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from Rolfe Winkler:

Lunchtime Links 8-2

Billions in Lehman claims could bury an elusive insurer (NYT) A fascinating story. My colleague Felix correctly compares the situation to AIG, the massive insurer that underpriced tail risk when it sold CDS on toxic paper. Here we have an interesting problem where this insurer appears to have been regulated, just not very well. If it can't be successfully regulated, and it poses huge systemic risks, should we outlaw insurance on tail risks that are potentially very fat?

Schumer tops House, wants $4 billion for C4C (CBS2) And President Obama will likely jump on board. Reader JL comments: "What better way to waste capital than pay it to people to buy crappy cars they don't need, that get barely better mileage than their current crappy car? Nice way to disguise a giveaway to Detroit and its unions as 'green.' BO is looking more Soviet all the time." One better way to waste capital has been to finance home purchases with taxpayer cash. We're hundreds of billions in the hole there!

Chart of the Day: Durable Goods shipments since 2000, military vs. non (NYT) Wow.

PIMCO's McCulley: Fed won't raise rates till 2011 (Bloomberg) I think I agree with him. Our trajectory will likely track '90s Japan. Though if Congress successfully destroys confidence in the dollar, the downturn will be more violent. And if it doesn't? Well, Japan is now headed into its third consecutive "lost decade" and demographics suggest this one won't be an improvement over the last two. It's a depressing thought, that we're headed in that direction.

from Rolfe Winkler:

Lunchtime Links 8-2

from Rolfe Winkler:

Lunchtime Links 7-31

White House says cash for clunkers will go on (NYT)  Note that the administration hasn't yet promised new funding.  So yeah, the program is good through the weekend, but the key will be whether there is a new appropriation.  Michigan Senator Carl Levin is quoted in the article exhorting people to rush to their dealers to buy now.  The more transactions he can stuff through the channel, the more pressure he puts on Obama to make a new appropriation.

MUST READ--"Take back the beep" campaign (David Pogue)  Ever wondered why, when you're leaving a message on someone else's cell phone, you have to wait through 15 seconds of nonsense?  (E.g. "If you want to leave a numeric page, press 5."  Who leaves a numeric page!?!)  In aggregate that's a massive amount of air time being used, which adds up to billions worth of revenue for cell phone companies.  Pogue is tired of it and has organized a little protest campaign.  He lists e-mail addresses for the big four carriers where you can send a complaint.  I was happy to, and it didn't even take 15 seconds!

from Rolfe Winkler:

Lunchtime Links 7-30

(send links, pics, vids to optionarmageddon at gmail)

Did Warren Burger create the health care mess (Slate)  Interesting article.  It claims a 1975 Supreme Court decision paved the way for medical entrepreneurship, which the author says has been detrimental.  I'm sure in some cases it has been.  But I scratch my head when I read this:  "The idea that health care is a legitimate arena for investment is monstrous."  Investment in medicine is bad?  An intriguing thought, not well enough explained.

Jeremy Grantham says to take profits (Marketwatch)  The market has risen too far, too fast says the Bear who turned Bull when the S&P was down around 700.

from Rolfe Winkler:

Evening Links 7-29

(send links, pics, vids to rolfe.winkler at thomsonreuters)

Desperate AZ may sell capitol buildings to raise money (Arizona Republic)

Accounting gimmicks help Wells Fargo (and others) boost profits (WSJ)

FDIC poised to split banks to lure buyers (WSJ)  "The strategy, which is likely to begin soon, is aimed at selling the most distressed hunks of failed banks to private-equity firms and other types of investors who may be more willing than traditional banks to take a flier on bad assets. The traditional banks could then bid on the deposits, branches and other bits of the failed institution that are appealing."

Bollinger sees first amendment for economy (Bloomberg)  I'm not sure what to make of this article.  The "first amendment" thing sounds interesting, but the writer goes nowhere with it, instead he digresses into a wide-ranging piece about Bollinger and the issues he has faced at Michigan and Columbia.

from Rolfe Winkler:

Lunchtime Links 7-28

(send links, pics, vids to optionarmageddon at gmail)

Tenacious G (NY Mag)  Another good article on Goldman.  Most useful is the commentary regarding the $13 billion AIG collateral payments and the $28 billion worth of FDIC-guaranteed debt.  Without those bailouts, Goldman would be gone.  I'd always thought that was true.  Helpful to have confirmation.

Argentina's first couple deliver prosperity--for themselves (Guardian)

China tells U.S. to manage flood of dollars with care (Reuters)  Tim Geithner is in China with Hillary Clinton this week.  Top of the agenda is convincing the Chinese we're actually really serious about getting the deficit under control, but not until 2013.

from Rolfe Winkler:

Morning Links 7-27

Fitch: Five firms hold 80% of derivatives risk (CFO)  The five banks---Chase, Goldman, Morgan Stanley, Citi and BofA---also account for 96% of exposure to credit derivatives among 100 companies studied.

The end of the end of the recession (Scribd)  Tyler D. collects lots of charts from David Rosenberg to make the point that the economy is hardly climbing out of recession.  At best we're going to stagnate for some time before de-leveraging re-accelerates.

from Rolfe Winkler:

Lunchtime Links 7-24

MUST READ--Accountants gain courage to stand up to bankers (Jonathan Weil)  Be still my beating heart.  "The scope of the FASB’s initiative [to expand the use of fair value accounting] is massive. All financial assets would have to be recorded at fair value on the balance sheet each quarter, under the board’s tentative plan." These rules still have to be formally proposed.  Oh boy I hope this happens...

Delphi gets $6.2 billion bailout of pensions (WSJ)  I was so busy annotating Sheila Bair's testimony yesterday morning that I missed this.  The article quotes a Brookings scholar who says PBGC may eventually require a $100 billion bailout.

Evening Links 6-24


The Great American Bubble Machine (Rolling Stone via ZH)  Matt Taibbi strikes again, this time taking on Goldman Sachs.  What makes the story so refreshing is the language RS lets Taibbi use.  The fraud and corruption occurring at the highest levels of finance is obscene; Taibbi describes it with obscenities.

US Treasury Auction changes may overstate bids (Reuters)  Is Treasury manipulating bond auctions to overstate the interest of foreign lenders?