Archive - Aug 30, 2009 - Story

• Japan democrats win landslide in historic election (Reuters)
• As Germany's Angela Merkel poised next on the chopping block (Bloomberg)
• Must read: REITs racing to bankruptcy (Contrarian Profits)
• Alan Abelson: Sometimes a great nation (Barron's)
• World stocks controlled by a select few (Global Research)
• Russia's perspective on America: The new bourbons (Pravda)

While the capital markets debate has recently shifted to a discussion of who is right: whether equities, surging higher in expectation of something close to Zimbabwean hyperinflation, or the bond market, where yields have been declining, indicating the much more rational credit world is seeing deflation as the norm for a long time, a different perspective of this divergence can be witnessed by comparing treasury curve flattening versus commodity price movements.

Tishman Speyer's 2006 acquisition of Stuyvesant Town for $5.4 billion apparently is about to turn terminally sour. The "biggest deal for a single American property in modern times" which never managed to be profitable from day one, is on the verge of completely exhausting reserve accounts tied to $3 billion of securitized accounts.The premise - take the 11,227 rent-stabilized units apartment complex and convert them to market-rate. Alas, the timing could not have been worse due to an implosion in the NY rent market, coupled with legal difficulties - to date only 4,350 of the units have been converted to market rate, while the remaining rent-controlled units will likely increase in number due to a recent court ruling.

The US bond market is 2x bigger than the stock market (counting the value of all US bonds), and, there are less idiots running around. Since most bonds trade over the counter—obviously we have the Tbond futes—you better know what you are doing.

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