Friday, April 10, 2009

New Citi Slogans

We get beaten over the head with memes all the time, so here are a few for Citibank

Monday, March 23, 2009

What Does $1 Trillion Buy?

There have been numerous explainations and visual aides describing a trillion dollars, so I thought I'd join in too.

I looked into how much a skyscraper costs and I found this 61-storey building ready to go up in Louisville for $380 million.

If we just call it a cool $500 million, then $1 trillion dollars will buy you 2000 skyscrapers, or about what you see in the picture below. I think it's a picture of Portland, OR. Either that or Hong Kong. Click on it to get the full image.

Saturday, February 14, 2009

You'll Never See This in the Media

Let's take an historical look down memory lane and take the pulse of the ever exciting Initial Public Offerings of yore and now.

In the December quarter of 2004, there were 53 IPO's.

In the December quarter of 2005, there were 39 IPO's.

In the December quarter of 2006, there were 73 IPO's.

In the December quarter of 2007, there were 71 IPO's.

In the December quarter of 2008, there was 1 IPO.

In January of 2009, there were 0 IPO's.

So far in February of 2009, there has been 1 IPO.

It's as if we fell off a cliff and hit a brick wall.

Saturday, February 7, 2009

A Fed Paradox?

A couple of months ago, the Federal Reserve pre-announced possible intent to purchase long-dated US treasuries. I chalked this up as a follow-through to their zero-interest-rate policy because it was accompanied with a verbal commitment to maintain the ZIRP policy for a considerable time into the future. The hoped-for effect was to hammer down the far end of the treasury yield curve.

I had chalked it up to a clever statement designed to get others to do the deed, because the mere announcement sent investors scrambling to buy treasuries ahead of the Fed, looking to capitalize on on the demand for treasuries later when the Fed began buying. This had the perverse effect of making the Fed purchases unnecessary, since long-dated treasuries were now being purchased in large quantities.

Then the Fed reiterated the commitment, but think about this possibility: the sheer amount of debt the Treasury must issue is going to send yields up. All these investors who wanted to jump the Fed's purchase program might start dumping their treasuries, causing yields to go up further as the Treasury now has to compete with the glut coming to market.

So now we would have treasuries tanking, and the Fed would do what? Would it start buying en-mass? Would this get others buying treasuries? I think not! I think the Fed could find itself buying more and more treasuries only to let others bail on them while the bailing is marginally good.

The Treasury would be financing US debt by greatly expanding the Fed balance sheet. Who's going to jump on that train? I would think this would lower the demand for treasuries because it is inflationary.

Is there a scenario where we don't end in severe to hyper-inflation? What would be the effect of just defaulting right now?

Tuesday, January 13, 2009

And then there is this little man...

The look he gives when he misses that high note at the end is priceless.