Rolfe Winkler

Thain speaks

January 26, 2009

WSJ’s Deal Journal has the scoop:

Memo from John Thain

It has been an honor to lead this company over the last very difficult year.  The decisions that I made were always with the best interests of our shareholders and employees above all.  I believe that the decision to sell to Bank of America was the right one for our company and our clients.  While the execution has been difficult, I still believe in the strategic rationale of the transaction and I wish you all the best for the future of the combined companies.

Monday layoffs

January 26, 2009

As layoffs increase, so will foreclosures.  This means more house price declines and permanent impairments for bank balance sheets.  These were the layoff announcements I spotted early today…

Can Obama get us off the junk?

January 25, 2009

In his Sunday column this week, Frank Rich does a fine job diagnosing our economic disease. He does this in the service of his larger point, that Obama’s less-than-flourishing inauguration speech calling on Americans to be more responsible is exactly the message we need to hear. Well that’s all fine.  But Rich, being a very liberal Democrat, lets Obama off easy—crediting our new President’s words, but not criticizing his actions.

New Stimulus details

January 24, 2009

The Obama administration released new details of its stimulus plan today.  You can find them all in this pdf.  The report is titled “The American Reinvestment and Recovery Plan – By the Numbers.”  Conveniently, the one number left out is the plan’s total cost.  Estimates are now in the $875 billion range I believe.

Freddie asks for another $35 billion

January 24, 2009

In a filing with the SEC yesterday, Freddie laid out its second request for taxpayer funds:

Good investments…

January 23, 2009

As pessimistic as this blog tends to read, in reality I’m optimistic.  Not about the economy, but about how people will deal with it.  Money isn’t everything.  When there’s less of it, and less opportunity to earn it, folks may just find other, more profitable things to do with themselves.  Justin Owings has a nice piece reminding us that there are more important things in life…

Sponsor an Executive

January 22, 2009

John Thain is in desperate need of new furniture (see previous post).  Please show your support…

CNBC: Thain out at BofA

January 22, 2009

CNBC’s Charlie Gasparino is reporting that Ken Lewis will be holding an emergency meeting at 11:30 with John Thain to decide Thain’s future.  Ken Lewis and the BofA folks are pissed they overpaid for Merrill and need someone to blame.  Thain is the logical target.

Caroline Kennedy….OUT!

January 22, 2009

Wow.  I’m positively giddy over this.  NY Post:

Caroline Kennedy tonight withdrew her name from consideration to replace Hillary Clinton in the U.S. Senate after learning that Gov. David Paterson wasn’t going to choose her, The Post has learned.

Chutzpah, thy name is Chrysler

January 21, 2009

by Rolfe Winkler, CFA

(n) chutzpah—Yiddish—unbelievable gall; insolence; audacity (via wordnet)

Two days ago, Chrysler worked out a venture with Italy’s Fiat SpA to make itself “viable” and thus worthy of the second, $3 billion tranche of government loans offered last month.  It’s an odd deal.  WSJ (emphasis mine):

Cool photo of the inauguration crowd

January 21, 2009

From a satellite.  If you zoom in, you can see GWB’s helicopter behind the Capitol building, which itself looks pretty cool from space.

Out-Francing France?

January 20, 2009

While the new administration is kicking around a near $1 trillion stimulus plan, the French appear to be done stimulating, at least for now.  Forbes:

The Mattress Savings Plan

January 20, 2009

I’m just saying… Banks are “effectively insolvent.” FDIC doesn’t have the money to bail out the depositors of even one large failed bank. Banks are paying 0% on liquid deposits.

If the banking system is insolvent, so is your bank.  If the FDIC has no money, it’s quite possible the government can’t protect you.  If the bank is not paying any interest, then you are paid nothing for exposing yourself to these risks.  So why not convert at least a portion of your savings to Benjamins and put them in your mattress?

Bank Death Watch, adding Wells & Chase

January 20, 2009

Don’t look now, but Chase and Wells Fargo are getting hammered in early trading.

Roubini: Banking system “effectively insolvent”

January 20, 2009

Fresh bearish commentary from Dr. Doom.  Bloomberg:

U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is “effectively insolvent,” said New York University Professor Nouriel Roubini, who predicted last year’s economic crisis.