Financial News Watch

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The banks are going to be on line for refinancing a significant quantity of maturing bonds. A recent new issue from American Express, who is considered a higher quality financial sector name highlights the fragile state of the financial system. This debt sold at a junk bond spread of 425 basis points over Treasuries. [...]

My plans now are to go to a subscriber model for my efforts.  It appears I have some devoted readers, but incredibly despite my track record of reporting the unfolding of this Bust, readership is slipping and has hardly grown for a year. I suppose you either get my language and approach or you don’t. [...]

The pace of foreclosures continues a pace. With the subprime situation starting to ripen and mature, perhaps this suggests that the Alt A and Pay Option wall of the hurricane is coming ashore. This is real delayed time fuse explosive material too. By this I suggest that the recoveries will be even worse than for [...]

A new Radio Free Wall Street podcast is now available. The following is more background and related material on the energy substitution theory I advanced in today’s podcast. Complex topic to can’t be address in one cast or a few blogs, but theme requires enormous investment. The MIT study on the Future of Coal, also with discussion [...]

The crash of China’s stock market is now pretty much along the lines seen in the 1929-1932 US crash, the Japanese 1989-1992 crash and the NASDAQ bust. Last night it fell another 5.2% to 2,470. I recall the hook last year on this one: “the Chinese authorities would hold it all together until after the [...]

“Clearly, something is amiss in the markets that few in our strategy, if anyone, have experienced before.” — Letter to Black Mesa investors The trained monkeys in the casinos Boyz have meet the enemy and to quote Pogo, “his is us”. More evidence is rife that big Berserker hedge funds are in liquidation mode. Repeating again, [...]

One pill makes you larger. And one pill makes you small. And the ones that mother gives you. Don’t do anything at all. Go ask Alice When she’s ten feet tall- White Rabbit - Jefferson Airplane New podcast is available. Just when it seemed that the majority of fantasy down the rabbit hole [...]

One of the Bully wannabes icons is (was?) Whole Foods, who bombed on their earnings report after the close. The stock came down another 20% and it is not exactly like this was still a high flyer beforehand. Given that I feel grocers in general are good market plays now I decided to pay a [...]

One of the questions I have been raising concerns losses that Berserkers end up taking on their tendency to make big one way bets. This crowded one way betting is something I have cautioned readers about. It feels great until it gets suddenly reversed and liquidated. Now comes answers to my question as it [...]

The beat goes on, the beat goes on. Drums keep pounding a rhythm to the brain. La de da de de, la de da de da A new podcast is available. A reader sent along a item that showed up in the Sheeple-Crony Capitalist “Housing” Bill that I had to pass on. I am guessing this [...]

“Winning and keeping the confidence of men with money to bestow or withhold is essential to the fiscal operations of the new government.” - Alexander Hamilton We are rapidly moving to the end game, where massive American assets are being marked down and sold to new foreign masters, and international finance front men. Whole new financial [...]

One casualty of the housing bust is without a doubt Washington Mutual or WaMu. This company is an important front to watch in terms of the future of the US economy, given that this bank holds $185 billion in deposits. There currently is a lot of schadenfreude on the internet, blogsphere and in my comment [...]

The FDIC moved this weekend on two more banks.  I see a real problem with this week’s bank closures in that the FDIC pissed away $862 million covering only $3.233 billion in deposits. What does this suggest? Perhaps that the FDIC is waiting too long to act, thus pushing up the costs of bank closure? [...]

In the take these dice from my cold dead hands department one has to wonder how much of this kind of story is still out there hiding under rocks or stuffed into Level III accounting. How many market distorting rogue trades and/or hoarding operations have been set up in God knows how many assets? How [...]

The powerful rally in financials illustrates an important point. A bear raid where many stocks are shorted by 15, 20, even 25% combined with the July 14-15 capitulation was a set up for a ferocious short covering move. When I suggested such at the time, some suggested I was trying to catch a falling dagger. [...]

A series of high profile earnings shortfalls overnight from numerous sectors including the supposedly bullet proof technology arena promises to turn back on the Blue Light Specials (BLS) sirens. I wouldn’t rule out another rapid waterfall drop in the markets here. Therefore it seems timely to comment on some of the BLS set ups I [...]

The blowback that I repeatedly warned about from the monetary loosening, and crony capitalist interventions has succeeded in transforming the United States into the world’s biggest Blue Light Special (BLS: new Winterism). The crackpot theories that got us here should be spelled out for the record: 1) Lack of transparency (causing total breakdown in [...]

The big short covering rally continues into it’s third and a half day this morning, as does the market’s love affair with extreme betting. The stampede into Mad Max casualties and financials and out of CUB plays is a sight to behold, and the reasons for it need to be understood. It’s betting in [...]

One of the small consolation prize benefits showing up is that there are far fewer bad eggs entering the subprime delinquency pipeline at the front end. When you look at this chart of ABX 2006-01 consisting of 20 securitized mortgage trusts, remember that this is a cohort of homeowners who started their mortgages at around [...]

As I have suggested in Thursday’s podcast and my recent posts the first equity infusion Band-Aid for Freddie and Fannie has materialized and as quickly as I had predicted. The details and price levels are a bit unclear, but there are stories running that Hank Paulsen wants the GSEs shareholders to eat a shit sandwich. [...]

The FDIC take down of IndyMac has occurred. This bank had $19.06 billion in deposits, and from the FDIC site it looks like the insurance pool will eat $4-8 billion on this one. With about $52 billion in FDIC reserves on hand, we can get some idea of the possible burn rate as this process [...]

A new podcast has been posted. A 12 minute free preview is also available. Yesterday’s huge rout of the financial sector looked like the panic phase for that sector. This morning once again the tension looked to be relieved for the moment. Then Fannie and Freddie were slammed by new comments about solvency from “former” Fed [...]

The Teflon-like faith in the implied guarantee of the government sponsored agency sector at long last seems to be cracking, and admittedly well past the point I thought it would. I had thought that 20% drops in housing prices would have caused the markets to connect the dots some time ago that “somebody” would [...]

There is something that is not quite adding up. Despite the 56% plunge in China’s stock market, that country continues to be the receptacle of the world’s hot money. The FT.com article makes this mention.

Logan Wright at Stone & McCarthy analysts in Beijing estimates that hot money entering in the first five months could be as […]

With the indexes down 20% the mainstream media has now declared this a bear market. Once again they have gotten their time tenses backwards, as the o que aconteceu reality is that we have already witnessed one of the most devastating bear markets on record. In our weekly podcast and in the freebie clip, I […]

I have used the term hyperinflation to describe the current economic environment and have been met when some scoffers who suggest I am using hyperbole. Since I don’t at all consider it to be plain vanilla inflation when letters arrive in the mail every fifteen days with another price increase as the following story alludes […]

In the Whodathink Department we now see bank credit quantity in a major free fall. The reason for this is straightforward, the bank system as a whole simply does not meet capital requirements even with all the fictitious capital accounting and lack or proper reserving being employed. And they know it, so loans [...]

In the Whodathink Department we now see bank credit quantity in a major free fall. The reason for this is straightforward, the bank system as a whole simply does not meet capital requirements even with all the fictitious capital accounting and lack or proper reserving being employed. And they know it, so loans [...]

On the inflationary fish kill watch comes data on the cost of construction. This would seem to throw cold water on the theory that a slowing economy alone stifles inflation. The reality is that inflation stifles the economy long before Phillips Curve economics takes hold. And unsound money accelerates the process. The average cost of constructing [...]