Archive - Oct 2009

• Asian stocks fall as bank loan-loss speculation raises valuation concerns.
• China's economy expands 8.9% in Q3, fastest pace in a year, on stimulus, lending.
• Euro rises above $1.50 for first time since August '08 on recovery outlook.
• Leading Index in U.S. probably rose for sixth month in sign of expansion.
• Russia warns of reduced access to credit, signalling cut in interest rates.
• Sept's regional, state unemployment rates climbed in 23 states and the District of Columbia.

The REIT space has seen share prices pop significantly in this extended bear market rally. This, along with a few financial shenanigans, seems to have masked the effect that a literal real estate depression has had on those entities which buy, sell, develop and hold real estate. The fundamentals and macro outlook are still horrendous, yet share prices have been elevated significantly. Ackman, from Pershing Square, has released his short thesis on the REIT Realty Income, and I throw my 22 cents in (it was 2 cents, but I levered up 10x), as well as offer another REIT with a greater cash flow problem...

When I testified on Parliament Hill last April, I knew it be a matter of time before pensioners would be protesting their cuts in pensions and benefits. As much as the images of Nortel pensioners taking it to the Hill disturb me, they are nothing compared to the mass protests we'll see all around the world in the future when the pension crisis reaches a boiling point. Politicians should take this as a wake-up call and act in the best interests of all citizens.

He was going to Europe for an extended period and my lawyer thought it would be a good idea after the whole New York Mag thing.

A rare interview with the woman behind the pseudonym behind the man behind the pseudonym.

Almost a month ago to the day, Silver Lake Co-CEO Glenn Hutchins revived an only briefly lost concept: The "Golden Age of Private Equity," with a quip to Reuters that “the financial markets may be on the cusp of a new ‘golden age’ for private equity...."  You needed only go to the Private Equity Analyst Conference a bit before to find that Benjamin Jenkins of Blackstone was caught pronouncing "private equity can thrive in the new world order," around the same time David Rubenstein chimed in with "...we're back."

Can someone please explain why Mr. Bove noted on CNBC that Wells Fargo is proving "itself to be a standout" in the banking industry (2:30 into the clip), that it would help push the market higher, and that is it the big winner in today's earnings derby, a mere nine hours before he ends up downgrading the company to a SELL? Perhaps, the SEC can advise on that particular conundrum.

Most market commentators attribute the sharp reversal of fortunes of the equity markets in the afternoon to a downgrade of WFC by Bove. That definitely is a factor, but what is a bit puzzling is that every bank earnings coming out are usually put under a lot of scrutiny, maybe not on CNBC, but definitely amongst the financial community. Today's late sell-off is more reflective of the paper thin liquidity out there and how trading is become a ping-pong match between high frequency traders.

Submitted By: Geoffrey Batt

No one rings a bell at the top?  Watch CNBC.  There may not be a better counterexample.   Late to just about every party, CNBC’s favorable coverage of a stock, commodity, ETF, etc., typically presages a turn and subsequent decline in the asset(s) in question.  Think wildcat oil in June 2008- to select one out of uncountably many examples.

Disclosure: I am long equities listed on the Iraq Stock Exchange, having made my first investment in January 2008.

Disclosure: upon learning CNBC’s Erin Burnett would spend the week highlighting ways to invest in Iraq, I threw up a little in my mouth.

There were no notable movers in the September BLS State unemployment report: the worst states were the usual suspects: Michigan, Nevada, Rhode Island, California, and South Carolina, while the states that have 8 people to share among them, North and South Dakota, Nebraska, Utah and Iowa, continued being the best performers.

If this is the kind of garbage data that moves the market, then fuck this shit. Click here for a primer on Dick Bove.

"There is a sense that if you make money you are going to give. Making money, however, is different from stealing money. If you steal the money, you are not expected to give it to a charity my friends. If you steal the money we will take the money back from you, by way of the government, and put you in jail. The American taxpayer in fact has given trillions of dollars, billions directly to Goldman Sachs so that Goldman can use the taxpayer subsidy to play a parlor game and pay themselves record bonuses." - Dylan Ratigan

Same old battle being played out by the Robots gunning "inflation" or "deflation" on a 15-min. chart in real time. Huge herds running back and forth, being spooked by various Fed Head jawboning, Central Bank threatening, financial channel chattering, etc.

Mark the date: October 29, 2009. It will be characterizied by a drop in futures for a few minutes followed by a rapid and inexplicable pop on no news, courtesy of last ditch attempt by the Fed to "liquify" the market thanks to $1.6 billion devalued portraits of George Washington. And poof, just like that... Treasury purchases are gone (until Bernanke wakes up on the wrong side of the bed and wants to see Dow 36,000).

This the skinny on PNC Bank. The "Off the Books" version, you know the stuff you will never get from the sell side or the popular media.