Wall Street Breakfast: Must-Know News [View article]
Investors flee stocks, leaving hedge funds in driver's seat. Pension fund managers say they continue to shave their exposure to equities, fleeing stocks for bonds as they try to achieve stable returns that more-or-less keep pace with their obligations. ______________________...
Another foreseeable unintended consequence of further QE will be reduced returns on most fixed income instruments. Those currently holding debt should benefit from appreciation as rates drop but those making fresh purchases a year or two from now will be hard pressed to meet projected returns of 7% to 8%. All of this will simply further aggregate the problem of unfunded pension obligations.
Wall Street Breakfast: Must-Know News [View article]
Whitney warns on state budget crisis. Look for states to suffer a collapse similar to the banking industry implosion of 2008 as crippling deficits come back to haunt them, outspoken analyst Meredith Whitney said Tuesday (video). "The similarities between the states and the banks are extreme to the extent that states have been spending dramatically and are leveraged dramatically," she said. Whitney, famous for calling the financial sector crisis, warned banks aren't out of the woods yet, predicting a sharp drop in housing prices and shrinking trading revenues will decimate Q4 earnings. ______________________...
Rather than correct the structural issues of fiscal imbalances and insolvency, we will proceed in some fashion to "fix" the problem with additional liquidity in the form of new debt which will only "paper over" the underlying problem and kick the can down the road.
Along with reducing the power of unions, we need reductions in services, compensation and retirement benefits. Additionally, the private sector can reduce its footprint by outsourcing routine activities to the private sector who can perform them at a lower cost.
We must recognize we, at every level, are living beyond our means and must embrace difficult decisions and pain as part of the solution.
Stocks Give Up Gains, Finish Broadly Lower [View article]
I believe the S&P 500 got up to 1130 and then sank to 1113, passing through 1120 (Fib 50% retracement from March 09 lows) but remaining above the 200 day SMA of 1110.
Much as with Arizona, the Cambride (Harvard incident) and others that are not coming to mind, this president makes his decisions upon highly filtered, fragmentary information and formulates a response aligned with his agenda and political interests.
Current reports about denying assistance from Belgium, Japan, Norway and Britain to assist in skimming, dredging and other clean-up efforts are particularly disturbing because its likely tied to the 1920’s law known as the Jones Act -- a protectionist law that requires vessels working in US waters be built in the US and be crewed by US workers.
According to the few sources covering this take on the story our refusal is based upon "paperwork", certainly not risking the entire Gulf ecosystem to protect relationships with the maritime unions.
Finally, why did he not deal with the bankers that spilled $trillions of toxic assets into the global economy in the same manner that he is dealing with BP?
Wall Street Breakfast: Must-Know News [View article]
Trader you are spot on. This guy and his rogue band from Chicago know how to fight dirty, party, talk smack and engineer elections but they are way out of their DEPTH (pun) when it comes to solving complex problems that require initiative, judgment, decisive thinking and keen intellect. As George Wills recently noted, Obama delivers beautiful speeches but usually is no relationship between the rhetoric and the topic being discussed. It's simply lyrical language. Nobody is home.
Wall Street Breakfast: Must-Know News [View article]
U.S. bankruptcies near five-year high. The pace of U.S. bankruptcies in May reached the second-highest daily level since 2005, as an improving economy failed to significantly help Americans struggling with debt payments. May saw 133,459 bankruptcy petitions, a 10% rise from the year before. If there's any silver lining to be found, bankruptcies usually peak in an economic cycle between six and eighteen months after an economy bottoms out, so the high May figure could potentially signal the road to recovery. ______________________...
That would be true unless June is higher but I hope you are right.
The author makes a number of keen observations that reveal the dual standards of regulation among departments and other oversight bodies. One standard is for the financial industry and the other standard is for all other industries. It was recently reported that:
The Department of Interior's Minerals Management Service (MMS) is peopled by those who hold the strings on America's natural treasures and is courted by those who, like the Deepwater Horizon drillers, want to exploit those resources. Yet in the aftermath of the Deepwater Horizon accident, it is becoming apparent that the firewall that should exist between these two groups – the regulators and the regulated – is closer to a revolving door.
Could you imagine if this same scrutiny were to be applied to the financial industry and its relationships with Treasury, the Fed and the SEC? The relationships between the regulators and the regulated are marked by a complex web of regulatory capture characterized by cozy relationships, revolving doors, industry lobbyists writing legislation and other gross conflict of interests.
Why is not Obama outraged and disgusted by this glaring $trillion regulatory failure?
Wall Street Breakfast: Must-Know News [View article]
______________________...
Another foreseeable unintended consequence of further QE will be reduced returns on most fixed income instruments. Those currently holding debt should benefit from appreciation as rates drop but those making fresh purchases a year or two from now will be hard pressed to meet projected returns of 7% to 8%. All of this will simply further aggregate the problem of unfunded pension obligations.
Wall Street Breakfast: Must-Know News [View article]
______________________...
Rather than correct the structural issues of fiscal imbalances and insolvency, we will proceed in some fashion to "fix" the problem with additional liquidity in the form of new debt which will only "paper over" the underlying problem and kick the can down the road.
Along with reducing the power of unions, we need reductions in services, compensation and retirement benefits. Additionally, the private sector can reduce its footprint by outsourcing routine activities to the private sector who can perform them at a lower cost.
We must recognize we, at every level, are living beyond our means and must embrace difficult decisions and pain as part of the solution.
Stocks Give Up Gains, Finish Broadly Lower [View article]
BP: President Obama in Deep Water [View article]
Current reports about denying assistance from Belgium, Japan, Norway and Britain to assist in skimming, dredging and other clean-up efforts are particularly disturbing because its likely tied to the 1920’s law known as the Jones Act -- a protectionist law that requires vessels working in US waters be built in the US and be crewed by US workers.
According to the few sources covering this take on the story our refusal is based upon "paperwork", certainly not risking the entire Gulf ecosystem to protect relationships with the maritime unions.
Finally, why did he not deal with the bankers that spilled $trillions of toxic assets into the global economy in the same manner that he is dealing with BP?
Wall Street Breakfast: Must-Know News [View article]
Wall Street Breakfast: Must-Know News [View article]
______________________...
That would be true unless June is higher but I hope you are right.
Why BP but Not Wall Street? [View article]
The Department of Interior's Minerals Management Service (MMS) is peopled by those who hold the strings on America's natural treasures and is courted by those who, like the Deepwater Horizon drillers, want to exploit those resources. Yet in the aftermath of the Deepwater Horizon accident, it is becoming apparent that the firewall that should exist between these two groups – the regulators and the regulated – is closer to a revolving door.
Could you imagine if this same scrutiny were to be applied to the financial industry and its relationships with Treasury, the Fed and the SEC? The relationships between the regulators and the regulated are marked by a complex web of regulatory capture characterized by cozy relationships, revolving doors, industry lobbyists writing legislation and other gross conflict of interests.
Why is not Obama outraged and disgusted by this glaring $trillion regulatory failure?