ABK will announce it's raising cash and any potential downgrade will be put off in light of that fact. I'm sure there are enough banks out there with exposure -- do I hear BS/JPM -- that someone will stump up another billion or two just to keep the wheels from coming off.
AAPL was an upside blowout. Projections light for Q3, but they have a history of doing that. There's not much for the bears but not that much more for the bulls. Mac sales up huge... 51% YoY. iPhone down 1.7% sequentially. No, this was a good quarter.
"Fed Continues to Treat Symptoms, Not Disease (TAF/Derivatives Edition)"
of note and on topic in the second half of the post, the story referenced a law suit brought by the state of Massachusetts and the use of "novation"... transfereing investments without investors knowlege nor permission.
my question is how wide spread is "novation". I "fired" an investment broker who had engaged in a scheme i did not understand where by municipal bonds i requested and purchased for my account, where loaned for a term and a fee to a broker dealer.
i only discovered this tactic when my municiple bond acrued a federal a tax liability due to my account being paid a "premium" that WAS reported on a 1099 as a taxable event.
i asked for an explanation...got confabulation...and sought a new bond trustee.
NOVATION...is that part (part) of the problem with the overall stress on financial system?
You don't think discount brokers operate for the juicy commissions do ya? Security repurchase agreements are a big business for every shop on/off the street...run through NSCC even.
The more interesting part of the video was the contrasting views on commodity price inflation. Mason's point on us policy regarding biofuels vs. the economist from Barclay's view that high commodity prices were a function of growth in China and that was good. How does growth in China contribute to an increase in the price/shortage of rice globally.
BENTONVILLE, Arkansas -- Sam's Club, the membership warehouse division of Wal-Mart Stores Inc., is limiting how much rice customers can buy because of what it calls "recent supply and demand trends."
The broader chain of Wal-Mart stores has no plans to limit food purchases, however.
Sam's Club says it will limit customers to four bags at a time of Jasmine, Basmati, and long-grain white rice. Rice prices have been hitting record highs recently on worries about tight supplies.
Sam's Club's restriction is effective immediately at all locations where quantity restrictions are allowed by law. It does not apply to other staples such as flour or oil.
This whole thing is a crack up boom of epic proportions.
Ambac dropped 43% today, MBIA 34%. The market is not making a big distinction between monoline mortgage/CDO insurers who announced bad results yesterday versus those who will probably announce them in a week.
knew a bit about repurchase agreements, but didn't think my bond trustee could play those games with this particular security.
as for stock borrow agreement... a frequent poster here YTL linked a vid regarding stock FTDs by broker dealers and that info opened my eyes to the ponzi scheme of the delayed and barrowed stock delivery process.
is the system the house of cards it seems to be... or am i just a coward...the more i learn the less i sleep.
Commercial real estate has yet to see a true 2008 CMBS come to market. Lehman priced one last week, but most of the bonds were pre commercial melt down (Oct07). Another bond is being priced next week, but again many of the loans are 4 to 12 months old (this would have been unheard of a year ago).
I doubt commercial debt spreads can fall further, but future commercial real estate losses remain hard to predict.
That Sam's Club news is not good. Not good at all. Regardless of the size of the bags, that there is a need to limit the amount of rice a consumer can purchase rather than simply raising the price of rice shows that we are facing serious supply problems. When talking about rice (a product that can keep you alive rather than simply making your quality of life better), price increases are irrelevant in the face of dwindling supply.
The Fed wants to cut rates to help the banks become solvent eventually by interest rates differentials... but the rate cuts are leading to dollar devaluation... and since the USD is the currency in which food commodities are denominated ... thats part of the reason why the commodities are booming. This leads to inflation which leads to money chasing more commodities to hedge against it... which leads to higher commodity prices and will eventually lead to famine in parts of the world.
So... if you were Ben who would you save? A few million people or a few banks?
LOS ANGELES (Reuters) - Starbucks Corp (SBUX.O: Quote, Profile, Research) said on Wednesday it was the latest victim of the U.S. mortgage meltdown.
Blaming consumers in hard-hit housing markets of California and Florida, the coffee shop chain slashed its quarterly and 2008 profit forecast below Wall Street targets and said it faced the "weakest economic environment" in its history.
The company's shares tumbled 12 percent on the news, which came four months after company founder Howard Schultz returned as chief executive with a mandate to turn around the struggling U.S. business.
Shocking. They don't even have to send a stockboy over to slap price stickers on the items. They can sit in the control room and dynamically change prices, like in the spot market, after each bag gets hoisted off the rack.
By the time a customer walks from the shelf to the checkout counter, prices can go up 20%. Sound like Argentina?
I'm carrying 44,000 lbs of junk food on the back of my trailer , as i write. I train new driver's, so i'm not actually driving right now. I'm in Nebraska currently, and i'm booked for loads thru next week. At any time, let me know and for the right price, i can obtain and Deliver up to 44k lbs of whatever you want.
I have in my possession a blank slip found in a fortune cookie six weeks ago. Some kind of omen?
One part of me says to save it for a troubled day and write in my own fortune.
I think we should all order our chinese food with NO rice. They give too much anyway, it isn't good for you and I throw away at least half. Then they will stop serving so much and have no need to hoard.
The Fed wants to cut rates to help the banks become solvent eventually by interest rates differentials... but the rate cuts are leading to dollar devaluation... and since the USD is the currency in which food commodities are denominated ... thats part of the reason why the commodities are booming. This leads to inflation which leads to money chasing more commodities to hedge against it... which leads to higher commodity prices and will eventually lead to famine in parts of the world.
So... if you were Ben who would you save? A few million people or a few banks?
This isn't Ben's fault - I can blame Ben for lotsa crap but this isn't one of them - its a dish we've been cookin' for twenty fucking years.
We've been pumpin' dollars out into the world via our deficits to the tune of a half trillion dollars to almost a trillion dollars per year for as long as many of us have been working, borrowing & spending. Our trading partners have been sending us crap & stashing & bogarting the resultant dollars they receive in exchange like no tomorrow thinking - hey its rock solid reserve currency - no sweat.
Now they need to use those bills to buy food and guess what - there isn't enough food & too many dollars. Shocking that the prices would skyrocket, eh?
There is NOTHING Ben can do to grow more rice... and the dollars are already out there in spades.
If Ben raises rates then he faces both a credit crisis AND accelerating deficits (future crises) AND growing domestic unemployment. By easing he drew attention the fact the emperor (the dollar) had no clothes. It was no win from the get-go... it really was baked in.
This is not something that just happened yesterday - this dollar flood - its been going on for a generation. We've all been a part of it - everyone who has bought cheap Chinese crap & Saudi oil (dryfly raises hand - 'me too'). Foreign community just woke up and said 'Hot damn - look at all these dollars we got... are they any good? Lets find out?' And SUUU-PRISE they aren't near as good as they thought 'cause there are way too many of them. Everybody has a huge stash of them.
This is not going to work out quickly or painlessly - the result of the work out will be that we here in the US are going to be a whole lot poorer than we thought... we'll have to actually start carrying some of our own fat weight.
The same will be true for countries that hoarded dollars - they will discover they too are poorer than they thought. They got beau coup dollars but they don't buy as many goods 'cause there are too many of them. Next time maybe they will hoard rice instead.
True one cannot blame Ben for the past twenty years.. Future cause is debatable. If it makes more sense to hoard rice than dollars you will get less planting and more hoarding. Ben has been for awhile stating the problem with the world was oversavings by others and not that we were borrowing and consuming to much. I agree we are going to be much poorer. I have been working on my fat stockpile for twenty plus years.
This is not going to work out quickly or painlessly - the result of the work out will be that we here in the US are going to be a whole lot poorer than we thought... we'll have to actually start carrying some of our own fat weight.(dryfly)
For years the ecofreaks have been arguing that we couldn't go on forever, using up limited resources. The financial curmudgeons argued that we couldn't go on forever living on borrowed money.
that there is a need to limit the amount of rice a consumer can purchase rather than simply raising the price of rice shows that we are facing serious supply problems
frankly, no one is going to be without rice here. i'm sure what they are doing this for is to prevent folks from buying bags and shipping them to other places. it would be very easy to sell and ship over the internet, or to ship to relatives in another locale. They're not going to make any money from a customer that pulls in with a pickup and buys 25 bags now are they? Think about it.
What a sad, sad, pathetic affair the whole ratings process has been exposed to be. Utterly impotent. Mason says "way past time"... really, are you sure? Wouldn't want to be to hasty now.
From Mr. Dry: Now they need to use those bills to buy food and guess what - there isn't enough food & too many dollars. Shocking that the prices would skyrocket, eh?
How about this angle: Really, the dollars don't flow to foreign countries -it's electronic right. So when Dung Fu Ming wants to draw on his account guess who has to print- The bank of China- right. Now we have our printing (not here in the U.S., but overseas), but what does it matter now that we're all linked globally. Printing is printing- eh. By way of easy credit and our insatiable appetite for widgets, war and oil we have contrived to export the expansion of credit and money to the rest of the world and that = inflation. Now you are in China or Egypt or Sam's Club and your under-employed, worried about the future- and whola- your asking yourself do I have enough food. Should I stock up for a rainy day. This is the dynamic I believe is at work here.
Ambac and all the others will retain their AAA rating even as they go out of business. Okay, they actually won't go out of business - the taxpayer will bail them out, too, of course. Anything else would risk the house of cards falling over and then some executive somewhere wouldn't get to buy a second weekend yacht, and we can't have that! As for millions starving in the world, the people in charge don't care about them; they'll just revise the inflation figures until nothing is measured by them as they keep on churning out dollars.
Enjoy the $4 a gallon gas since it is just a brief stop on the way to $5 a gallon.
Uno
OT
Going to be a good day tomorrow.
AAPL Tanking
AMZN Tanking
SBUX Tanking
Let's give props to all the people who read this blog for knowing this a few months ago.
ABK will announce it's raising cash and any potential downgrade will be put off in light of that fact. I'm sure there are enough banks out there with exposure -- do I hear BS/JPM -- that someone will stump up another billion or two just to keep the wheels from coming off.
AAPL was an upside blowout. Projections light for Q3, but they have a history of doing that. There's not much for the bears but not that much more for the bulls. Mac sales up huge... 51% YoY. iPhone down 1.7% sequentially. No, this was a good quarter.
CNBC segment with shadowy indications there could be "2 or 3 investors" looking at ABK.
It appears we're back to the daily Gasparino-fest until they raise capital.
over at naked capitalism YS talks about...
"Fed Continues to Treat Symptoms, Not Disease (TAF/Derivatives Edition)"
of note and on topic in the second half of the post, the story referenced a law suit brought by the state of Massachusetts and the use of "novation"... transfereing investments without investors knowlege nor permission.
my question is how wide spread is "novation". I "fired" an investment broker who had engaged in a scheme i did not understand where by municipal bonds i requested and purchased for my account, where loaned for a term and a fee to a broker dealer.
i only discovered this tactic when my municiple bond acrued a federal a tax liability due to my account being paid a "premium" that WAS reported on a 1099 as a taxable event.
i asked for an explanation...got confabulation...and sought a new bond trustee.
NOVATION...is that part (part) of the problem with the overall stress on financial system?
sorry, previous post was on topic for the previous thread about ambac suing bear sterns... the state of mass is suing BS for similar reasons, i think
"Fed Continues to Treat Symptoms, Not Disease (TAF/Derivatives Edition)"
Kinda hard when the disease is using monetary policy to drive the economy and that's your job description.
What does it matter now that the Fed is already holding the AAA turds?
"Fed Continues to Treat Symptoms, Not Disease (TAF/Derivatives Edition)"
Kinda hard when the disease is using monetary policy to drive the economy and that's your job description.
Amen!
Mock Turtle...
You don't think discount brokers operate for the juicy commissions do ya? Security repurchase agreements are a big business for every shop on/off the street...run through NSCC even.
Key words:
Stock Repo Agreement
Stock Borrow Agreement
This came across briefing.com this afternoon:
15:40 \tABK AMBAC Fincl: S&P says Q1 results won't result in rating change - Bloomberg (3.29 -2.74) -Update-
Wow! Mason said that?! Mason's a rockstar! That guy moves mountains.
On a seperate note, who the hell is Mason?
Must be a slow news day...
Mason and Rosner, of the "why is no one listening to us?" crowd.
The more interesting part of the video was the contrasting views on commodity price inflation. Mason's point on us policy regarding biofuels vs. the economist from Barclay's view that high commodity prices were a function of growth in China and that was good. How does growth in China contribute to an increase in the price/shortage of rice globally.
BENTONVILLE, Arkansas -- Sam's Club, the membership warehouse division of Wal-Mart Stores Inc., is limiting how much rice customers can buy because of what it calls "recent supply and demand trends."
The broader chain of Wal-Mart stores has no plans to limit food purchases, however.
Sam's Club says it will limit customers to four bags at a time of Jasmine, Basmati, and long-grain white rice. Rice prices have been hitting record highs recently on worries about tight supplies.
Sam's Club's restriction is effective immediately at all locations where quantity restrictions are allowed by law. It does not apply to other staples such as flour or oil.
This whole thing is a crack up boom of epic proportions.
Ambac dropped 43% today, MBIA 34%. The market is not making a big distinction between monoline mortgage/CDO insurers who announced bad results yesterday versus those who will probably announce them in a week.
Enfinity
thanks for the direction
i got a lot to learn...
knew a bit about repurchase agreements, but didn't think my bond trustee could play those games with this particular security.
as for stock borrow agreement... a frequent poster here YTL linked a vid regarding stock FTDs by broker dealers and that info opened my eyes to the ponzi scheme of the delayed and barrowed stock delivery process.
is the system the house of cards it seems to be... or am i just a coward...the more i learn the less i sleep.
Commercial real estate has yet to see a true 2008 CMBS come to market. Lehman priced one last week, but most of the bonds were pre commercial melt down (Oct07). Another bond is being priced next week, but again many of the loans are 4 to 12 months old (this would have been unheard of a year ago).
I doubt commercial debt spreads can fall further, but future commercial real estate losses remain hard to predict.
Big...
But doesn't Sam's Club sell rice by the 50 lb sack? Maybe it was cheaper to buy it in bulk @ Sam's then on the spot market?
FYI Costco is limiting rice too, just hasn't hit the tape yet.
Why can't they go back to hoarding toilet paper?
That Sam's Club news is not good. Not good at all. Regardless of the size of the bags, that there is a need to limit the amount of rice a consumer can purchase rather than simply raising the price of rice shows that we are facing serious supply problems. When talking about rice (a product that can keep you alive rather than simply making your quality of life better), price increases are irrelevant in the face of dwindling supply.
I am officially concerned now.
So here's the dilemma right?
The Fed wants to cut rates to help the banks become solvent eventually by interest rates differentials... but the rate cuts are leading to dollar devaluation... and since the USD is the currency in which food commodities are denominated ... thats part of the reason why the commodities are booming. This leads to inflation which leads to money chasing more commodities to hedge against it... which leads to higher commodity prices and will eventually lead to famine in parts of the world.
So... if you were Ben who would you save? A few million people or a few banks?
Some I dont think he obsesses over it too much.
Why would Sam's start rationing? If they're going to sell it all out anyway, why not just jack up the price?
LOS ANGELES (Reuters) - Starbucks Corp (SBUX.O: Quote, Profile, Research) said on Wednesday it was the latest victim of the U.S. mortgage meltdown.
Blaming consumers in hard-hit housing markets of California and Florida, the coffee shop chain slashed its quarterly and 2008 profit forecast below Wall Street targets and said it faced the "weakest economic environment" in its history.
The company's shares tumbled 12 percent on the news, which came four months after company founder Howard Schultz returned as chief executive with a mandate to turn around the struggling U.S. business.
Starbucks slashes outlook, blames housing meltdown
| Reuters
Pulte beat analysts numbers!
Yahoo! 404 - Page Not Found
And by beat I mean missed by almost 4x
GMAC and ResCap downgraded by Moody's
grim, here's the link
Moody's downgrades GMAC, ResCap ratings - MarketWatch
Bloomberg: Bondholders Lucky to Get 10 Cents in Looming Defaults
Bondholders Lucky to Get 10 Cents in Looming Defaults (Update1) - Bloomberg.com
Credit Suisse May Post Quarterly Loss on SF5 Billion Writedown Credit Suisse May Post Quarterly Loss on SF5 Billion Writedown - Bloomberg.com
London Office Market Faces `Stress' Amid Credit Slump
London Office Market Faces `Stress' Amid Credit Slump (Update1) - Bloomberg.com
"why not just jack up the price"
Shocking. They don't even have to send a stockboy over to slap price stickers on the items. They can sit in the control room and dynamically change prices, like in the spot market, after each bag gets hoisted off the rack.
By the time a customer walks from the shelf to the checkout counter, prices can go up 20%. Sound like Argentina?
GOOD JOB BEN!
Cal writes:
Pulte beat analysts numbers!
Yahoo! 404 - Page Not Found earns_pulte_2
And by beat I mean missed by almost 4x
Cal | Homepage | 04.23.08 - 6:28 pm | #
But Bill Miller said a miss of 4x expectations is already priced in.
The Sams Club / Costco rice story is the top story in the business section of the LA Times
I'm carrying 44,000 lbs of junk food on the back of my trailer , as i write. I train new driver's, so i'm not actually driving right now. I'm in Nebraska currently, and i'm booked for loads thru next week. At any time, let me know and for the right price, i can obtain and Deliver up to 44k lbs of whatever you want.
No shortages from my vantage point, Yet
"The Sams Club / Costco rice story is the top story in the business section of the LA Times"
The result of this: massive run on rice at Sams/Costco.
Bye Bye Rice. And don't try to ask for a second bowl the next time you eat out for Asian food.
"Uncle Ben's Helicopter Rice"
4822: I am hysterically laughing here... would be funny if it wasnt going to mean famine and a few million souls.
I have in my possession a blank slip found in a fortune cookie six weeks ago. Some kind of omen?
One part of me says to save it for a troubled day and write in my own fortune.
CurlyDan
I think we should all order our chinese food with NO rice. They give too much anyway, it isn't good for you and I throw away at least half. Then they will stop serving so much and have no need to hoard.
So much good news today! Good thing we've already reached bottom or I might begin to worry a bit!
Is rice sticky?
Jack writes: Is rice sticky?
Only on the way down.
"Uncle Ben's Helicopter Rice"
4822, you SOB. Thanks to you I now have an ounce of Dogfish Head 60-Minute IPA all over my Macbook Pro.
Not that I'm worried about the computer (God bless AppleCare) ... but the beer, man! Do you have any idea how expensive hops are these days?!
UncleBens.com - Instant & Long Grain Rice Recipes - Wild, White, & Brown Rice Recipes - Healthy Meal Solutions
Some great free recipes here. Maybe the McCain's will try and pirate them.
Screw that, they should be upgraded to AAAA (QuadA...) That'll show you all.
The Fed wants to cut rates to help the banks become solvent eventually by interest rates differentials... but the rate cuts are leading to dollar devaluation... and since the USD is the currency in which food commodities are denominated ... thats part of the reason why the commodities are booming. This leads to inflation which leads to money chasing more commodities to hedge against it... which leads to higher commodity prices and will eventually lead to famine in parts of the world.
So... if you were Ben who would you save? A few million people or a few banks?
This isn't Ben's fault - I can blame Ben for lotsa crap but this isn't one of them - its a dish we've been cookin' for twenty fucking years.
We've been pumpin' dollars out into the world via our deficits to the tune of a half trillion dollars to almost a trillion dollars per year for as long as many of us have been working, borrowing & spending. Our trading partners have been sending us crap & stashing & bogarting the resultant dollars they receive in exchange like no tomorrow thinking - hey its rock solid reserve currency - no sweat.
Now they need to use those bills to buy food and guess what - there isn't enough food & too many dollars. Shocking that the prices would skyrocket, eh?
There is NOTHING Ben can do to grow more rice... and the dollars are already out there in spades.
If Ben raises rates then he faces both a credit crisis AND accelerating deficits (future crises) AND growing domestic unemployment. By easing he drew attention the fact the emperor (the dollar) had no clothes. It was no win from the get-go... it really was baked in.
This is not something that just happened yesterday - this dollar flood - its been going on for a generation. We've all been a part of it - everyone who has bought cheap Chinese crap & Saudi oil (dryfly raises hand - 'me too'). Foreign community just woke up and said 'Hot damn - look at all these dollars we got... are they any good? Lets find out?' And SUUU-PRISE they aren't near as good as they thought 'cause there are way too many of them. Everybody has a huge stash of them.
This is not going to work out quickly or painlessly - the result of the work out will be that we here in the US are going to be a whole lot poorer than we thought... we'll have to actually start carrying some of our own fat weight.
The same will be true for countries that hoarded dollars - they will discover they too are poorer than they thought. They got beau coup dollars but they don't buy as many goods 'cause there are too many of them. Next time maybe they will hoard rice instead.
Added audio of the Bloomberg Ambac discussion here-
drop.io sacrealstats001
This isn't Ben's fault
True one cannot blame Ben for the past twenty years.. Future cause is debatable. If it makes more sense to hoard rice than dollars you will get less planting and more hoarding. Ben has been for awhile stating the problem with the world was oversavings by others and not that we were borrowing and consuming to much. I agree we are going to be much poorer. I have been working on my fat stockpile for twenty plus years.
This is not going to work out quickly or painlessly - the result of the work out will be that we here in the US are going to be a whole lot poorer than we thought... we'll have to actually start carrying some of our own fat weight.(dryfly)
For years the ecofreaks have been arguing that we couldn't go on forever, using up limited resources. The financial curmudgeons argued that we couldn't go on forever living on borrowed money.
It turns out they were both right.
Just bought a bag of Super Lucky Elephant rise at my Costco. No rationing in Kansas City.
Finally got the wedgy out of my Ambac shorts.
that there is a need to limit the amount of rice a consumer can purchase rather than simply raising the price of rice shows that we are facing serious supply problems
frankly, no one is going to be without rice here. i'm sure what they are doing this for is to prevent folks from buying bags and shipping them to other places. it would be very easy to sell and ship over the internet, or to ship to relatives in another locale. They're not going to make any money from a customer that pulls in with a pickup and buys 25 bags now are they? Think about it.
Aw, hell, d-, we need a live whipping boy. Greenspan looks to be on his last legs.
I vote for Ben for striping!
Just bought a bag of Super Lucky Elephant rise at my Costco
Huh. Here the brand is "Lucky Panda Laughing Loudly".
What a sad, sad, pathetic affair the whole ratings process has been exposed to be. Utterly impotent. Mason says "way past time"... really, are you sure? Wouldn't want to be to hasty now.
S&P and Moody's will never ever ever ever downgrade MBIA or Ambac.
"S&P and Moody's will never ever ever ever downgrade MBIA or Ambac."
It might weaken our strong dollar policy.
Obligatory farm aphorism for Ambac AAA rating:
"This issue keeps popping up like a dead horse floating down a river."
I bet Ambac will be the first company to declare bankruptcy while holding a AAA rating.
From Mr. Dry: Now they need to use those bills to buy food and guess what - there isn't enough food & too many dollars. Shocking that the prices would skyrocket, eh?
How about this angle: Really, the dollars don't flow to foreign countries -it's electronic right. So when Dung Fu Ming wants to draw on his account guess who has to print- The bank of China- right. Now we have our printing (not here in the U.S., but overseas), but what does it matter now that we're all linked globally. Printing is printing- eh. By way of easy credit and our insatiable appetite for widgets, war and oil we have contrived to export the expansion of credit and money to the rest of the world and that = inflation. Now you are in China or Egypt or Sam's Club and your under-employed, worried about the future- and whola- your asking yourself do I have enough food. Should I stock up for a rainy day. This is the dynamic I believe is at work here.
Is rice sticky?
Apparently more so than home prices
Ambac and all the others will retain their AAA rating even as they go out of business. Okay, they actually won't go out of business - the taxpayer will bail them out, too, of course. Anything else would risk the house of cards falling over and then some executive somewhere wouldn't get to buy a second weekend yacht, and we can't have that! As for millions starving in the world, the people in charge don't care about them; they'll just revise the inflation figures until nothing is measured by them as they keep on churning out dollars.
Enjoy the $4 a gallon gas since it is just a brief stop on the way to $5 a gallon.