Those who will not make it

http://www.nowpublic.com/style/list-retail-store-closings-us
Nice list of the stores that have closed so far. I would expect this list to expanded in the first Q1 since it is the worst time of the year for reatil stores.

Treasury Department has committed nearly $10 billion more than the $350 billion

http://online.wsj.com/article/SB123068292824744097.html

Funny, only the government can commit more money then it has and not be called illegal. If we did this we would go to jail for Check-kiting.

China problems mount in China

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=205627bf-ef00-4995-8866-910eb7d6ce45

More sings of trouble for china.

Russia

http://www.cnbc.com/id/28429975

More problems caused by the slide in oil prices.

Vegas rolls a 2

http://www.time.com/time/business/article/0,8599,1868932,00.html?cnn=yes
Looks like tough times ahead, I see huge profit in shorting in Wynn.

GMAC and Pimco

http://www.bloomberg.com/apps/news?pid=20601087&sid=aTNWiojvYf.E More details about GMAC's bailout are out and one has to ask, is PIMCO the smartest player? Twice they bet the government would blink and they did.

Oil causing issue for Venezuela

http://www.cnbc.com/id/28401097/for/cnbc/
The longer we are below $60 the more problems we are going to see.

Japan falls of a clidff

http://www.cnbc.com/id/28387318

Production is falling off a cliff.

The outlook is also grim.

More bad news for Q1

SEC and COX

http://clusterstock.alleyinsider.com/2008/12/secs-cox-i-didnt-want-that-stupid-short-selling-ban-but-paulson-made-me-do-it
Whatever. You are the guy in charge. Man up or get out.

Happy Holidays

http://www.calculatedriskblog.com/2008/12/christmas-present-for-ubernerds.html
Hat tip to CR.

GMAC dodges a bullet

http://www.google.com/hostednews/ap/article/ALeqM5ipXQ4Xt28W8JuZ1_k7BkHKzdsApgD959AJ780

We postpone another BK.

Cerebus

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYRolHyQg960&refer=home
If they survive another 6 months I would be surprised.

“We still believe we bought well,” he said of Chrysler and GMAC. “In those cases, we got caught in what we see as a ‘perfect storm’ in the auto and housing sectors.”

Who is the bigger fool those who blame the storm or those who saw the storm and laughed about it. There is no way this was a good buy if you look deep at GMAC you should have been very scared. And buying a aging and tired auto company is not a good buy.

Internet Ad revenue

http://mediamemo.allthingsd.com/20081224/new-york-times-november-was-so-terrible-even-our-interent-ads-were-down/?reflink=ATD_yahoo_ticker
Bad signs for those depending Internet advertising. IE Google and Yahoo

2009 Headlines of the year!

Top 10 Headlines in 2009

1) China-USA trade war
2) Civil unrest in detriot
3) Drug War violense spreads to US from Mexico
4) Obama's Massive Tax increases.
5) cali and NY decalre Bankruptcty
6) The fall of muniplicials tied to SCDO
7) The Great Pension Crises
8) Why Gold did not play out as expected
9) Oil at $100 Again
10) FDIC requires Bailout money

bonus!
11) Failed Bank list tops 100
12) Ford the last car maker left.
13) Why did the treasury bubble collapase.
14) Is this a replay of 1933
15) AIG goes out of business
16) CRE Markets worse shape ever.
17) Loses from the credit crises top $2 Trillion
18) Euro/Dollar now at 1:1
19) Major Crisies forces change in China
20) Putin is discredited and steps down

More 2009 Themes

http://www.bloomberg.com/apps/news?pid=20601109&sid=a2gMphgAVl3U&refer=home

Civil unrest and reliance on superstitions

http://paul.kedrosky.com/archives/2008/12/22/the_major_risks.html

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3870089/Protectionist-dominoes-are-beginning-to-tumble-across-the-world.html

Frozen Ports in Long Beach, Singapore Mean Bleak 2010

http://www.bloomberg.com/apps/news?pid=20601109&sid=avcTZKlpHRqw&refer=home

Trade has grinded to a halt. Q1 and Q2 are going to be really ugly.

Awesome!

http://www.economist.com/displaystory.cfm?story_id=12798307

Credit Crunch the Board GAME!

Trouble in Mexico

http://www.financialsense.com/Market/wrapup.htm

Cali and NY go BK 2009 headline

http://www.thedailybeast.com/blogs-and-stories/2008-12-22/what-if-new-york-go-bust/

synthetic collateralized debt obligation

http://online.wsj.com/article/SB122999335538628723.html?mod=googlenews_wsj
Another word for 2009.

Hyperinflation

http://www.econbrowser.com/archives/2008/12/federal_reserve_1.html

What it looks like in Zimbabwe
http://blogs.wsj.com/marketbeat/2008/06/27/the-64000000000-inflation-question/

More feared then Deflation.

http://caps.fool.com/blogs/viewpost.aspx?bpid=119784&t=01006124249416869148


http://online.barrons.com/article/SB122973300556423035.html?mod=googlenews_barrons

See page 2

CRE all the talk in 2009

http://www.calculatedriskblog.com/2008/12/reis-commercial-real-estate-loan.html

We wonder why know one

http://www.telegraph.co.uk/news/worldnews/northamerica/usa/3869117/General-George-S.-Patton-was-assassinated-to-silence-his-criticism-of-allied-war-leaders-claims-new-book.html
We wonder why know one believes the government. If this is true.

FDIC running out of money?

http://optionarmageddon.ml-implode.com/2008/12/20/hey-barackyou-might-want-to-see-this/

World faces total financial meltdown: Spain's bank chief

http://www.businessday.com.au/business/world-business/world-faces-total-financial-meltdown-spains-bank-chief-20081222-734j.html
Just another sunny day.

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/21/AR2008122102171.html?hpid=topnews

In hard times, analysts say, nations are more inclined to take steps that inhibit trade, often with dire consequences. Trade restrictions imposed by countries trying to protect domestic industries in the 1930s, for instance, escalated into a global trade war that deepened and prolonged the Great Depression.

Count on politicans to due the wrong thing.

What Bush did.

http://www.nytimes.com/2008/12/21/business/21admin.html?em
I dislike look back pieces like this cause it is easier to see the right answer in hindsight. However there are several key points to the article which are correct.
Give it a read and decided for yourself.

Lets check on Ireland

http://bloomberg.com/apps/news?pid=20601087&sid=aMlHWBjivGkw&refer=home

The government will inject 1.5 billion euros into Anglo Irish in return for preference shares with 75 percent of its voting rights, the government said late yesterday. Allied Irish Banks Plc and Bank of Ireland Plc surged in Dublin trading after getting 2 billion euros apiece.

So you made loans and need a government hand out. No Problem.

Chrysler dead man limping

http://www.nytimes.com/2008/12/22/business/22chrysler.html?_r=1

In other words, Cerberus appears willing to give up its 80.1 percent stake in Chrysler to the United Automobile Workers and anyone else the troubled automaker owes money to.

Why would you do this? Cause the liabilities are not worth the risk anymore.

Cerberus officials lobbied the White House last week to prevent the private equity firm from being held responsible for the Chrysler loans if the automaker cannot repay them, according to people with knowledge of the talks who declined to be identified because the discussions were private.

But Chrysler executives, who are responsible for the day-to-day operations of the company, were shut out of the discussions, those people said.

Whoops looks like someone has a hot potato

Can you spare a rubel comrade.

http://bloomberg.com/apps/news?pid=20601087&sid=avGyVvJh9b3w&refer=home

Without a revival in commodity prices or state help, some Russian companies risk failing, according to Pacific Investment Management Co., which runs the world’s largest bond fund.

Not going to happen anytime soon.

Failure to Bail out Bank Topples Belgian Government

http://www.cnbc.com/id/28325166

Third time the government has falling in a year. Just more cracks.

Twenty Comments on the Current Economic Scene

http://alephblog.com/2008/12/18/twenty-comments-on-the-current-economic-scene/

Always a pleasure to read this blog.

Chart porn of the day

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgnTAqQTWWrTAwroY9okp4abIQls99QKmx6nw1-pRXqwONlZjk7g0A8ojbSgOP7g_SqGv5K8LUp3biv80qLbj6Dn1gZ8DQPdAEU1rInxLGTjSJdkGZ16zQH-E_-Fxv_EHDO52vdn37hdXE/s1600-h/longbond.jpg


http://jessescrossroadscafe.blogspot.com/2008/12/long-term-us-bond-and-dollar.html

Ponzi Nation: What Spitzer, Madoff, Geithner, and Adam Smith Can Teach Us About Our Own Mass Stupidity

http://www.vanityfair.com/online/politics/2008/12/spitzer-geithners-the-status-quo.html

If this keeps up I will subscribe to Vanity Fair. They just have some excellent business articles.

And so I asked Eliot Spitzer what he made of incoming Treasury Secretary Tim Geithner, and sure enough he gave a reply markedly lacking in discretion: “Tim is a good guy, but he’s not a thinker. He’s the status quo.” I asked if F.D.I.C. Chairman Sheila Bair, the Republican who is improbably the left’s favorite financial regulator right now, might have been a better choice; he wasn’t sure if she could handle “the politics” but said she had been the “voice of reason” in the whole debacle. He did not know whether reports that Geithner is behind a movement to oust Bair for not being a “team player” were true, but he said he shared my concerns that the regulatory team being assembled would not do enough to challenge the logical flaws and undemocratic principles that characterize Wall Street’s, ahem, conventional wisdom.

I know people are down on Spitzer but he did a great job looking into the problem childs of wall street. Better to be hated then loved if you are regulator.

2009 to worse than 2008

http://ftalphaville.ft.com/blog/2008/12/19/50632/the-hypothetical-downside-scenario/

Word of the Day

http://www.urbandictionary.com/define.php?term=Ponzi%20Crawl&defid=3244785

As Cali so goes the US

http://www.nytimes.com/2008/12/18/us/18calif.html

In a preview of what will be seen in other states very soon.

“We had to say we can’t spend money we don’t have,” Mr. Lockyer said.

Or raise fee's to drive more people away.

Aaron McLear, a spokesman for the governor, said the board’s move had the potential to put tens of thousands of workers in unemployment lines just a week before Christmas. Mr. Lockyer agreed, saying the private construction business — already dealing with double-digit unemployment — would be hit hard.

When the govenment can not spend we are looking at some serious damage to the country. With it taking a every large part of GDP it would a tsunmia of bad.

Credit Suisse to Use Illiquid Assets to Pay Bonuses

http://www.bloomberg.com/apps/news?pid=20601087&sid=abJOQQI18SAE&refer=home

Here is something we can not sell, good luck. Damn.

Whitney turns bearish

http://caps.fool.com/blogs/viewpost.aspx?bpid=118096&t=01000420523245711617

Congress get a pay raise

http://thehill.com/leading-the-news/with-economy-in-shambles-congress-gets-a-raise-2008-12-17.html

Just more money wasted.

Must read of the day.

http://www.minyanville.com/www.minyanville.com/articles/GS-AXP-GE-C-Fed-ms/index/a/20374

But hope is not a viable investment strategy.

Casue when hope is gone we are screwed.

Instead, what the Fed has done is push all their chips into the pot, gambling everything on one final card. Stocks are no longer being priced according to fundamentals, because they're now simply pawns in the Fed's giant credit market gamble.

Unfortunately, this reckless gesture sets the stage for a more likely negative outcome, and that's full-blown deflationary collapse and a subsequent crisis of confidence in the central bank itself.

50% chance of this occuring.

more on DB and bond markets.

http://ftalphaville.ft.com/blog/2008/12/18/50594/of-deutsche-bonds-and-conspiracies/
Important stuff.

Chart Porn of the day

http://www.calculatedriskblog.com/2008/12/four-bad-bears-update.html

CRE market at a standstill

http://www.realtor.org/press_room/news_releases/2008/commercial_real_estate_outlook_dampened?LID=RONav0021
Massive losses in CRE market will be the talk of 2009

1873 repeat?

http://www.infowars.net/articles/december2008/161208Unrest.htm

A recent report produced by the U.S. Army War College's Strategic Institute warns that the United States may experience massive civil unrest in the wake of a series of crises which it has termed "strategic shock."

The report, titled Known Unknowns: Unconventional Strategic Shocks in Defense Strategy Development, also suggests that the military may have to be used to quell domestic disorder.

Who says the army does not have intelligence. If you look at the reaction to Madoff you start to see signs of very angry people. IF GM goes, you will get a huge multiplier.


http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3526645/Citigroup-says-gold-could-rise-above-2000-next-year-as-world-unravels.html

"The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock.

"Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration, with the risk of a feedback loop. We don't think this is the more likely outcome, but as each week and month passes, there is a growing danger of vicious circle as confidence erodes," he said.

All of this is 'end of the world stuff' Where we go is still underdetmined.

Unintended Consequences

http://market-ticker.denninger.net/archives/692-The-Idiocy-of-Bernankes-Bubbles-and-CNBS.html

http://www.calculatedriskblog.com/2008/12/negative-yields-on-money-market-funds.html

So this is it. 3 months. In March we will know if it worked. If not we are facing ugliness. By that I mean Dow 3000 or less. Massive collapse in treasuries. Massive cuts in government spending.

How do you lose 103%

http://globaleconomicanalysis.blogspot.com/2008/12/calpers-to-report-losses-of-103-on-its.html
Just an odd math problem. If you lose a 100% you are broke. But they lost more than they started with. Wow. That is talent.

DB and the bond market

http://ftalphaville.ft.com/blog/2008/12/17/50514/deutsche-rattles-the-bond-market/

Follow up article

http://ftalphaville.ft.com/blog/2008/12/17/50520/banks-who-might-not-call/

Very weird.

Question of the day

http://www.swoopo.com/

Super bargin site or money making machine?

Why we don't need bank innovation

http://www.wilmott.com/blogs/satyajitdas/index.cfm/2008/12/15/Banking-on-Steriods

Zero

http://blogs.wsj.com/economics/2008/12/16/economists-react-who-could-ask-for-anything-more/
My person take, this news is good for a shelf like of about two weeks. Then we will see the grim retail numbers for Decmember. Welcome to histroy in the making. Either they are brilliant or will go down as the most horrible crimials in the world for selling the US to lowest bidder to save the bankers.

The other side

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_lynn&sid=aS98ereBggE8
Some thoughts about the other side of recession we are heading into.

The Coming Anarchy

http://www.theatlantic.com/doc/199402/anarchy

West Africa and much of the underdeveloped world: the withering away of central governments, the rise of tribal and regional domains, the unchecked spread of disease, and the growing pervasiveness of war

Scary. This is true anarchy and we should scared of any person who wants it. An excellent think piece.

Blame Game Madoff scandal

http://clusterstock.alleyinsider.com/2008/12/i-hate-bernie-madoff

Her strongest point is that it simply doesn't make sense to say that people who gave their money to Madoff should have done more due diligence and monitoring.

Really, so you don't care about your money. I not sure how else to interrupt a statement like that. Money has to be watched. Especial as you approach a million plus.

But most people-I’d venture to say at least 90% of us-don’t have time to manage our money or to keep tabs on the “professionals” we hire to do just that

Then you are idiots. Sorry. The truth hurts. If you don't watch your money it will be gone.

And no one deserves to be wiped out just because he's dumb or even greedy.

LOL. Yes they do. Greed does not work. Most people clearly said they where there cause the returns where great. As for being dumb, I am just speechless. Most people with this money are educated. The rules are not hard to follow. Diverisfy yourselfs. If you had done just that you would be down but not out. Sorry that is the hard truth. No magic investing. No secert sause. Just don't trust one thing.

Some awesome pics from Greece

http://www.boston.com/bigpicture/2008/12/2008_greek_riots.html
Looks like pure chaos.

Ford the way it was for the USSR

http://en.wikipedia.org/wiki/GAZ

In May 1929 the Soviet Union signed an agreement with the Ford Motor Company. Under its terms, the Soviets agreed to purchase $13 million worth of automobiles and parts, while Ford agreed to give technical assistance until 1938 to construct an integrated automobile-manufacturing plant at Nizhny Novgorod. Completed in 1932, the factory and marque was titled Gorkovsky Avtomobilny Zavod, or GAZ. GAZ's first vehicle was the medium-priced Ford Model A, sold as the GAZ- A, and a light truck, the Ford Model AA (GAZ-AA). GAZ-A production commenced in 1932 and lasted until 1936, during which time over 100,000 examples were built.

Many American engineers and skilled auto workers moved to the Soviet Union to work at GAZ. A few American workers stayed on after the plant's completion in 1932, and became victims of Stalin's Great Terror, either shot or exiled to Soviet gulags.[1] The factory's name changed when the city was renamed after Maxim Gorky. From 1935 to 1956, the official name was augmented with imeni Molotova (literally, named after Molotov).

I thougth this was great story. And it continues today with GAZ buying the stratus assembly line.

Zuckerman and Madoff

http://clusterstock.alleyinsider.com/2008/12/mort-zuckerman-id-never-heard-of-madoff
Zuckerman is worth several billion and is considered a very asute investor. Just goes to show you have to watch the pennies very carefully.

Fall of Lehman

http://money.cnn.com/2008/12/12/magazines/fortune/3days_full.fortune/index.htm?postversion=2008121500

Great read.

Fitch: Alt-A Mortgages Deteriorating More Rapidly than Expected

http://www.housingwire.com/2008/12/15/fitch-alt-a-mortgages-deteriorating-more-rapidly-than-expected
Very ugly news, we are seeing a accelerating of loses. Look for massive downgrades soon.

2009 Story, How many states go BK?

http://www.nytimes.com/2008/12/15/us/15funds.html?_r=1
More problems for the states. 23 States are in serious risk of BK in the next year.
Ugly.

Problems around the world mount

http://fistfulofeuros.net/afoe/economics-and-demography/why-we-all-need-to-keep-a-watchful-eye-on-what-is-happening-in-greece/
Greece. Just a precursor to what we will see.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a5PyWzGVCR7E&refer=home
Correa Defaults on Ecuador Bonds. A victim of low oil prices. More victims will happen.


http://www.washingtonpost.com/wp-dyn/content/article/2008/12/14/AR2008121402029.html?hpid=topnews
Argentina. Victim of the Agri boom going bust. Once again the scariest one of all. The food supply collapse was the final nail that pushed the economy off the cliff in the 30's and brought the most suffering.

Madoff madness

http://ftalphaville.ft.com/blog/2008/12/15/50424/the-madoff-o-meter/

The count so far from the banks and others funds 24 Billion.

http://ftalphaville.ft.com/blog/2008/12/15/50428/elementary-dear-sec/
Why the SEC should not be trusted.

http://seekingalpha.com/article/110643-the-noble-lie?source=headline1

all finance is a confidence game

http://www.bloomberg.com/apps/news?pid=20601087&sid=aKgINkd9m988&refer=home
Sorry I don't think you run a $50 Billion con without help.

http://ml-implode.com/viewnews/2008-09-11_BanksWhereTheMoneysNot.html
Is you bank a ponzi scheme wainting to collapase?

Ireland near brink

http://ftalphaville.ft.com/blog/2008/12/15/50427/irelands-answer-use-the-pension-pot/

When you take the pension funds you are almost done. There is little doubt this is a last gasp to save the banks. This too shall fail.

All you eggs in one basket.

http://www.nypost.com/seven/12132008/news/regionalnews/investor_furor_over_50b_scam_143966.htm

http://globaleconomicanalysis.blogspot.com/2008/12/madoff-madness-i-knew-he-was-cheating.html

Rule #1 before I learn buy low and sell high, I heard do not put your eggs in one basket. For all those weathly investors it is a tragerdy but you can not trust one thing. I am shock to see how many people had all there money in one spot. In the end few people understand financial markets, or making money. We are searching for the easy money. It is a illusion. There is no perfect stragery, there is no safe investment.

#2 Why the hell would you invest thinking he was doing something illegal??? In the end it will crash. Ponzi scheme or insider trading. In the end you will get screwed. Greed is not good. Wall Street the movie has created a legion of Gordon Geckos. Everyone is searching for the easy money and does not care if we screw people in the end. Sad.

#3 The even worse part, if you took money out in the last six years you can be sued to return it. Since you received illegal money you have to give it back. So not only do you lose all your princiapl, but you lose six years of returns. Ouch.

24 and 25...

http://www.fdic.gov/news/news/press/2008/pr08134.html

Haven Trust Bank, Duluth, Georgia, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver.

http://www.fdic.gov/news/news/press/2008/pr08135.html

Sanderson State Bank, Sanderson, Texas, was closed today by the Texas Department of Banking, and the Federal Deposit Insurance Corporation (FDIC) was named receiver.

I would not be surprised to see mulitples of banks each time now as the problems increase.

Bloomberg V Fed

http://alephblog.com/2008/12/12/what-do-you-have-to-hide-ii/
Fed 1. Bloomberg 0. Sicking. Excellent read.

GMAC fading

http://www.reuters.com/article/ousiv/idUSTRE4BB5FZ20081212
When GMAC fails,GM is done. Along with this breaknews on CNBC says it is going shut most of prodcution in Q1, this effectly will take out the suppliers who depend on GM since they will not be buying and means no receivables since the car makers take profit when the car ships to the dealer. If GM goes, the dealers will go right behind them. Why? Cause there inventory will lose 30%-40% of its value with the GM BK. Dark times.

Jim Rogers calls most big U.S. banks "bankrupt"

http://www.reuters.com/article/newsOne/idUSTRE4BA5CO20081211

Jim Rogers, one of the world's most prominent international investors, on Thursday called most of the largest U.S. banks "totally bankrupt," and said government efforts to fix the sector are wrongheaded.

Ouch. I take a great interest in what Jim Rogers thing.

"Without giving specific names, most of the significant American banks, the larger banks, are bankrupt, totally bankrupt," said Rogers, who is now a private investor.

I have already bought puts on the remain banks for July-Dec 09.

General Growth

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/12/AR2008121201349.html
We are now looking at the largest commercial real estate BK in histroy.

Ponzi

http://www.cnbc.com/id/28195029
Imaging thinking you worth millions only to find out you are now broke. WOW.

What is team Obama worried about?

http://marcambinder.theatlantic.com/archives/2008/12/its_quite_unsettling_to_talk.php
Hell how about Russia or China going down.

Chrysler's Hidden Coffers

http://www.forbes.com/opinions/2008/12/09/chrysler-cerberus-bailout-oped-cx_dg_1210gerstein.html
Where there is money and secrets you find corruption.

Chart Porn of the day

http://www.ritholtz.com/blog/wp-content/uploads/2008/12/sp-composite-real-regression-to-mean-large.gif

Federal share of economy soaring

http://www.usatoday.com/news/washington/2008-12-10-spending_N.htm?csp=34

All that spending will push the federal share of the nation's $14.4 trillion economy to 25% or more — past the post-World War II record of 23.5% set in 1983, at the end of what was then the worst recession since the Depression.

Unsustainable and when it stops we be in full crash mode.

This number is bad, retail sales

http://uk.reuters.com/article/hotStocksNews/idUKN1137513020081211

Not good, bad for a recession. I fear it will get worse.

Oil

http://www.hemscott.com/news/static/tfn/item.do?newsId=71262100220282
Oil is traded in dollars. The dollar goes down, Oil should go up. For those who bought DXO yesterday, congrats you just made 20%.

Mo’ problem assets, mo’ problems

http://ftalphaville.ft.com/blog/2008/12/11/50329/mo-problem-assets-mo-problems

Love the title!

More Weirdness with the Agri Sector

http://www.silverbearcafe.com/private/12.08/famine.html
Not sure what is going but this is not first article I have seen about problems in the main farming area of country.

As Cali so goes all of us.

http://www.latimes.com/news/local/politics/cal/la-me-budget9-2008dec09,0,6944624.story
As Cali so goes all of us.

Goldman says these states are most likey to default

http://www.bloomberg.com/apps/news?pid=20602007&sid=ac9AV.yzTCNw&refer=govt_bonds

New Jersey
California
Florida
Nevada
Ohio
Wisconsin
Michigan
Illinois
Massachusetts
Connecticut
Hawaii

DXO

So cheap I am going to pick up some for the long term.

Must read from Jesse's Cafe

http://jessescrossroadscafe.blogspot.com/2008/12/nobel-prize-winning-economist-joe.html

Must read from Jesse's Cafe

http://jessescrossroadscafe.blogspot.com/2008/12/nobel-prize-winning-economist-joe.html

Worse idea yet from the Fed.

http://www.nakedcapitalism.com/2008/12/fed-ponders-issuing-debt-to-finance-its.html


http://jessescrossroadscafe.blogspot.com/2008/12/is-fed-taking-first-steps-to-default-or.html

The fallen

http://online.wsj.com/article/SB122886123425292617.html
great stuff from the WSJ. There reason it is called a bear market is the mauling people take. No system is perfect. Mr market will prove it every time.

Free Fall

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3692255/Asian-trade-in-free-fall-as-exports-to-West-dry-up.html

It is going to be bad in Asia.

worse then the GP?

http://www.prudentbear.com/index.php/commentary/bearslair?art_id=10160

Couple of quick points here.
Why we are off book from the great depression
1) Speed of delivery of information. This accelerates all market moves.
2) Massive Debt levels
3) No savings cushion
4) Much greater white collar population
5) Massive government Borrowing
6) Population spreads, IE huge growth in non-working age population.

Think about all these before comparing today to the Great Depression.

The real Bottom?

http://www.bloomberg.com/apps/news?pid=20601087&sid=aKNSK0gYlqB0&refer=home
This is in the ball park of where I think the market will bottom at. I still feel that anything below 500 is a nightmare for the markets.

AIG the neverend bailout

http://calculatedrisk.blogspot.com/2008/12/aig-black-hole.html
Another excellent post from CR

Whitney: Banks On Life Support Next 18 Months

http://www.cnbc.com/id/28155366
Her last big call? C at below $10. Happened in week.

Oracles of Doom

http://www.ritholtz.com/blog/2008/12/oracles-of-doom/
Be sure to read the NY post article.

Gold backwardation

http://ftalphaville.ft.com/blog/2008/12/09/50227/the-gold-backwardation-theory/

Gold, shiny and loved. Sorry I agree with the post that we are not at the point that gold is not for sale. Just not true. Yes things are bad, Yes the printing presses are running 24/7. yes Fiat currency is crazy. Yes some day hyper inflation will be a problem. But it will not look like it does today. Things take time to play out.

General Growth Properties

http://online.wsj.com/article/SB122875588694888349.html
Excellent read over at the WSJ about General Growth.

The Bucksbaum's losses show how the 2008 financial crisis is hitting not just risk-loving Wall Street firms and leveraged upstarts but also long-established, family-run companies with histories of conservative growth. The crisis has sparked the most rapid and severe destruction of wealth in recent history, rivaled only by the Great Depression, when the number of millionaires plunged by an estimated 75%.

Whatever if you debt ratio is 83% your are not being conservative.

NY post on U6

http://www.nypost.com/seven/12092008/business/obama_white_house_is_in_for_a_nasty_surp_143334.htm

Another look at the BLS numbers. Once again I view U6 as the clearest measure the government produces. I also agree the birth/death number mess with the true number.
I am looking for March to be the end of the rally period and by then the numbers may be horrific as companies are usually very hesitant to lay anyone off before Jan 1.

Time to buy or Sell

http://alephblog.com/2008/12/09/a-reason-to-sell-stocks-amid-the-rally/
One man's take. I agree stocks are overpriced and will not provided a great return at these prices.

Odd timing Ill Gov Blagojevish arrested.

http://www.marketwatch.com/news/story/Illinois-Gov-Blagojevich-taken-federal/story.aspx?guid={2C84E9DD-0CEF-4F7F-A2F4-1A416DCCC422}&dist=hplatest

Odd timing less then 24 hours after the BOA action.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ahDmj5UJtGd4&refer=home

Up 50% on the year.

http://nymag.com/news/business/52754/
Fun article to read. I remember trading when Baldwin went down and it considered a bomb shell. Along with the Milken in the 80's.

“People who lose money always need someone to blame,”

So true it hurts.

“The sense of entitlement that everybody has because nothing has gone wrong for them is frightening to me,”

Easy to make money in a bull market, but the real men make money with the bears, everyone else ends up mauled for life.

Short-sellers weren’t responsible for the crisis

Fudge the book, pay the price.

The Velocity of Money

http://www.minyanville.com/articles/Fed-liquidity-velocity/index/a/20257

What is the exit strategy. Hell I would feel better if the strategy was consistent for a week.

Hedge Fund model is dead.

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_hassett&sid=anXt996yzU6o

The hedge model is dead. 10% may survive.

Chart Porn of the day

http://ftalphaville.ft.com/blog/2008/12/09/50212/defaults-different-this-time/

Big story of Q2 2009

http://www.thonline.com/article.cfm?id=223064

With March-July being the time of delivery for contacts that where sold at the peak of the commodities bubble. We will see many cases of Farmers being offered 50% less then promised or nothing at all the company holding the contacts is broke.

Not sure about this source.

http://www.leap2020.eu/GEAB-N-29-is-available!-Phase-IV-of-the-Global-Systemic-crisis-Breakdown-of-the-Global-Monetary-System-by-summer-2009_a2435.html

But scary as hell to read.

Ever wonder how many earthquakers there are each day?

http://earthquake.usgs.gov/eqcenter/recenteqsww/Quakes/quakes_all.php

From Bad to Worse

http://online.barrons.com/article/SB122852239295784329.html?mod=b_hpp_9_0002_b_online_exclusives_weekday_r1
A Barron's take. We are already building the next crises in the solutions of the current one.

High Re-Default Rates

http://calculatedrisk.blogspot.com/2008/12/dugan-high-re-default-rates.html

I never expected this to work. Houses are overpriced and need to ajust lower.

Bullish on the Dollar?

http://www.moneyandmarkets.com/depression-deflation-and-your-survival-2-28569

Not so sure the dollar will be the best way to hide, I remain very concerned of hyper inflation cause of the massive influx of dollars. We did not try this durning the depression. I remain on the side we have not seen it like this before. We are off book from history. Where we go and where we end is unknown.

Why is oil cheap and getting cheaper?

http://www.theoildrum.com/node/4846#more
Great read, totally agree we are still in a downward spiral.

Idiots and your money

http://seekingalpha.com/article/109632-10-contrarian-reasons-for-a-bottom?source=headline1

The buy-and-hold discipline is dead and market timing lives.

Whatever, buy and hold is based on quarterly or yearly updates. Had you looked at your portfolio and said the financial are in trouble, I am going to move out of them you would have been good. Had you thought I am going to short, but hold the stock you would have been very well off. Had you ignored the market you got taking to cleaners.

Stock prices are just plain beaten up.

Really, they are market price. If the market prices them low it does mean they are beating up. It means the price was too high.

Speculation is dead.

Humor I guess.

NBER declares that the recession is here

Yes they are backward looking. So using them to justify a upward move is just as crazy to use them justify a lower move. It is all about market forward fundamentals.

Mr. Market has gone through most of the stages of “grief”.

Assuming we are done, we are not. Plenty of more grieving to do.

VIX and More reports that the TRIN Index is flashing a buy signal

Dont think that a high or low VIX is a direct correlation the market it is not. Just another measure of fear.

A Chinese SWF refuses to invest in foreign financials.

I only care what the government of China does with the 1 trillion of Treasuries and if it keeps buying. The individual investors does not matter in the large scale market.

The market doesn’t go down on bad news.

Cause the market is pricing in a recession. The only thing it wants to know is what happens in 1Q of 2009. right now not much worse then now. The market will change when it has more info. Right now the market thinks 2009 may not be so bad.

Nassim Taleb tries to out-bear Roubini.

Once again things are bad ,ignore them at your own risk.

Nouriel Roubini is partying like a rock star and seems to have groupies.

Well he was right. So what.


There are people trying to sell you this time as a buying opportunity. It is if you care about the short term money. It is not in the long term. 2Q 2009 will be bad. We will see the Obama hope fade and we will see the consumer beaten down from here. We will see unemployment rocket higher. Don't think so, look at the revision. Dont be surprised to see that last number go from 500K to 1 Million. Why? The revision from the past two months did the same thing.
Well he was right. So what.

http://www.minyanville.com/articles/C-citigroup-jpm-fre-fnm-mortgage/index/a/20247

An analysis by the Associated Press finds the government’s purchase of stock in large and small banks has lost about $9 billion, or a third of its value, in just a month.

Short term losses are ok since we are in a downturn. The hope (Dream) of many who did these is in the long term we will profit.

The danger: Uncle Sam ends up artificially propping up banks in the long-term. In short, Federal guarantees could become a crutch for poor management. Somewhere along the line, someone needs to say that weaker financial institutions need to fail to assure the overall strength of the nation’s banking system.

They are a cructh cause we did not let anymore fail. In the end the losses must be realized. Trading with government only defers the loss.

BIS report via FT

http://ftalphaville.ft.com/blog/2008/12/08/50163/the-crisis-according-to-bis/

Good read.

Ultrabroke

http://www.ritholtz.com/blog/2008/12/how-to-become-ultrabroke/

Totally agree something is wrong with the returns on the double shorts. I see this in SFK with its weird trades versus the rest of the market. In the end buyer be ware.

End the war on Mary Jane

http://online.wsj.com/public/resources/documents/st_DEFICIT_20081201.html
From the Wall Street Journal no less.

A look at all the states

http://online.wsj.com/public/resources/documents/st_DEFICIT_20081201.html

And where the budget shortfalls are.

Pick a side

http://www.typetees.com/product/1466/Now_Panic_and_Freak_Out?streetteam=tcritic

Pick your side

http://www.keepcalmandcarryon.com/products/keep-calm-and-carry-on-poster

Oil going lower is very dangerous.

http://www.247wallst.com/2008/12/an-irony-in-low.html

Oil going lower is very dangerous. It will destabilize the mid-east, Latin America and most troubling Russia which is already in free fall. Also it is looking to be very bleak for all agriculture as much of it was sold with corn and grains at double or triple the current price and we could see major defaults and BK if the contracts are not fulfilled at the bubbled prices. With ethanol now dead corn is in free fall. But most of the crops where sold (But not paid for) at much higher prices. So the choices will be to defualt on all these contracts (bad for farmers and bad for us cause it disrupt the food supply) or the middle men pay the rates and default. Once again the food supply is disrupted. Bad times ahead.

U6 Unemployment numbers

For those who don't know I prefer to look at U6 versus U3(The general Unemployment number).

http://www.marketwatch.com/news/story/payrolls-plunge-stunning-533000-november/story.aspx?guid=%7B5446C124-6428-4C60-8CB9-30505CCA12AA%7D

An alternative gauge of unemployment - which includes discouraged workers and those whose hours have been cut back to part-time - rose to 12.5% from 11.8%. The number of workers forced to work part-time rose by 621,000 to 7.3 million.

Market watch does not disclose this as U6 but it is the December number. This number is gr owning about 1% per month. I view 12% or higher be very scary numbers. We are now at the lows of the 80's which where the worse outside of the Great Depression when we hit 25% (A guess number as the official numbers did not start till the late 40's)
If the 80's peaked at 12.8% and that was the trough of that recession we clearly have a ways to go. Additional the revision have been horrific.

Loss take toll in the hampton's

http://www.vanityfair.com/magazine/2009/01/wall_street200901

I am remined of a article I read about the people who lost everything in 1929. So much wealth built on debt. All gone now.

Cali wants you to take an IOU?

http://www.bloomberg.com/apps/news?pid=20601087&sid=a2TUhalNFDds&refer=home

Cash is king, paper you uses to wipe your....

Skater Marketing

http://www.cnbc.com/id/28051860

Humor for the day!

Commercial real estate

http://www.reuters.com/article/innovationNews/idUSTRE4B31D820081204

Commercial real estate continues to blow up. This is the first cracks in the Dam. Much more pain to follow.

Tough Love

http://clusterstock.alleyinsider.com/2008/12/roubini-nuke-general-motors-gm-ceo-shareholders--then-bail-out
I am on the side of letting the market take these guys out. But I would not want to pull that trigger. Something must be done to help the workers. If we let them fully fail you will see massive unemployment (20% would not be outside the realm of possibility).

SBUX

http://www.247wallst.com/2008/12/starbucks-sbux.html#more
Question for the day
If starbucks goes BK, will the USA go BK with it?

Bond market near breaking

http://www.euromoney.com/Article/2054070/The-US-treasury-market-reaches-breaking-point.html

Scary stuff.

http://jessescrossroadscafe.blogspot.com/2008/12/breaking-zirp-barrier.html

If you look at the last chart on the post, you will see the flight to quality marked the peak of the 1930's recovery. When it crashed it took the whole market with it. Bring in the lows of 1933 which market the bottom.

When this happens we will put in a bottom some where between 3000-5000 if we are lucky.

Mexico and the war on Drugs

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/03/AR2008120303953.html?hpid=topnews

This war is fueled by the USA on both sides. We buy the illegal drugs funding all the gangs and fund the government to wage war on the cartels. No end is in sight. Combined with massive budgets that will be forced on the US you can expect the cartels to win unless we legalize drugs. What would this do? Bring the money out from the illegal world. Allow legitimate business to control the markets. Tax the hell out of the drugs. All you have to do is look at Prohibition and how it ended to see what would happen once we end the war drugs.

Fed's wants 4.5% interest rates

http://online.wsj.com/article/SB122833771718976731.html
Now how did we get in this mess? Oh yeah over borrowing with low interest rates.
Give the drunk a another shot he is still standing.

World hangs by a thread.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3537362/World-stability-hangs-by-a-thread-as-economies-continue-to-unravel.html

"The global financial crisis has not bottomed yet. The impact is spreading globally and deepening," said Zhang Pin, head of the national development commission. "Excessive bankruptcies and business closures will cause massive unemployment and stir social unrest".

All great economics problems cause massive change and not usually a good kind

"What happens when China attacks Japan? Will the US retaliate on our behalf?"

WWIII that is what happens.

Russia is a hostage to oil prices. If Urals oil stays below $50 a barrel for long, we are going to see an earthquake of one kind or another.

Likely to happen sooner then later.

Why the Dollar is in deep trouble.

http://www.ft.com/cms/s/0/12eab3b4-bf06-11dd-ae63-0000779fd18c.html?nclick_check=1

“Investors might renew their flight to safety, though this time away from dollar-denominated assets, thereby forcing the US economy into a hard landing and pulling the global economy into a deeper recession,”

If we are lucky it will be a deep recessison.

Google

http://online.wsj.com/article/SB122826503489174369.html

When you cuts perks you effect moral, when 97% of your revenue is one stream watch out. Rough water ahead for google.

Meredith Whitney Op-ed from FT

http://www.ft.com/cms/s/0/11344d06-befb-11dd-ae63-0000779fd18c.html

She is now more bearish? Ouch.

Auto sales ugly

http://www.247wallst.com/2008/12/ugly-motor-sale.html

The good news is that this was not any worse than the estimates. The bad news is that calling this good news would be like rewarding your kid for almost passing the math class being taken for the third time.

If you gone 25% each month when do you hit zero? Humor for the day.

Hedge fund sues WSJ for disclosure

http://www.ft.com/cms/s/0/91002758-bc26-11dd-80e9-0000779fd18c.html

SRM claims the newspaper acted in "flagrant disregard'' of its rights by publishing in August that the fund was down about 85 per cent since its inception in 2006.

Hmm your losses are double the SP index, sounds like news to me.

Cali is broke

http://ftalphaville.ft.com/blog/2008/12/02/18971/californias-fiscal-emergency/

Cuts are coming and taxes are going up.

GM decideds to kill three brands

http://www.nypost.com/seven/11282008/business/gm_outlines_plan_to_scrap_pontiac__other_141274.htm

Clearly killing off brands is a desperate move. GM has no clue what to do and how to make money. If you think shuting down three brands is the only to due you might as well kill all but one.

Ken Fisher wacked

http://www.nypost.com/seven/11282008/business/fisher_flounders_141277.htm
Pretty much for the last year I have read his market picks and thought he was off mark. Clearly he was. It only remains to see if he can recover or if Mr market is not done schooling him.

Use of math to model behavior of your enemies.

http://www.goodmagazine.com/section/Features/the_new_nostradamus

Awesome read, I love the solution to the Israel-Palestine problem.

Some moves by Carlos Slim

http://www.247wallst.com/2008/11/saks-sks-a-pois.html#more

http://www.bloomberg.com/apps/news?pid=20601086&sid=aoPHoLjgduGY&refer=latin_america

http://www.chron.com/disp/story.mpl/headline/biz/6120083.html

Having made all the Billions he has, it is always interesting to see what he is buying. I would not buy into any of these stocks, I would bet he is acquiring shares in Citi as a short term play and is trying to acquire Saks at a step discount to increase his retail holdings.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1qy41NFwas4&refer=home

Russia’s ruble headed for its biggest weekly decline against the euro in at least five years as the central bank scaled back its defense of the currency to avoid depleting foreign-cash reserves.

With Dollar reserves shrinking and no end in site to oil's decline which puts pressure on the central bank. Look for russia to curtial spending. However the rubel can only fall so far before the people will pressure the government to do something.

Panic in China

http://www.telegraph.co.uk/news/worldnews/asia/china/3525052/China-slashes-interest-rates-as-panic-spreads.html

Signs of cracks in China.

http://siteresources.worldbank.org/INTCHINA/Resources/Quarterly_December_2008.pdf

In summary china is in or near recession. Long term this is bad for treasuries as china will turn it 'dollars' inward instead of buying treasuries.

Latest from RGE

http://www.rgemonitor.com/roubini-monitor/254591/desperate_measures_by_desperate_policy_makers_in_desperate_times_the_fed_moves_to_radically_unorthodox_policies_as_economy_is_in_free_fall_and_stag-deflation_deepens

Another batch of worse than awful news greeted today Americans getting ready for the Thanksgiving holiday: free falling consumption spending, collapsing new homes sales, falling consumer confidence, very high initial claims for unemployment benefits, collapsing orders for durable goods. It is hard to get any worse than this but the next few months will serve even worse macro news. At this rate of contraction as revealed by the latest data it would not be surprising if fourth quarter GDP were to fall at an annualized rate of 5-6%.

Just think it is only the beginning.

And this week, indeed, the Fed, together with the Treasury, started to implement some of the “crazier” policy actions that we discussed last week: a) outright purchases of agency debt and MBS to the tune of a whopping $600 billion; b) another $200 billion of loans to backstop the consumer and small business credit markets (credit cards, auto loans, student loans, small business loans); c) an effective policy of aggressive quantitative easing as the balance sheet of the Fed – already grown from $800 billion to over $2 trillion – will be expanded further as most of the new bailout actions and new programs will be financed via injections of liquidity rather than issuance of public debt.

Print till there is no tomorrow.

Desperate times and desperate economic news require desperate policy actions, even more desperate than any “desperate housewife” could dream of. The Treasury will be issuing in the next two years about $2 trillion of additional debt (on top of having to refinance and rollover another $1 trillion of maturing debt) while the Fed/Treasury/FDIC are taking on a massive amount of credit risk via outright bailouts and guarantees (TAF, TSLF, PDCF, ABCPFFFMLM, TALF, TARP, Bear Stears, AIG, Citigroup, TALF and another half a dozen new facilities and programs). These policies – however partially necessary – will eventually leads to much higher real interest rates on the public debt and weaken the US dollar once this tsunami of implicit and explicit public liabilities and monetary debt driven by rising twin fiscal and current account deficits will hit a world where the global supply of savings is shrinking – as most countries moves to fiscal deficits thus reducing global savings – and foreign investors start to ponder the long term sustainability of the US domestic and external liabilities.

The only way this will end is the dollar replaced by another currency. Monetary Reset. Along with painful budget cuts. 2009 should be interesting to say the least.

People not following the news

http://www.bloomberg.com/apps/news?pid=20601109&sid=aUYLG7W1nGpM&refer=home
The gamblers remain in charge.

How to short everything via ETF's

http://www.stocktradingtogo.com/2008/07/17/40-great-inverse-short-etfs-for-bearish-investors/

Don't you call this a Ponzi scheme?

http://www.247wallst.com/2008/11/aig-aig-recycli.html

Or is it just me?

Printing presses running 24x7

http://www.nypost.com/seven/11262008/business/start_the_presses_140871.htm

As part of the ambitious moves, the government's two huge printing facilities - in Washington, DC, and Fort Worth, Tex. - will have to expand their already strained, 24-hour output.

Goodbye Dollar bils we hardly knew yeah. Hello $1000 dollar bills.

NJ in trouble

http://globaleconomicanalysis.blogspot.com/2008/11/state-of-new-jersey-is-insolvent.html
This palls to the problems in CA and FL. I fully expect the next bailout to be for the states. Till someone take a sharp knife to spending we will continue to spend like a dunking sailor.


http://www.reuters.com/article/businessNews/idUSTRE4AO1A520081125?feedType=RSS&feedName=businessNews
Give use the money or we are all dead. Idiots.

Nice article about making sure your money is safe.

http://www.moneyandmarkets.com/citigroup-collapses-banking-shutdown-possible-28325?ref=patrick.net

Risk is the most ill understood item for most casual invenstors. Any type of investment with a return has some type of risk. That return is your reward for taking a risk. The higher a return the greater risk you are taking. Look at banks with the highest CD rates and look closer and you will see higher risk somewhere.

It’s because the risk is higher for CDs, but much lower for Treasury securities. It’s because even within the realm of government guarantees, there’s a pecking order.

The first-priority guarantee: Maturing securities that were issued by the U.S. Treasury department itself.

The second-priority guarantee: Maturing securities that were issued by other government agencies, such as Ginnie Mae.

Third: The Treasury’s backing of the FDIC.

What is worse than deflation?

http://ftalphaville.ft.com/blog/2008/11/26/18733/contagious-deleveraging/

Debt deflation. With Banks usually the worse offenders cause they can high leverage.

Just like in 1930, it will be the economic fundamentals that give the best indication of where things are going. House prices continued their downward trend yesterday. High unemployment is not even yet a factor.

We are done with phase 1, sub prime crises, now entering a much worse phase, Global depression brought on by debt deflation.

A couple of thoughts about Hank "The bazooka"

http://www.spiegel.de/international/business/0,1518,592268,00.html

I did not actually anticipate that it would get as bad as it did. It has gone beyond my wildest imagination.

And this in the not the bottom by a wide margin.



http://blogs.wsj.com/deals/2008/11/25/the-paulson-plan-truly-idiotic/

Democrats didn’t want anyone [economists] testifying because it was before an election and no one was willing to stand before that bulldozer known as Paulson. No one wanted to make tough political decision before the election. They didn’t empower any experts to come in and testify. Why is that? They were playing politics, too. That’s what we’re dealing with–a complete leadership failure in Congress and the administration.

Don’t underestimate the role of politics in the decision not to fix things.

We are from the government and here to help you. Famous last words.

The Most Volatile Market Ever

http://bespokeinvest.typepad.com/bespoke/2008/11/the-most-volatile-market-ever.html

Volatile is not your friend. This implies a deep uncertainty about the market. Combined with a lack a volume says the gamblers are in charge and the house always wins in the end.

All About the Dollar

http://www.minyanville.com/articles/C-citigroup-STOCKS-volatility-bailout-liquidity/index/a/20123

Inside story of Citi

http://www.bloomberg.com/apps/news?pid=20601109&sid=ar.ByjvMr3YI&refer=home

In short no leadership, a silent bank run and even the FDIC did not want to get involved.

``The board has let Pandit flounder with no real plan for creating value either for its customers or its shareholders,''

http://clusterstock.alleyinsider.com/2008/11/-it-was-a-complete-death-spiral-

By the end of the week, a small number of clients, including wealthy customers of Citigroup's private bank, had started defecting. Executives and government officials worried about a potential exodus.

And you think I am all doom and Gloom

http://jsmineset.com/index.php/2008/11/22/what-must-be-done-to-avoid-financial-destruction/

I think we have at least till March before anything crazy will happen. In March we will pass the first days of the Obama lift. The first quarter numbers will be bad, horrific will be over used. The treasury will find itself in a terrible position. Stop borrowing money or become the Wiemar republic. Don't count on them not borrowing. From there we will be off book.

Starbucks

http://www.247wallst.com/2008/11/starbucks-sbux.html#more
When Starbucks goes bankrupt it will mark the end of one of the greatest marketing stories ever told. Convince people coffee is worth more than a buck and that venti is a real word.

Fed gets TARP Bailout

http://clusterstock.alleyinsider.com/2008/11/fed-gets-20-billion-tarp-bailout-
Uses $20 Billion from the TARP loan to loan another $200 Billion. I guess Math skills don't work as well as those in Washington.

National Intelligence Council Briefing 2025

http://image.guardian.co.uk/sys-files/Guardian/documents/2008/11/20/GlobalTrends2025_FINAL.pdf
Excellent read, tough to say what the future will look like.

Humor and Doom

http://ftalphaville.ft.com/blog/2008/11/25/18681/the-armageddon-index/

Citi

http://ftalphaville.ft.com/blog/2008/11/24/18618/whitney-on-citi-a-speculative-investment/

Lots of Citi news and reactions today. So Far whitney has been dead on with Citi. If that is the case then 20 Billion is only 10% of what will be needed.

FHA in need of a bailout soon

http://www.cnbc.com/id/27891145

Defense and the Financial Crises

http://blog.wired.com/defense/2008/11/unsolicited-a-2.html#more

A look forward to what may happen in 2010 and beyond as the full effects of the financial crises are felt.

WTF?

http://www.bloomberg.com/apps/news?pid=20601103&sid=arEE1iClqDrk&refer=us

The U.S. government is prepared to lend more than $7.4 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year, to rescue the financial system since the credit markets seized up 15 months ago.

You should read that one twice. Half of the GDP.

The money that’s been pledged is equivalent to $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages.

Just an awesome post.

http://www.ritholtz.com/blog/2008/11/what-obama-geithner-aig-fiasco/

Few observers outside Wall Street understand that the hundreds of billions of dollars pumped into AIG by the Fed of NY and Treasury, funds used to keep the creditors from a default, has been used to fund the payout at face value of credit default swap contracts or “CDS,” insurance written by AIG against senior traunches of collateralized debt obligations or “CDOs.” The Paulson/Geithner model for dealing with troubled financial institutions such as AIG with net unfunded obligations to pay CDS contracts seems to be to simply provide the needed liquidity and hope for the best. Fed and AIG officials have even been attempting to purchase the CDOs insured by AIG in an attempt to tear up the CDS contracts. But these efforts only focus on a small part of AIG’s CDS book.

Where did all the AIG money go, into paying out CDS at 100%. Effectually wasted and that is why AIG needed more money.

You see, there are trillions of dollars in outstanding CDS contracts for the Big Three automakers, their suppliers and financing vehicles. A filing by GM is not only going to put the real economy into cardiac arrest but will also start a chain reaction meltdown in the CDS markets as other automakers, vendors and finance units like GMAC are also sucked into the quicksand of bankruptcy. You knew when the vendor insurers pulled back from GM a few weeks ago that the jig was up.

And many of these CDS contracts were written two, three and four years ago, at annual spreads and upfront fees far smaller than the 90 plus percent payouts that will likely be required upon a GM default. That’s the dirty little secret we peripherally discussed in our interview last week with Bill Janeway, namely that most of these CDS contracts were never priced correctly to reflect the true probability of default. In a true insurance market with capital and reserve requirements, the spreads on CDS would be multiples of those demanded today for such highly correlated risks. Or to put it in fair value accounting terms, pricing CDS vs. the current yield on the underlying basis is a fool’s game. Truth is not beauty, price is not value.

The government is now in a rock and hard place. Let GM go Bankrupt and take out the CDS market and everyone else goes down with it or bail them out and hope people will still buy treasuries.

Time to buy

Dollar Bearish Fund (UDN)

Reaction to Citi Bailout

http://economistsview.typepad.com/economistsview/2008/11/the-citigroup-b.html

Citibank is effectively acknowledging that they did not have the resources to survive alone without government assistance. I did not use the words bankrupt or insolvent.

In short, a punt.

Why Citi may go down like Wamu

http://brontecapital.blogspot.com/2008/11/sheila-bair-and-seizing-citigroup.html
Less then 5 hours before Asian makrets open. Betting on some statement. Markets Drop tomorrow.

Emerging Market Debt Costs Jump in Week, Hastening IMF Bailouts

http://www.bloomberg.com/apps/news?pid=20601086&sid=aIJif6jqDY3U&refer=news

``Clearly we are in the early stages of a crisis in emerging markets,'' said Neil Dougall, head of emerging-market research at Dresdner Kleinwort in London. ``The fact we have already seen $80 billion penciled in for possible dispersion indicates that the IMF is going to be facing quite significant pressure.''

Yep and it is going to be very bad.

Irleand

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3486249/Markets-wary-of-Irish-debt-as-fresh-rescue-looms.html
The collapse of Ireland with be much worse then Iceland

Jim Rogers on current events

http://www.thedailybeast.com/blogs-and-stories/2008-11-23/your-money/

This is the first time in world history that I’m aware of where every government is doing the same thing, printing and spending huge amounts of money,” he said. “This has always led to inflation. Perhaps it’s different this time, but I doubt it. Some of the most dangerous words in the investment business are ‘it is different this time’. I expect a lot of inflation down the road.”

Hyper inflation always has occured in the past when large scale printing was attempted.

Layoff Tracker

http://www.forbes.com/2008/11/17/layoff-tracker-unemployement-lead-cx_kk_1118tracker.html
Every Million is worth 1% on the unemployment numbers. Does not included the underemployed where a a million laid off may mean 2% more.

Two so far this weekend, Citi still pending

http://www.latimes.com/business/investing/la-fi-banks22-2008nov22,0,3887469.story

The only story left is Citi for the weekend. Look for some annoucement tomorrow.

A tsunami of hope or terror?

http://www.businessspectator.com.au/bs.nsf/Article/A-tsunami-of-hope-or-terror-LHRJP?OpenDocument&src=stf
Lets just say when this is over, someone is going to be shot.

China Protest increase

http://www.latimes.com/news/printedition/asection/la-fg-chinariots19-2008nov19,0,4258918.story
"But there is no channel to allow people to express their will. They lack the right to speak, the right to organize and unionize to represent their interest, therefore they can only use an irrational way by demonstrating or rioting to solve problems."

All major downturns have caused major collateral damage. This is just sign of what is to come

http://brontecapital.blogspot.com/2008/11/sheila-bair-and-seizing-citigroup.html
At this point nothing would be more shocking. A perfect end to the banking system. Full Nationalization would be a last dramatic move to save the world.

Alt-A Losses Outstripping Expectations, Moody’s Says

http://www.housingwire.com/2008/11/20/alt-a-losses-outstripping-expectations-moodys-says/

As of Oct. 2008, serious delinquencies for Alt-A pools — including option ARMs — averaged 20.3 percent of current balance for the 2006 vintage and 17.5 percent for the 2007 vintage, up from 16.9 and 12.2 percent six months ago. At the same time, prepayment rates on these pools are at historical lows and are currently averaging in the mid to high single digits, Moody’s noted. Serious delinquencies refers to mortgages more than 60 days in arrears, in this case.

Ugly.

Google

http://www.streetinsider.com/Analyst+Comments/Analyst+Defends+Google+%28GOOG%29%2C+Says+Search+Ads+Will+Hold+Up+Well/4181750.html
Now the greatest Short opportunity left.
Yes I know google is the gold kid of the Internet. Yes I know people say it is worth $500-$600. That will not stop the slide to $150. Online Ads are going to dry up as ecommerce gets whacked.

http://www.alleyinsider.com/2008/11/depression-2-0-comes-to-ecommerce

No question a year from know people will wonder how did we not see Google at 150.

Which is worse to bailout GE or GM?

http://seekingalpha.com/article/106445-general-electric-genuine-risk-of-collapse

Either going down would a body blow to the markets. When you look at companies that have survied for so long to be in this much trouble it is sad.

Risk Spreads in Ireland

http://www.rgemonitor.com/euro-monitor/254464/is_ireland_the_next_iceland
In more bad news for UK Banking customers who where lured to Ireland when the government did a guaranty of the Banks. It is now looking increasing likely the country will collase like Iceland. I would give them two more weeks before the government is force to step in.

Fears rise over possible Ecuador default

http://www.marketwatch.com/news/story/Fears-rise-Ecuador-may-default/story.aspx?guid=%7B46EE5CFA%2D6F60%2D4688%2D906C%2D4889080A83FF%7D

http://www.bloomberg.com/apps/news?pid=20601086&sid=aJGOmMDjxUUY&refer=news

Six times in 100 years. Really why would you lend them money. Just saying.

Signs of Big problems for Hotels

Checking out the price of Hotels in the 'Mile' in Chicago. For the Saturday after thanksgiving. Normally the price would be $500-$600 if you get a room. (from last years trip). This year? $245 on the mile in the Westin. I have never paid these little to staying the holiday Inn. The only other time I saw rates cheaper was Dec of 2001 I stayed in New York at the Waldorf For $200. I am pretty sure there hotel was at its lost point ever.

End of the Big 3

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/19/AR2008111903669.html

The Big Three said nothing, which prompted Rep. Brad Sherman (D-Calif.) to rub it in. "I'm going to ask the three executives here to raise their hand if they flew here commercial," he said. All still at the witness table. "Second," he continued, "I'm going ask you to raise your hand if you're planning to sell your jet . . . and fly back commercial." More stillness. "Let the record show no hands went up," Sherman grandstanded.

Where do we find these people. You are asking for the government to save your company. For Good sake at least flying commercial.

It was a display of stone-cold tone-deafness by the automaker chiefs. In their telling, they have no responsibility for the auto industry's current mess. Threatening the nation with economic Armageddon if they are not given government aid, they spent much of the session declaring what a fine job they've been doing in Detroit.

So it was hard to feel sorry for the executives when Rep. Peter Roskam (R-Ill.), late in the hearing, reminded them again that "the symbolism of the private jet is difficult," and mischievously asked the witnesses whether, in another symbolic gesture, they would be willing to work for $1 a year.

"I don't have a position on that today," demurred Wagoner (2007 total compensation: $15.7 million).

"I understand the intent, but I think where we are is okay," said Mulally ($21.7 million).

And people wonder why the people of the USA will not bail them out.

Now the only question is did the market price in a collapse or bailout. I am voting for a bailout.

Ireland, Next in line now

http://www.creditwritedowns.com/2008/11/is-ireland-next-iceland.html

If the datapoints are correct I would expect Ireland to collapes before the end of the month.

Signs of a collapase

http://ftalphaville.ft.com/blog/2008/11/19/18442/cds-update-gloom/

CDS market was a lead indicator of a further fall for the stock market.

http://www.cnbc.com/id/27799264


http://ftalphaville.ft.com/blog/2008/11/19/18426/cds-report-lurching-towards-armageddon/

European credit spreads were lurching back towards “Armageddon levels” on Wednesday

It is now clear that the failure to rally from the triple bottom will signal a drop to the next support levels. If we close anywhere near the current levels, DJ at 8100 and SP at 830.

Look for 6400-5300 to be the next support level.

So ends the story of Ambac, MGIC and the others

http://ftalphaville.ft.com/blog/2008/11/19/18444/the-death-throes-of-the-bond-insurers/

The outlook for the bond insurance industry is, flatly, bleak.

Once you are a penny stock, forget about it.

Homebuilders DOA

http://www.cnbc.com/id/27791089

The National Association of Homebuilders Housing Market Index hit a record low of 9. This number pivots around 50. Above 50 is good and below 50 is bad. 9 is the all-time super record low. An index of buyer traffic fell to 7

IE no one is buying or looking.

The Securities Industry and Financial Markets Association figure that $400 billion of the $1.5 trillion have defaulted, so presumably they have been written down. $250 billion will reset their interest rate in 2009 and another $700 billion in 2010.

Much more loses need to be taking.

Till we clear out the bad loans, we are not going to see progress.

Signs the Dollar is in trouble

http://www.atimes.com/atimes/Japan/JK19Dh01.html

The US government needs to borrow at least US$1 trillion in the coming year, excluding the US Treasury's $700 billion plan to bail out the financial and other industries,

IF we borrow this much it will equal the last 4 yesrs of borrowing and includeds no increase or other spending Obama has talked about.

"The dollar now looks strong for a technical reason. The money the US financial firms had invested in the world is being repatriated into the homeland, causing dollar-buying. But once this conversion into the dollars is done, the currency will head south,"

Last done by the Carter Administration.

http://en.wikipedia.org/wiki/Carter_bonds

This stabilizatin was one of the last acts of 1934 which marked a bottom of the great Depression. If we reach this it will mark either the end of the downturn or if it occurs and things continue to worsen will be off book from history. That is a very scary thought.

Dutch insurer to buy a bank in the US to get TARP Money

http://www.cnbc.com/id/27780339
The madness for everyone to become a bank is crazy.

Bloomberg on the Banks

http://www.bloomberg.com/apps/news?pid=20601109&sid=aAmfkLEyMPYM&refer=home

``The Fed's commercial paper programs avoided a mid-air collision,'' said Josh Rosner, managing director of New York- based research firm Graham Fisher & Co. Having to deliver on the loan commitments ``would have caused a liquidity crunch'' for the banks that made them, he said.

So there broke.

The 30 biggest U.S. banks hold about $1 of capital for every $11 of ``risk-weighted assets,'' a figure that encompasses assets both on and off the balance sheet, Scott said. Off-books assets get about half the risk-weighting as those on the books, which means banks are required to hold about half the capital.

The assest are crumbling fast.

Some banks already are so burdened with faulty mortgage investments that they might have become ``toast'' with the stress of additional capital requirements, Rosner said.

They are dead man walking

Jeffrey Previdi, a senior director in the public finance unit of Standard & Poor's, said the Fed's actions have brought ``a little bit of return to normalcy'' in the tender-option bond market. ``But there are still some real issues concerning credit or liquidity providers and their strength.''

How long before we know that it is not going back to normal till we purge the bad debt.

Russia Halts Market for 30th time

http://www.bloomberg.com/apps/news?pid=20601087&sid=aTTGqbAfZWjI&refer=home

Russia joins Hungary, Iceland and Pakistan among a handful of central banks raising interest rates to stem currency losses, as the rest of the world cuts the benchmarks to spur lending.

hmm what do all these countries have in common? All bailed out by the IMF expect russia.

$7 Billion wasted trying to save the ruble.

Every time the price of oil decrease the more problems Russia is going to have.

Citi and To big to bailout

http://www.portfolio.com/views/blogs/market-movers/2008/11/13/citis-desperate-straits

With so many bad things to choose from, this would clearly be very bad. If the government had to step in now it would take $1T dollars to fix it. Let me repeat that $1T. We now a company too big to bailout. The ship is sinking the only question is who is the last one off the ship.

Russia and S&P

http://www.themoscowtimes.com/article/600/42/372357.htm

Lots of weirdness in russia these days.

Sometimes they just nail it.

http://www.minyanville.com/articles/dollar-Paulson-acrimony-crude-drys-spx/index/a/19963

I love to read a post which just nails the current feelings. SP840 is looking to not hold, the march to 600 is underway if we close were we are right now.

War with IRAN and why it might end badly

http://www.theatlantic.com/doc/200810u/kaplan-iran-war
Scary stuff, Hopefully our leaders do not choose this path.

GE

http://www.reuters.com/article/ousiv/idUSTRE4AC0JJ20081113
The FDIC is bailing out GE for 147B. Two question, when did GE pay into FIDC? Never.
Why did they not use TARP? Out of money already? Does not want to talk to congress again?

Soros

http://www.reuters.com/article/ousiv/idUSTRE4AC5IN20081113
Some great commentss from George Soros.

Japan ponies up 100B for the IMF

http://www.cnbc.com/id/27690477
No one is impressed. Another drop in the wave which is engulfing everyone.
Topping that off with China now in recession (and those are the government numbers) along the USA and UK in deep trouble. The wave can not be stopped now, the only question now is where to take shelter and what the world will look like on the back side.

Chicago -Big Problems ahead

http://www.suntimes.com/news/politics/1275442,CEO-daley-layoffs-chicago-economy-budget-111208.article

“Huge layoffs are coming in November and December. And next year, there’s going to be [even more] huge layoffs. All the corporation CEOs have come in to tell me. That’s just the beginning. It’s not their end result,”

Poland joins the list

http://ftalphaville.ft.com/blog/2008/11/13/18197/the-big-le-borrow-ski/

In further signs of an event that has never happen, the global recession is gathering steam

Ben "The Printer"

http://ftalphaville.ft.com/blog/2008/11/13/18207/prsh-dum-prsh-dum-prsh-dum/

In an uncannily prescient speech in 2002 (Deflation: Making Sure It Doesn’t Happen Here), he laid out a detailed plan for avoiding deflation in a western economy. This involved printing money to bail out failing banks, and buying troubled assets such as mortgage-backed securities. If necessary (and we are not quite there yet, in my opinion), he advocates printing more money to finance an increase in the budget deficit and pay directly for tax cuts. That man was Ben Bernanke, now the chairman of the US Federal Reserve. Read his speech on the Fed’s website. So far, about two-thirds of the plan has been implemented, and he clearly stands ready to complete the job if needed.

In Short Ben thinks that hyper Inflation is the last stop. If this happens you can you look at the USA to be the next Iceland.


http://ftalphaville.ft.com/blog/2008/11/10/18038/the-unthinkable-has-happened/

http://www.telegraph.co.uk/finance/financetopics/recession/3446686/Ken-Clarke-warns-Britain-is-on-the-brink-of-meltdown.html
"We still have a major, major crisis in this country and... public finances are in a terrible mess".

Mr Clarke, 68, said the British economy is headed for a "catastrophic crisis" that will be "far worse than anything that has occurred in my lifetime".

In short it will be worse then we all think.

Intel

http://www.bloomberg.com/apps/news?pid=20601087&sid=a8duq1YbR2j8&refer=home
Sign of more bad news. With the continued credit problems the contigan is spreading very quickly. Looking for a crash before the end of the year. DJI 5300 SP 600.
4Q numbers will be across the board bad.

Orders dried up amid customers’ inability to get credit to finance technology purchases.

http://www.prudentbear.com/index.php/commentary/featuredcommentary?art_id=10136

Within the financial sector, de-leveraging is well advanced. In the real economy it is in the early stages.

I would say under way but not yet peaked from the financial sector.

Ultimately, "all the king’s horses and king’s men" cannot prevent the de-leveraging of the financial system under way. The extent of de-leveraging is substantial and likely to take time. In recent years, money was cheap and other assets were expensive. As each of the global economy’s credit creation engines breaks down and systemic leverage reduces, money becomes scarce and more expensive triggering substantial adjustments in asset prices in a reversal of the process.

Things will become very cheap. If you have any money left

David Roche of Independent Strategy, a consulting firm, estimates that $4 to $5 of debt is now required to generate $1 of economic growth. As credit creation slows and debt levels fall, the sustainable level of global economic growth may fall as well.

Of interest to this thought is the difference between $4 available then and what will be available in the future. I would guess it will be a long time before growth is seen

too much common sense

http://www.moneyweek.com/news-and-charts/economics/have-we-reached-a-minsky-moment.aspx
For economics

Duh, losses may be above 1.4T

http://www.cnbc.com/id/27680391
Of couse they will be, the treasuiry already has loaned out almost $2 trillion with no signs of improvment. Huge amounts of loss have not been taken. Just look at the Level 3 assest still polluting the banks. Citi has $1T by itself!

Canada

http://www.thestar.com/News/Canada/article/535392
Nothing to see here. Canada is fine.

Humor

http://www.washingtonpost.com/wp-srv/opinions/cartoonsandvideos/telnaes/telnaes11122008.html

Mexico

http://climateerinvest.blogspot.com/2008/02/billionaire-carlos-slim-calls-for.html

http://www.economist.com/countries/Mexico/

After a very interesting discussion with some about what Carlos Slim is doing and saying, I went back and looked for english translation of his 2008 moves. While not very open about what he is doing, it is somewhat clear that he is proposing huge infrastructure. The main question is why? In short Jobs. Without massive job dislocation occuring he wants to try to protect his companies which need the consumer to have money for phones for example. He knows the economy is in trouble. The only question now is how bad will it be and can the government create enough projects to keep unemployment under control.

Swiss in trouble?

http://ftalphaville.ft.com/blog/2008/11/12/18122/spot-of-swiss/
Say it aint so. UBS dead man walking. CS dead man walking. I can not see Obama trying to save UBS, just to much political problems. Regardless of the fact that a collapse of UBS would have huge collartral damage. Yet another wave the will crest soon.

Google going down below $300

http://www.247wallst.com/2008/11/could-google-go.html

I am betting it will go below $200. We have underestimated how bad things are going to be.

I own puts on Google.

Bid-to-cover

http://www.federalreserve.gov/newsevents/press/monetary/20081112a.htm

Whoops ,Bid-to-cover at 8%. Guess no one is buying.

PBS show on the crash

Brokers Believe Worst Is Over and Recommend Buying of Real Bargains

Wall Street in looking over the wreckage of the week, has come generally to the opinion that high grade investment issues can be bought now, without fear of a drastic decline. There is some difference of opinion as to whether not the correction must go further, but everyone realizes that the worst is over, and that there are bargains for those who are willing to buy conservatively and live through the immediate irregularity.

-- New York Herald Tribune, October 27, 1929

Written two days before the crash of 1929, had you bought then you would have broken even in the 50's

http://www.pbs.org/wgbh/amex/crash/index.html

PBS is doing a show on the great crash, looks very interesting.

more pain for the banks

http://moneynews.newsmax.com/streettalk/bank_bailouts/2008/11/11/150151.html

The Wall Street as we know it is dead. What will be left is the only question.

People leave there cars

http://www.belfasttelegraph.co.uk/news/local-national/economic-crisis-sees-people-abandon-luxury-cars-at-dublin-airport-14052806.html

We people start to give up on there property you can be sure things are going arye.