Pension funds are keeping their hedge fund managers despite the recent decision by CalPERS to dump them.» Read More
Taxpayer Bailout Made $35 Billion (CNBC via AP) "The government's heavily criticized $700 billion financial rescue program has earned nearly $35 billion in income over the past two years, according to data obtained by The Associated Press. The data showed that income from the Troubled Asset Relief Program rose nearly 17 percent through November, compared to where it stood in October. The income was boosted by the government's ongoing sales of Citigroup."
Companies Staying in Cash (Wall Street Journal) Most cash since Eisenhower: "Corporate America's cash pile has hit its highest level in half a century. Rather than pouring their money into building plants or hiring workers, nonfinancial companies in the U.S.
were sitting on $1.93 trillion in cash and other liquid assets at the end of September, up from $1.8 trillion at the end of June, the Federal Reserve said Thursday. Cash accounted for 7.4% of the companies' total assets—the largest share since 1959.The cash buildup shows the deep caution many companies feel about investing in expansion while the economic recovery remains painfully slow and high unemployment and battered household finances continue to limit consumers' ability to spend."
CNBC's Diana Olick on Possible Expanded Role for GSEs (CNBC) "Last week I interviewed an investor who buys foreclosed properties and rents them out long-term for solid returns. He claims that's the only way to right the housing market — get long-term investors to eat up the excess inventory. The biggest roadblock, however, is credit.
Fannie Mae and Freddie Mac both limit the number of investor mortgages. Multiple sources now tell me that the Administration, specifically over at the Department of Housing and Urban Development, is considering ways to get more investors into the housing market, possibly with the help of Fannie and Freddie. HUD would not confirm that, but Fannie Mae's chief economist Doug Duncan said it is definitely on the table both at HUD and at Fannie. "
CNBC's Jeff Cox on Declines in The U.S. Treasury's Market. \(CNBC\) "Despite the surprise success of Thursday's 30-year bond auction, analysts think the outlook for Treasurys is anything but bullish—prices will continue to decline, pushing interest rates higher. The reason, most bond pros believe, is that economic signs are getting better, inflation threats are accelerating and the government keeps issuing more debt."
New developments on the EU debt trading speculation front.
"First, the results show that there is no evidence of any obvious mis-pricing in the sovereign bond and CDS markets. Second, the CDS spreads for the more troubled countries seem to be low relative to the corresponding bond yield spreads, which implies that CDS spreads can hardly be considered to cause the high bond yields for these countries. Finally, the correlation analysis shows that changes in spreads in the two markets are mainly contemporaneous. The vast majority of countries show now lead or lag behaviour, and when series are not changing contemporaneously, CDS and bond markets are basically equally likely to lead or lag the other. Furthermore, these relationships have been broadly stable over time."
Bond insurer MBIA is suing Morgan Stanley over claims made by the bank regarding mortgage backed securities.
Specifically, the case involves MBIA claims that Morgan Stanley "made false representations regarding the underwriting standards" of bonds it later insured.
It's not difficult to become a little blasé about lawsuits against banks involving the alleged misrepresentation of underwriting standards on mortgage backed securities.
Mortgage repurchase exposure stories have been swirling for some time. At NetNet, we've covered that storyline before.
Insider Monkey responds to Carney's piece Pershing Square's Amazing Returns Cause an Internet Dust-Up .
Insider Monkey responds:
It's good to be Billy Joel: The 61 year old has a stunning new girlfriend.
At 29, Alexis Roderick is 31 years his junior. She's also smart: She works for Morgan Stanley , in their Garden City office, as a senior risk officer.
New York Newsday reports: "Roderick graduated from Stony Brook University, where she focused on political science, economics and Latin American studies. She has been with Morgan Stanley since April 2005." Little else seems known about her.
Occam's Razor seems to be slicing through the financial blogosphere.
Joe Weisenthal wrote about it this morning . Perhaps, based on the time stamps of the posts, he was inspired by Felix Salmon —who had used the concept in a post about the alleged 'speculation' in eurozone debt.
Felix Salmon jumps off from an article in The New York Times about the 'fight' between financiers and central bankers.
Clear the racks! Consumers could be poised for a retreat.
That's according to a new study that is expected to be officially released tomorrow by WSL Strategic Retail, a retail marketing and consulting firm.
"It's very possible the consumer will retreat in January and we've been talking about this," said WSL CEO Wendy Liebmann. "Our data indicates that most people don't believe their personal finances will get better for another three years."
I’m always surprised—pleasantly surprised—when I find myself agreeing with Paul Krugman. Today is one of those surprising days.
Here’s what Krugman writes:
The payroll tax cut is designed to be temporary—which is one of it’s biggest defects. But Mike Konczal at Rortybomb points out that politics may cure this defect :
“It’s clear that it would be an ugly battle to raise this payroll tax in 2012 when unemployment will likely be 8%+,” Konczal writes. (Note: this is leading Konczal and other liberals to worry that the payroll tax cut might be a bad idea.)
This is a point I haven’t taken into account yet. It raises the possibility that the payroll tax actually could lead to more spending—if the public believes that it will be made permanent and therefore create a permanent increase in income. I’m still not convinced this would happen, however, because I suspect the appetite for savings and develeraging exceeds the actual ability of cash-strapped households to save.
There’s a deep irony here. The payroll tax cut might work as intended—encouraging spending—but only if the public believes that it won’t be as limited as the Obama administration plans.
CNBC's Patti Domm and Jeff Cox discuss the jobs report and the current dilemma of long-term unemployment.
CNBC's Patti Domm and Jeff Cox discuss the recent GDP numbers and what factors have been affecting it.
Investors give and investors take away, and nowhere has that been more true lately than in value stocks.