rosey99

Cut Ken Lewis Some Slack - For Now

Oops. . .Meant to say BofA-Merrill deal. Not
Citi.

Cut Ken Lewis Some Slack - For Now

Interesting, especially the comparison to Pandit at Citi. I would point out that an ongoing investigation into the Citi-Merrill deal may have played a role. We just don't know yet. I read that Lewis walked out the door with less than $200 million (plus or minus) altogether, and that means he is probably more of a laughing stock than ever to the Wall Street crowd. I think Henry "Hank" Paulson made a lot more than that in tax breaks alone when he left GS and went to Treasury. Compared to the puppetmasters in New York, the guy looks like a piker.

The Coming Consequences of Banking Fraud

This is provocative, if IMO a bit paranoid. I doubt very much that the required level of coordination is possible for long, or that the parties involved have the brains or discipline to pull off such a grand scheme. I do agree that something has got to give, I just don't think the capitulation will be planned in any sense.

It's looking more and more like a game of musical chairs, and I doubt the players have any real idea about when the music will stop. They just think they do.

I do agree that when they are discredited, there will be some really interesting "interpretations" of what was done. And of course, who benefited the most. Nice post, there is a lot of material here.

U.S. Judiciary Emerging as Investors' New Best Friend

Who'd a thunk it? Lawyers of all people. Maybe checks and balances will work after all. This is encouraging news, thanks for the post.

Four Reasons We're Headed Even Higher

Very, very interesting. The assertion that the economy, and by implication equity markets, run on "confidence" begs the question of just where the confidence comes from. Large systemic imbalances (i.e., trade deficit/dollar) remain in place, and a number of potential problems are lurking in CRE, residential real estate (ARMs, etc.), unemployment, and just how quantitative easing will wind down. Granted, we do not know the scope of these challenges, but it seems premature to say "it's all good."

I would suggest that when securities markets are running on confidence, without what IMO is a solid basis in fact, or even a basis in likelihood, we are really just hearkening back to 2007. Right now the markets seem to be pricing in a "V" shaped recovery, and I am unable to find reasonable basis for that thesis. At least for the moment.

Hence my belief that when the markets are rising on "confidence" for which there is little basis, THAT confidence is a key ingredient in a bubble. Until I have a better understanding of how the issues I not above will play out, I would rather risk missing the early upside than getting killed.

I also note that the author is looking at Dow 11,000 as a confirmation of recovery, suggesting that markets will accurately (and perhaps timely) predict real economic recovery. Please recall that recently markets had predicted endless credit growth, and then financial Armageddon, neither of which came to pass. To make a long story just a little longer, I don't see how the author's "four reasons" mitigate much of the future uncertainty, or our systemic issues. Looking at the economy through the lens of asset markets is a big part of how we got in this mess in the first place.

Tier 1 Capital Ratios of Large U.S. Banks

Just out of curiosity, I was wondering if anyone has an idea how the FASB rule changes relating to valuation of encumbered assets might affect the tier 1 capital ratios. I don't remember exactly, and I am too lazy to find out, just when the changes went into effect and if the numbers above reflect the rule change or not.

Anyone?

Lobbying Datapoint of the Day

Looks to me like these folks are better investors than we ever realized. So far they have already collected more than $350 billion. . .A nice return on their paltry $114 million.