The world's biggest banks and securities firms have announced $290 billion in asset writedowns and credit losses since the beginning of 2007, including reserves set aside for bad loans
now ring the bell . . . . who's next?
NDFI is a acronym for "non deposit taking financial institution" and then there's this . . . .
Investment bank, hedge fund and broker balance sheets are about half the size of the commercial banks in the US and about one-quarter the size in Europe. Both assets and liabilities of NDFIs are dominated by repos, meaning that NDFIs lend and borrow based upon collateral of assets that are constantly marked to market. As asset prices fluctuate, leverage must constantly be adjusted.
Which gets me back to the media and a recommendation that I respectfully suggest to every host on CNBC, Bloomberg and Fox Business Network -- when interviewing a member of the bullish cabal, ask the following questions:
2. Do you have the flexibility to raise or reduce the cash component of your portfolio?
3. What was your cash position two years ago, what was your cash position a year ago and what is your cash position today? And why were your cash positions at those levels?
4. Have you ever been bearish?
5. How have the deteriorating economic conditions and worsening profit picture affected your market and economic views?
6. What change in conditions from current expectations would lead to a further change in your market views?
I might add, in bull markets, the obligation of the media is to ask the bears the same questions.
Borrowers in California who fight foreclosure can stretch the process to 18 months, said the chapter president of the California Association of Mortgage Brokers and president of Cal-Pro Mortgage Inc. in Stockton.
That doesn't take into account the woman he knows who hasn't made a mortgage payment in eight months and hasn't heard from her lender.
``Now she's afraid to mail in a payment for fear it'll come to somebody's attention,'' he said.
April 3 (Bloomberg) -- Bear Stearns Chief Executive Officer Alan Schwartz said the fifth-largest U.S. securities firm might have survived if the Federal Reserve had acted earlier to lend money directly to investment banks.
Since we can never know, it's totally ridiculous that a major media outlet would even give this type of thinking credibility by printing it. This is like me saying, I might not have been hurt walking down the street if the ball hadn't rolled in front of me . . . duh.
It's time to convert retirement savings from an IRA to a Roth IRA model. Collect the estimated $5.8 trillion of deferred taxes now and apply this to resolving the Social Security and Medicare shortfalls.
If we wait, expect as much as half of that money to disappear. The Treasury and Congress can simplify rollovers from mediocre investment choices to brokerage accounts, and simplify conversions to Roth IRAs. This way, the government could collect trillions in deferred taxes before the money is lost to a bear market.
The rollover and conversion choices should be voluntary, and premature withdrawals should be discouraged. Investors would be wise to remember that the reason they lost money in the last bear market was the rigid buy-and-hold investment strategies forced on them by traditional advice.
Congress could provide incentives to simplify the process by spreading the taxes over a three to five-year period, capping the income-tax rate for Roth IRA conversions, and removing the current income and age tests to qualify. Savers should look before they leap, of course, but they should be allowed to "leap."
British Airways, based in London, has canceled more than 200 flights since the terminal opened March 27, after computer log-on failures for baggage handlers and delays at staff car parks sparked turmoil at the airport, Europe's busiest.
British Airways already is Europe's worst airline for lost luggage and the second-worst for delayed bags, according to the Air Transport Users Council. The flights canceled today were domestic or European. All long-haul services were scheduled to operate as normal, the airline said.
In 1993, Berkshire paid $433 million for the Maine-based company. Rather than use cash, Buffett used Berkshire Class A stock to fund the purchase. That Berkshire stock is worth eight times more now, giving the Omaha, Nebraska-based insurance and investment company a $216 billion market value.
Dexter didn't make it that long. It ended shoe production in the United States and Puerto Rico in 2001, and Berkshire folded what was left into its H.H. Brown Shoe Group unit.
"What I had assessed as durable competitive advantage vanished within a few years," Buffett wrote on Friday. "By using Berkshire stock, I compounded this error hugely. That move made the cost to Berkshire shareholders not $400 million, but rather $3.5 billion. In essence, I gave away 1.6 percent of a wonderful business -- one now valued at $220 billion -- to buy a worthless business."
"To date, Dexter is the worst deal that I've made," Buffett went on. "But I'll make more mistakes in the future - you can bet on that. A line from Bobby Bare's country song explains what too often happens with acquisitions: 'I've never gone to bed with an ugly woman, but I've sure woke up with a few.'"
Peloton, founded by Ron Beller and Geoff Grant in 2005, is seeking buyers for the $1.8 billion fund's assets, according to a letter sent today to investors. Firms including Citadel Investment Group LLC and GLG Partners Inc. have made bids, two people familiar with the situation said.
The fund's demise after an 87 percent gain last year highlights the severity of the U.S. subprime-mortgage collapse, which has spread to AAA-rated securities and triggered bank margin calls. Boston-based Sowood Capital Management LP shut down last year after losing $1.5 billion. Two funds managed by New York-based Bear Stearns Cos. filed for bankruptcy.. . . . at Fort McMurray's pit mines, it takes 2 tons of sand, 250 gallons (947 liters) of water and 1,400 cubic feet (39.6 cubic meters) of natural gas to produce one barrel of synthetic crude, says Peter Wells, director of research firm Neftex Petroleum Consultants Ltd. in Abingdon, England. That's enough water for a day's use for a U.S. family of four and enough natural gas for 5.6 days. The gas is burned to power a process that extracts a tarry substance called bitumen from the sand and then refines it into synthetic crude.
In turn, each barrel generates as much as 110 kilograms (240 pounds) of carbon dioxide equivalents, the same as refining three barrels of traditional light crude.
"When you're schlepping around two tons of sand for a barrel of crude, it shows that conventional oil is already well into depletion," says Jeffrey Rubin, chief economist at CIBC World Markets Inc. in Toronto. "Price will ultimately ration demand. People won't be able to afford to drive."
France's second-largest bank by market value plans to raise 5.5 billion euros from investors after the trading loss and subprime-related writedowns depleted capital, the Paris-based company said today. The Bank of France, the country's banking regulator, said it's investigating the situation.
I've said it before, and I'll repeat it again: To err is human, but it requires an MBA to create total clusterfuck . . .
The bonus portion of the incentive packages range between $2.5 million for Kripalani and $1.45 million for Garcia. The executives must remain with the company through at least March 15, when the bonuses are to be paid, according to the filing.
AT&T is disconnecting more home-phone and high-speed Internet customers for failing to pay their bills.
from a good website to monitor . . . http://bigpicture.typepad.com/
I quote Barry . . . "I am naturally skeptical. I see too much bullshit everywhere. Hence, I believe Trust is something that must be earned, not given away. Not demanded, not assumed, but actually earned. Especially if you are a startup company, with enormous access to lots and lots of very personal data. These firms should have to earn your confidence. They have gotten carte blanche so far, but I suspect the era of blind faith is coming to an end.
Ask yourself these questions: Who do I trust? Who can I rely on, confide in, bank on, have faith in? Who do you read? Who do you let get inside your head? Who do you believe? Who are you sure about? What companies do you entrust with your personal files and passwords? Your social security number, bank account data, personal financial info, data? Who do you trust?"
I am also a huge skeptic of everything which causes some friction among my friends as they see me as being "negative" NOT. They're not the same thing. I just don't trust anything I didn't see myself, experience myself or hear myself. I read and listen to lots of stuff and research it before I act on it but rarely do I blindly accept it as truth . . . . unless of course it's skeptical. :-) CK The investment by the Springfield, Mass Finance Control Board, the municipal body that manages the city's finances, is valued at $1.2 million, down from $14 million a year earlier, according to Secretary of State William Galvin. The finance board has hired Boston-based law firm Goulston & Storrs to investigate the investment, Springfield officials said in a statement. Massachusetts Attorney General Martha Coakley has also started a probe into the matter, which was reported earlier today by the Boston Globe. The Springfield finance board said it ``believes that Merrill Lynch can and should be held fully accountable for any potential losses.''
The chairman of the Springfield finance board is Chris Gabrieli, who ran unsuccessfully for Massachusetts governor in 2006. Gabrieli, a venture capitalist, was defeated by Deval Patrick.
big surprise . . . . that everyone is trying to duck responsibility.
One way to raise revenue would be to apply sales tax to services, such as those provided by attorneys, accountants, consultants, architects and auto repair shops, Levy said.
"This has been widely discussed around the country for 10 to 20 years. We are a service economy, and we have this sales tax (on goods) that's doomed to grow slower than the economy," he said.
According to his research, California's services industry is worth about $700 billion a year, the biggest chunk representing health care.
That alone could raise about $10 billion in additional revenue to the state and local governments, Levy said.
Their discovery fuels the work of researchers who study the development of embryos, the genesis of diseases or the workings of cells. The technique is used to disable or weaken single genes, illuminating their roles in disease and aging, and has produced more than 500 mouse models of human disorders such as hypertension and cystic fibrosis, which may aid drug studies.
``This is staggering,'' Capecchi, 70, said in an interview. He called the 3 a.m. phone call from Sweden ``a huge surprise.''
Capecchi was born in Italy, where he was forced to wander the streets for four years after his mother was imprisoned by the Nazis in a concentration camp. His mother found him after World War II and brought him to live with his aunt and uncle in the U.S. He completed his thesis work under James D. Watson, who won the Nobel Prize in Medicine along with Francis Crick in 1962 for their work on the structure of DNA.
Now a human geneticist at the University of Utah in Salt Lake City, Capecchi and Smithies, 82, of the University of North Carolina at Chapel Hill, showed how a mouse's genetic information can be permanently changed, creating animals that pass down their disease traits to their offspring.
Early in 1963 The Drifters (produced by Leiber-Stoller since 1959) recorded a Mann/Weil composition called "Only In America." When Atlantic decided not to release it the vocals were erased and replaced by Jay and the Americans. "Only In America" was released in July, 1963 and became their first chart hit (#25) with Jay Black singing lead. Leiber and Stoller's work with the Drifters and the Coasters caused them to turn over production of the group's material over to Artie Ripp of Kama Sutra Productions (Later to be Kama Sutra Records). One year and two singles later they had their biggest hit with "Come a Little Bit Closer" (#3). "Let's Lock the Door (#11) and "Think of the Good Times" both charted in the summer of 1965. At this time they began the second phase of their career with "Cara Mia" (#4). Beginning with Cara Mia" the group began covering successful oldies. Their next release was "Some Enchanted Evening" (#13) followed by Neil Diamond's first songwriting success "Sunday and Me" (#18).
Even the imprisonment of lobbyist Jack Abramoff and former Rep. Duke Cunningham, R-Calif., on corruption charges that included earmark abuses has not dulled lawmakers' appetite for pet projects. One recent study found that earmarks in House legislation went from 3,000 in 1996 to 15,000 in 2005.
And Obey said earlier this year that House members had requested 32,000 earmarks in spending bills for fiscal 2007.
"Error at the bell last night (clarification): This error at the bell last night really did contribute to the rally. Bottom line is that one of our competitors inadvertently sold 5346 too many of the SPX Sep 1450 calls and needed to cover them in a hurry. At the time the mkt was down 1% on the day.
In covering, it is likely the crowd front ran the order, exaggerating the move.
Once the move got going, the variance hedging phenomenon kicked in. Most dealers place MOC (Mark on Close) orders to hedge their daily delta risk.
If this theory holds, then they would have put in large sell orders yesterday MOC at around 3:40PM. Once the mkt started to run, their delta position would've changed from net long to net short and they would have needed to buy that much more SPX exposure into the bell. Our index trading desk predicts that for every 2 pt move up in the SPU, dealers needed to buy approx 500MM notional in delta.
With liquidity being lousy right now, that created the violent move."
this explanation came from one of the Big 5 brokers
Steve Forbes, editor-in-chief of Forbes magazine, predicts that skyrocketing oil prices are just temporary - and a massive price collapse will dwarf the Dot-Com crash that began in 2000. In Sydney, Australia this week for a global conference of CEOs, the respected financial editor said that the price of oil has inflated into an unsustainable and speculative market bubble - and he says that when this bursts, it will make the Dot-Com crash "look like a picnic."
The paper quotes Forbes as saying that the price of oil (which rose above $70 this week) had been inflated by speculators and would soon begin a rapid slide. "While there is a lot of talk in my country, the U.S., about the housing bubble, I think the real bubble, to be blunt, is in the price of oil," he said. "It's a huge bubble. I don't know what's going to pop it, but eventually it will pop. The price has to be brought down to earth, and when it does there's going to be a lot of yelping from the hedge fund managers."
Forbes said that speculation on oil hitting $100 a barrel was misplaced. He also believes that the price of oil will decline significantly in 2006.
"I'll make a bold prediction: I think in 12 months, you're going to see oil down to $35, $40 a barrel," Forbes said. "In the meantime, it's a huge drain, more a psychological drain (on the economy), but it's not forever. This thing is not going to last." Forbes blames the oil price spike on rising inflation and aggressive buying on the part of burgeoning Pacific Rim countries. "China and India are buying more of the stuff. As the global economy expands, more energy will be consumed," he said. "But if you look at the price of oil three years ago, it was $20 or $25 a barrel. Supply and demand might have shot it up to $30, $35 a barrel. The rest of it is inflation."
Forbes spoke to The Australian just as news was drifting in regarding the damage sustained to the oil-rich Gulf of Mexico in the wake of Hurricane Katrina. Industry observers say that energy companies such as BP, Chevron and Shell have been forced to shut down offshore platforms, which account for 25% of U.S. domestic oil and gas output.
here's a link to another Steve Forbes interview click here
"Delivering a speech to the National Bureau of Economic Research, the Fed chief said "changes in energy [and food] prices should have relatively little influence on 'core' inflation, that is, inflation excluding the prices of food and energy."
now that's brilliant isn't it?
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