Dow Solid in 2010...The Economy, Less So.

Posted by Sean Doyle, December 31, 2010.


So, the Dow Jones Industrial Average is set to finish 2010 up 11% while the S&P 500 will close the year up a lucky 13%. However the "real economy" is barely trudging along at a drunken snail's pace. This recovery is officially the weakest in the post-war period and to many people across America the "Great Recession" has never truly abated. The chart below (which I cribbed from The Atlantic) illustrates just how greatly the rate of economic improvement is dissipating:



Th outlook for 2011 is overwhelmingly bullish with many "experts" calling for market returns in excess of 20%. Just in the name of fairness here's a few folks who have a slightly different view for the upcoming year:

David Rosenberg: "Bearish Outlook for 2011."
Doug Kass: "Here Are My 15 Surprises To Watch For in 2011."
John Taylor: "Explains Why Off-The-Charts 2011 GDP Estimates Are Irrelevant, And Why Defaults WIll Be Pervasive."
Meredith Whitney: "50-100 US Cities Could Default."
Peter Brimelow: "Huge Stock Market Decline Coming, But Not Yet.."
Ken Fisher: "Prepare For A Very Frustrating Market in 2011."

Happy New Years, Haines!

The Curious Case Of Buckley T. Ratchford.

Posted by Sean Doyle, December 14, 2010

The Colbert Report	Mon - Thurs 11:30pm / 10:30c
Found Goldman Sachs MasterCard
www.colbertnation.com
Colbert Report Full Episodes Political Humor & Satire Blog March to Keep Fear Alive

Ask An Irishman!

Posted by Sean Doyle, December 12, 2010.

"...Greed, greed, and more fucking greed!"

Nobody drops an F-bomb better than an Irishman. Here's a man who knows of what he speaks!

The Life And Times Of B-Fine

Posted by Sean Doyle, November 30, 2010.

Image by Colin & Sean Doyle

For whatever reason, Goldman Sachs CEO Lloyd "B-Fine" Blankfein is an awesome photoshop candidate. Perhaps it is B-Fine's puggish "good looks" or just his pugnaciously napoleonlic demeanor. Who really knows? The above image is a mash up of the Jay-Z album "Kingdom Come" and a typical Lloyd-full-of-contempt "fuck you" grin he's shooting towards some ill-informed congress-fellow.

Let's face it, B-Fine and Jay-Z have a lot in common. Both grew up in housing projects in rough-as-hell Brooklyn neighborhoods. Both hustled their way to the absolute tops of their given fields (finance and music). And while both men preside as Kings of money-making Manhattan society, Jay and B-Fine still maintain their Crooklyn-earned gangsta credibility.

Anyway, here's a look at some of Wall Street Beast's best Blankfein photoshops for 2010:

From the 9/5 article "On The Road of Capitalism..."

From the 11/22 article "The World's Greatest Trader..."

From the 4/27 article "Long Day..."

Lloyd Blankfein is the gift that keeps giving and here at WSB we promise to keeping giving you the best B-Fine photoshops on web.

Monday Morning Linkfest

Posted by Sean Doyle, November 29, 2010

Money Bikini Image Courtesy of Ujena.com

New York Magazine: "Axl Rose Files Lawsuit Because He Hates Slash So Much"

Zero Hedge: "The Grand Unified Theory Of Physics And Economics"

Wall St. Cheat Sheet: "Why I Sold My Gold"

Forbes: "Will The Next Internet Revolution Be Televised"

Barrons: "Citi Ups Hewlett-Packard Target to $70"

Wall Street Journal: "Leaked US Cables Expose Tension With China"

NY Times: "Markets Slip Following Details Of Irish Aid"

Are Portugal and Spain next? The markets seem to think so...

Dirty Rotten Scoundrels?

Posted by Sean Doyle, November 24, 2010.Image by Colin & Sean Doyle

Et tu, Kenny?

Yesterday, the FBI issued a "wide ranging" subpoena to Citadel, the powerhouse Chicago based hedge fund run by Ken Griffin. Citadel joins fellow hedge funds Diamondback , Level Global, and SAC Capital (amongst others) in receiving FBI subpoenas as regards insider trading. Rumors are running wild as to what exactly the feds have on some of America's most powerful hedge fund managers. However, there is little doubt that the government is targeting the biggest fish in the sea.

As more big name traders get pulled into this insider trading investigation I must admit this situation is starting to remind me of baseball's steroid scandal. In many ways Steve Cohen and Ken Griffin are the McGwire and Bonds of the trading world. Their (Cohen's and Griffin's)average yearly returns of 20-30% are huge (the market equivalent of 70 home runs), and to many observers unbelievable. Like McGwire and Bonds, there has long been whispers that big hedge fund managers use "shortcuts" to give them an unfair advantage (i.e insider information). From my perspective, I do hope the rumors and allegations are false, as Cohen and Griffin are some of my trading heroes. But then again, so were Andy Pettitte and Roger Clemens...

Links:

CNN Money: "Don Chu Arrested in Insider-trading Probe."

NY Post: "Targeted Hedge Funds Are Toast."

Fortune: "Why The Feds Want Steve Cohen."

World's Greatest Trader In Serious Trouble?

Posted by Sean Doyle, November 22, 2010.

Photo Courtesy of Vanity Fair.

Steven A. Cohen, kingfish of the mammoth SAC Capital and holder of WSB's unofficial appellation "World's Greatest Trader" (see here and here) may be in the sights of FBI. According to Henry Blodget of Business Insider, a major goal of the government's huge investigation into institutional insider trading is "nailing SAC Capital." Say it ain't so Stevie!

This afternoon, according to the Wall Street Journal, the FBI raided the offices of Level Global and Diamondback Capital Management, two hedge funds run by former managers at SAC Capital. Level Global is run by David Ganek, who like his mentor is an avid art collector with a knack for picking stocks. Diamondback Capital is run by Richard Schimel, another decorated SAC alum.

Rumors have long circulated that Steve Cohen was the object of an FBI investigation, and thanks largely to a disgruntled ex-wife his once stellar reputation has taken a hit in recent years. However, after all of this scuttlebutt, is Cohen the biggest fish the FBI has in their ever widening net?

Image by Sean & Colin Doyle.

Perhaps there is an even bigger figure in this insidious institutional insider trading debacle. One who posses even more power than Stevie Cohen. A man long rumored to be the Dark Lord of the Sith himself....Lloyd Blankfein!

Only time will tell on this front. Until then, let's hope Steve Cohen is innocent as he has been a hero to many traders, including this one.

Here's some linkage:

NetNet w/ John Carney: "The Government May Still Have Nothing On SAC Capital."

Forbes: "Wall Street Braces For Insider Trading Charges."

Fun With Furry Animals!

Posted by Sean Doyle, November 17, 2010.

Quantitative easing explained...

Benny The Bondtrader.

Posted by Sean Doyle, November 17, 2010.

Benny has taken to the bond pits! Flush with cheese from his new $600 billion (federal reserve) hedge fund he started with some of his FOMC bros, Ben Bernanke has gotten into the bond trading racket. With an eye on US treasuries, "The Chairman" as he likes to be called, is looking to build a strong position in American debt. When told by some close associates that he (Bernanke) was getting a big head over his trading prowess, Bernanke responded, "George Soros ain't got nothing on me!!"

Chart Courtesy of Bloomberg Businessweek.

Ol' Bud Fox Has Still Got It.

Posted by Colin Doyle, November 4, 2010.

----------------------------------------------------------------

A random search on Google of the following terms:

Coke, Hookers, Coke

Voila....

Left Wing Nuts In San Francisco Ban Happy Meals

Posted by Sean Doyle, November 3, 2010.Photo Courtesy of Mario Anzuoni / Reuters.

First off, I apologize for the obvious redundancy of the title. Apparently the Politboro in the City by the Bay has outlawed the Happy Meal. You know the Happy Meal, that innocuous glob of cheap deliciousness that is often packaged with an equally cheap (and innocuous) little toy. Yes, I know, San Francisco is home base to Comrade Pelosi and her apparatchiks, but even I was surprised by this dastardly attack upon an American institution.

In order to counter this vile aggression, the patriots at McDonalds have brought back their secret weapon....The McRib!!! Your move, Nancy pants.

Here's the linkage:

The Week: "San Francisco's Happy Meal Ban"

The Midterms Are Here.

Posted by Sean Doyle, November 1, 2010.

A homeless man begs President Obama as he (Obama) leaves a French restaurant in Chicago yesterday. (Photo Courtesy of Reuters/ Larry Downing.)

Two years have passed since the historic election of Barack Obama and America is still mired in the longest economic slump since WWII. Unemployment stubbornly hovers around 10% despite a myriad of Government and Federal Reserve programs and strategies. The American people have lost faith in both public and private solutions to an economic mess which they feel they did not create. Enter the Tea Party. A loose confederation of fiscally concerned citizens and oddballs.

Because of this nascent and controversial political movement, Republicans are expected to take back control of the House of Representatives and make major strides in the Senate. This conservative retake will deal a serious, if not fatal, blow to the Obama governing coalition. The burning question now, is how will this newly divided government effect the still fragile "recovery?"

If you are in the Krugman-Keynesian camp, you believe that the only way out of this economic black hole is massive government intervention and Federal Reserve quantitative easing. If you are in the Santelli-Ryan camp you see a government debt monster that eats away at the entrepreneurial spirit of America and leaves us uncompetitive in the global economy.

Image Courtesy of The New York Times/ Election 2010.

So, depending on which camp you're in, the results of today's election are either financial armageddon or fiscal salvation. Just the kind of hyperbole we need at this economically frail moment! Happy voting!

The Old Double Irish.

Posted by Sean Doyle, October 23, 2010.

Don't be evil. Or pay taxes. So it turns out Google (GOOG), everybody's favorite search engine/ intelligence agency, used a technique referred to as the "Double Irish" to save some $ 3.1 billion in taxes. It's a little complicated so I'll leave the pretty Double Irish duo below to explain it. Basically it involves income shifting, "Dutch sandwiches," and whole bunch of clever cross border loopholes. I guess if it's legal it's not evil. Go Goog!!!!

Back in Cramer's day a "Double Irish" meant two shots of Jameson at lunch....

Here's some linkage:

NY Mag: Google Uses the "Double Irish" and the "Dutch Sandwich" to Avoid Billions in Taxes.

Bloomberg: Google's 2.4% Rate Shows How $ 60 Billion Lost To Tax Loopholes.

Well, That's Not So Bad...

Posted by Sean Doyle, October 21, 2010

Cartoon courtesy of Dave Granlund.

Jeez!! What's the big deal anyway?

The FHA announced today that the taxpayer bailouts of Fannie and Freddie could cost another $363 billion through 2013 in a worst case scenario (i.e: double dip recession). This is in addition to the $148 billion in taxpayer dough that's already been spent since the government seized the bloated old couple. That's only half a trillion dollars! That's not so bad. Why's everyone freaking out? It's not like our government is running deficits or our debt to GDP levels are reaching scary levels....

Apple Hearts Facebook?

Posted by Sean Doyle, October 20, 2010
Image courtesy of Nick Bilton/ New York Times

Apple Inc. (AAPL) is soon to be the most valuable company in America. Oh yeah, and they have about $51 billion in cash sitting on their balance sheets. That's a super fat chump of change. So it begs the question...Will Jobs and Co abandon their time worn strategy of organic growth in the name of acquisitions? $51 billion can buy you a whole lotta stuff. But, what makes the most strategic sense for the Kings of Cupertino? In today's NY Times Dealbook section there is an excellent article on just that topic. I have some ideas of my own....

What can $51 billion buy?

Here's some ideas:

Warren Buffett: $47 Billion

Facebook: $35 Billion.

Sirius/XM: $5.3 Billion

NY Yankees: $1.6 Billion

Boston Red Sox: $860 Million

RIMM (Blackberry): $25 Billion

Electronic Arts: $5.1 Billion

Netflix: $7.1 Billion

Playboy: $175 Million

Yahoo: $21.7 Billion

Empire State Building: $1.5 Billion

Personally, I'd buy the Yankees and Playboy and the Empire State Building and turn it into my own private residence (Haha) but I digress. However, for strategic business reasons there is simply no better buy for Apple than Facebook. With it's 500 million membership base and superhuman growth rates Facebook is in the unique position as both a powerhouse tech company and one that is (depending on one's own feelings on the matter) "affordable" for Apple. There are, of course, natural synergies between the two. Both companies are lifestyle brands with high customer satisfaction and hip factor. Up till now, Zuckerberg has been reluctant to sell his baby. But perhaps Steve Job's fabled reality distortion field and a $ 40 billion dollar check might change his mind.

Tan Man Settles!

Posted by Sean Doyle, October 18, 2010.

Angelo Mozilo, God's gift to the tanning booth, has agreed to pay $ 67.5 million dollars to the SEC on charges that he committed fraud and insider trading during his stint as head of Countrywide Financial. Mozilo, who bares a striking resemblance to Syracuse University's beloved mascot "Otto The Orange" (see below), is the genius who brought us "liar loans" and nearly destroyed the world economy all while making himself and several California tanning salons very wealthy.

After pocketing a good chunk of change ($ 139 million) for selling his Countrywide stock in 2006 and 2007 as the phony real estate bubble which he helped to create burst, "Tan Man" now gets to ride off into the sunset. The rest of the world, however, isn't as lucky...

Google Crushes 3rd Quarter.

Posted by Sean Doyle, October 15, 2010.

Google, Al Gore's second favorite technology company, posted better than expected 3rd quarter results last night. Earnings came in at $7.64 per share, much better than the $5.89 the search giant posted in the same quarter last year. Wall Street, as usual, is unfashionably late to the party with a slew of hasty upgrades by "savvy" analysts. Here's a few ups for shits and gigs:

RBC raises GOOG target to $690 from $600.

Oppenheimer raises GOOG target to $650 from $630.

Barclays raises GOOG target to $675 from $550.

UBS raises GOOG target to $720 from $685.

With Apple trading at all time highs and Google making its way there, Vide President Al Gore was heard to collapse in a delirious (for him) joy...

Mr. T, Gold Bug.

Posted by Sean Doyle, October 14, 2010.

Pimm Fox better watch his back....

Hoenig To Fed: "Knock Off This Easing Bunk!"

Posted by Sean Doyle, October 12, 2010Photo Courtesy of Reuters/ Tami Chappell

Tom "The Bomb" Hoenig has about had it up to here with all this quantitative easing chatter! If Messrs Bernanke and Yellen don't knock off this cheap money kick, Hoenig may just have to layeth the smacketh down. Speaking before the National Association of Business Economics on Tuesday, Hoenig (who is a Fed inflation hawk) announced that "...the benefits are likely to be smaller than the costs," regarding a further round of Fed easing. Upon hearing Hoenig's comments an incensed Chairman Bernanke was heard to respond, "Tom better shut his 'effing mouth before I shut it for him!"

One Man's Trash Is Another Man's Treasure...

Posted by Sean Doyle, October 8, 2010.

"Junk Bonds Are Back On Top" So reads the headline in yesterday's New York Times. Due to historically low interest rates, companies with less than stellar credit ratings are in a mad rush to sell bonds to get financing. According to the Times, in the first nine months of 2010 $275 billion in junk bonds have issued worldwide. That number is up from $163 billion in the year before period, and by the way, an all-time record.

Photo Courtesy of Tina Fineberg/ The New York Times.

"Other than 1988 at Drexel, this is the best time I've ever seen, and it's getting better," said Jim Casey (pictured above), the new junk bond king, who runs the desk at JP Morgan.

Speaking of trash, take a look at this utterly scary jobs chart from the folks at Clusterstock. This nightmare graphic illustrates how truly anemic this post-recession "recovery" has been...

Tepper Don't Play.

Posted by Sean Doyle, September 27, 2010.Photo Courtesy of Marco Grob/ New York Magazine.

I must say I was very impressed with Hedge Fund King David Tepper's performance on Squawk Box last Friday. He was damn funny, and self deprecating (which is highly unusual for self important financial types) all while he made the notion of trading a few billion dollars seem easy as pie. Tepper even matched wits with professional wise ass Joe Kernan. Check it out below:

APPLE > THAILAND.

Posted by Sean Doyle, September 24, 2010.

It's official. Apple Inc.'s (AAPL) market cap is now larger than the GDP of Thailand! As of now, the stock market values Apple at $ 267 billion dollars. In contrast, the Gross Domestic Product of Thailand, a nation of 66 million people, comes in at $ 263 billion. (By the way, Apple has about 34,000 full time employees. So if you do the math, each Apple employee is 2000x more productive to the world economy than an average citizen of Thailand...)

This is a phenomenal success story for Steve Jobs and crew. (Especially for a company that 15 years ago looked dead in the water). Who knows? Maybe Apple will become the first trillion dollar company in World history. At this rate who's to bet against them?

Maria Shakes Her Bartiromos...

Posted by Sean Doyle, August 27, 2010

The Recovery So Far....

Posted by Sean Doyle, August 10, 2010
(Just in case you were wondering, the monkey is the Fed, and the dog is the U.S. economy...)

Is Chairman Bernanke the hero of the Great Recession? WSJ Economics Editor David Wessel seems to think so...

On The Road Of Capitalism There Are Passengers And There Are Drivers...

Posted by Colin Doyle, August 5, 2010.

"Pretty Boy" Lloyd's super-team has gone from perfecto to downright choppy in it's trading division. Goldman Sachs, which (remarkably) posted zero down trading days in Q1, has revealed in a filing that they had 10 days of trading losses in Q2. (Including 3 days of 100+ Million in losses...ouch)

Why the sudden change in trading performance? Insiders believe Lloyd's wild rock-n-rolla lifestyle may have contributed to the lackluster results.

Here's the linkage:

Dow Jones Newswires: Goldman Sachs Had 10 Days Of Trading Losses In 2Q- Filing.

Huffington Post: Goldman Sachs Makes Plan To Spin Off Prop Trading.

Did Goldman Get A Backdoor Bailout?

Posted by Sean Doyle, July 26, 2010.Where would Goldman Sachs (GS) be today without the controversial bailout of AIG?

Well, according to Chuck Grassley, the rascally irascible Republican Senator from Iowa, GS would be up shit's creek sans paddle. "It's as if the New York Fed used AIG as a front man to bail out big banks all over the world," Mr. Grassley said in a statement. "It took nearly two years for the public to learn these details, and they were only revealed because Congress wouldn't take no for answer. Taxpayers deserve to know what happened with their money."

Good luck Chuck with that last point.....

Linkage:

NY Times: An AIG Failure WOuld Have Cost Goldman Sachs, Documents Show.

Jim Rogers Calls Bullshit!

Posted by Sean Doyle, July 26, 2010.Photo Courtesy of The Bob Backlund Appreciation Society.

Jim Rogers, everyone's favorite bow-tied American ex-pat, lambasted the European Union bank stress tests that were performed last week. In an e-mail Rogers labeled the European tests a "PR exercise just as was America's." Rogers went on to say they were "a waste of time - and journalistic ink."

Just 7 of the 91 banks tested in Europe failed the stress test. Fellow curmudgeon Nouriel "Captain Happy" Roubini also attacked the quality of the EU tests stating that he felt they were not nearly "stressful" enough. Here's Cap Happy on Squawk Box this morning...

It seems to me that both Roubini and Rogers are right on this one. If, hypothetically, the Europeans ran a hardcore stress test on their major banks and the majority were proven to be insolvent then that would spark a crisis that could well destroy the European economy. Therefore, it is in everyone's interest that the tests reveal a robust and well capitalized banking sector. In that scenario, the stress criteria must be meetable by the majority of banks. The EU knew this going in and set standards they felt their banks could attain. So yes, this was a glorified (but unfortunately necessary) PR exercise. 

 NY Times: Doubts Persist as Most Europe Banks Pass Stress Tests.

Roubini To Obama: Grow Up!!!

Posted by Sean Doyle, July 18, 2010

Renowned NYU Economist Nouriel "Captain Happy" Roubini has grown weary with President Obama's inability to talk to the nation as adults regarding the economy. Roubini went on Bloomberg Radio with Tom Keene and said, "We have to recognize that Americans are adults. Then we have to speak to them straightforward about the risks and challenges that we have, rather than kicking the can down the road." Roubini added that the President must maintain fiscal stimulus in the short term before ending it altogether. Obama then must follow that up with serious spending cuts and new taxes to tackle what is a monstrous $8 trillion dollars worth of new US marketable debt!

MARKET MADNESS!!!

Posted by Sean Doyle, July 14, 2010.Photo Courtesy of Lions Gate Entertainment.

Props to Zero Hedge and David Rosenberg for the following chart illustrating the sheer intra-year volatility of the 2010 (S&P) US stock market. A series of mini trends and counter trends have emerged, thus creating a wild back-and-forth bi-polar quality to equity trading. These violent twists and turns have only served to further alienate retail investors. 

Bob Prechter < Dipshit.

Posted by Sean Doyle, July 7, 2010.

Photo by Nathalie Schueller.

"Bullet" Bob Prechter, backer of the famed Elliot Wave Theory, came out the other day with a dire prediction for the US economy. Prechter's prescient prognostication?? He sees the Dow sinking to below 1,000 over the next five to seven years due to a deflationary depression that will grip America and much of the globe. Whoahh!!!!

Even amongst bears that's a pretty bleak view. Hell, even amongst dedicated survivalists that's a pretty bleak view! According to Prechter, "U.S. house prices are about halfway down in their bear market." It should be noted that house prices are down about 40% from their peak.

Here is Prechter on Bloomberg discussing the US dollar and debt:

The chart below is how Prechter sees the next four to five years possibly playing out in the Dow. If this dire scenario comes to pass we'll have a lot more to worry about than just asset devaluation and deflation. Trust me, if the DJIA sees the bad side of 1,000, eating and surviving will be far greater daily priorities than our 401k values.

Apple Presents The iHand!!

Posted by Sean Doyle, July 7, 2010

Graphic Courtesy of Google Nexus One Phone.

With Apple Inc (AAPL) now about twenty-five dollars off of its recent high of $279 the Apple-bulls have re-emerged in force.  JP Morgan's Mark Moskowitz just slapped a $390 price target on the ever popular stock. That's a Street high, but many market watchers think that it's just a matter of time before some brave soul crosses the big 4 ($400) for the house that Jobs built.

Below is a graphic from Alacra Pulse showing what the best analysts on the Street forsee for Apple's future...

Short Circuit.

Posted by Colin Doyle June 30, 2010

Well, what do ya know? Looks like we had another "flash crash" yesterday. This time, shares of the not-so-venerable Citigroup (C) plunged 17% in less time than it takes banksters to raid the U.S. Treasury of taxpayer money to cover their bad trades. Which, as we all know, can happen rather fast. However, the 5 minute freeze in trading activity which is triggered by a rapid plunge in shares allowed for the trade to be corrected and the stock to open up at a price that was in line with earlier trading activity.

Chart Courtesy of Zero Hedge/ Bloomberg Terminal.

LINKS:

Zero Hedge: Fat Digital Finger Breaks Citi Stock...

NY Times Dealbook: Citi Suffers It's Own Minicrash.

WSJ: Citigroup Becomes Second Stock Halted By Circuit Breaker.