Daily Investment Interpretations

Thursday, March 25, 2009

2009-3-25:  Today was a roller-coaster ride. Two unexpected pieces of good news were announced: Durable-goods orders jump in February, surprising economists, and Surprise in housing data (video).       
As a result, the markets rose smartly (19 points on the S&P500). Then they fell 14 points negative, only to end up around 1% for the day.
    The NASDAQ increased
12.43 points (0.82%) to 1,529. The Dow climbed 89.84 points (1.17%) to 7,750, and the S&P 500 gained 7.63 (0.82%) to end the day at 814. Oil was essentially unchanged at 53.27, while Gold rose $12.00 to $938
    The articles below 
Darrell Delamaide's Political Capital
: Geithner's finesse won't work, and vultures don't do favors
: Geithner's finesse won't work, and vultures don't do favors

We owe, we owe: Will thawed credit markets help the world's biggest debtor nation?
    This article, written by the Seattle Times' Jon Talton, asks the question that many are asking: why are we encouraging a debt-financed re-inflating of the economy when what we need is to rebuild our savings accounts and pay down our debts?

How to become a beggar
    This Minyanville piece points out that the Treasury plan to buy long-maturation U. S. Treasuries is going to encourage governments that hold these instruments to sell them to the Treasury, investing the dollars they get in (inflation-resistant) commodities that these governments will sooner or later have to buy. And right now, commodities are selling at a discount. What a deal!

Rigormortis
    This article, by Mark Hulbert, observes that many investors and fund managers are paralyzed by what has happened in the financial markets. He urges preparing a plan for re-investing when the time is ripe.

No Return to Normal
    This excellent article by John Kenneth Galbraith points out that we aren't going to return to normal any time soon, and that the "normal" to which we return will be different from the norm 

Permanent Link to Only human
    This paragraph by Paul Krugman agrees with Time Magazine's Justin Fox' assessment that Paul Krugman is competent but not omniscient: Permanent Link to Paul Krugman: Smart economist, or all-knowing being?. (When Justin Fox finds that Paul Krugman agrees with Justin Fox' lese majesty, he exclaims, "OhmyGod! He is omniscient!") (A good-natured exchange.  (:-)
    One of the comments in response to Mr. Fox' blog is the hilarious adaptation below of the lyrics to the banking song in "Mary Poppins".)

banzai7 Says:
Tuesday, March 24, 2009 at 4:42 am

GEITHNER'S PUBLIC PRIVATE TOXIC ASSET TANK
(Fidelity Fiduciary Bank, Mary Poppins)
WilliamBanzai7

Sing along link: http://www.youtube.com/watch?v=jt9JpYRulSk

Father, these are private equity investors....

If you invest your tuppence
Wisely in Geithner's public/private toxic asset tank
Safe and sound?
Soon that tuppence,
Safely invested in the toxic asset tank,
Might compound!

And you'll achieve that sense of conquest
As the Fed's non-recourse loans expand
In the hands of the private asset managers
Who invest as propriety demands

You see, you'll be part of
McMansions in the Nevada desert
Toxic assets from Detroit to Fresno
Fleets of repossessed trailer parks
Majestic negative-amortizing Miami coops
Plantations of ripening securitised sub-prime....

All from tuppence, prudently
Fruitfully, frugally invested
In the, to be specific,
Geithner's Federal
Financial Stability
Public Private
Toxic Asset Tank!

Now,
When you co-invest your tuppence in the Feds toxic asset tank
Soon you'll see
That it blooms into equity returns of a generous amount
Semiannually
And you'll achieve that sense of stature
As your NAV expands
To the high financial strata
That established private equity now commands

You can indirectly purchase first and second home equity loans
Think of the foreclosures!
Mortgages! CLOs! CDOs, synthetic CDOs!
Bankruptcies! Debtor sales!

Opportunities!
All manner of public/private enterprise!
Auctioned ALT A! Subprime!
Collateralized schlock! SPVs!
Distressed SIVs! Amalgamations! Bad banks!

You see,
Tuppence, patiently, cautiously trustingly invested
In the, to be specific,
Tim Geithner's
Federal Financial Stability
Public Private
Toxic Asset Tank!

Welcome to our joyful family of private investors!!