Obama in London Town

Saturday, October 4, 2008, 12:13, London, UK, Camden Town, south-bound lane of the Northern Line tube station...


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Live Blogging from the Risk Metrics Conference Call

Live Blogging from the Credit Crisis call hosted by Risk Metrics with Nouriel Roubini, Barry Ritholtz, and Zach Gast:

• Barry is very bullish on physical gold, less bullish on paper gold. He says put 5-10% of your portfolio in it, and "go to the store and buy the bars, if you have to."
• Zach notes that the ban on short selling hasn't kept financial stock from dropping and that it's raised the transaction costs. Barry says the ban has been counterproductive.
  
• Nouriel argues for an FDIC guarantee on all deposits on all amounts.
• Zach suggests that the Treasury should match institutional and PE investments.
• Barry predicts that there's a 40% chance that the House won't pass TARP tomorrow.
• Barry predicts that the DOW will drop another 15-20% from its peak.
• Nouriel thinks the dollar will range between $1.50-1.60 per euro. He thinks that American exports will shrink, no matter what.
• Barry thinks that, long term ("3-6 months"), defense, infrastructure, and small-to-medium-cap biotech and medical devices.
• Barry notes that Buffet is one of Obama's economic advisers, and that McCain also has some good advisers, but concedes that McCain has some real idiots on his team. But on the top rung, he says they are toe-to-toe.

Permalink: http://dowwtf.blogspot.com/2008/10/live-blogging-from-risk-metrics.html

Buffet is the New Moody's

Buffet sinks $3b into G.E., and as Edward Yardeni points out, “Warren Buffett has become the new triple-A credit rating system. It’s a big endorsement for G.E.”

(Like the Goldman deal, he gets his own class of fancy stock that, in this case, pays dividend of 10 percent, and G.E. can purchase the shares back from Mr. Buffett after three years by paying a 10 percent premium, or $3.3 billion.)

Permalink: http://dowwtf.blogspot.com/2008/10/buffet-is-new-moodys.html

What to Expect From the Bailout

Here's a pretty straight-forward explanation of what we're about to see happen if the House passes the bailout tomorrow...


And Christopher Wood's macro analysis of the situation, from two weeks ago, is still right on. He writes,

"There are going to be casualties of this, it’s not pleasant, but the less the U.S. bails everybody out, the more bullish it is for the U.S. in the long run. Because it means the system isn’t completely corrupt. You can’t have socialism for rich people, capitalism for everybody else."

Catch the full piece, here.

"Bronx Residents on the Bailout"

This is worth it for the title alone, which can be read a number of different ways...


Permalink: http://dowwtf.blogspot.com/2008/10/bronx-residents-on-bailout.html

The DOW vs FDIC-Insured Deposits

If the DOW scaled with FDIC-insured deposits from 1990 to the present, it would now be at 6,000. Since the present crisis is (at least, more than anything else) driven by the absence of credit, the question of asset value and the availability of cash is of heightened importance.

As CDOs, CDSs and other financial instruments get stripped from the market, the 'distance' between the asset, the credit that it backs, and the borrower becomes shortened.


Permalink: http://dowwtf.blogspot.com/2008/10/dow-vs-fdic-insured-deposits.html

Give the Man a Greencard!

Welcome to the first installment of a weekly column here at DOW WTF?!, Give the Man a Greencard!

Since a disproportionate number America's most productive engineers, scientists, and entrepreneurs are foreign-born, let's give credit where it's due, make it easy for these guys to stay here (rather than forcing them back to Mumbai and Xanxii after they graduate from MIT because Sarah Palin thinks they look like terrorists), and help prop up our sinking ship.

While DC and Wall St propose that we borrow more money to pay for the money that we've already borrowed and can't pay back, and the two presidential candidates are locked in a contest to outdo each others' ignorance and ineptitude on the crisis, we need talented scientists and entrepreneurs more than ever. So, on with this week's entry: eSolar.

The Google-backed company has a new solar technology that creates hydrogen as well as electricity with an innovative dish design. The dishes, called Solarec, short for Solar Reduction of Carbon Dioxide, can not only produce hydrogen, but also desalinate water and create methanol, a useful fuel.
Permalink: http://dowwtf.blogspot.com/2008/10/give-man-greencard.html