28JAN09:
Q1-09 DOW: 8900
Q2-09 DOW: 7250
Q3-09 DOW: 5810
Q4-09 DOW: 3960
CITI NATIONALIZED
OBAMA GETS SICK 27AUG09:
Mini Crash 21SEP09 Predicted correctly:
Bailout=Bonuses
Demise of Bear Stearns
Demise of Lehman Bros.
Demise of AIG
Subprime would cause problems
Date of 2007 crash
CRAs were to blame
G20 riots were a party
Northern Rock run
Northern Rock Nationalization
HBOS and RBS demise
UBS really was Useless
Before Google (BG), analysts had to make phone calls and visit companies to be able to write research reports. Government statistics suffer a serious time lag and if they wanted to know how the economy was performing, simple activities like wandering around shopping malls would be undertaken. Imagine that? Analysts leaving their desks and talking to real people.
This weekend I decided to buy some small Christmas presents. For myself, obviously, and was perturbed. Whereas some run luxury car indices or the infamous Big Mac index, I follow the price of shirts. Business people wear shirts and just like the end of the dot com era, shirts and ties are back in fashion.
So when I saw Bob Diamond's beloved Lewins offering white shirts for only GBP20 (usually GBP25 in the sales and usually GBP45 when they are not in the sales), thoughts of deflation and desperation kicked in. The mall was nearly empty, the sales assistants more pleasant than usual and the only people wondering around were the poor trying to keep warm and security staff chasing shop lifters.
The death of a shopper in the US at a store that already discounts to below cost, is a worrying omen. When wealth is replaced by survival we all need to worry.
My current worry in the UK is that not only am I part of a Socialist regime but living in a police state where rumors, leaks and tittle tattle are treated as serious crimes. The arrest of an opposition politician for holding the UK government to account is a worrying development.
Who next? Bloggers?
telegraph says " MPs in threat to disrupt State opening of Parliament "
Sales in the nation's stores were strong over the weekend, to the relief of retailers that had been expecting a holiday shopping period as slow as the overall economy ... after shoppers flooded stores on Friday, foot traffic trailed off significantly on Saturday and Sunday.
Retailing professionals consider the weekend after Thanksgiving a barometer of overall holiday sales, which account for 25 to 40 percent of their annual sales. And in a year marked by an economic crisis, they are desperate for any signs that consumers are still willing to spend.
Fintag says Shopping is a drug for the masses and Karl Marx would have been pleased to see the masses being held down by fear and greed. The knock effects of diminish demand for goods are horrendous - unemployment being the worst. No job means no contribution to wealth creation.
COMPANIES HAVE TO WORK FOR DEBT AS INVESTMENT BANKS TOUGHEN UP
Now that banks are facing increased regulation and are more averse to lending, they are using the flipside of that argument to try to wrestle back business from the smaller firms by using the provision of debt as a currency. "The tone of the initial conversation between companies and bankers has changed recently," said a third person, close to a large bank. Another banker, at a large institution, said staff were instructed by senior management to use the lending relationship to in return demand their "fair share" of corporate business.
Fintag says The oil can is either empty or the oil has sugar in it. I have never experienced a world where my government decides who to lend to. I know it won't be hedge funds - which is a shame.
Ten "serious" bidders - including Dragon's Den star Theo Paphitis and property tycoon Ardeshir Naghshineh - will return to the table this week for talks with Woolworths' administrators as the race to buy the collapsed retailer's assets heats up. The talks held by Woolies' administrator Deloitte, which will initially concentrate on those offering the "more chunky proposals," according to an insider, resume today and will continue all week.
Since the group was put into administration, Deloitte's phone has been ringing off the hook. It has received more than 300 expressions of interest, ranging from potential bids for the going concern, to those interested in just one store or even some of its stock.
The insider said: "There are about 10 parties working on a 'serious' deal, and the administrators are obviously concentrating on those at the moment."
Fintag says There is a future in cheap and cheerful tat. Not that these bidders want to turn around Woolworth - more like asset strip it.
WELLS FARGO PUSHES CITI INTO FOURTH POSITION OF US NATIONAL BANKS
Further consolidation of the already highly concentrated US corporate banking market could create a fourth option for companies in search of a major credit provider and a source of nationwide banking capabilities, according to a report from Greenwich Associates. T Prior to the market upheavals of 2008, almost 80% of large US companies used Bank of America as one of their important corporate banks and 71% used JPMorgan. Citi, considered an important banking relationship by 60% of large US companies, ranked third.
Wachovia and Wells Fargo represented the number four and five US corporate banks as of July 2008, when research for the study was completed. Just over 40% of companies said they used Wachovia as one of their important banks and just under 30% said they used Wells Fargo. Wells Fargo announced a deal to acquire Wachovia in October.
Doug Short overlays the 4 major bear markets of the past centruy onto one chart. Its a comparison of today's S&P 500, the Dow post 1929, the Nikkei post 1989, and the NASDAQ after the tech bubble:
Fintag says Just as I was working on a similar chart ...yes, we are building a nice momentum.
China's President Hu Jintao has warned that the global financial crisis could weaken his country's competitiveness.
Mr Hu gave his warning at a meeting of the Politburo and his words have been made public by the state media.
As growth slows, Mr Hu said that in the coming period China would starkly confront the effects of the international financial crisis.
Fintag says Oh dear. Growth forecasts are only 7% to 8% ...most Western countries would love to have this sort of growth. Mind you, I will be interested to see if China is anywhere near these numbers but as a communist country that makes up statistics we will never know.
he political and public campaign to force Britain's banks to do more to help customers weather the economic downturn will gain impetus on Monday with a promise from Royal Bank of Scotland to give at least six months' breathing space to homeowners who fall behind with mortgage payments.
The promise, which will put pressure on other banks to make similar commitments, comes as ministers prepare to outline plans that could see voluntary codes of practice for the banking industry placed on a statutory footing.
The promise by RBS, which also owns NatWest, comes days after the government took ownership of a 58 per cent stake in the bank after shareholders shunned the offer to buy new shares as part of the bank's £20bn ($30.7bn) capital injection.
Fintag says So I now own 60% of RBS as a taxpayer. Can I vote to change its name to the RB of Scotland?
MONACO HEDGE FUND SUING WALL STREET JOURNAL OVER 'CONFIDENTIAL' DATA
The Wall Street Journal is preparing to defend a lawsuit from Monaco-based hedge fund SRM Global over the publication of allegedly confidential financial information.
The case, which will be held in the high court in London, centres on two articles published on WSJ.com in August, according to a report in the Financial Times.
The reports, which carried the headlines "Woods Fund Takes a Beating" and "Hedge Fund Suffers Sharp Losses", disclosed that the fund run by former UBS trader Jon Wood had allegedly lost about 85% of its value since it was founded in 2006.
Fintag says Shocking.
bloomberg says " London Diversified Said to Halt Withdrawals From Hedge Funds "
Dear John: I read with interest your recent column about rising inflation. Unfortunately, either you or I misunderstand something.
Inflation is an increase in the supply of money relative to goods produced. If more dollars are chasing the same number of products, prices go up. Central banks pumping cash into the system could certainly be inflationary, but we need to look at where the money is going. Right now, it is being hoarded.
Banks are sucking up cash to mend their balance sheets. Hedge funds are going to cash. Investors and consumers are beefing up their cash holdings. This is classic hoarding of cash in a deflationary cycle.
The main bit of evidence you give for inflation is actually evidence of deflation. Higher real rates for long-term borrowing can either be caused by fear of inflation or the scarcity of money, an unwillingness to lend. Given the LIBOR and other indicators, I think we cannot dismiss deflation so easily. E.G., associate professor, San Diego
Fintag says The jury is still out.
Deflation is everywhere ...
RUMOUR THAT UP TO A THIRD OF TOP FIRM'S STAFF TO BE AXED
Rumours are circulating that up to a third of Citigroup 10,000 London-based staff may be axed in the latest round of headcount reductions. The main focus of the cuts are thought likely to come in the investment banking unit. And The Globe & Mail reports that Citi has given notice to all 12 of the investment bankers it employs in Toronto.
The Evening Standard reports that BlackRock is to axe dozens of London-based staff, as 200 of the firm's 5,500 employees are laid-off in the first redundancies in the firm's 20-year history. And Reuters reports that BlackRock, Fidelity and ING have all been axing staff in Taiwan.
Fintag says From Citi to Nomura, DB to JP Morgan, December is always a big month for HR departments. Most have outsourced the firing process but I expect lots of news tomorrow and Wednesday followed by more next week. Good news for nobody really.
The entire nation is in the grip of massive, total denial that revenues will drop in a recession. Companies are trimming travel costs, as are consumers; San Francisco International Airport was virtually empty on Wednesday, once one of the busiest travel days of the year. Airports almost empty day before Thanksgiving.
"The dreaded Day before Thanksgiving was not so dreadful after all. Bay Area airports were eerily empty for much of what traditionally has been among the busiest travel days of the year. "There's nobody here," said Deborah Vainieri, who was waiting at San Francisco International Airport with her husband, Humberto, for a flight to Portland. In a plot to beat the crowds, the Vainieris had arrived at the airport four hours early. They walked right up to the check-in machine and were done in less than a minute."
Fintag says If you are feeling hard, read this. Otherwise stay in denial.
BlueBay Asset Management, a publicly traded investment firm based in London, said it would shut down its Emerging Market Total Return fund.
The $1.2 billion hedge fund, which accounts for 6 percent of assets under management, had dropped 53 percent this year, BlueBay said in a statement on Thursday. Its fund manager, Simon Treacher, resigned “following a breach of internal valuation policy,” it said. He couldn't immediately be reached for comment.
Satellite Asset Management and Artemis Asset Management joined the list this week of more than 75 hedge funds that have liquidated or restricted investor redemptions since the beginning of the year.
Fintag says Valuing crap is difficult. I like to value it over many years but many others like it to be marked to non-market. Why?
IF you were going to turn to only one economist to understand the problems facing the economy, there is little doubt that the economist would be John Maynard Keynes. Although Keynes died more than a half-century ago, his diagnosis of recessions and depressions remains the foundation of modern macroeconomics. His insights go a long way toward explaining the challenges we now confront....
In 1936, Keynes wrote, “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slave of some defunct economist.” In 2008, no defunct economist is more prominent than Keynes himself.
N. Gregory Mankiw is a professor of economics at Harvard. He was an adviser to President Bush and advised Mitt Romney in his campaign for the Republican presidential nomination.
Fintag says Good question but pretty poor answer.
WHY BUY NOW IF PRICES ARE PLUMMETING? HOW DEFLATION COULD DRAG US ALL DOWN
Even as recently as August, we were being told by the Bank of England that the real economic risk was inflation, with oil touching $150 a barrel, energy and food bills hitting new heights and commodities charting a similar path. In his August report, Mervyn King, the Governor of the Bank of England, confidently declared that inflation would breach the 2.5 per cent barrier if he did not raise interest rates above 6 per cent.
Now, just a few months later, oil has dropped below $50, commodity prices have fallen by 40 per cent and, five weeks before Christmas, British retails stores are slashing their prices by anything from 20 to 40 per cent. UK and US interest rates have been cut sharply and will go even lower, and the Bank and the US Federal Reserve are now predicting inflation may go negative - perhaps as soon as the middle of next year. All talk is of recession, deflation and depression.
Fintag says ...and the jury is still out.
GOLD POISED FOR BIGGEST MONTHLY GAIN SINCE 1999 AS DOLLAR DROPS
Gold headed for its biggest monthly advance since 1999 in London as a weaker dollar increased the appeal of the metal as a hedge against further declines in the U.S. currency.
The dollar is poised for a third monthly decline against the yen and its first monthly loss versus the euro since June. Gold prices have also been buoyed by demand for physical metal and exchange-traded funds. Gold demand rose 18 percent in the third quarter, the World Gold Council said this month.
Fintag says Yeah, yeah.
ALLIANZ HEDGE FUND CFO FACES LIQUIDATION AFTER VOTE
Allianz SE's 300 million-euro ($387 million) collateralized fund obligation linked to the performance of 80 hedge funds will be liquidated after a vote by investors.
Bondholders decided to close the so-called CFO after Allianz limited withdrawals from the 2.2 billion-euro Phenix Alternative Holdings fund of funds backing the security. More than 75 hedge funds have liquidated, suspended client withdrawals or limited redemptions since the start of the year because of turmoil in financial markets, according to data compiled by Bloomberg.
Fintag says German locusts.
31 comments
anonymous said ...
I wear a t-shirt. Only cost me 2.50.
01 Dec 08 - 07:00 gmt
anonymous said ...
Charles Tyrwhitt is still the best. Good value and good quality.
01 Dec 08 - 07:29 gmt
Hanky Paulson said ...
Which collar stays make the best lock picks? Once Keynes is discredited, I'll need to use them. Who's your favorite Austrian?
01 Dec 08 - 07:56 gmt
anonymous said ...
Any sign of Emma Willis cutting shirt prices yet?
01 Dec 08 - 07:57 gmt
Speedfreak said ...
Diamond wears Lewin's.... that explains it all.
01 Dec 08 - 08:06 gmt
Panta said ...
Hawes & Curtis 2 years ago 3 for 100 gbp today 5 for 100 gbp...
01 Dec 08 - 08:54 gmt
anonymous said ...
I have to agree that the arrest and detention of Damian Green was the most disturbing news I have heard for a long time.
01 Dec 08 - 09:16 gmt
anonymous said ...
Green's actions threatened to ruin an anti-terrorism operation that has been months in the making. Why should MPs feel they are abaove the law. He isn't part of the govt so doesn't have the right to access all information as he doesn't have the requisite security clearance. All media coverage is completely biased as it is written by those whose own careers are based on extracting this kind of confidential information.
01 Dec 08 - 09:30 gmt
anonymous said ...
The World Gold Council is an organization that’s main objective is to market gold on behalf of gold mines (gold mines pay them a sort of tax) of course they are saying its about to rocket.
01 Dec 08 - 09:40 gmt
fitzcaraldo said ...
@Hanky Paulson @07:29: "favourite Austrian after Keynes is discredited..." is Joseph Schumpeter, let's just hope the current cycle of destruction will be "creative" in the end...
01 Dec 08 - 09:47 gmt
Tradebot said ...
piss of anon @9.16 (or should I say Jacqui S)...Labour lackey. The politically motivated attack on Green was disgraceful...Brown has transformed from Mr Bean to Stalin...Gulak for the Tories...Democracy Zimbabwe style
01 Dec 08 - 10:26 gmt
Tradebot said ...
...this thing has "Mandelson" written all over it. Oops...what is that knock I hear on my door...
01 Dec 08 - 10:29 gmt
anonymous said ...
..probably your rent boy
01 Dec 08 - 11:53 gmt
anonymous said ...
London Scottish Bank hahah everything that's scottish is going into administration!
01 Dec 08 - 12:04 gmt
Moron said ...
dribble dribble dribble:))
01 Dec 08 - 13:32 gmt
anonymous said ...
Markets down....Moron starts commenting again. Almost perfect correlation
01 Dec 08 - 13:35 gmt
Moron said ...
dunno.... i thought i was commenting on Friday as well:)))
01 Dec 08 - 13:37 gmt
anonymous said ...
Tool
01 Dec 08 - 13:39 gmt
anonymous said ...
Fin, how many books have you sold?! are you making any money doing this?
01 Dec 08 - 14:01 gmt
anonymous said ...
And like annoying bird droppings, the troll Twisted Anon returns again.
01 Dec 08 - 14:15 gmt
anonymous said ...
@Tradebot; Look on Carl Gardener's legal blog for an interesting take on Damien Green
01 Dec 08 - 14:21 gmt
Moron said ...
bravo anon 14:15:)) ...this rally was just a typical bounce off prior lows......nothing more......what scares me is the slope of the declining 50 day moving averages on most stocks.....stay short....although at this point it is getting very concerning thinking abt the carnage this bear is yet to unleash:((
01 Dec 08 - 14:23 gmt
Finbar said ...
Yes, books sold to date have reached double figures...
01 Dec 08 - 14:30 gmt
anonymous said ...
@anon 13:35 your right Moron only perks up when his head or tails market calls get lucky. On Friday he wasn't commenting, but defending his calls.
01 Dec 08 - 14:31 gmt
anonymous said ...
Frankly, at least Moron has the guts to call it: Twisted Anon just waits to see what happens and then is like a little dog with a bone.
01 Dec 08 - 14:32 gmt
Moron said ...
its been the same call all along....s and p below 500 before this carnage is over....apology of a recovery therafter.....no wishy washy yes no maybe bullsh*t....things r gonna get really bad....
01 Dec 08 - 14:41 gmt
Alpha60 said ...
Finbar - Any clues as to which book stores you will strategically place your book of "cartoons". I have primed our new intern to scour the bookshelves.
01 Dec 08 - 14:54 gmt
anonymous said ...
newstar bits the dust.
01 Dec 08 - 16:19 gmt
Finbar said ...
A good job for an intern - all will be revealed on the 15th ...
01 Dec 08 - 17:37 gmt
Moron said ...
Dribblee dum dum
01 Dec 08 - 19:14 gmt
Kudlow said ...
Ouch today SPX means a retest of 741 this week or next week. If it breaks through, 650 will be next test and very soon and very likely in December.
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