Blogroll Addition and Weekend Must Read
I find myself checking in with the site Zero Hedge around 3-4 times a day. The writer, alias Tyler Durden of "Fight Club", has key insight and what seems to me to be very insider type information. I recommend stopping by and taking a look.
Going further, Zero Hedge has a post up today titled "The Incredibly Shrinking Market Liquidity; Or the Upcoming Black Swan of Black Swans" which is the weekends must read piece.
I have to admit, the concepts detailed in the post are extremely over my head, and thus I will need to review the article in full over the weekend before I can have a write up. I would appreciate any readers leaving their impressions in the comments section.
Stock Offerings; Ready, Set, Go!
It has been the central theme here at Economic Disconnect (as well as other venues, I am not unique!) that the whole pumping up of the banking sector by government was a crass effort to get the banks stocks in some kind of shape to sell stock in offerings. One could argue that the only coordinated effort this government has been a success at has been the elevation of banks stocks. Cast your mind back to when Ben "Boom Boom" Bernanke said one sign of a recovery would be for private investment to buy into bank stocks. Well, some untold Billions of dollars and a fake stress test later, we have arrived!
One may argue that there is no substansive difference in buying Citi stock at sat $1 or $3, or buying Bank of America at $3 or $8 but that is another debate. I think that the earnings reports (not the pre announcements) in the next couple of weeks will have their work cut out for them: Every major bank needs to make it past the $10 mark. For some they are already there, others need serious pumping, I mean help.
Perhaps the best of the bunch, Goldman Sachs, an investment house based in Washington DC, is not waiting for the others and seems ready to go on a big offering. While dilution of shareholders IS a bad thing, in the current market getting diluted really means you are in demand, so the stock reacts very strongly to the upside. Bizarro world indeed. Some details:
Goldman mulls big equity offering: report
Investment bank may use the money to repay government investment
SAN FRANCISCO (MarketWatch) -- Goldman Sachs Group is considering a multibillion-dollar equity offering as the investment bank tries to repay a $10 billion investment it got from the U.S. government in the midst of the financial crisis last year, according to a Wall Street Journal report Friday.
The share sale, which could be announced as early as next week, comes as the firm prepares to report "solid" first-quarter earnings Tuesday. Goldman executives haven't determined the exact size of the offering, but it is expected to carry a value of at least several billion dollars, the newspaper reported, citing unidentified people it called familiar with the matter.
If a Goldman offering were to succeed, that could suggest private investors are increasingly willing to invest equity capital in the U.S. banking sector. That appetite has been sorely lacking in the past year, as the financial crisis pushed several firms into bankruptcy or the arms of the government.
The main reasoning for repaying the TARP has been to get out of government manipulation imposed for taking the money. As GS runs the Treasury anyway, I fail to see the point in this!
A Reason to Save General Motors
Economic Disconnect is of course opposed to any and all bailouts of any kind anywhere on earth, or in our local group of galaxies. Still, if I had to find a reason to save General Motors, I would have to submit the 2010 Chevy Camaro:
That thing is just sexy!
You can read a nice take on the car, that made me want to run out and buy one, from Autoblog called "One Night Stand: Taking Home the 2010 Chevy Camaro SS". What a machine.
Friday Night Entertainment
I know, a little light on material this evening. Still, we must have some fun to start the weekend off right.
I am a huge boxing fan. I have no idea why, but I was thinking about Thomas "The Hitman" Hearns today. I found clip of when Hearns won his first world title, the WBA Welterweight Championship back in 1980. Hearns stops defending champ Pipino Cuevas in the second round with two of the biggest right hands you will ever see. Right at the 2:30 mark of the video the bombs are let loose:
A little music to start the weekend.
Loyal reader Watchtower expressed a desire to hear some classic Journey with Steve Perry, not that imposter they have in the band now. Who am I to say no to such a request? Here is "Only the Young" Please note this song was featured in the awesome film "Vision Quest":
One of my favorite albums was "The Sound of White Noise" by Anthrax. One of the best songs on it was "Only". Speed changes, great vocals, and a thunder baseline all rock:
While not a real song, the song by Adam Sandler in the film "The Wedding Singer" about his breakup with his fiance is totally hilarious! WARNING: some bad language, skip if easily offended!:
One of my favorites is John Denver. Truly a tragic loss. Any song is great, but take a listen to "Back Home Again":
Last call! Close the show with The Ramones and "I Wanna be Sedated":
Have a good night.