A batch of gloomy economic reports during the past few days suggested that recent optimism about a global recovery might have been premature. This caused Doug Kass to warn that “stock prices have moved ahead of fundamentals” and Kenneth Langone to caution that “investors seem to be getting ahead of themselves”, although he maintained that the long-term outlook on the market was positive.
Big banks across the US announced large common stock offerings and plans to repay the government, and the US administration attempted to bring transparency to the credit derivatives markets and also crack down on the credit card industry.
In addition to Kass and Langone, commentators featured on camera in this post include Elizabeth Warren, Meredith Whitney, Alan Greenspan, Peter Boockvar, Giles Keating, Jim Rogers, Barry Ritholtz, Dennis Gartman, Abby Cohen, Peter Eliades and Laszlo Birinyi.
The selection kicks off with a discussion on why the bubble burst, and concludes with a clip on Jacob Zuma being sworn in as South Africa’s (my home country) new president.
John Authers (Financial Times): Why the bubble burst “Why did the bubble burst last year? Was it due to overconfidence, too much reliance on the efficient markets model, or an explosive mixture of human nature and the free market? Or all of the above? John Authers, FT investment editor, summarizes the views of leading market experts he spoke to at a conference in Orlando, Florida, including Michael Mauboussin of Legg Mason, Richard Thaler of Chicago University and Russell Napier, author of Anatomy of the bear.”
Bloomberg: Ken Lewis says he’s focused on bank, not job security “Kenneth Lewis, chief executive officer of Bank of America Corp., talks with Bloomberg’s Margaret Popper about his focus on the bank’s operations after US regulators demanded the lender raise more capital after it failed a bank stress test.
“Regulators told Bank of America that it needs to raise $33.9 billion in order to survive a prolonged recession. Lewis, who was stripped of his chairman’s role after last month’s annual shareholders meeting, also discusses the results of the stress test, capital needs and the bank’s acquisition of Merrill Lynch & Co. They speak from Bank of America’s headquarters in Charlotte, North Carolina.”
CNBC: Credit card crackdown “President Obama wants to sign the Credit Card Bill of Rights into law by Memorial Day, and Jared Bernstein, chief economist for Vice President Biden, discusses the legislation.”
Bloomberg: Roubini says bank stress tests “not stressful enough” “Nouriel Roubini, the New York University economics professor who predicted the current financial crisis, and Joseph McAlinden, a fund manager at Catalpa Capital, talk with Bloomberg’s Pimm Fox about the government’s stress tests of the 19 largest US banks. Roubini and McAlinden also discuss their expectations for the US economy, government regulation of banks and the outlook for the European and Chinese economies.”
MSNBC: Show me the stimulus money “Since President Barack Obama signed the stimulus bill three months ago, only $46 billion of the $787 billion has been given out. Jared Bernstein, chief economist for Vice President Joe Biden, discusses.”
Giles Keating (Credit Suisse): Top 10 investment themes for 2009 “Most countries were in recession at the beginning of 2009. Analysts foresee that the slowdown will continue for at least another year. Giles Keating, head of the Credit Suisse Global Economics and Strategy Group, lists the top 10 investment themes that offer opportunities during the course of the year.”
CNBC: Stocks are ahead of fundamentals “Hedge fund manager Doug Kass of Seabreeze Partners Management (the man who called a generational low in the stock market back on March 10) says stock prices have moved ahead of fundamentals. Kass calls it the ‘Miley Cyrus’ stock market recovery where a premium is being paid for less-than-stellar value.”
MarketWatch: Dow 4,000 still in the cards “Peter Eliades of Stockmarket Cycles says the Dow still could retreat to 4,000. He tells MarketWatch’s Stacey Delo that the current range at the 8,400 level is an important benchmark to watch.”
Bloomberg: Birinyi on the outlook for stocks “Laszlo Birinyi, president of Birinyi Associates Inc., talks with Bloomberg’s Betty Liu and Julie Hyman about equity investment strategy. Birinyi, speaking from Westport, Connecticut, also discusses the outlook for the US stock market, the banking industry and corporate earnings.”
CNBC: Kenneth Langone – investors getting ahead of themselves “Investors seem to be getting ahead of themselves right now but the long term outlook on the market is positive, says Kenneth Langone, Invemed Associates chairman/president & Home Depot founder.”
Financial Times: Intel fined €1 billion “If the example of Microsoft is anything to go by, the record €1 billion fine slapped on Intel will not have much of an impact on the company, says FT’s Dan McCrum.”
CNBC: China’s dual economy “China is unlikely to grow 8% in 2009 as Jan Friederich, senior economist for global forecasting at the Economist Intelligence Unit has noted two different economies operating there. He shares his observations with CNBC’s Martin Soong.”
CNBC: Jim Rogers – teach your kids Mandarin “Commodities king and Quantum Fund co-founder Jim Rogers explains to CNBC’s Larry Kudlow why he remains bullish on Asia and commodities, his skepticism about the recent stock market rally, and why he left the United States to raise his daughters abroad.”
CNBC: RICS – UK housing slump easing “According to a recent survey, the UK housing price slump softened in April, and new buyer enquiries rose at their fastest pace in a decade. Simon Rubinsohn from RICS has more.”
Financial Times: Zuma sworn in as SA president “Nelson Mandela, a symbol of the country’s anti-apartheid struggle, and thousands of supporters and heads of state came to watch South Africa’s fourth democratic leader being sworn in.”