Greenspan should shut the heck up / Interesting insight from Meredith Whitney / More on the BLS BS
August 04, 2008
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RELATED TICKERS: WB
, JPM
Is it just me, or does anyone else out there wish that Alan Greenspan would just shut the heck up and go hang out on a beach somewhere. The "Maestro" (HAHAHAHA) is up to his old tricks talking about the economy from the sidelines again. In an interview with CNBC said last week "I think the data at this stage in the United States are not ... suggesting recession...We're right on the brink and I would be more surprised if we didn't (have a recession) than if we did, given the financial state. (see article: Global slowdown may put U.S. in recession: Greenspan)." Guess how we got there moron?!
This quote is like a quarterback throwing nine interceptions before being yanked from the game smugly commenting to a sideline reporter that it looks like his team might lose. How can Greenspan be so pompous as to absolve himself from any blame for this situation. It's bad enough that he made millions of dollars by writing a book, consulting, and giving lectures after leaving the Fed but for him to have the gall to stand there and comment on the situation without accepting one iota of blame takes some serious stones. Ahhhhh, OK that felt better. I've been meaning to get that off of my chest for a few days.
Yuck
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I heard a great interview with Oppenheimer 's Meredith Whitney on CNBC while driving in to work today. Here's a link for those of you who didn't see it, though I'm not sure what segment of the discussion this is because I don't have sound on this computer: Insight on where banks are headed, with Meredith Whitney, Oppenheimer & Co. director, equity research. I've obviously read a lot about her over the past year, but I don't believe that I have ever had the opportunity to hear her speak before. I came away very impressed. In short, she stated that she believes that the credit crisis is currently less than half over and that most bank stocks are likely to retest their lows. That's not why I am writing about her though. She mentioned two other things that I found particularly interesting.
1) The first is that she expects a number of banks to lose access to a significant portion of their cheapest source of funds, consumer deposits. A large deposit base is a huge asset for banks because it provides them with very cheap liquidity. As consumers become more and more afraid of bank failures, it stands to reason that they will split up their large accounts into multiple banks to make sure that they are fully insured by the FDIC. A number of large banks currently have a significant percentage of uninsured deposits (20%+...I don't remember the exact number). Two of the banks that have the largest percentage of uninsured deposits are Wachovia (WB) and JP Morgan (JPM). I guaran-darn-tee you that I would get any money that I had over the FDIC insurable limit the heck out of Washovia ASAP if I had that much money sitting around (alas I do not).
2) She expects credit card issuers to significantly cut back on the amount of credit that they are providing to consumers, which in turn would obviously hurt consumer spending.
Very interesting stuff that I can easily see happening.
Meredith Whitney's a lot easier on the eyes than that old coot Greenspan
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Outplacement firm Challenger, Gray & Christmas Inc. said this morning that announced job cuts by companies increased 141% versus the same period last year and 26% versus June 2008 (see article: U.S. July Job Cuts Double Year-Earlier Level, Challenger Says). More evidence that the BLS is full of it.
Deej
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