudge really) the budget problem, whereas now it has the convenience of timing to try to force it on the rest of the country.
I think it's a classic "it depends", depending upon what you are trying to accomplish and measure.
User 361751 and Siegel are correct if you are trying to assess what the overall market price being paid (in the S&P 500 companies) for the overall corporate earnings -- for instance, if you were an index fund this might be a meaningful metric.
If I'm an individual shareholder deciding (using Siegel's example) a share of Exxon or a share of Jones Apparel, then the weighting doesn't do much for me, both Felix and Bespoke are correct.
If China fears are crippling the Fed and preventing it from mopping up enough Treasurys to drive mortgage rates down then it's time to get a grip, Ambrose Evans-Pritchard says. "The Obama team should let it be known... that any country playing games with the U.S. bond market in this crisis will be treated as an enemy and pay a crushing price." [View news story]
Me neither.
How Did Hyundai Increase Sales in January? [View article]
Pensions: The Biggest Story of the Week - Or the Year [View article]
Pension bombs going off: "Barring a reprieve from Congress, companies may be forced to make more layoffs or curb capital investments to divert cash to shore up pensions." (scary chart) [View news story]
The Personal Savings Wildcard [View article]
Economic Forecasts: Why Is There No Bottom? [View article]
Bernie Madoff's lawyers have filed to exempt from seizure $62 million in bonds belonging to his wife, Ruth, as well as their NYC apartment. [View news story]
I'm coming down on the side - which is out of favor and much dismissed - that there was massive fraud in the U.S. economy, Portfolio's Jesse Eisinger writes. "Just because there was a Big Lie doesn't mean there weren't a lot of little liars." [View news story]
GE's Immelt Leads Insider Buying [View article]
Dogbert on bailout hearings. [View news story]
Three Reasons Why Investors Should Worry About Bank Nationalization [View article]
Although the US may not have gotten as overblown as Spain or Ireland, it was still quite overblown and still has a ways to go in falling back to levels that match up with income affordability (endangered income, at that) . Let's also recognize that overshoots happen frequently when corrections take place. Predictions are a fools errand, but I'll venture in anyway. Based on the data I've been seeing (i.e., Case Shiller), I'd say a further 10% drop is almost a no-brainer, 15% drop probable, 20% drop possible, and 25% certainly not implausible.
JPMorgan estimates that the average recovery rate for super-senior tranches of debt - the stuff that was supposed to be so ultra-safe that it carries the AAA tag - has been just 32%. "No wonder so many investors are now so utterly cynical about anything that bankers or rating agencies might say these days." [View news story]
Should We Let California Go Bankrupt? "There’s good reason why most states won’t fall down the fiscal black hole where California now dwells." [View news story]
A Concentrated Portfolio of 5-15 Stocks Can Crush the Market [View article]
Jeremy Siegel's Silly P/E [View article]
User 361751 and Siegel are correct if you are trying to assess what the overall market price being paid (in the S&P 500 companies) for the overall corporate earnings -- for instance, if you were an index fund this might be a meaningful metric.
If I'm an individual shareholder deciding (using Siegel's example) a share of Exxon or a share of Jones Apparel, then the weighting doesn't do much for me, both Felix and Bespoke are correct.