Skip to main content


Showing posts from March, 2007

The Sub-Prime Chickens Are Coming Home to Roost

Actual Conversation from last week: Investor, to his stock broker: "Do I have anything in my portfolio with exposure to the sub-prime mortgage market?" Broker: [laughing] From the Wall Street Journal, 3/15/07: "People lack the tools to quantify the exposure of the financial system to subprime, and where there is uncertainty, you sell first." -- Teun Draaisma , co-head of European equity strategy at Morgan Stanley The Point: Everybody who has anything invested in the stock market is directly or indirectly exposed to the sub-prime mortgage market, and as the sub-prime bubble goes, so will go the market. Sub-prime mortgages are loans made to borrowers with sketchy or outright bad credit, usually taken out to buy houses or refinance existing loans. These types of loans sometimes have higher-than normal interest rates, but also include loans with certain features that allow borrowers to pay abnormally low interest rates--or no interest at all--for a certain peri

A-Rod on the Clock

In the pre-millenium days, drugstores and gift shops used to sell "Millenium Countdown" clocks, that ticked down, to the second, the amount of time until the new millenium. Someobody needs to start making A-Rod Countdown clocks, to measure the time between now and when he bolts from the Yankees or is run out of town by villagers with torches in the middle of the night. I say "when," because as everyone knows, it isn't a question of "if" anymore. Not only has A-Rod failed to live up to expectations as a Yankee, but he is now running afoul of New York's Golden Boy, Mr. Yankee himself; Derek Jeter. If he was under the microscope before, he will be under the Hubble Space telescope now. Yankee fans will view each breath of his as a grave insult to their beloved club. Each twich of his lip will be countend as grievous affront. He will not be able to do anything, ANYTHING, right. Unless he jumps out of the gate this season with 15 home runs and a .450 av

The Great Troop Rift

An interesting and unfortunate battle is about to be waged in the U.S. government, and that is the fight to get our troops out of Iraq--or at least the fight for politicians to appear strongly enough on one side or the other of the issue to get elected in 2008. Strap in, because this is going to be one of the biggest, and maybe ugliest political battles of the decade. This, folks, is politics at its absolute worst. This is that ugly territory where literally life-and-death issues are decided by people have one goal and one goal alone: to get elected. You have the Democrats promoting a phased, pull-out plan, the same week as U.S. General Petraeus (the Julius Caesar of this campaign) saying that the U.S. needs to put more troops there, and for a longer period of time. You also have an un-popular president of a bruised and battered party on his way out, who has no plans of changing his course and will almost certainly pass the buck onto whoever replaces him. Meanwhile, he's trying