Market Commentary

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GSE and Moral Hazard

Author: David Kotok, Post Date: September 6, 2008

GSE stands for Government Sponsored Enterprises and is now the common reference for the federal government’s housing mortgage lenders Fannie Mae and Freddie Mac (FF).  Other GSEs like the Federal Farm Credit Banks or the Federal Home Loan Banks are not public shareholder-owned and have not encountered the problems of FF. “Moral hazard” is a […]

One Small Step for a Beaten-Up Insurer and a Battered Muni Market

Author: John Mousseau, Post Date: September 2, 2008

John Mousseau is a portfolio manager and heads the tax-free Muni section of Cumberland.  He is a member of the Management Committee of Cumberland Advisors.  His bio is found at www.cumber.com.  His email is John.Mousseau@cumber.com.  This past week, Financial Guaranty Insurance Corporation (FGIC) announced that Municipal Bond Insurance Corporation (MBIA) would reinsure $184 billion of […]

Banks, Cash & Labor Day

Author: David Kotok, Post Date: September 1, 2008

Labor Day weekend started with another bank failure; this time in Georgia.  That is number 10 for the year.  Another few hundred million is lost by the Federal Deposit Insurance Corporation (FDIC) fund as a billion-dollar, five-branch bank disappears.  The weekend also saw a few of us back at Leen’s Lodge in Maine, talking informally […]

Hans Christian Anderson and Vladimir Putin

Author: David Kotok, Post Date: August 19, 2008

Tivoli Gardens’ pleasantries are brightened by the warming sunshine in this western Baltic nation.  It finally stopped raining.  Three flavors of herring and a cold beer will mask geo-political and financial concerns if you allow it to happen.  Five and a half million Danish citizens live on their four hundred island nation, enjoy the fruits […]

Primary Dealers and Their Loss Experience

Author: Bob Eisenbeis, Post Date: August 18, 2008

Bianco Research periodically has published a compilation of the losses that have accumulated in major banks and investment banks as a result of the so-called subprime crisis. (1) When Chairman Bernanke hinted in his July 12, 2007 Congressional testimony that losses might reach $100 billion, this seemed alarmingly large.  But the Bianco data now show that […]

Joseph Stalin plus 75 (years) = Vladimir Putin

Author: David Kotok, Post Date: August 15, 2008

Seventy-five years ago another Soviet thug by the name of Stalin chased a food supply and starved the Ukraine. He killed between 7 and 10 million people and thought nothing of it. In an ironic quirk of history, Stalin was born in Gori, Georgia. We now say “Ukraine” and not “the” Ukraine because Ukraine is […]

Russia Enters Georgia – Cumberland Exits Russian Stocks

Author: Bill Witherell, Post Date: August 13, 2008

The Russian economy, fueled by energy and commodity exports, registered impressive growth of 8.1% in 2007 and is on its way to over 7% this year and probably in 2009 as well.  The Russian stock market as measured by the DAX Global Russia Index (DXRPUS) advanced by 40% in 2007, and as recently as June […]

Auction Rate Securities (ARS) and a new Fed ‘Maiden Lane 2’. Also, Cleveland: ‘hold your water.’ And more on fishing weekend in Maine

Author: David Kotok, Post Date: August 10, 2008

The Auction Rate Securities (ARS) market saw big news this week as Merrill Lynch, UBS, and Citigroup settled about $30 billion in claims and agreed to pay investors by buying back their frozen paper over the next several months.  Each settlement has its own time period and terms. The theme is nearly the same in […]

Fishing and Forecasting

Author: David Kotok, Post Date: August 6, 2008

Intermittent rain didn’t dampen the spirits of the attendees at the annual fishing, economic, and financial retreat.  This year’s was the largest gathering ever. CNBC’s Steve Liesman added to the enthusiasm with the live coverage that started on Squawk Box Friday morning and carried on to other shows during the day.  Steve and his producer, […]

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