(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.
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Friday, May 29, 2009
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.
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(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.
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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.
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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.
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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.
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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.
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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.
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“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.
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