Monthly Archives: April 2009

Swine Flu Pandemic Primer

By Admin | Published: April 26, 2009

As author of World Event Trading, I did an entire section on infectious diseases from the 1918 Spanish Flu to Bird Flu. The recent outbreak of Swine Flu is generating headlines and concerns globally. It has spread from Mexico to the US to New Zealand.  Expect the World Health Organization (WHO) to take the lead on dealing with the disease.

Critical point: fear of the disease is the biggest driver of behavior and societal changes due to the outbreak.

Reuters: “The new flu strain, a mixture of various swine, bird and human viruses, poses the biggest risk of a large-scale … …READ MORE

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A Sampling of Advisory Opinion: Looking After Our Best Interests – Barrons 4/4/09

By Admin | Published: April 7, 2009

A Sampling of Advisory Opinion: Looking After Our Best Interests
…The Fed/Treasury/FDIC/White House may decide that it’s in the best interests of the country to not only make the banks keep the money, but also to have these banks scrub their balance sheets by selling “toxic” assets to the new Treasury program….a very good idea, but potential abuses lurk. [Treasury's] legacy security and loan program needs to have buyers and sellers of assets. [But] I see only the FDIC as the one major seller of assets due to acquired loans from failed institutions…getting sold for less than 40 cents on … …READ MORE

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Ideas and Themes For The Coming Week

By Admin | Published: April 5, 2009

This is a holiday shortened week with Easter looming and most of Christian Europe on holiday from Thursday on…

However, there are some key things happening.

1. Earnings season starts on Tuesday with Alcoa leading it off. Remember, the analysts are expecting overall earnings to be down 36% in the quarter. The focus should be not on the actual earnings, but the outlook/guidance that companies give for the rest of the year. Also, look to see which managements are backing up positive guidance with share buys. Also, consumer credit comes out as well as hope for consumer spending with stimulus … …READ MORE

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Russia and China's Currency Plans

By Admin | Published: April 3, 2009

Over the last two weeks, both China and Russia have made headlines with their unhappiness over the current financial world order. The Chinese are worried over the future of their holdings of both the US dollar and US debt. The Russian’s are concerned about the use of the US dollar as a reserve currency and likely worried over the use of the US dollar in the pricing of their chief export oil.

In his speech to the G-20, Chinese President Hu Jintao said that the International Monetary Fund should increase its surveillance of the economic, and particularly the monetary, policies … …READ MORE

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G20 Surprise

By Admin | Published: April 2, 2009

On CBS, Geithner says “Of Course” when asked if he would oust CEO’s from TARP banks that are non-performing. This is precisely what I warned about yesterday.

The draft G20 statement apparently has everything for everyone and the euphoria in the markets is palpable with equity markets rallying strongly, bond yields are higher, and the US dollar is lower. There even appears to be an agreement between Medvedev and Obama for a one third cut in strategic arms without having to look into each other’s soul. (Which is probably a good thing for both of them.) Details on the G20 … …READ MORE

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April's Cruelest Joke

By Admin | Published: April 1, 2009

Did anyone notice how grumpy all the financial CEOs looked after meeting with President Obama last Friday? The meeting must have been quite unpleasant as the Obama administration is informing these private sector giants that they need to change the way they are running their business. The government wants more lending and less executive pay. Also, several banks indicated that they want to return the original TARP money and the Obama administration is telling them no.

While it may not have been explicit, the implicit threat was large. The FDIC is in the middle of stress testing the 15 largest … …READ MORE

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