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
I have spent much of the weekend fretting over the printing of money. When I did my Phd in Economics [Editor: Steady on], the concept of a developed country printing money to stimulate was always just a theory.
Never did I for once believe that a fully developed country like the UK would do such a thing. The problem is, it is too complicated for even my mind to analyze and conclude upon. Just as much as I have struggled with hedge fund replicators and the reinsurance industry, this is my other bet noir. Working out the meaning of life is a doddle compared to working out the ramifications of debt being bought by a government body and my ATM giving me extra notes with a strap line on them saying “this money is not for savings purpose”.
The meaning of life is about being sinful and then repenting. As long as it doesn't involve murder or fraud or, actually I don't know what the meaning of life is. Lunch. Yes. And a good workout in the gym eyeing up gorgeously fit women perhaps?
So back to the thorny question of printing money. Well the upshot is a devaluation of a currency's worth. This means it costs more to buy things. Inflation. But inflation is good. We all get pay rises and assets go up in value. But if the rest of the world has deflation, then we shall buy abroad. But our currency will decline and imports become more expensive unless the deflation is greater than the currency depreciation. See, my head is throbbing already.
As has been pointed out in various emails, the system is broken and cannot be fixed using old ways. A new world order is occurring and we are not talking about it. After the Great Depression, many new ideas and rules were implemented in the US like Glass-Steagall and the uptick rule. So far we have had in various guises, bad debts being moved off balance sheets. And that is it. Ok a few taxes have been lowered and a few bridges built but this is just a temporary measure.
But don't look to me for answers. If I had them, I wouldn't be writing a blog.
So where are the concepts, ideas, solutions? The people fixing it are the people who helped break it.
Seeing homeless people living in tents in California and the rise of that awful band from the 80's UB40, today we look to gold and grass custard. With all this talk of 1980's I bought myself a pair of shutter shades (the ones Paris Hilton wears) to hide my embarrassments.
A huge expansion of global capacity for producing liquefied natural gas is set to bring additional volumes on to an already depressed global market.
Plants scheduled to come on stream over the next year will increase global LNG production capacity by 30 per cent, putting downward pressure on natural gas prices worldwide, particularly in the US and Britain.
Fintag says I too feel there is too much gas around. Thank goodness I could find an article on Gas as I took a photo of this well known London gas works at the weekend:
Hedge fund investors who made money last year by betting against investment banks are now buying gold as a way of betting against central banks. The gold bulls include David Einhorn, founder of hedge fund Greenlight Capital, who last year came under the spotlight for his short selling of shares in Lehman Brothers, after arguing that the bank did not have enough capital to offset its exposure to falling property prices. Other funds looking at gold include Eton Park and TPG-Axon
Fintag says I knew there was an 80's revival but I didn't know us Hedgies were now Spandau Ballet fans. Now where is my frilly shirt and massacre?
In little over a fortnight, the Financial Services Authority will publish proposals that hedge funds should be allowed to be sold to small investors. This means that at least some of these funds could be marketed directly to the public, so as early as next year UK-based investments such as unit trusts or open-ended investment companies (Oeics) could provide access to hedge funds for savers putting in as little as £1,000.
Fintag says Good grief. They have been talking about this for years. Timing ins't great but now the agenda has changed. If the FSA push ahead with this, they will start on the road to serious hammer head regulation of hedge funds.
I may choose not to play. I prefer Goldmorgan Stanley to give me USD100 million than 100 million people giving me a dollar. I will leave retail to the retailers like Goldmorgan Stanley.
While accused hedge fund swindler Arthur Nadel sits in a Manhattan jail, Burton Wiand is busy seizing control of his assets -- a 453-acre mountainside tract of land in North Carolina, several airplane hangars and a jumble of bank accounts.
Wiand, a Florida lawyer, is a court-appointed receiver, a job that has become increasingly in demand in blockbuster fraud cases ranging from the Bernard Madoff scandal to the case against Texas tycoon Allen Stanford.
Fintag says Miss Marples to the rescue. Yawn ...
AIG TOLD U.S. FAILURE WOULD CRIPPLE WORLD'S BANKS, MONEY FUNDS
American International Group Inc. appealed for its fourth U.S. rescue by telling regulators the company's collapse could cripple money-market funds, force European banks to raise capital, cause competing life insurers to fail and wipe out the taxpayers' stake in the firm.
AIG needed immediate help from the Federal Reserve and Treasury to prevent a “catastrophic” collapse that would be worse for markets than the demise last year of Lehman Brothers Holdings Inc., according to a 21-page draft AIG presentation dated Feb. 26, labeled as “strictly confidential” and circulated among federal and state regulators.
Fintag says I still get very annoyed at this. AIG is an insurance company. I thought banks were the most precious thing to keep alive to ensure capitalism survives.
Insurance companies accept cash for risk and pay out if the risk comes true. In the middle they play with the premiums by backing horses and writing structured products for Goldman Sachs. AIG was a ponzi scheme.
So Madoff is in prison and AIG is free and being looked after nicely by the state?
new york times says " A.I.G., Where Taxpayers' Dollars Go to Die "
Why can't the government find the right way to bail out the financial system and the housing market? Historian Tom Woods has a provacative answer: it's a fruitless war against reality. No matter what steps we take, prices will fall to their market levels. What's worse, all the attempts to prevent this are just making things worse by creating chaos in the markets.
Earlier this week we ran an extended excerpt from Woods' important new book, Meltdown.* It's the first book we've seen that takes the perspective of Austrian economics and applies it to the current crisis.
Fintag says I have previewed this book looking for Fintag ideas. Yes, there a few stolen from this tiny little ol' blog but overall the book is a waste of time. Why do the Americans have to be so dramatic?
We are living through a market correction not a nuclear war.
CITADEL MARKETING NEW FUND WITH LOWER FEES, REPORT SAYS
The American hedge fund Citadel Investment Group plans to roll out several new funds, including one with lower fees that will aim to make money on currencies, interest rates and other trades based on broad economic trends, The Wall Street Journal reported.
The firm hopes to raise $2 billion in coming months and could raise $5 billion for its new Citadel Global Macro Fun, the newspaper said, citing marketing documents.
Fintag says That is not good. Less fees mean less risk management and oversight on managing the fund.
EVEN FOR MARKET VETERANS, IT'S UNCHARTED TERRITORY
AFTER the steepest decline since the Great Depression, unalloyed optimism among veteran stock market hands is hard to find. Byron Wien, chief investment strategist at Pequot Capital Management, says he is an optimist. Yet he advises small investors to buy gold and corporate bonds, not equities, which, he said, may be too risky right now.
Barton M. Biggs, managing partner at Traxis Partners, a hedge fund, places himself in the optimists' camp, too. Yet he advises well-to-do investors to arm themselves — with shotguns, if need be — against the possibility of a deepening downturn and accompanying “social unrest.”
Despite Friday's small gain, the Dow Jones Industrial Average marked its fourth consecutive week of losses as it tumbled through the 7000-point mark and spiraled to new 12-year lows. The Standard & Poor's 500-stock index is trading below 700 for the first time since 1996.
As earnings estimates are ratcheted down and hopes for a quick economic fix fade, the once-inconceivable notion of returning to Dow 5000 or S&P 500 at 500 looks a little less far-fetched.
Fintag says The ice is melting and the support ledge is just about visible.
BRITISH HEDGE FUND MANAGER GETS FOUR YEARS FOR FRAUD
A British hedge fund manager accused of swindling investors out of £15 million was sentenced to four and half years in prison on Friday.
Marc Duchesne pleaded guilty to conspiracy to defraud at his trial in London. According to prosecutors, he repeatedly told investors in his Benchmark Asset Management that their money was safe, while in fact using it to fund a lavish lifestyle.
Fintag says He is not British. Brits never get caught with their hedge fund trousers down. Duchesne is a French name.
Unemployment across the UK will reach 3.2 million - or just over 10% of the workforce - by the second half of next year, a business group has predicted.
The warning comes from the British Chambers of Commerce (BCC), which said the economy had worsened "significantly" so far in 2009.
Fintag says 1 in 10 ...
independent says " Jobless executives to get special help "
In this depression, the wretched victims of foreclosure by Obama's pals at Goldman Sachs, Citibank, and JP Morgan live and die in OBAMAVILLES. The arrogant elitist in the White House does not care.
Obama is presiding over a $10 trillion bank bailout, all money down a rat hole. Meanwhile, Obama's so-called anti-foreclosure program is an incentive payment bonanza for predatory subprime lenders - the Angelo Mozillos of Countrywide and their ilk, who sold subprime Adjustable Rate Mortgages which should have been illegal all along.
Fintag says This is getting to be so real I don't know whether I should send out blankets to Sacramento or learn how to cook grass soup?
Investors take out short trades when they expect a currency to fall. In recent days, futures traders in the US have significantly increased their bets that the euro will fall against the dollar. Data released by the Washington-based Commodity Futures Trading Commission on Friday showed that the "net short position" of trades against the euro by hedge funds and speculators almost doubled in the week to March 3 to 19,431 contracts from 10,081 contracts a week earlier.
"Quite a significant correction in the euro is coming in the next few months. The European Central Bank (ECB) is behind the curve in getting to grips with its economic problems," said David Buik of BGC Partners. He added that the eurozone entered recession later than other economies, but policy-makers had been too slow to act, putting the currency at risk.
Fintag says I am not so sure. If it holds rates up, I think it will be a safe haven. However, if Spain or Italy or Germany go bust, then yes you should short the currency with all your life.
43 comments
anonymous said ...
20% down = a classic bear market. Since Jan. 20 we are down 20%. Obama's bear market.
Other stats: Since he won in November - Dow down over 3000 points Since he won the primary in August - Dow down over 5000 points
Whoopi!!!!!
09 Mar 09 - 08:22 gmt
AthenaDelphi said ...
Damn it!~ I'm not 1st AGAIN. Who is up in America at this time and blogging at this site before me? I want to know. Probably someone in California who are 1 hour later then us. Snot nose kid.
Right stats though.
09 Mar 09 - 08:23 gmt
AthenaDelphi said ...
OK. 1 in 10 by second half of next year for England.
We're at 8.1% 1st Q in the USA. Bets on 10% by end of 3rd Q?
Pup tents in California for Obamaville. They get what they voted for. I have no pity, except for the dogs, cats and fish that are left behind in a daze as people leave their keys in the door as they leave.
09 Mar 09 - 08:26 gmt
AthenaDelphi said ...
Those sunglasses or 'shades' or 'eyewear' remind me of DEVO. Not UB40
09 Mar 09 - 08:29 gmt
Antwerp said ...
I missed this: British Airways at junk status.
Hard times for the world's favorite airline.
Many fond memories of the day flight from JFK to Heathrow with the odd chance of an upgrade to the Concorde.
Still, there is always the upstrart Virgin and Branson's Heathrow Clubhouse. And First on Alitalia to Roma. La dolce vita! lol.
Do we lose the frequent flier mileage points in bankruptcy? Oh the humanity!
09 Mar 09 - 08:40 gmt
anonymous said ...
when unemployment hits 15% - sell. when it gets to 25% - buy it.
England FOR SALE. Wonder if Germany wants it now?
09 Mar 09 - 08:43 gmt
anonymous said ...
Athena - I'm in San Francisco - went to see the Obamavilles that were on CNN.
Dressed down, parked away, took the bike off the rack, talked to a few. Very bitter people at republicans and ANY business people, CHINA and free trade, and if you mention God, be prepared to be spit at or told "I ask the Universe to help me".
Don't send blankets. They'll be confiscated as not made in America. Not snot nosed kid: 50yr old white guy - unemployed COBOL/IBM guy.
09 Mar 09 - 08:49 gmt
Antwerp said ...
AIG has the pension funds of German and French trade unions.
No way will the US gov't let them go under.
09 Mar 09 - 08:54 gmt
Tedspread said ...
Gold -- Selling to meet margin calls? forcing price down for last 2 weeks? China now hinting it wants more gold than currency. They're in Africa now, buying mines but not those that are public owned. Only those in nations that have authoritarian govts. No way to make $$ on that trade.
While Wolfgang Munchau's latest comment for the Financial Times, "An L of a recession – reform is the way out," fell short of being apocalyptic, it was the gloomiest piece I can recall coming from him.
09 Mar 09 - 09:04 gmt
Tedspread said ...
Looks like anyone who can leave the UK is going to......Detroit?
h t t p://finance.yahoo.com/news/Outside-buyers-drawn-to-apf-14577501.html
A trio of U.K. investors has bought a half-dozen and plans many more.
"I thought it would be quite good fun to have a look," said Darren Veness, who lives near Brighton, England.
n extreme cases, homes are on sale for $1 or less, which has enticed investors from the United Kingdom and Australia.
09 Mar 09 - 09:10 gmt
AthenaDelphi said ...
No Moron (donkey), No MrsR, no angry anon, no calls for me to be banned.
I'm outta here.
09 Mar 09 - 09:11 gmt
Antwerp said ...
CNBC: Developing countries face $700bn hole.
Just ask Brown. He'll be happy to give it out.
09 Mar 09 - 09:23 gmt
anonymous said ...
Barron's cover story called a bottom to the market in their magazine this weekend.
09 Mar 09 - 09:29 gmt
Antwerp said ...
UK takes 77% of Lloyds. Mr. Brown - I'll just bend over and grab my ankles now mate. Bring it on,get it over with, then zip it up, and leave me alone!
09 Mar 09 - 09:33 gmt
Tedspread said ...
CNBC guest is skrumpy.
09 Mar 09 - 09:37 gmt
Antwerp said ...
actually she's a shazza you wouldn't want to shag unless you gag her idiocy.
who does she work for? i'm shorting the company.
09 Mar 09 - 09:39 gmt
Tedspread said ...
smeghead
09 Mar 09 - 09:41 gmt
anonymous said ...
Jobless executives to get special help
The Government is to launch a £40m drive to tackle white collar unemployment as the toll of job losses among professionals and managers mounts
where do I sign up?
09 Mar 09 - 09:54 gmt
Tedspread said ...
Schroders
09 Mar 09 - 09:55 gmt
anonymous said ...
Goldman Sachs' chief executive said he opposed the full nationalization of banks, for it would mean management like me could not get huge salaries and bonuses with taxpayer money. We want guarantees and huge bailouts with no strings attached. It is only right.
09 Mar 09 - 10:27 gmt
anonymous said ...
Fin, your blog has been taken over by athena who posts under multiple identities now ... Have her banished to an institution please
09 Mar 09 - 11:05 gmt
Moron said ...
i'd say athena is hot:)))....she sounds hot!
09 Mar 09 - 11:18 gmt
Former Panta said ...
Ahh David Buick: a former collegue...btw, not so bad to be unemplyoed....with you portable at bed. I am now working for Free trial capital asset management. I t s a fund where investors can put their money just for 3 months. then i will have to sort something else out... PS where is PPsec...???
09 Mar 09 - 11:24 gmt
Panta said ...
@ moron. Yup but not so hot as arianb....any improvments mate?
09 Mar 09 - 11:26 gmt
Moron said ...
yeah...sex in the parking lot of the convenience store:)))
09 Mar 09 - 11:28 gmt
Tradebot said ...
hmm, not sure abou the fall of euro either. Spreadbetters are generally speaking always wrong. Trichet might cut rates to near zero, but printing money is definite no-no. The Germans would never accept that.
09 Mar 09 - 12:11 gmt
Tradebot said ...
hmm, looks like the clueless hacks of UK press are ignoring the Lloyds story. Perfectly boring commercial bank destroyed by meddling Scottish PM. Pathetic. Isn't there anything that man cannot destroy?
09 Mar 09 - 12:13 gmt
Bart Simpson said ...
Eat my shorts Moron..
09 Mar 09 - 12:18 gmt
Moron said ...
bary simpson is back!!!:)
09 Mar 09 - 12:22 gmt
Bart Simpson said ...
Bite me Moron!!
09 Mar 09 - 12:52 gmt
Miss Toastpoints said ...
AIG is Goldman's biggest counterparty, so if AIG goes, Goldman goes. Do you think the ex-goldman people in government are going to let that happen? It would wipe out too much of their own personal wealth plus that of their friends and lobbyists. Not gonna happen!
09 Mar 09 - 12:54 gmt
Alpha60 said ...
RIO LN what a pile of sh*t...
09 Mar 09 - 13:00 gmt
PPSec said ...
Fin, how did you miss this one: h t t p : //www.ft.com/cms/s/0/9f800110-0c15-11de-b87d-0000779fd2ac.html ... Does the protectionnism already started?
09 Mar 09 - 13:01 gmt
Super Mario said ...
Anyone get into RC Group as tipped earlier...holding up pretty well in the current mkt
09 Mar 09 - 14:59 gmt
kaka said ...
???????????!!!????QQ:306478122?!??:???
09 Mar 09 - 19:43 gmt
AthenaDelphi said ...
ok. i'm back and checking in. moron now thinks i'm hot. well, he's correct in that i'm having a hot flash right now.
someone else wants me banned for posting under 'aliases'. geez.
the only post i like so far today is kaka's.
09 Mar 09 - 21:31 gmt
AthenaDelphi said ...
after reading this morning's postings i don't even like my own.
09 Mar 09 - 21:39 gmt
Moron said ...
Athena honey shut up
09 Mar 09 - 22:40 gmt
AthenaDelphi said ...
I'm going to kill my 3 nephews who are visiting. Absolutely kill them. Hackers. In my own family.
Don't worry Moron. I'm going to shut up. I'm outta here for the week and those 3 miscreants are sooooo in trouble.
10 Mar 09 - 00:07 gmt
AthenaDelphi said ...
Finbar IT geek: get ride of everything from the comment pages of anon the 50 year COBOL guy, the Tedspread and Antwerp.
Kill them. Spawn of my sister from hell!
10 Mar 09 - 00:10 gmt
anonymous said ...
AIG needed immediate help from the Federal Reserve and Treasury to prevent a “catastrophic” collapse that would be worse for markets than the demise last year of Lehman Brothers Holdings Inc., according to a 21-page draft AIG presentation dated Feb. 26, labeled as “strictly confidential” and circulated among federal and state regulators.
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