(www.cnbc.com)From Columbia University
ANNOUNCER: The embodiment of the American dream, Warren Buffett and Bill Gates, self-made billionaires whose values run as deep as their wealth. One redefined an industry, the other the modern investor. But both put their stock in America, and by investing in business and humanity, reaped the rewards of this great country's capitalist tradition. Today that tradition is under siege, our way of life questioned. And with America at an inflection point, a future generation looks for guidance from the world's two greatest capitalists. Now, they are going back to school, not to learn, but to teach. Showing the next generation of business leaders that wealth is not about the money you amass, but the number of lives you enrich. Tonight in a CNBC town hall event, Warren Buffett and Bill Gates share their secrets to keeping America great.
Read the transcript here
Friday, November 13, 2009
Wednesday, October 28, 2009
New York Fed’s Secret Choice to Pay for Swaps Hits Taxpayers
(bloomberg.com) In the months leading up to the September 2008 collapse of giant insurer American International Group Inc., Elias Habayeb and his colleagues worked nights and weekends negotiating with banks that had bought $62 billion of credit-default swaps from AIG, according to a person who has worked with Habayeb.
Habayeb, 37, was chief financial officer for the AIG division that oversaw AIG Financial Products, the unit that had sold the swaps to the banks. One of his goals was to persuade the banks to accept discounts of as much as 40 cents on the dollar, according to people familiar with the matter.
Read the entire article
Habayeb, 37, was chief financial officer for the AIG division that oversaw AIG Financial Products, the unit that had sold the swaps to the banks. One of his goals was to persuade the banks to accept discounts of as much as 40 cents on the dollar, according to people familiar with the matter.
Read the entire article
Tuesday, October 27, 2009
Pimco's Gross calls top of rally in risky assets
(marketwatch.com) The six-month rally in risk assets -- while still continuously supported by Fed and Treasury policymakers -- is likely at its pinnacle," Gross wrote in his monthly market commentary.
The U.S. economy and most other developed economies became too reliant on rising asset prices, rather than the production of goods and services, in recent decades. When the financial crisis hit, governments and policymakers had to slash interest rates and take other more dramatic action to prevent asset values plunging, Gross explained.
Read the enitre article
The U.S. economy and most other developed economies became too reliant on rising asset prices, rather than the production of goods and services, in recent decades. When the financial crisis hit, governments and policymakers had to slash interest rates and take other more dramatic action to prevent asset values plunging, Gross explained.
Read the enitre article
Charlie Munger: Boom and bust is normal
(bbc.co.uk) Charlie Munger is Warren Buffett's long-time business partner, and the Vice-Chairman of Berkshire Hathaway.
Like Buffett, he was born in Omaha, but became a lawyer in Los Angeles before meeting Buffett, and becoming a fellow investor. The two spent many hours on the phone together, discussing business, and evolving the approach to investing that has paid off so spectacularly for them both.
View the video here
Like Buffett, he was born in Omaha, but became a lawyer in Los Angeles before meeting Buffett, and becoming a fellow investor. The two spent many hours on the phone together, discussing business, and evolving the approach to investing that has paid off so spectacularly for them both.
View the video here
U.S. Equities Will ‘Drop Painfully,’ Grantham Says
(bloomberg.com) U.S. stocks will “drop painfully from current levels” in the coming year amid disappointing economic data and shrinking profit margins, according to investor Jeremy Grantham.
The so-called fair value for the Standard & Poor’s 500 Index is at the 860 level, the chief investment strategist at Boston-based Grantham Mayo Van Otterloo & Co., which oversees about $89 billion, wrote in a quarterly report. The gauge fell 1.2 percent yesterday to 1,066.95. It has rallied 58 percent from a 12-year low on March 9 on rising confidence a U.S. economic recovery will boost corporate earnings.
Read the entire article
The so-called fair value for the Standard & Poor’s 500 Index is at the 860 level, the chief investment strategist at Boston-based Grantham Mayo Van Otterloo & Co., which oversees about $89 billion, wrote in a quarterly report. The gauge fell 1.2 percent yesterday to 1,066.95. It has rallied 58 percent from a 12-year low on March 9 on rising confidence a U.S. economic recovery will boost corporate earnings.
Read the entire article
Friday, October 9, 2009
Too Big to Fail by Andrew Ross Sorkin
(vanityfair.com)
Day One
Wednesday, September 17, 2008: After Lehman and A.I.G.
When Tim Geithner, president of the Federal Reserve Bank of New York, began his run that morning along the southern tip of Manhattan and up the East River just after six, the sun had yet to come up. He was tired and stressed, having slept only several hours in one of the three tiny, grubby bedrooms in the New York Fed’s headquarters.
Read the entire article
Day One
Wednesday, September 17, 2008: After Lehman and A.I.G.
When Tim Geithner, president of the Federal Reserve Bank of New York, began his run that morning along the southern tip of Manhattan and up the East River just after six, the sun had yet to come up. He was tired and stressed, having slept only several hours in one of the three tiny, grubby bedrooms in the New York Fed’s headquarters.
Read the entire article
Wednesday, October 7, 2009
Wednesday, September 16, 2009
Warren Buffett to CNBC: No Regrets From Crisis Weekend One Year Ago
(cnbc.com) Warren Buffett tells CNBC he has no regrets about any of the decisions he made over the weekend one year ago in September, 2008, when the financial crisis was at its worst.
In a taped interview with Squawk Box's Becky Quick airing tonight, Buffett says he "looked hard" at a telephoned offer that Friday night to buy AIG's property casualty operation in the range of $20 billion to $25 billion, but decided against it.
He recalls telling AIG CEO Bob Willumstad that night, "Unfortunately, I can't do this deal. And don't waste your time with me, so go someplace else."
Read the entire story
In a taped interview with Squawk Box's Becky Quick airing tonight, Buffett says he "looked hard" at a telephoned offer that Friday night to buy AIG's property casualty operation in the range of $20 billion to $25 billion, but decided against it.
He recalls telling AIG CEO Bob Willumstad that night, "Unfortunately, I can't do this deal. And don't waste your time with me, so go someplace else."
Read the entire story
Monday, September 14, 2009
Transcript: Jean-Marie Eveillard
(forbes.com) Jean-Marie Eveillard is senior adviser of First Eagle Funds.
Steve Forbes: Jean-Marie, thank you very much for joining us.
Jean-Marie Eveillard: My pleasure, Steve.
Forbes: You have been called a value investor. Can you define what you mean by value investing?
Eveillard: Well, value investing, it, as you know, it's Ben Graham, who in the '30s, found the value school--founded the value school. And it's the idea that you look at businesses, you try to figure out what they're worth. Not in terms of the next quarterly earnings, but what, if you have the cash, what kind of price you'd be willing to pay for it today, for the entire business.
Read the entire transcript
Steve Forbes: Jean-Marie, thank you very much for joining us.
Jean-Marie Eveillard: My pleasure, Steve.
Forbes: You have been called a value investor. Can you define what you mean by value investing?
Eveillard: Well, value investing, it, as you know, it's Ben Graham, who in the '30s, found the value school--founded the value school. And it's the idea that you look at businesses, you try to figure out what they're worth. Not in terms of the next quarterly earnings, but what, if you have the cash, what kind of price you'd be willing to pay for it today, for the entire business.
Read the entire transcript
Live Blog: Jim Rogers on the Crisis, Banks, Investment
(cnbc.com) Abolish the Federal Reserve and let AIG go bankrupt for the world economy to emerge cleaner from the financial meltdown, legendary investor Jim Rogers told CNBC a year ago.
But governments around the world have rushed to bail out banks and pumped trillions of dollars in their economies to avert an economic disaster. A year after Lehman Brothers collapsed, here is what Jim Rogers tells CNBC (most recent quotes at the bottom):
Read the entire article
But governments around the world have rushed to bail out banks and pumped trillions of dollars in their economies to avert an economic disaster. A year after Lehman Brothers collapsed, here is what Jim Rogers tells CNBC (most recent quotes at the bottom):
Read the entire article
Tuesday, September 8, 2009
Closely Watched Buffett Recalculating His Bets
(nytimes.com) Warren E. Buffett has two cardinal rules of investing. Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.
Well, a lot of old rules got trashed when the financial crisis struck — even for the Oracle of Omaha.
At 79, Mr. Buffett is coming off the worst year of his long, storied career. On paper, he personally lost an estimated $25 billion in the financial panic of 2008, enough to cost him his title as the world’s richest man. (His friend and sometime bridge partner, Bill Gates, now holds that honor, according to Forbes.)
Read the entire article
Well, a lot of old rules got trashed when the financial crisis struck — even for the Oracle of Omaha.
At 79, Mr. Buffett is coming off the worst year of his long, storied career. On paper, he personally lost an estimated $25 billion in the financial panic of 2008, enough to cost him his title as the world’s richest man. (His friend and sometime bridge partner, Bill Gates, now holds that honor, according to Forbes.)
Read the entire article
Tuesday, September 1, 2009
On the “Course” to a New Normal
(www.pimco.com) Analyzing why people play golf is like exploring the intricacies of string theory – there are so many permutations lacking scientific observation that physicists or golfers can pretty darn well say anything they like and the explanation might stick. When it comes to whacking that little white ball, the possibilities are nearly endless: People play to relax, to be with friends, to get close to Mother Nature, to enhance business connections, to compete and excel. Gosh, I don’t know, the Zen explanation for why we play golf could even resemble the old saw about climbing a mountain: People golf because it’s there. Whatever the reason, it is the most frustrating, damnable game ever conceived – alternately elevating and depressing you within the span of mere minutes. I love golf. No, I hate it.
Personally, the reason that golf draws me to its intricate web of psychological entrapment is epitomized by a simple six-inch trophy: a chartreuse ball resting on top of its ebony base, preening on a bookshelf in the family room at our desert home. Its inscription reads, “Hole in one, March 15th, 1990, 14th hole Desert Course, 155 yards.” Well and good, I suppose – the ace of my life – except it wasn’t. It was the ace of my wife. Above the inscription rests the name Sue – not Bill – Gross. It was a great shot but it wasn’t my shot, and I guess therein lies the explanation for why I continue to tee it up.
Read Bill Gross' letter here
Personally, the reason that golf draws me to its intricate web of psychological entrapment is epitomized by a simple six-inch trophy: a chartreuse ball resting on top of its ebony base, preening on a bookshelf in the family room at our desert home. Its inscription reads, “Hole in one, March 15th, 1990, 14th hole Desert Course, 155 yards.” Well and good, I suppose – the ace of my life – except it wasn’t. It was the ace of my wife. Above the inscription rests the name Sue – not Bill – Gross. It was a great shot but it wasn’t my shot, and I guess therein lies the explanation for why I continue to tee it up.
Read Bill Gross' letter here
Monday, August 31, 2009
Raft of Deals for Failed Banks Puts U.S. on Hook for Billions
(wsj.com) The biggest spur to deal-making among banks isn't private-equity cash or foreign investors. It is the federal government.
To encourage banks to pick through the wreckage of their collapsed competitors, the Federal Deposit Insurance Corp. has agreed to assume most of the risk on $80 billion in loans and other assets. The agency expects it will eventually have to cover $14 billion in future losses on deals cut so far. The initiative amounts to a subsidy for dozens of hand-picked banks.
Read the entire article
To encourage banks to pick through the wreckage of their collapsed competitors, the Federal Deposit Insurance Corp. has agreed to assume most of the risk on $80 billion in loans and other assets. The agency expects it will eventually have to cover $14 billion in future losses on deals cut so far. The initiative amounts to a subsidy for dozens of hand-picked banks.
Read the entire article
Bond Market To Stock Investors: You People Are A Bunch Of Morons
(www.businessinsider.com) Stock investors are giddy about the impending v-shaped recovery (which, at this point, seems required to drive the stock market higher).
Bond investors, meanwhile, are looking forward and seeing nothing but crap. Despite trillions of proto-inflationary reserves being pumped into the global economic system, bonds are rallying and rates are dropping.
Read the entire story
Bond investors, meanwhile, are looking forward and seeing nothing but crap. Despite trillions of proto-inflationary reserves being pumped into the global economic system, bonds are rallying and rates are dropping.
Read the entire story
Sunday, August 30, 2009
Too Bigger to Fail
(paul.kedrosky.com) The banks that were mostly too big to fail are now bigger. Maybe if they get bigger yet we can redefine “big” and call them “small” again, thus starting over.
Read the entire story
Read the entire story
Monday, August 24, 2009
The Trashiest Stocks Are On Fire (FNM, FRE, AIG)
(businessinsider.com) Since the market hit its lows in early March, the trashiest, most beaten-down stocks have been the big winners. Some are arguing that the trash stocks have to slow down soon. But in the meantime, it looks like investors are reaching for the trashiest of the trash. Check out the crazy runs in Fannie Mae (FNM), Freddie Mac (FRE).
See the charts here
See the charts here
Saturday, August 22, 2009
Grant's Summer Break Issue
To the readers of Grant’s: This compilation of recent articles, the first annual Grant’s Beachhead issue, is for you. And it’s for your friends, co-workers, clients, classmates, shipmates, brothers-in-law and maids-of-honor, too. Please pass it along, with our thanks, to any and all prospective members of the greater Grant’s family.
(www.grantspub.com)
Go here to read the Beachead Issue
(www.grantspub.com)
Go here to read the Beachead Issue
Thursday, August 20, 2009
Gartman Starts First Hedge Fund Betting on Stocks, Commodities
Will Gartman be more successful than other's with CNBC ties?
(bloomberg.com) Dennis Gartman, an economist and the editor of the Gartman Letter, said he is creating his first hedge fund to speculate on assets including global equities and commodities.
The River Crescent Fund, created Aug. 17, seeks to raise $200 million over the first year, Gartman said today in an interview from Suffolk, Virginia. The fund already includes some “well-known hedge-fund managers,” he said, without identifying them. Gartman has managed guaranteed notes since 2007 and an exchange-traded fund since April in Canada.
Read the entire story
(bloomberg.com) Dennis Gartman, an economist and the editor of the Gartman Letter, said he is creating his first hedge fund to speculate on assets including global equities and commodities.
The River Crescent Fund, created Aug. 17, seeks to raise $200 million over the first year, Gartman said today in an interview from Suffolk, Virginia. The fund already includes some “well-known hedge-fund managers,” he said, without identifying them. Gartman has managed guaranteed notes since 2007 and an exchange-traded fund since April in Canada.
Read the entire story
Wednesday, August 19, 2009
Pimco Says Dollar to Weaken as Reserve Status Erodes
(www.bloomberg.com) Pacific Investment Management Co., which runs the world’s biggest bond fund, said the dollar will weaken as the U.S. pumps “massive” amounts of money into the economy.
The dollar will drop the most against emerging-market counterparts, Curtis A. Mewbourne, a Pimco portfolio manager, wrote in a report on the company’s Web site. The greenback is losing its status as the world’s reserve currency, he said.
Read the entire story
The dollar will drop the most against emerging-market counterparts, Curtis A. Mewbourne, a Pimco portfolio manager, wrote in a report on the company’s Web site. The greenback is losing its status as the world’s reserve currency, he said.
Read the entire story
NY Times/Warren Buffett OP/ED
(www.nytimes.com) IN nature, every action has consequences, a phenomenon called the butterfly effect. These consequences, moreover, are not necessarily proportional. For example, doubling the carbon dioxide we belch into the atmosphere may far more than double the subsequent problems for society. Realizing this, the world properly worries about greenhouse emissions.
The butterfly effect reaches into the financial world as well. Here, the United States is spewing a potentially damaging substance into our economy — greenback emissions.
Read the entire OP/ED here
The butterfly effect reaches into the financial world as well. Here, the United States is spewing a potentially damaging substance into our economy — greenback emissions.
Read the entire OP/ED here
Tuesday, August 18, 2009
PIMCO's El-Erian: Stocks Have Hit A Wall
(www.businessinsider.com) Mohamed El-Erian has called the recent Wall Street rally a "sugar high." Now, he says U.S. stocks have hit a wall.
The chief executive of bond-king PIMCO said on Reuters TV that U.S. stocks had topped out because valuations have shot up too quickly.
Read the entire story here
The chief executive of bond-king PIMCO said on Reuters TV that U.S. stocks had topped out because valuations have shot up too quickly.
Read the entire story here
Sunday, August 9, 2009
Tudor Investment Calls Stock Gain a Bear-Market Rally
(bloomberg.com) Tudor Investment Corp., the $10.8 billion hedge-fund firm run by Paul Tudor Jones, said equity markets could decline later this year, creating buying opportunities.
Slowing growth in China and the return of front-page stories on swine flu may be “further catalysts for global equity markets to pause in September,” the Greenwich, Connecticut-based firm said in an Aug. 3 client letter, a copy of which was obtained by Bloomberg News.
Read the entire story
Slowing growth in China and the return of front-page stories on swine flu may be “further catalysts for global equity markets to pause in September,” the Greenwich, Connecticut-based firm said in an Aug. 3 client letter, a copy of which was obtained by Bloomberg News.
Read the entire story
You're An INVESTOR? How Quaint
(businessinsider.com) James Montier (via John Mauldin) observes that the average holding period for New York Stock Exchange stocks is now down to six months.
We imagine this has something to do with the boom in high-frequency trading, in which stocks are sometimes held for all of six seconds. But week-to-week performance benchmarking of professional fund managers probably has a lot to do with it, too.
In any event, can we please stop pretending that what most fund managers are doing every day is "investing"? Holding stocks for six months isn't investing. It's trading. And because trading is a negative-sum game--one largely focused on trying to figure out what everyone else is doing--it is really speculating.
Read the entire story
We imagine this has something to do with the boom in high-frequency trading, in which stocks are sometimes held for all of six seconds. But week-to-week performance benchmarking of professional fund managers probably has a lot to do with it, too.
In any event, can we please stop pretending that what most fund managers are doing every day is "investing"? Holding stocks for six months isn't investing. It's trading. And because trading is a negative-sum game--one largely focused on trying to figure out what everyone else is doing--it is really speculating.
Read the entire story
Paulson’s Calls to Goldman Tested Ethics
Just as we suspected......
(nytimes.com) Before he became President George W. Bush’s Treasury secretary in 2006, Henry M. Paulson Jr. agreed to hold himself to a higher ethical standard than his predecessors. He not only sold all his holdings in Goldman Sachs, the investment bank he had run, but also specifically said that he would avoid any substantive interaction with Goldman executives for his entire term unless he first obtained an ethics waiver from the government.
Read the entire article
(nytimes.com) Before he became President George W. Bush’s Treasury secretary in 2006, Henry M. Paulson Jr. agreed to hold himself to a higher ethical standard than his predecessors. He not only sold all his holdings in Goldman Sachs, the investment bank he had run, but also specifically said that he would avoid any substantive interaction with Goldman executives for his entire term unless he first obtained an ethics waiver from the government.
Read the entire article
Thursday, July 30, 2009
Secular bear, cyclical bull
(marketwatch.com) I'm referring, of course, to the debate over what kind of bull market began on March 9.
If that day represented a once-in-a-generation stock market low -- such as the kind seen in December 1974, for example -- then we're in a secular bull market that can be expected to last for many years and which will eventually take the stock market averages to a final top that is several times current levels.
Or did it mark a mere "cyclical" low, in which our expectations, both in terms of time as well as price, need to be far more modest?
For guidance I turn to Ned Davis, the eponymous head of institutional research firm Ned Davis Research.
Read the entire story
If that day represented a once-in-a-generation stock market low -- such as the kind seen in December 1974, for example -- then we're in a secular bull market that can be expected to last for many years and which will eventually take the stock market averages to a final top that is several times current levels.
Or did it mark a mere "cyclical" low, in which our expectations, both in terms of time as well as price, need to be far more modest?
For guidance I turn to Ned Davis, the eponymous head of institutional research firm Ned Davis Research.
Read the entire story
Monday, July 27, 2009
Friday, July 24, 2009
Please Stop With The "Bill Miller Is Back" Stories
(clusterstock.com) Once a media darling, always a media darling, at least in the world of high-profile, money manager gurus.
Today the Journal comes back to Legg Mason manager Bill Miller: "Blindsided by Bear, Mr. Miller Sees Bull."
The subtitle should be: "Long-only, high-beta investor does well when the market goes up."
Read the entire article
Today the Journal comes back to Legg Mason manager Bill Miller: "Blindsided by Bear, Mr. Miller Sees Bull."
The subtitle should be: "Long-only, high-beta investor does well when the market goes up."
Read the entire article
Buffett’s Goldman Stake Pays Richly
(nytimes/dealbook blog) Warren E. Buffett showed again why he is known as one of the world’s best investors, thanks in part to another prominent investor, Goldman Sachs.
Mr. Buffett’s stake in Goldman is now worth $9.1 billion, or about $4.1 billion more than what he paid 10 months ago, according to an analysis by Linus Wilson, an assistant professor of finance at the University of Louisiana at Lafayette.
According to Mr. Wilson’s calculations, Mr. Buffett would realize an annualized return of about 111 percent if he sold his Goldman stake, which is held by his conglomerate Berkshire Hathaway.
Read the entire story
Mr. Buffett’s stake in Goldman is now worth $9.1 billion, or about $4.1 billion more than what he paid 10 months ago, according to an analysis by Linus Wilson, an assistant professor of finance at the University of Louisiana at Lafayette.
According to Mr. Wilson’s calculations, Mr. Buffett would realize an annualized return of about 111 percent if he sold his Goldman stake, which is held by his conglomerate Berkshire Hathaway.
Read the entire story
Friday, July 17, 2009
The Joy of Sachs
(nytimes.com) OP/ED from Paul Krugman
The American economy remains in dire straits, with one worker in six unemployed or underemployed. Yet Goldman Sachs just reported record quarterly profits — and it’s preparing to hand out huge bonuses, comparable to what it was paying before the crisis. What does this contrast tell us?
First, it tells us that Goldman is very good at what it does. Unfortunately, what it does is bad for America.
Read the entire editorial
The American economy remains in dire straits, with one worker in six unemployed or underemployed. Yet Goldman Sachs just reported record quarterly profits — and it’s preparing to hand out huge bonuses, comparable to what it was paying before the crisis. What does this contrast tell us?
First, it tells us that Goldman is very good at what it does. Unfortunately, what it does is bad for America.
Read the entire editorial
Thursday, July 16, 2009
"Goldman Sachs In Talks To Acquire Treasury Department"
Just kidding, but worth a read.
(businessinsider.com)
..........According to Goldman spokesperson Jonathan Hestron, the merger between Goldman and the Treasury Department is "a good fit" because "they're in the business of printing money and so are we."..........
Read the entire story here
(businessinsider.com)
..........According to Goldman spokesperson Jonathan Hestron, the merger between Goldman and the Treasury Department is "a good fit" because "they're in the business of printing money and so are we."..........
Read the entire story here
First Pacific Advisors' Robert Rodriguez
Consuelo Mack interviews one of the best in the business.
(wealthtrack.com)
This week on WealthTrack's "Great Investors" series: he races Porsches for fun and runs top performing stock and bond funds for his profession. What makes First Pacific Advisors' Robert Rodriguez step on the investment brakes or the accelerator? That's next on Consuelo Mack WealthTrack.
Hello and welcome to this "Great Investors" edition of WealthTrack. I'm Consuelo Mack. This week our great investor is Robert Rodriguez, a maverick money manager who has accomplished a feat no one else has. For the last 25 years, he has run not one but two top performing mutual funds, in not one but two asset classes, a stock fund and a bond fund. As widely followed personal finance columnist Jason Zweig put it, that is the investing equivalent of running two marathons at the same time, which is why Zweig calls him the best fund manager of our time.
Read the transcript here
(wealthtrack.com)
This week on WealthTrack's "Great Investors" series: he races Porsches for fun and runs top performing stock and bond funds for his profession. What makes First Pacific Advisors' Robert Rodriguez step on the investment brakes or the accelerator? That's next on Consuelo Mack WealthTrack.
Hello and welcome to this "Great Investors" edition of WealthTrack. I'm Consuelo Mack. This week our great investor is Robert Rodriguez, a maverick money manager who has accomplished a feat no one else has. For the last 25 years, he has run not one but two top performing mutual funds, in not one but two asset classes, a stock fund and a bond fund. As widely followed personal finance columnist Jason Zweig put it, that is the investing equivalent of running two marathons at the same time, which is why Zweig calls him the best fund manager of our time.
Read the transcript here
Wednesday, July 15, 2009
Daily Show Takes on Lenny Dykstra
(huffingtonpost.com) It was only a matter of time before Jon Stewart -- an unabashed New York Mets fan -- tackled the puzzling rise and spectacular fall of Lenny Dykstra's career as a financial guru. Dykstra, an ex-Mets star, declared bankruptcy last week, after amassing what seemed to be a staggering fortune, including a California home once owned by Wayne Gretzky.
Stewart showed a clip of some of Dykstra's profanity-laden responses his recent financial and legal troubles, and responded with:
Read the entire story
Stewart showed a clip of some of Dykstra's profanity-laden responses his recent financial and legal troubles, and responded with:
Read the entire story
Monday, July 13, 2009
Madoff Is Headed for Prison in Butner, NC, Sources Say
We really do not want Bernie in NC
(cnbc.com) Convicted swindler Bernie Madoff is on his way to federal prison in Butner, NC, where he is sentenced to spend the next 150 years, CNBC has learned.
According to the Federal Bureau of Prisons Web site, the Butner facility houses a total of about 3,400 inmates.
Read the entire story
(cnbc.com) Convicted swindler Bernie Madoff is on his way to federal prison in Butner, NC, where he is sentenced to spend the next 150 years, CNBC has learned.
According to the Federal Bureau of Prisons Web site, the Butner facility houses a total of about 3,400 inmates.
Read the entire story
Sunday, July 12, 2009
Monday Interview: Man on the money with Buffett
(ft.com) Wesco Financial’s Pasadena headquarters are a blur of earth tones and cloudless sky. Bathed in southern California sun, the offices hold a glow befitting the gilded career of the company’s chairman, Charlie Munger.
Mr Munger, best known as business partner to Warren Buffett, head of Berkshire Hathaway, is settled deep into his chair. His lips stretched to a thin smile, the 85-year-old billionaire peers through thick glasses.
Over the years, generations of investors, chief executives and journalists have wondered why Mr Munger has stayed happily in the background for almost half a century as Mr Buffett forged a reputation as the world’s greatest stock-picker.
Read the entire story
Mr Munger, best known as business partner to Warren Buffett, head of Berkshire Hathaway, is settled deep into his chair. His lips stretched to a thin smile, the 85-year-old billionaire peers through thick glasses.
Over the years, generations of investors, chief executives and journalists have wondered why Mr Munger has stayed happily in the background for almost half a century as Mr Buffett forged a reputation as the world’s greatest stock-picker.
Read the entire story
Tuesday, July 7, 2009
Who Cares If Bill Miller Is "Back"?
(www.clusterstock.com) Hey hey, look who it is.
"Legendary" fund manager Bill Miller is back. Investor's Business Daily declares it Miller Time, noting that his Value Trust is handily outperforming the S&P 500 this year, up 9%. His Opportunity Fund is up 23%! Nice job to anyone who decided to put their money with the beaten-down start at the end of last year.
Read the entire article
"Legendary" fund manager Bill Miller is back. Investor's Business Daily declares it Miller Time, noting that his Value Trust is handily outperforming the S&P 500 this year, up 9%. His Opportunity Fund is up 23%! Nice job to anyone who decided to put their money with the beaten-down start at the end of last year.
Read the entire article
Monday, July 6, 2009
Jim Cramer Is Less Powerful Than Hannah Storm
This one is great....Cramer right there with Willard Scott!
(clusterstock.com) We're checking out Mediaite.com this morning, the new media/news/blog/aggregator/opinion/whatever site from former NBC guy Dan Abrams. They've got some stuff about -- what else -- Sarah Palin and Michael Jackson, but the real draw is their devilish "power grid" for media figures, which ranks everyone in using some homebrewed algorithm designed to ensure maximum linkbaitiness.
The big shock so far: Jim Cramer ranks one slot below Hannah Storm in the TV Anchors/Hosts category. And he's only one slot above Willard Scott!
Read the entire article
(clusterstock.com) We're checking out Mediaite.com this morning, the new media/news/blog/aggregator/opinion/whatever site from former NBC guy Dan Abrams. They've got some stuff about -- what else -- Sarah Palin and Michael Jackson, but the real draw is their devilish "power grid" for media figures, which ranks everyone in using some homebrewed algorithm designed to ensure maximum linkbaitiness.
The big shock so far: Jim Cramer ranks one slot below Hannah Storm in the TV Anchors/Hosts category. And he's only one slot above Willard Scott!
Read the entire article
Friday, July 3, 2009
U.S. regulators could learn from Canada's banks
(usatoday.com) Our northern neighbor sometimes seems so similar to the United States that it's hard to tell where the USA ends and Canada begins. Here's one way: Canada is the place with healthy banks, taxpayers unscathed by megabillion-dollar bailouts and no need to overhaul financial regulation because it was done right the first time.
As U.S. officials scramble to prevent a crisis sequel, the ability of Canadian banks to navigate the current financial storm is earning global plaudits. The World Economic Forum in October ranked the country's financial institutions No. 1 in the world for solvency. U.S. banks came in 40th, two rungs behind Botswana.
Read the entire article
As U.S. officials scramble to prevent a crisis sequel, the ability of Canadian banks to navigate the current financial storm is earning global plaudits. The World Economic Forum in October ranked the country's financial institutions No. 1 in the world for solvency. U.S. banks came in 40th, two rungs behind Botswana.
Read the entire article
The Great American Bubble Machine
(rollingstone.com) The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.
Any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.
Read the entire story
Any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.
Read the entire story
Thursday, July 2, 2009
More on Ron Insana's New Stint
(Clusterstock.com) Ron Insana -- the CNBC guy who plays the role of "wise one" because he had a stint in the fund-of-funds game -- has a new newsletter he's pumping with TheStreet.com.
If your the type of investor who thinks that getting Ron Insana's exclusive stock picks will help you make money, and you want to spend hundreds of dollars on that advice then more power to you, the link is here.
Read the entire article
If your the type of investor who thinks that getting Ron Insana's exclusive stock picks will help you make money, and you want to spend hundreds of dollars on that advice then more power to you, the link is here.
Read the entire article
Wednesday, July 1, 2009
CNBC’s Ron Insana Learns to Beat the Market — With Cramer’s Help
Not sure if this a joke or not, but here it goes
(Wall Street Journal-MarketBeatBlog)
In less than a year, Ron Insana, the CNBC senior analyst, apparently has learned a trick or two to go from money-losing hedge fund manager to sure-fire stock picker.
Insana, you may remember, left CNBC in 2006 to launch his own firm, Insana Capital Partners, which was billed as a fund of hedge funds. He sold the firm last year and went to work at Steven Cohen’s SAC Capital Advisors. Neither venture was terribly successful.
Read the entire article
(Wall Street Journal-MarketBeatBlog)
In less than a year, Ron Insana, the CNBC senior analyst, apparently has learned a trick or two to go from money-losing hedge fund manager to sure-fire stock picker.
Insana, you may remember, left CNBC in 2006 to launch his own firm, Insana Capital Partners, which was billed as a fund of hedge funds. He sold the firm last year and went to work at Steven Cohen’s SAC Capital Advisors. Neither venture was terribly successful.
Read the entire article
PIMCO's July Investment Outlook
(PIMCO.com) “Kill the umpire,” the fan cried to open the 1996 baseball season in Cincinnati, and eight pitches later, the man behind the plate, John McSherry, was dead, all 320 pounds of him screaming for more and more oxygen to feed his spastic heart. He’d been killed by a billion molecules of sink-clogging, Drano-resistant cholesterol that fed on his coronary artery and sucked up his life’s blood like a vampire in the heat of the night. The next day Howard Stern had characteristically railed that the antidote was obvious. It was the same for all fat people: “DON’T EAT,” he howled. As if the ump hadn’t known. The fact was, he couldn’t stop. He loved the taste of food – every sugary, fat-ladened, carbohydrated morsel. The first bite was a special ecstasy, as was the last, and everything in between. The man, it seemed, was a Cuisinart with four limbs.
Read all of Bill Gross's letter here
Read all of Bill Gross's letter here
Thursday, June 25, 2009
Market Capitalization as a Percentage of GDP
(ritholtz.com) Another interesting pair of chart from Ron Griess of The Chart Store. These two look at NYSE and NASDAQ relative to nominal GDP.
Read the entire article
Read the entire article
Tuesday, June 23, 2009
Gartman: Warren Buffett Isn't An "Idiot" .. But He Allowed "Inexcusable" Losses
(cnbc.com) Newsletter writer and frequent CNBC guest Dennis Gartman isn't standing behind his reported "Warren Buffett is an idiot" quote.
But Gartman does tell CNBC it's "inexcusable" that Berkshire Hathaway fell roughly 45 percent in one year because Buffett didn't do enough to "mitigate" his losses in a tough market environment.
Read the entire story
But Gartman does tell CNBC it's "inexcusable" that Berkshire Hathaway fell roughly 45 percent in one year because Buffett didn't do enough to "mitigate" his losses in a tough market environment.
Read the entire story
Tuesday, June 16, 2009
So whatever happened to Paul Volcker?
(thedeal.com) As the details pile up about what Treasury will formally recommend on regulatory reform Wednesday, you do have to wonder what happened to Paul Volcker and his suggestion in February of a new kind of "Glass-Steagall-like" separation of financial institutions. Volcker, who heads up Obama's Economic Recovery Advisory Board, made the comments at a conference, setting off some discussion among the pundits. Then, silence. Volcker himself hasn't been seen very much -- certainly not like Treasury's Tim Geithner and the seemingly irrepressible head of the Council of Economic Advisors, Larry Summers. A piece on The Huffington Post in May did report that Volcker is talking to the economics team in Treasury and advising Obama, but his office space in the Executive Office Building is empty and the HuffPo suggested that if he has an "office," it's that of CEA member Austen Goolsbee in the White House.
Read the entire article
Read the entire article
Why Most Investment Managers Have it Backwards
(www.advisorperspectives.com/Seth Klarman) For value investors, last fall’s crisis provided an unprecedented opportunity. Down markets are a great time to buy securities, as Graham and Dodd said in Securities Analysis, since the average investor can usually only get them “at prices that the future may cause him to regret.”
For Seth Klarman, founder and president of the Boston-based Baupost Group, last fall was a period that offered many of those opportunities. He delivered the keynote lecture at the annual meeting of the Boston Security Analysts Society last week. Klarman also was the lead editor of and authored the preface to the sixth edition of Graham and Dodd’s Securities Analysis, published in 2008.
Read the entire story
For Seth Klarman, founder and president of the Boston-based Baupost Group, last fall was a period that offered many of those opportunities. He delivered the keynote lecture at the annual meeting of the Boston Security Analysts Society last week. Klarman also was the lead editor of and authored the preface to the sixth edition of Graham and Dodd’s Securities Analysis, published in 2008.
Read the entire story
Sunday, June 14, 2009
This Rally May Need a New Source of Fuel
(nytimes.com) IN early March, when stocks fell to 12-year lows, many investors were confident of at least one thing: stocks were cheap.
Three months later, after huge gains, that consensus on stock valuations is breaking down. It’s quite possible that the rally will soon become a victim of its own swift success.
Liz Ann Sonders, chief investment strategist for the Charles Schwab brokerage firm, said that after seeing the Standard & Poor’s 500-stock index jump to above 940 from around 675 in just 14 weeks, a market that had been undervalued is now “fairly valued.” So a major tailwind that propelled stocks since March has disappeared.
Read the entire story
Three months later, after huge gains, that consensus on stock valuations is breaking down. It’s quite possible that the rally will soon become a victim of its own swift success.
Liz Ann Sonders, chief investment strategist for the Charles Schwab brokerage firm, said that after seeing the Standard & Poor’s 500-stock index jump to above 940 from around 675 in just 14 weeks, a market that had been undervalued is now “fairly valued.” So a major tailwind that propelled stocks since March has disappeared.
Read the entire story
Saturday, June 13, 2009
How Do I Know You’re Not Bernie Madoff?
(nytimes.com) Tony Guernsey has been in the wealth management business for four decades. But clients have started asking him a question that at first caught him off guard: How do I know I own what you tell me I own?
This is the existential crisis rippling through wealth management right now, in the wake of the unraveling of Bernard L. Madoff’s long-running Ponzi scheme. Mr. Guernsey, the head of national wealth management at Wilmington Trust, says he understands why investors are asking the question, but it still unnerves him. “They got their statements from Madoff, and now they get their statement from XYZ Corporation. And they say, ‘How do I know they exist?’ ”
Read the entire article
This is the existential crisis rippling through wealth management right now, in the wake of the unraveling of Bernard L. Madoff’s long-running Ponzi scheme. Mr. Guernsey, the head of national wealth management at Wilmington Trust, says he understands why investors are asking the question, but it still unnerves him. “They got their statements from Madoff, and now they get their statement from XYZ Corporation. And they say, ‘How do I know they exist?’ ”
Read the entire article
Wednesday, June 10, 2009
Buying Stocks or Bonds is ‘Gambling’: John Bogle
Why would anyone listen to John Bogle anymore? Does anyone?
(cnbc.com) Nobody should buy a stock and nobody should buy a bond, said John Bogle, founder and former CEO of The Vanguard Group.
“You’re betting on prices — you’re betting on buying them from those who don’t know how much they’re worth and selling them to somebody who thinks they’re worth more,” Bogle told CNBC.
Read the entire story
(cnbc.com) Nobody should buy a stock and nobody should buy a bond, said John Bogle, founder and former CEO of The Vanguard Group.
“You’re betting on prices — you’re betting on buying them from those who don’t know how much they’re worth and selling them to somebody who thinks they’re worth more,” Bogle told CNBC.
Read the entire story
The End of the Armageddon Trade
(wsj.com) Heard on the Street
It isn't the beginning of the end. But it may be the end of the beginning. The sharp rise in short-dated government bond yields in recent days around the world marks a shift in investor strategies: the Armageddon trade is being unwound.
Since the start of the year, investors have made huge gains betting on a steepening of government bond yield curves. They bought short-dated government bonds, betting yields would remain at low levels thanks to extremely accommodative monetary policy and continued risk aversion, while shorting longer-dated bonds, expecting yields would rise due to fears about inflation, massive government bond supply and fiscal deficits -- a trade known as a bear steepener.
Read the entire article
It isn't the beginning of the end. But it may be the end of the beginning. The sharp rise in short-dated government bond yields in recent days around the world marks a shift in investor strategies: the Armageddon trade is being unwound.
Since the start of the year, investors have made huge gains betting on a steepening of government bond yield curves. They bought short-dated government bonds, betting yields would remain at low levels thanks to extremely accommodative monetary policy and continued risk aversion, while shorting longer-dated bonds, expecting yields would rise due to fears about inflation, massive government bond supply and fiscal deficits -- a trade known as a bear steepener.
Read the entire article
Tuesday, June 9, 2009
Berkshire Bought Municipal Bonds Amid Higher Yields
(www.bloomberg.com) Warren Buffett’s Berkshire Hathaway Inc. doubled its municipal-bond holdings in nine months amid record swings in the value of the securities that the billionaire investor labeled “unthinkable.”
Berkshire increased its investment in debt issued by state and local governments to $4.05 billion as of March 31 from $2.05 billion on June 30, 2008, the Omaha, Nebraska-based company said in regulatory filings. Berkshire added $1.09 billion to the bet in last year’s third quarter and $985 million in the first three months of 2009.
Read the entire story
Berkshire increased its investment in debt issued by state and local governments to $4.05 billion as of March 31 from $2.05 billion on June 30, 2008, the Omaha, Nebraska-based company said in regulatory filings. Berkshire added $1.09 billion to the bet in last year’s third quarter and $985 million in the first three months of 2009.
Read the entire story
Monday, June 8, 2009
How to Fix Financial Television
(www.ritholtz.com) Over the past 5 years, I have appeared on various Financial TV shows over a 100 times. But I am also a huge consumer of financial news, in print, on the web, radio, and of course, TV. Being on both sides of the camera gives me a fairly good perspective on what does and doesn’t work on TV. I also have some strong ideas as to what is good and bad TV in terms of providing a social utility, being part of the democratic process, etc.
Indeed, this is a longstanding interest of mine. Over the weekend, I referenced the current Columbia Journalism Review (CJR) issue that focused on the role of the media in the credit crisis, stock market and economic collapse (CJR on CNBC, WSJ & Business Press). This area has long interested me (hence, our media panel at TBP conference). But I was surprised this post generated 100 comments from readers.
Read the entire article
Indeed, this is a longstanding interest of mine. Over the weekend, I referenced the current Columbia Journalism Review (CJR) issue that focused on the role of the media in the credit crisis, stock market and economic collapse (CJR on CNBC, WSJ & Business Press). This area has long interested me (hence, our media panel at TBP conference). But I was surprised this post generated 100 comments from readers.
Read the entire article
Saturday, June 6, 2009
Who Is Going To Lend Us The Money To Fund Our Exploding Debt?
(businessinsider.com) PIMCO's Bill Gross joins the chorus of folks concerned that our exploding deficits are leading us down the road to ruin.
The key questions here are:"Who is going to lend us the $2 trillion a year necessary to fund this spending?" and What interest rates are they going to demand to do it?"
Read the entire story here
The key questions here are:"Who is going to lend us the $2 trillion a year necessary to fund this spending?" and What interest rates are they going to demand to do it?"
Read the entire story here
Thursday, June 4, 2009
Buffett Is Less Bullish on U.S. Than You Think:
(Bloomberg--Alice Schroeder) To the unschooled ear, Warren Buffett’s reassuring words that “America’s best days lie ahead” and that he’s buying U.S. stocks sound prescient, not preposterous.
But fair warning -- he’s not as bullish as he sounds.
Buffett has been right so often that what his words mean, and whether he is right now, are important questions. His skill as a forecaster has a lot to do with his psychology: a buoyant optimism tempered by extreme caution that let him score killings on stocks such as Geico and American Express Co. while steering clear of speculative bubbles, leverage, subprime mortgages, and trying to figure out a rescue for his pal Hank Greenberg’s company American International Group Inc.
Read the entire article
But fair warning -- he’s not as bullish as he sounds.
Buffett has been right so often that what his words mean, and whether he is right now, are important questions. His skill as a forecaster has a lot to do with his psychology: a buoyant optimism tempered by extreme caution that let him score killings on stocks such as Geico and American Express Co. while steering clear of speculative bubbles, leverage, subprime mortgages, and trying to figure out a rescue for his pal Hank Greenberg’s company American International Group Inc.
Read the entire article
Wednesday, June 3, 2009
Julian Robertson's Steepener Swap Play
(marketfolly.com) Simply put, Julian Robertson is the definition of a hedge fund legend. And, his success is noted by the fortune he has amassed as he now graces the Forbes' billionaire list. He has pioneered a successful investment methodology, he has generated outstanding returns at his famous hedge fund Tiger Management, and his influence has sprouted some of the most successful modern day hedge funds in the form of the 'Tiger Cubs.' And, most importantly, he predicted the financial crisis two and a half years ago in an interview with Value Investor Insight. When he talks, you listen.
For those unfamiliar with Robertson, we'd highly recommend checking out the profile/biography we just wrote on him this morning. In that piece, we have outlined exactly why you should follow him (and the Tiger Cubs for that matter too). As we detailed in his profile, Robertson has a unique investment methodology. He takes a macro approach, finds a smart idea, researches it exhaustively, and places a big bet. And, when he feels he is more than correct, he will 'bet the farm.' And, it looks like we have identified Robertson's next play where he has and will continue to 'bet the farm.'
Read the entire story
For those unfamiliar with Robertson, we'd highly recommend checking out the profile/biography we just wrote on him this morning. In that piece, we have outlined exactly why you should follow him (and the Tiger Cubs for that matter too). As we detailed in his profile, Robertson has a unique investment methodology. He takes a macro approach, finds a smart idea, researches it exhaustively, and places a big bet. And, when he feels he is more than correct, he will 'bet the farm.' And, it looks like we have identified Robertson's next play where he has and will continue to 'bet the farm.'
Read the entire story
CHART OF THE DAY: The Trash Rally
(Businessinsider.com)
Skeptical bears have dismissed the nearly 3-month old rally as just a lot of short-covering and piling into beaten down trash, like financials. With this chart, you can see what they mean. Since the lows in early March, the S&P 500 is up less than 50%, but the NASDAQ OMX Government Relief index -- a basket of companies that have taken government support in one way has more than doubled. Though interestingly, the financial heavy index has slipped a bit since early may. Major banks, which were once the most volatile stocks, have become a snooze.
See the chart here
Skeptical bears have dismissed the nearly 3-month old rally as just a lot of short-covering and piling into beaten down trash, like financials. With this chart, you can see what they mean. Since the lows in early March, the S&P 500 is up less than 50%, but the NASDAQ OMX Government Relief index -- a basket of companies that have taken government support in one way has more than doubled. Though interestingly, the financial heavy index has slipped a bit since early may. Major banks, which were once the most volatile stocks, have become a snooze.
See the chart here
Tuesday, June 2, 2009
Reflections and Outrage
Transcript of Robert Rodriquez's recent speech at the Morningstar Conference.
(fpafunds.com)
I want to thank Morningstar for this honor of speaking to you today. We go back a long time, beginning in 1986, when Don Phillips became the very first analyst to cover my two funds, FPA Capital and FPA New Income. I am deeply grateful for having been selected three times for the Morningstar Manager of the Year award and being recognized for my work in both equity and fixed income management.
For those of you who do not know, I will be taking a sabbatical beginning next year. My trusted partners, Dennis Bryan and Rikard Ekstrand will assume leadership of FPA Capital Fund while Tom Atteberry will do the same for FPA New Income. These three outstanding managers are here today should any of you wish to meet and speak with them. Having a high degree of confidence in them as well as FPA, I will be leaving all my personal investments in the various funds and will retain my equity ownership in the firm. Many executives say they have confidence in their associates but few demonstrate this in such a tangible way. I will return 2011 in a supporting role. My decision to take a sabbatical has nothing to do with the current tumultuous market or my health. More than six years ago, I discussed this as a possibility. I consider this step part of the process of succession planning and execution.
Read the entire speech
(fpafunds.com)
I want to thank Morningstar for this honor of speaking to you today. We go back a long time, beginning in 1986, when Don Phillips became the very first analyst to cover my two funds, FPA Capital and FPA New Income. I am deeply grateful for having been selected three times for the Morningstar Manager of the Year award and being recognized for my work in both equity and fixed income management.
For those of you who do not know, I will be taking a sabbatical beginning next year. My trusted partners, Dennis Bryan and Rikard Ekstrand will assume leadership of FPA Capital Fund while Tom Atteberry will do the same for FPA New Income. These three outstanding managers are here today should any of you wish to meet and speak with them. Having a high degree of confidence in them as well as FPA, I will be leaving all my personal investments in the various funds and will retain my equity ownership in the firm. Many executives say they have confidence in their associates but few demonstrate this in such a tangible way. I will return 2011 in a supporting role. My decision to take a sabbatical has nothing to do with the current tumultuous market or my health. More than six years ago, I discussed this as a possibility. I consider this step part of the process of succession planning and execution.
Read the entire speech
Jeremy Grantham's Warnings to Investors
Another excellent article explaining Grantham's 2009 battle plan
(advisorperspectives.com)
Read the article here
(advisorperspectives.com)
Read the article here
Monday, June 1, 2009
Chinese Students Laugh At Tim Geithner
(www.businessinsider.com) Poor Tim Geithner. He already comes off as kind of nervous and insecure when talking in public, but at least in the US, the only people who ever bother him are crazed Code Pink activists.
But in China, representing the country as chief bond salesman, the man named to People's 50 most beautiful people list was openly mocked.
Read the entire story
But in China, representing the country as chief bond salesman, the man named to People's 50 most beautiful people list was openly mocked.
Read the entire story
Friday, May 29, 2009
Government’s response to financial crisis has been all wrong, Bob Rodriguez says
(investmentnews.com) The U.S. government’s response to the economic crisis has been “financially imprudent and irresponsible,” Robert L. Rodriguez, chief executive of First Pacific Advisors LLC of Los Angeles, said today.
Rather than help the economy and the markets recover, the government’s moves to prop up failing companies and get consumers spending again may actually make matters worse, he said during a keynote presentation at the Morningstar Investment Conference in Chicago, which was sponsored by Morningstar Inc., which is based in that city.
Read the entire story
Rather than help the economy and the markets recover, the government’s moves to prop up failing companies and get consumers spending again may actually make matters worse, he said during a keynote presentation at the Morningstar Investment Conference in Chicago, which was sponsored by Morningstar Inc., which is based in that city.
Read the entire story
Still Working, but Making Do With Less
The new consumer is more frugal and likely to stay that way
(nytimes.com) LINCOLN, Calif. — The Ferrells have cut back on dance lessons for their twin daughters. Vaccinations for the family’s two cats and two dogs are out. Haircuts have become a luxury. And before heading out recently to the discount grocery store that has become the family’s new lifeline, Sharon Ferrell checked her bank account balance one more time, dialing the toll-free number from memory.
Read the entire story
(nytimes.com) LINCOLN, Calif. — The Ferrells have cut back on dance lessons for their twin daughters. Vaccinations for the family’s two cats and two dogs are out. Haircuts have become a luxury. And before heading out recently to the discount grocery store that has become the family’s new lifeline, Sharon Ferrell checked her bank account balance one more time, dialing the toll-free number from memory.
Read the entire story
Top Buffett Aide Says There's No Sign Of A Recovery
Berkshire not seeing the same "green shoots" as the media......
(www.businessinsider.com) During the recent Berkshire Hathaway (BRK) annual meeting, Warren Buffett admitted that signs of an economic recovery were few and far between, at least at his businesses.
His close advisors are saying the same thing. Speaking at the Ira Sohn investment conference in New York, top aide David Sokol, the head of Mid-America energy holdings said there were no signs of a rebound ("We're not seeing the green shoots.") in housing or the economy and that the housing mess might persist through 2011.
Read the entire article here
(www.businessinsider.com) During the recent Berkshire Hathaway (BRK) annual meeting, Warren Buffett admitted that signs of an economic recovery were few and far between, at least at his businesses.
His close advisors are saying the same thing. Speaking at the Ira Sohn investment conference in New York, top aide David Sokol, the head of Mid-America energy holdings said there were no signs of a rebound ("We're not seeing the green shoots.") in housing or the economy and that the housing mess might persist through 2011.
Read the entire article here
Wednesday, May 27, 2009
Mortgage Rates Soar As Quantitative Easing Fails
(www.businessinsider.com) $1.25 trillion of quantitive easing hasn't been enough to keep mortgage rates down. Will the government double down again?
Bloomberg: Yields on Fannie Mae and Freddie Mac mortgage bonds rose for a fourth day, after yesterday for the first time exceeding where they stood before the Federal Reserve announced it would expand purchases to drive down loan rates.
Yields on Washington-based Fannie Mae’s current-coupon 30- year fixed-rate mortgage bonds climbed to 4.3 percent as of 10:25 a.m. in New York, the highest since March 10and up from 3.94 percent on May 20, data compiled by Bloomberg show.
Read the entire story
Bloomberg: Yields on Fannie Mae and Freddie Mac mortgage bonds rose for a fourth day, after yesterday for the first time exceeding where they stood before the Federal Reserve announced it would expand purchases to drive down loan rates.
Yields on Washington-based Fannie Mae’s current-coupon 30- year fixed-rate mortgage bonds climbed to 4.3 percent as of 10:25 a.m. in New York, the highest since March 10and up from 3.94 percent on May 20, data compiled by Bloomberg show.
Read the entire story
Saturday, May 23, 2009
The Last Hurrah and Seven Lean Years
(www.gmo.com) Another must read from Jeremy Grantham...this time his May letter
Read the letter here
Read the letter here
TARP Warrants Show Banks May Reap ‘Ruthless Bargain’
(bloomberg.com) Banks negotiating to reclaim stock warrants they granted in return for Troubled Asset Relief Program money may shortchange taxpayers by almost $10 billion if Treasury Secretary Timothy Geithner’s first sale sets the pace, data compiled by Bloomberg show.
While 17 financial institutions have repaid TARP funds, two have come to terms with the U.S. on the value of the rights to buy stock that taxpayers received for the risk of recapitalizing the industry. The first was Old National Bancorp in Evansville, Indiana, which gave the Treasury Department $1.2 million last week for warrants that may have been worth $5.81 million, according to the data.
Read the entire story
While 17 financial institutions have repaid TARP funds, two have come to terms with the U.S. on the value of the rights to buy stock that taxpayers received for the risk of recapitalizing the industry. The first was Old National Bancorp in Evansville, Indiana, which gave the Treasury Department $1.2 million last week for warrants that may have been worth $5.81 million, according to the data.
Read the entire story
Yale’s Swensen Recommends TIPS to Hedge ‘Substantial Inflation’
(bloomberg.com) May 23--David Swensen, the top-ranked college endowment manager in the past decade, said individual investors should own inflation-protected Treasuries because U.S. economic recovery efforts may lead to an increase in consumer prices.
“We’ve had this massive fiscal stimulus, massive monetary stimulus, and it’s hard to see how that doesn’t translate into pretty substantial inflation, or at least pretty substantial risk of inflation,” Swensen, Yale University’s investment chief, said in an interview on the “Consuelo Mack WealthTrack” television show that aired yesterday. Treasury Inflation- Protected Securities “should be in every investor’s portfolio," he said.
Read the entire article
“We’ve had this massive fiscal stimulus, massive monetary stimulus, and it’s hard to see how that doesn’t translate into pretty substantial inflation, or at least pretty substantial risk of inflation,” Swensen, Yale University’s investment chief, said in an interview on the “Consuelo Mack WealthTrack” television show that aired yesterday. Treasury Inflation- Protected Securities “should be in every investor’s portfolio," he said.
Read the entire article
CHART OF THE DAY: Credit Card Debt Swallows American Households*
(Clusterstock.com) *UPDATE: As several readers have noted, this chart compares an aggregate national figure with a per-household figure. This is an apples-and-oranges comparison. We apologize for the illogic and thank to our readers for catching it. We'll fix the chart on Monday.
EARLIER: Americans built up a lot of spending power over the last three decades, but it wasn't because they started earning more money. As today's chart starkly illustrates, credit card debt has exploded, making up for more modest gains in median household income. As you can see, for the very first time in history, credit card debt is creeping down, though it has a long way to go. And of course, this doesn't even include home all the home equity loans Americans used in place of the ATM. (Both lines are based on non-adjusted numbers)
Read the entire article
EARLIER: Americans built up a lot of spending power over the last three decades, but it wasn't because they started earning more money. As today's chart starkly illustrates, credit card debt has exploded, making up for more modest gains in median household income. As you can see, for the very first time in history, credit card debt is creeping down, though it has a long way to go. And of course, this doesn't even include home all the home equity loans Americans used in place of the ATM. (Both lines are based on non-adjusted numbers)
Read the entire article
Wednesday, May 20, 2009
Breakfast with David Rosenberg
(pragcap.com)The bulls enjoyed and the bears endured a massive 37% rally in the S&P 500 from the March 9th lows to the May 8th highs. Both in terms of duration and magnitude, this proved to be the most intense rally during this 20-month long bear market. And, the bounce has been so impressive that it has taken what was widely considered to be a massively undervalued stock market in early March to one that is now at least moderately expensive. (The FTSE All-World market P/E ratio on forward earnings estimates is now around 15x, well above pre-Lehman collapse levels and nearly double the lows for the cycle.)
Since the rebound from the March 9th lows was again led by the four sectors that led the decline during the bear phase – financials, consumer discretionary, materials and industrials – it stands to reason that this was just another counter-trend rally. What we know about history is that the sectors that led the downturn are never the ones to emerge as leaders in the next sustainable bull market.
Read the entire article
Since the rebound from the March 9th lows was again led by the four sectors that led the decline during the bear phase – financials, consumer discretionary, materials and industrials – it stands to reason that this was just another counter-trend rally. What we know about history is that the sectors that led the downturn are never the ones to emerge as leaders in the next sustainable bull market.
Read the entire article
Benefits of Being Benchmark Agnostic
(firsteaglefunds.com) Excellent piece by Jean-Marie Eveillard about benchmarking and closet indexing.
Read the article here
Read the article here
Sunday, May 17, 2009
Charlie Munger's got a billion words of wisdom
(latimes.com) About an hour before Charlie Munger, the Oracle of Pasadena, is set to speak, the pilgrims start filling a ballroom at the Pasadena Civic Center.
I am one of them. As I settle in, I meet Imelda McCarthy, retired and "a bit over 21," who is here from Dublin, Ireland, and attending with her 34-year-old son, Darrach, who lives in West Los Angeles. Bush Helzberg, an investment manager, flew in with his wife from Kansas City, Mo. Michael McGowan, author of "The Guide to Gold," comes every year from just down the street in Pasadena.
Read the entire article
I am one of them. As I settle in, I meet Imelda McCarthy, retired and "a bit over 21," who is here from Dublin, Ireland, and attending with her 34-year-old son, Darrach, who lives in West Los Angeles. Bush Helzberg, an investment manager, flew in with his wife from Kansas City, Mo. Michael McGowan, author of "The Guide to Gold," comes every year from just down the street in Pasadena.
Read the entire article
Saturday, May 2, 2009
One on One with Charlie Munger, Vice Chairman Berkshire Hathaway
(www.pbs.org) SUZANNE PRATT: Warren Buffett says he wants tough questions from shareholders at Berkshire Hathaway's annual meeting tomorrow. Investors will certainly ask about the company's stock. It has tumbled more than 30 percent in the past year. Also answering questions, Charlie Munger, Buffett's business partner for half a century and Berkshire's vice chairman. Munger keeps a low profile, but today in Omaha, he sat down for an interview with Susie Gharib. She began by asking him what he'll say to shareholders tomorrow to restore confidence in Berkshire.
CHARLES MUNGER, VICE CHAIRMAN, BERKSHIRE HATHAWAY: I think the reality is that if you hold a stock for a long long term even though it's screamingly successful as an investment, you will have huge declines in the value of that stock two or three times in half a century. And I don't think that should bother long term holders all that much.
GHARIB: Mr. Munger, shareholders will certainly have questions tomorrow on why Berkshire took such large positions in derivatives especially since you and Mr. Buffett have warned for years that derivatives are dangerous investments. What are you going to tell them?
Read the entire article
CHARLES MUNGER, VICE CHAIRMAN, BERKSHIRE HATHAWAY: I think the reality is that if you hold a stock for a long long term even though it's screamingly successful as an investment, you will have huge declines in the value of that stock two or three times in half a century. And I don't think that should bother long term holders all that much.
GHARIB: Mr. Munger, shareholders will certainly have questions tomorrow on why Berkshire took such large positions in derivatives especially since you and Mr. Buffett have warned for years that derivatives are dangerous investments. What are you going to tell them?
Read the entire article
Wednesday, April 15, 2009
Squawk Box Regular Gabelli Slams CNBC On Fox Biz
(clusterstock.com) Uh-oh. Will we ever see Mario Gabelli on CNBC again? During an interview on Fox Biz this afternoon, Liz Clayman asked him what the #1 mistake investors were making.
His answer: It's fairly simple, they listen to CNBC all day and panic.
Watch the video here
His answer: It's fairly simple, they listen to CNBC all day and panic.
Watch the video here
Sunday, April 12, 2009
Marry a Farmer
(Newsweek.com) Jim Rogers, the legendary American investor, financial commentator and, along with George Soros, founder of the Quantum Fund, is the ultimate commodities bull. More than 10 years ago, he started the Rogers International Commodities Index, and in 2005 he wrote "Hot Commodities: How Anyone Can Invest Profitably in the World's Best Market." Below, he explains to NEWSWEEK's Rana Foroohar why oil is still black gold.
Foroohar: Inflation-adjusted, oil is the same price that it was in 1976, and in 1870. So why are you still a bull?
Rogers: It doesn't matter. It's also true that just about any stock you can think about is at or below where it was in the 1970s right now. So what? There are still 15- to 20-year periods when commodities, stocks and any other asset class goes up a great deal. In 1987 stocks collapsed by 40 to 80 percent. But people who were smart enough to stay in them made 1,000 percent returns in the next decade. The point is to take advantage of those periods and make some money.
Read the entire story
Foroohar: Inflation-adjusted, oil is the same price that it was in 1976, and in 1870. So why are you still a bull?
Rogers: It doesn't matter. It's also true that just about any stock you can think about is at or below where it was in the 1970s right now. So what? There are still 15- to 20-year periods when commodities, stocks and any other asset class goes up a great deal. In 1987 stocks collapsed by 40 to 80 percent. But people who were smart enough to stay in them made 1,000 percent returns in the next decade. The point is to take advantage of those periods and make some money.
Read the entire story
Saturday, April 11, 2009
Volcker Assumes Smaller-Than-Expected Role With Obama
I knew it was only a matter of time before we saw this headline.
(WSJ.com) As an early supporter of Barack Obama, Paul Volcker gave the young presidential candidate gravitas and advice. He frequently sat by Mr. Obama's side at key economic events, and started carrying a cellphone for the first time, just to be able to brainstorm with the candidate from the campaign trail.
In the Obama White House, the role of the 81-year-old former chairman of the Federal Reserve has been more limited.
The one-time central banker has been put in charge of a presidential advisory board that hasn't yet had a formal meeting. It has been nearly a month since he has seen Mr. Obama. Mr. Volcker hasn't been a main player in key decisions handling the global financial crisis.
Read the entire article
(WSJ.com) As an early supporter of Barack Obama, Paul Volcker gave the young presidential candidate gravitas and advice. He frequently sat by Mr. Obama's side at key economic events, and started carrying a cellphone for the first time, just to be able to brainstorm with the candidate from the campaign trail.
In the Obama White House, the role of the 81-year-old former chairman of the Federal Reserve has been more limited.
The one-time central banker has been put in charge of a presidential advisory board that hasn't yet had a formal meeting. It has been nearly a month since he has seen Mr. Obama. Mr. Volcker hasn't been a main player in key decisions handling the global financial crisis.
Read the entire article
Return of Stock Bulls Signals Time to Sell: Technical Analysis
(Bloomberg.com) Investors turned optimistic for the third time since the credit crisis started last year, gauges of sentiment among individual investors in the U.S. show, a pattern that Helmsman Global Trading says is a signal to sell.
The difference between the American Association of Individual Investors Bull Index and Bear Index surged to 5.6 as of April 2. When the reading rose to 11.5 in November and 13.6 in January it coincided with the end of “bear-market rallies” of at least 21 percent by the MSCI World Index.
“What that’s going to show is that people always want to look at the glass as if it is half full,” said Martin Marnick, head of trading at Helmsman Global Trading Ltd. in Hong Kong. “Using common sense you know what that general trend is. We’re in a recession and this is not the start of a bull market.”
Read the entire article
The difference between the American Association of Individual Investors Bull Index and Bear Index surged to 5.6 as of April 2. When the reading rose to 11.5 in November and 13.6 in January it coincided with the end of “bear-market rallies” of at least 21 percent by the MSCI World Index.
“What that’s going to show is that people always want to look at the glass as if it is half full,” said Martin Marnick, head of trading at Helmsman Global Trading Ltd. in Hong Kong. “Using common sense you know what that general trend is. We’re in a recession and this is not the start of a bull market.”
Read the entire article
Wednesday, April 8, 2009
CRAMER A 'BUFFOON'
(nypost.com) Controversial CNBC market guru Jim Cramer has another feud on his hands.
Just weeks after "The Daily Show" host Jon Stewart took Cramer to task for trying to turn finance reporting into a "game," bear economist Nouriel Roubini attacked Cramer yesterday for predicting bull markets.
"Cramer is a buffoon," said Roubini, an NYU economics professor often called Dr. Doom. "He was one of those who called six times in a row for this bear-market rally to be a bull-market rally, and he got it wrong. And after all this mess and Jon Stewart, he should just shut up, because he has no shame."
Read the entire article
Just weeks after "The Daily Show" host Jon Stewart took Cramer to task for trying to turn finance reporting into a "game," bear economist Nouriel Roubini attacked Cramer yesterday for predicting bull markets.
"Cramer is a buffoon," said Roubini, an NYU economics professor often called Dr. Doom. "He was one of those who called six times in a row for this bear-market rally to be a bull-market rally, and he got it wrong. And after all this mess and Jon Stewart, he should just shut up, because he has no shame."
Read the entire article
Saturday, April 4, 2009
No Wonder Summers Is So Eager To Save Wall Street
(Clusterstock.com) Does the fact that Larry Summers made $2.8 million in speaking fees from Goldman Sachs, JP Morgan, Citigroup, and others last year explain the administration's ongoing generosity to Wall Street--both in terms of defining the problem in a way that benefits Wall Street (a "lack of liquidity") and in continuing to bail out the banks at taxpayer expense?
Read the entire story
Read the entire story
Thursday, April 2, 2009
Buffett Punished in Bond Market as Citigroup Borrows for Less
(Bloomberg.com) Billionaire Warren Buffett’s Berkshire Hathaway Inc. is being penalized in the bond market, paying more to borrow than bailed-out companies including Citigroup Inc.
Buffett’s firm paid more for its latest debt offering than Fannie Mae and Freddie Mac, the mortgage lenders that lost a combined $108.8 billion last year. Bank of America Corp. is also paying lower interest on notes under a program in which the U.S. agrees to guarantee debt.
Read the entire story
Buffett’s firm paid more for its latest debt offering than Fannie Mae and Freddie Mac, the mortgage lenders that lost a combined $108.8 billion last year. Bank of America Corp. is also paying lower interest on notes under a program in which the U.S. agrees to guarantee debt.
Read the entire story
Wednesday, April 1, 2009
Munger's Year End Letter to Shareholders
(wescofinancial.com)The worldwide economy is currently suffering the effects of a deepening recession, perhaps the worst economic disaster since the Great Depression. We will not attempt to prognosticate the effects thatWesco will suffer or when the economy will recover, but we are certain that in due course, Wesco will prosper. In the mean time, Wesco’s operations will bear their share of economicwoes.We will continue to practice Ben Franklin’s advice,that “a penny saved is a penny earned,” as we trim expenses, albeit in higher denominations, to better endure the weakening economic conditions that surely lie ahead.
Read the entire letter
Read the entire letter
Thursday, March 26, 2009
The Prime of Mr. Nouriel Roubini
Am I the only one who thinks Roubini may have peaked out?
(portfolio.com) It’s Saturday night. A stream of young fashionistas and other assorted Manhattan scenesters pours into a fashionable Tribeca building. They’re all headed for the loft of a middle-aged economist—a man whose name would hardly have registered with anyone but the most obsessive CNBC watcher a few years ago. A doorman on duty surveys the scene and rolls his eyes. “Another Roubini party,” he mutters.
Nouriel Roubini's thoughts about the economy in October 2008.The host of the hour, Nouriel Roubini—the New York University professor credited with calling the current economic collapse and a ubiquitous presence on financial-news shows who continues to forecast gloom and doom—is looking positively upbeat this evening. He greets guest after guest with a kiss on both cheeks as music thumps at a volume loud enough to irritate the neighbors. Suspended from the ceiling, above the throngs of minglers, are dozens of small glass globes, resembling nothing so much as bubbles.
Read the entire article here
(portfolio.com) It’s Saturday night. A stream of young fashionistas and other assorted Manhattan scenesters pours into a fashionable Tribeca building. They’re all headed for the loft of a middle-aged economist—a man whose name would hardly have registered with anyone but the most obsessive CNBC watcher a few years ago. A doorman on duty surveys the scene and rolls his eyes. “Another Roubini party,” he mutters.
Nouriel Roubini's thoughts about the economy in October 2008.The host of the hour, Nouriel Roubini—the New York University professor credited with calling the current economic collapse and a ubiquitous presence on financial-news shows who continues to forecast gloom and doom—is looking positively upbeat this evening. He greets guest after guest with a kiss on both cheeks as music thumps at a volume loud enough to irritate the neighbors. Suspended from the ceiling, above the throngs of minglers, are dozens of small glass globes, resembling nothing so much as bubbles.
Read the entire article here
Wednesday, March 25, 2009
‘Bull Market’ Has Begun, Templeton’s Mark Mobius Says
(Bloomberg.com) The next “bull-market” rally has begun and there are bargains in every emerging market following a record slump in stocks, Templeton Asset Management Ltd.’s Mark Mobius said.
The MSCI Emerging Markets Index has jumped 26 percent since reaching a four-year low on Oct. 27, outperforming the 4.2 percent drop in the MSCI World Index and 9.5 percent decline in the Standard & Poor’s 500 Index. Emerging markets made up the 10 best-performing benchmark gauges this year, led by the 28 percent gain for China’s Shanghai Composite Index.
“You have to be careful not to miss the opportunity,” said Mobius, who helps oversee about $20 billion of emerging- market assets as executive chairman at San Mateo, California- based Templeton. “With all the negative news, there is a tendency to hold back.”
Read the entire article
The MSCI Emerging Markets Index has jumped 26 percent since reaching a four-year low on Oct. 27, outperforming the 4.2 percent drop in the MSCI World Index and 9.5 percent decline in the Standard & Poor’s 500 Index. Emerging markets made up the 10 best-performing benchmark gauges this year, led by the 28 percent gain for China’s Shanghai Composite Index.
“You have to be careful not to miss the opportunity,” said Mobius, who helps oversee about $20 billion of emerging- market assets as executive chairman at San Mateo, California- based Templeton. “With all the negative news, there is a tendency to hold back.”
Read the entire article
Sunday, March 22, 2009
No Safety in Numbers
(NYTimes.com) Is there such a thing left as a safe investment? Stocks have been massacred, real estate all but wiped out. Each was promoted in its day — as was gold — as safe and secure, appropriate for widows and orphans.
If there is a truly last bastion of safety, it would be, of course, the U.S. Treasury bond, that venerable instrument with the full faith and credit of the United States behind it. Perhaps it is esteemed so highly because we think of it not as an “investment” per se but as an article of faith in Washington and, by extension, the entire country. It is our tax dollars, after all, that stand behind it — the accumulated output of our citizens. And ever since the Wall Street meltdown, as investors have fled from any security carrying a whiff of danger, Treasuries have been in hot demand.
Read the entire article
If there is a truly last bastion of safety, it would be, of course, the U.S. Treasury bond, that venerable instrument with the full faith and credit of the United States behind it. Perhaps it is esteemed so highly because we think of it not as an “investment” per se but as an article of faith in Washington and, by extension, the entire country. It is our tax dollars, after all, that stand behind it — the accumulated output of our citizens. And ever since the Wall Street meltdown, as investors have fled from any security carrying a whiff of danger, Treasuries have been in hot demand.
Read the entire article
Thursday, March 19, 2009
Enjoy The Sucker's Rally, Says Merrill's Rosenberg
(Clusterstock.com) David Rosenberg:
[The Fed's purchase of $300 billion of Treasuries] is equivalent to nearly 20% of this year’s bond borrowing requirement. As a stand-alone event we think this is worth 75-100 basis points of interest rate reduction (so today’s post-meeting 50bp rally takes us between one-quarter and half-way there). We also believe that the risk to this program size is clearly to the upside...
Fed’s announcement less bullish for equities, in our view.
But the equity market, which had already been enjoying a classic short-covering rally accentuated by quarter-end pressures, also reacted very positively to the Fed’s announcement today and at one point the S&P 500 looked set to break above the 800 threshold for the first time since mid-February. We are of the view that what occurred this afternoon was less bullish for the equity market than meets the eye. Here’s why:
Read the entire article
[The Fed's purchase of $300 billion of Treasuries] is equivalent to nearly 20% of this year’s bond borrowing requirement. As a stand-alone event we think this is worth 75-100 basis points of interest rate reduction (so today’s post-meeting 50bp rally takes us between one-quarter and half-way there). We also believe that the risk to this program size is clearly to the upside...
Fed’s announcement less bullish for equities, in our view.
But the equity market, which had already been enjoying a classic short-covering rally accentuated by quarter-end pressures, also reacted very positively to the Fed’s announcement today and at one point the S&P 500 looked set to break above the 800 threshold for the first time since mid-February. We are of the view that what occurred this afternoon was less bullish for the equity market than meets the eye. Here’s why:
Read the entire article
Treasurys Rally on Fed's Long-Term Purchase Plan
(CNBC.com) Treasury debt prices soared Wednesday, prompting the biggest one-day drop in benchmark yields since 1987, after the Federal Reserve made a surprise announcement that it would buy long-term Treasuries.
In a statement released at the end of its two-day policy meeting, the Fed said it would buy up to $300 billion worth of longer-term U.S. government debt over the next six months and expand purchases of mortgage-related debt to help ease credit market conditions.
Bond prices soared on the news. Benchmark 10-year note prices rose four full points while their yields, which move inversely, had the biggest one-day drop since October 20, 1987, the day after the 1987 stock market crash.
Read the entire article
In a statement released at the end of its two-day policy meeting, the Fed said it would buy up to $300 billion worth of longer-term U.S. government debt over the next six months and expand purchases of mortgage-related debt to help ease credit market conditions.
Bond prices soared on the news. Benchmark 10-year note prices rose four full points while their yields, which move inversely, had the biggest one-day drop since October 20, 1987, the day after the 1987 stock market crash.
Read the entire article
Friday, March 13, 2009
Rep. Maxine Waters Held Stock In Tiny Bank She Boosted
(WSJ.com) When Rep. Barney Frank was looking to aid a Boston-based lender last fall, the Massachusetts Democrat urged Maxine Waters, a colleague on the House Financial Services Committee, to "stay out of it," he says.
The reason: Ms. Waters, a longtime congresswoman from California, had close ties to the minority-owned institution, OneUnited Bank.
Ms. Waters and her husband have both held financial stakes in the bank. Until recently, her husband was a director. At the same time, Ms. Waters has publicly boosted OneUnited's executives and criticized its government regulators during congressional hearings. Last fall, she helped secure the bank a meeting with Treasury officials.
Read the entire article
The reason: Ms. Waters, a longtime congresswoman from California, had close ties to the minority-owned institution, OneUnited Bank.
Ms. Waters and her husband have both held financial stakes in the bank. Until recently, her husband was a director. At the same time, Ms. Waters has publicly boosted OneUnited's executives and criticized its government regulators during congressional hearings. Last fall, she helped secure the bank a meeting with Treasury officials.
Read the entire article
China’s Premier Wen ‘Worried’ on Safety of Treasuries
(Bloomberg.com) China, the U.S. government’s largest creditor, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said.
“We have lent a huge amount of money to the United States,” Wen said at a press briefing in Beijing today after the annual meeting of the legislature. “I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”
Read the entire story
“We have lent a huge amount of money to the United States,” Wen said at a press briefing in Beijing today after the annual meeting of the legislature. “I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”
Read the entire story
Wednesday, March 11, 2009
Rebalancing the Books-unpleasant but not unbearable
(Jeremy Grantham--FT.com) The proximate cause of our problems today is the breaking of the US housing bubble, and the ultimate cause is the remarkably widespread belief in rational expectations: that economic man behaves like a logical machine that in turn causes markets to tend to efficiency and equilibrium. In such a world the tech bubble was rationalised by Alan Greenspan as an internet-driven productivity burst, and the housing bubble (in reality a 100-year event) was so preposterous an idea that Ben Bernanke could not see it, such was his faith in efficiency.
In an efficient world all asset price changes merely reflect fundamental change and thousands of well-informed investors are bound to be right. There is never anything to fear and we can all keep dancing for ever.
Read the entire article
In an efficient world all asset price changes merely reflect fundamental change and thousands of well-informed investors are bound to be right. There is never anything to fear and we can all keep dancing for ever.
Read the entire article
Pimco Predicts Inflation, Joining Buffett, Marc Faber
(Bloomberg.com) Pacific Investment Management Co. which runs the world’s biggest bond fund, joined investors Warren Buffett and Marc Faber in saying inflation will quicken, sounding a warning for Treasury investors.
U.S. government and Federal Reserve efforts to snap the recession will increase costs for goods and services as soon as 2010, Pimco said in a report today on its Web site by Chris Caltagirone and Bob Greer. Commodity producers are also delaying projects, which may limit supply and lead to higher prices when global growth resumes, according to Pimco.
Read the entire article
U.S. government and Federal Reserve efforts to snap the recession will increase costs for goods and services as soon as 2010, Pimco said in a report today on its Web site by Chris Caltagirone and Bob Greer. Commodity producers are also delaying projects, which may limit supply and lead to higher prices when global growth resumes, according to Pimco.
Read the entire article
Monday, March 9, 2009
Jon Stewart Exposes CNBC's Worthlessness
(jasonkelly.com) In the clip below, Jon Stewart does his usual masterful job, this time on CNBC's worthlessness. Here's an index of key moments:
Cramer's "Bear Stearns is fine" call. (3:03)
"Lehman Brothers is no Bear Stearns. . . . Lehman Management is incredibly engaged and responsive." (3:15)
Merrill won't need to raise additional capital. (3:30)
Read the article and see the video here
Cramer's "Bear Stearns is fine" call. (3:03)
"Lehman Brothers is no Bear Stearns. . . . Lehman Management is incredibly engaged and responsive." (3:15)
Merrill won't need to raise additional capital. (3:30)
Read the article and see the video here
Sunday, March 8, 2009
Half Of Stocks Are Less Than $5
(Clusterstock.com) ....Nearly half of all stocks in the index are now trading at less than $5, and 37% are under $3....
Read the entire article
Read the entire article
The Latest Craze: Blue Chip Penny Stocks
(Ritholtz.com) Here’s a short list of only the highest quality, bluest of blue chip, penny stocks:
AIG (39 cents)
Citigroup (98 cents)
E*Trade (66 cents)
Fannie Mae (39 cents)
Freddie (39 cents)
Unisys (37 cents)
Read the entire article
AIG (39 cents)
Citigroup (98 cents)
E*Trade (66 cents)
Fannie Mae (39 cents)
Freddie (39 cents)
Unisys (37 cents)
Read the entire article
How to Deal With a 3 A.M. Fear
(NYTimes.com/Ben Stein) CAN it be that only a couple of years ago, Stephen A. Schwarzman of the Blackstone Group, wildly successful in private equity, treated hundreds of guests at his lavish birthday celebration to performances by Rod Stewart and Patti LaBelle?
Can it be that as recently as 2006, financial firms accounted for almost one-third of all the corporate profits in the United States? Or that money was so free-flowing that a single bat mitzvah party could be estimated to cost $10 million?
Read the entire article
Can it be that as recently as 2006, financial firms accounted for almost one-third of all the corporate profits in the United States? Or that money was so free-flowing that a single bat mitzvah party could be estimated to cost $10 million?
Read the entire article
Thursday, February 26, 2009
Obama Seeks $1 Trillion Tax Increase in Budget Plan
(Bloomberg.com) President Barack Obama proposed almost $1 trillion in higher taxes over the next decade on the highest-earning Americans, Wall Street financiers, U.S.-based multinational corporations and oil companies to pay for permanent tax breaks for lower earners.
Obama’s 2010 budget proposal, released today, would reinstate the top two Clinton-era tax rates of 36 percent and 39.6 percent, up from the 33 percent and 35 percent the richest Americans now pay. That would affect about 2.6 million taxpayers. The budget also would raise taxes on capital gains and dividends to 20 percent for top earners, up from the 15 percent set by former President George W. Bush in 2003.
Read the entire article
Obama’s 2010 budget proposal, released today, would reinstate the top two Clinton-era tax rates of 36 percent and 39.6 percent, up from the 33 percent and 35 percent the richest Americans now pay. That would affect about 2.6 million taxpayers. The budget also would raise taxes on capital gains and dividends to 20 percent for top earners, up from the 15 percent set by former President George W. Bush in 2003.
Read the entire article
Mean Street: Mr. Obama, Please Return to Planet Earth
(WSJ--Deal Journal Blog) Has the President lost his mind? Listening to last night’s speech, it sure seemed that way.
It’s taken him five months and three tries to simply come up with a Commerce Secretary.
But somehow over the next couple of years, he will reinvent how we do almost everything. How we bank and borrow. How we educate our children. How we cure cancer. How we use energy.
Even how we build cars.
Forget the ideological objections to Mr. Obama’s ambitions. How about the practical difficulties? How will Mr. Obama ever get all those things done?
The answer is he won’t and shouldn’t even try. If Obama really wants a second term, he should devote his entire first term to making the economy strong again. And that’s it.
Read the entire article
It’s taken him five months and three tries to simply come up with a Commerce Secretary.
But somehow over the next couple of years, he will reinvent how we do almost everything. How we bank and borrow. How we educate our children. How we cure cancer. How we use energy.
Even how we build cars.
Forget the ideological objections to Mr. Obama’s ambitions. How about the practical difficulties? How will Mr. Obama ever get all those things done?
The answer is he won’t and shouldn’t even try. If Obama really wants a second term, he should devote his entire first term to making the economy strong again. And that’s it.
Read the entire article
How Much Is The Bailout Going To Cost You?
(right.org) Right.org shows how much the bailout is going to cost each family... the bailout calculator also shows how much your taxes are going to rise.
Go to right.org
Go to right.org
Sunday, February 22, 2009
The Unbalanced Dow Jones Industrials
(Wall St Journal--MarketBeat Blog) As the Dow Jones Industrial Average hits lows not seen since the dot-com bust, Wall Street is getting antsy about its inclusion of low-priced stocks that some traders and analysts believe should be yanked from the 30-stock average.
Their gripes are based in simple arithmetic, since the average is weighted according to the nominal price quotes of its 30 components, hand-picked by top editors at Dow Jones & Co., which also publishes the Wall Street Journal.
With five stocks in the Dow trading under $10 – Bank of America, Citigroup, Alcoa, General Motors, and, as of today, General Electric – the average’s detractors say it’s become a skewed indicator of the market. They want the runts replaced for essentially the same reason the editors would never add in an extremely high-priced stock like Berkshire Hathaway, now trading above $76,000 a share, or Google, at $340
.
Read the entire article
Their gripes are based in simple arithmetic, since the average is weighted according to the nominal price quotes of its 30 components, hand-picked by top editors at Dow Jones & Co., which also publishes the Wall Street Journal.
With five stocks in the Dow trading under $10 – Bank of America, Citigroup, Alcoa, General Motors, and, as of today, General Electric – the average’s detractors say it’s become a skewed indicator of the market. They want the runts replaced for essentially the same reason the editors would never add in an extremely high-priced stock like Berkshire Hathaway, now trading above $76,000 a share, or Google, at $340
.
Read the entire article
Wednesday, February 18, 2009
Jim Cramer Warns Investors: Don't Follow Warren Buffett This Time
Attn all investors: It's different this time, don't follow Buffett. At least that's what Jim Cramer says.
CNBC Mad Money host Jim Cramer doesn't like what he sees in Warren Buffett's latest stock moves for Berkshire Hathaway, and doesn't think ordinary investors should follow the Omaha billionaire's lead this time around.
Buffett's holding company released its fourth quarter portfolio snapshot earlier tonight. It revealed a big reduction in Berkshire's holdings of Johnson & Johnson [JNJ 55.98 -1.12 (-1.96%) ].
Read the entire article
CNBC Mad Money host Jim Cramer doesn't like what he sees in Warren Buffett's latest stock moves for Berkshire Hathaway, and doesn't think ordinary investors should follow the Omaha billionaire's lead this time around.
Buffett's holding company released its fourth quarter portfolio snapshot earlier tonight. It revealed a big reduction in Berkshire's holdings of Johnson & Johnson [JNJ 55.98 -1.12 (-1.96%) ].
Read the entire article
Tuesday, February 17, 2009
Greenspan Says U.S. May Not Be Doing Enough to Promote Recovery
Now Alan Greenspan chimes in on how to fix the problems in the banking system. Thanks Alan!
(Bloomberg.com) Former Federal Reserve Chairman Alan Greenspan said the U.S. may be doing too little to repair its financial system and promote an economic recovery.
President Barack Obama today signed into law a $787 billion economic stimulus package of tax cuts and increased spending. He has also pledged to use the bulk of the roughly $315 billion left in the bank bailout fund approved by Congress last October to revive the battered financial industry.
Read the entire article
(Bloomberg.com) Former Federal Reserve Chairman Alan Greenspan said the U.S. may be doing too little to repair its financial system and promote an economic recovery.
President Barack Obama today signed into law a $787 billion economic stimulus package of tax cuts and increased spending. He has also pledged to use the bulk of the roughly $315 billion left in the bank bailout fund approved by Congress last October to revive the battered financial industry.
Read the entire article
Friday, February 13, 2009
Stimulus Package Explained (Q&A)
(ritholtz.com) Sometime this year, taxpayers will receive an Economic Stimulus Payment. This is a very exciting new program that I will explain using the Q and A format:
Q. What is an Economic Stimulus Payment?
A. It is money that the federal government will send to taxpayers.
Q. Where will the government get this money?
A. From taxpayers.
Read the entire story
Q. What is an Economic Stimulus Payment?
A. It is money that the federal government will send to taxpayers.
Q. Where will the government get this money?
A. From taxpayers.
Read the entire story
25 People to Blame for the Financial Crisis
(www.time.com/ritholtz.com) There is a strange and strangely interesting list of people to blame for the Financial crisis from Time magazine. It is quirky and odd and in more than a few places, misguided and ignorant.
Despite its deep flaws (and revealing ignorance), it is still kinda interesitng.
I normally don’t link to this sort of click bait — you must click thru each individual adding 25 phoney page views in an obnoxious attempt to improve traffic readings — but there is this interesting variation: Readers get to vote on each culprit. Surprisingly, they move Clinton, Bush and Greenspan way down the list.
A few strange issues with the list: Why is Bernie Madoff here? He is a common thief (perhaps uncommon thief given the amounts he claimed to have stolen) but he had nothing whatsoever to do with the Financial crisis afflicting the global economy. What journalist would add him to the list of causes of the crisis? (Strike that moron from your reading list).
Read the entire story
Despite its deep flaws (and revealing ignorance), it is still kinda interesitng.
I normally don’t link to this sort of click bait — you must click thru each individual adding 25 phoney page views in an obnoxious attempt to improve traffic readings — but there is this interesting variation: Readers get to vote on each culprit. Surprisingly, they move Clinton, Bush and Greenspan way down the list.
A few strange issues with the list: Why is Bernie Madoff here? He is a common thief (perhaps uncommon thief given the amounts he claimed to have stolen) but he had nothing whatsoever to do with the Financial crisis afflicting the global economy. What journalist would add him to the list of causes of the crisis? (Strike that moron from your reading list).
Read the entire story
Madoff Lawyer Sorkin's Mom Was A Madoff Winner!
(Clusterstock.com) Ira Sorkin's mom rode Bernie Madoff's Ponzi scheme up from 2001 until her death in 2007, when she cashed out, Bloomberg says. And the account, opened by Sorkin's father, may have been compounding fictitiously for years before that.
This makes Sorkin's mother--and, through inheritance, Sorkin's two sons--"Madoff winners": A few of the lucky thousands who reaped huge "investment gains" that were actually just other people's money.
Read the entire article
This makes Sorkin's mother--and, through inheritance, Sorkin's two sons--"Madoff winners": A few of the lucky thousands who reaped huge "investment gains" that were actually just other people's money.
Read the entire article
Wednesday, February 11, 2009
Charles Munger: How We Can Restore Confidence
(washingtonpost.com) Our situation is dire. Moderate booms and busts are inevitable in free-market capitalism. But a boom-bust cycle as gross as the one that caused our present misery is dangerous, and recurrences should be prevented. The country is understandably depressed -- mired in issues involving fiscal stimulus, which is needed, and improvements in bank strength. A key question: Should we opt for even more pain now to gain a better future? For instance, should we create new controls to stamp out much sin and folly and thus dampen future booms? The answer is yes.
Sensible reform cannot avoid causing significant pain, which is worth enduring to gain extra safety and more exemplary conduct. And only when there is strong public revulsion, such as exists today, can legislators minimize the influence of powerful special interests enough to bring about needed revisions in law.
Read the entire article
Sensible reform cannot avoid causing significant pain, which is worth enduring to gain extra safety and more exemplary conduct. And only when there is strong public revulsion, such as exists today, can legislators minimize the influence of powerful special interests enough to bring about needed revisions in law.
Read the entire article
For Bank of America and Merrill, Love Was Blind
(nytimes.com) IN mid-September, as Wall Street unwound and venerable financial institutions were brought to their knees, the mood inside the Manhattan law offices of Wachtell, Lipton, Rosen & Katz was decidedly celebratory.
After a weekend of whirlwind deal-making and emergency meetings at the Federal Reserve Bank of New York, John A. Thain and his team at Merrill Lynch had sold their troubled brokerage firm to the Bank of America Corporation, dodging the financial sinkhole that was swallowing Lehman Brothers.
Read the entire story
After a weekend of whirlwind deal-making and emergency meetings at the Federal Reserve Bank of New York, John A. Thain and his team at Merrill Lynch had sold their troubled brokerage firm to the Bank of America Corporation, dodging the financial sinkhole that was swallowing Lehman Brothers.
Read the entire story
Monday, February 9, 2009
Time For CNBC To Drop The Cramer Charade
(Clusterstock.com) Barrons' shredded Jim Cramer again over the weekend, putting forth the latest analysis showing that Cramer's picks underperform the market.* What was startling about the Barrons' article, though, was not this news, but CNBC's response:
"You wrote a premeditated hatchet job to curry favor with your new bosses at News Corp.," said CNBC's [spokesman Brian] Steel on Friday. "[Cramer] doesn't consider you a journalist."
Read the entire article
"You wrote a premeditated hatchet job to curry favor with your new bosses at News Corp.," said CNBC's [spokesman Brian] Steel on Friday. "[Cramer] doesn't consider you a journalist."
Read the entire article
Saturday, February 7, 2009
A 10-Year Stretch That’s Worse Than It Looks
(nytimes.com) IN the last 82 years — the history of the Standard & Poor’s 500 — the stock market has been through one Great Depression and numerous recessions. It has experienced bubbles and busts, bull markets and bear markets.
The Current Market Is the Worst Yet But it has never seen a 10-year stretch as bad as the one that ended last month.
Over the 10 years through January, an investor holding the stocks in the S.& P.’s 500-stock index, and reinvesting the dividends, would have lost about 5.1 percent a year after adjusting for inflation, as is shown in the accompanying chart.
Read the entire article
The Current Market Is the Worst Yet But it has never seen a 10-year stretch as bad as the one that ended last month.
Over the 10 years through January, an investor holding the stocks in the S.& P.’s 500-stock index, and reinvesting the dividends, would have lost about 5.1 percent a year after adjusting for inflation, as is shown in the accompanying chart.
Read the entire article
Buy Cisco, Intel, U.S. Technology Shares, Faber Says
(Bloomberg) Feb. 6 (Bloomberg) -- Investors should buy U.S. technology stocks after prices fell near the lows reached after the dot-com crash in 2000, investor Marc Faber said.
Cisco Systems Inc., Intel Corp., Microsoft Corp. and Oracle Corp. shares will outperform U.S. Treasuries over the next five to 10 years, Faber, managing director of Hong Kong-based investment firm Marc Faber Ltd. and publisher of the Gloom, Boom & Doom Report, said in a Bloomberg Radio interview today.
“You could make a case that in the U.S. some equities have come down a lot and are inexpensive,” Faber said. “In Nasdaq stocks, in high-tech companies, we have a base-building period.”
Read the entire article
Cisco Systems Inc., Intel Corp., Microsoft Corp. and Oracle Corp. shares will outperform U.S. Treasuries over the next five to 10 years, Faber, managing director of Hong Kong-based investment firm Marc Faber Ltd. and publisher of the Gloom, Boom & Doom Report, said in a Bloomberg Radio interview today.
“You could make a case that in the U.S. some equities have come down a lot and are inexpensive,” Faber said. “In Nasdaq stocks, in high-tech companies, we have a base-building period.”
Read the entire article
Friday, February 6, 2009
Buffett’s Buy Metric
(Ritholtz.com) .....Fortune first ran a version of this chart in late 2001 (see “Warren Buffett on the stock market”). Stocks had by that time retreated sharply from the manic levels of the Internet bubble. But they were still very high, with stock values at 133% of GNP. That level certainly did not suggest to Buffett that it was time to buy stocks.
But he visualized a moment when purchases might make sense, saying, “If the percentage relationship falls to the 70% to 80% area, buying stocks is likely to work very well for you.”......
Read the entire story
But he visualized a moment when purchases might make sense, saying, “If the percentage relationship falls to the 70% to 80% area, buying stocks is likely to work very well for you.”......
Read the entire story
Wednesday, February 4, 2009
Obama to Limit Executive Pay at Companies Getting Aid
Obama hitting them where it hurts!
(Bloomberg.com) President Barack Obama will announce today that he’s imposing a cap of $500,000 on the compensation of top executives at companies that receive significant federal assistance in the future, responding to a public outcry over Wall Street excess.
Any additional compensation will be in restricted stock that won’t vest until taxpayers have been paid back, according to an administration official, who requested anonymity. The rules will force greater transparency on the use of corporate jets, office renovations and holiday parties as well as golden parachutes offered to executives when they leave companies.
Read the entire article
(Bloomberg.com) President Barack Obama will announce today that he’s imposing a cap of $500,000 on the compensation of top executives at companies that receive significant federal assistance in the future, responding to a public outcry over Wall Street excess.
Any additional compensation will be in restricted stock that won’t vest until taxpayers have been paid back, according to an administration official, who requested anonymity. The rules will force greater transparency on the use of corporate jets, office renovations and holiday parties as well as golden parachutes offered to executives when they leave companies.
Read the entire article
Wells Fargo Cancels Mortgage Meeting in Las Vegas Amid Crisis
(Bloomberg) Wells Fargo & Co., one of the nine banks to receive funds in the first round of the Treasury’s bailout, canceled a four-day corporate event in Las Vegas as financial firms cut perks amid criticism from lawmakers.
“We had scaled back the mortgage event, but in light of the current environment, we have now decided to cancel,” the San Francisco-based company said today in a statement. The lender said it had already abandoned plans for other functions.
Read the entire article
“We had scaled back the mortgage event, but in light of the current environment, we have now decided to cancel,” the San Francisco-based company said today in a statement. The lender said it had already abandoned plans for other functions.
Read the entire article
Tuesday, February 3, 2009
Quote of the Day: Blaming Short Sellers
(ritholtz.com) There is a fascinating article about John Paulson in this month’s Portfolio.
What is so intriguiging is not the billions Paulson made on the collapse, but this exchange between short fund manager Jim Chanos and Bear Stearns CEO Jimmy Cayne.
Chanos, for one, is tired of the blame-the-shorts litany, and he recalls a conversation with Bear Stearns’ Schwartz to make his point.
The day before the Fed’s rescue of Bear Stearns, Chanos says he was walking to the Post House restaurant in New York City, when, at 6:15 p.m., his cell phone rang. He saw the Bear Stearns exchange come up on his caller I.D. and took the call.
Read the entire article
What is so intriguiging is not the billions Paulson made on the collapse, but this exchange between short fund manager Jim Chanos and Bear Stearns CEO Jimmy Cayne.
Chanos, for one, is tired of the blame-the-shorts litany, and he recalls a conversation with Bear Stearns’ Schwartz to make his point.
The day before the Fed’s rescue of Bear Stearns, Chanos says he was walking to the Post House restaurant in New York City, when, at 6:15 p.m., his cell phone rang. He saw the Bear Stearns exchange come up on his caller I.D. and took the call.
Read the entire article
Buffett buys HOG debt!
(Bloomberg.com) Billionaire investor Warren Buffett’s Berkshire Hathaway Inc. agreed to buy $300 million of debt from Harley-Davidson Inc., the biggest U.S. motorcycle maker, adding to holdings of corporate debt as yields rise.
Berkshire will get 15 percent interest on the senior unsecured notes, Milwaukee-based Harley said today in a statement. Davis Selected Advisers LP, the largest holder of the company’s stock, also committed to buy $300 million of debt. Harley, which is raising cash to lend to customers, rose the most in more than two decades in New York trading.
Read the entire article
Berkshire will get 15 percent interest on the senior unsecured notes, Milwaukee-based Harley said today in a statement. Davis Selected Advisers LP, the largest holder of the company’s stock, also committed to buy $300 million of debt. Harley, which is raising cash to lend to customers, rose the most in more than two decades in New York trading.
Read the entire article
Saturday, January 31, 2009
Steve Forbes Interviews Jeremy Grantham
Grantham's Big Call(Forbes.com)
Steve Forbes: Well thank you, Jeremy, for joining us today. First, since you have bragging rights in this situation, what made you a bear, [a] great skeptic? Between 1999 until about a couple of months ago, you were saying, "Stay out."
Jeremy Grantham Well, really very simple. Not rocket science. We take a long-term view, which makes life, in our opinion, much easier.
Steve Forbes: Well everyone says it, but you certainly practiced it.
Jeremy Grantham We actually do it. Well, we tried the short-term stuff and it was so hard; we thought we'd better do the long-term. We just assume that at the end, in those days, of 10 years, profit margins will be normal and price-earnings ratios will be normal. And that will create a normal, fair price. And more recently, we've moved to seven years, because we've found in our research that financial series tend to mean revert a little bit faster than 10 years--actually about six-and-a-half years. So we rounded to seven.
Read the entire transcript
Steve Forbes: Well thank you, Jeremy, for joining us today. First, since you have bragging rights in this situation, what made you a bear, [a] great skeptic? Between 1999 until about a couple of months ago, you were saying, "Stay out."
Jeremy Grantham Well, really very simple. Not rocket science. We take a long-term view, which makes life, in our opinion, much easier.
Steve Forbes: Well everyone says it, but you certainly practiced it.
Jeremy Grantham We actually do it. Well, we tried the short-term stuff and it was so hard; we thought we'd better do the long-term. We just assume that at the end, in those days, of 10 years, profit margins will be normal and price-earnings ratios will be normal. And that will create a normal, fair price. And more recently, we've moved to seven years, because we've found in our research that financial series tend to mean revert a little bit faster than 10 years--actually about six-and-a-half years. So we rounded to seven.
Read the entire transcript
Thursday, January 29, 2009
Merrill Bonus Scandal Heats Up, Cuomo May Demand Repayment
(Clusterstock.com) New York Attorney General Andrew Cuomo is stepping up the investigation into Merrill's $4 billion bailout-for-bonuses scandal. He is also reportedly considering demanding that the bonuses be paid back:
Susanne Craig, WSJ: New York Attorney General Andrew Cuomo is expanding the scope of his investigation into bonuses paid by Merrill Lynch, with the inquiry now likely to include whether directors and shareholders were misled about giant losses at the Wall Street firm, a person familiar with the situation said.
Read the entire article
Susanne Craig, WSJ: New York Attorney General Andrew Cuomo is expanding the scope of his investigation into bonuses paid by Merrill Lynch, with the inquiry now likely to include whether directors and shareholders were misled about giant losses at the Wall Street firm, a person familiar with the situation said.
Read the entire article
Obama Calls Wall Street Bonuses ‘Shameful’
(NY Times) President Obama fired a warning shot at Wall Street on Thursday, branding bankers “shameful” for giving themselves $18.4 billion in bonuses as the economy was spinning out of control and the government was spending billions to bail out many of the nation’s most prominent financial firms.
Read the entire article
Read the entire article
Saturday, January 24, 2009
Thursday, January 22, 2009
NBR interview with Warren Buffett
(www.pbs.org) SUSIE GHARIB, ANCHOR, NIGHTLY BUSINESS REPORT: Are we overly optimistic about what President Obama can do?
WARREN BUFFETT, CHAIRMAN, BERKSHIRE HATHAWAY: Well I think if you think that he can turn things around in a month or three months or six months and there’s going to be some magical transformation since he took office on the 20th that can’t happen and wouldn’t happen. So you don’t want to get into Superman-type expectations. On the other hand, I don’t think there’s anybody better than you could have had; have in the presidency than Barack Obama at this time. He understands economics. He’s a very smart guy. He’s a cool rational-type thinker. He will work with the right kind of people. So you’ve got the right person in the operating room, but it doesn’t mean the patient is going to leave the hospital tomorrow.
SG: Mr. Buffett, I know that you’re close to President Obama, what are you advising him?
WB: Well I’m not advising him really, but if I were I wouldn’t be able to talk about it. I am available any time. But he’s got all kinds of talent right back there with him in Washington. Plus he’s a talent himself so if I never contributed anything for him, fine.
Read the entire transcript here
WARREN BUFFETT, CHAIRMAN, BERKSHIRE HATHAWAY: Well I think if you think that he can turn things around in a month or three months or six months and there’s going to be some magical transformation since he took office on the 20th that can’t happen and wouldn’t happen. So you don’t want to get into Superman-type expectations. On the other hand, I don’t think there’s anybody better than you could have had; have in the presidency than Barack Obama at this time. He understands economics. He’s a very smart guy. He’s a cool rational-type thinker. He will work with the right kind of people. So you’ve got the right person in the operating room, but it doesn’t mean the patient is going to leave the hospital tomorrow.
SG: Mr. Buffett, I know that you’re close to President Obama, what are you advising him?
WB: Well I’m not advising him really, but if I were I wouldn’t be able to talk about it. I am available any time. But he’s got all kinds of talent right back there with him in Washington. Plus he’s a talent himself so if I never contributed anything for him, fine.
Read the entire transcript here
Wednesday, January 21, 2009
Monday, January 19, 2009
Ken Lewis, Failure
(Portfolio.com) .....Then in October, Ken Lewis told Lesley Stahl on 60 Minutes that he believed it was his patriotic duty to take the $25 billion in TARP money even though his bank didn't need it. With another $20 billion in cash and a whopping $118 billion in loan guarantees, Lewis must be draping himself with the American flag these days.
The bottom line is that Ken Lewis is a failure. Bank of America has now received more bailout money than the bank is worth. He believed he was doing everyone a favor when he agreed to buy Merrill Lynch with very little due diligence. But now we know he's nothing more than just another bank executive who refuses to read the writing on the wall about just how worthless the junk on the balance sheet really is.
Read the whole article
The bottom line is that Ken Lewis is a failure. Bank of America has now received more bailout money than the bank is worth. He believed he was doing everyone a favor when he agreed to buy Merrill Lynch with very little due diligence. But now we know he's nothing more than just another bank executive who refuses to read the writing on the wall about just how worthless the junk on the balance sheet really is.
Read the whole article
Jim Rogers Says Worried About Dollar, Favors China
(Bloomberg) Jim Rogers, chairman of Singapore- based Rogers Holdings, said investors should be “worried” about the U.S. dollar, and recommended selling government bonds and buying raw materials, China stocks and the yen.
“If I were you, I would be worried about the U.S. dollar,” said Rogers, 66, in a speech at the Asia Financial Forum in Hong Kong today. “The Americans are printing U.S. dollars. The Americans are going to do whatever they can to revive their economy, even if it means destroying the U.S. dollar.”
Read the entire story
“If I were you, I would be worried about the U.S. dollar,” said Rogers, 66, in a speech at the Asia Financial Forum in Hong Kong today. “The Americans are printing U.S. dollars. The Americans are going to do whatever they can to revive their economy, even if it means destroying the U.S. dollar.”
Read the entire story
Warren Buffett's Dateline Interview with NBC's Tom Brokaw: The Complete Transcript
(CNBC.com) TOM BROKAW, NBC NEWS:
Last fall, Warren a pollster told me that the election was between hope and fear. When it comes to the economy, who's winning, hope or fear?
WARREN BUFFETT:
Well, right now fear is. I mean, you're seeing it everyplace. You saw it at-- in the sales of almost every item at-- at Christmas. There's a lot of fear throughout the country. Even-- even with people whose jobs are fine, and who have money in the bank. But they-- they're worried.
Read the entire interview
Last fall, Warren a pollster told me that the election was between hope and fear. When it comes to the economy, who's winning, hope or fear?
WARREN BUFFETT:
Well, right now fear is. I mean, you're seeing it everyplace. You saw it at-- in the sales of almost every item at-- at Christmas. There's a lot of fear throughout the country. Even-- even with people whose jobs are fine, and who have money in the bank. But they-- they're worried.
Read the entire interview
Sunday, January 18, 2009
Watch out, world: Americans are saving again
(Globeandmail.com) In one of the biggest and most misunderstood changes in modern economic history, citizens of the largest economy in the world are suddenly doing something they haven't done in years: They're saving money. It is having myriad consequences, including a tsunami of money in one part of the world, and an air pocket in demand in other parts of the world, especially China.
Americans are suddenly spending less than they earn. While that might not sound heretical or surprising - how long can you go on spending more money than you earn? - it is an epochal moment for the free-spending United States. After saving an average of more than 7 per cent of disposable income until almost 1990, the United States went into a savings tailspin. Savings rates fell, in fits and starts, from 8 per cent, through 6 per cent in the early 1990s, to 2 per cent around 2000, to the ignominy of a negative savings rate by mid-2005.
Read the entire article
Americans are suddenly spending less than they earn. While that might not sound heretical or surprising - how long can you go on spending more money than you earn? - it is an epochal moment for the free-spending United States. After saving an average of more than 7 per cent of disposable income until almost 1990, the United States went into a savings tailspin. Savings rates fell, in fits and starts, from 8 per cent, through 6 per cent in the early 1990s, to 2 per cent around 2000, to the ignominy of a negative savings rate by mid-2005.
Read the entire article
Saturday, January 17, 2009
Drumbeat for Ken Lewis Resignation Builds
(ritholtz.com) Wednesday night, I suggested it was Time to Fire Ken Lewis of Bank of America. Since then, several other people have come out to echo those sentiments:
David Reilly, Bloomberg notes that the bad bet on Merrill follows a bad bet on China Construction Bank and an even worse bet on Countrywide:
Read the entire story
David Reilly, Bloomberg notes that the bad bet on Merrill follows a bad bet on China Construction Bank and an even worse bet on Countrywide:
Read the entire story
Legendary Investor Warren Buffett Upbeat for Longer-term
(www.voanews.com) The world's richest man, legendary investor Warren Buffett, tells VOA that despite a deep financial and economic crisis, he believes American stocks are cheap and he is optimistic about the longer-term future.
Read the entire article
Read the entire article
Treasury/Fed: All Goldman Sachs, All the Time
Don't quite understand the Government's obsession with Goldman Sachs, but here they go again.
(ritholtz.com) Yes, another Fed slot is soon to be filled, with another Goldman Sachs alum.
I never bought into the conspiracy that Goldman is taking over the financial world, but the lack of diversity of thought and the risk of groupthink is increasingly becoming a concern . . .
Read the entire story
(ritholtz.com) Yes, another Fed slot is soon to be filled, with another Goldman Sachs alum.
I never bought into the conspiracy that Goldman is taking over the financial world, but the lack of diversity of thought and the risk of groupthink is increasingly becoming a concern . . .
Read the entire story
Friday, January 16, 2009
Thursday, January 15, 2009
Today's Outrage: Bank of America's Secret Backroom Bailout (BAC)
(Clusterstock.com) In mid-December, the WSJ tells us, Bank of America (BAC) went to Hank Paulson and threatened that if he didn't give the firm another TARP bailout, they'd abandon the Merrill Lynch deal and cripple the financial system. Paulson then apparently spent more money he didn't have, promising that he would rescue BAC yet again. (This a month or so after an annoyed Ken Lewis said he didn't want or need the original TARP infusion).
There is only one word to describe this: Outrageous.
Read the entire article
There is only one word to describe this: Outrageous.
Read the entire article
The Usual Suspects
(Portfolio.com) Wall Street bankers who’ve spent any time in the business often find they suffer from “Goldman Sachs envy”—a bitter mix of resentment and begrudging admiration for the firm’s seemingly endless list of triumphs. It thrived while others struggled, and even if competitors were succeeding, Goldman always one-upped them. It sealed bigger deals, showered its executives with more money, and placed its powerful alumni in higher levels of government.
Now, with Goldman emerging from the financial crisis battered but still on top, the Street is seeing something more insidiously silly: a bona fide Goldman conspiracy. “A lot of people think that they must have gotten where they are because of some unfair advantage,” hedge fund manager Bill Fleckenstein says. “Nobody likes to think that someone flat out beat ’em.” (See a list of Goldman Sachs alumni and how they figure into the market turmoil of recent months.)
Read the entire article
Now, with Goldman emerging from the financial crisis battered but still on top, the Street is seeing something more insidiously silly: a bona fide Goldman conspiracy. “A lot of people think that they must have gotten where they are because of some unfair advantage,” hedge fund manager Bill Fleckenstein says. “Nobody likes to think that someone flat out beat ’em.” (See a list of Goldman Sachs alumni and how they figure into the market turmoil of recent months.)
Read the entire article
Tuesday, January 13, 2009
Ben Bernanke: We're Bringing Back The Original TARP
No wonder the public has lost confidence...government cannot even decide how to implement or oversee the TARP.
(Clusterstock.com) In his speech this morning to the London School of Economics, Bernanke indicated that the Federal Reserve may resurrect the original concept of the Troubled Asset Relief Program--buying troubled assets.
The basic idea is the same as its always been: banks hold so many assets of unknown and unknowable values that their are perceived as extremely unstable. To put it more bluntly: outsiders fear banks are still mismarking assets way above their actual value, so they won't trust the balance sheets. "Well capitalized" is just read as "lying about our financial health."
Read the entire story
(Clusterstock.com) In his speech this morning to the London School of Economics, Bernanke indicated that the Federal Reserve may resurrect the original concept of the Troubled Asset Relief Program--buying troubled assets.
The basic idea is the same as its always been: banks hold so many assets of unknown and unknowable values that their are perceived as extremely unstable. To put it more bluntly: outsiders fear banks are still mismarking assets way above their actual value, so they won't trust the balance sheets. "Well capitalized" is just read as "lying about our financial health."
Read the entire story
Longleaf Partners 4th Quarter Update
(longleafpartners.com) Client communication dated 12/19/08 to clients of Longleaf Partners.
Read the update here
Read the update here
Bruce Berkowitz: “Prices today are as attractive
(Advisorperspectives.com) Bruce Berkowitz is the Founder and Managing Member of Fairholme Capital Management and the portfolio manager for the Fairholme Fund (FAIRX), a $6.7 billion fund that he started in 1997. The Fairholme Fund, which has consistently outperformed the S&P 500 since its inception, is one of the top 10 actively managed funds within the Most Popular Mutual Funds in the Advisor Perspectives universe.1 One of the most respected experts on value investing, Mr. Berkowitz is the author of an introduction to a chapter in the 6th edition of Securities Analysis, a textbook on value investing by Graham and Dodd. The chapter is devoted to Graham and Dodd’s concept of the dividend factor, which forms the basis for Mr. Berkowitz’ reliance on free cash flow yield as his key metric for valuation.
Read the entire article
Read the entire article
Signs Seen of Possible Plea Deal for Madoff
(NY Times/DealBook Blog) After a federal magistrate refused to revoke bail on Monday for Bernard L. Madoff, the financier accused of operating a $50 billion Ponzi scheme, signs emerged that his lawyer was actively negotiating a plea agreement that could conclude the baffling fraud case without a trial, The New York Times’s Diana B. Henriques reported.
Federal prosecutors acknowledged in a court order released Monday that Mr. Madoff’s lawyer, Ira Lee Sorkin, is “engaging in discussions concerning a possible disposition of this case.”
Read the entire column
Federal prosecutors acknowledged in a court order released Monday that Mr. Madoff’s lawyer, Ira Lee Sorkin, is “engaging in discussions concerning a possible disposition of this case.”
Read the entire column
Eveillard and Englander Shun Leverage, Beat Rivals
(Bloomberg) Jean-Marie Eveillard, who beat 99 percent of rival equity fund managers last year by hoarding cash instead of borrowing it, is loading up on Japanese insurers and Hong Kong developers.
“Leverage eliminates your staying power,” said Eveillard, whose $16.8 billion First Eagle Global Fund beat the Standard & Poor’s 500 Index every year this decade. “If things go well, you look even better, but if things go badly, you end up doing worse,” he said in an interview from his office at Arnhold & S. Bleichroeder Advisers LLC overlooking Central Park in New York. “You could blow up if big leverage is being used.”
Read the entire article
“Leverage eliminates your staying power,” said Eveillard, whose $16.8 billion First Eagle Global Fund beat the Standard & Poor’s 500 Index every year this decade. “If things go well, you look even better, but if things go badly, you end up doing worse,” he said in an interview from his office at Arnhold & S. Bleichroeder Advisers LLC overlooking Central Park in New York. “You could blow up if big leverage is being used.”
Read the entire article
Saturday, January 10, 2009
Buffett’s Better Deal
No wonder Buffett doesn't like to hire investment bankers!
(Ritholtz.com) Earlier this morning, we discussed how badly the Treasury department, along with Congress, had bungled the bailout monies.
These two graphics show exactly what an awful deal the taxpayer got for our monies.
Read the entire story
(Ritholtz.com) Earlier this morning, we discussed how badly the Treasury department, along with Congress, had bungled the bailout monies.
These two graphics show exactly what an awful deal the taxpayer got for our monies.
Read the entire story
Thursday, January 8, 2009
Taxpayer financed signing bonuses....
(footnoted.org) While there’s been no shortgage of stories that question exactly what banks that receive money under the Treasury’s TARP program plan to do with that money, tracking down the details are a lot more difficult. In part, that’s because the Treasury department’s own website is an embarrassment that makes anyone trying to practice oversight, like my friends at bailoutsleuth.com, an exercise in extreme frustration. As the WSJ noted on Tuesday, Treasury’s most recent progress report on Tuesday didn’t even provide a running total on how much money has been handed out so far — a not-so-minor detail.
Read the entire article
Read the entire article
Paulson to Discover Fate of His $500 Million Fortune
(Bloomberg) Treasury Secretary Henry Paulson, a $500 million man when he entered office, said he’s about to discover how much of his fortune remains after two years of financial market turmoil.
“I’ve got to find out where my money has been invested,” Paulson, 62, said today after a speech, drawing laughter from the Washington Economic Club.
Read the entire story
“I’ve got to find out where my money has been invested,” Paulson, 62, said today after a speech, drawing laughter from the Washington Economic Club.
Read the entire story
Adult Entertainment Industry Wants a Bailout
Everybody wants a bailout, even the adult entertainment indusry! Not sure if this is a joke or not, but here is the story. Who knows, the way our government is throwing around money, they might get it.
(foxbusiness.com) With the financial industry, auto makers and more getting assistance from the federal government to stay afloat during the recession, the adult industry decided it would try to get something as well.
Girls Gone Wild CEO Joe Francis and “Hustler” magazine publisher Larry Flynt have said they will petition Congress for financial aid along the lines of what the Big Three auto makers are getting.
Read the entire article
(foxbusiness.com) With the financial industry, auto makers and more getting assistance from the federal government to stay afloat during the recession, the adult industry decided it would try to get something as well.
Girls Gone Wild CEO Joe Francis and “Hustler” magazine publisher Larry Flynt have said they will petition Congress for financial aid along the lines of what the Big Three auto makers are getting.
Read the entire article
Wednesday, January 7, 2009
10 investing basics from Buffett
(moneycentral.msn.com) Last year's market madness didn't just flush away $7 trillion in wealth.
It also washed away a lot of investors' confidence and left them stumped about the best position to take now. "Somewhere between cash and fetal," quips one pessimist.
In such downbeat times, let's consider a dose of optimism, wisdom and insight: the basics as taught by that perennial investing Yoda, Warren Buffett.
Read the entire story
It also washed away a lot of investors' confidence and left them stumped about the best position to take now. "Somewhere between cash and fetal," quips one pessimist.
In such downbeat times, let's consider a dose of optimism, wisdom and insight: the basics as taught by that perennial investing Yoda, Warren Buffett.
Read the entire story
Merrill’s Rosenberg: No Recovery In 2009
(Clusterstock.com) Merrill Lynch economist David Rosenberg has once again bucked the consensus among market commentators who appear to have agreed that the US economy will recover in the second half of 2009. Based on our entirely unscientific survey of people talking to financial news folks, it seems that many believe that a recovery will come sometime in the second half of the year and that the stock market will anticipate this recovery by rallying some nine months before the economy.
The lesson of this would seem to be: buy stocks now! The Obama recovery is coming and you might miss the bottom.
Well, not so fast says Rosenberg.
Read the entire story
The lesson of this would seem to be: buy stocks now! The Obama recovery is coming and you might miss the bottom.
Well, not so fast says Rosenberg.
Read the entire story
Monday, January 5, 2009
Byron Wien: Stocks, Gold, Oil To Skyrocket In 2009
(Clusterstock.com) It's that time of year again: Time for strategists to take big, bold swings, cross their fingers, and hope that enough goes right that they can say "As we said in January" (Or, if not, that the predictions disappear unnoticed in the noise).
Today, Pequot's Byron Wien throws his annual hat in the ring. Byron's bottom line? Buy everything.
Read the entire article
Today, Pequot's Byron Wien throws his annual hat in the ring. Byron's bottom line? Buy everything.
Read the entire article
Ready for a rally?
(Economist.com/Buttonwood column) Markets could decouple from the economy in 2009—in a pleasant way for equity investors.
SOOTHSAYING is not a very respectable profession. Like Cassandra, those whose forecasts are correct tend not to be believed. Most people are drawn into extrapolating from current trends and are thus surprised when things change. That is one reason why economists are so hopeless at predicting recessions.
Read the entire story
SOOTHSAYING is not a very respectable profession. Like Cassandra, those whose forecasts are correct tend not to be believed. Most people are drawn into extrapolating from current trends and are thus surprised when things change. That is one reason why economists are so hopeless at predicting recessions.
Read the entire story
Saturday, January 3, 2009
By the Numbers — How 2008 Shakes Out
(MarketBeat Blog-Wall Street Journal)
Now that 2008 is finally history, it’s time to look back at the year in numbers — most of them pretty terrible.
-33.84% The percentage loss in the Dow industrials, worst since 1931, third-worst in history.
-38.49% The percentage loss in the S&P 500, worst since 1937.
-40.54% The percentage loss for the Nasdaq Composite Index, worst in history.
Read the entire story
Now that 2008 is finally history, it’s time to look back at the year in numbers — most of them pretty terrible.
-33.84% The percentage loss in the Dow industrials, worst since 1931, third-worst in history.
-38.49% The percentage loss in the S&P 500, worst since 1937.
-40.54% The percentage loss for the Nasdaq Composite Index, worst in history.
Read the entire story
Subscribe to:
Posts (Atom)
Posts
