Archive - Mar 2009

Continuing the trend of disclosing the dirty laundry in Commercial Real Estate, I am presenting some raw data which the general readership should be made aware of before determining how fair (or not) any PIPP, TALF or other plan is to various beneficiaries.

Here is the summary:

As we've noted before, last month's housing numbers are far from being the basis for any bullish assumptions going forward. However some analysts seem to be using it as a springboard on finding other signs of hope; the boys over at Danske Bank have a bullish view and take the housing numbers in a much more positive light.

As we've noted before, last month's housing numbers are far from being the basis for any bullish assumptions going forward. However some analysts seem to be using it as a springboard on finding other signs of hope; the boys over at Danske Bank have a bullish view and take the housing numbers in a much more positive light.

The Office of the Comptroller of the currency is out with their much anticipated quarterly report summarizing all the recent trends and losses (would say profits but not much here lately) in derivative trading at commercial banks.

Here is the report's summary.

• Soros: Britain may have to seek IMF rescue (TimesOnline) [Who is rescuing the IMF?]
• FSA Stress Test shows Barclays does not need more help...
  

Unlike the administration, which deals in hope and promises, Zero Hedge believes that facts and empirical evidence tend to have a more justifiable reflection in securities prices. As such, I present a snapshot of the factual deterioration across the entire securitized CRE landscape, and the sad conclusion that with each passing day the inherent cash generating capability of these "assets" is becoming worse and worse. I hope to make this into a recurring piece every week.

As the financial world is losing one of its best and brightest advisory brains through David Rosenberg's impending departure from Merrill, we believe in spreading his gospel as much as we can, as his vision and instincts have saved many people (at least those who have found the contrarian in them to listen and act on his advice) their life savings. David has the uncanny ability of calling it like it is and it is our duty as responsible citizens to disseminate his words.

The week that was according to Dave

After BoA's IB tanked in Q3, '07 Ken uttered the infamous "I never say never, but I've had all the fun I can stand in investment banking at the moment." Quite a turnaround then...

Through this whole crisis, the conventional wisdom has been that the yen was somewhat more insulated to the crisis than other currencies, due to the inherently low levels of leverage in the Japanese economy (courtesy of the 90s). Much of the price movement since then has been attributed to ex-Japan macro factors; the "safe haven" theory, Japanese repatriation due to fiscal year end, open market actions by BoJ, etc.

Through this whole crisis, the conventional wisdom has been that the yen was somewhat more insulated to the crisis than other currencies, due to the inherently low levels of leverage in the Japanese economy (courtesy of the 90s). Much of the price movement since then has been attributed to ex-Japan macro factors; the "safe haven" theory, Japanese repatriation due to fiscal year end, open market actions by BoJ, etc.

...That the plane is back to crashing into the mountain. After vociferous pledges that business has never been more stellar, the big 3 banks are starting to hit retraction mode. Enter Jamie Dimon, who in a interview with the lovely Erin Burnett stated sheepishly and under his breath that "March was a little tougher." Talk about read between the lines understatements!

The man behind the Oak demonstrates that even despite his sage investor advice, he is also mortal.

What the U.S. economy will look like in 10 years is anyone's guess, however, it is fair to say that if Obama, in addition to being president, also moonlighted as commissioner of the MLB, then Jose Canseco, Barry Bonds, Mark McGwire and A-Rod would not only be swinging all day, but also juicing up on their bathroom breaks and twice on Sunday. Obama's fascination with the steroidal rejuvenation of the U.S. economy is astounding, however supply and demand is a little different than swinging a corked baseball bat.

What the U.S. economy will look like in 10 years is anyone's guess, however, it is fair to say that if Obama, in addition to being president, also moonlighted as commissioner of the MLB, then Jose Canseco, Barry Bonds, Mark McGwire and A-Rod would not only be swinging all day, but also juicing up on their bathroom breaks and twice on Sunday. Obama's fascination with the steroidal rejuvenation of the U.S. economy is astounding, however supply and demand is a little different than swinging a corked baseball bat.

The below piece, courtesy of Gorelick Capital, nicely summarizes the bull view on PPIP. The reasoning by author Chris Skardon is likely shared by the markets, at least over the past week, when no good news was too little, and no bad news was possible. While ZH agrees in principle with the near-term benefits and has in fact discussed these in length, it is the PPIP in context that should be considered, and just what the ramifications of the context leading to over 10 trillion in incremental US debt are, will be topic for the next post...