Archive - Sep 2009 - Blog entry

Senator "Johnny" Isakson from Atlanta wants to juice up the subsidy for home buyers. How much is this one going to cost us? Does the Senator have an axe to grind?

Buy a contango and high cost-of-carry burdened asset versus a stream of perpetual earnings? What planet am I from?

But the wizards of Wall Street remain undeterred. They will come up with new ways to model all risks, including systemic risk. Will the consuming public be fooled by their chicanery? I don't know about the consuming public, but I guarantee you that the pension parrots will be fooled by their chicanery.

A year after Lehman collapsed, what have they learned on Wall Street? Absolutely nothing. That's pretty much what I see on Wall Street and at the large "sophisticated" Canadian public pension funds. Behind the rhetoric, it's business as usual. Who needs risk management when the markets are on fire and you're looking to shoot the lights out?

The President asked the banks to do 'good'in his speech today. That isn't going to work. An old story of a bad deal.

Inflation is a possible but not a guaranteed outcome of what is taking place in the economy today. Deflation or a muddle-through economy with very low nominal growth are possible and probable outcomes.

Project Mayhem reviews the most important financial and geopolitical news of the past week and takes a look at the week ahead.

The SSTF pointed me to their web site. They provide information regarding the range of alternatives available to "fix" the problem. In my view they have come up with nothing that will work.

The growing divergence between lower 10 year Treasury yields and higher equity prices continues.

Natural gas price has spiked almost 60 % since Labor Day and prompted investors to believe a V-shape recovery might be near for the brutally battered U.S. natural gas market. However, don’t break out the champagne just yet until you learn more about two of the major factors driving this latest spike, Operation Flow Orders, and the trader's perspective.

As you have all read by now, Corus Bancshares went belly up on Friday adding yet another failed institution to the growing hall of shame. What makes Corus unique, however, is that they may have been the first failure with little to no delinquencies in their major loan portfolios.

I still think the best course of action is not to fight the tape, and of course, don't become fodder for the bulls.

The banking/ hedge fund/ private equity/ commercial real estate bubble is the Mother of All bubbles, but this is endemic to a culture that promotes excessive risk taking and rewards it with excessive compensation.

The stock market values companies based on earnings. Residential real estate is no different these days. So what's your home worth? Based on this simple calculation it may be lower than you think.