If the Fed cuts rates, and goes negative, it will have a direct impact on top consumer banks' balance sheets.» Read More
Various members of the NetNet crew are in and out this vacation and snow-filled week, so we've asked a few friends to fill in. The following is from hedge fund manager and financial columnist James Altucher ...
You want to see a "V"? Look at the rebound last year in spending of software and equipment by businesses:
— Basically, tech is going to benefit from two things...
1. After reading this article, I actually bought some of the applications. One of the few articles I read that actually improved my life a little bit. Top 10 online applications .
2. Is Chinese the new language of the Internet .
3. Online dating, Uri Geller the psychic, and how I met my wife .
4. Will the demand for Silver, Continue into 2011 ?
5. Does the January Effect really work in the stock market?
6. The Microcap Speculator has the macro call of the year : buy Chinese microcaps. I believe this one.
7. The SEC is starting to look into all of the private trading that is going on in Facebook stock, Zynga stock, Twitter, etc.
8. And finally, LuluLemon might've gained a new customer. HowI was talked into doing yoga , the video version.
Read more from Altucher on his blog The Altucher Confidential
Case-Shiller numbers for October-September are down.
Here's the roll-up:
Composite-10: Down 1.2% — to 159.03 (October 2010)
Composite-20 Down 1.3% — to 145.32 (October 2010)
Composite-10: Down .9%
Composite-20: Down 1%
All of the 20 MSAs—Metropolitan Statistical Areas—have shown declines.
Public Trading in Private Companies (CNBC via New York Times) Looking to buy stock in Facebook or Twitter—even though those companies are privately held? Well, look no further than the secondary trading markets! It sounds exciting, doesn't it? Just remember: Your shares are illiquid. And--oh, yeah—there is the small matter of the S.E.C. inquiry into the practice itself. Good luck! (Today's Wall Street Journal also reports on the same story .)
Non-US Banks Profit from Easy Fed Credit \(Financial Times\) Here's a story that should come as a surprise to know one: Non-US financial firms benefited from Fed credit programs. But what may come as a bit of a shock is the scale: Non-US Banks received more than half of the lending from TAF—the Term Auction Facility —which was the largest of the crisis bailout programs. FT Reports: "Some of the world's strongest banks have profited from an emergency credit facility set up by the US Federal Reserve to shore up confidence in the global financial system, according to a Financial Times analysis of data released by the Fed." And then there is the small matter of collateral quality: "In the summer of 2008, TD [a Canadian bank] was borrowing $1bn from TAF at rates of between 2 and 2.5 per cent. For that borrowing it used the lowest quality - and hence highest yielding - collateral acceptable to the Fed. More than 80 per cent of its collateral had a triple B credit rating at a time when such bonds yielded about 7 per cent. TD could therefore have made a notional gross spread of about $4m a month during 2008."
The Big Thaw: New York Digs out from Blizzard (NY Post) "The snow may have stopped falling, but the mess continues. A day after the big blizzard socked the city with over 20 inches of snow, both Kennedy and Newark airports are set to reopen at 6 p.m., officials said. Kennedy Airport was closed at 8 p.m. Sunday after thousands of flights had been canceled throughout the day. Newark closed just after 10 p.m. LaGuardia Airport, the smallest of the three major New York City airports, remained closed indefinitely. Hundreds of people were stuck this morning at the three airports."
AIG Secures Private Financing \(Wall Street Journal\) AIG announced today that is has secured $4.3 billion in financing from commercial banks. The funds will replace money lent by the New York Fed, as AIG prepares t repay its government loans. AIG traded at a 52 week high, flirting with the $60 per share mark in afternoon trading. "The government-controlled insurer said it has established $3 billion in new bank credit facilities, split between a 364-day line and a three-year facility, under which banks have agreed to make loans to AIG. In addition, AIG's property and casualty insurance subsidiary, Chartis Inc., entered into a one-year, $1.3 billion letter of credit facility. The new funding is being provided by 36 banks and will be available to AIG once the company pays down and terminates its secured credit facility from the New York Fed, which was established when the government bailed out the insurer in September 2008. "
Ninety-Eight banks that received TARP funds are still in trouble, based on their third quarter financial results. The number of troubled banks has risen from 96 the prior quarter. A 2 percent increase in the number of problematic banks may not sound like an impressive jump in risk — but it certainly isn't an improvement either.
This new data comes to us today from an analysis released by the Wall Street Journal .
And the takeaway point may be this: These numbers represent an important counter-narrative from the official line of cautious optimism.
Nicole Lapin, of CNBC's Worldwide Exchange, explains what she's long and what she's short this week.
Remember when you waited on tenterhooks when the Federal Reserve’s Open Market Committee was meeting. Would they raise rates? Lower them? Leave them unchanged? How should you trade the announcement?
These days are just plain boring. No one is shocked that the Federal Reserve will not alter its 0 to 1 /4 percent federal funds rate target. And we knew all the back in November that quantitative easing was back on.
The prospects of a Municipal Meltdown are on nearly everyone's list of potential nightmare scenarios for 2011, but whose opinions can we trust?
Since we've already learned (the hard way) that the professional ratings agencies are hopeless, how about a different approach to municipal credit insights? What if we turned to Zagat for a state-by state outlook? Can't be much worse than the non-anticipatory, bought-and-paid-for research we're relying on now...
Here's how those Zagat-style muni bond reviews might look...
Google n-grams shows the rise of public awareness of hedge funds. What seems clear, to me, is that hedge funds are getting far more attention than they deserve and investment banks not enough, given their relative importance to the broader economy.
The "doom loop" is shaking up stock markets as worries of negative interest rates in the US may come.
The rivalry between Bill Gross and his former company Pimco looks set to hinge on the U.S. economy this year. FT reports.
Tender issued for euro-denominated unsecured bonds worth 3 billion euros and dollar-denominated bonds worth $2 billion.