berated

$59 Billion Dubai Debt Default Could Have Much Wider Implications

Calm before the storm, I fear. And, we really don't know how *bad* it's going to be....

TIPS Are a Bargain Compared to Treasuries

While I like the concept behind TIPS, I'm finding it difficult to muster sufficient faith in the "owner" of TIPS (in case it's not abundantly clear: the US Govt). Knowing they can change the methodology of calculating the CPI (as they have done in the past) gives me pause. Better to put your money in other asset classes that will thrive or maintain in an inflationary environment....

The SEC Surrenders to the Oil Industry

So, after reading Salmon's post and von Altendorf's report, sentence construction what you choose to comment on!? Interesting....


On Nov 20 02:49 PM Tony Petroski wrote:

> From the author:
>
> "What are the consequences of allowing multi-billion-dollar systemically
> important multinational corporations to report their assets using
> proprietary mark-to-model tools involving discredited Monte Carlo
> simulations?"
>
> My answer: Huh?
>
> His answer: "I think we all know the answer to that one."
>
> Didn't they have any English teachers at Cambridge or Harvard?

Oct. Housing Starts: -10.6% to 529K vs. +1.7% to 600K expected, and +0.5% to 592K in September (revised from 590K). Permits -4% to 552K vs. +0.9% to 580K expected and -0.9% to 575K last month.

Just curious: how 'independent' is the housing starts number? If you buy into the idea the markets are manipulated, why can't the powers-that-be also influence other key metrics (or influence them more strongly if they're already influenced)?

Citigroup's (C) SEC filing today says CEO Vikram Pandit's salary stays at $1, with no award of "stock salary."

Pandit, taking a page from GS' Lloyd Blankfein, also apologized:

"We're truly sorry we weren't able to game the system the way those bastiges at GS did! We're sorry. Really."

Goldman Sachs' (GS) PR initiative takes another step, as sources say the bank is teaming with Warren Buffett to provide assistance to 10,000 small businesses. The program, which would range from counseling to funding, could be announced formally today.

Hey, God wants even small companies to have insurance. Lloyd & Co are just doin' the Big Man's work....

Micropayments Data Point of the Day

Interesting; this supports my own experiences when faced with the decision purchase wifi on a plane. I'm wondering if airlines would see more buyers if they added it as an option while buying a ticket (much like they offer seat upgrades or trip insurance)? Or, sold subscriptions or set quantities of access (and at a *reasonable* price--reasonable being $1 - $2 per flight).

Dow Hits New Bull Market Highs

"...the Dow just hit a new intraday bull market high."

Based on valuation? Can't be.
Based on speculation? Ya you betcha.

"It's like deja vu all over again" - (h/t Yogi Berra)

Unemployment: It's Even Worse than You Think

This morning when I walked down to the mailbox to get the paper, I noticed the creek was flowing uphill, leaves were fluttering back up to the very trees that only last week dropped them, geese were migrating north in an inverted "V" formation, and I was almost brained by a flying pig. "Huh", I thought, "another typical day in bizarro world...."

Consumer Credit Decline Continues

There's absolutely nothing wrong with individuals saving more; in fact, it's highly desirable.

But, any recovery we hope to see is predicated largely on consumers spending like they did in the past (almost 70% of our economy is/was comprised of consumer spending).

This is an oversimplification, but It would appear that we can't have both (save & spend).


On Nov 06 07:41 PM Raider_Luke wrote:

> I don't get it. What is so wrong about US consumers deleveraging?
>
>
> This is what they SHOULD be doing. Save more, borrow less, strengthen
> their balance sheet for the future.

Unemployment Above 10%

That appears to be a pretty compelling connection between the S&P growth and high unemployment and gives hope that we'll see something similar in the future. However, a few questions about "then & now" occur to my financially naive mind:

- how available was credit back then?
- what was the ratio of mfg to service sectors back then?
- what was the cost of raw materials back then?
- what was the ratio of our debt to GDP back then?
- were we in an inflationary or deflationary environment back then?
- how much exposure / uncertainty existed in financial sector re derivatives back then?

There are more questions to be sure, but you get the point. We'd need a lot more data before we can make educated guesses about the future (and even then, it may not matter due to the "New Normal").

Another Dip in the Earnings Beat Rate

Cetin finally has some competition as "Most Annoying Poster" on SA....

Superb economic summary of October in graphs. (Calculated Risk)

From reading others' works, it appears the market has priced in very optimistic 'recovery' GDPs (eg, 4% - 5%) over the next several quarters. However, almost half (1.66%) of the Q3 GDP recently released (3.5%) is due to Cash-for-Clunkers (aka govt stimulus). To be sure, programs like these get money (taxpayer money at that) into the economy, but it's hard to say it's creating actual 'growth'.

What happens when the govt stops pumping money into the economy? GDP falls and so will the equities markets as investors look for safer havens. That alone will comprise our second leg down. I don't think we're near the bottom at all....


On Nov 01 11:07 AM Stone Fox Capital wrote:

> Exactly. So how would a double dip be possible? We're still scraping
> along the bottom leaving very little room to drop and a lot more
> room to run.

Sources say Goldman Sachs (GS) stands to earn a $1B 'make-whole payment' from CIT Group (CIT) if it files for Chapter 11 or otherwise terminates a $3B financing facility extended by Goldman last June. On the other hand, U.S. taxpayers stand to lose the $2.3B the Treasury paid to purchase preferred shares in CIT.

Call me cynical, but I think we all know who's going to get the money....

10 Top Oil and Natural Gas Exporting Countries

Thanks for the article/chart; very interesting to see the relative rankings.

And, just a note to those not already aware of it, SU expects to complete the acquisition of PCZ by Aug 1.