State Street Investment Chief Resigns After Losses (Bloomberg)
The CEO of institutional money manager State Street is stepping down and the company has disclosed that it will lose $279 million dollars in subprime-related legal costs. At fir you'd think, $279 million, what's the big deal? Except that it's legal costs. Not subprime losses themselves. Last year the firm had already indicated direct subprime investment losses, leading to lawsuits over breaches of fiduciary duty.
Apartment Prices in Manhattan Defy National Real Estate Slide (NYT)
Looking for something to do with your bonus money? Word is, you just can't lose if you plow it into Manhattan real estate. Miraculously, amid all the industry weakness, Manhattan real estate continues to go up up up. Granted, that's according to studies from industry professionals, who might have a bit of an agenda. This is from the actual announcement: "Even if Manhattan sales stay at this level, which I expect they will, buying here is a homerun. From an investment angle, you just can't beat this New York City market." So yeah, it's not exactly impartial, academic objectivity here.
YRC to take charges, says economy not improving (Reuters)
Trucker YRC yesterday said yesterday it would take a big, $800 million charge to reflect the declining value of certain acquisitions. It also said that the economy is weak, and if there's anyone who would know this type of thing, it's the truckers. Certainly they have a better idea of what's going on than anyone on Wall St. or in Washington.
Winner of 2008 Iowa Primaries
Well, it starts today. With just a few hours before the big caucuses Obama contracts are trading at $.60 on the dollar, meaning you can still turn a pretty nice profit if he wins.Hillary is at second at $.25, meaning you can quadruple your money in the event of a Hillary victory not bad. On the Repub side, Huck takes it at $.53, with Romney at $.39. Get your bets in now before Drudge leaks the scores. Er, it's a Caucus that happens at night, so probably no chance of Drudge getting any early numbers. Besides, if memory serves, his are always wrong.
Oil Again Nears $100 a Barrel (AP)
What, oil again is nearing $100 barrel? So soon. Actually, we hadn't realized that that number failed to hold. Before we start popping open the bottles of Veuve, we want to see a sustained $100+ period, not just little peck on the cheek. It was funny how the market sold off yesterday and everyone said it was because oil hit $100, or at least a couple articles tried to make a connection. C'mon, are stock traders so psychologically weak that an arbitrary number would effect them? Seems doubtful.
Home Prices Must Fall Far To Be In Sync With Rents (WSJ)
Price-to-rent rations seem a bit like PE ratios. They matter, except when they don't. Anyway, a Fed study says home prices would have to fall by another 15 percent -- which is pretty significant -- in order to fall back into line with historical PR ratios, assuming rents grew at an annualized 4 percent clip. Or maybe rents could just soar like crazy, which would be a nice turnabout, seeing as the renters have had the last laugh lately. It'd bring a little joy to struggling homeowners, faced with increased interest rates and negative equity.
Intel: The Bulls are Back in Town (Infectious Greed)
We love chip fights. Nothing gets us more excited than arguments about demand, book-to-bill ratios, commoditization and the end of Moore's Law. And they always get so heated. We once (honestly) attended a presentation from a Wall St. strategist who said that chip analysts were the most consistent contrarian indicators, that there was almost always money to be made by going against them, whenever they achieve a consensus.