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December 2009



Term Deposit Facility? Oh, now I get it

December 28, 2009 – Comments (6)

The Fed is going to sell CD's to banks as a new tool to drain liquidity. At first blush, I was planning to be sarcastic and derisive about this idea, but now I am beginning to understand the financial subtlety of it all (that can't be a good sign).  [more]



McCain-Cantwell: it is a dream I have; well, not exactly

December 28, 2009 – Comments (1)

Yes, these 2 senators have proposed to bring back Glass-Steagall. (pause for cheers and huzzahs). I hope they succeed: it will solve, at least in part, the too-big-to-fail syndrome. BAC will have to cough-up MER, JPM will have to disgorge BSC, and C will have to give up all of Smith-Barney. Ironically, these financial institutions are bigger and more dangerous than before the meltdown. Yes, they fight tooth and nail to prevent this, since investment banking throws off many more $B's in profits than regular commercial banking.   [more]



Greedy? Now I am getting fearful

December 22, 2009 – Comments (19)

I have used the current rally to correct my (real) portfolios. Most have recovered about 90% (still a 10% loss, but considering what my portfolio has been through, close enough) of their value, and I have been steadily liquidating them and sitting on increasing amounts of cash. Course, problem with this strategy is that I will miss out on any more equity rallies, and this situation could last for quite a while. I remember the last time I did this a few years ago: I missed out on a lot of fun, but I did not suffer when the markets retreated.   [more]



GDP - OK, so where are we?

December 08, 2009 – Comments (0)

Journalists and reporters often do not report news and facts very accurately, and their recent coverage of the GDP is no exception. GDP did NOT increase 2.4%: this was a calculated "annualized" rate; in fact, it went up 0.7% during Q3. So: 4 x 0.7% = 2.4%. I wonder how many reporters understand this.   [more]



Quest for Junk

December 07, 2009 – Comments (1)

Gold, Oil, Junk Bonds, S&P 500: all are at price levels that overrun their headlights. What the heck is going on here?  [more]

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