Archive - Oct 20, 2009
What's Wrong With America: Part I
Submitted by Econophile on 10/20/2009 23:12 -0500If you moved music stands at Carnegie Hall for a living, you might think you were lucky to get the job. You get to work with the some of the greatest musical talents of our time. And, the work isn't that hard. Maybe even fun to be around all that genius. But what if you made $530,000 a year doing it. Now, THAT would be fun. Maybe board president Sandy Weill doesn't think that's so much. After all, it is the Big Apple.
Biden: "It's a Depression For Millions of Americans"
Submitted by George Washington on 10/20/2009 18:07 -0500What do you think?
PIMCO Dumps $80 Billion of Fed-Sponsored Agencies On Taxpayer's Lap; Makes Over $1 Billion
Submitted by Tyler Durden on 10/20/2009 17:16 -0500
As everyone else has been cheering the revival of the housing bubble, one person has been busy offloading a significant portion of his exposure to housing: Bill Gross. And the direct sponsor of billions of dollars hitting Mr. Gross' Wells Fargo banking account, why, the US taxpayer of course, courtesy of the Fed's printing press which continues keeping prices artificially high. With the Fed en route to purchase nearly one and a half trillion in Agency and MBS paper (for now), it has found eager sellers in the face of PIMCO. MarketWatch reports that PIMCO sold $30 billion in agency paper in September alone, and has sold over $80 billion year to date.
Patrick Parkinson: A Case Study in How to Get Promoted at the Fed
Submitted by EB on 10/20/2009 16:37 -0500Track the career of the man who in 1999 testified to Congress against derivatives regulation on behalf of the Fed and PPT, only to recant in 2008, then become Fed's Director of Banking Supervision.
Weekly ABC Consumer Comfort Index Drop To lowest Since July; -50 Reading
Submitted by Tyler Durden on 10/20/2009 16:20 -0500
The most recent weekly ABC consumer confidence index number is out, and at -50 it is the lowest reading in exactly 3 months. Surprisingly, consumers are not keeping their confidence in lockstep with the value of their burgeoning E-Trade accounts. What next is up the administration's sleeve is anybody's guess.
Daily Credit Summary: October 20 - CAT and Dogs
Submitted by Tyler Durden on 10/20/2009 15:39 -0500Spreads were broadly wider in the US as all the indices deteriorated (with IG just underperforming HY as intraday ranges remained low but sentiment was definitely more skewed to the widening side). The last week or so has seen a shift in the relative-strength between debt, equity, and vol and based on this we would expect HY-IG decompression in the short-term and equities to underperform credit here (for equity guys a sell the rally rather than buy the dips mentality in stocks short-term).
Fed Pressure Increases As Merkley, Corker Introduce Legislation To Audit The Fed, Protect Taxpayer Dollars
Submitted by Tyler Durden on 10/20/2009 15:28 -0500The Federal Reserve Accountability Act would require the GAO to audit all remaining emergency lending programs not already subject to audit. To protect against the risk that disclosure of the participation of particular institutions could disrupt markets, the GAO would be required to redact the names of the specific institutions. Names would, however, be made available one year after each emergency program is no longer used. In addition, to encourage greater accessibility for the average taxpayer, the Fed would be required to place these GAO audits along with additional audit materials on its website under a new “Audit” section.
Fitch Expects CMBS Loss Severity To Rise Markedly Next Year
Submitted by Tyler Durden on 10/20/2009 15:17 -0500As anyone who has spent even a day looking at securitization tranching or CDS trading will tell you, there are two critical components to any investment that involves risky fixed income: cumulative loss probability and loss severity: the first tells about how likely any given security is to default within a given amount of time, while the second determines what the final recovery will be assuming there is an actual even of default. The two are usually tied in very closely, as any (forced) delays in reaching a default state usually come at the expense of exhausting any underlying asset value (and in some cases being primed by additional layer of debt which get a first look on assets in the case of liquidation).
California AG Goes Postal On Caruso-Cabrera
Submitted by Tyler Durden on 10/20/2009 14:01 -0500After having been invited to appear on CNBC to discuss the litigation launched against State Street for what on the surface at least appears rather damaging allegations (and, in honesty, something that does not come as a surprise to anyone on Wall Street), the California Attorney General is greeted by this intellectual pearl from the woman who alleges bloggers tend to generically fall in the "idiot" camp. Michelle - while the blogosphere can not made any counterclaims yet, it is quite nice of you to open your mouth and do it for us:
Hussman: Average Americans Are Getting Scalped So That Bondholders Can Be Saved from Taking a Haircut
Submitted by George Washington on 10/20/2009 13:55 -0500The government rescued bondholders so they wouldn't have to take a haircut.
Everyday Americans? We've been scalped ...
Full Text Of Senator Schumer Letter To Mary Schapiro On Dark Pool Regulation
Submitted by Tyler Durden on 10/20/2009 13:37 -0500"As the Commission considers the treatment of ATSs, at this week’s open meeting and beyond, I respectfully ask that you consider the proposals outlined below to ensure that ATSs, while continuing to provide beneficial competition to registered exchanges that directly and indirectly benefits retail investors, do not undermine the fairness, transparency and integrity in our markets that the Commission has worked for so many decades to foster." - Sen. Chuck Schumer
Moody's Leak Disclosed, Other Potential Compromised Data Identified
Submitted by Tyler Durden on 10/20/2009 13:15 -0500The source of Moody's latest public humiliation in the matter of the Hilton Hotel LBO information leakage to Galleon, has been identified as Deep Shah, an analyst in his mid-twenties, who has since left the company, and is rumored to be back in India. A casual glance at Moody's reports that list Shah as an author discloses numerous other potential deals in which the former Moody's employer may have leaked information.
After Making A Public Ridicule Showcase Of The SEC, Judge Rakoff Set Sights On Rajaratnam
Submitted by Tyler Durden on 10/20/2009 12:39 -0500The man who should get a medal for singlehandedly telling the SEC to stuff it, has been assigned the one case that the entire hedge fund community will be following with great interest: that of the SEC/US Attorney vs. Galleon Management. And if Judge Rakoff's prior conduct is any indication, hedge fund portfolio managers just added another couple of grams to their daily endogenous cortisol release levels.
Obrigado Brazil!
Submitted by Tyler Durden on 10/20/2009 12:00 -0500We have complained over the past few months that there is simply way too much liquidity in the system, and that this is creating asset bubbles all around the globe. While this is quite obvious looking at the performance of the S&P 500, no matter what you may hear on CNBC or from your mutual fund manager about fundamentals supporting this move, the phenomenon has been exacerbated in emerging markets. It makes sense after all. Given that the crisis was rooted in the US and many issues haven't been seriously dealt with other than putting a little bit of lipstick on the occasional pig, a lot of money has been going abroad with the USD weakening, and emerging or commodity currencies screaming higher.
Why Was Paulson's June 2008 Meeting With Goldman's Board Purposefully Kept Secret By The Treasury?
Submitted by Tyler Durden on 10/20/2009 11:49 -0500According to Andrew Ross Sorkin's new book, which is out today, the Treasury department, and Hank Paulson in particular, have some new disclosure issues to discuss next time there is a hearing on matters of the financial crisis. Sorkin points out that in June 2008, at a time when Goldman's Board of Directors was in Moscow for a meeting with Mikhail Gorbachev, then Treasury Secretary Paulson decided to invite the entire BOD to his hotel suite in a meeting that would be "off the record" as it was considered a social event. Among the events discussed were: economic forecasts, the prospects of banks blowing up (like Lehman), as well as previews of his upcoming speech. How this occurred in an uncalendarized meeting where there was material disclosure, boggles the mind.





