Dec 26, 2009

Former Fed bank chief on paying Goldman Sachs counter-parties in full

What was done was appropriate because the potential costs of not doing that were probably exceedingly high. It certainly looked very threatening.

~ Gary Stern, former president of the Federal Reserve Bank of Minneapolis, "Taxpayers Help Goldman Reach Height of Profit in New Skyscraper," Bloomberg.com, December 27, 2009

(Stern stepped down in August as president of the Federal Reserve Bank of Minneapolis.)

Dec 20, 2009

Nouriel Roubini: Jim Rogers's $2,000 gold is "utter nonsense"

[Today's forecast by investor Jim Rogers that gold will double to at least $2,000 an ounce is] utter nonsense. [There is no inflation or] “near-depression” [to drive gold prices that high. If a severe depression came to pass, with investors buying canned goods and hiding out in log cabins,] maybe you want some gold in that scenario. Maybe it will reach $1,100 or so but $1,500 or $2,000 is nonsense.

~ Nouriel Roubini, speech at the Inside Commodities Conference in New York, reported by Bloomberg TV, "Rogers's $2,000 gold 'utter nonsense'," November 5, 2009

(Gold rose to a record $1,098.50 today.)

Dec 18, 2009

Jim Cramer on investing in banks he admittedly knows little about

"The Citigroup (C) deal was a good deal. It just wasn't good for the bank

I was adamant the other day -- some would say rabid -- that you be in on the deal. I specifically did not want you to buy it ahead of the deal, although I am now being ridiculed -- thanks Huffington Post! -- for suggesting that I wanted you in at $3.70.

Look, I have no idea really how Citigroup is doing. That's because they don't know how it is doing. That's the biggest flaw of the joint, of course. But what does matter is that I think that worldwide GDP growth is going to be stronger than people think, and that will cure a lot of the errors of all banks, including Citigroup.

Sometimes, as I say in Getting Back to Even, bad merchandise turns into good merchandise at a price. The idea that so much supply could knock down Citigroup to where the stock traded is of ZERO interest to me. The dilution? It is manageable.

The main thing is the stupidity of the critics who keep calling it a bad deal. A bad deal is one that breaks print, not one that goes up after.

Make judgments only about whether you make or lose money. That's what you can try to control.
The rest is dross ginned up by people who need something to write or talk about."

~Jim Cramer, "Did You Make Money? Then It Was A Good Deal", TheStreet.com, December 18, 2009, (link)

Dec 17, 2009

Alan Greenspan on stock market rally as economic stimulus

“When stock prices go up, the market value of common stock or of equity in banks and other financial institutions rises,” he said. “And the market value of liabilities is importantly affected by the size of the equity market value cushion on banks’ balance sheets.”

~Alan Greenspan, "Greenspan Says Stock Rally Means Lower Stimulus Need", December 17, 2009, Bloomberg.com (link)

Dec 16, 2009

Mortimer Zuckerman on creating jobs

Only massive programmes are equal to the challenge of restoring stable growth to our economy. One such programme would be to establish a National Infrastructure Bank, advocated by prominent Democrat Felix Rohatyn, to which the government would assign the $65bn (£40bn, €45bn) annually allocated to support infrastructure construction nationally. The bank would have the capacity to borrow, with federal guarantees, an additional $200bn. This programme would ensure a rational rather than a political investment in infrastructure, and provide long-term infrastructure development on a major scale with a maximum multiplier effect on the economy.

~ Mortimer Zuckerman, "The free market is not up to the job of creating work," FT.com, October 18, 2009

Time on their 2009 Person of the Year

Professor Bernanke of Princeton was a leading scholar of the Great Depression. He knew how the passive Fed of the 1930s helped create the calamity — through its stubborn refusal to expand the money supply and its tragic lack of imagination and experimentation. Chairman Bernanke of Washington was determined not to be the Fed chairman who presided over Depression 2.0. So when turbulence in U.S. housing markets metastasized into the worst global financial crisis in more than 75 years, he conjured up trillions of new dollars and blasted them into the economy; engineered massive public rescues of failing private companies; ratcheted down interest rates to zero; lent to mutual funds, hedge funds, foreign banks, investment banks, manufacturers, insurers and other borrowers who had never dreamed of receiving Fed cash; jump-started stalled credit markets in everything from car loans to corporate paper; revolutionized housing finance with a breathtaking shopping spree for mortgage bonds; blew up the Fed's balance sheet to three times its previous size; and generally transformed the staid arena of central banking into a stage for desperate improvisation. He didn't just reshape U.S. monetary policy; he led an effort to save the world economy.

~ Time, "Person of the Year 2009," December 16, 2009, by Michael Grunwald

Dec 15, 2009

Bill Gates Sr on estate taxes

Society has a just claim on these fortunes. The facts are clear: The estate tax raises substantial revenue from those with the capacity to pay it.

"Senate’s Baucus Seeks Temporary Extension of Estate Tax in 2010", Bloomberg, December 15, 2009,

Humpty Dumpty on the meaning of words

"When I use a word, "said Humpty Dumpty in rather a scornful tone, "it means just what I choose it to mean - neither more nor less."

"The question is," said Alice, "whether you can make words mean so many different things."

"The question is," said Humpty Dumpty, "which is to be master - that's all."

~ Lewis Carroll, Through the Looking Glass, Chapter VI

Dec 14, 2009

Maria Bartiromo on the Fed's independence

The independence of the Federal Reserve has been one of the greatest things about this country.

~ Maria Bartiromo, as appeared on CNBC, December 14, 2009, 3:10 EST

Dec 11, 2009

Alexander Hamilton, father of the US central bank, on the price of liberty

"The United States debt, foreign and domestic, was the price of liberty"

~Alexander Hamilton, as quoted on the front page of the website of the US Bureau of the Public Debt, a wing of the US Department of the Treasury

Dec 10, 2009

Obama on TARP bailout

There has rarely been a less loved or more necessary emergency program than TARP, which as galling as the assistance to banks may have been indisputably helped prevent a collapse of the entire financial system.

"Obama to extend bailout fund, use a chunk for deficit", CNBC.com, December 10, 2009,

Dec 9, 2009

Walter Williams on the pretense of knowledge

Whether it is health care, education, employment or most other areas of our lives, I ask you: Who has the capacity to master all the complexity to make choices on behalf of others? Each of us possesses only a tiny percentage of the knowledge that would be necessary to make totally informed decisions in our own lives, much less the lives of others. There is only one reason for the forcible transference of decision-making authority over important areas of our private lives to elite decision-makers in Congress and government bureaucracies. Doing so confers control, power, wealth and revenue to society's elite.

~ Walter Williams, "The Pretense of Knowledge," December 2, 2009

VP Joe Biden on the prospects for economic recovery

"We inherited one heck of a mess, as you well know. The GDP was a -6.3%, 740,000 people lost their jobs before I lowered my hand after taking the oath... We're making progress. The GDP's growing, we're going to be producing jobs by the beginning of next year, in the first quarter of next year... it took us a long time to catch up.
...
Here's the deal, we have now, of that recovery act, we've been in business 7, 8 months, the one thing you haven't seen... is those big wasteful projects. No one has come up with anything like, 'You went out there and spent $2-million on something that didn't exist.'
...
First of all, the kind of jobs we're trying to create are not make-work jobs. We're trying to build a new platform, Jon [Stewart], for the 21st century. We're investing in energy, we're investing in education, we're investing in healthcare... these are the kinds of things that are going to provide these guys with real, live jobs that aren't exportable, that are going to be able to be kept here
...
Jobs are going to lag behind growth in this country from somewhere between 12 to 18 months... Everything is growing now... We'll be creating jobs by February or March of next year."

~Vice President Joe Biden, as appeared on Comedy Central's The Daily Show With Jon Stewart, November 17, 2009

Jason Trennert: bullish until "the bill comes due" (2009)

We're bullish until the bill comes due.

~ Jason Trennert, as appeared on CNBC, December 9, 2009, 9:35 EST

Dec 6, 2009

Jesper Parnevik on Tiger Woods transgressions

I feel really sorry for Elin [Nordegren Woods]. I would be especially sad about it since I'm kind of ... I really feel sorry for Elin, since me and my wife were at fault for hooking her up with him. We probably thought he was a better guy than he is. I would probably need to apologize to her and hope she uses a driver next time instead of the 3-iron.

It's a private thing, of course. But when you are the guy he is, the world's best athlete, you should think more before you do stuff. . . And maybe not just do it, like Nike says.

~ Jesper Parnevik, professional golfer, "Jesper Parnevik on Tiger Woods transgressions," Golf Channel, December 3, 2009

Dec 3, 2009

Lloyd Blankfein on dog-piling short sellers

“I’m for markets,” says Blankfein, who today describes the situation [financial panic of 2008] as “tricky.” “But when it felt like it had gotten abusive, when it was free money to short-sellers who were piling on, it felt less like the market and more like it was being manipulated.” He adds, “I crossed over.”

~ Lloyd Blankfein, CEO, Goldman Sachs, "The Bank Job," Vanity Fair, January 2010, by Bethany McLean

Dec 2, 2009

Sovereign wealth funds play bubbles

It will not be too bad this year. Both China and America are addressing bubbles by creating more bubbles and we're just taking advantage of that. So we can't lose.

~ Lou Jiwei, Chairman China’s sovereign wealth fund, China Investment Corporation, "Wealth Fund Muscles Up as Markets Recover," Reuters, August 28, 2009