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...