Fiscal Condition of Detroit (CRC), Paulson & Co. March Results, LA Bond Rating Cut, Thoughts On Maiden Lane III, Yahoo and Foursquare?

Interesting articles mostly from my Twitter feed (April 6 and 7, 2010).

Moody's cuts L.A.'s bond rating, warns of further downgrades - LA Times
Fiscal Condition of Detroit by Citizens Research Council of Michigan PDF (ht @pkedrosky)
Report: Detroit bankruptcy looms without drastic change - Detroit News
Paulson & Co. has a good March - MarketWatch (ht @morgan03)
S&P 500 and all ten sectors overbought - Bespoke Financial Group (ht DailyCrux)
Food Stamp Usage Hits Record 39 Million, 14th Monthly Increase - Mish (ht @mika2k1)
Peak Oil Theorist Now Thinks We're At Peak Demand, Oil Won't Break $100 - Business Insider
Unvarnished: New Social Network Could Ruin Your Reputation - PC World
Calacanis: Here's My 48-Point iPad Review - Business Insider
Thoughts on Maiden Lane III - Aleph Blog
U.S. Regional Mall Vacancies Climb to Decade High, Reis Says - Business Week
China Central Bank Said to Resume 3-Year Bill Sales - Bloomberg
Euro's reserve standing may be hit by Greek crisis - Reuters
Hyatt, Starwood eye Indian hotel market - Reuters
Yahoo Considers Buying Foursquare For ~$100 Million - Business Insider, VentureBeat
Macarthur rejects Peabody's $3.3 billion offer - Reuters
Thousands May Lose Rental Vouchers - NY Times (ht @future_shock)
Business software maker CA to cut 1,000 jobs, consolidate offices in restructuring effort - AP

Australia Raises Rate to 4.25%, Japan Stays Put At 0.1%, Statements and AUD, JPY Reaction

The Reserve Bank of Australia raised the cash rate by 25 basis points (0.25%) to 4.25%.   Here is a quote from the RBA statement by Governor Glenn Stevens 4/6/2010.
"Interest rates to most borrowers nonetheless have been somewhat lower than average. The Board judges that with growth likely to be around trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average. Today’s decision is a further step in that process." [read full statement at rba.gov.au]
The Bank of Japan left its overnight rate at 0.1%. Here are some quotes from the monetary policy statement.
"The Bank of Japan will encourage the uncollateralized overnight call rate to remain at around 0.1 percent."

"The Bank recognizes that it is a critical challenge for Japan's economy to overcome deflation and return to a sustainable growth path with price stability. To this end, the Bank will continue to consistently make contributions as central bank.    In the conduct of monetary policy, the Bank will aim to maintain the extremely accommodative financial environment." [read full statement at boj.or.jp PDF]
Interesting movement going on in AUD and JPY pairs from 12:30-3:30a.  You can see the various uptrends, downtrends, channels and triangles.  I want to see how oil and gold react as well.  Chart source:  FreeStockCharts.com.

Fed Minutes: Conditions Warrant Low Fed Funds Rate, Thomas Hoenig Votes Against Action (3/16/2010)

From the FOMC Minutes on 3/16/2010, the Fed Governors (minus Thomas Hoenig) see "exceptionally low levels of the federal funds rate for an extended period". I'm going to chart out gold and oil contracts next to see if they sense inflation or deflation (or fiat money-flation).
"Committee Policy Action

In their discussion of monetary policy for the period ahead, members agreed that it would be appropriate to maintain the target range of 0 to 1/4 percent for the federal funds rate and to complete the Committee's previously announced purchases of $1.25 trillion of agency MBS and about $175 billion of agency debt by the end of March. Nearly all members judged that it was appropriate to reiterate the expectation that economic conditions--including low levels of resource utilization, subdued inflation trends, and stable inflation expectations--were likely to warrant exceptionally low levels of the federal funds rate for an extended period, but one member believed that communicating such an expectation would create conditions that could lead to financial imbalances. A number of members noted that the Committee's expectation for policy was explicitly contingent on the evolution of the economy rather than on the passage of any fixed amount of calendar time. Consequently, such forward guidance would not limit the Committee's ability to commence monetary policy tightening promptly if evidence suggested that economic activity was accelerating markedly or underlying inflation was rising notably; conversely, the duration of the extended period prior to policy firming might last for quite some time and could even increase if the economic outlook worsened appreciably or if trend inflation appeared to be declining further. A few members also noted that at the current juncture the risks of an early start to policy tightening exceeded those associated with a later start, because the Committee could be flexible in adjusting the magnitude and pace of tightening in response to evolving economic circumstances; in contrast, its capacity for providing further stimulus through conventional monetary policy easing continued to be constrained by the effective lower bound on the federal funds rate." (source: federalreserve.gov)

"Voting against this action: Thomas M. Hoenig.

Peshawar Suicide Bomb, Bond Yields vs Market Correction, CBOE Put/Call Ratio, Office Vacancy Rate Up, Rents Less Bad (REIS)

Matt Tiabbi on banks toxic swap deals with Jefferson County, Alabama - Rolling Stone
Wilbur Ross with Virgin Money bid for Royal Bank of Scotland - Dealbook
Rick Bookstabber (SEC Senior Policy Adviser) on the Municipal Market - Rick Bookstaber Blog
China Construction Bank - China GDP Growth >9.5% would be problematic - FT
CBOE Monthly Equity Put to Call Ratio Nears All-Time Low -VIX and More
Could Rising Bond Yields Trigger An Equity Market Correction? - DKMatai
Deflation on the prowl as Bernanke shuts down his printing press - Telegraph
Office vacancy rate hits 16-year high - Reuters
Net Yen Shorts Surge Even As Euro Shorts Hit Fresh Record (CFTC) - Zero Hedge
Philadelphia Sells Debt as Muni Issuance Rises From Low of 2010 - Bloomberg
Related: Treasury Says Build America Bonds to Save Issuers $12.3 Billion - Bloomberg
Suicide bomber kills 38, wounds 100+ at NW Pakistan party rally in Peshawar - Telegraph
Triple blasts hit northwest Pakistan capital near U.S. consulate - CNN
Iraq bombers target embassies, killing at least 41 - LA Times

Watch oil.... Three Blasts Hit Saddar Area Peshawar - April 5, 2010 (Video)

Alan Greenspan Responds To Michael Burry's NYT Op-Ed, Peter Schiff Wants A Public Debate

Watch Alan Greenspan on ABC News (1st video) respond to Michael Burry's NYT Op-Ed (I Saw the Crisis Coming. Why Didn’t the Fed?). Michael Burry (a 1-man hedge fund) was first in on credit default swaps or insurance on sub-prime MBS (see the 60 Minutes story).

ALAN GREENSPAN, the former chairman of the Federal Reserve, proclaimed last month that no one could have predicted the housing bubble. “Everybody missed it,” he said, “academia, the Federal Reserve, all regulators.” But that is not how I remember it. [read at NYT]

30 Year Rally In Bonds Over? Bill Gross, Jim Grant Bets House Plant's Life, TYX (30-Year Treasury Yield Index) Chart

The 30-Year Bond yield ($TYX) could be reversing its 30 year secular downtrend.  Check out the chart.  It is interesting that Bill Gross, the biggest bond fund manager in the world at Pimco, prefers stocks over bonds (CNBC Video).  Gross also mentioned that the US, UK and Japan have the ability to default through money printing (devaluation/reflation) which "produces lower prices in bonds and negative returns" and "there's an estimated $40 trillion present value of entitlements in the United States, and the recent health care reform has added about $500 billion to that... a trend nonetheless that suggests it's going higher and higher and higher" (Bill Gross Bloomberg Radio interview).

It would be interesting to see a big re-balancing out of bonds and into stocks going forward.  It wouldn't surprise me to see bond volatility soon (watch the $MOVE Index).  Look at the 30 year chart of the CBOE 30-Year Treasury Yield Index (symbol: TYX at FreeStockCharts.com). Technically, watch the downtrend resistance level closely and a potential base of support.

30-Year Treasury Yield Since 1980

Also Jim Grant (Grant's Interest Rate Observer) would bet on his houseplant's life that US Treasury Yields are likely to rise and he takes on the US Dollar (video below courtesy of Bloomberg).  Grant downgraded US Treasuries (see video).  If interested Jim Grant debated with David Rosenberg on Treasury Yields (link). David Rosenberg thinks Treasury yields are headed lower, taking the other side of Gregor Macdonald, Jim Grant and Bill Gross.

Interviews w/ Chatroulette Founder Andrey Ternovskiy, 20 Million Unique Visitors Last Month!

Chatroulette clocks 20 million unique visitors a month according to Andrey Ternovskiy, the 17-year old founder.  It was created only 3 months ago!  Scobleizer on CinchCast interviewed him while waiting in line for the iPad.  Andrey is currently talking with VCs.  Gotta love the black swans in internet land.

Prechter: Between Now and May is 3rd Best Selling Opportunity Since 2000

Robert Prechter of Elliott Wave International thinks between now and May is the 3rd best selling opportunity to sell stocks over the past 10 years.  First in 2000, second in late 2007 and third "between now and a few weeks from now".  What do you think, will there be a third wave down from the 2007 peak (Wave C)?  Prechter thinks we're in for another deflationary episode, even after the trillion in stimulus.
"I think you can short just about everything, somewhere between now and May we're going to have a real rollover. Think about this progression. In October the bond market topped out. In November the Dollar bottomed. In December Gold and Silver and the utilities average, go figure that one, topped out. In January the CRB Index of commodities topped out. The US stock market is the last domino holding up. The best trade on the board, the one I've been bullish on for the past six months has been the US Dollar....."

For more watch the full interview below or find it through Bloomberg Video.
Deflation Wave vs. Printing Press

Chicago Commercial Real Estate Updates (April 3, 2010)

Articles from ChicagoRealEstateDaily.com.

3/31/2010:  Apple Store on North & Clybourn finds buyer [read]
3/31/2010:  Streeterville Red Roof Inn foreclosure suit (in $484 Million CMBS) [read]
3/29/2010:  Downtown office vacancy rate at 17.1% [read]
3/24/2010:  Mirvac must must refinance $123.5M in industrial loans [read]
3/22/2010:  Local office values to keep falling: survey [read]
3/19/2010:  Two steak houses coming to River North [read]
3/17/2010:  Allerton Hotel has $72 million in overdue loans [read]
3/15/2010:  Level of distressed local property jumps [read]
3/10/2010:  Bank of America forecloses on Silver Tower condo project [read]
3/8/2010:  Delinquent mortgages, construction loans rise in Chicago [read]

Nice Apple Ipad Review Video By PC Magazine

Check out this Apple Ipad review by Tim Gideon of Pcmag.com. This thing looks "off the hinges" imho. If interested Walt Mossberg of All Things Digital did a review a few days ago.

Jim Grant and David Rosenberg Debate Treasury Bond Yields (Video Link from 3/23/2010)

There was a "great debate" on March 23, 2010 between Jim Grant (Interest Rate Observer) and David Rosenberg (Gluskin Sheff) on if Treasuries are for losers. Jim Grant thinks "T-bonds are trash" and David Rosenberg is an "optimist on the T-bond because he's a pessimist on everything else", the FT moderator said.  Watch the full debate video at Jim Grant's website here. Hopefully it is still up.  Below I put up quotes from both sides that I found interesting. I also recommend you watch the Marc Faber, Nassim Taleb, Hugh Hendry debate on Treasuries.


Master of Business Card Throwing Video (Samsung Digital Camcorder H205 Launch)

Watch this guy throw a business card like a Hira-shuriken (Ninja throwing star). It was an ad for the new Samsung Digital Camcorder H205 and was filmed with it. He can pop a balloon on the ceiling of a gym with a business card.

Icahn Dumps Blockbuster In March 13D Filing, $BBI Financial Trends and Senior Subordinated Notes At 20.25

Remember Icahn was buying Blockbuster in 2005. I thought there was some kind of 2004 Kmart real estate play going on but turns out they mostly lease space.  Six months ago they announced they were closing 960 stores or 5.5 million square feet of space through 2010 (Costar). It looks like the no late fee and quasi-netflix plan didn't hit the ball out of the park.  Maybe flooding the market with $1 dollar kiosks will save the day or perhaps sell overseas assets. Numbers speak louder than words so check out Blockbuster financial trend analysis over 10 quarters (revenue growth %, revenue, net income, net margin % and shareholder's equity, interest coverage and Netflix revenue revenue trend) courtesy of Wikinvest.  I also provided charts of BBI stock, $300 million subordinated notes and Icahn's liquidations.  First watch this video.

Hydropower In Central Asia, Rogun Dam Project - Guest Post

This is a guest post by Philip H. de Leon of OilPrice.com.

The Hydropower Solution in Central Asia: yes but…

Surfing the wave of the hype for renewable energy such as hydropower and the invitation by the United States to many regional countries to get involved in the efforts to stabilize Afghanistan, Tajikistan is bringing back to the table the Rogun hydropower dam project. Rogun, conceived in Soviet days, was planned to generate 3,600 megawatts but the collapse of the Soviet Union halted the completion of this project. Now an independent country, Tajikistan, one of the poorest in the world, sees Rogun as a central element for its energy independence and a source of severely needed foreign currencies that could be earned through the export of electricity.

That effort comes at a time when clean energy is seen as the panacea to reduce the world’s dependency on polluting fossil energy, just like using olive oil was once seen as a solution to reduce cardio-vascular diseases. The push for clean energy is laudable but an expensive undertaking. Its implementation remains sketchy in poor countries where the lack of long-term political, economical and social visibility is a deterrent for foreign governments, companies, multilateral institutions and venture capitalists from making long-term costly investments. The “let’s all hold hands and save the environment” speech quickly dies when the practicality of such projects are plugged into the picture.

China PMI Reaches 57, Copper Demand To Slow, Mortgage Bond Yields Jump, March CMBS Delinquencies Up

Here are some interesting articles I just read. Get ready for some charts.

Jiangxi Copper Says Demand Growth to Slow on Power Spending Cut- Bloomberg
M&A Creeps Higher as Cross-Border, Hostile Deals Spur Recovery - Bloomberg
CMBS Delinquencies Up Sharply In March (Trepp/Real Point) - Zero Hedge
Will Government Debt Risks Derail The Expansion? (Bond/Swap Spreads) - JP Morgan
Fed Ends Its Purchasing of Mortgage Securities - New York Times
Mortgage-Bond Yield Spreads Jump as Fed Exits Market - Bloomberg
China's manufacturing activity picks up in March - MarketWatch
Overtaking the Dollar: The Three Phases of Yuan - Economic Forecasts and Opinions
ADP Says U.S. Companies Unexpectedly Cut Payrolls - Bloomberg
Fannie Mae Releases February 2010 Monthly Summary - PDF
General Growth files exit proposal, auction rules - Reuters
Starwood Said to Raise $2.8 Billion for Real Estate Funds - Bloomberg
How to Corner the Gold Market by Janet Tavakoli (3/30) - Huffington Post
Marijuana legalization will be on California ballot (3/25) - Reuters