Items of Interest:
Andy Kessler / Wall Street Journal:
Was It a Sucker's Rally? — You can have a jobless recovery but you can't have a profitless one. The Dow Jones Industrial Average has bounced an astounding 30% from its March 9 low of 6547. Is this the dawn of a new era? Are we off to the races again? ...
Barry Ritholtz / The Big Picture: Can You Have a Profitless Recovery ?
Henry Blodget / Clusterstock: Kessler: It Was A Classic Suckers' Rally And You Fools Fell For It
Michael Laprarie / Wizbang: The April Numbers Are In ... and there's not a lot of great news.
Guy Lerner / Technical Take: It Takes Bulls To Make A Bull Market
Burrows & Swarts / SmartMoney: Can This Rally Keep Going?
Bill Fleckenstein / MSN Money: Where You'll See Real Recovery First
Shawn Tully / Fortune: Two Bellwethers Are Pointing Toward a Recovery
"Four in Four" -- Eight reasons why the Bank Stress Tests can’t be trusted:
- How can anyone trust the results of any kind of test where the results are negotiated?
- The stress tests cover 2009 and 2010, when the problem loans will be increasing right through 2011.
- Why did the Stress Tests not include exposures to Construction & Development Loans? This 590 billion dollar loan category is already causing significant problems on bank balance sheets, and this category lost 54.7% during the 1988 to 1992 bank crisis.
- Commercial loans in default rose 43% in the first quarter to 3,678 buildings according to Real Capital Analytics Inc., a New York-based research firm.
- Commercial property values have declined by approximately 30% since its 2007 peak and will likely fall another 18% this year according to the real estate investment unit of Deutsche Bank (DB).
- One of five homeowners is now underwater on their mortgages. More defaults and foreclosures are on the way. Home prices continue to decline and mortgage rates have reached a trough.
- According to the ValuEngine Stress Tests, Credit Card Companies American Express (AXP) and Capital One (COF) will need more capital, as will BB&T Bank (BBT) with its exposures to C&D and CRE loans.
- Geithner and Bernanke did not create confidence they created an investment trap. There are $4.8 trillion in potential problem loans - mortgages, home equity, credit card, commercial and construction & development and at least 25% will go bust over the next two to four years...
John Hussman / Hussman Funds: Banks Pass Test, But Regulators Fail
Douglas Elliott / Brookings Institute: Implications of the Bank Stress Tests
Timothy F. Geithner / ssa.gov:
discussion:Jeralyn / TalkLeft: Social Security and Medicare ReportMegan McArdle / The Atlantic Business Channel: The Problem with Social SecurityMichael D. Tanner / Cato @ Liberty: The Social Security Trustees ReportEric / Viking Pundit: The entitlements that won't be there — WSJ: “Medicare …Brian Faughnan / RedState: Whoops... Entitlement Programs Collapsing Faster than ExpectedMike Hall / AFL-CIO NOW BLOG: Health Care Reform, Revived Economy Best Rx for Social Security, MedicareMike Lillis / The Washington Independent: Just in Time for the Health Reform Debate...W. James Antle, III / AmSpecBlog: Medicare, Social Security: Too Big To Fail?
Report: Medicare fund eight years from insolvency -- The trustees' prediction is the bleakest assessment in years for the nation's health plan, which will soon face further pressures as baby boomers enter the system.
Reporting from Washington -- Underscoring the urgency of the current push in Washington to rein in skyrocketing healthcare costs, Medicare's trustees warned today that the program's biggest fund would run out of money in just eight years.
The prediction -- issued in an annual report on Medicare and Social Security finances -- offered the bleakest assessment of Medicare's future in years and reflects growing concerns among policy experts that the nation's healthcare spending is unsustainable...
Sarah Axeen / New America Blogs: COST: The News About MedicareIgor / Wonk Room: Fixing Medicare's Insolvency ProblemJohn Steele Gordon / Commentary: Ization Nation — The Obama Administration is bent on taking …James Ridgeway / MoJo Blog Posts: Phony Social Security “Crisis” Is Fueled by New Report
Home prices slide 14% -- National median home price falls to $169,000 in first quarter, due to market flooded with lower-priced foreclosures and short sales.
The steep slide in home price accelerated at a record pace during the first three months of 2009, according to an industry report issued Tuesday.
The national median home price of single family homes sold during the first quarter fell 13.8% to $169,000 year over year, and 6.2% compared with the last quarter 2008, according to the National Association of Realtors (NAR). That was the largest year-over-year decline in the 30-year history of the report...
House Prices Slip 1% in March -- House prices across the US in March fell an average 1% from February and are down 13.9% from the same time last year, according to a monthly report released moments ago by Integrated Asset Services (IAS)...
Libby Spencer / The Impolitic: Retailers drop prices to win sales
Fannie And Freddie Will Need Almost $100 Billion In 2010 -- The Office of Management and Budget released a report yesterday on the budgets and proposed overhauls of Fannie Mae and Freddie Mac that included the possibility of liquidating their assets. But don't get your hopes up.
The two government run mortgage finance companies have been scandalously costly for tax-payers, costing Americans far more in bailout money than they ever saved in cheaper mortgages. The OMB says that the two companies will need at least $92.2 billion more in fiscal 2010. This is on top of the $78.2 billion in aid they've received since they were taken over by the government in September...
Options for Fannie, Freddie May Include ‘Wind-Down’ -- Options for overhauling Fannie Mae and Freddie Mac, the government-run mortgage-finance companies, may eventually include liquidating their assets, according to an analysis released today by the Obama administration...
Matt Welch / Reason: Richard Epstein: Chrysler Bankruptcy “should be struck down on …
How Ford Restructured Without Federal Help -- The company is now at a disadvantage to its less prudent rivals.
You're forgiven if you think the Chrysler Bailout is a hot new car that competes with another model called the GM Rescue. Then there is the Ford Forgo, brought to us by the only Detroit auto maker to forgo government assistance, at least so far.
That's good for the taxpayers and for Ford, right? Well, maybe not. While General Motors and Chrysler will emerge from the government restructuring wringer with significantly reduced debt, Ford will still likely be obliged to repay its lenders. This could put Ford at a competitive disadvantage -- an unfortunate irony for the one Detroit car company that has gotten the decisions mostly right in the last few years...
Founding Bloggers: Is It Unpatriotic To Buy A Ford?
NOW SHE'S EVICT-ORIA GOTTI -- Mafia Princess Losing TV Castle to Foreclosure after Stiffing Bank Out of $650,000 ...
Despite a vast fortune amassed by her late father, Gambino boss John "Dapper Don" Gotti, the flashy Mafia princess has skipped two years of loan payments and will lose her home in tony Old Westbury, according to court records.
The 46-year-old former reality-TV star owes $650,000 to lender JPMorgan Chase -- a debt secured by a mortgage on the nearly $4.2 million mansion that she won in her divorce with ex-husband Carmine Agnello...
NY Times Development blog:
Victoria Gotti, Latest Celebrity to Face Foreclosure
FORECLOSING ON POL -- State Sen. Kevin Parker -- a vocal supporter of foreclosure relief for troubled homeowners -- has good reason to take that position.
His own two-story Flatbush house is in danger of being repossessed.
According to court papers, Parker, a four-term Democrat representing Brooklyn's 21st Senatorial District, hasn't paid a dime in more than a year toward the $488,000 mortgage he took out in 2006...
SEN. PARKER ARRESTED IN FOTOG ATTACK -- Brooklyn state Sen. Kevin Parker was busted last night after allegedly attacking a New York Post photographer who was trying to take his picture, police said...
At a time when the official unemployment rate is nearing double digits, and 6.35 million people are receiving unemployment benefits, the U.S. government is on a hiring binge …
discussion:theblogprof: Obama: Private Hiring NO! Public Hiring YES!
- Capitalism Is In No Way Broken - Brian Wesbury & Robert Stein, Forbes
- Business Must Become More Like the NFL - Roger Martin, Financial Times
- Hedge Fund Failings Repaid With Backlash - David Weidner, MarketWatch
- Is a 'Systemic Risk Regulator' Possible? - Alex Pollock, The American
- Credit Card Holders Have Rights, Too - Rep. Carolyn Maloney, The Nation
- The Real Problem with Credit Cards: Cardholders - Barbara Kiviat, Time
- The Real Reason CEO Compensation Got Out of Hand - Ray Fisman, Slate
- Which Billionaire Will Control the NY Times? - Richard Siklos, Fortune
- Global Push For Cap & Trade Is Dead - Terence Corcoran, National Post
- Where's the Forecasted Job Growth? - Editorial, Investor's Business Daily
- Curve Watching Beats Economic Forecasters - Caroline Baum, Bloomberg
- The Mythology Surrounding the Corporate Tax Rate - John Tamny, RCM
- How Banks Slipped the Fed's Noose - Alan Reynolds, New York Post
- This Is Not Another Great Depression - Steven Levitt, Freakonomics
- Heading Off Another Crisis in the Muni-Bond Market - Arthur Levitt, WSJ
- Jobs: What a Rebound Will Look Like - Moira Herbst, BusinessWeek
- Stress Testing President Obama's Facts - Evan Newmark, Deal Journal
- The President's Silly Healthcare Announcement - Keith Hennessey
- Guess Who's Coming to the White House - Jonathan Cohn, The Treatment
- Big Turnarounds Do Happen in the Right Hands - Mark Gimein, Big Money
- We’re Dull, Small Banks Say, But Have Profits - New York Times