I Read the News Today, Oh Boy: 'Has the Market Put in a Bottom?'

• US Probes Goldman's Timberwolf Deal, Alleged Victim Says 'Whole Thing Was Fraudulent Concoction' - Huffington Post
• This Spike In Bearish Sentiment Is Screaming For A Reversal - Business Insider
• Has the Market Put in a Bottom? - T3 Live
• The Worst Money Supply Plunge Since The Depression Means A Double Dip Is Now A 'Virtual Certainty' - Business Insider
• Wealth Matters - Teaching the Value of Work to Children of Wealth - NY Times
• Sweet Gigs: This Guy Collects $400K a Year for Doing…Not Much - Dealbreaker
• Small-Business Guide: Smart Ways to Promote Your Business on Twitter - NY Times

For links like these in real-time follow me on Twitter.

Posted via email from jessefelder's posterous

The Miraculous Earnings Recovery

From "Chart of the Day" comes the following chart detailing the massive 700% gain in S&P 500 earnings from the low made last year. Most of the recovery, I would note, comes from the "bank profit mirage" resulting in very poor quality of earnings. Still, this is a pretty dramatic visual representation of the "v-bottom" many economists were hoping for back during the depths of the financial crisis.

via chartoftheday.com

Posted via web from jessefelder's posterous

Bend Had Its Cake...

...but we didn't get to eat it. I'm talking about the local real estate bubble, something I haven't discussed in these pages for quite some time.

The reason I'm circling back to it now is because back in the heyday people commonly said that Bend would be insulated from future recessions because of our real estate boom. This was akin to having our cake and eating it, too.

Well it turns out it doesn't quite work that way. In fact, the consequences of the local real estate boom have been much more dramatic here than most regions around the country.

This is evidenced by the fact that Bend real estate prices saw the largest decline in the first quarter in the country. Out of over 300 metropolitan areas, ours was the worst. Maybe those saying we were the most overvalued in the nation back at the peak were on to something.

As a consequence of this real estate meltdown Bend has made another dubious "top" list: we now have one of the highest unemployment rates in the country. Nearly 16% of the local population is out of work.

Should we have known better? If so, would we have had the courage to do anything differently? I don't know. But it sucks having the real estate cake smashed in our face like this.

Posted via email from jessefelder's posterous

I Read the News Today, Oh Boy: Massive Debt Spill

• White House Jester Beheaded For Making Fun Of Soaring National Debt - The Onion
• Case Shiller: Housing Rebound Losing Steam? - Econompic
• 10 Leading Economic Indicators That Are Rolling Over - Pragmatic Capitalism
• Rush is on to jump on bearish bandwagon - MarketWatch
• It's Official: Apple Is Now Worth More Than Microsoft - Business Insider
• The Only Thing Worse Than a Bull? An Inflationist Bear - Pragmatic Capitalism
• The Most Bearish Guy in the World? - Infectious Greed
• Bend Makes Another "Top" List - Business Insider
• Study Finds Sunscreen May Help Cancer Develop Rather Than Prevent It - Consumerist

For links like these in real-time follow me on Twitter.

Posted via email from jessefelder's posterous

Gross' Rhetoric Makes for Good Headlines and Bad Trade Ideas

At the end of March Bill Gross, manager of the largest bond mutual fund on earth, told Bloomberg, "Bonds have seen their best days... Real interest rates are moving higher. That's the main bear element in the bond market." That sure sounds to me like a bearish position on long bonds.

Those playing this bearish bond (bullish on inflation) trade have gotten hammered over the past month losing nearly 10% over that time. Somehow, though, I doubt Gross was hurt that badly. In fact, in his latest letter he sounds a lot less bearish on long bonds:

Several months ago I rhetorically asked whether it was possible to get out of debt crisis by increasing debt. Yes – was the answer, but it was a qualified yes. Given that initial conditions were favorable – relative low debt as a % of GDP, with the ability to produce low/negative short-term policy rates and constructively direct fiscal deficit spending towards growth positive investments – a country could escape a debt deflation by creating more debt. But those countries are few – the U.S. among perhaps a handful that have that privilege, and investors, including PIMCO, have strong doubts about U.S. fiscal deficits leading to strong future growth rates.

So the developing predicament is becoming more obvious to Shakespeare’s “lenders and borrowers be.” Fiscal tightening and budget conservatism may have come too late for Greece and its global lookalikes. Continued deficit spending may be an exorbitant privilege extended to only a few. Caught in the middle are many developed countries that likely face New Normal growth rates and a continued bumpy journey toward that destination. Investors must respect this rather tortuous journey in the months and years ahead for what it is: A deleveraging process based upon too much debt and too little growth to service it.

Gross has talked about deleveraging before but here he seems to be saying that the U.S. likely faces severe growth challenges ahead which would obviously put a lid on inflation. He also suggests that the country (like Japan over the past 20 years) may be one of the few able to maintain low interest rates while growing the national debt. This is a long way from, "bonds have seen their best days," and, "real interest rates are moving higher." In fact, since he said this bonds have seen some pretty damn good days as rates have moved significantly lower (chart above).

So was Gross just talking down long treasury bonds in late March so he could accumulate a position? Certainly it's gotta be tough moving upwards of a $1 trillion around. I imagine it would help a great deal to have a selling bias in the marketplace when you need to be a buyer in that kind of size. Barron's reports that this may have been the case:

Gross helps manage more than $1 trillion worth of assets at Pimco. In recent weeks, Gross has said that investors world-wide are liquidating holdings amidst the uncertainty caused by Europe's debt problems. Last week, Pimco's Total Return Fund, its most prominent fund, revealed that it had increased its holdings of US government debt to 36% of the portfolio in April, its highest level since last November.

Gross also disclosed that he personally bought a significant amount of his firms' Corporate Opportunity Fund which maintains an average maturity over ten years. Someone who truly believes that, "bonds have seen their best days," would be very unlikely to utilize this kind of fund.

At the end of the day, 'actions speak louder than words,' and while Gross may have been spouting bearish warnings he and his firm were trading the other side. In my experience, when it comes to large, successful institutional investors like Gross the rhetoric usually makes for, "good headlines and bad trade ideas."

Posted via email from jessefelder's posterous

I Read the News Today, Oh Boy: Paddle, Sam!

• Home Buyers Get Surprise Boost From Europe Crisis as Loans Drop to Below 5% - WSJ
• Insiders Are Buying the Dip - Pragmatic Capitalism
• Have You Seen M3 Lately? - The Mess That Greenspan Made
• Time To End The Giant Tax Break For Hedge Fund Managers - Business Insider
• A Billionaire Goes All-In on Gold - WSJ
• And we wonder why the economy is such a mess... - Pragmatic Capitalism
• Las Vegas land prices: 80% off peak - Calculated Risk
• Wow: Tiger's wife wants $750 million and the kids - Business Insider

For links like these in real-time follow me on Twitter.

Posted via email from jessefelder's posterous

Austerity Is Economic Suicide for Deleveraging Economies

Richard Koo has an important message for the leaders of Great Britain, Spain and the U.S.: focusing on cutting the budget deficit amidst a balance sheet recession is economic seppuku. Japan's 'been there; done that' and it didn't work out so well.

via youtube.com

Posted via web from jessefelder's posterous

Oversold Is An Understatement

'Sold out' might better describe the current state of the stock market.

Less than 10% of all stocks listed on the NYSE currently trade above their 50-day moving average and this is the lowest reading for the McClellan Oscillator in all the data available from Stockcharts.com (roughly the past 11 years).

We saw similar readings in the late summer of 2007 just as the financial crisis was getting started so this doesn't necessarily mean a major bottom is near. It does suggest that the current bout of selling may be close to exhaustion and that we are likely due for at least a relief rally pretty soon.

I will be watching the action intently over the next few trading sessions... while wearing my new hat.

Posted via email from jessefelder's posterous

What Separates Wall Street From Main Street

Earlier this month Bloomberg gave us this headline:

Today they give us this one:

Does anyone else see the irony here? Goldman doesn't have even one single losing day in the entire first quarter but it's clients, on the other hand, lose money on the firms' "top trades."

There is only one explanation for this and you will find it in any of the 'behind the scenes' financial books written by former insiders. The big investment houses make it a common practice to keep profitable trades for themselves while pawning the losing trades off on their customers.

In his classic "Liar's Poker" Michael Lewis writes about his very first trade as a bond salesman for Salomon Brothers:

My first order. I felt thrilled and immediately called the U.S. treasury trader in New York and sold him three million dollars' worth of treasury bonds. Then I shouted over to the London corporate bond trader, "You can do three million of the ATTs," trying, of course, to sound as if it really weren't that big a deal, just another trade, like going for a walk in the park.

There was in every office of Salomon a systemwide loudspeaker, called the hoot and holler or just the hoot. Apart from money, success at Salomon meant having your name shouted over the hoot. The AT&T trader's voice came loudly over the hoot: "Mike Lewis has just sold three million of our AT and Ts for us, a great trade for the desk, thank you very much, Mike."

I was flushed with pride. Flushed with pride, you understand. But something didn't quite fit. What did he mean, "Our AT and Ts"? I hadn't realized the AT&T bonds had been on Salomon's trading books. I had thought my trader friend had snapped them up from stupid dealers at other firms. If the bonds were ours to begin with . . .

Dash was staring at me, disbelieving. "You sold those bonds? Why?" he asked.

"Because the trader said it was a great trade," I said.

"Nooooooo." Dash put his head in his hands, as if in pain. I could see he was smiling. No, laughing. "What else is a trader going to say?" he said. "He's been sitting on that position for months. It's underwater. He's been dying to get rid of it. Don't tell him I told you this, but you're going to get fucked."

Lewis didn't get fucked but his customer did. Salomon's great trade was it's customer's big loser. Is this starting to sound familiar?

On main street this would be seen by anyone as, if not fraud, just plain bad business. On Wall Street, however, it's just business as usual.

Posted via email from jessefelder's posterous

"Risk is again a four-letter word"

During the "flash crash" I tweeted:

Well I got my answer. The Wall Street Journal reports:

Risk is again a four-letter word among individual investors. That could spell further trouble for the stock market in days and weeks ahead. Already, investors pulled $2.8 billion out of U.S. equity funds in the week through May 12, according to Lipper FMI, the most since March 2009. Safe-haven money-market funds, meanwhile, saw inflows of $16.6 billion. That broke a 17-week streak of declines.

This may be the reason stocks are now retesting the closing lows seen during the crash of a couple weeks ago. Funds have to meet redemptions and with no cash on hand they are forced to sell into weakness rather than use it as a buying opportunity.

I have discussed the risks of growing risk aversion in more depth recently. We can only speculate, however, whether it will continue to feed upon itself and exacerbate the current weakness in stock prices. But it seems to me, that there are currently too many folks calling for a crash right now for it to come to pass.

Follow me on Twitter

Disclosure: long SDS

Posted via email from jessefelder's posterous

I Read the News Today, Oh Boy: Testing the 200-DMA

• Seth Klarman: Stocks Face Another Decade of Zero Returns - Business Insider
• Mortgage Foreclosures Hit Record as Job Losses Strain Budgets - Bloomberg
• Banks Are Finally Capitulating, As Short-Sales Reduce Shadow Inventory Backlog - Business Insider
• Disinflation Alert - Econompic
• Crude Oil Is Officially in a Bear Market - MarketBeat
• Suddenly, Everyone's In the CRASH Camp, Not Just The Bear Camp - Reformed Broker
• State Finances Rigged in Conspiracy by Banks, Advisers - Bloomberg 
• Walmart says consumers under pressure - Financial Times
• A Guilt-Free Hamburger - WSJ

For links like these in real-time follow me on Twitter.

Posted via email from jessefelder's posterous

Robert Shiller: Investors Are Too Complacent

The "Irrational Exuberance" author tells Bloomberg that stocks are still overpriced and investors and economists are underestimating the risk of a double dip recession:

via bloomberg.com

Posted via web from jessefelder's posterous

I Read the News Today, Oh Boy: A Bad Month for Cartoon Characters

• Goldman, Citigroup Flood Congress With Cash As They Seek To Influence Reform - Bloomberg
• California Now Has A Higher Default Risk Than Battle Zone Thailand - Clusterstock
• Mortgages - A Tough Time for Self-Employed Borrowers - NY Times
• Newer Air Bags Could Be Doing More Harm To Belted Drivers Than Good - Consumerist
• We, the people, must take responsibility for our country's debt woes - NY Times
• Apple, and Foxconn's "Suicide Cluster" - Infectious Greed
• Good call: Just say 'no' to stocks - LA Times
• Raptors at the Liquidity Fence, and the Big Whoosh - Infectious Greed
• 11.2 Million Homeowners Are Now Underwater - Calculated Risk
• Great story: Man lands job with $6 Google campaign - CNN
• "Raising Cain" Author, Dr. Michael Thompson, Discusses the Challenges Modern Society Presents to Boys and Men - Art of Manliness

For links like these in real-time follow me on Twitter.

Posted via email from jessefelder's posterous

How Bad Are Equity Analysts?

Really, really bad. A recent McKinsey report shows that they've overestimated company earnings by nearly 50% over the past decade. This is one very good reason you should never value stocks based on "expected" earnings.

via pragcap.com

Posted via web from jessefelder's posterous

Look What I Just Bought

Okay, I'm about a decade late but it's still in fashion! (Available at Amazon.com)

via businessinsider.com

Posted via web from jessefelder's posterous

I Read the News Today, Oh Boy: Playing the Ratings Game

• New York attorney general subpoenas 8 mega-banks regarding their role in the mortgage crisis (NY Times)
• Europe = Marge Simpson (Big Picture)
• The New Gods of Greece (Horsey)
• California now in top ten for highest government default probabilities in the world (Credit Writedowns)
• Most retail investors no longer believe the markets are fair and open (WSJ)
• Syracuse Students To Show Jamie Dimon Their Tits (DealBreaker)
• Adobe hits back at Apple in Flash war (FT)
• Microsoft Aims to Use the Cloud to Outdo Apple and Google (Wired)

For links like these in real time follow me on Twitter.

Posted via email from jessefelder's posterous

Hit Me Baby One More Time

A recent poll conducted by the Wall Street Journal shows that the majority of the American population now feels that the "stock market is no longer fair and open."

Specifically, more people agreed with this statement: "Because of corporate corruption and broker practices, the stock market is no longer a fair and open way to invest one's money." than this one: "The stock market is a fair and open way to invest one's money, and there are rules that make it fair and equal for all."

Basically, people feel like Wall Street has rigged the game to make money off of them rather than for them and, as an insider, I'm glad to see they're finally seeing the light. This is exactly how Wall Street has rigged the game and individual investors should be aware of it.

I wrote last week about the psychological consequences of the bursting economic bubbles over the past decade and, more recently, the mysterious "flash crash" that dropped the Dow Jones Industrial Average over 1,000 points in the blink of an eye. These poll results back up the idea that investors are becoming disenchanted with risk assets like stocks.

The fact that the New York Attorney General is now investigating virtually every large Wall Street bank in the country doesn't do anything to dissuade people of this notion. In fact, it's probably contributing to its increasingly popularity. 

This growing negative sentiment is both good news and bad news for investors. Let's hit the bad news first: so far this has been one epic bear market since 2000. But it's probably not over yet. Yes, this is the kind of sentiment that you expect to see at bear market bottoms BUT individual investors have not yet given up the bull ghost. 

The speed and magnitude of the rally over the past year is evidence of investors hopping right back on the "buy the dip" freight train to trading riches. When they finally give up on this strategy, and only then, will we see a major bear market low.

Sometime during 2011 will mark the 61.8% time retracement of the bull market that began in 1982 and ended in 2000. This may coincide with the pervasive negative sentiment/investor despair that I believe will signify the end of the pain and the start of a new, real bull market.

And now for the good news: this next selloff may finally be THE buying opportunity of a lifetime. The last major bull market that ended 1966 can be instructive here. Stocks went sideways for a few years before selling off dramatically during 1973-74 (akin to the 2008-09 selloff). Still, the bear market didn't come to its conclusion until 1982 amidst pervasive investor malaise and extraordinary undervaluation.

This is a pattern that has repeated itself many, many times over the course of market history. The "buy the dip" mentality must die before a new bull market can be born. Polls like this one show we are well on our way there. One more major selloff may be all it takes.

Posted via email from jessefelder's posterous

I Read the News Today, Oh Boy: Wall Street Fail

• Federal Prosecutors Launch a Criminal Probe of Morgan Stanley (WSJ)
• For Goldman Sachs the conflicts aren't the problem; the conflicts are the opportunity. (WSJ)
• Euro Package Leaves Governments Out of Ammunition (Bloomberg)
• Beijing Property Prices Collapse (Business Insider)
• Why Small Businesses Think The Recovery Is A Myth (Business Insider)
• Tiger Woods Loses Coach as Hank Haney Steps Down After 6 Years (Bloomberg)

For links like these in real time follow me on Twitter.

Posted via email from jessefelder's posterous

John Stewart: A Nightmare On Wall Street

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
A Nightmare on Wall Street
www.thedailyshow.com
Daily Show Full Episodes Political Humor Tea Party

Hat tip, Reformed Broker

Posted via web from jessefelder's posterous

I Read the News Today, Oh Boy: Fixing Greece

• The EU bailout: Too much, too late (Felix)
• Greek Debt Woes Ripple Outwards, From Asia to the US (NY Times)
• Kanellos, the Greek Protest Dog (The Mess)
• Andy Kessler: The Markets Have Good Reasons To Be Nervous (WSJ)
• Jim Rogers Shorting US & Emerging Market Equity Indexes (Market Folly)
• The "Real" Unemployment Rate Jumps To 17.1% (Business Insider)
• How Many Clients Did Goldman Screw to Pull This Off? (Bloomberg)
• It makes more sense to invest in mutual fund cos. than in mutual funds (NY Times)
• Dr. Copper Sends a Clear Warning Signal (Pragmatic Capitalism)
• Android demolishing iPhone in sales (Fortune) 
• Bye-Bye, Facebook (Baseline Scenario)
• Drunk Golf Fan Gets Taser Treatment For Heckling Tiger Woods (Consumerist)

For links like these in real time follow me on Twitter.

Posted via email from jessefelder's posterous

I Read the News Today, Oh Boy: The Best Contrarian Indicator Ever?

• The cartoon above was published today and probably one of the best contrarian indicators I've ever seen. (Editorial Cartoonists)
• PLUNGE! 1987 Style Sudden Drop in US Stocks Driven by Program Trading and a Ponzi Market Structure (Cafe Americain)
• Nasdaq declares 20 minutes didn't happen today, cancels a bazillion trades (Reuters)
• Stocks Have Now Run WAY Ahead Of The Actual Economy (Business Insider)
• Alice Schroeder on 'Woodstock for Capitalists' - "the trill is gone" (Bloomberg)
• Discount broker ETF price war is great news for individual traders and investors (Bloomberg)
• Even bears aren't bearish enough on Spain's sovereign debt (Money)

For links like these in real time follow me on Twitter.

Posted via email from jessefelder's posterous

The Crash Is More Important Than You Think

I was in the car most of the day today so I largely bypassed the commotion in the markets. Without Bloomberg radio on Sirius I would have missed all of it. (I can't recommend the stock but Sirius radio is a great investment opportunity; I heartily endorse the product).

Last week I wrote that, "The Goldman Case Is More Important Than You Think," arguing that investors may begin to lose their appetite for risk after experiencing the pain of the bursting of the internet bubble, housing bubble and the meltdown surrounding the financial crisis. The past decade has been one of the worst ever for risk assets. History shows that after periods like this one entire generations swear off the source of risk that caused them so much pain.

I could have just as easily written, "Greece Is More Important Than You Think," arguing that the problems in Europe are systemic and not solely the problems of that one country. Globalization means we are all interconnected for better or worse. I believe today was a prime example of that.

The major media outlets, however, are looking for excuses for the "glitch" that caused the market to drop 1,000 points today but these are only excuses. One fat finger trade doesn't cause the world's currencies, stock and bond markets to all simultaneously move in terms of many trillions of dollars. No, Goldman Sachs is a real problem for investor confidence, the PIIGS are a true systemic threat to the world economies and financial markets and today is evidence of that.

I have been sounding the call for caution for a few months now and I think it's important to recognize that none of these issues were addressed by the rumor of a fat finger trade that helped the market rally off of its lows today. They remain major risks and so I am still very cautious on risk assets.

Posted via email from jessefelder's posterous

Where, Oh Where Has My Hero (Warren Buffett) Gone?

There goes my hero,

Watch him as he goes.

There goes my hero,

He's ordinary.

-Foo Fighters

I have been a fan of Warren Buffett for a very long time. In fact, I consider him one of my most important mentors. However, I have become a bit less enchanted by the 'Oracle of Omaha' recently.

After reading Alice Schroeder's biography, "The Snowball: Warren Buffett and the Business of Life," I thought it  was a fearless, well-written review of both Buffett's accomplishments and his failures (which are more numerous and significant than most accounts would have you believe - he IS human). I finished it with a better understanding of Buffett the man and somewhat disabused of my idea of Buffett the myth. In response to what I believe was an even-handed chronicle of his life, Warren lashed out at Schroeder and has punished her for not lionizing him as most journalists have done over the years. I doubt that Buffett's mentor, Dale Carnegie, would approve.

More recently, I was surprised to hear him stand behind Goldman Sachs at Berkshire Hathaway's recent shareholder meeting after railing against Wall Street ethics (or lack thereof) for decades. In addition, after famously calling derivatives "weapons of mass financial destruction" and vilifying their use on Wall Street Warren has been increasing Berkshire Hathaway's activities in the area and even gone so far as to lobby Washington to curtail their pursuit of regulating them. To make matters worse, these two, clear hypocrisies seem to be inspired by a simple profit motive. Berkshire's investment in Goldman Sachs and its large derivatives positions are obviously blinding Buffett to the uncompromising values he expounded for so long.

As a fan of his, I have always wanted to make the trip to Omaha to attend the Berkshire Hathaway annual meeting. But I have to agree with Schroeder, who writes in a piece today for Bloomberg that, "the thrill is gone."

[At the last shareholder meeting Buffett] touted one quarter’s earnings of NetJets as if they were meaningful, defended Berkshire’s lobbying in Washington, justified the firm’s use of “financial weapons of mass destruction” (derivatives), trashed the actions of the CEO of Kraft Foods Inc. while defending those of the CEO of Goldman Sachs, and talked of a future of higher inflation rates and lingering unemployment on the heels of a year of cheerleading investors to buy U.S. stocks at high valuations.

You can get this kind of corporate gobbledygook on company conference calls every quarter. So the main reason to go now is the circus. In an unprecedented and death-defying move, Buffett has already scheduled both the 2011 and the 2012 meetings. Assuming the pattern continues, these will be bigger than ever, but no better. And if the shareholder meeting has become a bubble, then the question is, how long before it pops?

I have to think that there are other shareholders and Buffettites out there that feel the same as Schroeder and me. People gravitated towards Warren because he was a different breed of Wall Street tycoon; both Warren and his company held themselves to a higher standard of discipline, ethics and excellence. Berkshire and Buffett, however, have started to look a lot more like your average company and CEO than the paragon of capitalism that they were.

I, for one, hope the bubble doesn't pop - that I can one day attend the 'Woodstock for Capitalists' and feel the thrill of seeing Warren in all his glory of preaching intelligent investing and on his high horse of righteous repudiation of Wall Street abuses. That is the Warren Buffett the world loves and desperately needs, especially during times like these.

Posted via email from jessefelder's posterous

Bank of the Cascades Last Hurrah?

I was quoted in today's Bend Bulletin in an article by Andrew Moore regarding Bank of the Cascades. The company just experienced another painful quarter losing $23 million and the stock price continues to languish sub-$1. There was a spike in the share price, however, right around the time of the company's annual meeting. As I told Andrew, this probably stems from rumors or simply fears on the part of shortsellers that the company would announce a capital infusion or a buyout, however unlikely that may be.

Here's the Bulletin quote:

Jesse Felder, a Bend investment adviser and founder of Felder & Co., said the stock’s meteoric rise was likely the combination of an Internet rumor about the company that fueled speculators as well as traders covering their short positions as the stock’s price rose.

“The stock is trading on rumors now,” Felder said. “If the short-sellers catch any rumor, they are all going to scramble to buy back their stock, and that’s why you see big spikes like that.

“Some people also will speculate,” Felder said. “They see the company’s massive short position and put out a rumor the company is going to be bought out or receive capital and the (short traders) get scared. All kinds of games are being played in these thinly-traded stocks.”

Aside from the games traders are playing with the stock price, I am eager to see the company's official 10-Q. It should be released within a week or two. As I've written before, the company's commercial real estate portfolio has held up surprisingly well as the residential side has been just devastated. I am interested to see whether this relative strength can be maintained.

Cascade's capital ratios are dwindling with every quarter of continued losses. A few more quarters like this one and the bank will be insolvent so the company NEEDS the commercial portfolio to hang in there over the next few quarters. If it starts to deteriorate, I believe that potential investors will be loathe to give the bank the capital it needs to survive. It would also have important implications for the local economy.

The bottom line for Cascade Bancorp is they either get a capital infusion (and soon) and the company survives or they don't get it and FDIC steps in to clean up the mess. Only time will tell and it looks as if time is getting short.

Posted via email from jessefelder's posterous

I Read the News Today, Oh Boy: Web of Euorpean Debt

• Why A Eurozone Break-Up Would Trigger The Mother Of All Financial Crises (Business Insider)
• Bond Vigilantes: Where Are They Now? (NY Times)
• Frugality among consumers is outliving recession (AP)
• Oh, those naughty short selling…US senators? (FT)
• California State Revenue Plunges Dashing Hopes of an Easy Budget Fix (LA Times)
• Regulators looking into possible antitrust violations at Apple (WSJ)
• Greenspan Wanted Housing-Bubble Dissent Kept Secret (HuffPo)
• Facebook's Privacy Settings Are Actually "Evil Interfaces" (Consumerist)

For links like these in real time follow me on Twitter.

Posted via email from jessefelder's posterous

I Read the News Today, Oh Boy: European Union

• Europe Is Now "Performing Without a Net" (Pragmatic Capitalist)
• Deflation Could Stall Efforts to Revive Greece (NY Times)
• Greece and the spiderweb of counterparty risk - sound familiar? (Financial Times)
• So I Guess This Latest Crop Of Bank Failures Was Really Bad (LOL Fed)
• Could Goldman Go the Way of Drexel? (Barron's)
• Nasdaq Bulls On Parade (SentimenTrader)
• The ‘Worrisomely Unworried’ Crowd (Big Picture)
• A Lost iPhone Reveals Apple’s Churlish Side (NY Times)
• Will Google Own the Living Room? (Wired)

For links like these in real time follow me on Twitter.

Posted via email from jessefelder's posterous