Insomniac Hedge Fund Guy

U.S. Must ‘Stop Punishing Banks,’ Halt Loan Claims, FBR Says

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Sept. 6 (Bloomberg) — U.S. government-backed firms and agencies should “stop punishing banks” and suspend demands for mortgage repurchases because they are impeding an economic recovery, according to Paul Miller of FBR Capital Markets & Co. Repurchase losses may total $121 billion, wrote Miller, a former federal bank examiner, in an analyst’s note to clients dated today. He previously said the tally might range from $54 billion to $106 billion. Losses for Bank of America Corp. could reach $66 billion in some scenarios, he wrote. Fannie Mae, Freddie Mac, the Federal Housing Authority and the Federal Housing Finance Authority “are … Read more

U.S. Stock Futures Drop Amid Concern European Crisis Worsening

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Sept. 5 (Bloomberg) — U.S. stock futures fell, indicating the Standard & Poor’s 500 Index may slide for a third day when exchanges open tomorrow, as European markets showed growing concern the sovereign debt crisis is worsening. Bank of America Corp. declined 5.9 percent and Citigroup Inc. dropped 4.9 percent in German trading as banks led the Stoxx Europe 600 Index to a 4.1 percent retreat. Alcoa Inc., the largest U.S. aluminum producer, slumped 3 percent in Germany. S&P 500 futures expiring in September lost 2 percent to 1,145.60 at 11:50 a.m. in New York. U.S. markets are closed for … Read more

Why Financial Institutions Should Move to Asia

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Financial Institutions around the world and especially those in Europe and the USA face a crucial set of choices about the future of their institutions. Western Governments are riddled with debt and their only way out is decades of austerity and taxes, but the new world is a mobile world, globalization has set limits on how much a government can impose it’s will on the corporations and citizenry of a nation. Excess taxes and austerity will lead to a mass financial migration to emerging markets. For advise on moving to Asia, contact us Having spent most of my life in Asia, … Read more

Investing in a Crisis

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Mobility and a long term outlook are essential when managing your portfolio in a crisis. The ability to select the best quality long term investments from the traditional and emerging markets. For hedging mobility is key, the ability to access Foreign Exchange, Commodities and Futures to balance your risk is a new fundamental asset for investors. Cash is no longer king and the value of the USD is being eroded which means everyone must rethink their investment strategy and adjust their portfolio holdings. While many think that if they live in the USA and earn in USD nothing will change, … Read more

Obama Cancels Ozone Rules After Lobbying Push From Business

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Sept. 2 (Bloomberg) — President Barack Obama quashed proposed rules on ozone from the Environmental Protection Agency, agreeing with Republicans and industry to withdraw the costliest regulation being considered by the administration. Obama said he is seeking to reduce regulatory burdens as the economy recovers, and said the EPA would weigh tighter standards on ozone, which causes smog, in two years. “Ultimately, I did not support asking state and local governments to begin implementing a new standard that will soon be reconsidered,” Obama said today in a statement. The EPA’s proposed regulations for ground-level ozone would have revised rules issued … Read more

Banks Overwhelmed by Mortgage Refinancing After Job Cuts

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Sept. 2 (Bloomberg) — Mortgage rates near historic lows have sparked a refinancing boom that has U.S. lenders struggling to handle the surge. “There’s just so much volume,” said Kristin Wilson, a senior loan officer in Bloomington, Minnesota, for Fairway Independent Mortgage Corp., who has seen clients seeking lower rates climb to about half of her business from 20 percent a month ago. “We can’t just ramp up by hiring inexperienced people because they don’t know what they’re doing.” The lending logjam extends to the nation’s biggest banks, which fired thousands of mortgage workers after interest rates rose in November … Read more

Stocks plunge after US hiring dries up in August

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NEW YORK (AP) — Stocks tumbled Thursday after a dismal report on the job market renewed fears of another recession. No new jobs were created in the U.S. last month, the government said early Friday. It was the worst report in 11 months. The unemployment rate held steady at 9.1 percent. It has been above 9 percent in all but two months since May 2009. “It’s certainly ugly,” said Jeff Kleintop, chief market strategist at LPL Financial. Kleintop said the report didn’t change his view that the economy was headed for a stretch of weak economic growth, not a recession. … Read more

Achieving Growth in Europe

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Achieving Growth in Europe Eurozone manufacturing activity contracted for the first time in almost two years in August, underlining investor concerns about a deteriorating global growth picture. In a worrying sign for policymakers, the regional slowdown appeared to be spreading. German factories, which have supported growth in the bloc for some time, hit the brakes in August and France’s manufacturing sector contracted for the first time since July 2009. Speech by Jean-Claude Trichet, President of the ECB at the Jackson Hole Economic Symposium Panel: Setting priorities for long-term growth Jackson Hole, U.S.A., 27 August 2011 The title of our panel … Read more

White House sharply cuts growth forecast

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(Reuters) – President Barack Obama on Thursday sharply cut estimates for U.S. economic growth, underscoring the difficult challenge he faces in spurring a stronger recovery and creating more jobs. The president, who must curb high unemployment to improve his chances of winning re-election in 2012, will give a major speech on September 8 on how he plans to lift hiring and growth. “The economic projections make clear there is a real need in the short term to kick start economic growth and get on a sustained higher growth path,” White House budget chief Jack Lew told reporters on a conference … Read more

U.S. judge pans rush in BofA $8.5 billion mortgage pact

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(Reuters) – A judge questioned why Bank of America Corp’s $8.5 billion settlement with mortgage securities investors was being rushed for approval and whether the trustee that negotiated it treated investors fairly. U.S. District Judge William Pauley set a September 21 hearing to consider requests from some investors to move the case to Manhattan federal court from a New York state court, where the trustee Bank of New York Mellon Corp wants it handled. That timetable is slower than Bank of New York Mellon wanted and could imperil a scheduled November 17 hearing before New York State Supreme Court Justice … Read more

US Dollar to Come Under Pressure

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The United States has the least balanced maturity schedule of any major nation. Over 70 percent of its bonds mature within 5 years, compared with an average 49 percent for the 34 member countries in the OECD. The U.S. Treasury has succeeded in extending the average maturity of its debt to 62 months, out from less than 50 months in 2009. That process needs to continue. One sign that investors are more nervous about longer-dated bonds is that the yield gap between 10-year notes and 30-year bonds, currently the longest U.S. maturity, is trading at 137 basis points. This gap … Read more

S&P rates Subprime Mortgages higher than the USA

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S&P rates Subprime Mortgages higher than the USA MHP Standard & Poor’s gives a higher rating to securities backed by subprime home loans, the same type of investments that led to the worst financial crisis since the Great Depression, than it has assigned to the US government debt. S&P is poised to provide AAA grades to 59% of Springleaf Mortgage Loan Trust 2011-1, a set of bonds tied to $497-M lent to homeowners with below-average credit scores, and virtually no equity in their properties. New York-based S&P took away the US’s Top rank on August 5, saying Washington politics were … Read more

The Noise About a Gold Bubble

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Red’s POV on all of this Noise about a Gold Bubble Gold may be a bit over extended in, but it is not a place to make a Bearish call IMO. The Gold Bears had a shot the Gold price last week, when Gold put in a temporary Top at 1911 oz and began it healthy correction. It tapped 1709 three days later. That 10.5% fall did not drive the Gold Bulls away, the Gold players saw the dip as technical mark to start buying again, and Gold’s has rallied 7.3% off that low. And during the rebound the CME … Read more

Merkel backs euro fund boost, faces revolt risk

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(Reuters) – German Chancellor Angela Merkel’s cabinet approved new powers for the euro zone’s bailout fund on Wednesday, but she faces an uphill battle to convince party skeptics to back efforts to contain the crisis. Concerned that Germany’s parliament has little control over the European Financial Stability Facility (EFSF), some members of Merkel’s center-right coalition are threatening to oppose boosting its powers when the Bundestag (lower house) votes on September 29. If enough conservatives rebel and Merkel is forced to rely on opposition parties to pass the legislation, she could face pressure to dissolve parliament and call early elections, although … Read more

Investors slash equities in August melt

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Reuters) – Global investors slashed their holdings of equities below 50 percent this month and piled into cash, reflecting what was lining up to be the worst August for world stocks since 1998. They also lifted exposure to bonds in North America, Britain and, to a lesser extent, the euro zone, where Germany is considered a safe haven. Reuters polls of 57 leading investment houses in the United States, Europe ex-UK, Japan and Britain showed the average stock holding in a balanced or model portfolio falling to 49.2 percent. It was the lowest since at least February 2009, when the … Read more

Global stocks at two-week high, rally may stall

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(Reuters) – Global shares edged up to their highest in nearly two weeks on Tuesday, but the rally looked to be running out of steam on the back of concerns over Europe’s debt troubles and U.S. growth. World stock markets, as measured by MSCI, were up 0.17 percent, but European markets were mixed, with Germany’s DAX index down half a percent and U.S. futures pointed to a weaker open for Wall Street. With big-ticket data like U.S. job numbers due later this week, many investors remain uncertain about a recovery in the world’s largest economy, leaving risk for a correction … Read more

Lehman to seek creditor vote on $65 billion payout

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(Reuters) – Lehman Brothers Holdings Inc will ask a bankruptcy judge on Tuesday to let creditors vote on its $65 billion payout plan, a key step toward ending the biggest bankruptcy in U.S. history. The investment bank, under Chapter 11 bankruptcy protection since September 2008, will present its plan outline at a hearing in U.S. Bankruptcy Court in Manhattan. If Judge James Peck deems the outline sufficient, creditors will vote on the plan on November 4. The plan would pay creditors an average of 20 cents on the dollar, with some groups receiving more, including derivatives creditors who would take … Read more

Banks Lead Greece Recovery

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Greek stocks rallied, with the benchmark ASE Index climbing the most in more than 21 yrs, as EFG Eurobank Ergasias SA (EUROB) and Alpha Bank SA announced a merger. Eurobank and Alpha Bank each rose by the allowed daily limit of 30% after saying they will combine and sell new equity to strengthen their capital in an attempt to weather the debt crisis. Larger rival National Bank of Greece SA (ETE) gained the most on record while Piraeus Bank SA (TPEIR) had the highest advance in almost 18 yrs. The ASE rose 14% to 1,006.59 at the 5 p.m. close … Read more

Strauss-Kahn meets with IMF

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Strauss-Kahn meets with IMF Chief and staff members The Washington-based International Monetary Fund (IMF) said Monday that its former boss Dominique Strauss-Kahn paid a visit to the Global lender and met with its Chief and staff members. He visited IMF headquarters Monday afternoon, and current IMF Managing Director Christine Lagarde met him prior to his meeting with Fund staff, an IMF spokesman said in a short statement. “These were private meetings, arranged at his request. We have no further comment to offer,” the statement said. IMF spokesman David Hawley said on August 25 at an IMF press conference that Mr. … Read more

Brazil raises primary surplus target

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Brazil raises primary surplus target Brazilian Finance Minister Guido Mantega said Monday that the government will raise the primary surplus target for Y 2011 to minimize the effects of the Global financial crisis. The surplus will be raised from 117.8 to 127.8-B Reais (US$73.6 to 79.9-B), representing some 3.3% of the nation’s GDP. In the 1st 7  months this year, Brazil’s primary surplus amounted to 92-B Reais (US$57.5-B). “We are taking precautions against a possible escalation of the crisis to prevent Brazil from suffering the same fate as the affected countries,” Mantega said. “We want Brazil to continue in a … Read more

Japan Unemployment Rate Rises as Noda Becomes Prime Minister

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Aug. 30 (Bloomberg) — Japan’s jobless rate rose for a second month and retail sales dropped, underscoring the challenge for incoming Prime Minister Yoshihiko Noda in securing Japan’s recovery from the March 11 earthquake. The unemployment rate rose to 4.7 percent in July as payrolls fell by 40,000 from a month earlier, the statistics bureau said today in Tokyo. Retail sales slid a seasonally adjusted 0.3 percent from June, a Trade Ministry report showed. Noda, who was elected premier by the lower house of parliament today, inherits a recovery under threat from an advancing yen and a global slowdown. A … Read more

Gross Says Look Elsewhere as U.S., Europe Face Recession

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Aug. 30 (Bloomberg) — The global economic crisis is leading to a possible “developed economy” recession in the U.S. and Europe, which may be hard to alleviate, according to Pacific Investment Management Co.’s Bill Gross. In this environment, the world’s biggest manager of bond funds favors investing in Australia, Mexico, Brazil and Canada, along with non-dollar currencies that have strong ties to the Asian continent, Gross, co-chief investment officer and founder of Pimco, reiterated. Although global equities are attractive because dividend yields in many cases are higher than bonds, they’re vulnerable to faltering growth, Gross wrote in a monthly investment … Read more

Central Bankers Urge Governments on Expansion

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  Central bankers gathered at an annual retreat in Jackson Hole, Wyoming, this weekend had a message for political leaders: monetary policy alone can’t keep the global expansion going. Federal Reserve Chairman Ben S. Bernanke urged adoption of “good, proactive housing policies” to reverse the depressed U.S. real estate market and warned lawmakers to avoid steps that may hurt short-term growth. Ewald Nowotny of the European Central Bank Governing Council said euro-area governments should expand the powers of their regional bailout fund. “Most of the economic policies that support robust economic growth in the long run are outside the province … Read more

Industries Prone To Bubbles and Why

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A bubble (sometimes called an asset bubble, financial bubble or investment bubble) exists when the market prices of assets in a particular class far exceed those assets’ true value. These inflated values are unstable and eventually fall dramatically. Dozens of bubbles have inflated and burst over the course of history. While some bubbles appear to be one-time events, certain industries have seen bubbles form repeatedly, with investors seemingly never learning from past mistakes. Let’s examine a few of these industries and what appears to make them bubble-prone. Precious Metals In times of economic turmoil, many investors view precious metals as … Read more

The Fed’s Toolkit Revealed

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The slowdown in US growth has raised speculation the US Federal Reserve may have to provide additional monetary support to the economy, and the Fed Chairman say they are monitoring the issues and standing by. With interest rates already effectively Zero and the Fed’s balance sheet at a record US$2.85-T, US central bank officials has not acted yet to stimulate economic activity further yet. Persistent unemployment and new turbulence in financial markets has added pressure on the Fed to do something. US Fed Chairman Ben Bernanke noted last week that the Fed is prepared to respond to possible further weakness. … Read more

Greek Banks to Merge

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ATHENS—Two of Greece’s largest lenders, Alpha Bank SA and EFG Eurobank Ergasias SA, Monday announced plans for an estimated €7 billion ($10.15 billion) tie-up that would create the country’s largest bank, in a bid to address mounting problems in the Greek banking sector. “I am confident that the new combined entity will act as an important agent for the economic development of the country,” Eurobank Chairman Efthymios Christodoulou said. “It is also well placed not only to withstand the current economic turbulence, but to create new opportunities and play a pivotal role in the future growth of the region.” According … Read more

Obama to Tap Krueger as Top Economist

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President Barack Obama on Monday plans to nominate Princeton University’s Alan Krueger to be chairman of the White House Council of Economic Advisers, a White House official said. If confirmed by the Senate, Mr. Krueger, a labor economist, is likely to provide a voice inside the administration for more-aggressive government action to bring down unemployment and, particularly, to address long-term joblessness. Mr. Krueger, 50 years old, returned to Princeton a year ago after serving as assistant Treasury secretary for economic policy during the first two years of the Obama administration—which means he has recently cleared the sometimes treacherous Senate confirmation … Read more

What a week! My prediction for next week.

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The nay sayers, glass half -empty, perma-bears, and high frequency traders did their best to crack my resolve.  But beware, when you live out West with three ski resorts out your deck, highs in the high 70’s with no humidity, it take more than Chicken Little to make me croak.  East coast types were palpitating about the rare hurricane, Irene, that seemed to be bearing down on Wall Street.  With the German DAX and Greece debt in free fall, weather cooperated to make the average hedge fund type positively cataclysmic.  Hard to believe the market rebounded 4.5% for the week, … Read more

Analysis: “Safe haven” assets start to look risky – Yahoo! Finance

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Analysis: “Safe haven” assets start to look risky tA bank clerk removes 200 Swiss franc banknotes out of a money counter in a bank in Zurich August 16, 2011. REUTERS/Arnd Wiegmann On Friday August 26, 2011, 6:04 am EDT By Jeremy Gaunt, European Investment Correspondent LONDON (Reuters) – This year’s heady bout of risk aversion on financial markets has ratcheted up demand for gold, U.S. Treasuries and the Swiss franc to levels that suggest they may no longer be the “safe havens” they are billed as. Some investors see all three as vulnerable to a sharp sell-off should the global … Read more