What would have happened had the Fed not saved Bear Sterns
20% equities sell-off and ugly financial sector outlook. Banks are still a sell. http://www.frontlinethoughts.com/pdf/mwo032108.pdf
Posts
Apple and Steve Job's
Apple has been voted "World's most admired company" by FORTUNE magazine. I am a huge fan of Apple products: iPhone, MacBook Air and their amazingly intuitive and fun to use softwares. It probably takes a visionaire like Steve Jobs to get there. But does he have to be dictatorial in his leadership as fellow workers have reported it? Jobs attitude should raise the concerns of shareholders about his practices: - Non disclosure of his cancer surgery in 2004 - Stock options back-dating (OK Apple was not the only company doing it)
Northern Rock, Bear Sterns, ... Who will be next?
Let me know which bank you think will be the next one to default. Cyrille
CFOs say no economic recovery until late 2009
Survey of CFOs by the Duke University provides interesting reading about the economic outlook Optimism among chief financial officers in the United States is at its lowest point ever (see chart below) Most CFOs say the economy is currently in recession or will be in recession at some point during 2008. Nearly 90 percent of CFOs say the economy will not rebound until 2009. They expect inflation will increase to 3 percent this year. Credit conditions have directly hurt 35 percent of companies, through decreased availability of credit and higher interest rates (up 118 basis points on average). Seventy-four percent of CFOs say the Fed cuts have had no impact on their business. In Asia, CFOs have turned more pessimistic (43% more pessimistic vs 38% more optimistic); they think that the likely US economy recession will have a negative impact on their firm's earnings but expect domestic demand to help replace the subsequent loss of business. In Europe, CFOs have turned extremely pessimist...
Fed injects even more money to help ease credit crisis
The US Federal Reserve announced that it would lend primary dealers in the bond market up to $200bn (€130bn, 100bn) in Treasury securities for a month at a time and accept ordinary AAA-rated mortgage-backed securities as collateral in return. It was followed by similar moves, although in smaller scale, from other central Banks. Analysts said it took the US central bank a step closer to the nuclear option of buying mortgage-backed securities in its own right. http://www.ft.com/cms/s/0/801479f4-ef70-11dc-8a17-0000779fd2ac.html
Inflation won't pick up
Interesting arguments from John Mauldin about why there should be no inflation in the US in the near future. http://www.frontlinethoughts.com/pdf/mwo022908.pdf
Leveraged losses, lessons from a Mortgage Market Meltdown
http://www.brandeis.edu/global/rosenberg_institute/usmpf_2008.pdf