Gerald

The Abysmal Track Records of Moody's, Fitch and S&P

If the rating agencies were held to the same level of responsibility and transparency as public accountants things would be different. The easiest way to get a handle on them would be to ask them to function under the same rules of professional conduct as the public accountants: there are many similarities between the two particularly since both involve providing opinions on financial information. However this would force them to a much higher level of transparency and also require them to spell out clearly their principles for credit ratings. This could turn out to be an unpleasant surprise.

E*Trade to Customers: Your Money Is Safe

Most accounts in E-Trade are around the US$ 100K level so that the insurance schemes should provide enough protection. However if E-Trade were in financial difficulty, they would probably be bought by a foreign financial institution i.e. those foreign banks that provide FX and stock trading on internet platforms e.g. Deutsche Bank, Fortis, DBS, HSBC, BOC PRC, ICBC PRC. What about IB?

The Fed Rate Cuts: Do They Really Help the Economy?

Your analysis is insightful. What is needed is a young economist like Steven D. Levitt to come out and tell people that USA going into recession is part of nature and that it has many positive consequences. The existing behavior of the Fed is predicated on the notion that a recession must be avoided at all costs. Question is can it really be avoided or all that is happening is it is being delayed so that when it occurs it hurts a lot. It would be really sad if history repeats itself so that we go through another period of dreadful inflation and then need to find a man of stature like Paul Volcker to be the Fed Chairman to smother it out of the system.

Who's Failing Us With Bad Information?

The way forward is to resolve the valuation issues surrounding all the CDOs and other ultra complex fixed income derivatives. It is now apparent that these investments are more equity in nature rather than fixed income. If the credit ratings for these instruments were nullified, then equity valuation techniques could quickly be applied to value these instruments and their values determined accordingly. This will naturely involve some discomfort but then chapter on these difficult products could be closed sooner rather than later.

Sliding Dollar Turns U.S Into World's Discount Mall

At what point does the Federal Reserve become accountable for failing to protect the value of the US$? Nobody can stop economic cycles and so it is an understandable natural phenomenon for countries to go into recession periodically. However it would appear to be reckless to lower interest rates when interest rates are already low by historical standards and commodity prices are raging like fire. Money lost on real estate and subprime mortgages cannot be recovered and there is really no way to repair the situation unless we can go back in time.

Expecting China Medical Growth - Even if the 'Bubble' Bursts

Is there anyway to approach this medical growth this from a westerm pharma firm approach e.g. say Acomplia, Advair, Celebrex, Lipitor?

Comparing Bubbles: China vs. Nasdaq and Homebuilders

An interesting article. An important question is given that the RMB has exchange controls and the PRC stockmarkets presently allow very little foreign investment, one needs come up with a theory as to how global investment money gets into these PRC equity markets to initiate the bubble. Otherwise examing the history of open market activity may only provide limited guidance.

Is the Market Misreading the Fed?

Could Bernanke be skillful enough to cut the discount rate by 25bps instead of the fed fund rate? This would confuse the financial markets in an amusing way: he would be meeting the market half way so to speak. It would bring rate relief to those with mortgages yet it would force the banks to continue to be responsible for proper credit assessment. We will be in suspense until this afternoon.

Is the Market Misreading the Fed?

Could Bernanke be skillful enough to cut the discount rate by 25bps instead of the fed fund rate? This would confuse the financial markets in an amusing way: he would be meeting the market half way so to speak. It would bring rate relief to those with mortgages yet it would force the banks to continue to be responsible for proper credit assessment. We will be in suspense until this afternoon.

Is the Market Misreading the Fed?

Could Bernanke be skillful enough to cut the discount rate by 25bps instead of the fed fund rate? This would confuse the financial markets in an amusing way: he would be meeting the market half way so to speak. It would bring rate relief to those with mortgages yet it would force the banks to continue to be responsible for proper credit assessment. We will be in suspense until this afternoon.

What do Schwab and Bernanke Have in Common?

One aspect rarely spoken about Mr. Bernanke is that he has a long career ahead of him as our FED Chairman. It would pay him great dividends to think long term since he will have his job for many many years. A quick fix that leads to longer term pain is not to his advantage. Looking back to the Volcker era, trying to remove the inflation beast once it is entrenched in the US economy is a very punishing long term mission. Lowering interest rates will likely lead to a weaker dollar and thus lead to the possibility of hefty inflation. Not lowering interest rates may lead to a type of meltdown in certain sectors of the finance industry but this is by no means the apocalypse of the US economy. There will be short sharp pain that may last at most for two or three years. Short pain for long term gain is the better choice.

A Historical Perspective on Recent Bear Markets

Thank you for the article. However the pain and fear are probably in the fixed income and housing markets. Equities are likely falling due to margin calls on fixed income and housing assets. We are in unchartered territory: never has there been so much leverage been available for fixed income and housing assets. It would be interesting to get a handle the growth in leverage in these asset classes over the last 10 years and an estimate as to the average leverage ratio at this point.