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.