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 | 1335.8 | -3.3 | -0.25% |
| Eurostoxx Index | 2493.6 | -14.3 | -0.57% |
| Oil (WTI) | 96.21 | -0.7 | -0.72% |
| LIBOR | 0.52 | -0.003 | -0.62% |
| US Dollar Index (DXY) | 79.03 | -0.048 | -0.06% |
| 10 Year Govt Bond Yield | 1.93% | 0.03% |
Markets are a touch weaker on disappointing economic date out of Germany and China. Greek debt talks continue, and sovereign spreads in Europe are behaving. Portugal has completely retraced the yield spike from a week ago. Europe seems to be quieting down. That said, Europe isn’t “fixed” by any stretch, and still has tight credit issues. The VIX (which is a fear index) has returned to pre-crisis levels, indicating Europe is fading into the background. Of course contrarians view that as a sell signal. (VIX is high – time to buy, VIX is low – time to go).
The SEC is trying to figure out a way to deal with money market funds. It is ironic that the SEC is trying to find out a way to “stabilize money market funds” while the Fed is doing everything it can to destroy them. The SEC is creating new capital guidelines which will hopefully allow money market funds to navigate the next financial crisis. Unfortunately, with rates so low, money market funds can’t cover their costs and provide investors a non-negative return. So the point may be moot – there may not be many money market funds left when the next crisis approaches.
No major economic data on tap today or tomorrow. We will get initial jobless claims and consumer sentiment data later this week. Earnings season is winding down.
Filed under: Uncategorized |
All Things in Moderation 
This article is a pretty good rundown on the upcoming Dodd-Frank efforts to regulate the “shadow banking system”.
http://www.cnbc.com/id/46293260
LikeLike
Bernanke at 10 today. They’re going to ask him the same question, 20 different ways. How does Friday’s jobs report affect your views on the recovery and the economy in general?
LikeLike
You’re getting QEIII whether you like it or not.
LikeLike
LOL
Not until the unemployment rate rises again. That could be this month or March.
LikeLike
Greg Sargent has said he will ask beach_music to leave the PL if someone can produce one or more of his posts claiming that he would actually leave if Greg were to ask.
“But having lurked here a lot, I have decided I have too much respect for Greg to allow beach to accomplish his purpose unchallenged. I wish Greg would call beach’s bluff and ask him to leave for the good of the community.”
okie, you mentioned this possibility this weekend. Does anyone have the capacity to remember when he said that? Sorry to interrupt.
LikeLike
On your topic, everyone on CNBC this morning agreed “naked” shorting should be banned even the brightly red guest host, a fund manager himself
LikeLike
“On your topic, everyone on CNBC this morning agreed “naked” shorting should be banned even the brightly red guest host, a fund manager himself”
Naked shorting (i.e. shorting without a borrow) is already illegal.
LikeLike
How odd then that all, including Jim Cramer were speaking as if it were not.
LikeLike
Yes, brent is right, but it is almost never enforced.
Welcome shrink btw.
LikeLike
Brent:
Thanks for including the explanation of VIX — I guess you probably knew I’d have to ask otherwise.
Any particular reason Portugal’s yields have come back down? Or is it just another case of irrationality of the market?
LikeLike
shrink:
For the effect of that request, I’m guessing we should see how many Congressmen lived up to their pledge to limit their terms. LOL
LikeLike
Shrink,
After beach single-handedly led Seal Team Six to kill Bin Ladin, and won his Pulitzer Prize, you’re still trying to get him kicked off PL? 🙂
Smileys work here. All I’m gonna say about that.
LikeLike
I understand that beach honored his pledge not to run again after his term in Congress, though the president personally asked him to stay and serve.
/gossip
LikeLike
He’s just an asshole.
LikeLike
All these Congressmen trying to tell the Bernank what is going on in the economy remind me of the supposed story about Johnny Cash at his prison concert, where the warden asked him not to play Folsom Prison Blues because it would remind the men that they were in prison. “You think they’ve forgot?” Cash replied.
LikeLike
Hi Shrink.
OT to Mark — -Thanks for the link to the economist story.
LikeLike
“Yes, brent is right, but it is almost never enforced.”
If you naked short a stock and the investment bank can’t find the shares, then you will get bought it on settlement day. It doesn’t mean the SEC is going to take you away in handcuffs.
If you do it in large size, the SEC will come after you and force you to disgorge profits and pay fines. Case in point – the SEC went after Sandell for shorting naked during the Hibernia deal. Sandell is a merger arb hedge fund that had a position in Hibernia bank, a small New-Orleans based bank that was being purchased by Capital One. It was a tender offer. The tender deadline was Friday, August 26, 2005. Over the weekend, Hurricane Katrina wiped out New Orleans. The hurricane was an incentive for Capital One to back away from the deal. Hibernia would have lost half its value if Capital One walked away. Sandell sold the stock it had tendered. It wasn’t allowed to do that because they didn’t officially own the stock anymore and there wasn’t a borrow. The SEC came after them for that and forced them to disgorge the losses they avoided and pay a fine.
So, enforcement actions do happen if the amount of money is large enough. But for most people, the consequences of naked shorting is a buy-in on settlement day.
SEC complaint
LikeLike
brent:
I agree, enforcement action is likly to occur as often as New Orleans goes entirely under water!
LikeLike
“the consequences of naked shorting is a buy-in on settlement day”
Talk about leverage. Therein lies the danger.
LikeLike
Banned, fair enough.
Note in the action, they imposed fines not only on the fund, but also the employees involved. Granted Pat Burke made millions at Bear (we worked together on the Euro arb desk), and he could probably cover his fine by renting out his summer house in Watermill, but still.
LikeLike
shrink,
beach will be very mad to find out people are talking behind his back. He did say multiple times he would leave if Greg asked him to. I even suggested myself that Greg his bluff but it fell on deaf ears at the time.
I am perhaps the second or third most tolerant person towards beach, but even he gets on my last nerve much of the time.
LikeLike
brent:
That would still make him a piker next to Mozilo who paid a 67 million fine on a profit estimated variously to be in the 400-500 million range.
LikeLike
No, it would make his day to know anyone is talking about him at all. So I guess no one has an example of him saying that and searching is no longer possible. Too bad.
LikeLike
I haven’t listened to the testimony, but the Bernank must be talking up the economy today. We’re about back in the green.
LikeLike
Or Franklin Raines, who paid himself tens of millions of dollars on fraudulent accounting. Franklin Raines made Lay and Skilling look like pikers.
LikeLike
Franklin Raines made Lay and Skilling look like pikers.
Ken Lay was a piker.Andy Fastow engineered much of the criminality of Enron, while Skilling knew what he was doing but there was so much money, while Ken Lay was looking through swatches of leather upholstery for the new corporate G5, going around collecting awards and accolades, and hobnobbing with politicians and big whigs and getting his ego stroked left and right. And he died in jail.
Definitely a piker next to Raines.
Never forget: consulting firm McKinsey blessed Enron’s tight-loose management practices. And the unilateral focus on the current days ticker price.
LikeLike
I have it on in the background. Typical session – Democrats are trying to get the Bernank to agree we need higher taxes. Republicans are trying to get the Bernank to agree we need lower spending.
LikeLike
Ah yes, the 447 word “question” for you Mr. Chairman
LikeLike
Sorry Shrink, I actively skip Beach’s posts when I’m over there reading. Generally, the person who says he’s the smartest person in the room isn’t.
As always Brent et al, thanks for all the economic/financial interpretation of current events. It’s a real asset to ATiM.
LikeLike
“Federal Reserve Chairman Ben Bernanke on Tuesday renewed a pledge to prevent Europe’s financial crisis from damaging the U.S. economy in testimony before Congress that mirrored remarks he made last week”
Ah, but what’s he going to do about climate change? LOL
LikeLike
“Federal Reserve Chairman Ben Bernanke on Tuesday renewed a pledge to prevent Europe’s financial crisis from damaging the U.S. economy in testimony before Congress that mirrored remarks he made last week”
Ah, but what’s he going to do about climate change? LOL
Phew….I guess I can stop paying attention to what’s going on in Europe. What a relief!
LikeLike
ash:
He’ll get to the problem with Wes Welker’s hands by August, no rush now.
LikeLike
He’ll get to the problem with Wes Welker’s hands by August, no rush now.
Why no until August? Is it going to take that long for him to make sure Europe doesn’t screw up the US? Rank amateur.
Or maybe he’s going to fix Manchester United’s central midfield problems.
LikeLike
Thanks, lms.
@banned: Finally Pat Toomey asks about the unintended consequences of an exceptionally loose monetary policy, hurting savers and inflating bubbles. Calls the Treasury market a bubble.
Bernake is “aware of these risks.” Acknowledges savers don’t only invest in Treasuries – they also buy corporates – and if the economy improves savers make money on corporate bonds.
Acknowledges that the point of the current monetary policy is to drive investment dollars out of safe investments (i.e. Treasuries) and into risky assets. Pledges the Fed will prevent a bubble.
Ben: The effect of the Fed on Treasury rates is “modest.” (Don’t blame us for where Treasuries trade)
LikeLike
@kevin,
And no one has even said “Boo” to Raines. He has skated scot-free.
LikeLike
And no one has even said “Boo” to Raines. He has skated scot-free.
Ken Lay lost his head for being Enron’s Marie Antoinette. Andy Fastow, who was pretty much behind the shenanigans (with Skilling’s he-musta-known assistance and support), is now in a halfway house. And Ken Raines is free and very, very wealthy.
That’s what I meant, when amplifying on how Skilling and Ken Lay were, indeed, pikers by comparison.
LikeLike
Savers buying coporate bonds? Just how sophisticated a group of savers are we talking about? Call me crazy, but I think the group that rotates out of bank CDs into AAAs is kinda small.
LikeLike
A headline that any writer can pull out when they hit the wall for a story:
“Greek Government Finalizing Agreement on Bailout”
LikeLike
From the category of this is “news” but it’s certainly no surprise…
http://karenhandelkomen.com/
February 7, 2012
The Honorable Nancy Brinker
CEO, Susan G. Komen for the Cure VIA EMAIL
5005 LBJ Freeway, Suite 250
Dallas, Texas 75244
Dear Ambassador Brinker:
Handel has resigned. You can hit the link if you want to read her final volley.
LikeLike
Handel has resigned.
Sometimes bullying and intimidation is a good thing.
I doubt she went willingly.
LikeLike
ruk:
Blame the media I’m guessing?
LikeLike
“Savers buying coporate bonds? Just how sophisticated a group of savers are we talking about? Call me crazy, but I think the group that rotates out of bank CDs into AAAs is kinda small.”
Yes, who cares if the interest income doesn’t cover food and energy price increases? That stuff isn’t in the core, so it doesn’t count.
LikeLike
From the Handel letter…
Just as Komen’s best interests and the fight against breast cancer have always been foremost in every aspect of my work, so too are these my priorities in coming to the decision to resign effective immediately. While I appreciate your raising a possible severance package, I respectfully decline.
She declined a severance package? And she was new to the board was she not. Wonder what the motivation was behind that. It probably represented a significant amount of change!
LikeLike
ruk
Impossible to solicit donations when the headlines say that you’re money is going to pay off a hated departing board member.
LikeLike
john/banned
Impossible to solicit donations when the headlines say that you’re money is going to pay off a hated departing board member.
Well if that was Handel’s motivation for refusing to accept a severance package then kudos to her, it was the right thing to do.
I’m curious about her reference to the “possibility of a severance” having been raised.
Just prurient interest on my part, but I wonder if Brinker or another honcho was simply calculating a price to control the damage. I’d just love to know what was really said behind the closed doors…not for any political knowledge…just pure soap opera theatrics.
LikeLike
She declined a severance package? And she was new to the board was she not. Wonder what the motivation was behind that. It probably represented a significant amount of change!
One interpretation is that severance was in exchange for staying quiet. The implication being that she prefers to retain the option of publicizing her side of the story.
LikeLike
“One interpretation is that severance was in exchange for staying quiet. The implication being that she prefers to retain the option of publicizing her side of the story.”
Bingo. I smell a book. And she’ll have no problem joining a pro-life / anti-abortion / anti-choice (choose your preferred description) organization as a fundraiser.
LikeLike
bsimon
One interpretation is that severance was in exchange for staying quiet. The implication being that she prefers to retain the option of publicizing her side of the story.
Your guess is as good as any other. I’m not sure why I find this so interesting…I think it is perhaps just the fascination at watching how power plays unfold and eventually end.
LikeLike
More news:
A federal appeals court in California has upheld a lower court’s ruling that Proposition 8, the state’s ban on gay marriage, is unconstitutional.
LikeLike
Handel’s job there is done. It didn’t turn out the way she expected, but she got what she wanted. She was using SGK as a pawn in a bigger agenda.
LikeLike
shrink, just saw your request. I’ll find it as I consider it to be for a good cause. yello, if you can find one faster, I will not be offended.
LikeLike
Worth a read:
“Is the White Working Class Coming Apart?
by David Frum Feb 6, 2012 11:45 AM EST
Charles Murray’s new book does not provide an adequate explanation for the collapse of the white working class.”
http://www.thedailybeast.com/articles/2012/02/06/charles-murray-book-review.html
Courtesy of Paul Krugman’s blog:
“February 7, 2012, 10:22 am
Blaming the Victims of Inequality”
http://krugman.blogs.nytimes.com/2012/02/07/blaming-the-victims-of-inequality/
I will note my distaste for the language construct that statistical differences in income constitute “victimization”.
LikeLike
“You’re getting QEIII whether you like it or not.”
Thank you sir!
May I have another?
LikeLike
For our economic wonks..Brent/johnbanned/Scott/mike et al
How about a quick down and dirty scoreboard for QEIII
QEIII takes place as predicted and the winners are: ???? the losers: ????
LikeLike
@ruk:
Winners: homebuyers, borrowers. stock and commodity investors (though helping commodity investors is not the Fed’s intent), banks.
Losers: retirees, pension funds, insurance companies, the economy if we inflate another bubble somewhere.
LikeLike
For those who haven’t seen it, Steve Pearlstein’s piece on the desirability of eliminating SuperPAC’s in favor of direct bribery of swing state voters is quite amusing:
“Forget super PACs. A modest proposal for legalizing bribery
By Steven Pearlstein,
Published: February 4, 2012”
…
“So, I propose that we finally give up the charade that we are not “buying” elections and, in fact, do exactly that — mount an all-out political and legal challenge to laws preventing us from buying votes directly.
As you know, bribing voters is an honored tradition in this country, dating to the early days of the Republic. From the Federalist Papers it’s clear that the practice was known to the Framers; if they had found it incompatible with democracy they surely would have banned it in the constitution. Significantly, they did not — nor did they include the regulation of vote-buying in their enumeration of the powers vested in Congress. Therefore, we would be on solid constitutional grounds in trying to establish a property right of all citizens to vote in federal elections — a right that, like all other property rights, can be sold on the free market.
I’ve heard indirectly from Karl Rove that it is not necessary to buy the votes of all citizens to attain the certainty we require. His estimate is that by buying the votes of 10 million Americans every two years, focusing on the key swing states and districts, we can be assured of complete control of the White House and both houses of Congress, and through them the courts and the independent agencies.
I’ve done up a rough business plan for such an effort, based on a Bain & Co. estimate that the average price for a vote will settle in at $1,000. In an open market, of course, we have to expect competitive bidding from the unions (at least until we have succeeded in crushing them) as well as traitors to our class (Soros, Buffett et al). Even at that price, we’re talking a mere $10 billion per election cycle, or $5 billion a year, which on an after-tax basis works out to $4 billion a year. That’s a heck of a lot less than it would cost us if Democrats ever get a hold of power again.”
http://www.washingtonpost.com/business/steven-pearlstein-forget-super-pacs-a-modest-proposal-for-legalizing-bribery/2012/01/30/gIQAz66CqQ_story.html
LikeLike
“RUK, on February 7, 2012 at 11:26 am said:
For our economic wonks..Brent/johnbanned/Scott/mike et al
How about a quick down and dirty scoreboard for QEIII
QEIII takes place as predicted and the winners are: ???? the losers: ????”
Also, if you are concerned about growing income inequality in America, QEIII may not be your preferred policy due to the reasons that Matt Taibbi cites:
“For those who don’t remember QE, this is a magical money-printing program the Fed has been using two years in a row to artificially prop up the economy (well, parts of it, anyway). “Helicopter Ben” Bernanke has printed a couple of trillion dollars, just waved a wand and invented them, then used those funds to buy things like mortgages and t-bills.
That this is a terrible idea ought to be self-evident. The irritating thing is that this ought naturally to be a campaign issue for progressives, because the most direct consequence of QE is to magnify the income inequality problem, as this study of the British version of QE (decried by our witty friends at Zero Hedge as the winner of the “real men of captain obvious genius award”) concluded. The study by Dhaval Joseph of BCA research concluded that QE might have been a factor leading to the British riots.
The reason QE is “good for the rich and bad for the poor” is obvious: by pouring trillions in jet-fuel cash into the inequity engine that is the banking sector, we’ve seen massive increases in share prices and corporate profits, without any resulting increases in wages. As the Joseph study concludes:
‘Real wages – adjusted for inflation – have fallen in both the US and UK, where QE has been a key tool for boosting growth. In Germany, meanwhile, where there has been no quantitative easing, real wages have risen.’
It should be obvious to anyone that printing two trillion new dollars and handing it to the corrupt financial sector to play with will not result in higher wages for ordinary people. This ought to be an issue for the left/progressives, but thanks to Barack Obama’s ownership of the program, it’s now turning into a campaign issue for Republicans.”
http://www.rollingstone.com/politics/blogs/taibblog/rick-perry-vs-ben-bernanke-round-one-20110816
LikeLike
I still think CU is not how you buy votes. the Social Security Act is how you buy votes.
LikeLike
JNC at his most eloquent said it best last week. It went something like this:
Bad economy, no growth, higher unemployment = need QE3
Improving economy, more growth, declining unemployment = need QE3
LikeLike
ruk:
Here’s an easy test. The Bernank didn’t mention QE3 today, so everything that fell precipitously are the things that would benefit
LikeLike
“Bad economy, no growth, higher unemployment = need QE3
Improving economy, more growth, declining unemployment = need QE3”
Wait. QE3 are tax cuts?
LikeLike
““Bad economy, no growth, higher unemployment = need QE3
Improving economy, more growth, declining unemployment = need QE3″
Wait. QE3 are tax cuts?”
Federal reserve version of supply side.
“vulgar Keynesianism robed in the ideological vestments of the prosperous classes.”
“Four Deformations of the Apocalypse
By DAVID STOCKMAN
Published: July 31, 2010”
LikeLike
For those of us who remember, Halftime in America is an obvious homage (film school word) to Morning in America:
LikeLike
Halftime in America is an obvious homage (film school word) to Morning in America
While waiting for a new tire to be put on my car yesterday, I was subjected the spectacle that is Fox News (It was not a good day). Anyway, there was unanimous agreement that the Chrysler ad was an Obama campaign ad. I had not thought of that, but it actually was a brilliant Obama campaign ad. The end of Obama’s first term is halftime, the economic engine is just starting to roar etc.
I couldn’t help but laugh at the complaint from one pundit that Madonna should have used an American rapper instead of MIA, who is British. She actually said the Super Bowl needed to be more American.
LikeLike
Personally, I wish they would go back to marching bands. Waiting to see if Madonna finished in one piece was too nerver racking.
LikeLike
I think leno had the best line re: the eastwood ad. “It’s halftime America and we’re down $15 trillion and China has the ball”
LikeLike
Normally I try to leave what happens at PlumLine on PlumLine, but this may be of interest here from an impromptu chat with the Washington Post blog support staff:
“jondenunzio
4:40 PM EST
“Ignore” feature — on the improvement list. Near the top. Early reports from developers are it should not be too hard. Hopefully that turns out to be true and we have it soon. i agree with you — it would be a huge help.”
http://www.washingtonpost.com/blogs/plum-line/post/proposition-8-is-overturned-and-obama-catches-a-break-on-gay-marriage/2012/02/07/gIQAQCCswQ_blog.html
LikeLike
nova:
So far Detroit has tried an end of career singer, and an end of career actor, to explain to us that there not an end of days town. I believe it when they can’t film a Tranformers movie there because they have buildings going up, not coming down.
LikeLike
So far Detroit has tried an end of career singer, and an end of career actor, to explain to us that there not an end of days town
Who was the end of career singer? Not Eminem.
I know you’re mostly joking on the movie comment, but they also filmed the remake Red Dawn in Detroit which, as you may recall, takes place after our country has been invaded by the commies who have largely destroyed our city. Interestingly, the remake originally had the US being invaded by China, but after some criticism and fear that they would miss out on Chinese moviegoers, the villains were changed to North Korean. The Chinese own us and control Hollywood!
LikeLike
“Personally, I wish they would go back to marching bands. Waiting to see if Madonna finished in one piece was too nerver racking.”
I would rather listen to Dan Dierdorf, Michael Irvin, Mel Kiper and John Madden analyze the Pro Bowl than listen to another washed-up act.
LikeLike
The Madonna Show was a decent halftime show–for 1998. I always loved Like a Prayer and enjoyed Cee Low’s performance. The man has presence. I wish they’d put up Dierks Bentley. Up On The Ridge is spectacular! His new album just got a rave in the Post. I’ll be buying it. Mind you, I’ve a serious soft spot for Dierks. I’ll let Mom-NOS say it.
http://momnos.blogspot.com/2009/11/every-smile-memory-cassidy-dierks-and.html
Not exactly related to the game (or the halftime show), but SMASH! had a promising beginning on Monday. Well, gotta run. Insanely busy leading up to the Scotland trip.
BB
LikeLike