Wednesday, December 16, 2009

So many thoughts, so little time

Wow, I can't believe I'm just getting around to addressing the "Bernanke as Person of the Year" story. There are many people that will cite the magazine cover indicator which says that when something hits the cover of the mainstream mags, it/he/she has peaked. It' s too early to say, what Bernanke's ultimate legacy will be, but he's been the focus of the financial world for much of the past 12 months so it's a worthy selection as someone who is newsworthy.

The tastiest part of the interview has to be this exchange pulled from the extended interview.....

TIME: Do you have a mortgage?
Bernanke: Oh, yes, we refinanced.

TIME: Oh, perfect. When?
Bernanke: About 5%. A couple of months ago.

TIME: Good time.
Bernanke: Yes. We had to do it because we had an adjustable rate mortgage and it exploded, so we had to.

TIME: So, did you get a fixed rate at 5%? I think this might be the most valuable piece of information. (Laughter.)
Bernanke: Thirty years fixed rate at a little over 5%.

I think I threw up a little in my mouth when I heard that The FEDERAL RESERVE Chairman had an Adjustable Rate Mtg that EXPLODED. This is like the Surgeon General smoking 3 packs a day. I think it's safe to ignore any prediction from someone that felt it was a wise choice to hold an ARM through the financial crisis (on a separate note: How does the Fed Chairman even get a mortgage without it being some sort of conflict of interest? My wife works for an accounting firm that may have done some audit work for Exxon once so I can't buy gas from Mobil, but the Fed Chair can get a mortgage from the very banks he's saving?).

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Empire State Manufacturing Survey fell substantially

"The Empire State Manufacturing Survey indicates that conditions for New York manufacturers leveled off in December, following four months of improvement. The general business conditions index fell 21 points, to 2.6. The indexes for new orders and shipments posted somewhat more moderate declines but also moved close to zero."

Architecture Billings Index slipped again...

The American Institute of Architects’ Architecture Billings Index declined to 42.8 in November from 46.1 in October. Any reading below 50 indicates contraction. "There continues to be a lot of uncertainty in the construction industry that likely will delay new projects in the near future," said Kermit Baker, chief economist at the American Institute of Architects.

Treasury to Delay Citigroup Sale

Ooops! The Treasury was rushing for the exit to get out of Citigroup's stock and along the way forgot to see if anyone else was heading in the same direction. Unfortunately, Citigroup was trying to bring $20 billion of stock to market and although the stock was almost $5 just two months ago, they were only able to price the deal slightly above $3. So, the US Treasury that was going to sell their shares hit the brakes when today's deal fell below their purchase price of $3.25. It would be political suicide to sell their shares for a loss right now -- ironically, the shares are trading at $3.24 right now :)

Cheers!

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