Thursday, October 21, 2010

Well I'm not buying any U.S. bank stocks soon ...

AOK - A well-written piece pulling a lot of the current bank & mortgage issues together.

An update on asymmetric information and corporate governance in bank bailouts

Edward Harrison | October 21, 2010 2:00 pm |

"Last June I wrote a post on the topic of corporate governance that pointed to one of only two outcomes as the likely result of the bank bailouts. Outcome number one was bank prudence and low credit growth in the face of uncertainty. Outcome number two was a reckless heads I win, tails you lose mentality that permeated the 1980s leading to the S&L crisis. To date, we have mostly seen outcome number one, which (if you can believe it) is the thing you would like to see. But this necessarily means slow growth until the uncertainty about earnings and litigation passes.
Let me take this opportunity to update you on my thinking in the wake of the foreclosure crisis.
Regulatory forbearance means under-performance or excessive risk

Bill Dahmer - Thoughts from a Warm Island: Mexico and other Emerging Markets

Mexico has not really been on my radar, so it is good to read something about it. Anecdotally, I have one friend who is Mexican who recently moved from Austin back to Mexico. She seems to love it. No poverty where she is. At least not in the photos she posts on FB. My step-brother on the other hand is a Drill Push and has been working down in Mexico for a number of years now. He thinks it is the biggest SNAFU going. So the truth is probably somewhere in between.

Bill Dahmer - Thoughts from a Warm Island: China and The Markets

By Bill Dahmer

China is very effective at using organizations like the WTO and IMF to its own advantage against the west, while effectively keeping foreign competition out of China with tariff and non-tariff barriers to trade as well as with bureaucratic measures. I know lots of foreign companies make stuff in China, but very few actually make any money in China. The Chinese have simply not allowed that to happen. It is almost a political-trade policy crafted after studying Japan's export-driven trade policy combined with France's masterful manipulation of EU political institutions for its own narrow, national self-interest. You have to admire China Inc. on some level that they are able to out-compete us using the western institutions that we created like the WTO, IMF and even the UN.

PLEASE READ THIS - Decriminalization Works - it's been tested

AOK- This is an incredibly important point to get out to North Americans - the "War on Drugs" is not even close to being won; with not only insane amounts of money, time, resources & political rhetoric being wasted but also so many lives being warped and ruined - of users, enforcement personnel, victims of the criminal gangs, their families and countless others. Just saying. It's time to change things.

Scary IPOs Are Price We Will Pay for Zero Rates: William Pesek

Oct. 18 (Bloomberg) -- Prasarn Trairatvorakul struggled for balance as the ferry taking him across a Bangkok river pitched in choppy waters.
“It’s a bit like the world economy these days,” the Bank of Thailand governor deadpanned as he plopped down next to me on a ferry deck chair. “Very hard to control.”
Prasarn would certainly know. Thailand may offer the best example of a curious phenomenon: how the Federal Reserve’s ultralow interest rates are benefiting Asia more than America. Excess central-bank liquidity explains the disconnect. Asia is getting loads of it, U.S. assets are getting little.

Giraffe Thoughts ...