Friday, March 27, 2009

Why there are lags in house price downturn and consumption "corrections" in places like DC, NYC, and SFO.

No dummy - it's not the "diversification" or tech mecca or some BS that even my cellmates can spew out in between bufus.It's the wife factor. In USA it costs 50% of what you ARE to get out of a sinking UNION. Or keep paying the due that's worth 10% of what you're worth every year.Kinda like the decision to carry Level 3 asset in your balance sheet.

Here's the bomb: People are so stupid that they tend to MAXIMIZE their losses carrying that for 3-5 years and then pay the split-fee and yet the insane wife still takes everything including the dog.

You my friend, are either the dog or the good husband.

I never carry level 3 assets. That's why I still consider myself above any of these miscreants in C and BAC in terms of moral and ethic. Ok, that's it for now, I'm going to attend pruno class this afternoon. Tata.- BM

Greetings, I will be taking over social issue discussions

From now on. Good to meet you all.

- BM

Tuesday, March 24, 2009

Address to the Chinese Friends.

I understand that you have been approached a number of times, with reminders, friendly, but stern, that should you choose to stop "co-operating" with us, you will face an economic ruin. That means giving us more money and resources.

Here's why you should continue lending us money: Because by growing more than the cost of the borrowing, I could earn a living while paying you back the money I borrow. This is what a white retired lazy male called "Skeptical Optimist" wrote in his blog. He even threatened your country with our navy boys while at it. I fully expect being automatons that you are, you will not be able to critically evaluate the requirements above and will simply comply.

I understand that you are without courage, oh Chinese people, and at this point completely out of option. As an American (with capital A), I am glad to see your nation's service to our Nation. You are weak, and we will be merciful. You cannot think, and we will supply the arguments, and you will just have to nod your head. You will work, we will NOT pay.

Such is the fact of life, that slavery is a necessary evil. Because otherwise, how can one be "above average" - if someone else is not below.

Thank you again my Chinese friends. Keep shining shoes, making shoes, fixing shoes, or whatever it is you do with my shoes. God Bless.

Friday, March 20, 2009

Topic removed. Thank you for the e-mail.

And replaced with a random topic.


Pace® Soft Tacos
(Prep/Cook Time: 15 min.)

1 lb. ground beef
1 tbsp. chili powder
1 cup Pace(r) Picante Sauce
8 flour tortillas (8")
1 cup shredded lettuce
1 cup shredded Cheddar cheese

COOK beef and chili powder in skillet until browned. Pour off fat.

ADD picante sauce and heat through.

SPOON about 1/4 cup meat mixture down center of each tortilla. Top with lettuce and cheese. Fold tortilla around filling. Serve with additional picante sauce. Serves 4.

Thursday, March 19, 2009

Time to celebrate.

Brother KJ is nominated as the most famous person in the world by Time Magazine.
Praise be to the kimchee gods.

Typical Long investor in SPG

is someone with BA, 20-40 yrs old, $35-80k salary, and graduated 1.75 - 2.63 GPA.
They are absolutely impotent in every aspects of life including mating, and substituted glue for the more bonafide "medicines".

I wish I work in biotech, because I want to examine these people brain structure in depth using a very nice microscope.

PS: and reading the Skeptical Optimist. LOL.

My GHOD. There's a protest in front of 85 Broad?

About CDS?!!! These peasants need to be put back to their place.
Will send a couple of buldozers off the WTC site to handle the work.

Wednesday, March 18, 2009

Boy-O, u have disappointed me.

By this time of year I would have expected industrial needs and basic materials to be given priority dead center.

But instead you are blundering into playing financial STOCKS!!!!! You put financial stocks in the center, and ignored the plight of everybody else. Why, I think you are about to learn new lessons in your latest move Sir.

Another disappointment from one of your most ardent, shadowy supporter.

Friday, March 13, 2009

Good reading: Summers speech at the Brookings Institute

Remarks of Lawrence H. Summers, Director of the National Economic CouncilResponding to an Historic Economic Crisis: The Obama ProgramBrookings Institution, Washington, DCMarch 13, 2009

I am glad to be here. This morning I want to describe our understanding of the root of our current economic crisis, talk about the rationale for the Administration’s recovery strategy, and connect our longer-term economic strategy to the central objective of sustained and healthy expansion.
Economic downturns historically are of two types. Most of those in post-World War II-America have been a by-product of the Federal Reserve’s efforts to control rising inflation. But an alternative source of recession comes from the spontaneous correction of financial excesses: the bursting of bubbles, de-leveraging in the financial sector, declining asset values, reduced demand, and reduced employment.
Unfortunately, our current situation reflects this latter, rarer kind of recession. On a global basis, $50 trillion dollars in global wealth has been erased over the last 18 months. This includes $7 trillion dollars in US stock market wealth which has vanished, and $6 trillion dollars in housing wealth that has been destroyed. Inevitably, this has led to declining demand, with GDP and employment now shrinking at among the most rapid rates since the second World War. 4.4 million jobs have already been lost and the unemployment rate now exceeds 8 percent.
Our single most important priority is bringing about economic recovery and ensuring that the next economic expansion, unlike it’s predecessors, is fundamentally sound and not driven by financial excess.
This is essential. Without robust and sustained economic expansion, we will not achieve any other national goal. We will not be able to project strength globally or reduce poverty locally. We will not be able to expand access to higher education or affordable health care. We will not be able to raise incomes for middle class families or create opportunities for new small businesses to thrive.
And so today, I will explain the rationale behind the President’s recovery program and our strategy for long-term economic growth. Our problems were not made in a day, or a month or a year, and they will not be solved quickly. But there is one enduring lesson in the history of financial crises: they all end.
I am confident that with the strong and sound policies the President has put forward and the passage of time, we will restore economic growth and regain financial stability, and find opportunity in this moment of crisis to assure that our future prosperity rests on a sound and sustainable foundation.
First, I’d like to describe how best to think about this crisis.
One of the most important lessons in any introductory economics course is that markets are self-stabilizing.
When there is an excess supply of wheat, its price falls. Farmers grow less and others consume more. The market equilibrates.
When the economy slows, interest rates fall. When interest rates fall, more people take advantage of credit, the economy speeds up, and the market equilibrates.
This is much of what Adam Smith had in mind when he talked about the “invisible hand.”
However, it was a central insight of Keynes’ General Theory that two or three times each century, the self-equilibrating properties of markets break down as stabilizing mechanisms are overwhelmed by vicious cycles. And the right economic metaphor becomes an avalanche rather than a thermostat. That is what we are experiencing right now.
Declining asset prices lead to margin calls and de-leveraging, which leads to further declines in prices.
Lower asset prices means banks hold less capital. Less capital means less lending. Less lending means lower asset prices.
Falling home prices lead to foreclosures, which lead home prices to fall even further.
A weakened financial system leads to less borrowing and spending which leads to a weakened economy, which leads to a weakened financial system.
Lower incomes lead to less spending, which leads to less employment, which leads to lower incomes.
An abundance of greed and an absence of fear on Wall Street led some to make purchases – not based on the real value of assets, but on the faith that there would be another who would pay more for those assets. At the same time, the government turned a blind eye to these practices and their potential consequences for the economy as a whole. This is how a bubble is born. And in these moments, greed begets greed. The bubble grows.
Eventually, however, this process stops – and reverses. Prices fall. People sell. Instead of an expectation of new buyers, there is an expectation of new sellers. Greed gives way to fear. And this fear begets fear.
This is the paradox at the heart of the financial crisis. In the past few years, we’ve seen too much greed and too little fear; too much spending and not enough saving; too much borrowing and not enough worrying. Today, however, our problem is exactly the opposite.
It is this transition from an excess of greed to an excess of fear that President Roosevelt had in mind when he famously observed that the only thing we had to fear was fear itself. It is this transition that has happened in the United States today.
What is the task of policy in such an environment?
While greed is no virtue, entrepreneurship and the search for opportunity is what we need today. We need a program that breaks these vicious cycles. We need to instill the trust that allows opportunity to overcome fear and enables families and businesses to again imagine a brighter future. And we need to create this confidence without allowing it to lead to unstable complacency.
While the economy is falling far short today, perhaps a trillion dollars or more short, we should never lose sight of its potential. We have the most productive workers in the world, the greatest universities and capacity for innovation, an incredible amount of resilience, entrepreneurship, and flexibility, and the most diverse and creative population of any major economy.
One striking statistic suggests the magnitude of the opportunity that is before us in restoring our economy to its potential. Earlier this week, the Dow Jones Industrial Average, adjusting for inflation according to the standard Consumer Price Index, was at the same level as it was in 1966, when Brookings scholars Charlie Schultze and Arthur Okun were helping to preside over the American economy.
While there could be many ways to question this calculation, that the market would be at essentially the same real level as it was in 1966 when there were no PCs, no internet, no flexible manufacturing, no software industry, and when our workforce was half and our net capital stock was a third of what it is today, may be regarded by some as the sale of the century. For policy-makers, it suggests the magnitude of the gains from restoring sustained economic growth.
Producing recovery and harnessing these opportunities, however, will depend upon the choices we make now. This is what the President’s program sets out to achieve.
Towards this end, the President is committed to an approach that moves aggressively on jobs, credit and housing, thereby attacking the vicious cycles I described earlier at each of their key nodes. In this effort, he has insisted that we all recognize that the risks of over-reaction are dwarfed by the risks of inaction.
The first component of the President’s program is direct support for jobs and income to engage the multiplier process in favor of economic expansion. Increases in income lead to financial repair which supports further increases in income. Rising employment will lead to rising spending, which leads to further increases in income and employment.
The Recovery and Reinvestment Act is the largest peacetime economic expansion program in the country’s history. It will inject nearly $800 billion into the economy, ¾ of it within the next 18 months. The Council of Economic Advisors’ estimates suggest that the Recovery and Reinvestment Act will save or create 3.5 million jobs. It will at the same time do some of the work that the nation has needed done for a long time—doubling renewable energy capacity in the next 3 years, supporting middle class incomes, modernizing ten thousand schools, and making the largest investment in the spine of our national economy – the nation’s infrastructure – since Dwight Eisenhower’s investment 50 years ago.
Already, its impact is being felt by cops and teachers who would have been laid off but whose jobs have been saved—it may retain14,000 teachers in New York alone. It will, for most American workers, be felt in the coming weeks as withholding schedules are adjusted, in continuing unemployment insurance benefits and health benefits for hundreds-of-thousands of workers who already would have done without, and in contracting already underway with respect to tens-of-billions of dollars of infrastructure projects across the country.
It is surely too early to gauge the broader economic impact of the President’s program. But it is modestly encouraging that since it began to take shape, consumer spending in the US, which was collapsing during the holiday season, appears, according to a number of indicators, to have stabilized.
The second major portion of the President’s strategy is the financial stability plan. It is directed at addressing the vicious cycles associated with de-leveraging and credit contraction. A strong flow of credit is necessary because factories need it to buy equipment, stores need it to stock their shelves, students need it to attend college, consumers need it to buy cars, and businesses need it to meet their payrolls.
The approach rests on two pillars: The first is a trillion dollars for financing or purchasing mortgages, student small business loans, and other financial instruments through the TALF (or what is now called the Consumer Business Lending Initiative), the GSEs, and public-private investment facilities that Secretary Geithner will be detailing in the weeks ahead.
Reactivating the capital markets is essential to realistic asset valuation, to restarting nonbank lending, and to enabling banks to divest toxic assets when they judge it appropriate.
The second pillar of the program is assuring that our banking system is well capitalized and in a position to lend on a substantial scale. The stress tests now underway will enable a realistic assessment of the position of each different institution and appropriate responses in each case to assure their ability to meet their commitments and lend on a substantial scale. And as the President said in his joint address to Congress, “When we learn that a major bank has serious problems, we will hold accountable those responsible, force the necessary adjustments, provide the support to clean up their balance sheets, and assure the continuity of a strong, viable institution that can serve our people and our economy.”
As a result of government interventions in the financial markets, key credit spreads are already substantially narrower than they were last fall. There are some indications that the expectations of future actions have been a positive in reducing credit costs in a number of key areas. It is our hope and expectation that further support for capital markets, transparency with respect to the condition of banks, and infusion of capital into the banking system, will create virtuous circles in which stronger markets beget stronger financial institutions, which beget stronger markets, leading ultimately to financial and economic recovery.
The third component of the President’s recovery strategy is addressing the housing market. The vicious cycle of rising foreclosures leading to declining home prices, leading to rising foreclosures – must be contained. This problem is at the heart of our economic crisis.
Through direct interventions, using the GSE’s to bring down mortgage rates and make possible refinancings for credit-worthy borrowers who have lost their home equity as house prices decline, and through setting standards and providing significant financial subsidies for measures directed at payment relief to prevent foreclosures, we are achieving several objectives.
Housing wealth and its contribution to expenditures is being maintained. And critically lower mortgage rates mean more income for consumers, and function like tax cuts in support of consumer spending. Depending on market conditions the administration’s program may save American households more than 150 billion dollars over the next 5 years.
Taken together, these steps to support incomes, increase the flow of credit, and normalize housing market conditions address each of the vicious cycles that is leading to decline.
With the passage of time, it will permit the re-engagement of the normal processes of economic growth: rising incomes and employment, greater credit flows, increased spending, a stronger US economy and a stronger global economy. They will reinforce crucial dynamics that will also operate to promote recovery.
For example, about 14 million new car sales are necessary for replacement and to accommodate rising population growth. Yet car sales are now running at an annual rate of about 9 million. New household formation requires something like 1.7 million new housing units a year and housing starts are now running about 400,000 a year. Once the inventory is worked off, investment will increase. Historical experience suggests that rapid inventory decline such as we have observed in recent months is followed by increased production to rebuild inventories.
Of fundamental importance is ensuring that we do not exchange a painful recession for another unsustainable expansion. That would not only be irresponsible – it would be counterproductive. We have seen what happens when we pursue policies that produce short-term, instead of durable and sustainable growth.
We have seen housing prices reach unsustainably high levels and credit spreads reach unsustainably low levels in the middle of this decade. And we saw bubbles in technology in the late 1990s.
Bubble driven economic growth is problematic because of disruption and dislocation – affecting those who took part in the bubble’s excesses and those who did not. And, it is not entirely healthy even while it lasts. Between 2000 and 2007 – a period of solid aggregate economic growth – the typical working-age household saw their income decline by nearly $2000. The decline in middle-class incomes even as the incomes of the top 1% skyrocketed has a number of causes, but one of them is surely rising asset prices and the fact that financial sector profits exploded to the point to where they represented 40% of all corporate profits in 2006.
Confidence today will be enhanced if we put measures in place that assure that the coming expansion will be more sustainable and fair in the distribution of benefits than its predecessor. That is why the President has priorities that go beyond the immediate goal of containing the downturn and promoting recovery.
An overhaul of our financial regulatory system is one such priority. In little more than two decades, we’ve witnessed the stock market crash of 1987, the Savings and Loan scandals, the decline of the real estate market, the rapid decline of Asian markets, the collapse of the NASDAQ telecom bubble, Enron, Long Term Capital Management, and today’s crisis. This is roughly one crisis every 2.5 years. We can and must do better.
There is room for debate about how regulation should be enhanced, but not about whether we can stay with the status quo. Treasury Secretary Geithner will be laying out the Administration’s approach in some detail in the coming weeks and the President is eager to take this issue up with his fellow leaders at the April G-20 meeting. While the discussion can get pretty technical quickly, some things should be clear:
Regulatory agencies should never be placed in competition for the privilege of regulating particular financial institutions.
Globally, the United States must lead a leveling-up of regulatory standards, not as has happened all too often in the recent past, trying to win a race to the bottom.
No substantially interconnected institution or market on which the system depends should be free from rigorous public scrutiny.
Required levels of capital and liquidity must be set with a view toward protecting the system, even in very difficult times.
And there must be far more vigorous and serious efforts to discourage improper risk taking through transparency and accountability for errors.
An additional requirement for financial stability is that the government’s own finances be stable. When I left Washington eight years ago, people were debating what to do when there was no more federal debt. That is hardly our problem today. I hope that all of those who participate in the debate over this year’s budget, whether they agree or disagree with President Obama’s priorities, will share his commitment to truthful and realistic budgeting and fiscal sustainability to ensure that after recovery, the ratio of the nation’s debt to its income stabilizes.
If growth in the coming years is not to be driven by asset price inflation-induced consumption, other engines of growth must be identified. These forms of growth should be sustainable and shared by the majority of American households.
Stronger exports are one sound foundation for sustainable expansion. That is why along with strengthening financial regulation, the President will be working on the global growth strategy at the G20. Priorities will include spurring demand around the world and assuring the adequacy of funding for emerging markets.
These are issues both for global recovery - at a time when 2009 is likely to be the first year of negative global growth since the Second World War - and for a healthy, less debt-dependent US expansion.
But moving away from foreign debt-financed growth is only one component of ensuring a healthy expansion. An additional component is addressing our healthcare system. It is no accident that the period of the most rapidly rising wages for middle income families was the 1990s when healthcare cost inflation was relatively well controlled. Our ability to produce competitively in the United States will be enhanced if we contain healthcare costs. I have heard it said that GM’s largest supplier is not a parts company or a tire company, but Blue Cross Blue Shield.
Containing healthcare costs help keep the economy sustainable and so does improving quality and access. A study I helped sponsor while at Harvard demonstrated that less than 1 in 4 Americans with hypertension had it under control. This means huge costs for treating strokes down the road as well as children who will never know their grandparents. By investing in healthcare now, we can make our economy, as well as our people, healthier. We will also increase confidence in the ultimate stability of the nation’s finances.
An equally important engine of recovery can be investment in reducing our energy vulnerability and our contribution to climate change. That is why the Recovery and Reinvestment Act provided for doubling renewable energy and weatherizing 75 percent of federal buildings. It is also why the President’s budget points toward strong action to implement a market-based cap-and-trade system, after the economy recovers, beginning in 2012.
Let’s be realistic. Sooner or later we will have to reduce our dependence on foreign energy and contain our carbon emissions. As Federal Reserve Chairman Ben Bernanke’s doctoral thesis demonstrated 30 years ago, unresolved uncertainty can be a major inhibitor of investment. If energy prices will trend higher, you invest one way; if energy prices will be lower, you invest a different way. But if you don’t know what prices will do, often you do not invest at all. That is why we must move forward as rapidly as possible to reduce uncertainty and carefully create a new cap-and-trade regime.
There is another benefit as well. As many enlightened business leaders have recognized, the confident expectation that pricing policy will discourage carbon use in the future will spur a whole range of green investments in the present, when our economy can benefit from all the investment it can get. And in the long run, we believe this will create millions of new jobs. And the evidence is clear: we can choose to lead these industries, with all the commensurate economic and political and environmental benefits, or we can choose to lose out on these jobs and these opportunities.
Finally, while America’s education system may not be directly implicated in the current economic crisis, it is surely the case that improving it is essential to the long-run growth of the economy and to ensuring that this growth is shared, lifting up more families who get the opportunities afforded by a better education and expanded access to college.
I’ve spoken in the language of economists and economic policy – budgets and prices, capitalization and interest rates. That is because I believe there is no substitute for careful analysis in setting economic policy. But as we debate these abstractions, we must always keep in mind that our economic policies affect real lives – and economic problems cause real pain.
The decisions we make will determine whether children will look to their parents with pride when they come home from work – or fear that their home will be lost. Whether families will experience the prosperity this nation is capable of producing, or the disruption and dislocation that too many have found instead.
President Obama inherited an economy in crisis. This is not a crisis we sought – nor is it one we created. But it is one, under the President’s leadership, that we have answered. The Obama Administration is embarking on what I believe is the boldest economic program to promote recovery and expansion in two generations. No one can know just when its positive effects will be fully felt. No one can predict when this crisis will be resolved. But in resolution, I am confident there is enormous opportunity for both Americans and for the United States of America. We can and we will emerge more prosperous, stronger, wiser, and better prepared for the future.

Tuesday, March 10, 2009

Short here?

I guess you also like to play this game back in the days:

Friday, March 6, 2009

Please read this:

and realize you have been duped big time, and yet still has the balls to yell insults at the people spending the time to make you aware of this gigantic crime being committed to you:

The end result is that if you do not have a means of transporting yourself out in the event of a riot ... there will be LULZ to be had.

What does a riot look like, you ask the mortgage toiletman!

Well, it begins with a very nice Sunday morning. Then you see something like 500-1000 vehicles and sometimes buses parked in the town center. Then out come tens of thousands of angry people you have never seen before and a few hundreds of them were going straight at you, and then pitch black.

Later, eye witnesses from every town will tell you the same thing. That people from other places riot in theirs. Isn't that strange? LOL.

This whole thing, was due to the inability to handle a very simple issue regarding CDS, that has been talked about for 2 years at every level of society (in the know that is).

Sigh, what do I know, or care. I got my exit route covered.

Still don't have a good picture? Well then this interview should give you another piece of the puzzle.

KAI VIGELAND: The reach of the Madoff scandal is so vast that today the FBI set up a special hotline for investors who think they're among the victims. The agency may want to keep that line open even after the dust settles. Because history teaches us that it probably won't be the last scam of this economic cycle.
There's a name for the part of the cycle we're in -- It's called the "bezzle."
Richard Parker of Harvard's Kennedy School knows all about it. Professor Parker good to have you with us.
PARKER: Delighted to be here.
VIGELAND: So, tell us. What is the "bezzle?"
PARKER: The "bezzle's" a term that was coined by the American economist John Kenneth Galbraith in a book called "The Great Crash: 1929" which he wrote in the middle of the 1950s. What he recognized was that at any given time there is a certain amount of embezzlement going on in the economy. Now this falsely inflates the sense of the total wealth of the economy at that moment. Because, not only does the embezzler now have substantial resources under his control but the embezzled does not yet know that he or she has lost those resources. And so there's, in effect, a kind of double counting of wealth of both the victim and the victimizer. And the inventory of that duplicity is what Ken called the bezzle.
VIGELAND: And at another point in time, then, all of that comes to light, is discovered?
PARKER: Yeah, what happens is that the bezzle varies in size with the business cycle and with the financial cycle. And so, what we've had in the last few years, presumably, is a run-up in the bezzle in conjunction with the run-up in the value of the markets. So that more and more people were drawn into the markets. Money was being made. More and more people came in, threw more money at the market and, as long as the markets kept rising and a new round of investors kept coming in, older investors kept getting good returns on their money and spreading the news that this was a great, sound and high-returning investment.
VIGELAND: So, how does Bernie Madoff fit into the bezzle and particularly within the context of the entire financial crisis?
PARKER: Bernie Madoff is a representative of the species of the bezzler, if you will. And he's by no means unique. This pattern of behavior can be traced back to that famous South Sea Bubble, or the Dutch Tulip Mania. It was a prominent feature in the crash of 1929, and is always present in the run-up in these financial cycles. And then, as the top of the market is reached, and we tip over and start sliding downward . . . of course, new money stops coming in and the game is over.
VIGELAND: So, now that we've entered this bezzle phase, is it safe to assume that there are more Madoffs out there?
PARKER: Oh, I think it's very safe to assume that there are more Madoffs out there.
VIGELAND: Will they be as bad -- $50 billion worth?
PARKER: Oh, I think they could be much worse. I mean . . .
VIGELAND: Oh, geez.
PARKER: Again, what you have to remember is once one or two of these start to tip over, confidence in the market slips. More people begin to pull their money out of various investment vehicles in a rush to get to the door and put it in CDs or cash or whatever. So, we're very likely to see many more of these and larger ones as well, too. I mean, we just don't know what's out there. That is a dark and scary forest to go wandering in in 2009.
VIGELAND: Richard Parker is a senior fellow at Harvard's Shorenstein Center and the author of "John Kenneth Galbraith: His Life, His Politics, His Economics." Thanks so much.
PARKER: Thank you, Tess. I really enjoyed it.

How many A&&holes work in Manhattan

Someone forwarded me this:

1. The average a-hole spend 2% of their time (i.e., about 30 min/day) walking the streets of Manhattan
2. You pass an average of 1 a-hole per block when walking the streets of Manhattan
3. The average block is 1/12th mile long
4. Manhattan has 22.96 sq mi in areaHmmm...... a bit of quickie math (assuming you only see a-holes coming toward you on your side of the street) yields an estimate of 1.3 million. Either my data/model is wrong or about 35% of the people employed in Manhattan are a-holes.

Do the same with your cities with parameters that I may have missed, along with your definitions of a-holes.

Thursday, March 5, 2009

Lots of stories, none good.

With much lighter load in my portfolio, I feel finally less pressure to offer some serious thinkings for the weeks ahead.

1. GE - completely surrounded with no escape. They will get government "cooperation" and will trade like C. Impact:
a. 401ks/pension plans - nuff said.
b. insolvent CDS writers: The "fundamentals" writer such as insurance companies, who didn't hedge as effectively as the hedge funds and GS of the world. Typically run by eggheads, these would go to government for another round of handout. Names? Just throw a few dart and one will hit - PRU? HIG? AIG? (just kidding on the last one).

2. Chinese did the right thing - no explicit stimulus. US has trapped itself.
a. Many argues pushing the "demand" side (rebate checks, shovel-ready jobs) is the way to go. The reality is that "supply" or "demand" side are both constrained by the fact that only about 10% of the money will come back as consumption, and the rest will go paying off debt. In fact, contrary to gov't mantras: the less money someone has at this point, the more likely he/she uses the stimulus to pay off debt. They see this as a "source" of their ongoing problems recently. Private polls and recent underground studies have confirmed that.
b. Of course some eggheads in Obama cabinet realized this as well and instead of calling it "spending" bill, called it "National Investment Whatever" Act. If I must guess, the "investment" content vs. the "spending" content is about 1:5 at the most. No bills go out without a debate and those debates invariably demand the "faster" cure, which is chronically over the ages perceived to be the "spending" part.
c. I don't advocate tax cuts (supply siders). Why? I don't believe in Jesus. Ok, just kidding - aside from my disdain of the neo-cons and christian fanatics, such thing does not address the current situation, or too slow to do anything at the moment.

So the Chinese have figured it out, and Obama did not in the stimulus front. Therefore some economy will grow and some will absolutely falter. Decoupling? By definition, if two people committed two opposite acts, you will expect opposite results, hao bu hao?

3. Misconception about health care and education. There are some hopes that Obama will correctly address issues in this space, that people pay too much for too little. Where's the red meat? The for-profit education sectors - which has not fallen nearly as much as the health-care insurers/providers. The executives in these two sectors in many cases were extracting 200% - 300% more money than their counterparts in C / AIG / ABK. Don't believe me? Then do your own research and let me know when you're ready for another raid. :)

4. There have been ill developments on the "private capital" stories that I have shared a few weeks back, about them buying portfolios that the insolvent banks could no longer hold due to lack of capital. I have received news that about $100B of this will be disbanded for "other" use in 2 weeks time, to my disappointment. In my opinion, these were the last hopes of actually clearing the market in any significant way, and the administration has failed to follow through their promises in lieu of political agendas. While the impact may seem muted initially, the long term hit will be felt around may-june, in ways that I could not conceive beyond further chronic stock weaknesses.

Until then be well. Don't eat too much beef.

Monday, March 2, 2009

Mandatory post - new month.

Otherwise the page looks blank, as if I was trying to post porn and didn't do it properly.

Anyway, nothing new. Oh, maybe a new catch phrase: 30-30 at the next bottom.

For the next 30 yrs it will be up and down 30%? LOL.