Archive - Feb 23, 2010

After a third sequential decline in unadjusted Case-Shiller housing prices, is it ok to come out of a contrarian shell and proclaim the government-subsidized home price appreciation rally dead? Afdter the unadjusted Composite-20 reading peaked at 146.7 in September, the index has slowly declined for 3 months in a row and is now at 145.9. The only good thing one can say is that the rate of decline has not accelerated. However, with just over a month left on MBS QE, we are not very hopeful for a second V-recovery to appear in home prices any time soon.

A delegation consisting of EU, ECB and IMF "experts" came to Greece, saw and said "more cuts." Greece, in turn, is doing all it can to soft circle enough support to come to market with a €3-5 billion 10 year bond issue, and has no option but to oblige. The troubled PIIGS member has so far proposed a 5.5% maximum cut in gross salaries to civil servants via entitlement cuts, while the EU is now suggesting an average 7% cut. How this will be accepted by Greece's already striking unions, whose protesters earlier barricaded and shut down the primary building of the Athens Stock Exchange, is unknown but will hardly inspire enthusiasm for wage cutting programs.

• States reported fifth consecutive drop in tax collections in Q4 (Rockefeller Institute)
• Harvard's Rogoff sees "bunch" of sovereign defaults (Bloomberg)
• German business confidence unexpectedly declines (Bloomberg)
• $1 trillion of debt has to be rolled in Europe in next two years (Telegraph)
• Deathbed of Keynesian economics will be in U.K. (Bloomberg)
• Greece not alone in exploiting EU accounting flaws (Reuters)

• Most Asian stocks rose, reversing earlier decline, amid speculation Dubai World will be able to fix its finances.
• German business confidence unexpectedly drops on coldest winter in 14 years.
• Obama unveiled a last-ditch $950B health-care plan.
• Oil falls for first day in six on forecast of gain in US crude supplies.
• Senate moved forward on a $15B job-creation package as 5 Republicans voted for the Democratic bill.
• US Treasury says consumer watchdog benefits banks.
• ABB taps emerging markets, guards cash to escape "thunderstorm".
• Brookfield Asset Mgmt is readying a bid to take a large ownership stake in General Growth.

RANsquawk 23rd February Morning Briefing - Stocks, Bonds, FX etc.

RANsquawk 23rd February Morning Briefing - Stocks, Bonds, FX etc.

President Obama's Proposal on health care "reform" is a far reaching plan that will cause financial havoc to the health care system specifically and to the economy in general. It, along with the plans passed by the Senate and the House, are so invasive that we will be forever mired in bureaucratic control of this most important segment of our lives. Think of the movie "Brazil."

Deutsche Bank AG is to assume the longevity risks of nearly 3 billion pounds ($4.6 billion) of pension liabilities from BMW’s U.K. plan. This is the largest deal yet in corporate longevity insurance, effectively doubling the size of the market. Will longevity swaps become the new age pension solution or will they offer a false sense of security?

The economic advisor to libertarian Ron Paul’s 2008 presidential campaign gives his views in an exclusive Hedge Fund Radio interview. The Republicans of the last administration weren’t “real” Republicans. The US government is a “cancer on the economy.” The Fed “has managed the economy into the ground.” Interest rates will skyrocket, stock and bond markets will crash, and more financial institutions will fail. Civil unrest is coming. Gold, commodities, and emerging market stocks will be the only place to hide out. You won’t be able to buy “a stick of gum” with a dollar.

Bait and switch ...