Archive for March, 2009
Tuesday, March 31st, 2009
In February, OA published thoughts regarding the troubled state of the insurance industry. First we noted that insurers were seeking to change their regulatory capital requirements in order to avoid harming shareholders---say by cutting dividends or raising incremental capital. We also wrote that, at the corporate level, many companies are ...
Posted in insurance | 4 Comments »
Tuesday, March 31st, 2009
(Send links, videos, pics to optionarmageddon at gmail with subject “link” ... Thanks to Adam V.---$10---for his donation!)
Today's Must Read: Financial Rescue Approaches GDP as U.S. Pledges $12.8 Trillion (Bloomberg) Bloomberg has been keeping tabs on the size of the federal bailout. This article has a very handy table at ...
Posted in links | 3 Comments »
Tuesday, March 31st, 2009
According to the Boston Globe, the Pension Benefit Guaranty Corporation approved a more aggressive allocation of fund assets at just about the worst possible moment. (HT Michael W.)
Just months before the start of last year's stock market collapse, the federal agency that insures the retirement funds of 44 million Americans ...
Posted in bankruptcy, government spending, taxpayer issues | 4 Comments »
Tuesday, March 31st, 2009
January data for the S&P Case-Shiller Home Price Index was released today. I've created a chart and a table from the data in order to tell the tale. (Click to enlarge)
Despite the government's efforts to put a floor under house prices---printing money to buy MBS in order to hold down ...
Posted in housing | No Comments »
Tuesday, March 31st, 2009
Chicago's #2 paper is aiming to keep its print and online operations going, but it has one problematic creditor (Sun-Times):
[Chairman Jeremy Halbreich's] overriding goals are to sustain the company’s print and online news operations while “preserving as many jobs as possible," he said.
The company has one significant creditor -- the ...
Posted in bankruptcy, media | 1 Comment »
Monday, March 30th, 2009
(Send links, videos, pics to optionarmageddon at gmail with subject “link”)
Obama Says GM/Chrysler have last chance to survive (Bloomberg) The administration will continue funding GM for 60 days and Chrysler for 30 days to give them one last chance to cut costs. Debts have to be restructured; unfunded pension/benefit promises ...
Posted in links | No Comments »
Sunday, March 29th, 2009
John Gavin of Disclosure Insight has written a letter to FASB opposing its proposal to refine mark-to-market rules. Like John, I hope FASB sees the light.
It has been said that changing MTM rules would be like giving inmates keys to their own prison. Seems to me banks already have keys---to ...
Posted in accounting, banking | 9 Comments »
Sunday, March 29th, 2009
(Send links, videos, pics to optionarmageddon at gmail with subject “link” ... Thanks to Kay B.---$20---for her donation!)
Today's Must-Read: Welcome to America, The World's Scariest Emerging Market (WaPo) One of the best op-eds I've read recently. Back in September, OA published an op-ed in the Baltimore Sun comparing the U.S. ...
Posted in links | No Comments »
Saturday, March 28th, 2009
(Send links, videos, pics to optionarmageddon at gmail with subject “link” ... Thanks to Toby---$15---and Edgar P.---$5---for their donations!)
German Chancellor Counsels Against More Stimulus (FT) "This crisis did not come about because we issued too little money but because we created economic growth with too much money, and it was ...
Posted in links | No Comments »
Friday, March 27th, 2009
The tutorial below is from Salman Khan. It walks through one reason---outlined in OA's pop quiz earlier this week---that the Geithner plan is such a disaster: because of the huge incentive it gives banks to buy their own assets in order to transfer the risk of further writedowns from themselves ...
Posted in bailout, banking | 2 Comments »
Friday, March 27th, 2009
We're not quite as healthy as we thought we were. Oops. (WSJ)
J.P. Morgan Chase Chief Executive James Dimon said...that March was a little tougher than the first two months of the year....Bank of America...CEO Kenneth Lewis also said that March had been a tougher month for his bank. ...
Posted in banking, Economy, FDIC, leverage, politics, taxpayer issues | 5 Comments »
Friday, March 27th, 2009
(Send links, videos, pics to optionarmageddon at gmail with subject “link” ... Thanks to Bobby S.---$8---for his donation!)
Today's Must-Read: The Quiet Coup (The Atlantic) Baseline Scenario's Simon Johnson, former Chief Economist of the World Bank, explains why our crisis is so similar to emerging market implosions of the past: "to ...
Posted in links | 4 Comments »
Friday, March 27th, 2009
[Reader Note: Allow me to introduce a guest writer: Keith Allman. Formerly in the quantitative analytics group at MBIA and the principal financial group at Citi, Keith now runs the training and consulting firm Enstruct. He literally wrote the book on modeling structured finance cash flows. Recently he ...
Posted in banking, leverage | 4 Comments »
Thursday, March 26th, 2009
I will be updating this info each week in order to track fiscal and monetary policy from a bird's eye view. (For those interested, a tutorial regarding this data from last week's post.)
According to the Treasury Dept., Total U.S. Public Debt Outstanding increased $12.7 billion since last week.
(Click charts to ...
Posted in debt, Fed, inflation, taxpayer issues | No Comments »
Thursday, March 26th, 2009
(Send links, videos, pics to optionarmageddon at gmail with subject “link”)
Today's Must Read: Pension Glut Lies at Heart of Crisis Wracking Hungary (WSJ) Charles Forelle has been leading the paper's coverage of Iceland; this is a fantastic story about how pensions have bankrupted Hungary. Nothing destroys economies quite like entitlement...
A ...
Posted in links | 2 Comments »
Wednesday, March 25th, 2009
On the heels of Britain's failed debt auction today, our Treasury had its own trouble selling bonds. WSJ:
The indirect bid -- demand from domestic and foreign institutions, including foreign central banks -- for the $34 billion five-year Treasury note auction was 30%, compared to 48.9% from the previous auction in ...
Posted in debt, government spending, taxpayer issues | 13 Comments »
Wednesday, March 25th, 2009
(Send links, videos, pics to optionarmageddon at gmail with subject “link” ... Thanks to Mark K.---$9---for his donation!)
Successful Bank Rescue Still Far Away (Martin Wolf) "the government has ruled out the only way of restructuring the banks’ finances that would not cost any extra government money: debt for equity swaps, ...
Posted in links | 1 Comment »
Wednesday, March 25th, 2009
The Mortgage Bankers Association continues its downward spiral. Last summer OA wrote about the association's albatross: brand new HQs constructed, at the top of the market, by former President and CEO Jonathan Kempner. Not helping matters was MBA's trouble finding tenants to fill the 60% of the building they don't ...
Posted in housing, politics | No Comments »
Wednesday, March 25th, 2009
A good special from Frontline on runaway deficits.
There are lots of other goodies at Frontline's website.
Posted in debt | No Comments »
Wednesday, March 25th, 2009
Like his counterpart on this side of the Atlantic, UK Prime Minister Gordon Brown has called for massive stimulus from all governments in order to jump start the world economy. The Governor of the Bank of England took the unusual step of criticizing the PM, insisting that Brown act with ...
Posted in debt, Economy, government spending | 8 Comments »
Tuesday, March 24th, 2009
(Send links, videos, pics to optionarmageddon at gmail with subject “link” ... Thanks to Neil A.---$20---for his donation!)
Putting off Hard Choices with Easy Money (John Hussman) "Ultimately, funding the bailout of lousy assets comes at the cost of debasing our currency and selling our good assets to foreigners."
U.S. Seeks Expanded ...
Posted in links | No Comments »
Monday, March 23rd, 2009
Tonight China escalated its criticism of U.S. fiscal and monetary policy. The governor of China's Central Bank, Zhou xiaochuan, called for a new reserve currency to replace the dollar. FT:
China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled ...
Posted in Dollar, Economy | 8 Comments »
Monday, March 23rd, 2009
The stock market's positive reaction---best 10-day gain since 1938---should leave no doubt about Geithner's bank rescue plan: it's a mammoth taxpayer giveaway to investors. Or so the market believes it's going to be. Forthwith, a tutorial for those not quite clear about the mechanics of the giveaway.
(At the bottom, there's ...
Posted in bailout, banking, stocks, Wall Street | 30 Comments »
Monday, March 23rd, 2009
Kudos to Steve Kroft for asking the most important question: "is there some limit to the amount of money we can spend or print trying to solve this crisis? And are we getting close to it?" This is the question "stimulus" proponents always avoid.
President Obama's response: "There is. The limit ...
Posted in politics | 5 Comments »
Monday, March 23rd, 2009
Here's the press release from the Treasury Dept. I've created a simple chart below to explain the plan. Click to enlarge it.
There are a few things that should be highlighted, in particular the amount of leverage being provided by government and the fact that these partnerships will be able to ...
Posted in bailout, banking, FDIC, Fed, leverage, taxpayer issues | 1 Comment »
