ebworthen

Wall Street Breakfast: Must-Know News

Eli - Good work, thank you.

Despite seemingly different headlines, I see common threads in each story:

1. New 2009 high's = investor on top step of teetering ladder

2. FDIC wants banks to prepay fees = they know the shi* is going to hit the fan, and want a slow draw of capital (i.e. depositors cash) to pay for collapses. Hey, they can always get backstopped by the FED but this way it looks legit and is "non-panic" promoting.

3. All eyes on FOMC - FED will continue artificially low rates which will perpetuate the debt bubble, and they will continue socializing private debt and kicking the can down the road.

4. Geithner to push for reforms - a tax dodger will insist that financial reforms are needed in an attempt to rebuild trust, even though current regulations and laws were ignored and not enforced and the perpetrators of fraud and malfeasance have been rewarded with taxpayer dollars. Good luck with that Timmy. No doubt Congress will play the foil for him since they are in on the game as well.

5. Same old same old - who butters Moody's bread? certainly not the average investor, Moody's knows though.

6. Towns backs down - Representative Towns got a phone call or "visit" that he will never publicly acknowledge during his lifetime. "Back off or else" they said, "you can't handle the truth" or something along those lines.

7. Intel's Otellini grows bullish - PC sales have been boosted by stimulus money and spending on equipment rather than people, it's the unseen "cash for clunkers" for Tech. that will have it's backlash come Spring.

8. Dark shadows over housing market - yet another compress bandage on a bleeding artery. "How'm I doin'?" says the near terminal patient, "Just great" lies the EMT to bolster chances of survival via perception versus reality.

9. Mortgage apps jump to 4 month high - see item # 3, also, FHA socializing risk and risk appetites, expiring tax credit, cash for clunkers redo except with houses and securitized mortgage obligations (deja vu all over again?).

10. Consumer confidence builds - Only in cancer wards and dog pounds is -49 to -46 a good thing. Considering the cotton candy markets and full court press of positive media spin; you would think it would be better.

11. Home prices edge higher - ditto #10 and see #9. A 0.6% increase in the Summer months with tax credits, FHA guarantees, and FED funded mortgage rates, not surprising and should be better if things were really improving.

12. Manufacturing a recovery - I suppose it's possible. It's also possible that orders were slashed Oct.-March of last year, and this uptick is simply compensation, that may end up as unsold inventory this Christmas/Winter.

I want to believe that this is a recovery, really. My gut tells me that our current circumstance is a historic case of groupthink.