Renewed Infrastructure Growth in Environmentalists’ Best Interest
November 24, 2008
Tom Evslin submits:
Given current "environmental" legislation, it will be impossible to create a meaningful number of jobs - except for engineers and lawyers - by next summer no matter how much federal money we allocate to this worthy endeavor. Decades of well-meaning legislation and regulation, a reaction and then over-reaction to real environmental abuses of the past, have left us unable to begin construction on any significant project until decades – I mean that literally – after the approval process has begun.
The good news is that this is all under our control IF we can pull together to maintain essential environmental protection AND eliminate unnecessary delay. We can and we ought to be rebuilding our roads and bridges and our power grid by next construction season. We ought to be increasing access to domestic energy from both traditional and alternative sources. Those jobs are badly needed and a trillion dollars spent on infrastructure projects has an almost certain return – very unlike the trillion or so we’re spending to bail out banks and bankers.
Renewed Infrastructure Growth in Environmentalists’ Best Interest
Existing Home Sales Clunk Along Bottom
November 24, 2008
The NAR (National Association of Realtors) reported a setback in existing home sales during October in what increasingly appears to be an extended period of "clunking along a bottom" that began forming last year. Home prices are another matter entirely. Of course, the NAR blames distressed sales and the unusually large number of lower-end homes being sold for the big price decline, citing "distortion" in the data. While these factors surely played a big role, it’s not like you can just dismiss them either and go on thinking that home prices, in the aggregate, are not tumbling in a big way. Many sellers will be comforted to learn of this "distortion" in the price data and blithely go on attempting to sell their homes for unrealistic prices.
Tim Iacono submits:
The median price for existing homes dropped to $183,300 in October, down a whopping 11.3 percent from a year ago, taking home prices back to levels last seen in 2004. 
Geithner, Summers Represent Change at Treasury
November 24, 2008
Chad Brand submits:
Tim Geithner and Larry Summers were the top two candidates for Treasury Secretary in the Obama administration, and today at noon ET we officially heard that both are joining Obama’s economic team. Geithner will head up the Treasury Department and Summers will be director of the National Economic Council. Having both of these men, rather than having to choose only one, seems to be a great idea and should bode well for future economic policy.
In what might prove to be an important development, we are not installing a CEO into the Treasury Secretary slot. President Bush’s record nominating people for this post has not been very impressive, as two of his former Treasury Secretaries were forced to resign, and the jury is still out on Paulson’s effectiveness thus far. What did those three men have in common? They were all corporate CEOs before heading to Washington.
Geithner, Summers Represent Change at Treasury
Shelf Filings Are Increasing, But Don’t Get Excited
November 24, 2008
David Enke submits:
Shelf registrations are increasing, but it has little to do with tapping into future higher prices or a new found optimism in the market (see WSJ article). Back in 2005, the SEC put a "shelf life" expiration date of three years on all shelf offerings. The initial set of filings after the ruling are now set to expire on December 1st of this year, causing many companies to refile, even if they are not expecting to access the equity capital markets at a time when prices are depressed.
Nonetheless, since shelf deals can be accessed at any time, it is smart to re-register so that capital can be accessed in the future when it does make sense. When the market is rallying, it is not unusual for companies to float equity that may be selling at inflated prices. On the other hand, accessing capital in a down market when value is low is probably more of an indication of trouble, making it less likely that companies will sell stock off the shelf in the next few months, even if re-registering opens up the window for them.
Shelf Filings Are Increasing, But Don’t Get Excited
Obama’s Real Economic Team
November 24, 2008
Felix Salmon submits:
On Saturday, the WSJ knew exactly who would be joining Tim Geithner in Barack Obama’s economic team:
Congressional Budget Office director Peter Orszag will be Mr. Obama’s budget director. Jacob Lew, a former Clinton budget director, will head the White House’s National Economic Council. Jason Furman, the economic policy director of the Obama campaign, is likely to be Mr. Lew’s deputy. And Austan Goolsbee, a University of Chicago economist and long-time policy confidante, is expected to chair the Council of Economic Advisers.
More on Hindsight Bias
November 24, 2008
Roger Nusbaum submits:
Another day, another blog post with a lot of comments left, so thank you for that. Working its way into Saturday’s comments was a little bit more humor than the previous couple of days. So maybe a 6% lift in the last hour on Friday did do a lot to improve people’s spirits.
A couple of weeks ago, I made a reference or two to a concept brought up by Dr. Brett called hindsight bias. An example of hindsight bias would be to look back over the last couple of years and say "well, of course there was going to be a fill in your own description of the current mess."
Forex Interplay: Euro vs. Dollar As Risk Appetite Returns
November 24, 2008
Grace Cheng submits:
The euro moved sharply higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.2895 level and was supported around the $1.2565 level.
Risk appetite returned to the market as traders mulled Obama’s appointment of Geithner and the tripartite Federal Reserve / U.S. Treasury / FDIC bailout of troubled U.S. banking giant Citigroup (C). Government officials will provide Citigroup with US$ 20 billion of fresh balance sheet capitalization and will absorb up to US$ 306 billion of the bank’s troubled assets. The Bush administration warned that Citigroup’s bailout may not be the final one and Citigroup’s shares were up more than 50% mid-way through the trading session.
Forex Interplay: Euro vs. Dollar As Risk Appetite Returns
U.S. Public Pension Plans Able to Recover from Market Slump
November 24, 2008
Research Recap submits:
A new analysis of U.S. public pension investment data indicates that public plans exhibit prudent investment behavior - even during volatile market conditions. The results are contained in a new report by the National Institute on Retirement Security [NIRS].
According to report co-author Dr. Christian Weller:
U.S. Public Pension Plans Able to Recover from Market Slump
Profiting From Risk Aversion
November 24, 2008
Geoff Considine (Quantext) submits:
In October and November of 2008, we have seen the equity and bond markets descend into a state of extreme risk aversion. Investors need look no further than the VIX index to see this. VIX is often referred to as the “fear index” because it goes up when investors drive the prices of options upwards in an attempt to buy some protection for their portfolios (pdf). VIX has been closing in the 70 to 80 range for weeks—albeit with periods of lower volatility in between. VIX actually measures the implied volatility of options on the S&P 500 index that are very close to expiration—think near term—30 days or so. While many investors are focusing on the short-term swings, there is a great deal of information available by looking at longer time horizons (i.e. longer dated options). There are also substantial opportunities to manage portfolio risk for the investor willing to pay attention to the levels of implied market risk in options.
After analyzing the broad market conditions, I find that selling covered call options into this market looks attractive—but not selling covered calls on just anything. As investors have become highly risk averse, they have driven the prices of options so high that even some very stable stocks have ended up with options prices that seem excessively high. Investors can sell covered calls on these stocks, thereby realizing a considerable portion of the upside potential and providing a cushion against potential declines in price.
Wall Street Journal: Homebuilders Want $250 Billion Stimulus
November 24, 2008
Trader Mark submits:
$250 Billion more? Just slap it on top of everything else. Why not - it’s all free money and we have unending pockets. Keep in mind, the homebuilders got a generous handout… err, subsidy just this spring which was "sold" to America as a home owner help package - but as a top 10 lobbyist group they are going to keep going to the trough. If you want to see the dirty dealing behind the scenes and why all lobbyist groups should end read on —> [Apr 4: Congress is Rushing to Help Homeowners (NOT!)]
But that was the last handout they got, this is now half a year later - let’s focus on the latest plan.The irony is we need all home building to STOP - no new homes built - and to get people to suck up all the available inventory for the next few years so any "stimulus" should be aimed at one spot only - existing homes. But the "existing home" lobby does not exist, only the home builder lobby…
Wall Street Journal: Homebuilders Want $250 Billion Stimulus
-
Recent Posts
- Renewed Infrastructure Growth in Environmentalists’ Best Interest
- Geithner, Summers Represent Change at Treasury
- Existing Home Sales Clunk Along Bottom
- Shelf Filings Are Increasing, But Don’t Get Excited
- More on Hindsight Bias
- Obama’s Real Economic Team
- Forex Interplay: Euro vs. Dollar As Risk Appetite Returns
- U.S. Public Pension Plans Able to Recover from Market Slump
- Profiting From Risk Aversion
- Wall Street Journal: Homebuilders Want $250 Billion Stimulus
-
Latest S.E.C. Filings- 4 - WEISSER ALBERTO (0001186250) (Reporting)
- 4 - Bunge LTD (0001144519) (Issuer)
- 4 - GWATHMEY ARCHIBOLD (0001285986) (Reporting)
- 4 - Bunge LTD (0001144519) (Issuer)
- 4 - NEWCOMB JOHN L JR (0001205150) (Reporting)
- 4 - FIRST FINANCIAL SERVICE CORP (0000854395) (Issuer)
- 4 - Roberts James Hildebrand (0001292659) (Reporting)
- 4 - GRANITE CONSTRUCTION INC (0000861459) (Issuer)
- 4 - WACEK MICHAEL G (0001234584) (Reporting)
- 4 - ODYSSEY RE HOLDINGS CORP (0001137048) (Issuer)