enigmaman

Crony Capitalism: On Obama's Economic Policies

Obama is able to comfortably check off several campaign promises as accomplished that is for sure, but at what cost? He has thrown the baby out with the bath water as well as cut off his nose to spite his face, his goal was not to win at all cost he wanted to win at any cost, next election will be strewn with the bodies of many expendable Democrats who he and his party purposely served up as sacrifice for the collective good of the party, Obama does care one bit of how he is or will be judged, because in his mind the proof is not in the pudding but in the tasting, this is all about the Obama legacy, just like Nero who fiddled as Rome burned, it not that Nero didnt care about Rome, he just cared about making room for his new palace more,

A Look at George Soros's Recent Trades

adding to Walmart tells me they are being very defensive, if the economy double dips Walmart will be able to weather the storm better then any other in their industry, they cast a wide deep net covering just about everything the consumer would need in good and or bad times. Its stock price will not collapse as so many other have the potential to

With U.S. Economy Still on the Ropes, Where Are the Banks?

yes, but you cannot, so while the bankers make hay while the sun shines on them, the heart of America is being eroded, when the time comes that the economy finally does turns positive for fundamental reasons what will it look like? As you say they "hope that the economy improves" in any event whether it does or doesnt the debt and any resulting mess will be left for middle America.


On Oct 28 09:40 PM E Nuff Sed wrote:

> If I could borrow at 0% and get a 4% return for no risk I would do
> the same. Basically with "mark to market" is suspended - the government
> is slowing is slowly inflating the bank while hoping that the economy
> improves.

With U.S. Economy Still on the Ropes, Where Are the Banks?

As the economy was in melt down mode back room deals were struck between the WH and WS bankers, the meeting they had in private put into place the schemes that were needed to build up the balance sheets of the banking system, to stabilize the markets and restore confidence to the American people. Of course it would come at a price, the bankers would not lend, helping main street was never their objective, that would be left to the government to do. The government would win on both fronts because as the old saying goes "you dont bite the hand that feeds you"

Wall Street Breakfast: Must-Know News

And to make everybody feel better about the future and the benefits of the 787 billion stimulus bill the AP reports this bit of news


WASHINGTON — A top White House economist says spending from the $787 billion economic stimulus has already had its biggest impact on economic growth and will likely not contribute to significant expansion next year.

Christina Romer, the chair of President Barack Obama's Council of Economic Advisers, said Thursday that the $194 billion already spent gave a jolt to the economy that contributed to growth in the second and third quarters of the year. She told a congressional panel that by the middle of next year, the impact of the stimulus will level off. Romer said spending so far has saved or created 600,000 to 1.5 million jobs but warned that unemployment will remain high, above 9.5 percent, through the end of 2010.

Avoiding the Pitfalls of Confirmation Bias

Seems to me you cannot trust the fundamental approach because its all biased, the company telling you why they are as good as they are even when they are not, then you have the big analysis company following the corp every move who explains why the negative you think you see isnt what you think it is, and not at all negative, then you have the other financial companies come in behind the first few jumping on the band wagon, cheering the numbers reported, then you have CNBC chiming in as well finding green shoots all over the place and then you have little old main street investor who isnt sure, nervous but then says, who am I to fight those who know more then I, that have direct access to the corp any and all info, have the best financial minds doing their own research and issuing their own reports and charts, little old main street investor working with Fidelity doing his own research and to expect him to come up with the true story seem a bit presumptive, except if he also an expert in forensic accounting. Sounds like your asking way to much of main street, after all most on Wall Street with all their financial and accounting degrees, years of experience and hot line to the boss, most of them got it wrong. So while I agree with the articles premise it seems impossible to attain

What the Fed Said Yesterday

Its quite simply the fact that the Fed pushed back its plan to begin withdrawing from its MBS purchase, pushed back from Oct 09 to March 10. So reading between the lines is " The economy isnt doing as well as we had hoped" if they got out as originally planned Im sure they were worried the economy could double dip, so they err on the side of caution, delay and advise " all's well" IN the mean time they need to find someone else willing to buy MBS because right now the Fed is the only game in town, that alone should make one pause!!!

3 Oligarchs Dominate the Housing Market, Backstopped by You

If it wasnt so sad it would be funny, how the Fed Gov is on their soap box calling for reform, to reign in those "to big to fail", protect the consumer, saying all the right words but doing nothing to change anything, the big get bigger, main street gets shafted, let me restate its not completely true DC doles out just enough reform to quell the masses, to stop riots in the street, but only just enough to do that and not really change anything, have their cake and eat it to. So sad to know Fed Government knows exactly what they are doing "That which you tolerate you encourage"

Sobering Stat: ARMS Index Indicates Market Is at Peak, Not Bottom

Can you provide a graph comparing the S&P 500 move as it relates to your TRIN since the rally began, then you will be able to see the correlation if any.

Sobering Stat: ARMS Index Indicates Market Is at Peak, Not Bottom

No surprise, recent days where 1/4 of daily volume involved handful of securities, double digit daily gains of virtually insolvent companies, market churning going nowhere for the past week, bounce in the morning, flat all day then bounce at the close, market seems to be struggling to stay positive, overly bullish sentiment getting stronger as daily volume has been picking up just as the market appears to be rolling over

Four Reasons We're Headed Even Higher

And now a word from the National Bureau of Economic Research (abstract)
Long-term data for 25 countries up to 2006 reveal 195 stock-market crashes (multi-year real returns of -25% or less) and 84 depressions (multi-year macroeconomic declines of 10% or more), with 58 of the cases matched by timing. The United States has two of the matched events--the Great Depression 1929-33 and the post-WWI years 1917-21, likely driven by the Great Influenza Epidemic. 45% of the matched cases are associated with war, and the two world wars are prominent. Conditional on a stock-market crash, the probability of a minor depression (macroeconomic decline of at least 10%) is 30% and of a major depression (at least 25%) is 11%. In a non-war environment, these probabilities are lower but still substantial--20% for a minor depression and 3% for a major depression. Thus, the stock-market crashes of 2008-09 in the United States and other countries provide ample reason for concern about depression. In reverse, the probability of a stock-market crash is 69%, conditional on a depression of 10% or more, and 91% for 25% or more. Thus, the largest depressions are particularly likely to be accompanied by stock-market crashes, and this finding applies equally to non-war and war events. We allow for flexible timing between stock-market crashes and depressions for the 58 matched cases to compute the covariance between stock returns and an asset-pricing factor, which depends on the proportionate decline of consumption during a depression. If we assume a coefficient of relative risk aversion around 3.5, this covariance is large enough to account in a familiar looking asset-pricing formula for the observed average (levered) equity premium of 7% per year. This finding complements previous analysis that were based on the probability and size distribution of macroeconomic disasters but did not consider explicitly the covariance between macroeconomic declines and stock returns.
Just another opinion, point of view from a non partisan group on the long term prognosis for the economy

Four Reasons We're Headed Even Higher

I will confess I wish I was more invested so I could have taken advantage of this huge move but I wasnt and Im not and I wont, the good news I no longer worry about it, water under the bridge. IMO- this market is looking tired, light volume rally, the market run was not on fundamentals it was all because it was Backed by the US Government, now though those deals are running out, treasury sales are doing OK could be better could be worse and will be, Bernanke is beginning to tighten the reigns ever so slowly by letting programs expire, no more cash for clunkers, first time buyer program is in its 9th inning, higher oil will return, fed tax shortfall will need to be addressed, 2T fed deficit surprise will eventually sink in, China tippy toppy market, 1.5 M soon losing unemployment, I dont know you tell me, is there more juice in this market or has it all been squeezed out, will the smart money try to get the last penny of will they leave something on the table for others to fight over while they slip out the back door un noticed, thats what I would do if I was part of the smart money crowd.

Four Reasons We're Headed Even Higher

You said " that 2009 would be the year of premature top calls" that was a no brainer because there always have been and will always be prognosticators that try to call tops and bottoms based on whatever fundamentals and technicals that appear to reinforce their belief. But eventually one of them will be correct correct. You seem to make fun of Doug Kass a bear who correctly called the bottom, a genius but now a clown because he is calling the top. Believe what you will at your own peril but no matter how good the market appears from its lofty heights, except what is reported the game has not improved on the playing field

Looking at Banking in Switzerland

You still have the Lunatics in charge except now they have to report to the asylums keeper and their partners the Fed Gov, who is quite happy with the way things are going right now because flush with Fed $$ banks are moving in the right direction money wise, its a good life, a license to steal and perfectly legal now that the Government is on your side, in the end its all about dollars and cents, " Whats sport to the cat is death to the mouse" thats why the mouse made a deal with the cat

Has President Obama's Mortgage Modification Plan Failed?

falling home prices is the biggest problem facing mortgage modifications, unless there is a sizable spread between its current loan to value lenders will be less inclined to do modifications. Since values continue to drop and its been estimated that currently 25% of mortgaged homes are underwater and will rise to 50% in the next few years lenders have little incentive to erode their portfolio any more then it is. No lender wants to refi a questionable loan carrying a higher rate for a still questionable loan at a lower rate, especially with home prices continuing to fall, if the property value is going to drop why not keep it on the books with a lower loan amount carrying a higher rate, then provide a higher loan amount at a lower rate, it makes no sense, there is no real upside to the lender, yes the program is a failure and should be accepted as such.