Market Commentary


Helicopter Hank

Author: Bob Eisenbeis, Post Date: September 24, 2008

Little did Chairman Bernanke realize, I am sure, when he gave the speech before the National Economics Club in Nov. 2002 that earned him the nickname “Helicopter Ben,” that he would be relegated to back-seat navigator as Helicopter Hank shoveled taxpayer dollars to his former Wall Street friends.  Secretary Paulson has jumped from one “deal” […]

How Much Money Does the FDIC Really Have?

Author: Bob Eisenbeis, Post Date: September 22, 2008

As the result of the projected approximately $8 billion loss to the FDIC associated with the IndyMac failure and the widely publicized fact that the FDIC fund is now running low, concern has turned to its capacity to handle another large bank failure. An AP article suggested that the FDIC may be running out of […]

What a week! Not just last week but next week, too!

Author: David Kotok, Post Date: September 20, 2008

As the fate of Secretary Paulson’s plan is debated by Congress, we offer a few bullets for contemplation: If we believe what we are told, this extraordinary increase in the use of federal credit is needed to keep the United States from a modern version of the Great Depression.  There are many who don’t believe […]

AIG-LEH-Federal Reserve and Asymmetric Information. Special thanks to John Silvia, Dennis Gartman, George Akerlof and (we hope) Janet Yellen

Author: David Kotok, Post Date: September 16, 2008

September 16, 2008-a critical FOMC meeting day “How did we get into this big of a mess?” asked the journalist.   “Asymmetric information” we quickly answered.   Huh?  What’s that? My friend, John Silvia, is not only my fishing partner.  He also is one smart economist and an encyclopedia of research references.   “Look at George Akerlof’s “Lemons” […]

September 11th Reflection

Author: David Kotok, Post Date: September 11, 2008

There are two images that have not muted with time.   They are exactly 84 months old.  After seven years, these closed eyes still see the jumpers as vividly as I did that morning.  I counted five in the few minutes between the time I first turned around to look at the smoldering North Tower […]

Wishful Thinking

Author: Bob Eisenbeis, Post Date: September 10, 2008

Markets breathed a sigh of relief on Monday following the government bailout of the debt holders of Freddie Mac and Fannie Mae. But one wonders if that sigh is like that of the murderer who received life in prison rather than the death penalty. Once the immediate threat was removed then the reality of the […]

Trouble in the Eurozone

Author: Bill Witherell, Post Date: September 9, 2008

The 10th anniversary of the January 1, 1999 launching of the euro is approaching.  However, the celebrations are likely to be tempered by the sluggish performance of the 15 European economies that have adopted the euro as their common currency (Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, […]

Hank Punts on First Day of Pro Football Season

Author: Bob Eisenbeis, Post Date: September 8, 2008

Treasury and the Federal Housing Finance Agency (FHFA) placed Freddie and Fannie into conservatorship, replaced existing management, suspended dividend payments on outstanding equity and preferred stock, and promised injections of new capital in the form of senior preferred stock with warrants.  The actions are designed to maintain the flow of funds to housing and to […]

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  His email is  This past week, Financial Guaranty Insurance Corporation (FGIC) announced that Municipal Bond Insurance Corporation (MBIA) would reinsure $184 billion of […]

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