But for the many reasons we’ve described in these reckonings, we doubt that we’ve seen the last of this bear market.

“Either cuts in spending or increases in taxes will be necessary to stabilize the fiscal situation,” said Ben Bernanke in response to a question posed by a Member of Congress. Then, he added…

“The Federal Reserve will not monetize the debt.”

That last sentence has a ring to it. It reminds us of Richard Nixon’s “I am not a crook.” Surely, it is destined to make its way into the history books, alongside Bill Clinton’s “I did not have sex with that woman” and the builder of the Titanic’s “even God himself couldn’t sink this ship.”

Monetizing the debt is precisely what the Fed will do. But it will not do so precisely. Instead, it will act clumsily… reluctantly… incompetently… accidentally… and finally, catastrophically.

That’s our prediction, here at the Daily

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BGI taps longtime Smith Barney executive Longley for key role in expanding asset manager’s distribution reach. 

 

As bloggers across the Internet were talking up a potential sale of exchange-traded funds leader Barclays Global Investors, some real news was taking place at the San Francisco-based asset management giant. 

The $1.5 trillion asset manager said on Thursday it had hired longtime Citi/Smith Barney executive John Longley as its new head of national accounts in the U.S.

In that role,

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Mike Larson is off today, so he asked me to fill in for him. And one thing that I think Mike and I both agree on is that ETFs, or exchange traded funds, are one of the best things that ever happened for small investors.

You may already know about the advantages they have over conventional mutual funds … liquidity, low costs, transparency, diversification, and more.

What you may not know is that there is a new investment that looks a lot like an ETF but is actually a whole different species. I’m talking about ETNs: exchange traded notes.

On the surface, ETNs share many of the characteristics of ETFs. You can buy and sell them on the stock exchange throughout the day, their performance closely mirrors an index, and they give you access …

Yen continues to kick!  Jim Rogers disses sterling…  China’s 4th QTR GDP…  Singapore announces stimulus… And Now… Today’s Pfennig!

A nasty day in the currencies yesterday, except Japan of course. The Dow jumped 290 points yesterday, maybe an Obama bounce? You all know that I subscribe to an Obama bounce for stocks and the dollar in the first part of this year… But given what I know about, and what you now know about, after I drew it all out yesterday, the additions to the deficit that Obama will make, the focus on the fundamentals should return by late spring, early summer… That’s my story and I’m stickin’ to it!

Well… As I

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China will not save Western banks

The chairman of China’s largest sovereign wealth fund has said he “does not have the courage” to plough money into Wall Street and the City.

By Malcolm Moore in Shanghai Last Updated: 5:20PM GMT 04 Dec 2008

Lou Jiwei, the chairman and chief executive of the China Investment Corporation, a $200bn (£135bn) fund, said China had no intention of “saving” the West from the financial crisis.

“Right now we do not have the courage to invest in financial institutions because we do not know what problems they may have,” said Mr Lou, at the Clinton Global Initiative conference in Hong Kong.

China’s disastrous investments in Blackstone, the private equity fund, Morgan Stanley, the investment bank, and Barclays Bank appear to have dulled the appetite for further gambles.

Mr Lou sank $3bn into Blackstone at $29.605 a share in June 2007. The share price of the fund closed yesterday at $6.04,

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The puke down continued yesterday. The sold them with both hands, well they have been selling them with both hands for ages now haven't they.I read one quick snippet about JP Morgan and Bank America going to mid 90s levels. I find the selling in the financials to be fascinating but also scary (not to imply emotion but for the sake of word economy). BAC closed at $13.06! What would Krazy Eyez Killah from Curb say about that one? I sold BAC recently in the $28s, about ten minutes later they banned short selling and the stock went to about $37. So since then it has fallen by almost 2/3? Another name I sold a long time ago and still follow is Barclays Bank. I sold it after it had fallen a lot and it is down 80% since then.One thing that has to happen ...