Posts Tagged Lender Of Last Resort

Today’s Key Market News – A Communist Retirement

Posted by admin in Uncategorized on March 28th, 2010

communistparty Todays Key Market News A Communist Retirement

(Stocks in article: NYSE: , NYSE: , NASDAQ: , NASDAQ: , NYSE: FRE, NYSE: TIF, NYSE: DLM)
American equities have opened broadly lower this morning, mainly due to a news report from the Wall Street Journal that proposes Ben Bernanke seeks to break the market’s trust that the Fed will always be there in times of distress. Come on guys! Are President Bush and Senator Dodd going to allow that? Independent agency my arse! We all know how things work. The country is just a big corporate box, and Ben feels the heat from above as much as any corporate puppet does.
Wall Street Greek, which clearly defies the corporate mold, is absolutely sure Ben will break, even if he holds the view that the Journal depicts. The guy’s voice cracks when he testifies to Congress. He’s never looked confident, but that doesn’t mean he will not mature into a strong . We are willing to go through some with Ben (as long as doesn’t kill us in the process), and we are absolutely certain he’s going to learn a lesson from the current credit market mayhem. Most importantly, we are sure he will cut the , and we are looking for a 50 basis point cut in September, or sooner, if chaos draws Ben into it.
The most important news of the day is that weekly initial unemployment claims rose 9,000, to 334,000, and out of a range we viewed as stable. In our weekly report, we wrote, “it’s about time this data starts to show signs of a weakening employment environment. We expect the later September report of the will show new hiring sharply lower, excluding .” The labor market should now show the signs of consumer stress we have been expecting.
In the news we handpicked for you below and within our sidebar section of the same name, there’s a report that the lent some money as the lender of last resort to an unnamed borrower. It was a lot money, and just another bit of evidence that we are still right smack in the middle of this liquidity crisis. H&R Block (NYSE: ) reported a distressed situation related to its mortgage unit, as we expected it would in our weekly article “The Greek’s Week Ahead – Wall Street Summer Wind.” We wrote, “H&R Block (NYSE: ) has some mortgage market exposure that might come to light and hurt the shares on Thursday.” In case you think we only deliver doldrums, we also had something nice to say about the National Bank of Greece (NYSE: ). was scheduled to report earnings at 10:00 a.m. this morning, but appears to be running on Greek time. Give it another fifteen minutes…
In some notable news missed by major media, China replaced five Cabinet Ministers today, including its Finance Minister. In trying to avoid reading into this, we are hoping there’s some personal scandal or criminal blunder behind it, and not a serious failure within China’s financial markets structure. Many of the ministers were just plain too old and responsible for nonfinancial matters, like spying for instance. One even died in office (we hope of old age), so we would not read Stalinist paranoia into the moves. Jin Renqing, the Finance Minister, is 63. He’s claiming personal reasons for his departure. Given his age, there would probably be a 50% chance that he’s really got personal reasons, maybe health related, except for one simple giveaway. Jin is apparently accepting a new job, and it’s quite a few steps down the ladder. He will now be deputy director of the Development Research Center of the State Council. Also, in communism, nobody retires early!

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Todays Key Market News A Communist Retirement

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Bernanke Comes Down from the Ivory Tower

Posted by admin in Uncategorized on February 24th, 2010

the+feds+ivory+tower Bernanke Comes Down from the Ivory Tower
Let’s call a , and an ace Ben Bernanke? Well, even has to admit, Ben knows something more now than he did when TheStreet.com’s tore him a new one. The Federal Reserve action today was significant, and more so in the implications of the effort than in the action itself.

Kudos to the Fed!

In essence, what the Fed appears to have done through today’s action is to become a more significant lender of last resort for the mortgage and other markets. Primary dealers were until this point still wary of investment in troubled credit markets. The Fed has effectively said, “we got your back” to the dealers, “no, really we do.”

What’s more enthusing about the whole arrangement is that it’s clear the world’s central banks are working hand-in-hand with the private sector in finding and also in refining effective resolution to credit market strife. Kudos to Ben Bernanke for thinking outside the box and coming out of the ivory tower. He’s reached out to the so called real world. ’s criticism, that “they know nothing,” regarding the Fed’s grasp of real world economics, no longer holds water. Let’s give credit where credit is due. The beautiful, creative, dynamic human mind is problem solving and finding new ways to cure new economic illness. What’s more, the Fed and its challenged Chief look to have been working tirelessly and aggressively and are for that effort alone.

ICSC-UBS Same-Store Sales

Weekly same store sales moved only 1.6% higher in the week ended March 8th. This defied recent improvement of trend, and compared to the prior week growth rate of 2.1%. Retail sales are due on Thursday, and this result has no bearing on our expectation of decent data, on a relative basis, from the report.

Department stores like Macy’s (NYSE: M) and (NYSE: ) continue to bear the of the pain in retail, stuck between discount and high end. The one stop shop middle class model is not built for the current economic environment. The rich will continue to buy jewelry and designer goods from Tiffany’s (NYSE: TIF) and Saks (NYSE: SKS) at tagged prices (do they even tag in these shops?), while more of the lower middle class will migrate to the Wal-Marts (NYSE: WMT) of the world.

International Trade January

January’s International Trade Report showed the deficit actually narrowed, versus expectations for a widening on tough oil imports. Both exports and imports rose, thanks to rising prices. The reason the deficit narrowed is logical to us, and ugly for that matter. Domestic demand is on the decline my friends, while global demand remains solid. That’s not a good thing, and this report offers no positive news as a result. You’re just lucky it was muted by the Fed’s pre-market action. Plus, it’s not directly clear to the masses that a deficit narrowing in today’s environment is bad news. In fact, I bet at least five Congressmen were quoted today naively taking credit for it.

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Bernanke Comes Down from the Ivory Tower

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