Kentucky Derby Picks 2009

Thursday, April 30, 2009

As I have previously written, the Kentucky Derby is a notoriously difficult race to handicap. It is a 20 horse scrum that depends on gate position, start, luck, and finishing talent. One thing to avoid: speedsters. Much more often than not, the horse that takes the early lead can’t sustain it. Here are my picks:

Take the trifecta box on:

1) Friesan Fire
2) Papa Clem
3) Dunkirk

For your longshot, take Summer Bird to win.

And for what it’s worth, I Want Revenge and Pioneer of the Nile could easily be in the money.

Here’s the Daily Racing Form’s Past Performances sheet.


Futures Rises on Nuclear Destruction of U.S. Cities

Thursday, April 30, 2009

Stock futures rose overnight as five major American cities were destroyed by nuclear weapons. It’s not so much that the economic news is good, it’s that traders see glimmers of hope in the bad news.

“The worst is over,” said Alex Nussbaum, of ETFO Capital Management. “We’ve had five major cities wiped out so it seems likely that their will be fewer destroyed in the future. Plus, New York City was bypassed, and that’s a big greenshoot.”

Indeed, investors seemed to find greenshoots everywhere in the news. Fallout readings for regions surrounding the bombed cities indicate levels far below physicists estimates.

“The bull is back,” said Tad Tucker-Jones, of Knightbridge Securities. “We’ve seen a bottom here and Dow 15,000 is on the horizon.”

No time to continue this…but you get the point.

GDP Down 6.1% in Q1

Wednesday, April 29, 2009

Only 6.1%! Market soars on the news. Look at those green shoots, everywhere!

Apocalypse NYC

Tuesday, April 28, 2009

Sorry, I can’t help a sensationalistic headline…

At any rate, read this, courtesy of Reuters (h/t Clusterstock):

New York City’s net personal income tax revenues plunged 51 percent in the first 24 days of April, compared with the same period a year ago, the city comptroller’s office said on Monday.

Yes, 51%.

Though the city’s real estate market fended off much of the pain seen around the nation until late last year, the depth of its current fall was underscored by the state’s mass transit agency.

“We’re seeing it declining even faster and deeper than in the post-1987 deflating of the real estate bubble,” said Gary Dellaverson, chief financial officer for the Metropolitan Transportation Authority, at a finance committee meeeting.

Uh huh.

Democratic Governor David Paterson, speaking to reporters, estimated the state’s deficit next year at $2.7 billion.

The state will update its financial plan later this week, he said. New York City also should issue new estimates soon.

While there was a “significant” drop in state corporate tax revenues in March, followed by a decline in personal income tax collections in April, Paterson added that there were signs the economy might stabilize sooner than anticipated.

Well, this is true if New York State is going to receive a huge check from the Feds. If not, Paterson is smoking crack. Throughout this meltdown local, state, and the Federal government have drastically underestimated their budgetary shortfalls. New York State’s deficit next year will be an order of magnitude higher than $2.7 billion.

And if you think this is bad, wait until you see what happens on a federal level.

Big Surprise: Citi and BoA Fail Stress Test

Tuesday, April 28, 2009

From the Wall Street Journal.

Ken Lewis on life support. Pandit, too (though it really wasn’t his fault).

The real problem here is one, to repeat an oft used explanation, of confidence. No one believes the banks or the government. Any reasonably informed person sees what Geithner and Bernanke are doing and breaks out in a cold sweat. Borrowing and printing money to reinflate a bubble (our economy) is either genius or suicide. To me, it is most assuredly the latter.

We are in for years of topsy-turvy hard times with the outcome far from assured. Forget ripping the band-aid off quickly, they’re wrapping it up in bandages made of dollars. It’s going to hurt a lot more when it finally comes off.

Obama Wants 3% of GDP to Science

Monday, April 27, 2009

Absolutely love this.

Absolutely right.

America’s Banking Oligarchy

Friday, April 24, 2009

This is a must read. IMF Chief Economist (2007-2008) Simon Johnson in The Atlantic:

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again). In each of those cases, global investors, afraid that the country or its financial sector wouldn’t be able to pay off mountainous debt, suddenly stopped lending. And in each case, that fear became self-fulfilling, as banks that couldn’t roll over their debt did, in fact, become unable to pay. This is precisely what drove Lehman Brothers into bankruptcy on September 15, causing all sources of funding to the U.S. financial sector to dry up overnight. Just as in emerging-market crises, the weakness in the banking system has quickly rippled out into the rest of the economy, causing a severe economic contraction and hardship for millions of people.

But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.