Bing Blog

A happy day in American business!

Jamie Dimon

Fall is just busting out all over. You can hardly stand up safely the good news is just flying around so fast.

The Dow, for instance, is about to go over 10,000 again. Won't that be nice? Sure. It shows that no matter what's really going on underneath our economic system, investors want to make money and think they can still do so by buying and selling stocks and sometimes even bonds. Yay for those cockeyed optimists! They make the world go 'round!

Oil has hit a high for the year. You might think this is bad, and it is, if you have to buy gasoline every day. But it's good as a leading indicator of where we might be going. It means that really smart guys in Saudi Arabia and Texas have decided that the spending power of your average American citizen is improving, and so they can gouge us a little bit more every day until we stop buying so much gasoline again or cars that eat it up so fast.  They have confidence that we're all going to be able to suck it up and get to that magic $5 per gallon price they're definitely pumping for, so to speak.

And in perhaps the most stunning proof of economic life, Wall Street is set to pay out its biggest payday ever -- about $140 billion to the guys who broke the machine and then got the assignment to fix it. What's that?  Don't seem fair? Nonsense. JPMorgan profits are up sixfold! A whole bunch of others can't wait to pay off their TARP money! Reports give several reasons for the big payday -- melting credit markets, an improving stock market, lingering positive vibes from the bailouts... but we know it's not that, don't we? We know that Wall Street is paying itself $140 billion... because it can! That's why!

All hope for ridiculous future wealth for each of us resides with the rampant, uncontrolled, irrational exercise of organized greed that drives the markets. It looks like we're well on the way to total recovery in more ways than one, ladies and gentlemen.

23 Comments Add Comment

All that, and it's raining.

Sign me up Bing, sign me up FAST.

OK. I've had enough. Sign me out Bing. Sign me out NOW.

Ugly but indeed true. Greed has resurrected itself in the name of recovery but it is really a deception. US is still in debt up to our necks, and our Govt continues to print paper money all the while WallStreet is laughing all the way to it's mistress - the American banks and the US Treasury! Well, it'll be China that will be laughing at the WallStreet soon, oh yah that's the US. Put up WallStreet for a adoption. Let's ask China if they want the American greed along with the American debt. But China wants gold, not the almighty Dollar! Good day to you Bing!

The beast of the East, program trading, rides again!

I'd like to pre-emptively post the following quote from the movie Billy Madison in response to angry comments about "Wall Street greed" that are sure to be posted hereafter:

"[Commenter,] what you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul."

Wall Street firms are just like law firms, consulting firms and medical practices in one respect. When they make money, they have to give half of it to the employees or those employees walk out the door.

That's why they are all good places to work but, in my opinion, not good places to invest your money.

Bing, I feel better now.

Let's see. The market rats are still convinced that they know how to make the big score.
Oil companies are sure they can get our money.
Big business leaders are still raking in their millions.

When you think about it, the world is not coming to an end. It sounds like business as usual to me.

I am predicting Dow 50000. However, the catch is that a loaf of bread will cost $50. The administration's assault on the dollar covers the first two points. On the TARP point I can't let the government off the hook for the bailouts and for causing the issue (Fannie/Freddie) in the first place. Now those same companies are "Too Bigger to Fail?" Don't even pretend this is a Free Market. The government had made sure the fix is in.

Of course the Dow is up and the price of oil is up,,,,that's because the DOLLAR is DOWN,,,you don't have to be a economic major to figure that out,,,,Geeez when I hear/read about people yapping about the Dow climbing it makes me think I have landed on the Planet of the Apes,,,and like Taylor in that movie I want to kill them all and keep a few of the cute ones for pets.......

Bottomline,,,as the dollar falls,,things like the DOW, price of oil, value of property will climb.........the dollar is headed for Pesoville,,,,,,and here in Canada we are trying to keep our dollar under yours so we can sell you something,,,,nothing worse than having a neigbour who is broke and out of work,,,,drags us all down and depresses everybody...

This recession is not over we are on a long slide to the bottom...the average American has a lower Fico score than a bag lady,,the bag lady may be broke but at least she is not in debt up to her eyeballs...

I will start to believe things are getting better when I see Americans with jobs and money in their pockets looking to buy something made in Canada...

Wall Street pays itself because it can...not because it should...greed is good? Only for the greedy, I don't care what Gordon Gecko said...

RE "It means that really smart guys in Saudi Arabia and Texas have decided that the spending power of your average American citizen is improving"

Or it means that the economic situation will be turning up in the rest of the world, especially the developing world, increasing the demand for oil. Couple that with the facts that oil contracts are still generally denominated in dollars, and since we keep creating money out of thin air in the US, said dollars will be worth less tomorrow that they are worth today.

The result is that you'll see oil prices increasing, especially oil prices as measured in dollars.

Who tells elephants when or when not to dance?

Can you get what you need during their gavotte?

Yes, but you surely can be crushed if the dance spins in an unanticipated direction.

The Really Smart Guys really depend upon the rest of us to behave as really stupid guys....and we usually don't let them down. We've now taught them that there are no real consequences to poor RSG behavior....we'll bail them out....they're too important to fail! That'll teach'em.

Happy days are here again, the sky's not gray, it's blue least until the next bit of market hysteria pushes us in a depressing direction.

In this environment extravagant Wall Street bonuses are simply the tranference of public money to private hands. The threat of these employees walking if they don't get huge unearned bonuses? What conceivable loss could be associated with that?

Cry havoc, and let loose the dogs of's the time for creative destruction....not a return to the old ways, now doomed more than ever. We might as well do it now; the longer we wait, the more dire the inevitable consequences. Of course, with its casino mentality, thinking long has never been one of Wall Street's strongest suits.

Bing, you have a most interesting style. You draw in the traditionally business oriented blog cruisers (righteouly impressed by your impeccable credentials), who've been pretty much hammered by reality in the past 2 years, by providing intermittent tastes of the old business exuberance. At the same time you attract a community of participants who never totally bought in to the whole 'whatever business creates is fundamentally healthy'. This nexus, created by a man who once enjoyed 'Zap' comix, is not ever quite what either party of true believers expects. If the 'serious' business world was populated by your self-questioning like I don't think we'd be in the mess we're in today.

You're obviously as confused and conflicted as most human beings, which, compared to the obnoxious moral certainty of much of the business community, is refreshing. It's almost a suitable substitute for stugatz (which only work for awhile).

Bears, bulls and now elephants ? Beware the snake oil in the grass.

Wall Street symbols are the "Bull" and the "Bear".

If we could ask those who run with the "Bulls" and those who track "Bears" what their perceptions are of these animals, what do you think they would say?

Wall is not "Disney Land"! "Casinos" are for gambling. "Wall Street", we hope, represents America's determination to stay the financial leader it claims to be!

The idea that bonuses on the street were paid with public money is a dramatic, misleading simplification of a complex topic. Commenting on it is like arguing about baseball at the bar, unless you've got an analysis in your hands that shows funds invested by the government plus the value of guarantees extended by the government versus funds repaid by the banks plus dividends paid by the bank plus options repurchased from the government by the banks.

The banks received capital (some were forced to take it), the banks that are now paying big bonuses repaid that capital (with dividends and/or interest) and the banks repurchased options they gave the government as part of the deal (providing Uncle Sam with a nice return in certain cases). The problem is that newsreports added up the face value of guarantees (not just cash extended) to make a good story, and then never followed up with any stories saying that the guarantees expired and the cash was repaid by many recipients.

That said, the organizations that guarantee mortgages that are now controlled by the government are a different matter altogether. There, the cash costs continue to be clear (and big).

The bonuses are not as big as they used too. After all, the real Dollar bill has Hamilton's mugshot. And the way things are going, pretty soon the real dollar will have Benny Franklin on it.
Or even Mr. Smileyface.

Chicagosail, I agree that it's an abject over-simplification (the devil is always in the details), but the long term political implications of the public quite accurately perceiving Wall Street's shameless greed (given the incredibly poor decision making that pervaded both institutions requiring bailouts as well as those 'forced' to accept them) has significant long-term consequences.

Wall Steet is continuing to provide plenty of fodder for class hatred (and nobody is more class-conscious than Americans). This reminds me a bit of the early abuse of alleged WMD's in Iraq....given prior abuses, any administration is going to have a hell of a time ever generating public support for either bailouts or pre-emptive military strikes, regardless of their actual worthiness. It won't matter much how logical your arguments are; it signifies, to the general public (who are suffering mightily right now) that the Street is going back to its old habits like nothing ever happened. While a year may be a long time for the attention span impaired financial world, it will be 'yesterday' for the millions whose lives were ruined by its profligate behavior.

As you must know, drag NY Yankee statistics into certain Cubs bars, and they'll delight in placing them where the sun don't shine, regardless of their veracity. The voting public displays a similar disregard for details that require much cogitation! The public is starting to hate the corporate world at least as much (perhaps more) than it once hated government. Perception, for us unwashed masses, is reality.

About a week and a half ago I was looking at the fundamentals of Schlumberger (SLB) when it was about $57. The fundamentals looked good and it started moving while I was studying it. It hit 59, I waited for the pullback. At 60, 61, 62 I still waited for the pullback. Today the stock is almost $69 and I'm still waiting for the pullback.
Meanwhile I haave been studying the fundamentals of another stock. It looks pretty good and just jumped $1. To hell with waiting for the dip; I think I"ll pounce.


There's an old Wall Street saying "A rising tide lifts all boats."

Trouble is, so many of these boats were beached when the tide rolled out, so some of them are holed.

Which brings to mind another old Wall Street saying ... "Don't buy this cycle's Sunbeam."

Leeroy, that goes well with Warren Buffet's more recent statement that 'when the tide goes out, a lot of investors are left swimming naked'.