Archive - Jan 29, 2010 - Blog entry

5-min VIX Charts ~ Intra-day Bottom & Close

A greater government involvement in the financial sector is not something I thought I’d ever ask for, but it has turned into a necessity in order to preserve, not destroy, capitalism.

Is Google Inc. (NASDAQ:GOOG) a Buy, Hold or Sell? Not knowing what kind of performance you’re paying for makes it challenging to answer. It would be just like asking, do I take the over/under in the Super Bowl without knowing the over/under line.

How to win the war against terrorism. Predator drones are turning the tide. It may all come down to the price of wheat. Afghanistan is a different story. Is this where our zero stock return is coming from?

The lead story this morning of ZH is "The Only Thing Better Than A Zero Hedge? Wells Fargo's "Never Lose" Economic Hedge", explaining more accounting shenanigans (if you read the links below, you will see that I have caught Wells in a few rather aggressive interpretations) related to MSR's. One thing that was noted was the inputs for valuing MSRs using interest rates as was extolled by management. Well...

The US Gov't can show 'profits' ad infinitum by endlessly EFT'ing money from the Treasury's savings account (at JPM) to the Fed's brokerage account (at GSCO) and vice versa. Or better yet, the Fed can pay the Treasury several times more by printing trillions of US dollars, buying companies on Wall Street, and achieving small dividends.

Thus, the so-called "profits" are NOT evidence that the US economy is doing well. Far from it, these profits are proof that the printers are working long hours. Moreover, the state's Dept. of Moral Hazard has taken upon itself Robert Wadlow-sized liabilities, which call into question the solvency of the entire American financial system.

Frustrated with hedge funds and private-equity investments, public pension funds are turning to one of the oldest investment strategies—using borrowed money to boost performance...