• CEO Pay
    Posted by on April 6th, 2010 at 8:49 am

    The NYT has a neat graphic detailing CEO pay at many top firms. On a side note, it turns out that many CEOs are middle-aged white guys.

  • I Smell Pulitzer
    Posted by on April 6th, 2010 at 8:27 am

    The WSJ bravely uncovers the story of Americans who have plunged from the Upper-Middle-Upper Class all the way down to the Middle-Upper-Middle Class.

    Indeed, the bank of Mom and Dad is closing at a time when young people are having trouble borrowing from traditional lenders. Some 22% of young people between the ages of 18 and 34 said they’ve been turned down for a mortgage, loan or credit card in the past year, according to a February survey from FindLaw.com, a legal marketing and information site. That’s double the percentage of any other age group in its survey.
    As a result, many young people are now moving home to save on rent. About 21% of young adults say they’ve either moved in with a friend or relative, or had a friend or relative move in with them because of the economy, according to a study from the Pew Research Center.

    First Haiti, now this! Why God? WHY??

  • Growth Has Been Leading Value
    Posted by on April 5th, 2010 at 3:16 pm

    Since the summer of 2006, growth has been leading value. Much of the reason is that financial stocks have crowded the value side. Right now, I’m not sure if either side has a big advantage. Simply due to the wide yield curve, I’d still lean towards growth.
    Here’s a look at the Vanguard Growth Fund (VIGRX) divided by the Vanguard Value Fund (VIVAX):
    image923.png

  • Mauboussin and Surowiecki
    Posted by on April 5th, 2010 at 12:49 pm


    (Via: Kedrosky)

  • Uncle Sam Made 8.5% on Bailouts
    Posted by on April 5th, 2010 at 12:14 pm

    From Reuters:

    U.S. taxpayers earned an annualized 8.5 percent return from the government’s bailout of 49 financial firms, underscoring efforts by the industry to speed up repayments and warrant repurchases, according to a report by SNL Financial.
    Firms such as Citigroup (C.N), which still has common shares held by the U.S. Treasury Department, and rivals that have made partial redemptions were excluded from the analysis, SNL Financial said in a statement on Monday.
    Proceeds from Troubled Asset Relief Program (TARP) warrant repurchases and auctions led to a surge in returns through March 30, SNL said. So far, since the start of the program in late 2008, 64 institutions have fully repaid government aid.
    For months, taxpayers balked at government efforts to help banks, which they saw as the main culprit behind the worst U.S. recession since the 1930s, as the collapse of investment bank Lehman Brothers shook global financial markets in late 2008.
    The biggest banks, such as Goldman Sachs Group Inc (GS.N), repaid the money they owed the Treasury last year and earlier this year. Still, more than 600 smaller banks are left in the program, and owe roughly $130 billion to taxpayers.
    Goldman alone produced a return of 20 percent to taxpayers at the time of repayment in July last year, according to SNL.
    Overall, firms that have exited the programs, plus those 18 that have fully redeemed their TARP preferred stock but still have their warrants held by the Treasury, returned 7.6 percent in the period, SNL Financial noted.

    I wasn’t too worried about the money going to the top banks. As for AIG and the car companies, well, that’s another story.

  • Thought for the Day
    Posted by on April 5th, 2010 at 11:06 am

    From Arnold Kling:

    My take on the mortgage finance boom/bust, TARP, the stimulus, health care reform, and the global warming crusade is that they represent a series of ruling-class mistakes. From my perspective, these mistakes are in the tradition of such ruling-class mistakes as World War I and Vietnam.
    I attach paramount importance to resisting the ruling class at this time. I view ethnic and cultural controversies as devices used by the ruling class to keep the resistance divided. The ruling class wants you to think that if you don’t support their entrenched power, the country will be over-run by a bunch of anti-intellectual racists and homophobes. I call baloney sandwich on that one.

    If there were a stock or ETF tied to the public policy of “libertarianism for the rich/paternalism for the poor,” I’d rate it a very strong long-term buy.

  • Freakonomist Keeps Close Eye On GE Stock Versus Height Of Mexican Weightlifters
    Posted by on April 5th, 2010 at 10:53 am

    The Onion:

    CHICAGO—A University of Chicago freakonomics professor told General Electric investors Monday to keep a close eye on recent fluctuations in the heights of competitive powerlifters from Mexico. “Usually we can count on a stable average of 5 feet 8 inches, but last month’s quarter-inch drop in height among Mexican dead-lift competitors in the middle-heavyweight division could spell disaster for GE’s aviation and software subsidiaries,” freakonomist James Duncan said. “But, like anything else, a shrewd investor must always ask himself one thing: How many hot dogs did I eat last year?” Duncan previously gained recognition for tracking first-time home ownership and teenage mothers’ gum purchases against the Times Tom Jones Is Played Per Day Index.

  • The Buy List Is Now Up Over 10% YTD
    Posted by on April 5th, 2010 at 10:23 am

    The day is still young, but the CWS Buy List officially crossed the 10% line for the year. This is why I don’t try to time the market. I never would have said that we’d make 10% in a little over one quarter. Joey Banks (JOSB) is at another new high.

  • Vanity Fair’s Awful Interview With Erin Burnett
    Posted by on April 5th, 2010 at 9:52 am

    Vanity Fair just published an awful interview with CNBC’s Erin Burnett. I’m not exaggerating when I say that the interview is most about the interviewer. The interview is apparently about Mr. Eric Spitznagel’s momentous event of interviewing Burnett, and she’s somehow in the way.
    Here’s one example:

    If you watch enough cable news, it starts to seem like if AIG or Citibank goes under, we’re all going to be like Charlton Heston in Planet of the Apes, staring up in disbelief at the disembodied head of the Statue of Liberty and screaming “You blew it up! Damn you! Damn you all to heeeeeelll!” If we don’t save those companies from bankruptcy, are we headed towards an ape-run dystopia?
    (Long pause.) I don’t know. I would say no, but banks and availability of credit are the most basic and important things for an economy. What if the banks had failed? Nobody keeps cash anymore. We think society moves forward, generation after generation, ahead and ahead and ahead. We don’t realize maybe how reliant we are on things that are far from hunting and gathering.

    I counted the words. Erin won but the margin was less than 2-to-1.
    (One more thing — it wasn’t the disembodied head, but you can clearly see much of the torso.)

  • March ISM = 59.6, Best Since 2004
    Posted by on April 1st, 2010 at 10:02 am

    More good news for the economy. The Institute for Supply Management released its index this morning and the reading was 59.6. This was better than economists’ expectations. It’s also the best number in close to six years. Last month’s ISM was 56.5.
    As I explained recently, the ISM is one of the best indicators of how well the economy is doing. Anytime the ISM is 44 or less, it’s almost certain that we’re in a recession.
    Now the problem is jobs and that report comes out tomorrow. Goldman just lowered its NFP estimates from 275,000 to 200,000. I’ll be happy with any positive number.