frosty

The Consumer Is Not Back, But Thanks for the Markup in Stock Price

Report after report says, ". . . beat estimates" rather than "the anlaysts were wrong again". How the financial media can make lemonade out of lemon rinds is beyond me. Company after company reports sharply lower revenue, most are showing losses or at least significantly reduced earnings, the BEST they can say is that sales have hit bottom rather than sales will increase in the near future, what earnings most companies have are largely from accounting and tax benefits rather than product sales, yet Catapiller has a "blockbuster quarter"? Go figure.

Thursday Outlook: Commodities, Global Markets

I'll dispute your reference to "crummy news". You obviously don't watch CNBC where the financial news is always good! My goodness, negative earnings? The company remains in business doesn't it, so their stock is a bargain. Just wait until the e comes back into the p/e, then you'll REALLY see some action.

I do fear that, as you have so aptly suggested many times, that market manipulators through computerized trading are driving this rally to nonsensical heights.

A Look at Caterpillar's Blowout Quarter

Report after report says, ". . . beat estimates" rather than "the anlaysts were wrong again". How people (like this one) can make lemonade out of lemon rinds is beyond me. Company after company reports sharply lower revenue, most are showing losses or at least significantly reduced earnings, the BEST they can say is that sales have hit bottom rather than sales will increase, what earnings most companies have are largely from accounting and tax benefits rather than product sales, yet Catapiller has a "blockbuster quarter"? Go figure. This is a stock I will own, but not at today's price or at this "not as bad as expected" point in the "recovery".

CIT Gets $3 Billion in Funding; Is It Just a Stopgap?

Suffice it to say there are strategies and games too complex or mysterious for many to figure out. CIT is insolvent but for the emergency loan which will probably be paid directly to those makin the loan - but - it's a fresh $3B on the books at a fresh interest rate which may or may not pay. Thus CIT stays afloat for another week or another month but really does now look very Lehmanesque.

As CIT Group (CIT) clinches its $3B rescue - $2B of which is committed by its bondholders so far - doubts abound on whether it can survive without a completely new structure. Felix Salmon: It's just kicking the ball a little down the road. Noam Scheiber wonders if CIT just got the same treatment that predatory mortgage-modders are doling out.

Sounds like another Lehman - do whatever you can to prolong the agony another day, another week. Good luck to all involved.

Karl Denninger rips The Washington Post's defense of Goldman Sachs (GS): "I know nobody that objects to making a profit. I know a lot of people who object to theft."

Congress should pass a law taxing bank bonuses 100% for the next 5 years. In this way the taxpayers, who provided the capital for current and future bank profits, will get the bonuses we so richly deserve. Congress should also level the playing field with deferred income for executives limiting it to the IRA/401K maximums the rest of us have to live with. Anything over that, no matter when it is paid out, is current income taxed at current rates. This is one more way the wealthy are able to shift the current tax burden to the rest of us.

Heidi Moore tries to understand Main Street's hatred of Lloyd Blankfein (GS), and its love of Jamie Dimon. The question's better than the answer.

Gee, could it be the transfer payment from the US Treasury to GS bonus pool?

Goldman's Success: Put Down Those Pitchforks

The profits are fine. The bonuses should go to the taxpayers, however since we provided the opportunity to turn the business around.

Jon Stewart Takes on Goldman Sachs [Video]

Moon Kil Wong observed, "Do banks deserve bonuses while they make money off of arbitrating taxpayer financed advantages that we gave them? Would they make profit solely off their prudence, intelligent judgement, and hard work? The answer is an obvious no."

If congress passed a law taxing bank bonuses 100%, the taxpayers would get these bonuses and it would help even the score a little, except, of course, for the millions of now chronically unemployed.

Jon Stewart Takes on Goldman Sachs [Video]

By the way, Goldman has always had a strong democratic leaning. Gosh, could they be a liberal organization?

American Enterprise Institute and Consumer Financial Protection

The AEI must be a mortgage broker organization. They confused me a little about "conservatives" vs. "liberals are elitists" and "educated and sophisticated elites" vs. who got stung most in the subprime and alt-a implosion. They seem to be saying that conservatives ("ordinary Americans") are not well educated and liberals are.

I thought it was precisely the "ordinary Americans who lacked financial sophistication . . ." that these products were designed to fleece and who flocked to these products precisely because they lacked financial sophistication. Do they really believe that it was doctors, lawyers, business executives, professors, and other educated elite who took out liar loans? Bull!

"So who will be able to get those more complex products and services? Not ordinary Americans, whose lack of financial sophistication will make the risks of selling to them too great for most providers." Isn't this the great lesson of the mortgage implosion: that indeed it IS TOO RISKY to sell these products to people who can't understand them.

Several times in my life I had to "suffer the humiliation" of filling out a mortgage application form, supply my employer's name and agree that it could be contacted to verify my employment, supply my income history to prove I could actually make the monthly payments. Whew! What's wrong with this? This is the only type of requirement that will bring any stability at all back to the mortgage market.

Stupid position.

The House of Representatives okays a bill to force GM and Chrysler to restore dealership ties cut in bankruptcy. The bill's future in the Senate is unclear: "When you have a bankruptcy, there are winners and losers,” which is "unfortunate, but that’s the way bankruptcy courts operate.”

The USPS would like to close post offices too but congress won't let them. Maybe some congressional committee can find enough synergy to merge failed dealerships with unprofitable post offices. Chrysler stamps anyone?

Unwise to Tax the Rich to Pay for Health Care

If the wealthy are taxed a few more thousand dollars a year, they will move their economic activity offshore. Ridiculous! There seems to be a one-sided argument regarding taxing wealthy people marginally more, ie., they will stop creating jobs and other beneficial economic activity. Well, if they deserve credit for creating jobs then they also deserve credit for destroying jobs which is what has been happening for the last 2 years. By reason, they are also responsible for the other detimental economic activity that's been going on. So let's be even handed about this. The wealthy giveth and the wealthy taketh. But do they giveth enough and are they trustworthy enough to do this without government encouragement?

The marginal tax rate argument and the paltry few thousand the some will have to pay is a deflection away from an inherently un-understandable tax code. There are far greater marginal rate hits - when you make $65,000 suddenly you're paying 25% marginally rather than 15% if you earn between $16,000 and $65,000, and so on up the ladder to 35%. I suggest that the huge 10% marginal middle class increase effects many more people in a much more material way than a 1% or 1.5% increase on the wealthy. None of the wealthy-defenders remark about the 6.2% SS tax REDUCTION that occurs at $106,000. No one seems to factor in all the tax dodgers hiding all sorts of stuff in Switzerland (possibly as many as 52,000 in one well known bank alone). Reading some of this dribble almost makes me go for may hanky worried as I am for the well-being of the wealthy. Believe me, they can take care of themselves without your help. Nottingham Sheriff Geithner and others are looking out for them.

Every tax increase is "unfair" to some to the benefit of others. In this situation, I would rather see people who can afford to do so pay a little more for a program that provides a very broad social benefit and ultimately a very broad economic benefit as well.

Should anyone really be upset with Goldman Sachs (GS) taking advantage of government programs to produce stellar earnings when we're still subsidizing those evil corn farmers? Joe Weisenthal makes the case for non-event-based outrage.

You're right there. Farmers, who tend to be "free market", "capitalism" supporters (whatever those terms mean any more) are the biggest welfare recipients in the country. I heard milk farmers just last night on tv complaining about how they're losing money producing milk because of the huge overproduction problem. Get this, one influential farmer wants a federal milk policy that sets minimum prices, production quotas, etc. What happened to all that bitching about Washington bureacrats? I guess they're not so bad after all if they help you.

Breaking with consensus, Bloomberg's Matthew Lynn thinks investors have no right to pry into Steve Jobs' health, or that of any CEO. "There are all sorts of things that can go wrong with a company. Shareholders can't be protected from every type of risk."

Gee, can we see his cat scans get his doctors' diagnoses? Maybe we can get all his doctors to testify to Bloomberg. Sorry folks, Steve Jobs' health is not a reality tv show.

Your medical problems are none of my business and neither is Steve Jobs'. People didn't know his medical condition was serious? Clue: when a workaholic like Jobs takes a 6 month leave of absence for medical reasons, it's serious. Oh, did I forget? He was previously cured of pancreatic cancer. What his condition is is his business to reveal or not. If anyone was unaware that it was potentially serious they weren't paying attention. And this is a basis for investigation and possible shareholder lawsuits?! Get real.

Regarding disclosure, don't you watch House? Things aren't always easy to figure out, nor their seriousness, nor their progression. Trust him and his doctors to reveal what is pertinent if anything. P.S. He owns more Apple stock than potential litigants do.