200801.31
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Warburg & MBIA

Last month Warburg Pincus agreed to buy 16.1 million shares of MBIA at $31 per share and also received warrants to purchase an additional 8.7 million shares at $40. Today MBIA reported a loss of $18.61/share ($2.3 billion) and the stock is trading at about $12 in pre market. Warburg is known as a savvy…

200801.30
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Selling the Rallies

The market rallied and then fell on the news of the Fed cutting another 50 basis points. Obvioiusly, there are still plenty who are selling the rallies and with market sentiment so bearish that is not a surprise. From my viewpoint this is a good thing. Long term investors should be looking for the market…

200801.30
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Grant’s Indictment of the Fed

James Grant is back on the editorial page of the New York Times with a scathing indictment of the Wall Street, Main Street and Washington: Striving so mightily to make one and one add up to three or four or five, Wall Street, Main Street and Washington collectively brought us to the impasse of 2008,…

200801.30
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Under a Republican Administration

Have you noticed that Classical and Austrian economists seem almost giddy about the potential collapse of the US economy? If you read too much of this stuff you almost can’t help but be negative about the prospects for the US. Here’s another one at Mises.org by Christopher Westley: So it has come to this. Years…

200801.30
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Keynesian Sleight of Hand

Robert Murphy, author of The Politically Incorrect Guide to Capitalism, has an excellent editorial about the current Keynesian response to the alleged potential future recession. Murphy is quite a bit more pessimistic than I am about the current slowdown, but my only real disagreement is about timing. I don’t think the public has caught on…

200801.29
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About that Weak Economy…..

Yeah, not so much. Jan. 29 (Bloomberg) — Orders for U.S. durable goods rose more than forecast in December, suggesting business investment is holding up even as other parts of the economy weaken. The 5.2 percent increase was the biggest since July and follows a revised 0.5 percent gain in November that was greater than…

200801.28
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Contrarian Indicator

Many investors claim to be contrarians, buying the things nobody wants and selling the things that everyone wants, but few have the intestinal fortitude to actually do it. If one is to be true to that claim (and I think we should) then stocks are the thing that few want. The latest poll from the…

200801.28
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Stimulus Roundup

I haven’t written much about the stimulus plan weaving its way through Congress because I think it is mostly irrelevant. It isn’t big enough to have much impact either way. However, the economic logic of the plan is so flawed, it is too big a target to pass up. The plan currently before Congress is…

200801.24
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Problems with Capitalism?

Mark Gilbert has an article at Bloomberg in which he blames capitalism for the orgy of credit of the last decade: Jan. 24 (Bloomberg) — Any banker, trader or investor asked to invent the perfect market environment for creating wealth beyond the wildest dreams of avarice would come up with conditions akin to those of…

200801.24
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What Bad Jobs Market?

WASHINGTON — The number of U.S. workers filing new claims for unemployment benefits fell unexpectedly last week for a fourth-straight week, suggesting that a resilient labor market at the start of the year might keep the U.S. economy from sliding into recession. Initial claims for jobless benefits fell 1,000 to 301,000 after seasonal adjustments in…