Video-o-rama: Risk appetite fades on stimulus gloom

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Events this week were dominated by the announcement of US Treasury Secretary Geithner’s Financial Stability Plan and a deal reached in the Senate on the Economic Stimulus Bill. However, the big bail-out bang soon whimpered as investors were disappointed about the lack of detail.

While markets remained mired in uncertainty, a barrage of video footage on the ins and out of the various plans was produced. Commenting on the financial rescue packages were the likes of Bill Gross, Paul Volcker, Steve Forbes, Frederic Mishkin, Mark Zandi, Robert Shiller, Byron Wien, Martin Feldstein, Paul McCulley, Jim Rogers, Nouriel Roubini, Peter Schiff and John Silvia.

In lighter vein, this week’s compilation kicks off with a message from Jon Stewart to Wall Street: “I suggest that you don’t complain about whether or not you get a window seat on the rescue boat.” Also, don’t miss the “Stimulus” item at the end of the post.

The Daily Show: Wall Street bailout
“Wall Street doesn’t like how the trillion dollars will be distributed to save them.”

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Source: Jon Stewart, The Daily Show, February 11, 2009.

ABC News: Obama – no “easy out” for Wall Street

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Source: Terry Moran, ABC News, February 10, 2009.

Financial Times: Big bail-out bang whimpers
“The Treasury’s financial rescue plan lacks detail and was unwelcome by the markets, says FT’s Francesco Guerrera.”

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Click here for the article.

Source: Financial Times, February 10, 2009.

CNBC: Deal reached on economic stimulus bill
“A deal has been reached on an economic stimulus bill, according to Senate Majority Leader Harry Reid.”

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Source: CNBC, February 11, 2009.

Bloomberg: Gross, Volcker, Mishkin and Forbes on stimulus
“Bill Gross, co-chief investment officer of Pacific Investment Management Co. and former Federal Reserve Chairman Paul Volcker speak about the prospects for a US economic stimulus package. President Barack Obama is demanding Congress to pass a stimulus bill before its February 16 President’s Day holiday. This report also includes comments from former Fed Governor Frederic Mishkin, Steve Forbes, chief executive officer of Forbes Inc., Charles Calomiris, a professor at Columbia University, Mark Zandi, chief economist of Moody’s Economy.com, and Joel Prakken, chairman of Macroeconomic Advisers.”

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Source: Bloomberg, February 10, 2009.

CNBC: Shiller and Wien discuss stimulus
“Insight on how human psychology drives the economy, with Robert Shiller, Yale School of Management’s professor, and Byron Wien, Pequot Capital chief investment strategist.”

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Source: CNBC, February 11, 2009.

CNBC: Feldstein on stimulus deal
“Martin Feldstein, Harvard University professor and a member of Obama’s economic recovery advisory board, discusses the stimulus deal reached by Congress and today’s bank CEO hearings on Capitol Hill.”

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Source: CNBC, February 11, 2009.

CNBC: Pimco’s McCulley – a Treasury plan short on details
“Investors are searching for more detail than Tim Geithner was willing to provide, with Paul McCulley, PIMCO portfolio manager/managing director.”

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Source: CNBC, February 11, 2009.

CNBC: Rogers – let banks fail
“It’s not the first time in the world that investment banks and commercial banks have gone bankrupt, this has been going on for hundreds of years,” Jim Rogers, CEO of Rogers Holdings, told CNBC Tuesday.”

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Source: CNBC, February 10, 2009.

Bloomberg: Roubini expects US to play stronger role in banks
“Nouriel Roubini, a professor at New York University, talks with Bloomberg’s Kathleen Hays about the banking industry and housing market. Roubini, who forecast the US recession two years ago, says the US government will have to nationalize some of the biggest banks because they are now ‘effectively insolvent’.”

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Source: Bloomberg, February 9, 2009.

Fox Business News: Peter Schiff – economic Armageddon?

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Click here to view Part 2.

Source: Fox Business News (via YouTube), February 5, 2009.

The Wall Street Journal: Silvia on the prospects for a US recovery
“John Silvia, chief economist at Wachovia, talks about his expectations for the future of the country’s gross domestic product, employment data and whether government stimulus will work.”

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Source: The Wall Street Journal, February 10, 2009.

CNBC: Dr Doom – US inflation could hit 200%

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Click here for the article.

Source: CNBC, February 6, 2009.

Bloomberg: Inside look – January foreclosures top 250K
“Foreclosures exceeded 250,000 for 10th straight month in January; analysis and discussion with RealtyTrac’s Rick Sharga.”

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Source: Bloomberg (YouTube), February 11, 2009.

John Authers (Financial Times): The importance of dividends

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Click here for the article.

Source: John Authers, Financial Times, February 10, 2009.

Bloomberg: Gross bought mortgages, sold US debt

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Click here for the article.

Source: Bloomberg, February 11, 2009.

Financial Times: Martin Fridson on default rates and distressed debt
“Martin Fridson, chief executive of Fridson Investment Advisors, which invests in corporate debt, expects corporate default rates in the US to peak around 15% or 16%, the highest level since the Great Depression. More dire economic conditions could push this level higher. The reason for the soaring default rates is that the quality of outstanding bonds is so much worse than in previous cycles. Investors lent money to companies that were a lot riskier to lend to than they have in the past. This expectation assumes the financial system will get back on its feet, but the outlook could worsen again for the financial system, and that would mean expectations have to be reviewed.

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“In Part 2 Martin says a higher default rate combined with structural changes in the debt markets such as changes to the bankruptcy code could push recover rates to 15 cents on the dollar. The average recovery rates over the cycle tend to be in the range of 40 to 45 cents, with recovery at the low point usually at 25 cents. These could be lower this time around. Losses could also come to holders of bonds in banks, especially in banks that could fail or get taken over by the government.

Click here to view part 2.

In Part 3 Martin says the best time to buy distressed debt is when default rates peak, which is not expected until the end of 2009 or the first half of 2010.

Click here to view part 3.

Source: Aline van Duyn, Financial Times, February 8, 2009.

CNBC: Mr. Yen on crisis response – a “behind the curve”
“Eisuke Sakakibara, the former finance minister for Japan, believes moves to counter the financial crisis have been a little slow. ‘So far, the authorities have been a little bit behind the curve,’ he told CNBC. ‘You should have infused capital a little bit earlier.'”

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Source: CNBC, February 12, 2009.

BBC News: BoE’s Mervyn King says UK “in deep recession”

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Click here for the article.

Source: BBC News, February 11, 2009.

YouTube: Stimulis – because all economies have performance issues
“Are you an economy with performance issues? If you find it hard to achieve and maintain growth, maybe Stimulis is right for you. Take Stimulis once every election cycle or whenever you’re in need …

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Source: YouTube, February 4, 2009.

 

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