White House LIES: CFC
by ilene - October 30th, 2009 9:49 pm
White House LIES: CFC
Courtesy of Karl Denninger at The Market Ticker
This is ridiculous and anyone who believes it deserves to eat The White House Dog’s used food:
The administration’s blog post argued that Clunkers helped to lower auto prices on the rest of the vehicle market as well, a fact the administration said Edmunds ignored.
What a total load of crap.
First, I personally walked into dealerships during the "CFC" program time, and every single one of those dealers was literally screwing everyone who walked into the door.
Normally, you can buy an American car for $100 or so over invoice price. I have, in fact, not purchased one vehicle for more since I started buying cars! My last "new" American vehicle, a 2002 Suburban, was bought during the 0% "craze" following 9/11 and even with the 0% financing I bought it for $1,000 UNDER factory invoice. I saw no dealer willing to sell at anything approaching that number this time – they were all selling at full sticker, and two had their own "supplemental rip-off stickers" on the windows that they refused to negotiate on yet were full of junk (the usual "undercoating" and "fabric protection" for $250 garbage.) People literally got robbed to the tune of $2,000, $3,000 and sometimes more than the rebate was worth on these so-called "deals."
Second, this "program" destroyed the low end resale market. It literally took all those cars and crushed them! If you were in the market for such a clunker as the only car you could afford they all disappeared for the duration of that program. This did severe damage to sections of the used-car market and the consumers dependent on it.
This program was nothing other than a royal screwing of the American Consumer and a sop to the UAW, and that’s a fact. Edmunds got this exactly right and the White House is pissed off that they got called on their incessant lies by a very influential auto industry publication.
Well, boo-freaking-hoo Barry.
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DiggIs David Tice the John the Baptist of Wall Street?
by ilene - October 30th, 2009 9:00 pm
Is David Tice the John the Baptist of Wall Street?
Courtesy of Damien Hoffman at Wall St. Cheat Sheet
John the Baptist is responsible for the Apocalyptic stories in our cultural consciousness. He envisioned a world in which a total hell would descend on earth more wild than Marylin Manson’s most drug induced hallucinations. Similarly, as Liz Claman correctly notes in the following video, David Tice sees the world from a different prism: a completely hellish one.
David manages a bearish fund. So, like anyone who knows how the Wall St. machine works, he makes the rounds to talk his book. However, like all evangelists before him, David’s repetition has not done much in the way of changing reality.
Permabulls and permabears share the same common flaw: they take one extreme view and carry it to its logical (although improbable) conclusion. As a result, they fail to account for the ever-changing nature of societies and the complexity of the unknown.
Humor yourself and decide whether David is a consistent investment adviser — his fund’s performance (Nasdaq: BEARX) is not — or one step away from the loony bin:
Click here to watch the video.
Note: Wall St. Cheat Sheet is offering a FREE 14-day, no risk trial of the Premium Newsletter - just click here.
Icahn Discloses Plans For CIT
by Zero Hedge - October 30th, 2009 8:38 pm
Courtesy of Tyler Durden
CIT is now certain to file for bankruptcy over the weekend, after it was unable to obtain the requsite number of consents for its exchange offer. The only question is whether or not the bankruptcy will be a pre-packaged, in which bondholders will accept specific haircuts or if it will be a free fall Chapter 11, which would likely promptly devolve into a Chapter 7 liquidation, if creditors are unable to come to a non-blocking agreement. In an odd development today the firm announced that it had chosen Icahn to provide an incremental $1 billion DIP for when the company does file. By doing so, the BOD and the executive committee basically kissed their jobs goodbye: Icahn has been vocal and extremely critical of everyone at the fancy-lobbied firm at 505 Fifth.
With the new priming financing, Icahn will further lower his cost basis, and raise his weighted average holdings in the firm’s capital structure. Icahn has already stated that he is the largest holder of company bonds, which has as of yet been unconfirmed. We expect one of the affidavits to be filed promptly at Bowling Green on Sunday to confirm or deny this claim.
In the meantime, the below interview by Fox Business News with Icahn should bring some clarity for the plans that the corporate raider has for this most recent conquest. One only hopes that this most recent venture will be more successful than Federal Mogul which likely cost Icahn several years of his life, and not to mention a few hundred million.
Ayn Rand Eviscerated in GQ
by ilene - October 30th, 2009 8:23 pm
Ayn Rand Eviscerated in GQ
Courtesy of Joshua M Brown, The Reformed Broker
I’ve not read anything by Andrew Corsello before, but his evisceration of Ayn Rand in GQ magazine is a thing of caustic, vicious and snark-filled beauty.
I did my share of battle with the Rand Cult earlier this fall when I interviewed her Ghost to discuss capitalism’s share of blame for the credit crisis. Corsello never meets her ghost, but speaks to quite a few of her acolytes in his piece.
I’m adding Andrew Corsello to my list of writers to keep up with.
Here’s why:
goddamn, the experience of being 19 years old and reading Ayn Rand! The crystal-shivering-at-the-breaking-pitch intensity of it! Not just for that 19-year-old, but for everybody unfortunate enough to be caught in his psychic blast radius. Is “experience” even the right word for The Fountainhead and Atlas Shrugged? Ayn Rand’s idolization of Mickey Spillane and cigarettes and capitalism—an experience? Her tentacular contempt for Shakespeare and Beethoven and Karl Marx and facial hair and government and “subnormal” children and the poor and the Baby Jesus and the U.N. and homosexuals and “simpering” social workers and French Impressionism and a thousand other things the flesh is heir to: experience?
Read the rest:
Read Also:
Interview With The Ghost Of Ayn Rand (TRB)
Charts, Charts, Charts
by Zero Hedge - October 30th, 2009 7:20 pm
Courtesy of Tyler Durden
…and then some more. Courtesy of saltwater powerpoint for 8 keyboards.
| Attachment | Size |
|---|---|
| GS Kickstart.pdf | 373.35 KB |
A Brilliant Warning On Robert Rubin’s Proposal to Deregulate Banks, circa 1995
by ilene - October 30th, 2009 6:54 pm
A Brilliant Warning On Robert Rubin’s Proposal to Deregulate Banks, circa 1995
Courtesy of Jesse’s Café Américain (posted Oct. 29)
Out all day on university visits with my son, returned to see the miracle GDP recovery number bull the market higher, after Goldman Sachs had cast a pall of gloom the prior day. Le Proprietaire had investments that leaned towards smelling bear trap, and was gratified to see the gains, especially after a day reviewing prospective tuition and fees.
There is little doubt in this mind that the number will be revised lower, and the chain deflator lowball will prove to be transitory, and the recovery will be ephemeral, at least based on real numbers. The Clunkers programs pulled sales forward, which is a useful thing only if there is the follow up of systemic reform. The consumer is flat on their back, and median wages and employment are going nowhere. One can stoke monetary inflation with enough Fed expansion, but without the vitality that bestows permanence and self-sufficiency.
A reader sent in this prescient warning from 1995, when then Treasury Secretary Robert Rubin, late of Goldman Sachs, mentor to Larry and Timmy of the current US ship of state, wanted to unleash the power of the big money center banks to ensure their "efficiency and international competitiveness."
If only the US had rejected the Rubin – Greenspan doctrine then, and firmly said no to freewheeling finance, and not succumbed to the hundreds of millions of dollars in lobbying and donations spread about Washington in that 1990′s campaign by Wall Street that culminated in Fed preemptive action, followed by a massive lobbying campaign led by Sandy Weill.
In December 1996, with the support of Chairman Alan Greenspan, the Federal Reserve Board issues a precedent-shattering decision permitting bank holding companies to own investment bank affiliates with up to 25 percent of their business in securities underwriting (up from 10 percent).
This expansion of the loophole created by the Fed’s 1987 reinterpretation of Section 20 of Glass-Steagall effectively renders Glass-Steagall obsolete. Virtually any bank holding company wanting to engage in securities business would be able to stay under the 25 percent limit on revenue. However, the law remains on the books, and along with the Bank Holding Company Act, does impose other restrictions on banks, such as prohibiting them from owning insurance-underwriting companies.
In August 1997, the Fed
…
Hampton Georgia (Pop. 5,300) Attacked by FDIC, FHA, Fannie and Freddie
by Zero Hedge - October 30th, 2009 6:44 pm
Courtesy of Bruce Krasting
The FDIC held a big auction this week of properties they own outside of Atlanta Ga. JP King conducted the auction. The FDIC put up 187 properties for sale. The results have not been released yet. I suspect that it might be an interesting story when the numbers do come out. I reviewed some of the available information and came up with some observations.
-Of the 187 properties listed by the FDIC 18 were located in Hampton, Ga. Zip 30228.
-FHA (Federal Housing Administration/HUD) is currently listing 32 properties in zip 30228.
-Freddie Mac has only 2 listings in 30228.
-Fannie Mae has 25 properties for sale in 30228.
-The total number of homes that the government has foreclosed and has for sale in Hampton Ga. is 78.
-The FDIC is auctioning off the following home at 148 Makenna Drive; while at the same time FHA is trying to off-load the same model at 202 Makenna. Note that the FHA notice suggests a Sale Pending at $84,000. I will bet that the auction price for the FDIC is far less than the price FHA got for its house. Therefore the FHA deal is going to crater.
-It is fairly clear from this that one part of the government, FDIC, is killing the REO owned by other parts of the government. That is insane. No one appears to be looking at the Federal REO problem and attempting to make sense of it.
-The For Sale signs by the Feds are all over the poor town of Hampton, Ga. What does this do to the people who live there and own homes? For them Uncle Sam is driving down local RE prices. What are those folks going to do when the price of their home drops as a result of the liquidations by the Washington crowd? They are going to default on their mortgages too. We know that the biggest source of default in the current cycle is that borrowers are so far underwater they have no economic incentive to pay. So they don’t.
-Hampton Ga. is a troubled community. It was overbuilt with fast money. What is particularly troubling for me is that FHA has a 40% share of the government owned properties in this community. That is a very big number. At…
Fannie Mae Seriously Delinquent Rate Hockeysticks to 4.45% From 1.57% In Prior Year
by Zero Hedge - October 30th, 2009 6:31 pm
Courtesy of Tyler Durden
The FNM “seriously delinquent” rate has gone parabolic, increasing by roughly 5% sequentially and just under 300% YoY. As mere text will simply not do this metric justice, please enjoy this chart of the dataset from Blytic. It tells you all you need to know about the Fed’s containment of the housing problem.
The August seriously delinquent single-family number comprised of a 2.87% non-credit enhanced delinquencies and a very bothersome 11.52%, consisting of credit enhanced loans.
The deterioration of FNM’s book however did not stop it from increasing the size of its book. In September Fannie’s total book of business hit $3.242 trillion, up from $3.229 trillion in August and $3.079 trillion in the prior year.
This trend should bother you, dear taxpayer, because it is your money on the hook here, which is not only massively mismanaged by Bernanke & Co., LLC, but which sees another $80 billion of free funding every month courtesy of the dollar printing press to onboard even more toxic garbage onto your balance sheet.
Radio Zero: Anti-Halloween Week
by Zero Hedge - October 30th, 2009 6:10 pm
Courtesy of Marla Singer
The market has been in anti-Halloween mode the last two quarters, cleverly hiding its true nature under a placid costume before exposing its real hockey mask clad self on Halloween weekend. How perfectly contrarian!
Join us, again, for a contrarian night at Studio Zero, where Radio Zero will bring you all the musicial highlights of our annual Halloween blow out party in real time as it happens. Early morning (East Coast time) linger for our traditional (invited) anonymous A-List DJ of the night- an exceptional treat with the most gob-smacking hard beats, no tricks (we promise).
Our test broadcast begins, well, now. Live stuff from yours truly? Think 6:30 – 7:00ish ET. The heat of the party? You’ll know it when you hear it.
Listen here: http://cdo.zerohedge.com:8000/listen.pls
Or pick up our West Coast Mirror (with 1000 slots) here: http://72.13.86.66:8000/listen.pls thanks to the mind-blowing generosity of EGI Hosting.
Chat up the DJ (send your .mp3 files) here: radiozh.
Or… join our IRC server at chat.zerohedge.com #radiozh. If you just can’t be bothered with an IRC client, we’ve provided one for you here. Otherwise, consider getting mIRC. You might find it useful in connection with new features Zero Hedge before too long… but if I tell you more about that I will have to buy your puts in size.
Daily Credit Summary: October 30 – Vermicious Knids
by Zero Hedge - October 30th, 2009 5:50 pm
Courtesy of Tyler Durden
Spreads were broadly wider in the US as all the indices deteriorated (as IG and HY closed at their wides with the former making its largest jump wider since 10/01). IG trades 7.8bps wide (cheap) to its 50d moving average, which is a Z-Score of 1.3s.d.. At 109bps, IG has closed tighter on 63 days so far this year (217 trading days) and we note that the distance to the average is getting close to its largest since this rally began (a critical break over 9-10bps above the average would suggest we are in a new era. Yesterday’s crack of IG not being able to break the 50-day average (while technical nonsense) is notable in that we have not seen an upside break and unsuccessful test of the average since the March rally began in credit.
Indices typically underperformed single-names with skews widening in general but were really just playing catchup from yesterday’s moves as from Wednesday’s close single-names are actually underperforming suggesting some more weakness is due in the indices. The names having the largest impact on IG are Constellation Energy Group Inc. (-22bps) pushing IG 0.17bps tighter, and International Lease Finance Corp. (+39.58bps) adding 0.25bps to IG. HVOL is more sensitive with American International Group, Inc. pushing it 0.42bps tighter, and International Lease Finance Corp. contributing 1.07bps to HVOL’s change today. The less volatile ExHVOL’s move today is driven by both Constellation Energy Group Inc. (-22bps) pushing the index 0.22bps tighter, and Wells Fargo & Company (+11.25bps) adding 0.12bps to ExHVOL.
Selling was broad-based today but we do note the lowest quality names saw the most selling pressure with CCC and below relatively crushed. There was also some notable selling in the crossover space as BBB-/BB+ names underperformed either side. Utilities (Eletric more than others) saw a safety bid today while Leisure (Gaming, Lodging, and Sports/Rec) were all weaker along with Autos and Builders. Capital Goods were mixed but Transports were very weak. Healthcare also saw a bid and was benefiting from the safety trade (particularly Hospitals & Health Services). Interestingly, Airlines saw some buying today also with UAL and AMR both tighter
The price of investment grade credit fell 0.27% to around 99.6% of par, while the price of high yield credits fell 1.315% to around 92.13% of par. ABX market prices are lower by 0.29% of par or in…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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