BOO YAH!!!!

I'm not a big fan of Jim Cramer on CNBC... is this supposed to be investment advice or just entertainment?

But I happened to catch his show last evening, after a 777 point drop on the Dow...

Cramer's the guy with the sound effects, and practically every stock last evening was greeted with SELL!, SELL!, SELL!

The most fascinating segment, however, was his comments on Wachovia Bank, which was just taken over by CitiGroup.

Two weeks ago, Cramer had a personal friend on the show, the CEO of Wachovia Bank, who told viewers that the company had strong controls in place, and that "problem loans" only amounted to about $10 billion dollars.

Whoops!!!!!!!!!!!!!!!!!

Two weeks later, those problem loans had somehow mushroomed to about $42 billion dollars, and the company then promptly joined the deadpool.

What went wrong? Did the CEO intentionally mislead the investing public? Or was he just unaware of what was actually going on in his company?

Who knows?

The company is now essentially worthless.and Cramer has installed CEO Robert Steel on his show's "Wall of Shame".

It is rare to see a TV host eat humble pie, which is why you should definitely take a look at this show segment!

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Friday, October 3, 2008

Wachovia CEO Robert Steel is really getting a reputation on Wall Street!

Yesterday, according to a report on CNBC, Steel spent the day huddled with CitiGroup executives in New York... and somehow neglected to mention that Wells Fargo was thinking of opening up the auction and re-bidding for Wachovia.

Citigroup executives found out about this turn of events independently at around 2 AM this morning.

Makes you wonder if Robert Steel ever took a course on ethics, doesn't it?

Washington Spam

From: Henry Paulson
Date: 9/23/2008
Subject: Urgent transaction - need your help

Bright Greetings Dear American:

I need to ask you to support an urgent and important business relationship with a transfer of funds of great magnitude.

I am Ministry of Treasury of the Republic of America. My country has had a crisis that has caused the need for a large transfer of funds of 700 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with renowned Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transactin is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren towallstreetbailout (at) treasury (dot) gov so that we transfer your commission for this transaction. After I receive you’re information, I will respond with detailed information about safeguards that will be used to protect the funds.

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Yours Faithfully,
Minister of Treasury Paulson

Bailout

"We've reached a fundamental agreement on a set of principles, one, for taxpayers, which is tremendously important," Senator Christopher Dodd said. "We're very
confident we can act expeditiously."

At least one prominent Republican says matters still aren't settled.

"House Republicans have not agreed to any plan at this point," said John Boehner, R-Ohio, minority leader.

Instead of receiving the entire sum at one time, Treasury will receive the money in installments, with $250 billion in bailout funds available immediately, the Wall Street Journal reported. Lawmakers also said the deal calls for the government to receive stock warrants of participating companies, the Journal said.

Bailout Alternative

A group of GOP lawmakers circulated an alternative designed to attract private capital back into the credit markets with less government intrusion.

Under the proposal, the government would provide insurance to companies that agree to buy frozen assets, rather than purchase them directly as envisioned under the administration's plan. The firms would have to pay insurance premiums to the Treasury Department for the coverage.

"The taxpayers haven't done anything wrong," said Rep Eric Cantor, R-Va., adding that rather than require them to bear the cost of the bailout, the alternative "pretty much puts the burden on Wall Street over time."

AIG: Greed ahead of responsibility...

AIG

"Once again the Fed has put the taxpayers on the hook for billions of
dollars to bail out an institution that put greed ahead of
responsibility and used their good name to take risky bets that did not
pay off," said Sen. Jim Bunning, R-Kentucky, a member of the Senate
Banking Committee.

http://www.cnn.com/2008/US/09/18/bush.economy/index.html

Constructing a Harvard Portfolio

How to construct a Harvard Portfolio

Given the expanding universe of publicly-traded securities that track industry sectors, geographies, and indices, average individual investors could have replicated the Harvard Endowment portfolio using a combination of stocks, index funds, and ETF’s for the respective asset classes.

Determining how much to allocate to each sector would require making estimates about return, volatility, and correlation among asset classes and plugging these numbers into an optimizer.

Source: http://www.portfoliomonkey.com/blog/?p=16

AIG

Here is a brochure from AIG...

Ironic advertising?