Rolfe Winkler

Another reason to hate Philly

October 30, 2008

So the Phillies just won the World Series 20 minutes ago.  In his acceptance speech, the owner did the stand-up thing by first acknowledging the Rays and their great effort.  For all you baseball fans out there: has it sunk in that the Rays made it to the World Series this year?  The Tampa Bay Rays.  Together A-Rod and Derek Jeter make $50 million per year…$6 million more than the entire Rays team

Great News! (Seriously)

October 28, 2008

Banks AREN’T lending the money being gifted by Treasury!  They’re using it to stabilize their balance sheets.  As the WSJ is reporting this morning, most banks are hanging onto the cash being injected by Paulson, as opposed to using it for fresh loans, much to the chagrin of Democrats Chuck Schumer and Barney Frank (and the Republican administration itself as you’ll see below):

“People will play the way you pay them”

October 27, 2008

Arthur Kimball

This might be old news to readers of this blog, but still a nice way of putting it.

Another round of bloodletting

October 24, 2008

Stock market futures have triggered circuit breakers this morning, down the maximum they are allowed before the open.  The SPX suggests the S&P will open down 9%.  Everything is getting hammered in pre-market trading.  Japan’s Nikkei was off 10% overnight to 7649. It had been over 18,000 just over a year ago. Britain announced a lower than expected GDP number, off 0.5% in the third quarter.

Creative – not total – destruction: a rant

October 22, 2008

Arthur Kimball

Rolfe is right: capitalism requires failure. But it requires failure on the small scale, not systematic failure.

Capitalism without failure…..

October 22, 2008

A question for readers:  capitalism without failure is like…..what?  Fill in the blank.

“I don’t throw darts at a board. I bet on sure things.”

October 20, 2008

Yeah, yeah, Gordon Gekko doesn’t have much to teach us now. Insider trading is passe.

Must-Read Manifesto, er, Investor Letter

October 18, 2008

I’d never heard of Andrew Lahde until I saw CR‘s post on him tonight.  He scored AMAZING returns betting against subprime.  Below is his farewell letter to investors.

OptionARMageddon on the radio, today at 4:30PM EST

October 17, 2008

Tune in to Ron Smith’s show at by clicking on the “listen live” link at the top left of the main part of the page.

Staring down the 21st

October 16, 2008

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Where did the Lehman payouts go?

Over the weekend, the Depository Trust & Clearing Corporation (DTCC) issued a release stating that the net credit default swap (CDS) payout on Lehman bonds, to be paid on October 21. I’ve been talking to a few people about this over the last few days and this is the consensus. Sorry for only producing notes here…

Bank Depositors Fly to Quality

October 16, 2008

It’s well-known that bond investors flew to quality last month, buying up short-dated Treasuries at fantastic rates (chart courtesy of Curious Cat).  In a world where anyone could go bankrupt as the financial system melts down, who cares about yield?  Investors are more concerned with principal protection.  They trust Uncle Sam to pay back debts, even he has to run the printing press, so Treasuries are perceived as “riskless.”  Over the long-term inflation is a threat, but no one cares about inflation next year when they think their bank could implode next week.  Apologies I don’t have a more updated chart, but know that yields on the 3-month are still very low at 0.20%.

What Price Financial Stability?

October 15, 2008

Brad Setser recently commented: “All major financial institutions in the G-10 ultimately now have access — through their national central bank — to the Fed.” To avoid another bankruptcy the size of Lehman, the Fed has basically guaranteed, well, the worldwide banking system.  The problem is that an “unlimited guarantee requires unlimited access to financing.” No one, not even the Fed, has unlimited access to financing.  The Fed only has unlimited access to a printing press.  If the dollar loses all its value due to hyperinflation, it won’t be worth much to anyone as insurance against loss.

Why I don’t mind the bailout bill

October 14, 2008

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My old employer, The Providence Journal, has been kind enough to publish another one of my Op-Eds. This one lays out why I think the bailout bill, or TARP, is needed. It’s a little behind the curve, but that is because news travels faster than the ProJo’s publication schedule.  

Thinking about Morgan Stanley

October 13, 2008

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Morgan Stanley needs cash and fast. Let’s hope Mitsubishi UFJ, or someone (Secretary Paulson?), is feeling generous

Some good news (maybe)

October 12, 2008

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Have the markets finally caught a break?

Fears that Lehman’s Credit Default Swaps (CDS) settlement would lead to more bankruptcies might be unfounded.