Archive - Nov 2009

• APEC leaders back China's anti-protectionist stance, avoid currency debate.
• Asia stocks, currencies rise on APEC pledge to continue stimulus; Dollar drops.
• Euro gains a second day as recovery signs boost demand for risk.
• Japan’s GDP in Q3 rises 4.8% - higher than expectations, on rebound in domestic demand.

This is a reposting of part on of an article I published on my blog in October of 2007, over two years ago. Enjoy!

The land recession, as foretold over two years ago, the Reggie Middleton CRE short list - round two, and the macro argument behind why most pundits are actually still too optimistic regarding CRE

On September 30, 2008, the Treasury issued an edict innocuously titled "Notice 2008-83," published in the equally innocuously titled "Internal Revenue Bulletin 2008-42." Perhaps it is just our paranoid side, but we suspect you could return the country to the gold standard in "Internal Revenue Bulletin 2009-63" and no one would catch on for 6 months. Add to this the fact that Congress, and the rest of the planet, was already quite literally possessed by the upcoming vote on Emergency Economic Stabilization Act of 2008 (the underpinnings of what would later become the Troubled Assets Relief Program or "TARP") and it isn't hard to see why the "notice" went, ironically, somewhat unnoticed.

It shouldn't have.

"It wasn't a bow, exactly. But Mr. Clinton came close. He inclined his head and shoulders forward, he pressed his hands together. It lasted no longer than a snapshot, but the image on the South Lawn was indelible: an obsequent President, and the Emperor of Japan."

As one fellow blogger that I have the utmost respect for put it: "Did you catch the bit in boldface about 'tapping' federal retirement funds for short-term cash flow? Sounds so casual, so innocent, don't it? Think about it, though. Unlike private pension funds, whose trustees have a fiduciary duty under the ERISA Act to safeguard the interest of beneficiaries, fedgov pension funds are mere slush funds for politicians to grab at will. Under the sordid conflicts of interest which are tolerated within our imperial government, the managers of Social Security and federal retirement funds subserviently hand over their reserves to our insolvent government in ad hoc, 'we'll pay you back when we can afford to' transactions. In a private-sector pension fund, such malfeasance would land them straight in jail.

But then, government is all about granting itself the right to commit acts which are illegal for its subjects -- such as the Federal Reserve's 96-year-long currency counterfeiting operation. When the sovereign itself is dishonest, openly bilking its own pensioners, it is idle to talk of 'reform.' Organized crime is not amenable to reform. Either you end it, or you trust your security to the nebulous notion of 'honor among thieves.' Good luck with that!"

When Obama sets foot in China for the first time, he will confront a dramatically altered balance of power between China and the United States. This seismic shift is driven by China's astonishing economic growth over the past two decades and has accelerated during the global financial crisis. Its 9% to 10% annualized GDP growth rate in the past two and a half decades is unprecedented in world history.

Anyone advocating for war to help our economy is mistaken.

Everything you ever wanted to know about the credit rating industry but were afraid to find out.

After the New York Times came out with a very ingenuous piece of "objective" fluffery, we have littel to add except to bring readers' attention to our initial thoughts on Mr. Cohen and his place in the Wall Street parthenon.

H. Rodgin Cohen's (Failed?) Quest To Backstop Every Bank... Ever (And Usurp Geithner's Throne)

Lately, Goldman has been extolling the virtues of its theological affiliations and humanistic aspirations to, well, high heaven. Curious to dig deeper through the firm's purported philanthropic efforts, we decided to take a detailed look at the 2007 and 2008 tax records of the charitable Goldman Sachs Foundation. We will not comment on the performance of the actual Foundation: to the chagrin of many needy children who look up to the St. Goldman cathedral in anticipation of a generous holiday season, the Goldman Sachs Foundation has lost gobs of money in the past two years: the fund started off with $275 million in 2007, $269 million in 2008 and ended the year with $161 million. Of course, it is Goldman's prerogative to trade with its money as it desires: while this loss is deplorable, its only outcome will be that fewer Cap 'N' Trade propaganda initiatives will get the due "charitable funding" courtesy of Goldman. Yet what the foundation's tax record do provide, is a very unique and open glimpse in the myriad trading patterns of Goldman's proprietary trading operations... And boy does the firm trade.

While not there yet, the indicators are heading in the direction that one would expect to see at a market top.

"The Fed’s policy of maintaining low interest rates together with the weak dollar posed a threat to the global economic recovery. It is boosting speculative investment in stock and property markets and will pose new, real and insurmountable risks to the global recovery and particularly to the recovery in emerging markets. The situation has already encouraged a huge dollar carry trade and had a massive impact on global asset prices." Liu Mingkang, China Chief Banking Regulator