Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktVital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1195.9 | -18 | -1.48% |
| Eurostoxx Index | 2180 | -56.650 | -2.53% |
| Oil (WTI) | 96.42 | -1.250 | -1.28% |
| US Dollar Index (DXY) | 78.465 | 0.442 | 0.57% |
| 10 Year Govt Bond Yield | 1.96% | -0.06% |
US futures are down on the failure of the super committee to reach a deal. FWIW, I am surprised at the reaction – I don’t think anyone expected much anyway. Euro sovereigns are relatively stable this morning. Merger Monday is back, with a $10 billion deal in the pharma space and a deal in the insurance space. Corporations are sitting on a mountain of cash and valuations are low. We should be seeing a lot more of this.
So was Jon Corzine a crook, or just someone who made a bad trade? It seems some of the biggest distressed investors are betting the latter. Of course all assets are good investments at a price, and MF Global bonds are trading at 36 cents on the the dollar, and the bank debt is around 50 cents. These investors are betting that the missing 600 million of customer funds is out there, and will be found. If that is the case, you can make a case that the equity is actually worth something. Which means a full recovery on the bonds and a double or triple as the case may be.
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All Things in Moderation 
I don't know Brent. I've been reading a lot this morning that the ECB is doing more harm than good in restoring confidence and so maybe that's still affecting the market here? I'm finding it difficult to believe the "supercommittee" is the culprit as no one expected much from them. But then again, I'm sure you're more in tune with "Street sentiment" than I am. They seem like a bunch of "nervous nellies" to me if that's the case considering we actually had somewhat positive news on several economic fronts last week.
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I don't read too much into the market moves these days. My gut tells me we are going higher, not lower, but day to day, I don't have a view.
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So we're back to the roller coaster analogy? That works. I guess Krugman is saying the markets are reacting to the fact that the failure also signals lack of spending. Who knows? I do hope you're right re higher.
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Of course if Europe implodes in a dramatic fashion all bets are off. I think the economy is on the mend and if it weren't for Europe we would be having a rally. FWIW, I like some of Krugman's stuff, but I do think he has an ideological axe to grind.
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"Of course if Europe implodes in a dramatic fashion all bets are off. I think the economy is on the mend and if it weren't for Europe we would be having a rally. "Do you have an opinion on how long Europe can continue the band-aid/Pretend and Extend approach before they either have to commit one way or the other?I.e. either Eurobonds backed by the ECB and it's ability to print money (lender of last resort) or sovereign default and break up of the Eurozone?
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jnc, I think Scott nailed the underlying issue the other day, which is a currency not backed by a sovereignty.The nations will not cede their sovereignty in the end. If the economy otherwise turns around, that is, if there is growth fueled by externals, even if abetted by EZ credit from the EMU, then EMU may weather the crises. But if all EMU has going for it is credit easing, I do not see a happy ending. A restructuring of the Eurozone will be very painful.
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I definitely agree as to the cause of the problem, but I was interested in his (and any other informed observers) opinion about when it will come to a head one way or the other.
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Interesting piece in New York Magazine. I particularly like this turn of phrase:"In fact, the liberal failures of Obama and Clinton are but tiny potholes next to the vast gulch of failure that was the Carter presidency."When Did Liberals Become So Unreasonable?
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I was counting on Gingrich getting in, so we could end those "truly stupid" child labor laws. Otherwise, I'll have to make do with hitting the Sherwin-Williams in the morning to pick up illegals like always.
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Believe it or not, come Friday people will still be eating and using energy, and after that Christmas won't be cancelled (except in Europe of course), so I'm selectively buying and selectively shorting. I'm also having a rather lengthy totally nonsensical discussion about pizza in school lunches, on which the fate of our children seems to rest.
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David Frum's companion piece to the liberal one in the New York Magazine is good as well. Favorite quote from the article:"In the aftershock of 2008, large numbers of Americans feel exploited and abused. Rather than workable solutions, my party is offering low taxes for the currently rich and high spending for the currently old, to be followed by who-knows-what and who-the-hell-cares. This isn’t conservatism; it’s a going-out-of-business sale for the baby-boom generation."When Did the GOP Lose Touch With Reality?
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Thanks for the links, jnc4p. Both those essays were good reads.
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Via Paul Krugman's blog, this struck me as interesting:"On Nov. 2nd, a group of students in Harvard University Ec10, the introductory economics class taught by Greg Mankiw, staged a walk-out. In an open letter, the students lambasted Greg’s course and his textbook for “espous[ing] a specific – and limited – view of economics that we believe perpetuates problematic and inefficient systems of economic inequality in our society today…..There is no justification for presenting Adam Smith’s economic theories as more fundamental or basic than, for example, Keynesian theory.” "We Are Greg Mankiw… or Not?Two observations:1. Why go to introductory economics class if you already know everything there is to know about economics?2. It's always illustrative to contrast the behavior of those who go to college on their own dime versus those who have it paid for by someone else.
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