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Economics and Investing:
Reader HPD pointed us to this commentary by Mish Shedlock: Preliminary
Stress
Test Results. What a sham! HPD also mentioned
this: Futures
Fall, BofA May Need $35 Billion in Capital. HP had these incisive comments: "Expect
BofA (and Wells Fargo) stock to bounce after the initial decline. Geithner
has taught the market that he will throw a lifeline to any
large bank,
no matter how insolvent. Thus is capital misallocated in a centrally planned
economy." He added in a later e-mail: "Outrageous! But did we really
expect anything different? ...Gee, I wonder
why all the major servicers are sitting on aged REOs [Real
Estate Owned] .. Notices of Default
(NODs)
delayed seemingly indefinitely to avoid the paper loss. What is the
POA [power
of attorney] exposure? Are
checking
accounts swept nightly to avoid reserve requirements? (Yes they are.) Is this
accounted for in the "tests"? Who is holding [the] CDS [(credit
default swap) derivative paper] on the US government? How is that unwound?
Don't worry,
you're already
on the wrong side of
the
swap.
[Some
rantyness snipped.] We live in a centrally planned economy, the long term ramifications
of which we
cannot
predict. How many times can a dead cat bounce? Does the government have
the wisdom to manage such an economy?"
M.W. flagged this from The Wall Street Journal: 401(k)s
Hit by Withdrawal Freezes; Investors Cry Foul as Some Funds Close Exits;
Perils of Distressed Markets
LJ in England sent this: Bank
holds interest rates at 0.5% as it prints extra £50
billion
in cash
Obama Releases Details of $3.4 Trillion Budget Plan
