Dr. John Rutledge Blog

Twitter Posts on 2008-12-08

December 08, 2008 By: John Rutledge Category: all

2,267 companies around the globe are selling for less than the value of their net cash cash holdings. #
Rep. William Jefferson (D-La.), 9-term lawmaker facing 16 corruption charges lost reelection in a shocking upset over the weekend. Shocking? #
Headline: Bull Market In Politics. No kidding! This is not good for markets. #
Lawmakers Prepare $15B Auto Rescue Deal. This may not be so bad because it uses money already appropriated earlier this year. No new money. #
Very interesting piece from my friend Scott Grannis: http://tinyurl.com/64hran #
Hedge Funds Chalk up More Losses, Big Names Suffer. Big issue is funds that are closing their doors to redemptions. #
Brazil Q3 GDP growth likely 6%. A little good news is always welcome. #
output per hour grew at 1.3% (annual rate) from Q2 and Q3 2008, which is similar to the overall pace for 2007. #
People have pulled $45 billion out of banks and money funds to hold in the form of currency–$100 bills in a safe or coffee can–since Aug. #
Fed did not increase bank reserves at all in the year before mid-Sept. Since September (10 weeks) reserves are up 7x, from $100B to $700B. #
German, French stock markets +6% today. Hong Long +8.7%! #
Whoops. Correction. Hong Kong, not Hong Long (although being Long in HK would have been a good idea today.) #
Cisco, Dell Risk Losing Sales as Bankruptcies Flood Technology Gray Market. this is a big deal-companies competing with their own used prod. #
Citadel to Shut Tokyo Office, Cut Asian Investments, Eliminate 50% of Jobs. More hedge fund shrink-matches what I learned in Tokyo 2 wks ago #
800 companies in the S&P 1500 have pensions $280 billion under-funded. They started the year with a $60B surplus. #
ECB Weighs Impact of Rate Cuts, January Reduction Not Certain. IDIOTS! #
India stimulus plan $4B–that’s so cute! #
Barn’s burnt down
Now I can see the moon. #
10% of last year’s stimulus checks were used to buy iPods. Will be true of next stimulus package too. Hang onto Apple shares. #
average hedge fund assets-$300 million #
bama said on Dec. 6 he will boost investment in roads, bridges and public buildings to create and preserve 2.5 million jobs. (yes-I own CAT) #
GCC countries (Gulf oil producers) have amassed $1.6 trillion in non-oil wealth past 6 years. Will earn $4.7T by 2020 at $45/barrel. #
Saudi $500B infrastructure projects next 5 years. #
saw a NY commercial real estate deal today at $330/foot down from $1000 18 months ago, replacement cost higher than that and 8% cash yield. #
Dubai real estate collapse and Abu Dhabi rescue causing widespread losses for Gulf region investors. #
Commercial property sales down 77% past year in US, 50% W. Eur., 55% UK, 55% Canada. #
$80B commercial mortgage backed securities due next year. No visible supply. #
Merrill Lynch C.E.O. Thain is angling for a bonus of $10 million. If I were on the board he wold be lucky to walk away with his hat. #
Finland Q3 GDP +0.1%. #

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Twitter Posts on 2008-12-07

December 07, 2008 By: John Rutledge Category: all

Among global commercial property markets UK is hit hardest do far-down 30% with another 10% to go. US market down 15-20%, another 20% to go. #
Saw unlevered return on first mortgage pool today with 15% current return, 30% discount and full claim on assets. #
Obama suggests some auto execs should lose jobs. (And labor union leaders too, Mr. Obama?) #

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Twitter Posts on 2008-12-06

December 06, 2008 By: John Rutledge Category: all

Long day of meetings with real estate & private equity guys. Tsunami of assets for sale; time for focus/discipline. VERY tired, sleep time. #

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Twitter Posts on 2008-12-05

December 05, 2008 By: John Rutledge Category: all

Lovely flight NY to London. Ran into old friend from Kuwait Fund-had a great visit. May go there in January to talk portfolio strategy. #
Obama Spent Four Times as Much as McCain in Last Months of 2008 Campaign. Why isn’t anyone whining about BO “buying” the election? #
Deere finance arms accepts FDIC debt guarantee. Hmmm, the FDIC is also the tractor and combine lender of last resort? This stuff has to end! #
Shoppers bought online Monday but spent less. People shopping online to avoid sales tax and save gas. Xmas presents will be small this year. #
FDIC’s Bair warns investors fighting loan changes. Warns?
Who the hell does she think she is, Don Corleoni? #
Kashkari: Rescue fund needs flexibility, firepower. Send this guy back to NY. Having a deal guy run Treasury has been a total disaster. #
Wyoming’s public pension fund down 25 percent. They’re ALL down friends. Down 25% makes them a top quartile performer! #
Fortress told investors they can’t get their money back for a while, latest hedge fund to suspend redemptions as investors try to exit. #
In recent private meetings in Japan, China and with large US pension funds I have seen investors taking their hedge fund allocation to ZERO. #
That means they are lining up to redeem. That’s why every time the market goes up 1000 there is a gush of selling at 3PM. Will continue. #
“I am the ideal, the best and the most qualified person.” Jesse Jackson on why Gov. Blagojevich should appoint him to IL SEN. #
France Introduces a $33 Billion Economic Stimulus Plan. Q3/GDP growth was positive but, what the hey, everybody’s doing it! #
EU GDP Falls 0.2% in Q3. Japan GDP decreased by 0.1% in Q3. #
Sweden Cuts Key Rate to 2%.
Swiss GDP grew GDP 1.6% in Q3. Not so bad but lower than 2.6% in Q2. #
Indonesia GDP grew 6.1% rate in Q3. Still pretty good but very sensitive to falling commodity prices. #
Romania’s economy grows by 9.1% in Q3. (Both workers were very pleased at the result.) #
Australia GDP growth 0.1% in Q3-shrinking raw materials prices as China slows. Good way for US investors to place bets on China. #
D.E. Shaw & Co. and Farallon Capital Management LLC have limited client withdrawals from certain of their funds–Bloomberg. More redemptions #
3Q auto-loan delinquency rate jumps 15.9 percent. Going to get a lot worse. Loan quality here makes subprime mortgages look like Fort Knox. #
Best info source on auto market-used car prices. http://tinyurl.com/5jpq48 #
Keynes. “Economists set themselves too easy a task if all they say is once the storm is passed the sea will be calm again.” Amen brother #
Chicago approves $1.1 billion parking-meter lease. Interesting. They sole the future income stream or more accurately tax farming stream #
Stand by for a ram today. Employment number out. Street expects (-300K)’ish, I think it will be worse. #
Sweden unveils $2.8B 3-year economic stimulus plan. Awww, $2.8 billion, that’s so cute! #
Employers cut 533K jobs in Nov., most in 34 years. Yipes. Worse, I guess. Combination of no working capital and consumers hoarding cash. #

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Twitter Posts on 2008-12-02

December 02, 2008 By: John Rutledge Category: all

South Korea’s economy grew 0.5& in Q3 after 0.8% in both Q1 and Q2/2008. GDP was up 3.8% from a year earlier. Look for another rate cut. #

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Twitter Posts on 2008-12-01

December 01, 2008 By: John Rutledge Category: all

Paulson says other rescue programs being examined. Hank, stop rescuing us! PLEASE!!! #
Bernanke: lower interest rates are “feasible”. It is the Fed’s obsession with targeting interest rates that created this crisis. #
Retailers offer deals, discounts on ‘Cyber Monday’. Tearend markdowns on unsold merch retailer nightmare, makes bank shrink credit line. #
Don’t touch a retailer stock this quarter - no matter how cheap you think they look. #
edstone sells Midway Games stake at a huge loss. It is emotionally very hard to sell a stock at a big loss. (don’t I know!). #
Panel says US has been in recession since Dec. 07. You guys sure you don’t want to think it over a little longer? It’s only been a year! #

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Twitter Posts on 2008-11-29

November 29, 2008 By: John Rutledge Category: all

Groucho Marx. ” Well, when I’m out of hamburger, I sell it for 50c a pound.” #

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Twitter Posts on 2008-11-28

November 28, 2008 By: John Rutledge Category: all

OK, now this economic crisis is going too far. Today, Waffle House declared bankrupcy.I love Waffle House!!! Bailout time! #

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Twitter Posts on 2008-11-27

November 27, 2008 By: John Rutledge Category: all

I have way too much to be thankful for. #

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Twitter Posts on 2008-11-26

November 26, 2008 By: John Rutledge Category: all

Federal aid sought for Oklahoma pecan farmers. Next! #
Earnings Preview: Zale faces tough fiscal 1st qtr. Duh! when people hoard cash (they are hoarding cash) they don’t BUY jewelry, they sell it #
“Everything that is really great and inspiring is created by the individual who can labor in freedom.” Albert Einstein. #
Random House to digitize thousands of books. Yes! So far digital books have been a tease, priced to protect print market, not zero cost dist #
Had a very good time talking with Neil Cavuto on his show tonight. Subject was tax rates. Neil is a genuinely good and thoughtful man. #
Could fire a cannon through the airport today. Talk about nobody home! #
A 25 year old sales person today said some people told her it was bad like this before. Told her yes it has and it will end. Hang in there. #
I just bought (on sale) a roll up battery powered electric piano. Yes! Now I can play the Credit Crunch Blues for all my friends. #
Don’t spend much time praising #
Whoops. Don’t spend much time saying nice things about politicians but I thought Obama handled himself well in economics press fond today. #
Would love to be in Volcker group discussions but not holding breath for phone to ring. Paul’s an honest legit tough guy (LTG) on policy. #
I have discovered that recessions and stock market crashes sure make people crabby. Will publish my finding in a leading academic journal. #