Global Market Commentary, Analysis and Investments
Extend and pretend…
That's the government's way of handling the crisis. Extend credit and cash to those who don't deserve it. Then, pretend that everything is okay…
But the problems don't go away. They just get stretched into the future…
What did the feds do for GM? They took over the company. They extended cash and credit. They put in place a “Cash for Clunkers� program to encourage people to buy cars. Then, they pretended that the problems were solved.
[Read more...]A Brief Introduction from Eric Fry…
The last time I saw Daniel Loeb, I was riding in his private jet from Miami to New Jersey. Danny is a fascinating guy – a California surf rat turned New York hedge fund manager.
In other words, he's not your run-of-the-mill financial type. He came into the business through the backdoor and succeeded on the strength of his talents, wits and determination. He manages $3.4 billion in his hedge fund named Third Point Partners L.P. (For those folks who do not surf or who have never visited the beaches of Southern California, “Third Point� is the most distant of the three main surf breaks in Malibu).
[Read more...]Well, August washed up. It was the worst month for US stocks in almost a decade. And yesterday didn't help. The Dow couldn't manage a rally. It rose just 4 points.
The British newspaper, the Telegraph, has the story:
“It's pretty clear the US economy has hit a wall,� said Barry Knapp, head of US equity strategy at Barclays Capital. “The macro picture is dominating and, right now, it's not clear what's going to get the market out of this spot.�
[Read more...]“How did it all come to this?�
It's a question we've asked ourselves many times along this Coast-to-Coast Correction Tour. The answers are everywhere…in Wickenberg, Arizona…Livingston, Texas…Lake Charles, Louisiana and here along the border of Mississippi and Alabama…
[Read more...]Too bad Thomas Friedman has stopped writing about the economy. We could use a good laugh this morning. Chilly winds are blowing across this part of France. The children have all gone. The sun is low and cool. It's quiet here, and a bit sad.
But Friedman has moved on to giving bad advice on other subjects.
[Read more...]It still looks like the US stock market is rolling over. The Dow dropped another 39 points yesterday.
The Fed has already said it will leave its key interest rate at a very low level for a very long time. The US Treasury has already announced a budget with more than $1 trillion of fiscal stimulus in it. “Cash for clunkersâ€? …first time homebuyer tax credits…TALF – the “recoveryâ€? programs have all pretty much run their courses.
[Read more...]As Wall Street's big money players return from the Hamptons in the coming weeks, they will have to reassess the earnings power of their portfolio companies. Last week, Staples confirmed the message we heard from Office Depot and Office Max: the small business sector as a whole isn't very healthy. Disappointing earnings from Dell dampen the mood even further.
[Read more...]Oh, a storm is threat'ning
My very life today
If I don't get some shelter
(Ooh yeah) I'm gonna fade away.
– Gimme Shelter, The Rolling Stones
Nassim Nicholas Taleb says “every single human beingâ€? should bet these assets will decline…
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The Recovery Road Less Traveled
With his toes in the sand and the cool waters of the Atlantic Ocean lapping gently at his feet, your editor can fairly say we have reached the end of our little Daily Reckoning Coast-to-Coast Correction Tour. So where to now for your Ho-Jo-hopping correspondent? Ahh, more on that below. First, some more important considerations…
[Read more...]