Extend and pretend… That’s the government’s way of handling the crisis. Extend credit and cash to those who don’t deserve it. Then, pretend that everything is okay… But the problems don’t go away. They just get stretched into the future… What did the feds do for GM? They took over the company. They extended cash [...]
The big news yesterday was that the Fed decided to do about what we expected – not much. Bloomberg has the report: Federal Reserve officials decided to reinvest principal payments on mortgage holdings into long-term Treasury securities, making their first attempt to bolster growth since March 2009 to keep the slowing US economy from relapsing [...]
Has there been significant deleveraging in the US housing market? Not really. Instead, with already $7 trillion in home equity lost, mortgages have come down only $270 billion. It’s a significant discrepancy that’s going to have to come into alignment somehow. Jesse’s Café Américain explains: “This debt must be resolved. There are two major ways [...]
Ed. Note: This is an excerpt from Whitney Tilson’s presentation to the Value Investing Congress in Pasadena, California on May 5, 2010. Whitney Tilson is the founder and Managing Partner of T2 Partners LLC and the Tilson Mutual Funds. Two years ago, we stood up here on this exact stage and delivered a very downbeat [...]
Here’s a mystery: Homeowner defaults. Not that there are so many…the mystery is why there are so few… In Nevada, for example. Two out of three homeowners are underwater…which is hard to do in the desert. Some of them owe hundreds of thousands of dollars on something that doesn’t exist anymore – the equity on [...]
If you’re saving for retirement under a tax “advantaged” plan like an IRA or 401k, please be skeptical. The very same US government that’s offering you “advantages” is also your tax collector. Uncle Sam probably wants to help you save for a happy and healthy retirement, but maybe not. In a pinch — when his own [...]
Are we in a depression yet? The number of Americans living on food stamps has risen to 37 million. Food stamps are the soup lines of the ’00s. And what else was big in the ’30s? Escapist movies. Here’s a headline for you: “Box office takings set to smash records,” says The Financial Times. What [...]
Meanwhile, in yesterday’s market action…the big thing that happened was the same thing that seems to happen every day lately. Gold hit a new record high. It rose almost $18 to close at $1,164. Now, the question we must ask ourselves is an old one: is this the final, blow-out phase of the gold bull [...]
Pacific Investment Management Co (Pimco) has made its most substantial change in bond holdings since 2004. Its nearly $200 billion Total Return Fund has lowered its mortgage debt holding from 22 to 16 percent of its portfolio. At the same time, it’s increased its government debt — including Treasuries, agency debt, interest-rate derivatives, and FDIC-backed [...]
