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Archive for May, 2009

I have never been a big believer in electronics extended warranties; my general perspective is that if a device works for the first couple of weeks, it is likely to work for the rest of its useful life.  Unfortunately, just before heading off to Europe I seem to have had my black swan moment: my MacBook, iTouch, and cell phone (Samsung) all failed within a few hours of each other.  Perhaps someone set off an EMP.

So I hit Europe the old school way, or at least the early-90s way; no internet, limited phone contact, dramatically less flexible plans.  And it brings me back to an unpopular thesis I have had for most of the past decade: the mobile phone is actually a much more important invention than the Internet.

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Good Lord

Buried in the fine print of the Journal…good Lord, is there anything the Fed does that is remotely honest?  I know that lying has pumped up the markets, but if the price is that there is absolutely no government agency with any credibility, is it worth it?  We have argued for decades that the special characteristic of the US capital markets is our transparency and rigorous regulation; seven months of pathological lying makes us seem like a delusional dictatorship (“Grozny is under Russian control”):

The Federal Reserve significantly scaled back the size of the capital hole facing some of the nation’s biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining.

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Rotting Corpse

Fannie Mae may be dead, but unfortunately, it has not gone anywhere:

Fannie Mae, the troubled mortgage finance company, reported a first-quarter loss of $23.2 billion on Friday.

The mortgage giant also reported that it submitted a request for $19 billion from the Treasury Department to cover its losses. That followed a request earlier this year for $15.2 billion to cover 2008 losses.

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Zero Hedge keeps publishing market analysis; I’ll keep pirating it.

David Rosenberg (Merrill Lynch Bank of America departed):

Risk is much higher now than it was 18 weeks ago

The nine-week S&P 500 surge from 666 at the March lows to 920 as of yesterday has all but retraced the prior nine-week decline from the 2009 peak of 945 on January 6 to the lows on March 9. We believe it is appropriate to put the last nine weeks in the perspective of the previous nine weeks. To the casual observer, it really looks like nothing at all has happened this year, with the market relatively unchanged. But something very big has happened because the risk in the market, in our view, is much higher than it was the last time we were close to current market prices back in early January, for the simple reason that we believe professional investors have covered their shorts, lifted their hedges and lowered their cash positions in favor of being long the market.

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Hobbits

This is really weird – and no, it is not April 1:

Scientists have found more evidence that the Indonesian “Hobbit” skeletons belong to a new species of human – and not modern pygmies.

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Scoreboard

From Calculated Risk, the current status of the make-believe stress test.  You can be confident each number was derived after careful consultation with Rahm Emanuel, whose financial acumen was probably best exemplified in his dance degree from Sarah Lawrence and his decision to leave the Clinton Administration in 1998 to get in a couple of good years greasing merger approvals from people who used to work for him and a board seat at Freddie Mac.

These are poll-tested to allow total confidence that everything is fine, there is nothing to look at, please go home now, if we need you to do something we will put a dozen items in the New York Times specifying what, when, and where: (more…)

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So far I have stayed away from the Chrysler debate, largely because I’m pretty sure the company ceased operating when Daimler bought it in the least equal merger of equals since England and Scotland tied up in 1707.  Like its predecessor, DaimlerChrysler created an army of exiles from the target and ended with the realization by the acquiring entity that in the name of global dominance it picked up a rather expensive and quarrelsome province it would as soon be rid of.  And Cerberus did about as well as Bonnie Prince Charlie.

Recently, though, Chrysler has gone from being a small dress rehearsal for GM to a test case of the Obama Administration’s financial mettle.

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