Fri 2010-10-08 20:51 EDT

Top 20 Stocks With Huge Insider Selling - TheStreet

By Stockpickr Staff

You would think that after a huge stock market rally in September, corporate insiders would be optimistic and happy to hold on to their shares, expecting even more gains to come. Instead, corporate insiders are dumping stock in droves...The selling is so big that it equals $2,341 of insider selling for every dollar of buying...The total amount of insider buying for this reporting period was $177,064, vs. an unbelievable total selling of $414 million...

Huge Insider Selling; thestreet; Top 20 Stocks.

Fri 2010-09-17 19:26 EDT

Memo to Obama: time to break the refinance strike by the big banks

Christopher Whalen

...The Obama Administration and the Fed have taken the position that the crisis affecting the U.S. economy and the financial sector is slowly ending. In fact, the largest banks remain profoundly troubled by bad assets on their books as well as claims against these same banks for assets sold to investors. By allowing banks to ``muddle along'' and heal these wounds using low interest rates provided by the Fed, the Obama Administration is embracing a policy of deflation that has horrible consequences for U.S. workers and households...the Obama Administration has been providing political cover for the Fed to conduct a massive, reverse Robin Hood scheme, moving trillions of dollars in resources from savers and consumers to the big banks and their share and bond holders...the Obama Administration should use the power provided in the Dodd-Frank legislation to force an accelerated cleanup of bad assets and to mandate refinancing and principal reductions for performing loans with viable borrowers...President Obama also needs to focus on the growing competitive problem in the U.S. mortgage sector...now dominated by a cozy oligopoly of Too Big To Fail banks (TBTF)...Why is there no antitrust investigation of the top banks by the Department of Justice?...

big banks; break; memo; Obama; refinance strike; Time.

Sat 2010-07-24 15:55 EDT

The Path of Unemployment

Dean Baker

...The US, unlike most western European countries, is not set up to sustain long periods of high unemployment. Its system of social welfare is very much centered on work. This is most evident with health care. The vast majority of non-elderly people get their health care through employer provided health insurance. Individual policies tend to be very expensive, especially for people with any history of medical problems. When people lose their jobs, they generally lose their health care coverage as well...While the downturn has led to high and prolonged unemployment in the US, it has not had quite the same effect in Europe...several European countries, most notably Germany and the Netherlands, have adopted a policy of work sharing to limit unemployment...Under work-sharing schemes, instead of just paying workers for being completely unemployed, the government pays workers for being partly unemployed...Germany has been able to use this system to keep its unemployment rate from rising at all in the recession...In the US workers are seeing near double-digit unemployment with the implied loss of income and benefits, as well as the loss of self-esteem and social status that is associated with long-term unemployment. By contrast, workers in Germany and the Netherlands are adjusting to the falloff in demand with shorter workweeks and longer vacations...

path; unemployment.

Jesse's Café Américain Sun 2010-05-09 09:08 EDT

PLUNGE! 1987 Style Sudden Drop in US Stocks Driven by Program Trading and a Ponzi Market Structure

Jesse

US equities were gripped by panic selling as the Dow plunged almost 1,000 points driven by a cascade of 100 share high frequency program trading, estimated to have been about 80% of volume. Gold rocketed higher to $1,210...This is highly reminiscent of the 1987 crash driven by a flawed market structure based on automated trading and bad theories. The entire stock market rally which we have seen this year off the February lows resembles a low volume Ponzi scheme, and formed a huge air pocket under prices. This US equity rally was driven by technically oriented buying from the Banks and the hedge funds. There was and still is a lack of legitimate institutional buying at these price levels. This was machine driven speculation enabled by the lack of reform in a system riddled with corruption...

1987 Style Sudden Drop; Jesse's Café Américain; plunge; Ponzi Market Structure; program-trading; Stocks driven.

Calculated Risk Thu 2010-05-06 13:59 EDT

96.5% of Mortgages Backed by Government entities in Q1

CalculatedRisk

...Government-related entities backed 96.5% of all home loans during the first quarter, up from 90% in 2009, according to Inside Mortgage Finance...The government-sponsored enterprises--Fannie Mae, Freddie Mac, and Ginnie Mae--now own or guarantee an overwhelming share of originations. At the same time, non-agency mortgage securitization and loans retained in lender portfolios have largely dried up...Without the government backed entities there would be almost no mortgage market.

5; 96; Calculated Risk; government entity; Mortgage Backed; Q1.

Jesse's Café Américain Wed 2010-04-07 19:06 EDT

Banks Come Back For Another Bailout in Ireland While the US 'Manages Perceptions'

Jesse

The whole notion of bank bailouts is a tremendous injustice when not accompanied by personal bankruptcy and civil and criminal prosecution for those banks managers who created them and are found guilty of fraud. In addition, the owners of the banks, whether through debt or shares, should be wiped out and the bank placed in a proper receivership while its books are sorted out. The US is an accounting mirage. The notion that it will make money from its stake in Citi is a sleight of hand. The enormous subsidies to the banks both in terms of direct payments, indirect payments through entities like AIG, and subsidies such as the erosion of the currency and the deterioration of the real economy, will never be repaid. ...the facts seem to indicate that the US is still pursuing a policy of managed perceptions, accounting deceptions, and old fashioned insider dealing and other forms of corruption that always accompany government, but reach a feverish pitch in times of crisis. It is the establishment's form of looting.

Bailout; banking comes; Ireland; Jesse's Café Américain; managing perception.

naked capitalism Fri 2010-03-19 16:10 EDT

Lehman: Regulators Chose to Deny, Extend and Pretend

The Lehman Examiner's report gives an unintentionally damning portrayal, both of the the structure of financial regulation in the US and how regulators failed to use the powers they had effectively...the authorities recognized Lehman had a large negative net worth. Yet rather than move decisively towards an unwind, they proceeded inertially. They urged Lehman CEO Dick Fuld to find a rescuer (who would invest in that garbage barge, particularly when Andrew Ross Sorkin's account makes clear that Fuld's moves were so obviously desperate and clumsy as to be certain to fail) and also promoted the notion of an LTCM-style ``share the pain'' resolution. Yet with the rest of the industry weak, and the magnitude of hole in Lehman's balance sheet a mystery, these courses of action had low odds of success from the outset (indeed, the ``Lehman weekend'' in which the authorities almost bulldozed through a deal, seemed designed to avoid sober analysis of how bad things were at the failing investment bank)...As much as the SEC did not cover itself with glory in this exercise, its lapses are somewhat comprehensible. By contrast, the Fed's are much harder to explain or excuse. And guess who is about to be given more oversight authority?

denied; extends; Lehman; naked capitalism; Pretends; Regulators Chose.

China Financial Markets Thu 2010-03-04 08:47 EST

Stuck in neutral -- what Japan's rebalancing can teach us

Michael Pettis

...A few days ago I read a good article (``Stuck on Neutral'') about Japan [from] the Economist...about Japan's post-1989 rebalancing, ...discusses why, in spite of every attempt, Japan has not been able supposedly to rebalance the economy and achieve any real growth during the two lost decades after 1990. Private consumption never took off to drive economic growth...After many years of excess investment driving growth, Japan's rebalancing process, which occurred after corporate, bank and government debt levels prevented the investment party from continuing, locked the country into many years of slow growth because it had to grind through years of debt-fueled overinvestment...it doesn't matter what individual policies we take to boost consumption if these polices don't in the aggregate represent a real transfer of income to the household sector, as they did not in Japan...Japan's experience suggests one of the risks China faces...Chinese household consumption will undoubtedly rise as a share of Chinese GDP over the next decade or two, but the process nonetheless can be disappointing for growth. It depends on lots of other moving parts, most importantly perhaps the change in investment and the speed with which income is transferred to households. And the change in investment might depend on debt capacity constraints and the extent of earlier overinvestment.

China Financial Markets; Japan's rebalancing; neutral; stuck; teach.

naked capitalism Wed 2010-01-13 11:54 EST

William Black'' ``Anti-Regulators: The Federal Reserve's War Against Effective Regulation''

...This essay focuses on Chairman Bernanke recent appointment of Dr. Parkinson to lead the Fed's examination and supervision. My central point is that Dr. Bernanke appointed Dr. Parkinson because he shared Dr. Bernanke's anti-regulatory ideology and has never changed those views, even in the face of the Great Recession. The anti-regulator policies that Bernanke and Parkinson championed were the principal drivers of the fraud epidemic that have produced recurrent, intensifying crises...First, Dr. Parkinson was a leading proponent of the obscene (and successful) effort to prevent Commodity Futures Trading Commission Chair Brooksley Born from taking regulatory action to prevent destructive credit default swaps (CDS). Second, Dr. Parkinson, like Greenspan and Bernanke, subscribed to the naïve view that fraud was impossible in sophisticated financial markets and that credit rating agencies were reliable. Third, Dr. Parkinson endorsed the international ``competition in regulatory laxity'' that Dr. Bernanke (belatedly) warned has degraded regulation on a global basis...

anti regulators; effectively regulated; Federal Reserve's War; naked capitalism; William Black.

naked capitalism Mon 2010-01-11 20:12 EST

Guest Post: The Military-Industrial Compex is Ruining the Economy

George Washington

Everyone knows that the too big to fails and their dishonest and footsy-playing regulators and politicians are largely responsible for trashing the economy. But the military-industrial complex shares much of the blame.

economy; Guest Post; Military-Industrial Compex; naked capitalism; ruins.

Ambrose Evans-Pritchard - Finance and business comments Thu 2010-01-07 19:00 EST

Global bear rally of 2009 will end as Japan's hyperinflation rips economy to pieces

The contraction of M3 money in the US and Europe over the last six months will slowly puncture economic recovery as 2010 unfolds, with the time-honoured lag of a year or so. Ben Bernanke will be caught off guard, just as he was in mid-2008 when the Fed drove straight through a red warning light with talk of imminent rate rises -- the final error that triggered the implosion of Lehman, AIG, and the Western banking system. As the great bear rally of 2009 runs into the greater Chinese Wall of excess global capacity, it will become clear that we are in the grip of a 21st Century Depression -- more akin to Japan's Lost Decade than the 1840s or 1930s, but nothing like the normal cycles of the post-War era. The surplus regions (China, Japan, Germania, Gulf ) have not increased demand enough to compensate for belt-tightening in the deficit bloc (Anglo-sphere, Club Med, East Europe), and fiscal adrenalin is already fading in Europe. The vast East-West imbalances that caused the credit crisis are no better a year later, and perhaps worse. Household debt as a share of GDP sits near record levels in two-fifths of the world economy. Our long purge has barely begun.

2009; Ambrose Evans Pritchard; Business Comment; ending; finance; Global Bear Rally; Japan's hyperinflation rips economy; pieces.

The Money Game Mon 2009-12-28 16:44 EST

Here's The Secret Reason We Eliminated The Bailout Caps On Fannie And Freddie (FNM, FRE)

On Christmas Eve, when the news was assured of getting no coverage whatsoever, The White House announced that it had eliminated the maximum bailout cap for Fannie Mae (FNM) and Freddie (FRE). As some observers have pointed out, all the move really did was formalize what everyone has figured for decades, that the two zombie GSEs were truly organs of the federal government, and that their debts would be backed up ad infinitum. So, why the move, and why then? Credit analyst Edwart Pinto shares his theories.

Bailout Caps; eliminate; Fannie; FNM; FRE; Freddie; Money game; s; secret reasons.

zero hedge Thu 2009-12-17 10:37 EST

Is Selling US CDS A Risk-Free Way To Short The Dollar?

There has been much conjecture on whether using CDS is an effective way to hedge against US default risk. Many theoreticians, especially those of the post-March lows variety, have sprung up and are speculating that buying Credit Default Swaps on the US is ultimately a futile and pointless endeavor. The main argument: a US default would likely mean that interconnected dealers won't recognize contracts on a US default event, as they themselves will be out of business. Even if they continued to exist, like cockroaches in a postapocalyptic world, the collateral which backs derivatives is mostly US Treasurys: the same obligations that would end up being massively impaired...the US CDS seller syndicate could easily be one of the key sources of dollar short funding: with sellers pocketing euros and immediately going to market and selling dollars...a dollar-short unwind would probably have repercussions in the US CDS market. Not only would the dollar spike, but paradoxically US credit risk would probably widen dramatically...any unwind at the heart of the prevalent risk trade now: the massive dollar carry, would impact virtually every investment product, quite possibly in self-referential feedback loops. If correct, it merely shows how much more the Fed has at stake in keeping the dollar depressed than merely getting mom and pop to buy Amazon at $130/share. Losing control of the carry trade will be the systemic equivalent of allowing Lehman's book to be marked-to-market: a potentially complete collapse in systemic confidence, which would have such far ranging implications as the $300 trillion interest rate derivative market. And when sudden volatility reaches this product universe which is 6 times bigger than world GDP, the events from last year will seem like a dress rehearsal.

CDS; Dollar; Risk-Free Way; sell; short; Zero Hedge.

Jesse's Café Américain Thu 2009-12-17 09:56 EST

Treasury Cancels Plans to Sell Citi Stake After Failed Equity Offering Stings Shareholders

Jesse

The shareholders of Citigroup should be furious at the greedy and reckless actions of Citi's management in diluting their shares in order to obtain a freer hand in granting themselves fat bonuses. Tonight's equity offering failed to bring in a sufficient price, serving up a significant 20% discount to existing holders of the stock...Technically, Citi can pay back the TARP money from the proceeds. I wonder if they have the gall to do that and pay themselves bonuses this year to boot, which is the basis for this exercise in dilution in the first place. This shows the farce that the Obama financial reforms really are. Nothing has changed except that big bank losses were transferred to the public debt.

Failed Equity Offering Stings Shareholders; Jesse's Café Américain; Sell Citi Stake; Treasury cancels plans.

naked capitalism Wed 2009-11-25 11:13 EST

If the Fed is looking to inflate away problems, what should Asia do?

Edward Harrison of Credit Writedowns

Andy Xie thinks the Fed is on an inflationary path. Last month, he wrote an article in Caijing which says that `stagflation lite' is the Federal Reserve's preferred outcome. What's interesting is his recent article about the need for China and Japan to join forces under an ASEAN umbrella, rejecting the APEC umbrella shared with the U.S.

Asia; Fed; inflate away problems; looking; naked capitalism.

The Big Picture Thu 2009-11-19 10:50 EST

Recent Developments in Mortgage Finance

John Krainer

As the U.S. housing market has moved from boom in the middle of the decade to bust over the past two years, the sources of mortgage funding have changed dramatically. The government-sponsored enterprises--Fannie Mae, Freddie Mac, and Ginnie Mae--now own or guarantee an overwhelming share of originations. At the same time, non-agency mortgage securitization and loans retained in lender portfolios have largely dried up.

Big Picture; Mortgage Finance; recent developments.

zero hedge Tue 2009-11-03 19:57 EST

Guest Post: Systemic Risk is All About Innovation and Incentives: Ed Kane

Edward J. Kane vi Chris Whalen

...we present the views of our friend and mentor Ed Kane of Boston College, who argues that the problem with the financial regulatory framework is not the law, regulation nor even the regulators, but rather the confluence of poorly aligned incentives and financial innovation... The financial crisis of 2007-2009 is the product of a regulation-induced short-cutting and near elimination of private counterparty incentives to perform adequate due diligence along the chain of transactions traversed in securitizing and re-securitizing risky loans (Kane, 2009a). The GLBA [Gramm-Leach-Bliley Financial Modernization Act of 1999] did make it easier for institutions to make themselves more difficult to fail and unwind. But it did not cause due-diligence incentives to break down in lending and securitization, nor did it cause borrowers and lenders to overleverage themselves. Still, the three phenomena share a common cause. Excessive risk-taking, regulation-induced innovation, and the lobbying pressure that led to the GLBA trace to subsidies to risk-taking that are protected by the political and economic challenges of monitoring and policing the safety-net consequences of regulation-induced innovation. These challenges and the limited liability that their stockholders and counterparties enjoy make it easy for clever managers of large institutions to extract implicit subsidies to leveraged risk-taking from national safety nets (Kane, 2009b)...To reduce the threat of future crises, the pressing task is not to rework bureaucratic patterns of financial regulation, but to repair defects in the incentive structure under which private and government supervisors manage a nation's financial safety net.

Ed Kane; Guest Post; incentives; innovation; systemic risk; Zero Hedge.

Calculated Risk Tue 2009-10-27 11:17 EDT

SF Fed: Recent Developments in Mortgage Finance

CalculatedRisk

From San Francisco Fed Senior Economist John Krainer: Recent Developments in Mortgage Finance As the U.S. housing market has moved from boom in the middle of the decade to bust over the past two years, the sources of mortgage funding have changed dramatically. The government-sponsored enterprises--Fannie Mae, Freddie Mac, and Ginnie Mae--now own or guarantee an overwhelming share of originations. At the same time, non-agency mortgage securitization and loans retained in lender portfolios have largely dried up.

Calculated Risk; Mortgage Finance; recent developments; SF Fed.

Minyanville Fri 2009-09-04 19:31 EDT

Five Reasons to Stay Cautious with UNG

I'll be staying away from this market for now. However, beware that if hurricane season isn't disruptive and the winter is mild, we can probably expect a major decline in NG prices all along the curve early next year as inventory levels are near record highs and available storage is virtually tapped out. This could devastate the natural gas producer stocks...Many investors think that various natural gas plays in the master limited partnerships (MLP) field (pipelines, processors, etc.) are immune to fluctuations in the price of natural gas. In the short term, this may be true in many cases depending on the type of contracts. However, it's not true in the medium term. I'd be wary of this space at this time as any sort of alteration in pricing of contracts will almost certainly elicit cuts in distributions to shareholders. And since virtually all owners of these stocks buy them for the distributions, any cuts in distributions will likely devastate the share prices -- far beyond what would be theoretically warranted.

Minyanville; reasons; stay cautious; UNG.

Calculated Risk Fri 2009-09-04 19:23 EDT

FHA: The Next Bailout?

CalculatedRisk

John Burns Consulting sent out a note today titled: FHA Likely To Be The Next Shoe To Drop"The FHA's aggressive lending programs have continued throughout the housing downturn, causing its market share of the mortgage industry to grow from 2% in 2005 to 23% today. ... The FHA insurance fund, however, is likely running dry. ...

Bailout; Calculated Risk; FHA.

Bruce Krasting Fri 2009-09-04 18:30 EDT

Open Letter to FHFA's New Director Edward DeMarco - A Proposal for the Agency REO/Preferred Shares

Bruce Krasting

Let me welcome you to your new responsibilities. You have a very important job. There are a significant number of people in the financial world who lie awake at night worrying about the mortgage lenders you are responsible for. Fannie Mae, Freddie Mac and the FHLBs hold or guaranty $6.3 Trillion in residential mortgages. It is simply not possible for the US to get out of the mess we are in unless these Agencies are stabilized. Should those Agencies fail, all that has been done to heal the US financial sector will have been wasted. In a significant manner, your success or failure will determine the medium term course of the US economy.

Agency REO/Preferred Shares; Bruce Krasting; FHFA's New Director Edward DeMarco; Open Letter; proposed.

Steve Keen's Debtwatch Sun 2009-08-30 14:33 EDT

It's Hard Being a Bear (Part Two)

Cassander

One of the reasons I'm still a bear on the economy is because the economists in the optimists camp are relying upon very bad economic theory. If that theory is telling them good times are ahead, that's one of the best predictors of bad times you could have. Capital Assets Pricing Model (CAPM) preached that stock market price shares accurately, that the amount of debt finance a company has doesn't affect its value, and many other notions that have gone up in smoke during the GFC. CAPM developer William Sharpe ``assumed a miracle'': all investors agree about the future and their expectations about the future are correct. Macroeconomic theory has been dominated by IS-LM model erroneously attributed to Keynes but actually due to convervative neoclassical John Hicks, which ``emasculated what was original in Keynes's General Theory, and this bowdlerised version of Keynes was then demolished by Friedman in the 1970s to usher in the Monetarist phase''

Bear; hard; part; Steve Keen's Debtwatch.

Thu 2009-07-30 00:00 EDT

Zero Hedge: Guest Post: Tax Revenues Tanking

-- ``the lions share of the planned sales of Treasuries in 2009 cannot be met by demand from the market..Auctions will fail and the Fed will step in...the 2009 budget deficit is more likely to widen to levels between $2.5 and $3 trillion rather than the CBOs $1.8 trillion forecast. We also believe that inflation could start setting in as early as Q3 of 2009 and will accelerate sharply by 2010.''

Guest Post; Tax Revenues Tanking; Zero Hedge.

Fri 2009-07-24 00:00 EDT

Jesse's Café Américain: Friedman Resigns as NY Fed Chairman, Had Been Buying Goldman Stock in 2008-9

Jesse's Café Américain: Friedman Resigns as NY Fed Chairman, Had Been Buying Goldman Stock in 2008-9 -- ``it is perfectly all right for a Fed Chairman to buy shares in one of the banks he is 'regulating' especially when he is helping to make critical policy decisions directly involving them.''

2008 9; Buying Goldman Stock; Friedman resigns; Jesse's Café Américain; NY Fed Chairman.

Thu 2009-07-23 00:00 EDT

naked capitalism: New Stress Trial Balloon Floated

``Tire out the critics, numb the casual followers, and leave the boosters in firm control of share of mind.''

naked capitalism; New Stress Trial Balloon Floated.

Wed 2009-02-11 00:00 EST

Mish's Global Economic Trend Analysis: Open Letter To Congress On Sharing The Pain

``I call for the resignation of Fed Chairman Ben Bernanke, the abolishment of fractional reserve lending, and the end of the Fed itself''

Congress; Mish's Global Economic Trend Analysis; Open Letter; pain; shares.

Mon 2009-01-19 00:00 EST

Credit Slips: Shared Appreciation Clawbacks

mortgage modifications

Credit Slips; Shared Appreciation Clawbacks.

Tue 2008-10-07 00:00 EDT

naked capitalism: WaMu Purchase Puts JP Morgan at 15% Share of Bank-Broker Market

15; Bank-Broker Market; naked capitalism; shares; WaMu Purchase Puts JP Morgan.

Mon 2008-08-04 00:00 EDT

John McCain can't stand sucking up to the Christian right. Is this the end of the GOP's unholy alliance?

by Matt Taibbi; "The Bible-thumpers...would seem to have had little in common with the archpriests of the neoconservative movement...But they did: They shared an almost equal disdain for democracy, free speech and learning, and paradise for both groups was an intellectually mute America of vast malls, prisons packed full of ungrateful blacks, shitty TV programming to keep the brains chilled and 200-foot-high electrified fences along the Rio Grande."

Christian Right; ending; GOP's unholy alliance; John McCain; stand sucking.

Thu 2008-06-12 00:00 EDT

naked capitalism: So Much For Free Markets: Federally Sponsored Mortgages at 90% Share

90; Federally Sponsored Mortgages; free market; naked capitalism; shares.

Wed 2008-06-04 00:00 EDT

naked capitalism: Lehman on the Ropes, Nevertheless Buys Shares Back

Lehman; naked capitalism; Nevertheless Buys Shares; roped.