If U Say So

What's Another $1.15 Trillion?

I'm working on my wall street definitions. A bull market is a long term uptrend. A bear market is a long term downtrend. A bear market rally is a short term rally within a long term downtrend. A dead cat bounce is an even shorter term rally (1 or 2 days max) within a long term downtrend. So what is a sucker rally? A rally within a long term downtrend where the buyer of new long positions believes he or she is buying into a new long term uptrend?

What's Another $1.15 Trillion?

Trillion here, a trillion there.....pretty soon we'll be talking real money.

Obama: Rush to Judgment

I don't expect this hyper-spending will go on for more than another 18 months at most. Not that this administration will suddenly become more fiscally prudent rather fatigue will be setting in with the American electorate. We have a deep recession, a real estate market that will be in the dumps for years beyond the rest of the economy, mega pork barrel spending, the card check bill (being voted on today), and we're about to enter into what will turn into the most contentious debate for universal healthcare. In 18 months the writing will already be on the wall for the 2010 elections and we'll see a shift in the makeup of Congress.

5 Ways to Stimulate Innovation and Restructure the Economy

We actually are already instituting government planning in the field of energy. The Obama administration has chosen the path of picking the winners and losers. No matter that government planning of this type has served up a batting average of .000 in the past. The past is the past and this administration says they know what they're doing. The American voter has apparently agreed, and surely what will be will be.

Prison Terms Might Be the Future for Some Bank Executives

I don't know either the government nor the public is quite getting it yet. Consider the fact that Tim Geithner was till recent, interviewing Annette Nazareth for a top position at the Treasury. Annette Nazareth joined the SEC in 1998 as senior counsel to then-Chairman Arthur Levitt, later directing the Division of Market Regulation. While in that position, it was she who created the voluntary program intended to supervise large investment banks including Goldman Sachs, Morgan Stanley and the now-defunct Bear Stearns and Merrill Lynch. The program was canceled in September as the financial crisis erupted and the remaining investment banks converted themselves into bank holding companies.
GEITHNER STILL DOESN'T GET IT.
As for the public, virtually every politician who had a hand in blocking oversight of Fannie Mae & Freddie Mac are not only still in office but are heading up the Senate and House banking and finance committees. This is what we can call changeless change.

U.S. Dollar: The Best of Times, The Worst of Times

Good article. I sense problems in Europe will be catastrophic for one or more of the Eastern European states, Unfortunately, a failure there will have some pronounced effects among some Western European banks. What makes this especially bad is the large banks of Western Europe are such large share of the overall market in some countries. The dominoes might really start falling if Western Europe doesn't get a handle on this situation fast.

Why Did Geithner Duck the Question?

While its true that ducking questions doesn't instill confidence, saying.........

"Asian Central banks have reduced their holdings of Agency debt by $70 billion in the period 7-12/08. That trend is continuing in the first quarter of the year. At this time it unclear what surpluses the Asian investors will have in the next 24 months. What surpluses they may have could be directed to their domestic economies, reducing their ability to acquire our bonds. They also do not like the fact that Treasury yields are near zero in the short term and lower than inflation in the long term."

.....doesn't give me great confidence either. Of course, the purpose of the author's column is to express his own lack of confidence in Geithner's plan.
I don't have much confidence in it either but if its the course they're going to take, ducking questions which would otherwise shoot additional holes in the plan is to be expected if you want to have any shot at all of success.

Make Mortgage Bonds Tax Free

Sounds like a no-brainer, but we can't forget that these mortgage bonds were securitized and sold worldwide. So we might see some pick up in demand here in the states which would prop up prices somewhat worldwide, it doesn't rectify the reason these instruments are so illiquid. Its called transparency.When its figured how to universally score these securitizations according to likely foreclosures, we'll have a market but not before.

Looming Currency Devaluations

On Feb 28 08:38 AM know nothing wrote:

> Maybe we need to change the bankruptcy laws, so people can file every
> 2 years. Then lets change the the way we determine a person risk
> in the credit rating agency's system. That way people can have a
> clean slate sooner, So then we can all borrow more money, and keep
> this economy going. That's just wrong! and That's scary!

But it would make for an entertaining horror movie!

The Economy, And Why It's Taking So Long to Fix It

The bottom of the real estate bubble is entirely impossible to figure. On the one hand we have plenty of bank owned homes in inventory. We have owner occupied homes where people are deluding themselves regarding the true value of their own home, unwilling to lower their price. We have people with funds to buy into the real estate market but comfortable waiting for the market to go lower We also haven't yet reached peak unemployment which should force many more out of their homes before its all said and done. I live in California where unemployment is now over 10%, and the state is raising taxes, while the bubbles in home values are as large as anywhere in the nation. It seems to me new home construction will entirely disappear due to the relatively high cost of materials compared to already built homes which might see pre-2000 values in the next couple of years.

Looming Currency Devaluations

So, you're saying to forget currency trades and then in the very next and only sentence state that other countries won't have money to buy treasuries. Why do these two statements seem like they should come from two different people?


On Feb 27 03:05 PM Chris B wrote:

> Forget currency trades! The writing is on the wall that Japan, Europe,
> and China will have a lot fewer dollars with which to buy the coming
> tsunami of treasuries.
>
> Maybe I should double-down on TBT. I'm already up 14% in < 2 mos.

The Benefits of This Recession

The full felt pain of a recession has the potential to alter our saving habits in good times. However, that potential hasn't been realized because we haven't been accepting the normal business cycle. We elect politicians who know the health of the economy is number one in the minds of Americans. Therefore, if elected while we are in a recession, the populist move is to get us out as fast as possible. If elected while in good times, the populist appeal is to extend the good times as long as possible. Populist appeal is steering our economic present and future. This is a recipe for disaster.

Looming Currency Devaluations

Its rather ironic that this same Congress that has informally labeled China a currency manipulator and in need of revaluing the Yuan upwards would be shooting ourselves in the foot with the aftermath necessary selling of U.S. treasuries. Of course, our bright politicians, Chuck Schumer, Barney Frank, Chris Dodd, and Barack Obama don't yet understand banking and economics regardless of the positions they retain in the government. Amazing!!!

Tell Congress 'No' on the Trader Tax

Why aren't we applying the tax to home loans? What actions committed by Countrywide mortgage, Ameriquest, New Century, Washington Mutual, Delta funding, and Homebanc corp deserve no taxing consideration? I can answer that. They're already suffering market annihilation, and how would a tax bring back the real estate market? True, but how about the stock market? How has stock and bond trading contributing to the demise of the real estate market? Certainly the trading of mortgage backed securities has been an influence, but will taxing transactions help that market? This is just misguided populism, as best served up by a Congress always looking to score political points even if they will carry a detrimental reaction.
Some have posted that traders' volume doesn't contribute anything worthwhile to investing. I disagree. Volume brings smaller bid/ask spreads. On a 1000 share investment, 5 cents is $50. So you won't just be paying the tax, but also run the risk of a bigger spread as well. One only needs to look at the difference between a 1,000,000 avg volume stock and a 50,000 avg volume stock.

Manitowoc: Purely Speculative... For Now

Well, broke the 2003 lows and 1998 lows, a few more pennies will get us 1997 lows.......then we're looking for early 1995 lows of $1.60. I'm not making a prediction but find the lack of buying at any price very telling.