Evening Links 12-16

December 16, 2009

Fed repeats “exceptionally low” for “an extended period” (Fed statement) The Fed maintains that it isn’t raising rates for the foreseeable future, but repeated that it plans to end MBS asset purchases by April next year. Too bad we can’t get a surprise rate hike in order to chase risk back out of credit markets…

Wells’ CLO deal called “landmark” (Paulden, Bloomberg) The return of CLOs would be the latest sign that Wall Street is dancing again.

Big decision looms on Fannie and Freddie (Timiraos/Hagerty, WSJ) Suggests Obama could expand his commitment to Fannie and Freddie beyond $400 billion while he’s still able to unilaterally. If he waits till next year, Congress would have to approve.

Man of the Year: Ben Bernanke (Time) Ha! Ben should have said thanks but no thanks. Ten years ago Time christened Rubin/Greenspan/Summers as The Committee to Save the World. In the fullness of time, all have been proven failures. Time’s endorsement is final confirmation that Bernanke too is a failure.

Norway raises rates (Kremer, Bloomberg) More fodder for yesterday’s Norway thesis. Higher rates make for a more attractive currency…

Some debt-laden graduates wonder why they bothered with college (ABC News) Full of choice quotes: “You’re led down this path of needing to go to college,” [says one indebted grad]. “The college diploma is the new high school diploma.”

Spend more. Get less. The worst fun city in America (Wachs/Eskenazi SFWeekly)

The year in photos, part 1, part 2 and part 3 (The Big Picture) More from the best photo blog on the web.

Canadian ice-fishing…


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I think the focus shouldn’t be on “why did waste all this money on a college degree” so much (after all, what desirable job acn you reliably get with a HS diploma) as “why did i waste money getting a private college degree v. a way cheaper public school degree”.

Posted by Andrew | Report as abusive

Check out this article about a new “Petro Powers Currency”

http://www.telegraph.co.uk/finance/econo mics/6819136/Gulf-petro-powers-to-launch -currency-in-latest-threat-to-dollar-heg emony.html

Posted by Mike | Report as abusive

Dec. 17 (Bloomberg) — The panel that governs credit- default swaps in Japan asked a legal subcommittee to consider whether a private debt restructuring process that roiled contracts on consumer lender Aiful Corp. should trigger payouts.

“The International Swaps and Derivatives Association’s determinations committee in Tokyo decided yesterday to defer a decision on the matter until the subcommittee reviews it, the New York-based trade group said on its Web site. The 15-member determinations committee, comprising dealers and investors including JPMorgan Chase & Co., Goldman Sachs Group Inc. and UBS AG., rejected three attempts in October by holders of swaps on Aiful to get paid, citing a lack of publicly-available information.

Japan’s outstanding swap contracts jumped to $887.3 billion as of June 30 from $554.2 billion a year earlier, according to Bank of Japan data. Globally, there were about $25.7 trillion in contracts outstanding as of Dec. 11, according to the Depository Trust & Clearing Corp., which runs a registry that captures most trading.”

Why no payout? No capital available to payout? This could very will be the beginning of a confidence crisis about counter parties and their ability to payout on swaps.

Posted by larry winters | Report as abusive

NEW YORK/WASHINGTON, Dec 16 (Reuters) – The U.S. Treasury scrapped a plan to sell its $5 billion of Citigroup Inc (C.N) shares after a stock offering by the bank attracted weak demand and priced at a much lower-than-expected $3.15 a share.

Not so good news for the stock market.

Posted by larry winters | Report as abusive

To Andrew: College tuition is a huge bubble in the making. It will finally burst when more strapped families realize that motivated students can do most of it online, saving a ton.

I’m also surprised that it seems too many families ignore the cost savings they could achieve by using cheaper two year schools for the mundane courses and transferring to a costlier one only when there is truly a need to be there. It’s not like employers commonly ask job applicants if they spent the entire college career in one school.

Posted by al coholic | Report as abusive

Agree with Andrew! A state school will be fine for most people.

Too many doors are closed if you have no degree. It’s a screening tool used by most employers. You *probably will not* get a white collar job with any fortune 500 company without a college degree or a job in any state or federal bureaucracy. Without a college degree, you had better go into business for yourself, learn a trade like plumbing or data networking, work on a rig or as a miner, etc. if you want to make good money.

Posted by Dan Hess | Report as abusive