Back from Nashville

Our first trip to Nashville was moderately eventful. We woke up Saturday morning to the Nashville Marathon and wound up at the Grand Ole Opry that night. Oh yeah, I finally made it to the stage at the Ryman . . . .

A new leader in the banking crisis

UBS AG, Switzerland's biggest bank signaled that it will cut its investment bank to a rump after lost bets in subprime mortgages landed the Swiss group with a $37 billion bill, making it the biggest casualty of the financial crisis.

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?

Lightning Strikes

Want to see some interesting data on lightning strikes ?? click here

William C Moore - 80 years of surfing

Bill Moore, the icon of Malibu passed away in December, 2007. He was surfing regularly at 88 but then a combination of ailments took their toll. I was privileged to be invited to join the surfout at Malibu Surfrider Beach organized by the Malibu Surfing Association on Saturday to honor Bill.

60% of Americans are renters and they're not happy with government bailouts

see what's going on here

NDFI . . . . ??? what's that?

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.

Doug Kass on "bullishness"

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:

1. What is your investment mandate?

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.

quality forecasting by GE

4/11/08 after announcing quarterly earnings declines, Chief Executive Officer Jeffery Immelt cut the annual forecast he had once told investors was ``in the bag'' for 2008 and repeated as recently as March 13 . . . so much for relying on the predictions of the geniuses . . . again.

another Warren Buffet quote

"you only learn who has been swimming naked when the tide goes out -- and what we are witnessing at some of our largest financial institutions is an ugly sight."

I love forescasters

from Bloomberg this afternoon on Freddie Mac (25.46) and Fannie Mae (29.00)

Lehman Brothers Holdings Inc.'s estimated that the stocks will soar to $45 or more, while their colleagues at Goldman Sachs Group Inc. forecast that the shares will tumble to $16 or less.

I'm not kidding or making this up . . . . you just can't make up this stuff.

Why not live in your house for free

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.

Postdictive error

Using data after the fact to review decisions before the fact is a very critical mistake . . . . so when someone says that "we could have survived if . . . . " they are usually making this mistake. Today, this came out :

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.

Eiffel Tower opened 100 years ago today

100 years ago today, the Eiffel Tower opened. I was there 3 weeks ago and took this photo

UBS writing down another $18 billion

it's amazing how difficult this is becoming - from the Financial Times . . .

UBS is poised to reveal further writedowns of up to $18bn and seek a capital increase of about $13.1bn just weeks after shareholders approved a similar-sized injection from outside investors.

Times they are a changin'

Whole new ballgame: After years of free invites to the Giants' Opening Day, San Francisco supervisors got a decidedly less enticing offer to this season's home opener April 7 against the San Diego Padres.
"I am pleased to extend you the opportunity to purchase two tickets to Opening Day," team Senior Vice President and General Counsel Jack Bair wrote to each of the 11 supervisors.
"As you may know, it has been our custom for many years to invite our public sector guests to the game and to our pregame party on a complimentary basis, as we do our sponsors and key vendors," Bair wrote.
He reminded the supervisors, however, that all that changed last year when the board adopted an ordinance prohibiting officials from accepting gifts from anyone doing business with the city.
"As a result, we are required by law to charge you for the value of the tickets and benefits received," Bair wrote, including "the approximate pro-rata cost of the food and refreshments offered at our pregame party."
From what we hear, all but two of board's 11 members have taken the Giants up on their offer, with most opting either for a pair of lower box tickets ($49 each) or club level seats ($82 each).

thanks to (SF Chronicle) Phillip Matier and Andrew Ross

Here's an Idea - Reform retirement-savings

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 Airlines still has big problems

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.

Remembering William F Buckley, Jr

It's been a little while now since Buckley passed away and I've been absorbing some of the media reviewing his life, wit, philosophy. Charlie Rose had a wonderful hour long program reviewing the 17 times that Buckley appeared on his show the night he passed away; if you can find it, watch it.

I've never read one of Buckley's books but I have subscribed to National Review and I rarely missed Firing Line. Buckley was funny, confronting, fascinating, consistent to the end and so smart. I really liked his used of the English language.

Then I found something on youtube that seemed to really align Buckley with me in which he said on Meet the Press in 1965, "I'd rather be governed by the first 2,000 people in the Boston telephone directory than the 2,000 people on the faculty of Harvard University."

Thank you Bill Buckley for living the great life.

Lending Crisis?

``There's really only a handful of banks that are offering cash,'' said a money-market trader at a unit of Landesbank Baden-Wuerttemberg, Germany's biggest state-owned bank. ``Everyone is just waiting for the next bank to go down. There is no trust in the market. They're very afraid.''

Joe Lewis (no not the boxer)

talk about bad trading . . . . .

Lewis paid an average of $103.89 apiece for his 12.14 million Bear Stearns shares, according to yesterday's filing. He started accumulating most of his shares last July and has lost about $1.19 billion on the investment, or almost half his wealth, which Forbes magazine estimated at $2.5 billion in its 2007 survey.