“Ten Years (and a third of stocks’ value) Gone” (chart)

January Was Dow’s Worst In 113 Years

Daschle Paid Back $140k In Taxes After Vetting

‘Bad Bank’ Run By FDIC Possible By Next Week

Are You Ready for a Challenge?

Printing The NYT Costs Twice As Much As Sending Every Subscriber A Free Kindle

Are Money-Market Funds Enemy #1?

“Hello YouTube” – Gasparino Drops F-Bomb On Air

Obama’s stimulus plan: Hurry up and wait

California facing worst drought in modern history

The “Big Mac Index” and more…

Bank Bailout Could Cost Up to $4 Trillion

We have entered the deflation zone

30-year t-bond yield back within the long-term trend lines

Something’s gotta give: Oil-to-gold ratio near historic extreme

Bailout Rate of Return: -1,096%

Heigh Ho! Heigh Ho! It’s off to the unemployment office we go!

“I’ll have what Geithner’s having.”

Best Superbowl Commercials 1979-2009

Will Doug Kass get the Michael Arrington treatment at Woodstock for Capitalists?

The Serious Need for Play

Natty gas ($UNG) is pretty darn oversold and sitting right on its 2006 lows.

“Life is a video game. No matter how good you get, you are always zapped in the end.” -John Updike (RIP)

Only Four Chords Are Needed to Make a Hit Song

Bernie cheated at golf, too.

Blind Faith and Leverage: The New Hope

Stocks still in the top 2% of volatility periods since 1927

With our ever-increasing deficits, politicians (and citizens) will soon be consulting this list

Iceland Collapse: Riots, Suicide, and Soup Kitchens

Monday Bloody Monday: 61,000 Job Cuts Announced

Greatest NYTimes article ever printed?

Apple without Steve

(Click for video)

“Ten Years (and a third of stocks’ value) Gone” (chart)

January Was Dow’s Worst In 113 Years

Daschle Paid Back $140k In Taxes After Vetting

‘Bad Bank’ Run By FDIC Possible By Next Week

Are You Ready for a Challenge?

Printing The NYT Costs Twice As Much As Sending Every Subscriber A Free Kindle

Are Money-Market Funds Enemy #1?

“Hello YouTube” – Gasparino Drops F-Bomb On Air

Obama’s stimulus plan: Hurry up and wait

California facing worst drought in modern history

The “Big Mac Index” and more…

Bank Bailout Could Cost Up to $4 Trillion

We have entered the deflation zone

30-year t-bond yield back within the long-term trend lines

Something’s gotta give: Oil-to-gold ratio near historic extreme

Bailout Rate of Return: -1,096%

Heigh Ho! Heigh Ho! It’s off to the unemployment office we go!

“I’ll have what Geithner’s having.”

Best Superbowl Commercials 1979-2009

Will Doug Kass get the Michael Arrington treatment at Woodstock for Capitalists?

The Serious Need for Play

Natty gas ($UNG) is pretty darn oversold and sitting right on its 2006 lows.

“Life is a video game. No matter how good you get, you are always zapped in the end.” -John Updike (RIP)

Only Four Chords Are Needed to Make a Hit Song

Bernie cheated at golf, too.

Blind Faith and Leverage: The New Hope

Stocks still in the top 2% of volatility periods since 1927

With our ever-increasing deficits, politicians (and citizens) will soon be consulting this list

Iceland Collapse: Riots, Suicide, and Soup Kitchens

Monday Bloody Monday: 61,000 Job Cuts Announced

Greatest NYTimes article ever printed?

Apple without Steve

(Click for video)

Back in November I wrote a piece titled “CACB Turning the Corner?” At the time, Cascade Bancorp’s financials looked to be improving.

However, the company subsequently announced that they had mistakenly calculated their loan loss provisions resulting in greater losses than they had initially disclosed. That might have been a hint that things weren’t going as well as they seemed at the end of the third quarter.

Last week the company announced results for the final quarter and full year of 2009. Below are a few of the highlights.

-Bad news: Non-performing Assets exploded, growing over 80% in the final 3 months of the year alone to $180 million. This is a 224% increase for 2008 (fail).

-Bad news: The company can no longer afford to pay a dividend (obvious).

-Bad news: The total risk-based capital ratio dropped by over 50 basis points in 2008 (gulp).

-Good news: The total risk-based capital ratio leaves the bank still within the “well capitalized” range (phew).

-Good news: Deposits once again grew from the prior quarter, albeit at a slower rate (I think I can; I think I can).

The bottom line is things are getting pretty dicey for old CACB. It won’t be pretty if the bank continues to sustain these kind of losses in their loan portfolio. Investors obviously thought the bad news outweighed the good news and sold the stock off pretty hard yesterday.

The company may survive this real estate depression; I hope it does. However, there is now a very real possibility it may not. The action in the stock price is certainly far from encouraging (it’s less than a bottle of “two buck chuck”!!!). I don’t even want to think about the implications for the local economy.

The company has applied for government assistance via the TARP and this would definitely help them maintain minimum capital requirements. And if the company were able to sell assets above fair market value to the proposed “bad bank” that would also go a long way towards restoring the company’s balance sheet.

The bottom line, however, is Bank of the Cascades loaned way too much money to builders blinded by the biggest real estate bubble in history and is now paying the price. What the final tab will ultimately be is anyone’s guess.

Back in November I wrote a piece titled “CACB Turning the Corner?” At the time, Cascade Bancorp’s financials looked to be improving.

However, the company subsequently announced that they had mistakenly calculated their loan loss provisions resulting in greater losses than they had initially disclosed. That might have been a hint that things weren’t going as well as they seemed at the end of the third quarter.

Last week the company announced results for the final quarter and full year of 2009. Below are a few of the highlights.

-Bad news: Non-performing Assets exploded, growing over 80% in the final 3 months of the year alone to $180 million. This is a 224% increase for 2008 (fail).

-Bad news: The company can no longer afford to pay a dividend (obvious).

-Bad news: The total risk-based capital ratio dropped by over 50 basis points in 2008 (gulp).

-Good news: The total risk-based capital ratio leaves the bank still within the “well capitalized” range (phew).

-Good news: Deposits once again grew from the prior quarter, albeit at a slower rate (I think I can; I think I can).

The bottom line is things are getting pretty dicey for old CACB. It won’t be pretty if the bank continues to sustain these kind of losses in their loan portfolio. Investors obviously thought the bad news outweighed the good news and sold the stock off pretty hard yesterday.

The company may survive this real estate depression; I hope it does. However, there is now a very real possibility it may not. The action in the stock price is certainly far from encouraging (it’s less than a bottle of “two buck chuck”!!!). I don’t even want to think about the implications for the local economy.

The company has applied for government assistance via the TARP and this would definitely help them maintain minimum capital requirements. And if the company were able to sell assets above fair market value to the proposed “bad bank” that would also go a long way towards restoring the company’s balance sheet.

The bottom line, however, is Bank of the Cascades loaned way too much money to builders blinded by the biggest real estate bubble in history and is now paying the price. What the final tab will ultimately be is anyone’s guess.

“The reports of my death have been greatly exaggerated.” -Mark Twain

For the past few months, Warren Buffett, along with most investors, has been taking it on the chin. His investments have lost many billions in market value along with the slide in the stock market. Unlike other investors, however, due to his celebrity in the investment world Warren has been taking shots from the press, as well.

Doug Kass, a widely respected hedge fund manager and trader, penned an article last November titled, “Warren Buffett has lost his groove.” Today he published a follow up: “Is this the end of Warren Buffett?” In it he writes, “Buffett’s salad days seem to be over; the only question that remains is the timing and to what degree investors will abandon the Oracle of Omaha…. There is no apparent end to the decline [in Berkshire Hathaway's share price and, hence, Warren's standing] in sight.”

At the time of Kass’ earlier article, I wrote that I believed Warren’s bad press to be a very good contrarian indicator. I still believe this to be the case and stocks, ironically enough, are still above their lows of last November. It seem to me, however, there is even a deeper contrarian signal at work here.

“When your method becomes popular, switch to an unpopular method.” -John Templeton

If nothing else, Warren Buffett is the apotheosis of the “buy and hold” investment philosophy and is there any more unpopular method than “buy and hold” right now? For the past ten years “buy and hold” has profited its practitioners literally not at all.

Everywhere traders and short sellers are celebrating the once-in-a-generation volatility, chanting “trade ‘em; don’t marry ‘em” and “buy and hold is dead.” I have met more people in the past few months that want to learn to trade for a living than I did back in day-trading’s late 1990’s heyday. Trading is (once again) the new, new thing.

I believe traders would be wise to consider the late, great Mr. Templeton’s sage advice. Once-in-a-generation volatility doesn’t mean increased volatility that will last a generation. I believe it’s much more likely that volatility will soon revert to its mean – which means stocks will rally. In which case, “buy and hold” investors will be best rewarded for taking what looks to be a very contrary stand today. Hell, isn’t that exactly how both Mr. Buffett and Mr. Templeton earned their fortunes in the first place?

Sources:
Warren Buffett Has Lost His Groove
Doug Kass
TheStreet.com
November 12, 2008

Is This the End of Warren Buffett?
Doug Kass
TheStreet.com
January 27, 2009

The Death of Wall Street and Its Most Famous Icon
Jesse Felder
My Back Pages
November 13, 2008

“The reports of my death have been greatly exaggerated.” -Mark Twain

For the past few months, Warren Buffett, along with most investors, has been taking it on the chin. His investments have lost many billions in market value along with the slide in the stock market. Unlike other investors, however, due to his celebrity in the investment world Warren has been taking shots from the press, as well.

Doug Kass, a widely respected hedge fund manager and trader, penned an article last November titled, “Warren Buffett has lost his groove.” Today he published a follow up: “Is this the end of Warren Buffett?” In it he writes, “Buffett’s salad days seem to be over; the only question that remains is the timing and to what degree investors will abandon the Oracle of Omaha…. There is no apparent end to the decline [in Berkshire Hathaway's share price and, hence, Warren's standing] in sight.”

At the time of Kass’ earlier article, I wrote that I believed Warren’s bad press to be a very good contrarian indicator. I still believe this to be the case and stocks, ironically enough, are still above their lows of last November. It seem to me, however, there is even a deeper contrarian signal at work here.

“When your method becomes popular, switch to an unpopular method.” -John Templeton

If nothing else, Warren Buffett is the apotheosis of the “buy and hold” investment philosophy and is there any more unpopular method than “buy and hold” right now? For the past ten years “buy and hold” has profited its practitioners literally not at all.

Everywhere traders and short sellers are celebrating the once-in-a-generation volatility, chanting “trade ‘em; don’t marry ‘em” and “buy and hold is dead.” I have met more people in the past few months that want to learn to trade for a living than I did back in day-trading’s late 1990’s heyday. Trading is (once again) the new, new thing.

I believe traders would be wise to consider the late, great Mr. Templeton’s sage advice. Once-in-a-generation volatility doesn’t mean increased volatility that will last a generation. I believe it’s much more likely that volatility will soon revert to its mean – which means stocks will rally. In which case, “buy and hold” investors will be best rewarded for taking what looks to be a very contrary stand today. Hell, isn’t that exactly how both Mr. Buffett and Mr. Templeton earned their fortunes in the first place?

Sources:
Warren Buffett Has Lost His Groove
Doug Kass
TheStreet.com
November 12, 2008

Is This the End of Warren Buffett?
Doug Kass
TheStreet.com
January 27, 2009

The Death of Wall Street and Its Most Famous Icon
Jesse Felder
My Back Pages
November 13, 2008

CNBC: The Whole Country Needs A Bong Break

Hey Ma, Are We Bankrupt Yet? (Why Bend is broke)

Apple without Steve

Ponzi of the day

Deep Thoughts: Alan Greenspan is to Ben Bernanke as Jack Welch is to Jeff Immelt

Long bond rate right back to the lower trendline

Word of the Day: Agnotology

Time: 25 Best Financial Blogs

Technology is Great, but Are We Forgetting to Live?

Get Smart(er): How to Train Your Brain

Can Free Content Boost Your Sales? Yes, It Can

Government Plans On Building The Bad Bank

Deep Thoughts: Does anyone else find it ironic that Carl’s Jr’s $6 burgers are basically $6 now?

Long-term, stocks look severely oversold at support

Slumdwellers Sue Slumdog Millionaire Cast for Calling Them Names

How To Help Madoff’s Victims: Let Them Sell Tax Credits

Bailout Bitter: Why didn’t Deschutes think of that?

Are U.S. Stocks in a ‘Reverse Bubble’?

U.S. Stocks Slide to Worst Inauguration Day Drop in Dow Industrial History BUT Worst Dow Drop Since Election Meant 75% Rally in ’33

Southern California Home Sales Surge 51% as Foreclosures Push Down Prices

Music Industry Imitates Digital Pirates to Turn a profit

Hits from the Bong – Cypress Hill

CNBC: The Whole Country Needs A Bong Break

Hey Ma, Are We Bankrupt Yet? (Why Bend is broke)

Apple without Steve

Ponzi of the day

Deep Thoughts: Alan Greenspan is to Ben Bernanke as Jack Welch is to Jeff Immelt

Long bond rate right back to the lower trendline

Word of the Day: Agnotology

Time: 25 Best Financial Blogs

Technology is Great, but Are We Forgetting to Live?

Get Smart(er): How to Train Your Brain

Can Free Content Boost Your Sales? Yes, It Can

Government Plans On Building The Bad Bank

Deep Thoughts: Does anyone else find it ironic that Carl’s Jr’s $6 burgers are basically $6 now?

Long-term, stocks look severely oversold at support

Slumdwellers Sue Slumdog Millionaire Cast for Calling Them Names

How To Help Madoff’s Victims: Let Them Sell Tax Credits

Bailout Bitter: Why didn’t Deschutes think of that?

Are U.S. Stocks in a ‘Reverse Bubble’?

U.S. Stocks Slide to Worst Inauguration Day Drop in Dow Industrial History BUT Worst Dow Drop Since Election Meant 75% Rally in ’33

Southern California Home Sales Surge 51% as Foreclosures Push Down Prices

Music Industry Imitates Digital Pirates to Turn a profit

Hits from the Bong – Cypress Hill

Hey listen here
Now your mortgages and homes
I got stiffness in the bones
Aint no beauty queens in this locality (I tell you)
Oh but I still get my pleasure
Still got my greatest treasure
Heap big woman you gonna make a big man out of me
Now get this

Oh you gonna take me home tonight (please)
Oh down beside your red firelight
Oh you gonna let it all hang out
Fat bottomed girls you make the rockin world go round
Fat bottomed girls you make the rockin world go round
Get on your bikes and ride

-Fat Bottom Girls (Queen)

The other day, one of my favorite analysts, Jason Goepfert, pointed out that the Bank Index was once again getting stretched pretty far from its 200-day moving average, a very common technical indicator.

I thought it might be interesting to take a look at exactly how stretched it currently is and how it currently compares to other, recent occurrences. The chart below shows the past couple of times the Bank Index has dropped so far below its 200DMA (the only times in the history of the index that this has ever happened, according to Jason):

As the chart clearly shows, according to this measure (60% below its 200DMA) the index has never been this oversold. The past couple of times it has come close, in July and November of last year, the index saw dramatic snap-back rallies in pretty short order. Another difference this time is the potential for a divergence in the MACD lines, a bullish technical sign.

In addition to the positive technical picture, I am simply astounded at the pervasive negativity surrounding this sector. Sentiment is universally bearish – and I… well, I think I might be in love:

(Click for video)

Note: Check out Jason Goepfert’s superb work at SentimenTrader.com – I highly recommend it.

Hey listen here
Now your mortgages and homes
I got stiffness in the bones
Aint no beauty queens in this locality (I tell you)
Oh but I still get my pleasure
Still got my greatest treasure
Heap big woman you gonna make a big man out of me
Now get this

Oh you gonna take me home tonight (please)
Oh down beside your red firelight
Oh you gonna let it all hang out
Fat bottomed girls you make the rockin world go round
Fat bottomed girls you make the rockin world go round
Get on your bikes and ride

-Fat Bottom Girls (Queen)

The other day, one of my favorite analysts, Jason Goepfert, pointed out that the Bank Index was once again getting stretched pretty far from its 200-day moving average, a very common technical indicator.

I thought it might be interesting to take a look at exactly how stretched it currently is and how it currently compares to other, recent occurrences. The chart below shows the past couple of times the Bank Index has dropped so far below its 200DMA (the only times in the history of the index that this has ever happened, according to Jason):

As the chart clearly shows, according to this measure (60% below its 200DMA) the index has never been this oversold. The past couple of times it has come close, in July and November of last year, the index saw dramatic snap-back rallies in pretty short order. Another difference this time is the potential for a divergence in the MACD lines, a bullish technical sign.

In addition to the positive technical picture, I am simply astounded at the pervasive negativity surrounding this sector. Sentiment is universally bearish – and I… well, I think I might be in love:

(Click for video)

Note: Check out Jason Goepfert’s superb work at SentimenTrader.com – I highly recommend it.