Blogs

  • Citi Gets More "Gov't Money"...

    * Bailout fuels a rally... * How long the rally last? * A slew of data today... * Thoughts from Jim Rogers... ** Citi Gets More "Gov't Money"... Good day... And a Terrific Tuesday to you! Now that was quite the Investment Conference I just attended and gave two presentations to! Someone sent me a headline that appeared on the internet prior to the Conference that read: Three Kings of the Financial World on Tap to Speak for the Next WMI M2... And guess what? They considered me as one of those in the headline! WOW! OK, no... I'm not getting a big head, I've got my beautiful bride to keep me humble. She responded to hearing about this article with a heaping helping of, "OK King, take out the trash!" HAHAHAHAHAHA! OK... Chris left me some notes about the currency markets yesterday, so let's listen in to what Chris had to say, since he was here, and I was driving an hour to the airport in Fort Meyers, flying, and driving home yesterday. Herrrrreeee's Johnny! I mean Chris!...
  • The Paradox of Deleveraging Will Be Broken

    We are clearly not having as much fun taking off leverage as we had putting it on, or at least the vast majority are not. This week in Outside the Box we look at some very thought-provoking insights from my good friend Paul McCulley, who helps us think about how we got here and what will be the end point. From the letter: 'But what ailed Lehman was but a manifestation of what ailed, and ails the global financial intermediary system: the presumption that grossly levered positions in illiquid assets can always be funded, because those doing the funding will always assume the borrower is a going concern.' You need to read this when you have the time to think. The quotes from Keynes are important....
  • Obama picks his economic team...

    * Obama picks his economic team... * Nordic currencies rise... * US floods market with dollars... * China looks to keep growth at 8%... ** Obama picks his economic team... Good day... Hope everyone had a great weekend, mine sure was. We had a fun time Friday night bowling and playing pool at our Xmas party. Unfortunately Chuck wasn't able to attend, as he was down in Florida speaking at a Wealth Masters Conference. He will be heading back into St. Louis today, and will be back in the saddle tomorrow morning for what will be a short week. The big news over the weekend was the unveiling of President elect Obama's economic team. Obama has picked Timothy Geithner, head of the Federal Reserve Bank of New York, to be his Treasury secretary, and former Treasury chief Lawrence Summers will be White House economic director. Obama is also likely to nominate New Mexico Governor Bill Richardson as Commerce Secretary. Geithner has had a primary role in the Federal Reserve's attempt to steer Wall Street through the current financial tsunami. He also oversees most of the Fed's special lending programs set up this year to channel more than $1 trillion to banks and other financial institutions....
  • The Closing Bell-11/22/08

    Next week is a holiday week. I have to travel 2 days to get my father bring him to our home and take him back. In addition, more family is coming; and I will be doing most of the cooking. I will be staying abreast of the Market; if comments are needed...
    Posted to Steve Cook on Disciplined Investing by Steve Cook on 11-22-2008
  • Leverage Is an 8 Letter Word

    Leverage is an eight-letter word, which the markets now regard as twice as bad as the two four-letter words debt and pain (or fill in your own four-letter words). This week I try to give some insight into what is happening in the credit markets, some of it below the radar screen of most analysts. We will look at the potential for deflation and the Fed's response. There is a lot to cover, so let's jump right in. I talked with a friend who runs a collateralized loan obligation fund, or CLO. There are a lot of these funds in the Shadow Banking System. Typically they buy certain types of debt, with a lot of it in the bank loan space. In the old days of the last few years, banks would make loans to corporations and then sell them to CLOs and other institutions, making a spread on the loan and a profit on the servicing business. Some funds would typically leverage up somewhat and make a decent return....
  • The Stock Playbook 11/21/08

    The market fluctuated throughout most of trading Friday, as fresh concerns over the stability of the financial sector prevented the market from establishing any sustainable gains. But stocks moved sharply higher in the final half hour after a report that...
    Posted to The Stock Playbook by Dave Dispennette on 11-21-2008
  • Misguided risk aversion...

    * Bad data pushes investors into US treasuries... * Barclay's says the euro will rally... * SNB surprises with a rate cut... * Iceland gets their bailout... ** Misguided risk aversion... Good day...The dollar rallied a bit yesterday on some very poor economic data which illustrated just how bad things are getting here in the US. As Chuck has repeatedly told everyone, in the current trade pattern the dollar rallies whenever we get negative data for the US economy. Investors get spooked by this negative data, and run scared into the 'safety' of US treasuries. Ty sent me a quote from respected newsletter owner/author Bill Bonner yesterday: "Misguided risk aversion, anyone? A few months ago, investors stretched for yields. Now, it's safety they reach for...and grab U.S. Treasury debt with both hands. Investors now seem to have an unqualified trust in the full faith and credit of the world's largest debtor. Yields on 91-day T-bills have fallen to 0.11% - scarcely a tenth of one percent!"...
  • Building the Family Venture Capital Fund

    Most people want to help their children and grandchildren, but they want to provide more than money. One goal is to ensure the future generations are hard-working and productive citizens who have initiative. Another goal is to perpetuate the family's...
    Posted to Retirement Watch by Bob Carlson on 11-21-2008
  • Now what do we do?

    Economics This Week’s Data Weekly jobless claims rose 27,000 versus estimates of a decline of 11,000. October leading economic indicators declined .8% versus expectations of a decrease of .6% and an increase of .3% in September. The November Philadelphia...
    Posted to Steve Cook on Disciplined Investing by Steve Cook on 11-21-2008
  • The Stock Playbook 11/20/08

    The market plunged for a second straight day Thursday, falling to a ranges not seen in six years as financial and energy stocks tumbled and as demand for the safety of government debt spiked to historic levels. The Dow fell 444.99, or 5.56 percent, to...
    Posted to The Stock Playbook by Dave Dispennette on 11-20-2008
  • 1930s Parallels Keep Popping Up

    REVIEWING THE 1930s . The Principle of Knowing History . Let me get down on paper a bit about President Hoover (1928 to 1932) and President Roosevelt and the 1930s after nearly finishing up THE FORGOTTEN MAN (2007) by Amity Shlaes. Again, let me recommend...
  • On G-20 and GM: Economics, Politics and Social Stability

    The Big Three have a new customer, and it isn't you. As Detroit's former heavyweights fight for a slice of a $25 billion bailout package, more than humble pie is being eaten. If the automakers fail and take their companies into bankruptcy, Michigan as we know it ceases to exist economically. The trickle-down impact could rapidly become a waterfall: the seat supplier in Georgia loses three major customers. The factory worker who makes seats is out of a job. The bank who holds his mortgage takes another hickey. Commercial lending at that bank dries up. Ad nauseum. In the best of economic times, this would be a troublesome scenario. In today's economy, it's easy to see how policymakers are as worried about social stability as they are economics. No astute person thinks that the Big Three will be able to return to the business practices of last year. And no intelligent investor should be trying to evaluate portfolio decisions the same way this year either. We have moved from the realm of finance to political economy, and for that you need a different set of tools and a different mindset....
  • Association for Investor Awareness - Week of 11/20/2008

    In This Issue:

    Stocks Search For A Bottom
    High Energy Prices Will Return
    Commodities Will Also Rebound
    Infrastructure Spending Is Likely To Soar
    The Bottom Line This Week

    Stocks stumbled badly again last week as deteriorating economic news caused another round of investors to throw in the towel. By Friday afternoon, the Dow and the Nasdaq were down an additional 5.0% and 7.9%. The declines left the two indices down 35.9% and 42.8% for the year. Ouch!

    This week got off to an equally bad start. Although we had a 151 point gain on Tuesday, it was overshadowed by a 651 point slide on Monday and Wednesday.

    ...
  • SNB Cut Rates 100 BPS!

    * Trading Theme returns... * Automakers' bailout vote today... * Not using all your arrows... * Housing Starts go back to 1959! ** SNB Cut Rates 100 BPS! Good day... And a Tub Thumpin' Thursday to you! It's a short week for me, so this IS a Tub Thumpin' Thursday! I head to Florida tomorrow, and I'm ready! After last week, and the cold that's set in here, I'm ready! Too bad I'll be working about 1/2 the time! But, I'm not complainin'! OK... Whew! What an awful day yesterday for the currencies... In the morning, they ere in rally mode with the euro gaining ground to well within the 1.27 handle. But then the Trading Theme set in, and those gains were wiped out. The Trading Theme was set off by the awful Housing data, which reminded everyone of the deep, dark , dangerous days ahead... I bought some euros, and watched them rise, and went off to do something else... When I returned, they had fallen... UGH! The Japanese yen, however, rallied, as is the case with the Trading Theme... Risk trades get unwound, which benefits dollars, and yen. I've explained all this before, so I won't get into it again, but there's someone that has gone into the problems (credit markets and the Fed and Treasury's response to the crisis), and does a great job of telling it like it is... So, instead of hearing from me, ranting and cursing the "leaders" I'll let someone else explain it to you... This is a fellow named Ted Cook, that Ty Keough sent my way......
  • Yesterday was ugly, so is the Open; Patience for the moment

    Normal 0 MicrosoftInternetExplorer4 st1\:*{behavior:url(#ieooui) } <!-- /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:""; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt;...
    Posted to Steve Cook on Disciplined Investing by Steve Cook on 11-20-2008
    Filed under: