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Interesting musing from John Carney follows from a post of his refereeing the contretemps between Niall Ferguson and Paul Krugman:
We’ve broken the credit markets. Where once we could learn a lot about investor sentiment and expectations from the credit markets—including the markets for treasuries—the signaling function now is by and large useless. That’s because there are now way too many debt instruments that are the functional equivalent of treasuries. We have a lot of bank debt floating around that is backed by the FDIC explicitly, for example. And even the new debt that banks are issuing without explicit government guarantees is backed by a semi-explicit guarantee voiced by politicians who have promised “no more Lehmans.” In other words, every large, complex systemically important financial institution is a government sponsored entity these days. Why buy treasuries when you get a better return from bank debt that is just as safe? In short, the short term fluctuations in treasury yields now result from way more factors than they once did, and the signals about market expectations they through off are far less transparent.Thoughts? Agree? It's a thought-provoking take.
Host Evan Davis brought together Dr Shumeet Banerji, chief executive of management consultants Booz and Co, Rita Clifton, chairman of Interbrand London, and hedge fund manager Hugh Hendry, founder of Eclectica Asset Management to discuss various business issues of the day. In this week’s show they discussed whether the downturn is here to stay and whether people should embrace a new era of austerity. Six months ago the very idea would have been derided, but it is fascinating in this programme to hear how far such people have shifted.
Know those homeless-looking people you see on Bedford Ave? The ones who look homeless given their choice of attire, but aren't, and are in reality living in pretty sweet condos, etc? In years past you'd be secure in your disdain for the fact that despite only working part-time at America Apparel, they were shacking up in $5,000/month apartments. Now, not so much. 'Cause some of these hipsters are actually homeless, relatively speaking. Like everything in life, the blame can be squarely placed on parents, who are always ruining everything. And how 'bout those would-be home-owning hipsters? Are their parents still helping them out there? No!
Everyone? Probably not. But there do seem to be a decent number of people who he's rubbed the wrong way! First off, you've got the White House staffer who posted this pic of Big Lar up on the internet after he'd already run into some trouble re: sleeping on the job. Then you've got everyone interviewed for this article entitled "President's Economic Circle Keeps Tensions At A Simmer," the source of tension starting with an 'L' and ending with a 'arry "Sleep Like No Ones Watching" Summers.' We're not saying everyone has to be best friends, but there seem to be an awful lot of people who are more than happy to tell a reporter how much everyone dislikes Larry. Maybe it's because Obama's staff is mostly comprised of is a bunch of barely legal hotties, and Summers is the crotchety old guy who doesn't get any of their jokes or even make an attempt to learn sexting lingo? Either way, an accounting of Lar's inability to ingratiate himself to the team thus far.
He and Christina Romer came had a disagreement a few months back, and now she would appreciate it if Obama would show Summers who's boss, 'hood-style. If the President can't get it done, she'll take matters into her own hands. President Obama was getting his daily economic briefing one recent morning when a fly distracted him. The president swatted and missed, just as the pest buzzed near the shoes of Lawrence H. Summers, the chief White House economic adviser. "Couldn't you aim a little higher?" deadpanned Christina D. Romer, the chairwoman of the Council of Economic Advisers. Mrs. Romer was joking, she said in an interview, adding, "There are only a few times that I felt like smacking Larry." Yet few laughed in the president's presence.
Treasury Secretary Timothy Geithner is set to unveil his much-anticipated guidelines on investment banking pay this week. But he may be too late to influence the free-wheeling pay practices at Citigroup, which has been a big recipient of taxpayer funds worth $45 billion and counting. In a bid to attract talent, Citigroup has been paying traders in London guaranteed bonuses totaling millions of dollars. Among the lucky recipients are Rachel Lord, an executive in Citi's equities group, and Stefanos Bitzakidis, who is listed on Bloomberg as global head of exotic equity derivatives. The two received a total of roughly $3 million in guaranteed bonuses to join Citigroup from Morgan Stanley this year, says a person familiar with the situation.
In his debut as the nation's 75th treasury secretary, Timothy Geithner has been a smashing success -- if success is measured by more federal debt and less accountability to American taxpayers. It was never supposed to be this way. When our first treasury secretary, Alexander Hamilton, sought to establish the nation's first bank in 1791, he faced challenges from those who condemned the move as an unconstitutional power grab to control the flow of credit and direct the national economy. Against these criticisms, Hamilton drafted numerous provisions to ensure solvency, transparency and fiscal restraint on the part of the federal government. "No government,” Hamilton argued, "has a right to do merely what it pleases.”
Discussion of the 50% Retracement Rule,
potential future price levels, time studies, key dates, Fibonacci, Gann, Astro numbers, Robert Rhea's Great Depression analysis.
We came across this interesting piece in Dealbook the other day and thought it was very intriguing. Simply put: hedge funds are now investing in lawsuits now. The premise is pretty simple: they invest in one side of the lawsuit and get a share of the winnings (if, of course, they win the case). If you think about it, it makes sense. These investors essentially 'bankroll' a litigation team, thus giving them access to all kinds of different tools. The defendant/prosecutor obviously enjoys knowing that their team has deep pockets and the lawyers themselves will find comfort in the fact that they will have no problem getting paid. (Aside: Do you think this would de-incentivize them from working harder since they know they'll get paid regardless?)
By Evan Newmark
"Hank Paulson is a national hero. I said it last October and I’m sticking by it. And now, there’s actual evidence to back me up. The TARP bailout worked. The Wall Street crisis is over. via Mean Street: It’s Time to Enshrine Hank Paulson as National Hero." - Deal Journal - WSJ.
So here’s the letter I wrote to the Wall Street Journal after reading Evan Newmark’s paean to Hank Paulson last week:
"Dear WSJ,
Just out of curiosity — did Evan Newmark ever work for Goldman, Sachs? And if the answer to the question is yes, don’t you think that might have been a good fact to disclose before he fellated Hank Paulson in his “Mean Street” column?"
Sincerely,
Matt Taibbi
I didn’t get an answer, which I guess is not surprising. But in the interim I found out that Newmark did, indeed, work for Goldman.
