Clinton's Role

An interesting read via Stewie's blog regarding the mortgage crisis. Jason Leavitt does a fantastic job summing up the role's played by each variable of the mortgage melt-down. But, ultimately, Bill Clinton seems to deserve to be held accountable as well. Leavitt writes;
"...on November 12, 1999. With the CEO of Citigroup looking over his shoulder, Bill Clinton signed into law the Gramm-Leach-Bliley Act which repealed the Glass-Steagall Act of 1933.
The Gramm-Leach-Bliley Act permitted commercial and investment banks to consolidate, and almost overnight behemoth financial service companies that supplied everything to everybody were born. Smith-Barney, Salomon Brothers, PaineWebber and many other well-known and respected investment banks were gobbled up by Citibank, JP Morgan etc, and while the lay public didn’t have a clue what was going on, conflict of interests were rampant. Suddenly the banking arm of one of these financial service companies was pressuring the investment arm to raise its ratings on stocks to help lubricate the deal-making process. (As a quick side note, Citigroup played a major role lobbying for an end to Glass-Steagall. Starting in 1998, the finance, insurance and real estate industries together spent more than $200 million to get Glass-Steagall repealed, and not so coincidentally, only a couple days after Clinton signed Gramm-Leach-Bliley into law, recently-departed Treasury Secretary Robert Rubin was hired by Citigroup as a member of its 3-person office of the chairman.)
If you start with today and work backwards with intentions of figuring out when “all this mess started,” you’ll find many parties that played a role in adding fuel to a fire which was spinning out of control, but your journey won’t end until November 12, 1999 when Bill Clinton tore down the walls within the financial community.
I’m not going to go as far to say if Bill Clinton had not repealed Glass-Steagall, we wouldn’t be in the financial situation we’re in, but I can certainly say it would have been much more mild and probably isolated. When second and third parties are involved in a transaction, more due diligence is done, more scrutiny is applied, and less risk is taken."

It's a very interesting read. And to top it all off, the article ends with a great photo of Bill Clinton after signing the Gramm-Leach-Bliley Act. Looks like a circle-jerk at an occult sacrifice...not that I know what one of those would look like, but I've seen some movies.

da man

He's da man.

SKF overnight hold into a morning full of negative banking news, damn he's good.

yield curve

Is a bull market on the horizon?

The Trading Samurai

to sum it all up

Today's inflation numbers came in flat for February. So, not to worry, those higher prices at the pump and the grocery store are not cause for inflationary alarm. I felt "The Fly" summed it up nicely:
"During the worst housing crisis in 100 years, we’ve learned, NO ONE is allowed to fail. Everyone is too big. From homebuilders to money centers to low-end brokerage houses to monoline insurers, if you need a little scratch, knock on the Governments door and they’ll help you out. This, as you know, is not capitalism. This is socialism heavy, not light, which is disgraceful."

reading

From Minyanville:
Can the Fed Go Bankrupt?
"...central banks are still trying to convince markets that the financial system is merely experiencing “liquidity” problems. But if liquidity were the only issue, all the pumping the Fed and other central banks have been doing already should have cleared up this problem.
The problem isn't one of liquidity. It's one of solvency: loans banks made...are worth less now than when they made the loans. Because they made way (100 ways) too many of them, banks in general have no capital left. You can’t make loans if you don’t have capital.
So the Fed has to give the banks capital. This latest scheme is extremely troubling, especially for the already-battered dollar. The Fed is taking on “AAA mortgages” from the banks in exchange for Treasury Bills to give banks the capital. Of course we don’t know the price they are taking on these mortgages at and that is the crux of the matter. Everything is price.
Let’s say the mortgages continue to deteriorate in price (which is highly likely given the nature of our rating system to make them AAA) and then the banks are in no shape to take them back. If the Fed is stuck with declining assets it too will have a capital problem. But if the Fed loses capital it won’t go bankrupt like a regular company: It will just print the money to make up the difference. Literally.
If the Fed loses $50 billion, it can physically print (tell the Treasury to print) the currency to make up this difference. If there currently is $700 billion of physical currency in circulation, printing $50 billion new money would immediately devalue the dollar by 7%.
If the Fed takes on riskier and riskier loans, it becomes more and more negative for the dollar. A collapse in the dollar is a de-facto bankruptcy by the Federal Reserve and the U.S. in general."

Free Healthcare...

...unless we're bankrupt. An interesting blog posting here telling of the setback Governor Schwarzenneger is experiencing as he tries to provide healthcare to those without. The worrisome economic status of the state of California has led Governor Schwarzenneger to declare a fiscal emergency in January, as the fifth largest economy in the world battles with a $14-billion deficit. An attempt to raise revenue by increasing tobacco taxes was strongly opposed and unable to pass as a measure in the past election. So, we're left with school and hospital funding cuts in order to trim the budget. It's a sad statement on where priorities lie. Higher taxes on tobacco products? Hell no! Cut school and hospital funding? Who cares, so long as you don't raise the cost of my cigarettes. And since California will likely be the last state to feel the full effect of the mortgage/credit crisis pinch the seriousness of this problem is only just surfacing. 'tis a shame.

Be Afraid...

...be very afraid. I for one can't wait for tomorrow's open.

FLY Short Squeeze

The big news in the trader's blogosphere today has to do with the comment made this morning by "The Fly." As he succinctly puts it; "don't forget, "The Fly" will soon be shutting down this fucktarded blog-- in order to melt away into the confines of glorified internet folklore." This comment sure got people amped up, just check out the dialogue on Wallstreak. I thought it was pretty funny to go to a trading chat room and read the comments of people arguing with one another (and getting really angry) all because "The Fly" said he was closing up his blog. At any rate, if "The Fly" were a publicly traded company there certainly would have been a short squeeze in play today, sending FLY off the charts. Anyway, I'll definitely miss "The Fly" and all of his witty commentary. However, once he's gone maybe I'll find myself using the term "fucktard" a little less. Which wouldn't be such a bad thing.

Solar Purifying

A link I came across on boingboing brings you to this sight
which features water containers (they hold 1 gallon) that works with the sun "to allow UV-A radiation and increased temperature to destroy pathogenic microorganisms." Pretty cool.

Quiet Sunday

Not much to report this weekend. The only thing I've come across was this posting on Trader's Narrative that I found posted in MovetheMarkets. I found interesting the following:
"The most recent COT report dovetails with the fund flows data. We are seeing a continuation of the commercials going huge net long and the small speculator going the other way. Whether the futures market or the stock market, the two sides have clearly outlined their positions. There is no doubt where they stand."

Joining the Train...

Spurred on by the WallStreetFighter, and being that I'm in need of some link lovin', I'm keeping the train movin':

———-START COPYING HERE ———-

Geek Train - All aboard!

1 - Write a short paragraph at the beginning of your post and linkback to the blog(s) that put you on the list in the paragraph. You MUST do this. No-one plans on getting slapped for duplicate content any time soon, do they?

2 - Next, copy the list of originals below COMPLETELY and add it to your own blog. If you’d like a different keyword for your blog then change it, when you do your post, and it should pass to most blogs with that keyword, provided the train keeps on spreading.

3 - Take the adds from the blog that added you and place them in the “Originals” list.

4 - Add at least three new favourite blogs of yours to keep the train going, e-mail the blog owners (or comment on one of their posts) and insist that they post. The Originals:

(The satirical saint) Craig Kohler
(The kick-ass) Nate Whitehill
(The original) WallStreetFighter
(The crafty two at) TechRave
(The AdSense ‘dude’) Michael Cheney
(The overclocker) Shawn Knight
(The incredible) Chris Hooley
(The rhetorical) Michael Kwan
(The talented) Leo Chiang
(The root of all evil) John Chow
(The business dude) Josh Mullineaux
(The absurdly loud) Ed Lau
(The mastermind) Jon Waraas
(The yaketty) Stephen Fung
(The wickedly cool) Everton Blair
(The uber blogger) Ms Danielle
(The enterprising) Matt Coddington
(The career minded) Jane May
(The legendary) Gary Lee
(The nifty) Dosh Dosh
(The ambitious) Jeff Kee
(The Down Low) Shawn Low
(The reviewer) Thomas De Maesschalk
(The Post Whore) Derrich
(The Bitchy Mogul) Bob Buskirk
(The Anti-Social) Matt Propst
(The Hawk) Gregg Hawkins
(The Carpenter) HMTKSteve
(The Artist) Web Urbanist
(The Popularity Booster) Romlet
(The Funny Money Linkster) WallStreetFighter
(The Oldschool Blogger) Disassociated
(The life Coach) Agent Sully
(The Thinker) Ilker Yoldas
(Baby steps to big money)Fufunik
(The Sexy Swing Trader) Trading Goddess
(The Rajun Cajun) MadStocks

My adds:
(The Forex Trader) Grace Cheng
(The Short Squeezer) Squeeze Shorts
(The Prehistoric Trader) Dinosaur Trader
(The Glass Artist) Calyxann
If I missed anyone leave a comment and I'll add you. Thanks all!

Gold Stocks

To follow up the previous post, I'm reading an interesting article about the "Secular Gold Bull Market."
An excerpt of interest from the post being: "While the spot price of gold has yet to reach the swing high in April 2007, the Philadelphia Gold BUGS Index (HUI) has just surpassed it. If this sort of disconnect continues, either the price of gold has to run up to catch up, or the gold stocks will fall to realign with the commodity."

Gold Stocks: MDG, NEM, CDE, GG, GSC, GSS, RGLD

Sounds Like a Movie Script

If you have the time, attention span, and interest check out this article. I found it while fishing around TraderMike's blog. I wanted to carry it over to my blog so I can go back to it in the future to re-read. Interesting stuff, the world of hedge funds and what goes into some of them.

Got a Plan?

A great blog posting to check out. Get inside a traders head and see what goes into the development of a trading plan. As I am just starting out, this is the type of post that will help me revamp my current trading plan into one which will be more concise and particular. Fantastico! Wall St.Warrior
Here's a good follow up to this same topic.

Pivot Points

Want some schooling on Pivot Points? Go here...

B$

This website was referred to me by the sexy artist Calyxann. Blog$hares is a fantasy stock market for weblogs. Players get to invest a fictional $500, and blogs are valued by incoming links. It seems like a fun site to play around with. I'll blog more about it once I'm signed up and ready to "trade."

Something to Aspire to...

Over at TraderFeed the uber-intellect Brett Steenbarger made this post a few days ago that I've read a couple times since he posted it. The theme of the post being "What Makes a Professional Trader." He gives 5 observations on what he sees as critical in being a professional trader and then sums up his findings with some words of wisdom. I wanted to include this post in my blog so that I will be reminded to go back to it in the future. So, what makes a professional trader? In Mr. Steenbarger's opinion the common threads among professionals include: (1) Following a variety of markets, having a framework for how they think about markets. (2) They think big and are aware of the inter-play between multiple markets, allowing them to capitalize on big moves. Small traders, on the other hand, may loose sight of the context of price action within a market and "lack a framework for thinking about proper and improper pricing." (3) A focus on risk management. (4) Reasonable profit goals. (5) Psychology for performance improvement. In summary: "The best traders, like the best athletes, are always working on themselves, always refining what they do. In an important sense, they don't just use psychology to improve their performance. They work on their performance as a means of extending their personal mastery."
A very insightful post from Dr. Steenbarger.

Great Post

Here's a great exerpt from a blog I visit on a daily basis. traderfeed.blogspot.com is an incredible wealth of information. Here's a keeper.