Ms. Park was a co-host with Michael Kane on Business News Network Wednesday December 23 from 8 to 9am. Here is a clip.   more »

“The thing about the Masters of the Universe syndrome is that it plays on ‘What I’m doing is so obscure that you’ll never get it. You’re too dumb.’ This really became relevant when we hit the financial crisis a year ago.”--Elizabeth Warren

Warren (60) is Chairwoman of the Congressional Oversight Panel monitoring the Troubled Assets Relief Program, a preeminent bankruptcy scholar, author and tenured professor of law at Harvard University. As Chairwoman overseeing TARP, she keeps an eye on how the nation’s banks have spent the taxpayer money shovelled into them in the fall of 2008, as well as the destination of the rest of the $700 billion allocated by the government. For all this and more, Warren has now earned the title Bostonian of the Year. Read more on her interesting background and history in this story.


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This interview gives insight on the proposed amendment that would stop taxpayer-backed commercial banks from trading risky assets. Sen. John McCain (R-AZ) explains his proposal on Kudlow.



Total firewall is the only way to control the slippery slop between the lending side and the risk-taking side. It is the right thing to restore. It is time for bankers to give up their magician mantle and go back to banking and for tax payers to get out of the risk subsidizing business.

Interesting that McCain says he is leaning away from endorsing Bernanke's re-appointment...could real change be actually coming?   more »

Last Thursday Rick Sharga of Realty Trac appeared on Bloomberg and warned that the recent spate of less-bad housing data is a "false-positive trend" not likely to continue in 2010:

“I think that first quarter of next year we'll see a new wave of foreclosure activity. Delinquencies have been going up – we have five and a half million homeowners who are late on their mortgage payments right now, and many of those, under normal circumstances, would have already been in foreclosure. But the Treasury is asking lenders to make doubly sure that anybody who qualifies for the HAMP program or other modification program gets in those programs. We think we'll probably hit the historic peak next year, in 2010, as a lot of the Option-ARM loans reset, as unemployment related foreclosures peak, before numbers finally start to settle down a little bit in 2011. We're expecting the first quarter to be pretty ugly.”

Watch his interview here.   more »

Obama was on 60 Minutes last night talking about the problems he is having with "Fat Cat bankers":


Watch CBS News Videos Online

Interesting...could his administration be actually starting to get serious about reforms and regulation? I would love to be a fly on the wall in his meetings today with the Too-Big-To-Fail crew.   more »

This week Obama's acceptance of the Nobel Peace Prize came as an ironic reminder of the ethics and change so many had hoped he would bring to American politics. At this point one year in, I believe that he is a massive disappointment. The trouble is Obama set himself the high bar; he promised morality, fairness and an ousting of the status quo. A breach of this trust hits people harder than regular disappointments. His elegant words inspired the hope of the masses. So many believed.

This week a Rolling Stone article examines how Obama has sold out the American trust to Wall Street. In “Obama’s Big Sellout”, Matt Taibbi argues that President Obama has packed his economic team with Wall Street insiders intent on turning the bailout into an all-out giveaway. Rather than keeping his progressive campaign advisers on board, Taibbi explains how Obama gave key economic positions in the White House to the very people who caused the economic crisis in the first place. Taibbi also points to the ties Obama’s appointees have to one man in particular: Bob Rubin, the former Goldman Sachs co-chairman who served as Treasury secretary under Bill Clinton.

The full story is available online here. — Rolling Stone

Here is also a video clip of Taibbi giving a breakdown of his argument in which he identifies the major players on Obama’s economic team, untangles the web that ties them to Rubin and points to how these relationships play into the financial “reforms” the Democrats are currently pushing through Congress.

But hey, it is Christmas. Maybe there is still hope? What do you think: will Obama be able to do an about face, and remedy his breach of trust in 2010? Is it too late?   more »

Great piece from the WSJ's Liam Denning today: Gold Trades on Luster and Bluster reminding gold bugs and the rest of the world that unlike food, water or oil, gold is not consumed, it is mostly just hoarded. Lately gold has been acting an awful lot like other risky assets riding on zero rates and speculative in-flows. Meanwhile gold parties today are about as popular as Tupperware parties in the 70's. HMMMMM.....What's that rule about investing in unpopular themes and avoiding the madness of crowds?

"Above all, phrases like peak gold should trip alarms. Investors buying into similar arguments at the height of the energy bull markets suffered big losses as recession hit and supplies turned out to be ample. And those commodities really get used up, rather than merely stored in the hope someone else pays more for them later.

Another bull argument, recalling the days of the gold standard, observes that the money supply has expanded far faster than gold reserves. Yet even if proponents could agree on the metrics to be used—narrow or broad money? Official reserves? global stocks?—the argument hasn't held over time. Gold was range-bound after the early 1980s bubble until the middle of this decade, even as U.S. money supply expanded, and has displayed little correlation with movements in broad money-supply measures. Lately, it has even disconnected from measures of observed and anticipated inflation.

The gold price's reaction to recent events like the unexpected drop in the U.S. unemployment rate and worries about Dubai and Greece is more telling. Gold has dropped at even the slightest foreshadowing of monetary-policy tightening or signs the financial system faces another bout of fragility. Its correlation with the S&P 500 has leapt from about zero in May to more than 40%. For all the talk of fundamentals and being a safe haven, gold is behaving more like the risk assets against which it is supposed to offer diversification."

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Upset you missed out on this year's mega stock market rally? Don't be.

John Mauldin of Millennium Wave Investments says long-term investors should ignore the temptation to get a piece of the action. In his view, there's only one metric to pay attention to: Valuations. And, for now, stocks are at "nosebleed" valuations.

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The past couple of days the US $ is bouncing, up more than 1% so far. At 75.85 this afternoon, if the US dollar index can close through 76.10 over the next little while that would be significant.

Meanwhile the risk trade is taking a much deserved kick in the teeth:

Dec. 4 (Bloomberg) -- "The biggest rally in the U.S. dollar since June snuffed out an advance in commodities and equities as an unexpected drop in the unemployment rate triggered bets the Federal Reserve will lift borrowing costs. Gold slid the most in a year and two-year Treasuries tumbled." See: Dollar rally erases gains in commodities, US stocks after jobs.

The main risk building for investors the past few months has been precisely this: emerging markets, commodities, gold, equities, high-yield debt, have all rallied violently courtesy of the US carry trade extenuating the falling Greenback.

Whether its bad news of geo-political concerns driving a flight to safety, or good news in a better-than-expected US jobs report this morning, both extremes threaten to buoy up the much maligned dollar just as the masses are so confident of its demise.

If we are started into a true economic recovery then we should expect government intervention to pull back and interest rates to begin their long trend up. This is likely to support the U dollar. If the recovery is not taking hold and 2010 continues to disappoint recent hopes, this too is likely to support the dollar. Interesting times…   more »

Ms. Park was a speaker at the MoneyShow in Toronto on October 21 where she sat down for a three part interview with Karen Gibbs. The video clips are now available here:

Part 1: Stock Market not like the 80's and 90's

Part 2: Canada dependent on the US

Part 3: Time to be safe   more »

**Some have been talking about the Euro becoming the next benchmark currency. Not soon-- would be my take.

"The Dubai shock may be receding, but have the lessons been absorbed? The world is still awash with debt assumed to carry a guarantee from a rich neighbour. Take the euro zone: like the United Arab Emirates, it is a loose federation with a single central bank but only limited central political power to enforce fiscal discipline on profligate members. Excessive euro-zone deficits now present one of the biggest risks to the global recovery.

Several European countries – Greece, Italy and Belgium – already have debts of more than 100% of gross domestic product. Others will join them in 2010. Across the euro zone, the deficit in 2010 is likely to be more than 7% of GDP. The European Commission is demanding member states bring deficits back below the European Union's limit of 3% by 2013."

See WSJ: Europe's Threat to Global Recovery....   more »

What I find surprising about the big shift in market sentiment the past few months is not that some players have resumed their Reckless Myopia-- humans always come back to speculative madness eventually. But the surprising part this time is that it has resumed so quickly. Usually it takes at least a few years for market mania to resume; this time crazy has gone from zero to 60 in a few short months.

Another thing I have always found fascinating about market history is how universal human behaviour is through distant cycles and distant lands.

This next series of interviews with independent Chinese Economist Andy Xie draws these remarkable parallels between China and America and our present credit bust cycle and the Asian credit bust of 1998 as well as the Japanese banking crisis of the 90's and thereafter.

What I really like about Andy Xie is that he is a pragmatist. He has lived in America and is on the ground in China. He knows both countries and cultures well. He makes the real life, big picture points to help us understand the incredible economic links between China, America, our consumption habits and reckless behaviours.

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