Two years ago, when he spoke at the Value Investing Congress, David Einhorn said Lehman was in deep trouble. Turned out it was a good call. Today he gave another keynote at the conference in which he argued the policies of the administration have put us on a very dangerous path, one which has encouraged him to buy physical gold as insurance against sovereign default(s).
At Buttonwood, Sheila Bair noted that the DIF’s balance, its net worth, is now negative. They have $20 billion+ of cash on hand, but much is accounted for by the fund’s contingent loss reserve, which is to say the money is spoken for based on failures already in the pipeline.
Hopped over to the Economist’s Buttonwood conference this evening, where George Soros and Stephen Roach were on a panel. I will be tweeting as much of tomorrow’s conference as I can, including Sheila Bair’s talk in the morning and Larry Summers’ talk at lunch.
6-year-old Colorado boy is floating away in balloon (thedenverchannel) He’s still up there as of this writing, 7500-8500 feet up, in a homemade hot-air balloon filled with helium. Authorities say he could stay aloft for 12 hours. Update: Balloon lands, no boy.
Colorado will become the first state to reduce its minimum wage because of a falling cost of living.
JP Morgan blows out results (Bloomberg) It’s good to be TBTF!
WSJ artist ripped off! (Hedcuts) You know those neat little illustrations that WSJ runs in the paper? Turns out an artist is ripping them off. “…MY DRAWING was given as a gift to Vaclav Havel who then re-gifted it for president Obama?! And it’s now hanging in the White House?! You can bet your knickers I will do my damndest to let the President know he was scammed by the Spaniards and the Czechs! ;-)))”
From WSJ: Wall Street on track to award record pay
Major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year — a record high that shows compensation is rebounding despite regulatory scrutiny of Wall Street’s pay culture.
The Pension Crisis (WaPo) “After losing about $1 trillion in the markets, state and local governments are facing a devil’s choice: Either slash retirement benefits or pursue high-return investments that come with high risk.” If history is any guide, they’ll reach for yield and the consequences will not be good.