Archive - Feb 2, 2009

Bloomberg has done a good (and lengthy) analysis of the worst year ever of the world's third largest sovereign wealth fund, the $300 billion Norway Government Pension Fund.

Luis Arenzana has written an open letter to the FT in which he claims that the old man may have finally lost a screw in the "risk assessment" category.

And keeps it on further downgrade review...

We view this Bloomberg report with great suspicion.

15:00 *U.S. TREASURY ANNOUNCES QUARTERLY BORROWING NEEDS
15:00 *U.S. BORROWED $569 BLN IN OCT.-DEC. QTR VS $550 BLN FORECAST
15:00 *TREASURY CASH BALANCE WAS $367 BLN DEC. 31, $259 BLN FROM FED
15:00 *TREASURY SEES $225 BLN CASH BALANCE MARCH 31, $45 BLN JUNE 30
15:00 *U.S. TREASURY SEES BORROWING OF $165 BLN IN APRIL-JUNE QUARTER
15:00 *HIGHER U.S. BORROWING THIS QTR LARGELY DUE TO FED BILL PROGRAM
15:00 *TREASURY TO BORROW $493 BLN THIS QTR VS $368 BLN NOV. FORECAST

As we have pointed out before, one of the best artistic investments in this depression is possibly the artwork of Geoffrey Raymond.

14:00 *FED RELEASES QUARTERLY SENIOR LOAN OFFICERS SURVEY
14:00 *FED SAYS BANKS REDUCED LIMITS ON LINES OF CREDIT
14:00 *FED SAYS NEARLY 60% OF BANKS TIGHTENED CONSUMER-LOAN TERMS
14:00 *NET 80% OF BANKS TIGHTENED COMMERCIAL REAL-ESTATE LOAN TERMS
14:00 *FED SAYS NET 60% OF BANKS SAW REDUCED BUSINESS-LOAN DEMAND
14:00 *BANKS CITED DETERIORATING ECONOMY IN TIGHTENING LOAN TERMS
14:00 *FED SAYS 90% OF U.S. BANKS INCREASED BUSINESS-LOAN MARGINS
14:00 *FED SAYS 65% OF BANKS MADE IT HARDER TO GET BUSINESS LOANS

A report released earlier by Goldman thinkers Krag Gregory and John Marshall discussing volatility and options strategy, is recommending loading up the boat on S&P puts. The GS "portfolio strategy" team (we assume this is not the guys on the prop side who usually execute the opposite of whatever the sellside guys preach) expects the market to retest the 750 low in Q1, pretty much what Lehman said over the weekend.

The stress of the "biggest bankruptcy in history" and all those fee applications must really be getting to him.

Barclays/Lehman chief market strategist Barry Knapp came out with a report this weekend predicting a 10% drop for the S&P in this quarter, with a low of 750 to come soon. Why the pessimism? As Barry succinctly puts it "We were recently asked - Isn't all the bad news out? Unfortunately, we believe the answer is - No."

According to CNBC. And this includes the previously mentioned moratorium on state tax refunds. Then again, in December people were saying Cali would be out of cash right now, so the governator seems to have eeked out at least one more month of life for his state.

Apparently Vermont has also joined the Death Watch fray.

Tomorrow the D(istreesed)-3 post their January sales numbers. It will come as no surprise as GM, Ford and Chrysler "shock" the market with the latest batch of horrendous news which may likely serve as a preamble to more Detroit-to-DC panhandling daytrips.

Is anyone else getting tired of all these headlines about how Obama and his learned senators will only give aid to banks (and bail out the Western financial system) if the latter increase lending to consumers and companies? With all due respect, this is really dumb for two reasons: consumers actually don't want debt (kinda goes against the whole increasing savings concept) and companies actually have easy access to credit.

Is anyone else getting tired of all these headlines about how Obama and his learned senators will only give aid to banks (and bail out the Western financial system) if the latter increase lending to consumers and companies? With all due respect, this is really dumb for two reasons: consumers actually don't want debt (kinda goes against the whole increasing savings concept) and companies actually have easy access to credit.