Archive - 2009 - Blog entry

Audit the Federal Reserve bill gutted, EU monster rises from abyss, new strain of failflu emerges in Ukraine.

The recent bear rally has driven most of the solvent, semi-solvent and absolutely insolvent CRE stocks up, quite a few approaching 100%, while their macro outlook has deteriorated significantly, along with their fundamentals. Quite a few have actually acted in cahoots with the banks that held their increasingly worthless debt, having issued secondary offerings basically converting the bank holdings of debt that didn't have an icicles chance in the hottest portion of Hell of getting repaid, into worthless toilet paper, heretofore marketed as stock certificates. They have also begun offering this used toilet paper as dividends. If this isn't the sector screaming for me to come back and short it, I don't know what is.

India buys 200 metric tons of IMF gold.

Who's next?

So are problems with pensions only limited to the UK and Ireland? Of course not. There are governance issues plaguing private and public pension plans all around the world. Unless we get serious and address these issues, pension systems will remain vulnerable to flagrant abuses. Do we need a total collapse of pensions to rectify these issues?

The Obama Administration knows it didn't "create or save" 640,000 jobs but they use the Big Lie to justify the huge waste of taxpayer dollars through the $787 billion American Reinvestment and Recovery Act of 2009. They are desperate to justify the huge expenditure of taxpayer money. A day before they announced the 640,000 report, two AP reporters looked into the data of a previous report and found massive errors in reporting "created or saved" jobs.

China: Be cautious

Japan: Uh-oh ...

Failure to investigate and prosecute those responsible for bringing about the crisis may extend the crisis longer than any failure to spend more on stimulus...

We thought it is as good a time as ever to turn our attention back towards the hedge fund hot potato that is Freeport-McMoRan (FCX). Unfortunately, for longs, the technical picture appears to be rapidly deteriorating, developing an increasingly bearish profile ... this powder keg becomes especially apparent when viewed alongside an extremely high institutional sponsorship ratio of 79.8% ...

Check out this report on the Obama Administration's latest gift: free golf cart! This is from the Wall Street Journal. I really can't add much to this. Other than: Get one!

I'm following chatter of media and friends about the imminent doom that may come from Fed Funds rates increases, and that the market perceives a higher chance that the Fed pull away from zero interest rate policy soon. First, 2 Fed Funds charts showing no evidence the market perceives a risk that the Fed changes its policy near term. In fact, quite the opposite, bets are being put on that support extension of zero interest rates. The past 2 weeks have most definitely seen increased expectations for lengthening of current policy.

The sudden surge of optimism regarding the global economy resulted in the massive reduction in the costs of sovereign debt insurance. While the drop is not a surprise, the reasoning and the actions behind it surely are.

So, it looks like Lloyds and RBS are going to get broken up into smaller, more manageable pieces by the Brits. I think it is clear that something similar is needed in the US to dismantle the banking oligarchy. Could it happen here? Well, maybe the follow the leader dynamic that occurred during the misguided attempt to ban short sales will play out in this case as well.

An interesting report coming from McClatchy, concerning Goldman Sachs bets on the housing crash.

The deep thinkers at the Richmond Fed have come up with an analytic report on mortgages. The scary conclusion is that when the government is the provider of mortgages there is a significantly higher probability that the loan will default versus a private sector lender. In other words, Uncle Sam is a "soft touch" lender, no need to pay.That conclusion will not sit well with Congress, so it is unlikely that this report will see the light of day. I doubt that many in Congress could read it anyway.

The report breaks down each individual State's rules on defaulting on a mortgage. A must read for those thinking of going down that path.

Some 18 months ago, Verizon wired the Village of Croton-on-Hudson, New York, for FiOS, the fiber optic service that supposedly includes telephony, Internet access and, yes, high-speed HD television. But despite the fact that the Village of Croton has been wired for fiber for more than a year, no TV. Indeed, it now appears that VZ may be thinking of dumping the TV offering entirely.