Thursday, May 20, 2010

SAR #10140

BP has given new meaning to “going the extra mile”.

Small Fish: For insight into the degree of fraud in the financial system, follow the bouncing ball from CDR Financial to Financial Security Assurance Holdings, West Virginia water and sewer projects, Arizona's Governor Richardson, BofA, JPMorgan, Citi and others, the $2.8 trillion municipal bond market and the loss of tens of billions of taxpayer money. This is just round one.

Re-Tale: Wal-Mart's US sales fell 1.1% as customer traffic fell.  But penny pinching at home and increased sales in Brazil, China, Canada and Mexico gave them a 10% profit increase.

Need To Know:  Lots of mortgage and housing numbers are being tossed around this week.  Here are the keepers:  Thirty four states have total delinquency rates over 10%.  A record 14.69% of all mortgages are delinquent or in foreclosure.  Over 9.5% are either 90 or more days delinquent or in foreclosure.  Nationally the average house price fell 0.3% m/m.

Using Usury:  Throughout history, usurers have exploited the poor – as they do today.  The US used to keep a lid on it, but in 1978 the Supreme Court said it was okay for big banks (and their credit card companies) to hide in South Dakota and ambush the poor.  And the middle class.

Customers Serviced:  If you were still wondering how Goldman Sachs was able to make a profit for itself on every business day in the first quarter, there's this:  Seven of their nine “Top Trade” ideas for their customers lost money while they made money betting against them.

Credit Crunch:  The uncertainty and fear in Europe is pushing up short-term interest rates, making it harder for business to get loans.  That slows growth and increases the likelihood of default, which is what the uncertainty and fear are all about.  Think of it as just like in the US, immediately before Lehman.

Language:  Scientists from MIT and Cornell have reviewed the “Star Wars” test data and concluded that the system worked as designed in only 1 or possibly 2 of the 10 tests the military termed successful.  Being polite, they  said the missile defense system was based on "technical myths". ' Technical myth' has the same meaning as the word 'misspoke' as used by Blumenthal in describing his nonexistent tour of duty in Vietnam.

The Italian Job:  The Bank of Italy has suspended mark-to-market  “temporarily” to neutralize” the effect of capital losses from the declining value of European government bonds – after all, they will never default.  Right?

Too Much Too Much:  Much of the doom and gloom in the world is traceable to global overcapacity to produce and a under-capacity to consume.  As we've pointed out before, production doesn't matter much if the employees can't buy the products.

The Pain in Spain:  Spain's latest auction of short term bonds failed to garner sufficient bids to raise the targeted amount.  The interest rates required to peddle what paper they could were higher than the April numbers as investors become increasingly doubtful of getting their money back.  Wonder where Spain's going to get its share of the Greek bailout money?

Promises, Promises:  The Fed says it will not flood the market with crappy MBS until after the economic recovery is well established and the Fed has raised interest rates.  The Fed has purchased $1.25 trillion in Fannie/Freddie MBS – wonder what they're worth now?.

Scheduling Conflict:  Maybe 'we ain't gonna study war no more', but USMC Gen. Cartwright, Joint Chiefs vice-chair, is pretty sure we ain't gonna study it no less.  "There is nothing out there that tells us we won't be wrapped up in these conflicts for as far as the eye can see."

Previews:  Europe's problems stem from budget deficits caused by over-generous government handouts.  It is an object lesson the US should take to heart.  So says Paul Volker, while ">Professor Roubini says the US crash was step one and the eurozone's current disarray is but step two and it's not over yet;  Greece was just “the tip of the iceberg.”

Rinse and Repeat:  “Global oil production has been up against a ceiling for 6 years now.  And the resulting price advance in oil was clearly a key component to the global recession.  I see no reason why this can’t be repeated on a serial basis for years.”


Dink said...

"Much of the doom and gloom in the world is traceable to global overcapacity to produce and a under-capacity to consume"

Economically, but not ecologically. Fewer, yet more efficient, monkeys on the planet would be a good thing.

Demetrius said...

Wow, both of us are on about fraud today. Could be a lot of it about.

kwark said...

Re: Language Oh, they're just throwing a wet blanket on the pork-barrel party wagon, otherwise known as "missile defense". When all the cards are in your favor (as in the design of these tests), you'd think a 20% kill rate would make for a hard sell. Would the Pentagon be interested in any other weapon system that hit its target only 20% of the time? Well, maybe if enough CONgressmen told them they should be.