Tanya Azarchs of S&P spoke on Bloomberg TV saying something about the monoline's insurance of VIEs (variable interest entities) of the banks... no wonder they remained AAA via pressure as a cut could have forced massive amounts of capital to be required at the nation's largest banks at a time when they can least afford it.
With that and Mish's damning side-by-side comparison of MBIA AAA and Pfizer AA ratings with reality, I think I'm about ready to check out of this market.
Another media piece: FDIC: Banking Industry Earnings Fell Precipitously in 4Q
"In a sign that the problems surrounding the housing market may be spreading, the number of noncurrent real estate construction and development loans increased 73.2% during the fourth quarter, while credit card loans that were at least 90 days past due climbed 26%."
Karen Feinerman and Jeff Macke on Fast Money yesterday said blindly "you have to buy on bad news". no mention of fundamentals, no analysis, no rationality except that of a contrarian. stupid to say the least. a true indicator of how out of whack the Greenspan Put has made of even superficially sensible ppl.
more than somebody is understanding the banks and the currency are seriously "compromised". ( as in the Victorian word meaning a mademoiselle had received carnal knowledge)
IMF announces they are going to sell a couple million ounces of gold...
gold gaining nearly 40$ per ounce since the g7 meeting where this was announced.
and for who's benefit does the imf purportedly intend to sell this gold?
ha ha ha, they say they want to give debt relief and thus help provide medical care for the third world poor, but i guess it more like a buying opportunity the privileged.
Mish's analysis is nonsense. MBIA's "AAA" rating refers to its claims paying ability, not its debt. The Pfizer rating is for its debt.
These ratings are, in effect, on completely different scales. They use different criteria, and always have. Mish, with his usual combination of bold pedantry and half-understanding, is comparing apples to oranges.
Now, whether MBIA deserves a AAA rating from S&P and Moody's is certainly debatable. Frankly, I do not feel qualified to answer the question. But I do know that Pfizer's debt ratings have nothing to do with it.
FDIC's press release for its 4Q 2007 report:"The industry as a whole is coming off a golden period of record profits." (and entering a reddening period of record losses...) FDIC: Press Releases - PR-15-2008 2/26/2008
Nemo,
"In American finance, the problem bank list is a confidential list created and maintained by the Federal Deposit Insurance Corporation which lists banks that are in jeopardy of failing. The list is closely monitored, and if problems continue with a listed bank, the FDIC takes control of the bank; it may then sell the problem bank to a stronger one, or liquidate the bank and pay off the depositors."
Bank Lawyer's Blog: FDIC / Sheila Bair: CDO Lawyer
"Sheila Bair continues to say anything...ANYTHING...to satisfy her consumer advocacy fetish. Her latest exercise in self-pleasuring came last Friday, in a speech in San Jose (I guess she knew the way). She was hell-bent on continuing to give legal advice to servicers of collateralized subprime mortgage debt obligations as to how to best serve the interests of various classes of bond holders without getting themselves sued by an unhappy class...or two...or more... of disgruntled investors. She's obviously irked that too many servicers simply refuse to take her advice to modify loans across the board for at least five years (preferably, for the balance of the initial 30 year loan term) at existing teaser rates...."
Nemo says "Mish's analysis is nonsense. MBIA's "AAA" rating refers to its claims paying ability, not its debt."
Of course the non-insurance people are measured with different formulas; however, BS aside, most people SHOULD look at who CAN pay their debt, if they had to. The model used to rate MBIA has been wrong for years, the underlying ratios are pure pie-in-the-sky wishing for the best, not reality based. Pfizer COULD pay if they had to, MBIA has no chance in he## of being able to pay.
Common sense is a wonderful thing.
The Pfizer/MBIA analogy is only somewhat correct. Pfizer doesn't deserve an AAA - their revenues are set to decline over the next several years due to patent expirations. So their debt can't be covered as easily as it once was. A notch below gilt-edged sounds about right.
rcyran- you are correct, of course. Ratings are SUPPOSED to reflect the ability of an entity to pay, without causing any problems or hardships in the businrss. Sorry.
MBIA stuffed a bunch of shite in the off shore RE they own 17% of. That stuff comes back MBIA is dead. That's a very real possibility. There ability to pay there debts or their claims is weak at best, as they were raising debt, that is written to the books as capital @ 14%.
8 years ago you had an article with Oil supply and demand curves having 2-3 (not 1) equalibrium points. Where can I find it and is this what takes place today ?
Could oil have a equialbrium at $65 %84 and $125 ???
Hey guys, I'm making the rounds on my favorite housing blogs asking for a bit of assistance.
If any of the readers or posters here at Calculated Risk would care to help a fellow housing blogger beat a couple sports blogs in a blog contest, I'd appreciate your clicks. Seattle Bubble has made it all the way to the semi-finals of a blog tournament, and we would love any help we could get from the rest of the bubble-blogging community.
Equity markets are in the denial stage... when a large class of investors are in denial there are unusually good opportunities for profit. Every boost to the s&p500 offers improved returns to a new short position.
Imagine a large estate, light streaming from the windows, a large party going on inside as a storm rages outside. Dining windows broke, sleet pouring in, this room closed off as a new case of champagne is opened. Wolves howling in back, a bear scratching on the front door, lights are flickering... the party goes on.
idoc:
"a true indicator of how out of whack the Greenspan Put has made of even superficially sensible ppl."
I think it is just a recognition of the extremely short-term market environment. In a market which has a whole load of short interest there are times when even huge bad news no longer moves the stocks down and the shorts get very uncomfortable. This is not lost on the other players.
Same thing happens at the top, great news fails to move stocks any higher.
Ratings are SUPPOSED to reflect the ability of an entity to pay, without causing any problems or hardships in the businrss.
No, ratings are SUPPOSED to reflect the probability of default.
When Pfizer borrows money, they have to pay it back with interest on a fixed schedule. The probability of default therefore depends on the strength of Pfizer's balance sheet and the prospects for their future business operations.
When MBIA writes an insurance policy, they may not have to pay until the distant future, or even not at all, depending on how events unfold. The probability of default therefore depends on MBIA's balance sheet, and their future business operations... But more importantly, on the policies they write; i.e., the probability that the instruments they insured generate claims. Both S&P and Moody's say they have evaluated those insured instruments, run them through new "conservative" models of house price declines and mortgage defaults and so on, and concluded that MBIA has a very high probability of being able to satisfy all claims.
Are the ratings agencies lying? Or are their "conservative" models still garbage? Well, I have no idea... And neither, I suspect, do most of the people crowing loudest on the subject.
But there is certainly no insight to be gained on the question from Pfizer's (or any other company's) debt ratings.
New Jersey Governor Jon Corzine proposed a $33 billion budget that would reduce spending from the current year by cutting at least 3,000 jobs, eliminating three state departments and scaling back property-tax rebates.
borkafatty writes:
.....why is the dollar loosing ground so rapidly...i have never seen it fall as fast as it has in one day...curious minds want to know.
IMO, the final nail in the coffin was this piece of shit in Fed Vice-chair Kohn's speech:
And expected policy easing likely contributed to the drop in the foreign exchange value of the dollar, which is bolstering our exports.
So, he is fully acknowledging that cutting interest rates trashes the US$ but he LIKES it and he is going to continue cutting interest rates and the US$ can go to pot.
Having said that.. I'm going to sell some of the Euro ETFs towards the end of today, if this rapid rise holds - never mind the explanations, price action should always be given the respect it deserves. I can always jump back in tomorrow.
"So, he is fully acknowledging that cutting interest rates trashes the US$ but he LIKES it and he is going to continue cutting interest rates and the US$ can go to pot."
I do not think he likes it, but it may have a better chance of keeping most of us working. Of course relative to necessities we will be cash poor and highly in debt to boot.
Pfizer grew for years by buying up the small biotechs. None left to buy anymore so of course their growth is slowing.
Says something that they want to license some of their new drugs from foreign companies - we are totally losing yet another of our technical advantages due to lack of government support for scientific research.
I do not think he likes it, but it may have a better chance of keeping most of us working. Of course relative to necessities we will be cash poor and highly in debt to boot.
TG | 02.26.08 - 3:58 pm | #
Bingo.
Until the trade & CA deficit get back in line we can expect a weak dollar. Means we get to keep working but for less money measured as a basket of global currencies.
Big changes in the biotech world - I'm aware of some big firms moving major portions of their R&D to China. So much for high-paying PhD jobs in biochem & bioinformatics.
combine that with rapidly increasing commodity inflation, individual asset deflation and i'm tinking - Dustbowl v.2, weeee!
oh, and add in the mandated ethanol debacle to corn and feed corn prices, and an already shrinking stockpile of wheat, etc. from a 56% increase in export as China and everyone started hoarding, and we're looking at potential famine scenarios and potential government stupidity. the latter, even more so than normal.
BUT. the good news is that the hurricane season should be quite mild (for the US, not Asia) if the vertical wind shear theory (due to global warming) is correct. i'm still working out the ramifications of that...
NEW YORK, Feb 26 (Reuters) - The Financial Accounting Foundation, which oversees U.S. financial accounting rule makers, voted on Tuesday to reduce the size of the Financial Accounting Standards Board and increase the power of its chairman.
FASB will be reduced from seven members to five, effective July 1, and the board's chairman will have agenda-setting authority, according to an announcement of the decision.
I do not think he likes it, but it may have a better chance of keeping most of us working. Of course relative to necessities we will be cash poor and highly in debt to boot.
Also other countries don't like it. In the euro area you're really starting to hear some squealing about the weak dollar.
Trade conflicts were a major exacerbating factor during the Great Depression.
I imagine the govt. just might change its ethanol policy if starvation were to occur.
People might also chose to eat rather than drive or fly (substitution effect due to relative prices). But maybe this idea just reflects my NY sensibilities.
Every Friday Noon-1PM CST they have a weather call in to ISUs top climatologist. About this time of year they start watching the Bermuda High & SOI (El Nino)... and something else in the Gulf of Alaska. All are highly predicitve of whether the US Grain Belt is wet dry or in between.
I haven't checked in with them lately but if you can log in I'd start doing it every Friday. I frequently listen to them on the air when I'm on the road - haven't been in the area on a Friday lately though.
Also other countries don't like it. In the euro area you're really starting to hear some squealing about the weak dollar.
Tough shit - we are not their dumping ground.
I mean they can't have it both ways... either they get a dollar in exchange that is valuable because we aren't running a monster trade deficit - we make & trade stuff with them instead.
OR
They bust ass to make stuff for us and get little pieces of paper they can exchange for promises we will pay them with more little pieces of paper.
World has to choose which it will be - take some of the stuff we make or take our promises & little bits of paper. I find it astonishing that otherwise smart people don't get this.
World has to choose which it will be - take some of the stuff we make or take our promises & little bits of paper. I find it astonishing that otherwise smart people don't get this.
Oh ya one other option - quit sending us shit and we either go without or make it ourselves. That should be fun - watching paper pushers find their inner factory child.
thanks for the links. your first link was more of a historical viewpoint and the second, the IRI tends to just use 2 models of SST analysis, not any of the 6 standard models of the NOAA, although quite interesting.
but hey, weather forecasting is an even more dismal science than economics!
but hey, weather forecasting is an even more dismal science than economics!
Ya it can be. I was criss crossing Iowa & Missouri during the Floods of '93 and all I ever heard were more forecasts of rain!
BTW - a lot of the folks who call in on that Iowa Public radio call in only want weather reports... but if you have your models together the host will usually compare what they have going on at Iowa State OR encourage you to email them. These guys are really something else.
donna: ... we are totally losing yet another of our technical advantages ...
Well, if I'm going to be off-topic, I might as well be off-topic. As you can see from the link, just before the war broke out I was haranguing a room full of pharma researchers on a way to improve database searching. Sigh
Nemo: you can get an idea of the banks that are NOT in good shape by going to bankrate.com where they have a "safe and sound" facility that rates the soundness of banks. If you know the bank you are interested in you can find out quite quickly what their rating is. They rate banks from 1 star (lowest quality) to five stars. And conversely from 1 (highest) to 5 (lowest) quality.
Russia quietly prepares to switch some oil trading from dollars to rubles
Well not quite. The article says that they are going to denominate the contracts in rubles, not that buyers are going to pay in rubles. This is notational only for a current trade and is meaningful only for futures. But a buyer can lock in a USD price through currency futures if they want. Both the commodity futures and currency futures markets track the same expected exchange rate variations.
If Russia sells oil to Germany for example, the latter is most likely going to pay in Euros, as the Russians want Euros to buy all their BMW's and what have you.
What it seems to be all about is that the Russians see an unexpected major devaluation of the USD as a threat and want to protect themselves from it. Which is the message we are getting from all commodity markets.
Where can I find a copy of the "Problem List"?
Tanya Azarchs of S&P spoke on Bloomberg TV saying something about the monoline's insurance of VIEs (variable interest entities) of the banks... no wonder they remained AAA via pressure as a cut could have forced massive amounts of capital to be required at the nation's largest banks at a time when they can least afford it.
We are teetering on the brink here...
I imagine this is good news for stocks.
With that and Mish's damning side-by-side comparison of MBIA AAA and Pfizer AA ratings with reality, I think I'm about ready to check out of this market.
This should puch the dow up another 100 points.
Note to Self: Invent combination mattress-safe deposit box.
Another media piece: FDIC: Banking Industry Earnings Fell Precipitously in 4Q
"In a sign that the problems surrounding the housing market may be spreading, the number of noncurrent real estate construction and development loans increased 73.2% during the fourth quarter, while credit card loans that were at least 90 days past due climbed 26%."
http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=45228245-cb20-45e6-82fd-889d0d6034be
Karen Feinerman and Jeff Macke on Fast Money yesterday said blindly "you have to buy on bad news". no mention of fundamentals, no analysis, no rationality except that of a contrarian. stupid to say the least. a true indicator of how out of whack the Greenspan Put has made of even superficially sensible ppl.
more than somebody is understanding the banks and the currency are seriously "compromised". ( as in the Victorian word meaning a mademoiselle had received carnal knowledge)
IMF announces they are going to sell a couple million ounces of gold...
G7 approves IMF gold sales - Italy econ minister
| Business News
| Reuters
and the PM market hardly blinks.
Kitco - Gold Precious Metals - Buy Gold Sell Gold, Silver,
Platinum - Charts, Graphs, Prices, Quotes, Gold Stocks, Mining Stocks,
bullion dealers
scroll down to the 30 day graph on the right!!
gold gaining nearly 40$ per ounce since the g7 meeting where this was announced.
and for who's benefit does the imf purportedly intend to sell this gold?
ha ha ha, they say they want to give debt relief and thus help provide medical care for the third world poor, but i guess it more like a buying opportunity the privileged.
Karen Feinerman and Jeff Macke on Fast Money yesterday said blindly "you have to buy on bad news".
Sounds like they're trying to manipulate things a little tp keep alive the whole leveraged gambling ring Wall Street's got going on right now.
That's what I'd do if I had a show on CNBC or if my job depended on increasing leverage in the markets.
Here is Bloomberg's take on VIEs and Mish has a blog on it as well:
Goldman, Lehman May Not Have Dodged Credit Crisis (Update4) - Bloomberg.com
samsin --
Mish's analysis is nonsense. MBIA's "AAA" rating refers to its claims paying ability, not its debt. The Pfizer rating is for its debt.
These ratings are, in effect, on completely different scales. They use different criteria, and always have. Mish, with his usual combination of bold pedantry and half-understanding, is comparing apples to oranges.
He is not the first person to make this mistake.
Now, whether MBIA deserves a AAA rating from S&P and Moody's is certainly debatable. Frankly, I do not feel qualified to answer the question. But I do know that Pfizer's debt ratings have nothing to do with it.
Nemo, And Pfizer has better drugs...
FDIC's press release for its 4Q 2007 report:"The industry as a whole is coming off a golden period of record profits." (and entering a reddening period of record losses...)
FDIC: Press Releases - PR-15-2008 2/26/2008
Nemo,
"In American finance, the problem bank list is a confidential list created and maintained by the Federal Deposit Insurance Corporation which lists banks that are in jeopardy of failing. The list is closely monitored, and if problems continue with a listed bank, the FDIC takes control of the bank; it may then sell the problem bank to a stronger one, or liquidate the bank and pay off the depositors."
Problem bank list - Wikipedia, the free encyclopedia
Bank Lawyer's Blog: FDIC / Sheila Bair: CDO Lawyer
"Sheila Bair continues to say anything...ANYTHING...to satisfy her consumer advocacy fetish. Her latest exercise in self-pleasuring came last Friday, in a speech in San Jose (I guess she knew the way). She was hell-bent on continuing to give legal advice to servicers of collateralized subprime mortgage debt obligations as to how to best serve the interests of various classes of bond holders without getting themselves sued by an unhappy class...or two...or more... of disgruntled investors. She's obviously irked that too many servicers simply refuse to take her advice to modify loans across the board for at least five years (preferably, for the balance of the initial 30 year loan term) at existing teaser rates...."
Bank Lawyer's Blog: FDIC
Why doesn't somebody just make a bold move and declare that all banks are AAA rated. That should clear up the problem, right?
Or maybe Helicopter Ben and Paulson could paint a big "AAA" on their bald heads in red, white and blue and claim that everything is contained.
Just to brighten the day:
I just saw an ad on TV where Wachovia extolled the virtues of it's Option payments, including a payment less than interest-only.
How is it still possible that people are selling these things?
Oh and the ad said "Jumbo loans available" too!
Nemo says "Mish's analysis is nonsense. MBIA's "AAA" rating refers to its claims paying ability, not its debt."
Of course the non-insurance people are measured with different formulas; however, BS aside, most people SHOULD look at who CAN pay their debt, if they had to. The model used to rate MBIA has been wrong for years, the underlying ratios are pure pie-in-the-sky wishing for the best, not reality based. Pfizer COULD pay if they had to, MBIA has no chance in he## of being able to pay.
Common sense is a wonderful thing.
The Pfizer/MBIA analogy is only somewhat correct. Pfizer doesn't deserve an AAA - their revenues are set to decline over the next several years due to patent expirations. So their debt can't be covered as easily as it once was. A notch below gilt-edged sounds about right.
As for MBIA, an AAA rating is a complete joke.
bobn,
You'll note the legalese at the end that terms and conditions are subject to change the second this commercial ends.
Cheers,
poor banks only made 105.5B last yr. why wasn't i born into the right pedigree?
rcyran- you are correct, of course. Ratings are SUPPOSED to reflect the ability of an entity to pay, without causing any problems or hardships in the businrss. Sorry.
MBIA stuffed a bunch of shite in the off shore RE they own 17% of. That stuff comes back MBIA is dead. That's a very real possibility. There ability to pay there debts or their claims is weak at best, as they were raising debt, that is written to the books as capital @ 14%.
They don't deserve investment grade ratings.
Cheers,
Prof Krugman if you are reading this:
8 years ago you had an article with Oil supply and demand curves having 2-3 (not 1) equalibrium points. Where can I find it and is this what takes place today ?
Could oil have a equialbrium at $65 %84 and $125 ???
Hey guys, I'm making the rounds on my favorite housing blogs asking for a bit of assistance.
If any of the readers or posters here at Calculated Risk would care to help a fellow housing blogger beat a couple sports blogs in a blog contest, I'd appreciate your clicks. Seattle Bubble has made it all the way to the semi-finals of a blog tournament, and we would love any help we could get from the rest of the bubble-blogging community.
Go here to vote. (It only takes a few seconds.) Thanks!
Equity markets are in the denial stage... when a large class of investors are in denial there are unusually good opportunities for profit. Every boost to the s&p500 offers improved returns to a new short position.
Imagine a large estate, light streaming from the windows, a large party going on inside as a storm rages outside. Dining windows broke, sleet pouring in, this room closed off as a new case of champagne is opened. Wolves howling in back, a bear scratching on the front door, lights are flickering... the party goes on.
Does a AAA rating on MBIA change anything? Are investors now lining up to get MBIA insurance? I hope investors are not that dumb.
idoc:
"a true indicator of how out of whack the Greenspan Put has made of even superficially sensible ppl."
I think it is just a recognition of the extremely short-term market environment. In a market which has a whole load of short interest there are times when even huge bad news no longer moves the stocks down and the shorts get very uncomfortable. This is not lost on the other players.
Same thing happens at the top, great news fails to move stocks any higher.
Investment Banker --
Ratings are SUPPOSED to reflect the ability of an entity to pay, without causing any problems or hardships in the businrss.
No, ratings are SUPPOSED to reflect the probability of default.
When Pfizer borrows money, they have to pay it back with interest on a fixed schedule. The probability of default therefore depends on the strength of Pfizer's balance sheet and the prospects for their future business operations.
When MBIA writes an insurance policy, they may not have to pay until the distant future, or even not at all, depending on how events unfold. The probability of default therefore depends on MBIA's balance sheet, and their future business operations... But more importantly, on the policies they write; i.e., the probability that the instruments they insured generate claims. Both S&P and Moody's say they have evaluated those insured instruments, run them through new "conservative" models of house price declines and mortgage defaults and so on, and concluded that MBIA has a very high probability of being able to satisfy all claims.
Are the ratings agencies lying? Or are their "conservative" models still garbage? Well, I have no idea... And neither, I suspect, do most of the people crowing loudest on the subject.
But there is certainly no insight to be gained on the question from Pfizer's (or any other company's) debt ratings.
Someone help me with this one. These are the same banks that are already over extended going to help out the monolines, etc?
Is it possible for us consumers to start giving FICO scores to the banking institutions and rating the rating agencies ourselves?
I'd like to give CW a 515 BOA a 612, Moody's a bb which means that they cant rate anything above them..
consumer driven.....
.....why is the dollar loosing ground so rapidly...i have never seen it fall as fast as it has in one day...curious minds want to know.
New Jersey Governor Jon Corzine proposed a $33 billion budget that would reduce spending from the current year by cutting at least 3,000 jobs, eliminating three state departments and scaling back property-tax rebates.
New Jersey's Corzine Proposes Budget That Cuts Jobs (Update4) - Bloomberg.com
I'm from NJ originally, and NJ faces some really tough choices.
One problem is having 566 municipalities, each with own services, which leads to horrific property taxes.
Another was the bullshit Whitman tax cuts.
lastly, bond issue after bond issue after bond issue. HELOCing the state, one bond issue at a time!
borkafatty: ".....why is the dollar loosing ground so rapidly...i have never seen it fall as fast as it has in one day...curious minds want to know."
Russia quietly prepares to switch some oil trading from dollars to rubles
http://www.iht.com/articles/2008/02/25/business/place.php
.....why is the dollar loosing ground so rapidly...i have never seen it fall as fast as it has in one day...curious minds want to know.
I dunno, but when the Fed says that growth is more of a priority than inflation, that tells me they're going to blow more bubbles.
Since bubbles destroy economies it's only fitting that the dollar should decline significantly IMO.
Greenspan Says Gulf Inflation Will Fall If Dollar Peg Is Dropped: http://www.rttnews.com/forex/economicnews.asp?date=02/26/2008&item=10
Iran may sell oil in rubles to break 'dollar slavery': http://www.iranfocus.com/modules/news/article.php?storyid=14209
Bloomberg - Dollar Falls to Record Low as Home Prices, Confidence Slump
Dollar Falls to Record Low as Home Prices, Confidence Slump - Bloomberg.com
Vice Chairman Donald L. Kohn at the University of N. Carolina 2/26/08:
FRB: Speech--Kohn, U.S. Economy and Monetary Policy--February 26, 2008
52 week dollar low = 74.484 2007-11-12
Current: 74.745
http://quotes.ino.com/chart/?s=NYBOT_DX&v=s
*** 52wk Low\t74.484\t Date\t2007-11-23
No close above 1375 spus , please.
4822,
Noted on an earlier thread...we don't seem to be bouncing off of 75, do we?
borkafatty writes:
.....why is the dollar loosing ground so rapidly...i have never seen it fall as fast as it has in one day...curious minds want to know.
The news drivers was the better than expected German confidence report, then followed rapidly by the PPI, and consumer confidence numbers this am. Bloomberg's article on it is:
Dollar Falls to Record Low as Home Prices, Confidence Slump - Bloomberg.com
IMO, the final nail in the coffin was this piece of shit in Fed Vice-chair Kohn's speech:
And expected policy easing likely contributed to the drop in the foreign exchange value of the dollar, which is bolstering our exports.
FRB: Speech--Kohn, U.S. Economy and Monetary Policy--February 26, 2008
So, he is fully acknowledging that cutting interest rates trashes the US$ but he LIKES it and he is going to continue cutting interest rates and the US$ can go to pot.
Having said that.. I'm going to sell some of the Euro ETFs towards the end of today, if this rapid rise holds - never mind the explanations, price action should always be given the respect it deserves. I can always jump back in tomorrow.
-K
CNBC & Charley "Last" Gasparino at it again, for the 3rd day n a row, at 3:30pm EST spreading more rumors on world-wide TV...
Where on earth is the SEC, NASD, or FCC?
How is this daily rumor-spreading and blatant market manipulation on CNBC LEGAL?
Thanks in advance for any thoughts from the legally-minded.
IMO
Br - it's called free speech on teevee and that is funny coming from a blogger...
"So, he is fully acknowledging that cutting interest rates trashes the US$ but he LIKES it and he is going to continue cutting interest rates and the US$ can go to pot."
I do not think he likes it, but it may have a better chance of keeping most of us working. Of course relative to necessities we will be cash poor and highly in debt to boot.
That depends on the long end of the curve, doesn't it?
Pfizer grew for years by buying up the small biotechs. None left to buy anymore so of course their growth is slowing.
Says something that they want to license some of their new drugs from foreign companies - we are totally losing yet another of our technical advantages due to lack of government support for scientific research.
Stupid, stupid, stupid country.
I do not think he likes it, but it may have a better chance of keeping most of us working. Of course relative to necessities we will be cash poor and highly in debt to boot.
TG | 02.26.08 - 3:58 pm | #
Bingo.
Until the trade & CA deficit get back in line we can expect a weak dollar. Means we get to keep working but for less money measured as a basket of global currencies.
Sort of like share croppin'...
Big changes in the biotech world - I'm aware of some big firms moving major portions of their R&D to China. So much for high-paying PhD jobs in biochem & bioinformatics.
OT. I'm a bit of a weather geek and after the reworking of the NOAA, I could not find my forecasting tools until recently.
i'm estimating a 75% chance of moderate to very severe drought in the midwest and south this spring/summer.
this is what i get when i plug in the precipitation anomalies using the average of 6 forecast variables-
404 Not Found
(this was the model for last year, and it is very mild in comparison)
404 Not Found
(and for 04, fyi)
404 Not Found
combine that with rapidly increasing commodity inflation, individual asset deflation and i'm tinking - Dustbowl v.2, weeee!
oh, and add in the mandated ethanol debacle to corn and feed corn prices, and an already shrinking stockpile of wheat, etc. from a 56% increase in export as China and everyone started hoarding, and we're looking at potential famine scenarios and potential government stupidity. the latter, even more so than normal.
Wheat Breaches $12 for First Time After Biggest Gain Since 2002 - Bloomberg.com
BUT. the good news is that the hurricane season should be quite mild (for the US, not Asia) if the vertical wind shear theory (due to global warming) is correct. i'm still working out the ramifications of that...
just wanted to keep you guys in the loop.
Hmmmmmm...
U.S. accounting rule makers to get overhaul
NEW YORK, Feb 26 (Reuters) - The Financial Accounting Foundation, which oversees U.S. financial accounting rule makers, voted on Tuesday to reduce the size of the Financial Accounting Standards Board and increase the power of its chairman.
FASB will be reduced from seven members to five, effective July 1, and the board's chairman will have agenda-setting authority, according to an announcement of the decision.
[snip]
I do not think he likes it, but it may have a better chance of keeping most of us working. Of course relative to necessities we will be cash poor and highly in debt to boot.
Also other countries don't like it. In the euro area you're really starting to hear some squealing about the weak dollar.
Trade conflicts were a major exacerbating factor during the Great Depression.
"we're looking at potential famine scenarios"
I imagine the govt. just might change its ethanol policy if starvation were to occur.
People might also chose to eat rather than drive or fly (substitution effect due to relative prices). But maybe this idea just reflects my NY sensibilities.
damn those pesky italics
The dollar has been in this trading range since like mid October. Why the fuss today?
Cheers,
"I imagine the govt. just might change its ethanol policy if starvation were to occur. "
One can only hope cooler heads will prevail. (snicker)
I'm guessing price fixing, tariff's, protectionism, hoarding, the usual.
More bikes, less beef, reflects my NYC sensibilities.
OT. I'm a bit of a weather geek and after the reworking of the NOAA, I could not find my forecasting tools until recently. Alan Greenspend
AG - check out WOI radio online from Iowa State Univ.
WOI is Iowa Public Radio
Every Friday Noon-1PM CST they have a weather call in to ISUs top climatologist. About this time of year they start watching the Bermuda High & SOI (El Nino)... and something else in the Gulf of Alaska. All are highly predicitve of whether the US Grain Belt is wet dry or in between.
I haven't checked in with them lately but if you can log in I'd start doing it every Friday. I frequently listen to them on the air when I'm on the road - haven't been in the area on a Friday lately though.
Why the fuss today?
I'd say because its off almost a full percent today and on the verge of breaking near term support.
Look out below...
Also other countries don't like it. In the euro area you're really starting to hear some squealing about the weak dollar.
Tough shit - we are not their dumping ground.
I mean they can't have it both ways... either they get a dollar in exchange that is valuable because we aren't running a monster trade deficit - we make & trade stuff with them instead.
OR
They bust ass to make stuff for us and get little pieces of paper they can exchange for promises we will pay them with more little pieces of paper.
World has to choose which it will be - take some of the stuff we make or take our promises & little bits of paper. I find it astonishing that otherwise smart people don't get this.
World has to choose which it will be - take some of the stuff we make or take our promises & little bits of paper. I find it astonishing that otherwise smart people don't get this.
Oh ya one other option - quit sending us shit and we either go without or make it ourselves. That should be fun - watching paper pushers find their inner factory child.
Thanks dryfly, well worth a long distance call to compare data and modeling techniques.
Any local NYC weather geeks, there is an art/weather lecture on Sunday -
"Please join us for the first SP Weather Station Guest Lecture
(free and open to the public)
Sunday, March 2, 3:00 PM
LoVid (Tali Hinkis and Kyle Lapidus) and Douglas Repetto
speak about Cross Current Resonance Transducer (CCRT)
SP Weather Station
46-01 5th Street, Long Island City
(go to side entrance on 46th Ave between 5th Street and Vernon Ave)"
http://spweatherstation.net/
dryfly,
I think Wall Street shipped out some crap too.
Cheers,
lunatic fringe,
Nothing in today's $ chart is making me nervous.
Cheers,
Alan Greeenspend and dryfly
This is what you are looking for
http://www.cdc.noaa.gov/Drought/
A more global view
IRI Lamont
What about the NCUA?
Do they do separate reporting? If so I'd like to see how that side of the equation looks.
Karen Feinerman and Jeff Macke on Fast Money yesterday said blindly "you have to buy on bad news".
Personally I like this plan. With all the bad news yet to come, the market will soar and I can retire early.
sbarrkum,
thanks for the links. your first link was more of a historical viewpoint and the second, the IRI tends to just use 2 models of SST analysis, not any of the 6 standard models of the NOAA, although quite interesting.
but hey, weather forecasting is an even more dismal science than economics!
but hey, weather forecasting is an even more dismal science than economics!
Ya it can be. I was criss crossing Iowa & Missouri during the Floods of '93 and all I ever heard were more forecasts of rain!
BTW - a lot of the folks who call in on that Iowa Public radio call in only want weather reports... but if you have your models together the host will usually compare what they have going on at Iowa State OR encourage you to email them. These guys are really something else.
It is usually hosted by either Harry Hillaker or Elwynn Taylor.
And 'yes' the early indicators say it does look like drought. LINK
Yal,
I took a stab at finding the Krugman article you wanted and came up with this from an MIT site:
The energy crisis revisited
saying something about the monoline's insurance of VIEs (variable interest entities)
All right, someone's got to do it.
It's not the economy stupid! C'est la vie!
borkafatty: why is the dollar loosing ground so rapidly...
Wowsers! http://www.bankofcanada.ca/fx/iexe0102.gif
Well, Fannie's '07 10-K is coming out tomorrow. Nationalization of the big GSEs would dilute the currency a bit. (just thrashing)
donna: ... we are totally losing yet another of our technical advantages ...
Well, if I'm going to be off-topic, I might as well be off-topic. As you can see from the link, just before the war broke out I was haranguing a room full of pharma researchers on a way to improve database searching. Sigh
Nemo: you can get an idea of the banks that are NOT in good shape by going to bankrate.com where they have a "safe and sound" facility that rates the soundness of banks. If you know the bank you are interested in you can find out quite quickly what their rating is. They rate banks from 1 star (lowest quality) to five stars. And conversely from 1 (highest) to 5 (lowest) quality.
Russia quietly prepares to switch some oil trading from dollars to rubles
Well not quite. The article says that they are going to denominate the contracts in rubles, not that buyers are going to pay in rubles. This is notational only for a current trade and is meaningful only for futures. But a buyer can lock in a USD price through currency futures if they want. Both the commodity futures and currency futures markets track the same expected exchange rate variations.
If Russia sells oil to Germany for example, the latter is most likely going to pay in Euros, as the Russians want Euros to buy all their BMW's and what have you.
What it seems to be all about is that the Russians see an unexpected major devaluation of the USD as a threat and want to protect themselves from it. Which is the message we are getting from all commodity markets.
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