Friday, June 26, 2009

Warrants of the Federal Kind

WASHINGTON (MarketWatch) -- The Treasury Department set out a roadmap on Friday on how it intends to sell its stakes in banks held in warrants. Under the government's $700 billion bank bailout, when a bank repays the government it is allowed to repurchase the warrants at a fair market price. The plan announced Friday sets out procedures for reaching an agreement on the price involving independent appraisers. If the banks choose not to repurchase the warrants, Treasury said that it will sell the warrants through an auction process over the next few months.
four months of a rising stock market are thus explained. As soon as they dump this crap we can expect the mother of all selloffs.

BTW: "Warrants of the Federal Kind" because "Warrants of the California Kind" are coming soon.

Thursday, June 25, 2009

Happy Birthday

The barcode turns 35:
Bar code met the laser scanner on Friday, June 26, at a Marsh supermarket in Troy, Ohio, according to Motorola. With the 35th anniversary, Motorola offered some bar code technology relections, since Symbol Technologies, now a part of Motorola Enterprise Mobility Solutions, was founded, in part, by Dr. Jerome Swartz, the inventor of the laser scanning device for use with bar codes.

Motorola says:

- Without the bar code / laser scanner partnership, we'd have long lines at registers and tolls, (even more) lost baggage at the airport, and a lot of waiting for a package that may never arrive.

- Before the practical integration of bar codes and laser scanners, each company had its way of designating products, using a variety of letters, numbers or no codes at all.

- Typical error rate for human data entry is 1 error per 300 characters; with barcode scanners, the error rate can be as good as 1 error in 36 trillion characters.

- Use of the bar code ultimately resulted in significant economic and productivity gains for shoppers, retailers and manufacturers, with estimated cost savings of $17 billion in the grocery sector alone (according to GS1 US).

- UPC bar codes are scanned more than 10 billion times a day in applications spanning more than 25 industries.

The End of an Era

You all know the red bathing suit poster. I like this one better.

Wednesday, June 24, 2009

Ground Control to Major Thom

From LATimes:
Long Beach rocket launch venture files for bankruptcy
Sea Launch fires satellites into space from a floating platform at sea and a land facility in Kazakhstan. Its owners include Boeing as well as Russian, Norwegian and Ukrainian partners.
June 24, 2009

Sea Launch Co., a Long Beach-based rocket venture that is 40% owned by aerospace giant Boeing Co., has filed for Bankruptcy Court protection, citing recurring losses from operations.

The unusual company, which includes Russian, Norwegian and Ukrainian partners, said lower demand for lifting commercial satellites into space and a recent inability to secure financing to pay a $52-million arbitration ruling against it led to the Chapter 11 filing.

The venture, which launches rockets at sea from a floating platform, said in a statement that it "intends to maintain all normal business operations."

"Subject to court approval, Sea Launch will initially use its cash balance to meet operational requirements during the reorganization process," it said. It has about 130 employees based in Long Beach.

In the filing, Sea Launch listed assets of up to $500 million and liabilities of more than $1 billion.

Boeing is not having a good month. California, a bad decade.

Wednesday, June 17, 2009

Credit Default Swaps

Corporate Bond Risk Rises in Europe, Credit-Default Swaps Show
By Michael Shanahan
June 17 (Bloomberg) -- The cost of protecting European corporate bonds from default rose, according to traders of credit-default swaps.

Contracts on the Markit iTraxx Crossover Index of 45 companies with mostly high-risk, high-yield credit ratings increased 8 basis points to 738, according to JPMorgan Chase & Co. prices at 7:19 a.m. in London. The index is a benchmark for the cost of protecting bonds against default and a rise indicates deterioration in the perception of credit quality; a decline signals the opposite.

The Markit iTraxx Europe index of 125 companies with investment-grade ratings rose 2 basis points to 118.5, JPMorgan show.

A basis point on a credit-default swap contract protecting 10 million euros ($13.9 million) of debt from default for five years is equivalent to 1,000 euros a year.

Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements.

The Basin at Franconia

Kinda like the markets.

Monday, June 15, 2009


Northern Renter and his family took us to dinner in the Old Town section of Montreal.

Saturday, June 13, 2009

Thursday, June 11, 2009

Here Be There Dragons

It can't go on forever, and it won't. What will shock America into action is the prospect of fiscal collapse, which will grow more vivid each year. In 2008 federal borrowing accounted for 41% of GDP, about the postwar average. By 2019 the burden will double to 82% by the CBO's reckoning, reaching $17.3 trillion, nearly triple last year's level. By that point $1 of every six the U.S. spends will go to interest, compared with one in 12 last year. The U.S. trajectory points to the area that medieval maps labeled "Here Lie Dragons."

Read the rest at CNN/Fortune.

Ahhh... there be that pesky dragon:

Tuesday, June 09, 2009

2006 Redux

Apparently there's a time warp up in Wrightwood. Take a look at this one.
Tremendous home and location. Five bedrooms and five batrooms with a spectacular bonus room that includes a loft and space used for a pool table and table hockey etc. Home overlooks the lovely setting of Wrightwood's Country Club and local lake on nearly an acre of fenced level land. has been used as a vacation rental for the past five years-at $600. per night-sleeping 23 people. Includes laundry room and 2 car garage. Long driveway can fit up to 10 cars. 2 huge water heaters, 3 forced heating units and wet bar provide comfort for a large group. Intercom installed and wired for music throughout house. Home has been used in movie and commercial settings. Various movie stars have stayed in home over the years.

Sleeps 23! 5 years of $600/night short term rental wear! $250/sf! Purchased Sept '03 for $410k. Asking $950k! And here, look at the price/sf trend. $145 for what is selling.

Another Set of Bottoms

Let's get to the bottom of this. We are 2000 Dow points above any sort of acceptable bottom. Housing won't see a bottom for at least 5 quarters. Unemployment bottom? None, we just won't be able to ever get back to what used to be called full employent a few years ago.

Pushed Over The Line

By Iris J. Lav and Elizabeth McNichol
Updated May 18, 2009

Some 47 states are facing fiscal stress in their FY2009 and/or FY2010 budgets.
New mid-year fiscal year 2009 shortfalls of $60 billion have opened up in the budgets of at least 42 states and the District of Columbia.

Budget deficits are already projected in 46 states for the upcoming fiscal year. Initial estimates of these shortfalls total $133 billion. As the full extent of 2010 deficits become known, shortfalls are likely to equal $145 billion.

Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total $350 billion to $370 billion before accounting for various gap-closing measures.

States are facing a great fiscal crisis. At least 47 states faced or are facing shortfalls in their budgets for this and/or the next year or two. Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion. This figure, however, does not account for recent state actions to close their 2009 budget gaps or their projected gaps for 2010 or 2011, or for the $140 billion in fiscal relief that Congress provided for states in the American Recovery and Reinvestment Act.

Full article here.

For your purient interests. The dawg c. 1982:

Sunday, June 07, 2009

Saturday, June 06, 2009

Commercial Vacancies

The LATimes has one of those classic cases of understatement. Apparently there might be some trouble brewing in SoCal commercial real estate (CRE).
In Los Angeles and Ventura counties, the vacancy rate in the first quarter rose more than 50% over the previous year to more than 3% and asking rents fell from an average of $2.29 a square foot per month to $2.14, according to the real estate brokerage CB Richard Ellis Inc.
THREE percent? That's just plain silly. Nevertheless the article is interesting as long as you double all the small numbers.

Tuesday, June 02, 2009

Wrightwood Round Trips Plus

Last sale dates of 2002, 2003, 2005, 2006 and 2008. Of course the last was a bank repo. Where will the Great Unwind leave us? 1998 with 8 up years and 6 down years? Ouch.

Belt and Suspenders

The SacBee has the story:

What started as a municipal bankruptcy in the city of Vallejo has morphed into an all-out fight between California's local governments and unions over the sanctity of labor contracts vs. the autonomy of cities and counties.

Next battle zone: the floor of the state Assembly, where legislation requiring local governments to get state approval to file for bankruptcy protection is headed for a vote later this week.

This won't be the last imbroglio spawned by the state's fiscal turmoil. But it is likely to be among the hottest.

The bill by Assemblyman Tony Mendoza, D-Artesia, is sponsored by the California Professional Firefighters and supported by nearly three dozen labor organizations in the state and AARP – groups worried about labor contracts or pensions potentially being affected by bankruptcy filings.

This is so wrong on so many levels. Permission from the State to file municipal bankruptcy? Changing bankruptcy law to exempt labor from modification? This is why California is so screwed.

Monday, June 01, 2009

Lack of Posts

Just a dry spot. CAHSR, CA deficit and market head fake posts to come. Sorry.