MonkeyBusinessBlog

Big Dick Still Knows the Score

Well Richie, by all accounts from my high friends in very low places, last weekend in the NFL might've been the worst week for the Las Vegas sportsbooks ever. The favorites went 10-2-1. When its a disaster for the books, its probably not a great weekend for Big Dick. If you can picture this you'll see what I mean. Think of a degenerate gambler who cant rub two nickels together and has no teeth but still wagers and wagers stupidly, mostly on favorites. Now think of those beautiful facilities in Las Vegas known as casinos where the sportsbooks look like something out of NASA. Which side would you like to be associated with? Toothless and broke or glitz and glamor and riches?  Right. The books dont get beat up for long either. Neither does Big D. Away we go!

 

In the football, the Colts have looked good but the 49ERS are tough. They are 5-0-1 the last 6 times as an underdog. Getting a healthy 12 points, SAN FRAN is the play. The Jets and Miami have been exchanging barbs since the summertime. The Dolphins gave the Jets the business a few weeks back in Miami. Revenge? Perhaps but what we know is the Jets defense will not be embarassed again. The Jets are running the ball very well too. That smells like an UNDER! Finally, the GIANTS have played poorly their last 2 and matchup well with Philly. They have also covered the spread in Philly 4 straight times. Take the "G-MEN".

 

And Richie, yes we see your horse CLASSY JET is running today at the Big A. 4:12 pm eastern time. Not only are we betting her, but we look forward to a dinner at Don Peppe's restaurant (a REAL wiseguy place) in Queens, NY when she wins. (Richie's treat of course). She does look like she can do it in this 9th race. Take her.

 

So: SAN FRAN+12 @ Indy, UNDER 41 NYJ/MIA, NYG pickem @ Phi, and today the #9 horse in the 9th race at Aqueduct. Good luck and god bless.

Que Es Un Grande Bandito?

Raj Rajaratnam

OR

Stephen Friedman

We all know that Raj ran a multi billion dollar insider trading scam.  In investing circles this is known as adding "Alpha".  However, how can former Goldman Sachs chief Stephen Friedman get away with what he did?  Mr. Friedman was the Chairman of the Board of the NY Fed.  The NY Fed was responsible for making sure that AIG paid out all it's liablities to its counterparties (guess who was the biggest?  c'mon, take a guess) 100 cents on the dollar.  Mr. Friedman knew this information, before it became public information and proceeded to buy 50,000 shares of GS stock.  

Cellmates?  "It's colder than a pimp's heart"

Yep Keep Spendin', We Can Just Make More

A couple of stories caught my eye today. One is a recurring story that is bleeding us to death and the other was pointed out to me just now by one of our avid follower and readers Mike G. Oh and it's also bleeding us to death.

 

First the $8,000 tax credit for first time home buyers is going to be extended and not just for first time home buyers and not for couples who make less than $150,000. Oh no, if you lived in a house for at least 5 years and want to buy a new one, you can qualify. Also if you are couple that makes less than $250,000, you can qualify. That sure opens the net a lot wider. Now forget about the countless fraud thats going on (this happens whenever the government gives out money), with people claiming their 4 year old kid as the one who receives the credit and stuff like that, but how much is this costing us? Now $13.6bn is the number the government has allocated to the program but are any of these people going to default and cost the banks more when they default? And if the bank has no money to cover losses? The $13.6bn goes a lot higher for us taxpayers.

 

We've mentioned it before but John Crudele, our man at the NY Post business section, has said for years that people should be able to tap into their 401k plans, with NO penalty for early withdrawal, to purchase their first homes. Sure the stock market will initially take a hit and those lobbyists for Fidelity and Pimco and T.Rowe Price, etc would be cryin a blue river, but you gotta admit it would cost the taxpayer a lot less, yes? And call me crazy but if you are putting your own hard earned money into something rather than taking a gift, don't you focus just a little more at what you are doing with regard to the investment? Seems pretty straightforward to me.

 

The 2nd story can be read on www.edmunds.com down at the bottom left. They had all kinds of PhDs who were experts in the auto industry on the case, and basically figured out that of the 690,000 cars sold during the "Cash for clunkers" program only 125,000 were incremental purchases. Meaning people still wouldve bought most of those cars WITHOUT any program. They then took the $3bn that was earmarked for that program and divided it by the 125,000 extra cars. Voila each car in the "Clunkers" program cost us taxpayers $24,000. I think monkeybusinessblog.com came out about 2 minutes after this program was out back in July and blasted it. Now lets see. Is the administration going to brag about how great the program worked still? Maybe they will. We just wont, ok? Thanks Mike G for the tip.

 

Wonder how the printing press is going down in D.C.? I bet there are plenty of jobs being created in the money printing department. Those presses have to be working 24/7/365 now. And um, trust me when I say this, that AINT a good thing.

Feeling Heavy, No?

Is it just me or are stocks just kind of flip flopping back and forth? No, its not just me. Wanna know what my charts are saying? Soon, but not yet, it will be time to sell. And we will be happy to tell you which stocks those will be. I bet some of them surprise you. As the saying goes, the next shoe is about to drop.

 

For all you east coast baseball fans, we hope the rain stops in New York so they play the big game tonight at 7:57pm eastern. For all you non-baseball fans, you probably don't care if it rains for 40 days and 40 nights and if you are getting more and more bearish on these markets, you hope it floods. It might. Tread lightly if someone tells you stocks are cheap. They aint.  

Its Electric! Everyone Do the Elec-tric Sliiiiiiiide!

Do they still do the electric slide at weddings? I havent been to one in a while. (A wedding nor an electric slide). Well for those of you who dont know, the electric slide was one of these "group" dance things at a wedding or some other party that everyone seemed to know. (I never really got it. I must've been home watching "Jaws" the night they taught the dance step on the "streets"). We have a new kind of electric slide though. I don't think its as fun as the dance though.

 

Bloomberg.com has a nice article entitled "Electric-Car Companies Grab U.S. Cash to Blunt Risks". Now anytime you see someone talking about "U.S. Cash", do you know who that cash belongs to? Yep. You and I the taxpayer. So, apparently since no one else is really interested in investing in Al Gore's idea that everyone should have an electric car, we, the taxpayer, are footing the bill for those who are interested in building them. To the tune of $11bn. My guess is even though they are calling them "loans", we all know how "loans" work when the U.S. taxpayer is providing them to car companies.

 

A nifty quote is from Michael Omotoso a senior manager for J.D. Power and Associates (guys who study these trends.....a LOT). He says, "The U.S. government is saying we'll have 1 million electric vehicles on the road by 2015. Realistically, manufacturers could be selling 80,000 to 100,000 by 2015." Hiya. So maybe 8-10% of what the government is saying. Hmmm. And remember no other real private equity guys willing to pony up (technical term) and take some risk. Just you and me and our other taxpaying friends funding this whole thing. Fred Standish, a spokesman for Nissan's U.S. unit, says, "We don't know where this market will be." So now you gotta feel warm and fuzzy about more of our money being spent right? The U.S. Government certainly knows more about cars than Nissan right?

 

The clincher for me though was this little ditty by Rebecca Lindland, an IHS Global Insight Inc. forecaster, "Consumers aren't pulling on demand for electric vehicles. Instead regulation and policy is pushing these vehicles into the market." Awesome. Now everbody! To the right! Its Elec-tric! Boogie, Oogie, Oogie! Assclowns

Hey Protestors! You're in The Wrong Place!

The American Bankers Association (ABA) meeting is in Chicago this week. Apparently, there's going to be thousands of protestors there outside. Screaming stuff like, "We want our money back!" or "Give Us Back Our Homes!" Well the bankers you want to scream at aren't going to be at this conference!

Oh sure the media will cover it like its the peace protests for the Vietnam War or the 1968 Democratic Convention (funnily enough also held in Chicago!). But these banks that are going to mostly be in attendance at this ABA Conference are also about to go bust. They didnt take people's money. They lent it out to fools and hoodlums. Also known as mortgage borrowers and local developers.

The guys you want protestors are in the big "money center" cities. Like New York, London, Tokyo, and maybe even Peking (thats the old name for Beijing for you youngsters. Not sure why they do that with the name changing. Maybe they can now call New York, "Old Dork" or something like that). I guarantee the guys who are guilty of "stealing" these protestors money, probably arent even sending any representatives to this shindig in Chi-town. But you watch, the media will cover it differently. And the guilty ones will laugh like hell all the way to the......well you know.

Have A Great Weekend!

Big Dick a CHIEF, a BEAR, and Works UNDER No One

Editors Note--Its Friday and the snappy Big Dick, handicapper to the hoi polloi and glitteratti, is back to give us his always interesting pigskin prognostications. A nifty 2-1 record last week made all who followed his NFL plays, happy campers. We look to get happier this week. Take it away El Grande Dick--R.B.

 

Well Richie, thank you for the kind words. Big D would like to apologize to all you PHILLIES fans out there because we probably jinxed the PHILS on the one game they lost in the NLCS but they shouldve even won that one. But never fear, the World Series is near and we will back to the baseball then. But now the N-F-L L-O-C-K-S.

 

The KC CHIEFS have arisen from the depths. MATT CASSEL has thrown 132 passes without an interception. Even when KC was really bad last year, and the Chargers were good, they only lost by 1 point each time. The Chargers were 1-4 last year as a road favorite. It looks like the Chargers are worse than last year and the CHIEFS are better. The "sea of red" will be swarming in chilly KC on Sunday. Take the 5 points with the CHIEFS.

 

Big Dick is not a believer in the whole "here comes Cincinnati" thing. The underdog has now covered all 6 Cincy games this year. Bengals are only 2-9 as a favorite. Oh the BEARS are underdogs. Oh. Goodie. Take the BEARS.

 

Finally, on Monday Night the 17-4 Redskins take on the Eagles. You laugh and say, "C'mon Big D the 'Skins aren't 17-4." To which I reply, they are if you are counting the UNDERS they have under Coach Zorn since last year. Oh and the UNDER is 9-2 the last 11 between Philly and Washington. 37.5 is no problem. UNDER!

 

So to happily recap, our 3 winners are: KC+5 vs sd, CHI+1.5 @ Cincy, and UNDER 37.5 Wash/Phil. Good luck and god bless. Enjoy the baseball too.

All is Well in Real Estate Right?

As we've talked about this a lot lately, there seems to be a lot of neato reports on residential real estate all over the globe. Luxury apartments, 2nd homes, even regular old sales numbers are up. Then there's a nice thing that comes out every few days that makes me kind of scratch my head and shake it. Side to side. As in NOPE. Today's nice thing? An Albany, NY Appeals Court said that Tishman Speyer Properties and MetLife "wrongfully deregulated apartments in Peter Cooper Village, Manhattan's largest apartment complex." Uh oh.

 

For those of you who don't know, it's the large tract of land and buildings on Manhattan's East Side near the East River that runs from 14th to 23rd street, and its commonly known as Stuy Town. There's like 11,000 apartments and for awhile it seemed to be the last place for affordable rent. Lots of cops and firemen and their families live there. Well if this court ruling sticks, these tenants are gonna be getting a couple of bucks back from their new landlord, Tishman Speyer. And as you'll see in a second, Tishman aint exactly rolling in the dough. See Tishman bought Stuy Town from MetLife in 2006 for $5.4bn. Biggest single real estate deal in NYC history. The idea behind it was they'd get current tenants to move (or die!) and charge a nice higher rent for new tenants and make nice on their debt payments that are secured by the place. Well you can guess what happened there. Oh the loan to finance the place is $3bn. Wanna take a guess what the place is worth now? $2bn. Yowsah! Thats a 63% drop in 3 years!!

 

The point is, as Michael Corleone told Carlo Rizzi in the Godfather I, "only don't lie to me. You insult my intelligence." And dont give me this crap about how Stuy Town is a special situation. If Tishman flakes on this loan, which is probably going to happen before the end of the year, what does that do for the rest of the market? Both commercial AND residential?! Have a nice day.   

"I Just Ran Out of Bull-Sh*t."

I'm not really sure when it happened.  Maybe it was Goldman Sachs last earnings announcement. Maybe it was seeing a 29-year old compliance officer from Vampire Squid Inc. get named as the Chief Operating Officer of the SEC.  Perhaps it was the culmination of the last 9 months watching Barack Obama, his band of Wall Street toadies and the bottom-feeders known as the House and Senate Finance and Banking Committees make a complete mockery of real economic recovery and financial reform.  Perhaps it was reading FT today and seeing this Meriwether in New Fund

John Meriwether, the hedge fund manager and arbitrageur behind Long-Term Capital Management, is in the process of setting up a new hedge fund – his third.

The move comes barely three months after Mr Meriwether decided to close his second fund manager, JWM Partners, which was wound down after clients saw the value of their investments fall by more than 44 per cent over the course of the financial crisis.  JWM Partners was set up soon after the collapse in 1998 of Mr Meriwether’s first – and most infamous – fund, LTCM, which triggered a wave of panic across the world’s markets and prompted the US Federal Reserve to take thethen-unprecedented step of orchestrating a multi-billion dollar bail-out.

The man is deploying the same strategy that relies on leverage and small mispricings of liquid assets to make money, which is fine until the world blows up and he and his "Merri" men can't get back the now "panic" assets they have sold and can't get rid of the "mispriced" assets they have bought.  I'm sure he'll raise a $ billion in no time from fund of fund guys, dopey endowments and moronic pension funds.  I'm also sure he will lose.....again.

Whatever.  I used to be able to see the dark humor in all this.  It's not funny anymore, it really isn't. All writing about it and analyzing it does is get me depressed now.  There is a great scene (one of many actually) from the movie "Network" where depressed and disillusioned anchorman Howard Beale signs off for the last time (at least that is what he thinks).  He looks his audience in the eye and frankly states, "I don't have any bull-sh*t left.  I just ran out of it you see."  

Actually, I'm going to post the clip with the caveat that I believe in God, I don't think life is BS and my marriage is very good. However, I'm sure you'll get the point.  All the best.

"Hell, It Takes Even Eli Manning Six Years to Make a Hundred Million Dollars!"

Get a bat and turn the music up.  Then cut up your credit cards and send them back from where they came with a big GFY message....and pull your money out of the big boys and put it in the local community bank...if you can find one.  I love this guy.  Lots of F-bombs so be forewarned. 

Car Czar? Worry About What You Know and The SEC

So The Detroit Free Press just published an article "Former Car Czar: GM, Chrysler Were on the Brink of Disaster". You remember this guy Steve Rattner, right? He was the Car Czar appointed by Obama who had to resign his post due to some more pressing matters. Something about the SEC investigating him and his Quadrangle Group hedge fund about allegedly bribing folks to get investments from the New York State Pension Fund. Yeah, that guy. Yes, the guy who happens to be married to the lady who runs fundraising for the Democratic Party. And who shut down a bunch of dealerships who allegedly gave no money to the Obama campaign during the election. Which would kinda be easy to look up being married to the lady who accounts for all that, right?

 

Well, Rattner found time between building his legal defense team to talk to Fortune Magazine about his short stint as Car Czar. He says lots of stuff like "we were determined not to fail". Assuming I guess that he hasn't? And this one I really liked: "I needed the gentle e-mail push that came from Larry Summers (the National Economic Council chief who we love to remind everyone got bounced out of the presidency of Harvard for saying women don't have the mental capacity to be good at math and science. This makes him his generation's Jimmy the Greek, but he's still got a real big job), "Life will work out for you either way Steve, though America will be better off if you do this." Who was counseling Summers on those words? Had to be somebody from Hollywood. Now I'm gonna puke.

 

Anyway, Rattner spends a lot of time blasting Rick Wagoner, former GM CEO, and I guess that's rightly so. With little barbs like this, "Rick set the tone of 'friendly arrogance' that seemed to permeate the organization." I love that. Im going to set a tone for this blog now with "friendly arrogance". Absolutely perfect. I wonder how things were run over at the now investigated Quadrangle Group when Rattner was in charge? Non-friendly arrogance? What an assclown.

 

The best part though was when Rattner told Wagoner he was going to swim with the fishes (technical term) and Wagoner asked a great question, "So are you gonna fire Ron Gettlefinger (the head of the UAW) too?" Rattner was apparently "startled" by the question and said he had no authority to do that. Um, guy you are the Car Czar, I think you had the power to do whatever you wanted. But I'll tell you what, I bet if he fired the head of the UAW his old lady (technical term) would count a lot less money in the coffers of the Democratic Party. Hope and change everyone. Hey Steve, good luck with the SEC. Hope "life works out for you either way", like Larry "Jimmy the Greek" Summers said. 

More Taxpayer Waste?

I used to work with Ralph Cioffi and Matt Tannin. No not in their actual department but at the firm, Bear Stearns. Knew them pretty well. Ralph was a salesman of bonds who was REAL effective and from what I could see doing everything legally. You ask who Ralph and Matt are? Oh they are the guys sitting on trial right now in a courtroom in NYC. The press has kind of had a field day with this. Blaming them for the entire crisis on Wall Street and certainly blaming them for Bear Stearns demise. Usually when the US Government's Attorney General's office go after you, your cooked.

 

Funnily enough, I also know Assistant US Attorney, Jim McGovern, who is helping to prosecute the case for we taxpayers (the royal "we". Boy I'm name dropping today. Did I mention Mel Gibson went to my elementary school just for Kindergarten before he moved to Australia? I wasnt born then though). Well a buddy of mine who has since left the US Attorney's office (and will remain nameless so I've stopped name dropping), would have had this case if he stuck around. He told me so a while back when we were enjoying adult beverages at an undisclosed tavern.

 

I told him, "dude, (maybe it was "guy" but again i digress) this case is gonna be REAL high profile. The people are going to be out for blood. And I know a TON of d'bags and filthy animals in this Wall Street business. And I'm telling you this.....these 2 guys aint that." Which tells me when they start talking (testifying I think is the legal term), these jurors are going to be persuaded by these guys and not for the governments side. If you know what I mean. I've been following it a bit and already saw Ralph's defense lawyers say, "just because they made the wrong decisions on what to invest in, doesnt mean they need to go away for 20 years." Amen brother. Otherwise everyone would be in jail.

 

Now Ralph has that added little thing about taking out $2mm of the $6mm of his personal money that was in the fund while saying things were fine with the fund. But keep in mind, 1) he didnt take it ALL out, and 2) he gave the $2mm to secure a loan on a property he had in Florida. Which I think by now has also gone poof (technical term). So it wasnt like he bought fancy cars and expensive hookers with the loot. So they will use the ol' "these guys were dopes yes, criminals no way" defense and thats when Sister Irene and Mrs. Smith (some school teachers who knew them) and colleagues, and customers, and bosses, etc. will come testify on their behalf (I even could make the list! Now THAT would be interesting eh?) Got it? All this is gonna come out in the trial cause the one thing I am sure of in this case is the lawyers defending Ralph and Matt aint workin for a "buck three eighty" an hour. Capisce? And if we (again the royal "we") lose this case, then what? 

 

I have to consult with my "expert", Big Dick, but I'd make this a 50-50 chance the boys get off. That aint the kind of odds the government likes to play with. Stay tuned.

There Are Other Pirates Out There Too

Been following this "Raj Raj" situation. You've seen the newest insider trading scandal with billionaire Raj Rajaratnam allegedly at the helm right? Well its the biggest insider trading scandal involving hedge funds. See "Raj Raj" (which sounds a lot like "Bron Bron") runs a big ol hedge fund named Galleon. Well Galleon is a ship associated with the high seas around the 16th or 17th century. So, one of our favorite papers the NY Post, didn't miss a trick when they had a picture of Raj on their cover the other day with the headline "Pirate!". Its also rumored that "Raj Raj" was a nice donator to the Tamil Rebels, a terrorist group in Sri Lanka. Way to touch em all Raj Raj.

 

But I was talking with one of our longtime readers this morning and we wanted to know if people trade on inside information and get busted, how about people that put reports out that have no real facts to back up what they say, but it makes for a nice report when you have to stick it in a glossy folder to get someone to buy something you are selling?

 

I dont know who this Rightmove Plc is in London, but I can bet you they sell real estate. Or certainly get paid by the real estate industry because they put out this little nugget today: "London home sellers raised asking prices to a record high this month and led gains across the U.K. as the shortage of properties for sale intensified." Oh really? Whats the number thats higher?

 

Gains all over the U.K? Look pally, the U.K economy has a LOT more problems than its U.S. friends. Sorry to our British mates, but thats true. And um, there aint a whole lot of gains in the housing market ANYWHERE in the U.S. let alone "all over". So I call "poopie" (technical term) on that one too.

 

The last one I liked the most. "Shortage of properties intensified." You know what would be great right now? To do an undercover "candid camera type" show where I wear a wire and have a nice little camera attached to a fedora that I'm wearing. I would go around to all these supposed "shortage of properties" with a briefcase. I would say, "there are X dollars, euros, yen, etc. (pick a number and a currency) in my attache case. I won't need a mortgage but I heard you people here in the U.K. (again pick a country ANY country) have a housing shortage. So you got this nice little corner brownstone for sale for 2.5mm pounds eh? Well I got 1mm pounds in my bag. Do we have a deal?"

 

So based on this report by Rightmove PLC they would laugh me down the street right? Saying something like, "look you silly imbecile we have a housing SHORTAGE! Stop playing your silly little games."  Now all of you who think this would happen, look in the mirror right now, wash your face, and get out of the dream.

 

For those of you who think it would go down like this, take a bow: "Sir the asking price is 2.5mm pounds but I can call the seller to see if it is negotiable. Would you like some tea?" And then I would respond, "Look Sir Edmund, I got about 10 minutes and then I'm going to another "shortage of housing" down the block to try and buy that one. Your guy hits my 1mm pound bid or you will never see me again. Now I dont want any tea, but I heard that Pimm's is a good drink. Hit me with a belt of that while I wait."

 

Now my point is, I'm not sure if we'd get a sale, but stop with the lies that 1) there's a shortage and 2) prices are coming back, because there is no factual evidence of either except for these "Special Reports". Who makes the reports? How are the numbers calculated? If I find a lie, can I have these people arrested like "Raj Raj" for illegally manipulating a market? Makes you really wonder right? Watch your step people. We're watching you.  

 

"Wasn't There Anyone Else at Goldman Sachs?"

The scene: The Oval Office, today October 19.

Rahm Emanuel: "Welcome back Mr. President."

President Obama: "Thanks Rahm.  Hey, did you get the fund raising numbers from the Thursday gig in San Fran?"

Rahm: "Of course sir, $12 million."

President: "Man, that is sweet.  We are rolling.  First we get Olympia Snow on board for the big healthcare win and now this!  Check this out!  Look at the back of the Sunday New York Times!  Bono wrote me an Op-Ed!  "Rebranding America"  How about that??"

David Axelrod: "Damn straight sir.  Of course those crazy conservative hit-people, Frank Rich and Maureen Dowd attacked you again in the proceeding pages.  I took the liberty of cutting them out."

Rahm: "Those motherless....Say the word Mr. President and I will personally squash those dead-enders."

President: "It's okay Rahm.  We're all entitled to our opinions.  Now, I know there was something else we did before the fundraiser Thursday.  It's been such a whirlwind week.  What was it?"

Axelrod: "Oh, we stopped in New Orleans for a couple of hours.  We fulfilled our campaign promise to promise to rebuild the city."

President: "Ah, that's right. I really felt the love there.  Rahm, make a note to make sure we go back there same time next year."

White House Steward: "Excuse me Mr. President.  This gift basket came from a Mr. Blankfein."

President: "Oh, thank you Tom.  Just set it down right there."  Axe, can you read the card?"

Axelrod: "Yes sir.  "Dear Mr. President, thank you for the appointment.  From one world leader to another, you're the best!  Best regards, Lloyd."

President: "Hmm. That Lloyd sure is a nice guy.  What appointment? 

Axelrod: " Well, as you know we are bringing the SEC up to "First in Class" Status.  Nothing says first in class better than Goldman Sachs.  With that in mind, we hired a young fellow Adam Storch to be the SEC's COO."

President: "Ah, okay I see it here.  He HAS to be related to Larry Storch, Corporal Agarn from "F-Troop"!  Anyway, jeez......he's 29 years old and has 4 years of experience?  Couldn't we have found another guy from Goldman to take this job?"

Rahm: "Well sir, this is where my great trouble shooting skills come in.  All the other Goldman guys either we or the Bushies or Clintons brought to Washington were partners and multi-millionaires.  This guy Storch?  He's a Vice President working in the BACK OFFICE!  Those guys only make a few hundred grand a year.  I told Lloyd that we need a guy like that so we don't draw any heat.  Blankfein tells me they put this kid up for the SEC gig because he got second place in the firm's fantasy baseball league!"

President: "Ok, sounds like solid thinking.  But we better stop having crises because we're running out of Goldman guys!!"

{HUGE ROARS OF LAUGHTER!!!!!}

"Not Just Talking The Bull-Sh*t, But Actually Living the Bull-Sh*t."

From February 2008, "The Onion".  

Big Dick A Winning Traveling Man

Editors Note--Big Dick "kissed his sister" last week by going 1-1-1 in the NFL. He also correctly told us to place a win, place, and show wager on CLASSY JET at Belmont Park last Friday and CLASSY JET won some money by getting 3rd for the show bettors. Today he takes his show on the road and plays a couple of controversial road teams and a total. Go Big D!

 

Yes Richie, it was kind of a "whatever" weekend. But you do have a nice young filly with that CLASSY JET. We cant wait for her to run again. Speaking of running, lets head on the road!

 

The KC CHIEFS haven't won this year but they got real close last week. The Redskins have 2 wins, against the winless Rams and Tampa Bay. But they couldnt cover either of those games. As a matter of fact, the underdog has covered the spread in all 5 of the 'Skins games. KC is the underdog here with a generous 6.5 points. Take the points.

 

People are excited about Cincinnati and 4-1 with a flukey loss is pretty impressive. The problem is the underdog has covered in all of Cincy's games too! Well they are favored by 5 over HOUSTON who has been finding their offense lately. Why buck the trend? Why ask why? Talke the points.

 

Very simply, Green Bay has gone OVER the total in 21 of 29 games. Detroit has gone OVER 12 of 14 on the road. The total is 48. The bookies are begging you to take the under. Thats why we'll play the OVER!

 

Finally, in our bonus choice today at 4:07 eastern and a very special 1:07 pm pacific time lets keep with the road team theme. The PHILLIES are underdogs and the Dodgers NEED the game. You know what that means? Take the PHILLIES! PEDRO MARTINEZ has shocked almost everyone but the PHILLY management and hes an underdog today. Thanks bookmaker.

 

So: today: PHI+120 @ lad, sunday: KC+6.5 @ was, HOU+5 @ cin, OVER 48 GB/DET. Good luck and god bless!

It's Official. We Have Become a Banana Republic.

I'm sure there are many other sign posts that mark the week or the day or the hour that the United States of America showed itself to be a nation whose government works to serve the narrow interests of the few and tells the rest of us to suck on it.  For me it is this announcement.  From Bloomberg News;

 The U.S. Securities and Exchange Commission hired Adam Storch, a 29-year-old former employee in Goldman Sachs Group Inc.’s business intelligence unit, as the enforcement division’s first chief operating officer, according to people familiar with the decision.

The COO, who started Oct. 13, has “a great deal of background” in technology and managing processes and the pace of work, Robert Khuzami, head of enforcement, said yesterday in Washington. Storch, who worked since 2004 in a unit at Goldman Sachs that reviewed contracts and transactions for signs of fraud, will be charged with making the unit more efficient. Storch, reached by telephone at the SEC, declined to comment.

Khuzami announced the position in August as part of the unit’s biggest overhaul in three decades. He is taking steps to add front-line investigators, speed inquiries and create specialized units after the agency was faulted for missing Bernard Madoff’s$65 billion fraud.

Storch holds degrees in accounting and finance from the State University of New York at Buffalo and studied at New York University’s Leonard N. Stern School of Business. He has certifications in accounting, fraud examination and auditing.

Prior to joining Goldman Sachs, Storch was a senior analyst at accounting firm Deloitte & Touche and an intern at Neuberger Berman LLC, a New York-based asset management firm.

Khuzami has created specialty units of investigators and is giving people more incentive to cooperate with investigations. The five groups will investigate cases in asset management, structured products, municipal securities and public pensions, foreign corrupt practices and market abuse, Khuzami said in an Aug. 5 a speech in New York.

10,000 Is A Nice Number, Yes?

Sorry for the slower volume of posts by me the last few days. Eric and I have been occupied in negotiations for another monkeybusiness venture that we have been sworn to secrecy about for the time being. But dont you worry, you will all find out in due time what it is, and more importantly, be entertained IMMENSELY. And it won't cost you nothin'.

 

On a different matter, you know how they say these celebrity deaths come in 3's? Well Captain Lou Albano, Al Martino, and Bruce Wasserstein all died yesterday.

 

For those of you who don't know those fellas, Captain Lou was very BIG back in the day in the World Wrestling Federation (WWF) and helped make it a HUGE success. Hey fake or not, it was exciting stuff. So much so, that WWF founder and CEO Vince McMahon's wife is running for political office in Connecticut. Hope they at least send flowers to Captain Lou's family.

 

Al Martino played Johnny Fontaine in one of our favorite movies here, "The Godfather". You remember he was the Frank Sinatra character who was being blackballed by the movie industry and asked Don Corleone for a little "assistance"? As a matter of fact, "the offer he couldnt refuse" line was about getting Johnny out of his contract. Some voice Al had. We'll all miss him.

 

Bruce Wasserstein was perhaps the guy who made the most EVER from the world of investment banking. Died a bit suddenly at 61 years old the other day. Still doing deals until the end. For those of you keeping political score, he was staunchly liberal but would kill his mother for a nickel. Interesting cat. A college pal of mine was one of his first employees 20 years ago at Wasserstein and Perrella. Bruce addressed the young newbies by walking to a podium and with the kids ready to write feverishly, said, and I quote, "Those who are most successful in this business are the ones who know how to........fall asleep on airplanes." And he walked off the stage. And to quote, "The Godfather", thats a true story Kay.

 

Enough about obits, lets talk about life. How about that stock market! 10,000 Dow ehhhh? Strong like bull ehhhh? I have no idea what to say on this matter for the first time in awhile. But some words to live by, "sometimes the market just wants to go up," This is what's been going on for a few months now. I will tell you this though. My next trade will probably be to short some financial stocks. Yeah, yeah, I know about all of their kickass (technical term)  earnings but just want to know what happens when they start appropriately marking their commercial mortgage portfolios and other former "toxic" stuff. Good luck out there.

Who's Up For a Million Person March??

Yesterday I posted this "There is No America. There is No Democracy."

Pretty much, I just printed an article from the Financial Times that shed light on the cute practice lobbyists employ to make sure they "look their Congressmen in the eye" when he or she is voting, speaking or listening to testimony.  The pay people to stand in line for them in the early morning hours in order to save seats for them at sessions of Congress!  This is how our country is being, or maybe I should say, has been stolen from us.

"You want financial reform?"  "Screw you, your Congressman has been bought and paid for by the folks who want to keep things just how they are, or even make them worse."

"You want healthcare reform?" "Screw you again.  See above."

"You want to know just what the hell goes on in the wee hours as our Congressmen stuff all kinds of egregious sh*t into the yearly fleecing known as the "Omnibus Spending Bill"?  Screw you twice!"

The list goes on and on right?  This isn't capitalism and it isn't the America that millions of citizens paid for with their blood and sweat.  Yesterday, a real nice guy who came over to repair something in my house.  While the news was on, they were talking about Afghanistan.  We had met before so I knew he was a Guardsman.  He sighed and said, "I guess I'm going over again.  It's been two years so my unit is definitely due."  I said, "Oh man, I'm sorry."  He said, "Hey, it's my job. They call, I go.  Somebody's got to do it."  Anybody in that pigstye in Washington looking out for him?  Anybody paying to get into Congress and look their Congressman in the eye when they are voting to screw a great American like that out of his healthcare, his finances, his freaking job? 

This is nothing more than oligarchical thuggery.  The kind that serves you E-Coli in your freaking hamburger because the FDA has been bought off by the Cargill's of the world.  Well you know what?  Instead of those "Tea Parties" where we protest about taxes, how about we all get on a bus and  head down to DC.  We can beat the line-standers to the lines and keep the lobbyists out of Congressional hearings. We can fill up all the lunch and dinner tables downtown where Congress and lobbyists meet.  We can follow them all around and see who is talking to who.  If we really give crap, let's get off our asses and head down to DC use our rights and our wallets to break up this bullsh*t!

Send this around if you're with me.

"There is No America. There is No Democracy"

Presented almost without comment.  This is our system of government.  Those little elections we have every couple of years?  {Wank Wank}.  From the Financial Times Packed Agenda Proves Boon For Army Standing in Line.

I've bolded the most eerie part!

President Barack Obama's ambitious legislative agenda has created a mini-boom in the US capital for professional "line-standers": the homeless people, bike couriers and pensioners who are paid to queue all night to save seats for lobbyists in crucial congressional hearings.

Line-standing, an unofficial business that began in Washington about a decade ago, has been in demand this year as lobbyists scram-ble to get into legislative hearings shaping the healthcare, finance and energy ind-ustries.

Daily sessions in the Senate finance committee to thrash out healthcare legislation have been a particular boon, with line-standers hired to queue for as long as 24 hours to ensure that lobbyists get seats.

"It's been very busy now with healthcare and everything going on," says Gil Carpel, chief executive at Washington Express, a courier and line-standing company. "The real guts of legislation get massaged and manipulated in committee hearings."

His company charges $36 (€24, £23) an hour for a line-stander, who will queue from as little as two hours to as much as 48, depending on demand for the hearing. The lobbyist usually turns up 20 minutes before it starts and swaps places.

Being in the room maxi-mises a lobbyist's chance of understanding and influencing fast-moving situations in which billions of dollars are at stake.

"If you've got a relationship with a particular legislator you can make eyecontact with that person; you can see how they're reacting to testimony and questioning from therir colleagues," says Mark Gross, director of a rival company, Linestanding.com.

He says business has been "good, not great", suspecting that lobbyists are cutting back a little amid recession. But applications for the job, which pays $10-$20 an hour, have surged as unemployment has risen.

"We've been inundated with folks wanting to stand in line for a living. It's actually a little unsettling."

The capitol buildings open at 7am; before that line-standers queue on the street in camping chairs or even tents. "If the weather's bad, I bring my gear and sleep in my car," says Valentin Yordanov, a courier queuing in a corridor for a House committee hearing on derivatives legislation. The 27-year-old, who moved to Washington from Bulgaria six years ago, says Mr Obama's reform agenda has created more work. "It's the same thing with the recession," he says with a grin. "It means more hearings . . . more work for me."

Linestanding.com hires couriers, pensioners and waiters directly, and subcontracts with a man who hires homeless men from a local shelter. "I don't see any problem in that, helping somebody get back on their feet," says Mr Gross. Washington Express uses only its own couriers.

Claire McCaskill, a Missouri senator, tabled a bill two years ago that would ban the practice, and may revive the effort.

"The notion that special interest groups can buy seats at congressional hearings like they would buy tickets to a concert or football game is offensive to me," she says.

Repeat After Me, "If Blackstone and KKR are Selling I Should NOT be Buying."

You've seen this movie before.  From Bloomberg News;

 Blackstone Group LP, the world’s largest private-equity firm, is planning to list up to eight companies and sell five more to take advantage of rising stock markets and return money to investors, according to a person familiar with the situation.

The sale of the five companies will return an estimated $2.8 billion to investors, with $1.2 billion of that coming from the divestment of Kosmos Energy LLC assets, said the person, who declined to be identified because the information hasn’t been publicly released. Blackstone rose the most in two months in New York trading.

Blackstone, KKR & Co., Silver Lake and Fortress Investment Group LLC are among buyout firms lining up initial public offerings to repay debt used to purchase companies and return money to their investors amid a 59 percent gain by the Standard & Poor’s 500 Index since March 9. Blackstone President Tony James said last month he’s exploring possibilities to take companies public in the U.S. and through exchanges abroad.

“The equity markets are wide open for us right now,” James said at a conference in New York Sept. 15. “Every private-equity firm is probably experiencing the same thing.”

Hit here to read the rest Blackstone Said to Seek IPO for Eight Companies.

Think about what has happened in this country the last year or so. First they (Who are "they"?  I'll leave that up to you) take public the $ trillion or so of bank and financial company losses (they call this redistributing wealth).  Then they dress up the big banks nice and pretty with B.S. stress-tests and phony baloney accounting and get  about a hundred billion of institutional money to pony up capital for our fine institutions.  Then they buy up every treasury bond, agency mortgage backed security and agency debenture they can get their hands on to push hundreds of billions of investment dollars into stocks and other risk assets.  They also allow Wall Street to partake in this government buy-a-thon by acting as a beard or middle man, which in turn funnels billions of "trading profits" to Wall Street (more of our money becoming their money).  Now the markets are dressed up nice and pretty so the Blackstone's of the world can start unloading companies to the public, make some dough and pay back the banks holding the debt of these soon to be public companies.

Al Capone would be proud.

Columbus Day Pondering.

What a day I had yesterday!  First my son's hockey game IN STATEN ISLAND at 8AM (means leaving my home around 6am) was canceled.  That set up a fabulous morning with the family, a nice workout and then;

Giants 44 Raiders 7

Angels 7 Red Sox 6

NY Rangers 3 Anaheim Ducks 1

Yankees 4 Twins 1

As our friend Fletch would say, "TREMENDOUS!!"

Anyway, I've been thinking a lot which is always dangerous.  Last Wednesday I had a bad feeling about my short positions in Lennar and Toll Brothers.  I had a bad feeling because both stocks had plunged (much to my enjoyment) the prior few trading sessions, primarily because folks were getting worried about the expiration of the $8,000 first time home buyer credit.  People should be having a problem with the two luxury homebuilders because the technicals for their business are a bloody trainwreck, not because of the tax credit.  Therefore, I said to myself, "Self, there is NO WAY the government is going to let that credit expire.  In fact, not only will they extend it, they'll probably increase the amount, include ANYTIME homebuyers, and throw in a built-in pool with every purchase."  So I covered half my short last Wednesday.  Sure enough, on Thursday Washington was all abuzz about extending the tax credit.  The homebuilders sky-rocketed.  They came off a bit Friday and I just covered the rest of my short. 

 My point here is, if you're investing now, you have to have a feel for what the government is going to do. If they aren't trying to prop up the housing market, they are putting lipstick on bank-pigs, running the dollar printing press, or buying everyone a car. I don't want to play in that market so I am out.  I will say however, that I think the government is going to carry this market a few more rounds, till it can't anymore.  I think we trade sideways until Q1 2010 and then the real train-wreck happens.

Now on to a couple of questions.  How much money does GEICO make off insuring automobiles?  It has to be the most profitable business on the planet, INCLUDING THE ILLEGAL DRUG TRADE!  How the hell does this company afford to have THREE major campaign ads going 24/7 on network TV?  You have the gecko, the "stack of money with the glasses" and now a talking pothole!  And it's not like they're buying time on reruns of "Who's The Boss".  Every NFL game must have at least sixteen GEICO ads.  I don't hear investors complaining about the advertising budget so they must just be taking their "customers" to the cleaners! Something to think about right?

Next commercial.  Have you seen these John Hancock ads lately.  The ones where middle age people are texting back and forth to their loved ones, wondering what the hell they are going to do in this crisis. Once example goes something like this (and to make it really f**king obnoxious they show it to you as a text message "dialog") 

"Remember when we used to talk about the things we were going to do WHEN we retire?"

"Yeah, now we talk about WILL we be able to retire"

"When do you think we can start talking again about WHEN instead of WILL?"

And then the guy stares off into space as the announcer comes in, "Talk to a John Hancock representative today."  

Talk to a John Hancock representative?  About what!  The guy is at least 50 years old, his 401k has gotten hammered, the house he thought he had 300k in equity is now worth less than his mortgage, his kids have student loans that they can't pay because they can't get a job....oh, and his company is laying people off left and right.  WTF is John Hancock going to do about that?  Morons.

Finally, I've had enough of that freaking couple sitting on the beautiful island drinking their Corona's and throwing their Blackberry into the water or flying a kite with the Wall Street Journal.  I used to like those commercials.  Now I would like to see something like this happen to them on that f**king beach!

This is the Best We Can Do Folks.

I meant to get into the Federal Housing Administration this morning.  Then the President got the Nobel Peace Prize and I went straight into Friday afternoon comedy...at 8am.  However, this FHA "thing" is really something.  As we have stated earlier in these cyber-pages, the FHA has essentially become the new $trillion subprime lender for the nation.  Here's the New York Times FHA Problems Raising Concerns For Lawmakers.  Here's some nice tidbits

Running questions about the F.H.A.’s future — underscored by interviews with policy makers, analysts and home buyers — came to the fore on Thursday on Capitol Hill. In testimony before a House subcommittee, the F.H.A. commissioner, David H. Stevens, assured lawmakers that his agency would not need a bailout and that it was managing its risks.

Managing risk eh?  I guess that is a "forward looking assessment".  Last we heard, the FHA is CURRENTLY considering the hire of a chief risk officer.  They thought they would put a few hundred billion on and see how they would do.  Here's more from "The Commish"

But he acknowledged that some 20 percent of F.H.A. loans insured last year — and as many as 24 percent of those from 2007 — faced serious problems including foreclosure, offering a preview of a forthcoming audit of the agency’s finances.

That number is probably light...just a hunch.  Now on to our "leaders".  Here's the Queen of insanity herself....Maxine Waters;

“F.H.A. has stepped into the void left by the private market,” Representative Maxine Waters, Democrat from California, said at the hearing. “Let’s be clear; without F.H.A., there would be no mortgage market right now.”

You be clear girlfriend!  If the government wasn't handing out money to anybody who was even thinking of buying a house....nobody would be buying anything and the people who are buying...can't pay.  Makes sense.  Wait, here's some more great housing technicals!

“They’re counting their pennies, scraping up that 3.5 percent,” Bonni Malone of Prudential Americana in Las Vegas said. “Mostly they’re buying foreclosed homes from banks, although I had one client who bought from a guy that was dying. It’s turning around the market.”

Oh yeah!  And last but certainly not least, the man himself, The Honorable Barney Frank;

Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that the defaults were, in essence, worth it. “I don’t think it’s a bad thing that the bad loans occurred,” he said. “It was an effort to keep prices from falling too fast. That’s a policy.”

There you have it folks. "That's policy."  We'd be better off with this.  Have a great weekend!

This Just In From Major League Baseball!!!!

From the Office of the Commissioner of Major League Baseball - Allan "Bud" Selig

It is with great pride today that Major League Baseball breaks with tradition.  Effective immediately, based on his stunning "First Pitch" performance at this year's Major League Baseball All-Star game, we are proud to announce the winner of both the American League and National League 2009 Cy Young Award.  

President Barack Obama!

Big D Adds Some "HorsePlay" to his Selections

Editors Note--Big Dick was a controversial 1-2 last week with the Baltimore Ravens the victims of perhaps some "soft" officiating. More on that in a second. But one request, Big D: I have a horse running at Belmont today. Any thoughts in addition to your 3 NFL plays? Thanks! R.B.

 

Well Richie, lets get to your request first. Not a bad 2 year old filly you have here with CLASSY JET in the 7th at Belmont Park today. Post time is 4:12 pm eastern. She finished a nice, strong 3rd place in her debut a few weeks ago and while the filly that won that race is not in here, the filly who came in 2nd is. But your pony had to run a lot on the outside from her 10 post last time. Shes got a legitimate shot here from a more inside starting post. We'll take her to win. place, and show.

 

In the NFL, yes Richie there was some controversy. We were on the short side in the New England--Baltimore game last week but the Ravens didn't help themselves with a dropped ball at the 8 yard line with less than a minute to go. But the officials have probably gotten the message that Tom Brady can be hit. And his old offensive coach is the coach of the Broncos. Who have a nice defense. Denver has gone UNDER all 4 this year. Make it 5. UNDER.

 

San Francisco has been a nice surprise this year. Playing defense like their old coach Singletary did. Atlanta is ok but have yet to find their offense clicking. This won't be the week they click. UNDER again!

 

Finally, the highest total on the NFL board is 49 with Arizona and Houston. You know what we like to do in those cases right? Go opposite of what they are begging you to do! So lets take the OVER with the gunslingers Warner and Schaub as the two quarterbacks.

 

So to recap: Race 7 Belmont Park today, #1 to win, place, and show. Sunday: UNDER NE/DEN 41, UNDER SF/ATL 41, OVER AZ/HOU 49. Good luck and god bless.  

"I Won What??"

This had to be the scene last night in the White House residence;

{Telephone rings}

First Lady: "Hello?"

Voice:  "Hallo, zis is Thorbjoen Jagland.  May I please speak to ze President?"

First Lady: "Um, what is this in reference to please?"

Voice: "I vish to tell ze President zat he has von the Nobel Peace Prize."

First Lady: "Umm, okay.....Barack??

President Obama: "Yeah?"

First Lady: "A gentleman is on the phone. He says you've won the Nobel Peace Prize."

President Obama: "C'mon Michelle, I'm busy.  Tell W that I've fallen for his crank calls for the last time.  First it was pizza deliveries at 3am, then 1,000 subscriptions to "Guns and Ammo" and now this.  Tell him I give up. He can ride on Air Force One next week to the American League Championship Series.

First Lady:  "I really think you should take this.  No way W could do an accent like this.  Besides it's after 10pm.  He's already fast asleep."

President Obama: "Alright.  Hello, this is the President."

Voice: "Ah, Mr. President.  It is my honor to inform you zat you have von the 2009 Nobel Peace Prize!"

President Obama: "Alright...alright.  Rahm, Axe...is that you?  Nice try."

Voice: Mr. President, excuse me but I don't know zeese Rahm and Axe.  Zis is  Thorbjoen Jagland, head of the Nobel selection committee.  We have voted you ze peace prize."

President Obama: "For what??"

Voice: "For your excellent speeches of course!  You have reached out to ze Arab vorld.  You have asked North Korea and Iran to stop zer nuclear programs and you rocked at ze United Nations last week.  Didn't you see ze love in ze eyes of Abbas and Netanyahu ven you made zem shake hands?  Peace in Palestine can only follow a performance like zat!"

President Obama: "Why thank you Dr. Jagland.  You're right.  It's amazing how much different things work in the global arena versus here in the USA.  I made a speech about peace and disarmament and look what happened.  Peace and disarmament!  This country?  I've made some beautiful speeches on housing, the banking system, employment, financial reform, health care....The list goes on and on.  In some cases I actually proposed a plan....on paper no less!  And what have I gotten so far?  Nothing!  Maybe we Americans are a little slow on the uptake.  In any case, thank you very much.  You have really opened my eyes.  See you at the banquet.  Oh, can you make sure I don't end up sitting with Bono from U-2.  His act is getting a little tired.  Jack Nicholson perhaps?"

Voice: "Vat ever you vant Mr. President.  Good night."

President Obama: "Nobel Peace Prize....Imagine that Michelle....imagine that."

What's $350mm Amongst Taxpayer Friends?

Just saw that GM is close to selling the Hummer SUV business to a Chinese group. Now its the same group, Tengzhong, that said they might buy Hummer back in June. When GM came to the bankruptcy court in June, they said Hummer was worth $500mm. Guess what they are going to sell it to Tengzhong for, on behalf of us U.S. taxpayers? $150mm. Must be the vicious beating that financial markets have taken since June that caused the price to drop sooooooooo much. Oh wait stocks are UP about 20% since June! Nice work Government Motors.  

 

So as we keep telling you on these pages, this "saving" of the Auto industry was a nice donation to the United Auto Workers (UAW) and we will NEVER see that money that we "loaned" the auto industry. Say what you want about the banks, but a lot of them have paid us back. With interest. I wonder if Hummer sales increase now that the Chinese will be buying it? Probably. Oh Ms. Pelosi just came out and said, the House is considering extending the $8,000 tax credit for first time homebuyers. Keep printing the money assclowns. Wait till a few more months when the government has no money for these gimmicky programs or the auto industry or healthcare change or anything. God help us because based on this Hummer deal with the Chinese, they aint gonna be helpin us. They are going to be buying stuff nice and cheap and putting us over a barrel. Which they can. Splendid.

Ahhh, Yer Just Throwing Money Away

You ever hear people (usually self-proclaimed "wiseguys") use the phrase, "Ahhh, yer just throwing money down the toilet."? That usually came around in my life when people asked me if I was renting a home or owning one. I understood all the pros of home ownership and still decided to rent my primary residence in NYC. Still do. Did I miss some good runs up in the real estate market? I did. Was the real estate market the ONLY market to invest my money in? No it was not. Did I also miss 2 complete breakdowns of the real estate market? Yes I did. One went from the summer of 1987 to the summer of 1999. Thats twelve years for those of you scoring at home. The other one? Well we are in it NOW. You think this one can last MORE than 12 years? If you don't believe the 12 year number go look it up.

 

I see the malarky written in the papers and on the TV about how the real estate market is only down a "little bit from a really high place." I have friends who own homes/apartments in the NYC tri-state area and those pals trying to sell or get appraisals on their places? Let's just say they certainly aren't the ones being interviewed for these "studies". Lotsah places for sale. Not many buyers. I remember seeing all the crap too about how the rest of the country--and most of the world--was seeing housing prices crack, but not the New York area. And I'm sitting in the pumpkin patch with Linus from the Charlie Brown show waiting for the Great Pumpkin. Come on people, you can't believe that crap. As a matter of fact, in past real estate bubbles bursting in this country, New York's was worse than average. Why is it gonna be different this time?

 

In closing, let me do a little basic math for you and those assclowns that talk about throwing money down a toilet when renting. (While they continue to pay nice ever growing property taxes, especially in New York State, even if they have no mortgage on their home). Let's say you have a "dwelling" that cost $1.4mm at the top. Its now down to $1.2mm. Which is probably being kind as that is a drop of a mere 11%. If you were to rent a dwelling like this you would probably pay about $5500 a month to rent. Some of you not from the New York area are probably laughing right now, but trust me, these aint so crazy numbers. People pay these numbers. So now your "smart" purchase at $1.4mm has you in the hole 200k. So by my math you could rent for 3 years at $5500 before you "wasted" more money then the guy who apparently is NOT throwing money down the toilet. Think about that. Oh I'm gonna keep being "stupid" and rent now. Somebody tell me why I shouldn't please.    

Until We See This We Are Going Nowhere But Dooooooooooooown.

I'm eating the Financial Times for breakfast and lunch today!  Great work chaps!  Martin Wolf has a great piece today Big Bumps Lie Ahead on the Road to Recovery and Reform  I think Mr. Wolf has crystallized exactly what we need to see for a real and lasting global recovery.  First Mr. Wolf brings out the path to the promised land through the five "Rs"

Rescue, Recovery, Rebalancing, Regulation, Reform.

Beautiful.  We have had the rescue and we are currently in the "recovery" phase.  However, as we have been talking about, the current recovery we are feeling is a government induced buzz.  As most of us know, great buzzes not only do not last but they feel pretty crappy when they are over.  At least that is what people tell me.

Anyway, Mr. Wolf (his picture in FT would have me call him nothing but Mr. or Sir) says this about the "third R" Reblancing.

Despite the recovery in confidence, the financial system remains damaged (see chart). Private sector deleveraging has barely begun. The rise in savings rates in countries such as the US and UK may also prove permanent. So growth might weaken when the inventory bounce and fiscal boost have worked through. Early withdrawal of stimulus is likely to be a huge error.

Yet expecting countries with external deficits and geared private sectors to provide much of the demand boost is also very risky. That could well turn today's private sector debt crisis into tomorrow's public debt and currency crises. This is why a third 'r' - rebalancing - is so important. The world needs the big surplus countries to sustain a higher rate of growth in demand than in potential output, to reduce their surpluses. That is not yet happening. Current account "imbalances" have fallen this year, but largely because of the fall in oil prices. Moreover, the IMF expects these imbalances to widen from next year. This is less rebalancing than the world needs if the recovery is to be sustained and healthy.

That's it, nothing more and certainly nothing else.  The world ran on the model of "You lend it, we spend it, and then you re-lend it." for at least the last 25 years.  It reminds me of "Boogie Nights" where Dirk and Reed go to the record company and try to get their demo tape.

 

 It's over.  Now we need to have exactly what Sir Wolf describes.  We need the surplus nations of the world to build real and sustainable domestic demand.  These countries along with Dirk and Reed (also known as the United States) have engaged in a gigantic, multi decade high and now it is over.  The surplus nations did not address their own severe internal problems because they thought they didn't have to.  Now they do.  This will take years.  We are in for a long hard slog once the stimulus buzz wears off in the next few months.  The longer we ignore this the longer the road to recovery.  There is no other answer.  That doesn't mean that the sun isn't going to shine anymore or your kids are going to stop making you joyful or opportunities won't present themselves to you.  It just means that things are going to be a lot different.  Anybody who tells you otherwise, doesn't get it.

Oh, and with regard to the last two of Mr. Wolf's "Rs"  "Reform" and "Regulation"?  When pigs fly!