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.


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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).


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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.

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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.

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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.

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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."


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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.

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