Lunchtime Links 7-9
(Send links, pics, vids to optionarmageddon at gmail.com)
Bailouts let banks carry loans at values that are too high (NYT) This is a very important to understand. A big way banks avoid writedowns is by expressing “intent and ability” to hold toxic loans to maturity. They don’t want to sell at market prices, so they have intent. And they have an implicit government guarantee against failure, so they have ability.
Lenny Dykstra files for bankruptcy (Inquirer) Another Schadenfreude alert. Dykstra reminds one of Donald Trump: great at self-promotion, not so great at substance. Yeah, he was a good ballplayer. But a lot of his “talent” was likely due to steroid abuse. I remember Jim Cramer being interviewed for HBO profile of Dykstra called him one of the smartest guys he knew.
Sorry, not everything can be hedged (David Merkel) “…often the amount of CDS created exceeds the amount of debt covered….I call this a gambling market, because there are parties where the transaction takes place where neither has a relationship to the underlying assets. There is no risk transfer, but only a bet. My view is such gambling should be illegal…”
Buffett backs second stimulus (ABC News) We’re not going to clean up our mess of debt folks; we’re just going to blow another credit bubble. Count on it.
Historical unemployment data (Northern Trust) An interesting report from Paul Kasriel, but I wonder: How have the ways we measure unemployment changed? Is it fair to compare today’s data with data from 80 years ago? Maybe it is. I don’t know.
Breaking down June retail sales (Real Time Econ) A helpful interactive table. The box of text to the right makes the presentation a little kluge, but the text is helpful for those interested in detail.
Slump visists summer hideaway for the rich (NYT) The top of the market is also buckling substantially.
Treasury announces first PPIP investments (Reuters) The numbers are far smaller than initially anticipated, thank goodness. Every dollar spent as part of this program is a dollar wasted to bail out bank creditors.
Swiss workers want 2 more weeks vacation (Swiss Info) Four weeks isn’t enough.