The Baseline Scenario submits: By Peter Fox-PennerImproving the regulation of the financial sector is a prime topic of conversation amongst financial economists, and appropriately so. Most agree that massive failures of financial regulation were one, if not perhaps the largest, cause of the 2008 meltdown.Complete Story »

  Tom Armistead submits:Eric Dinallo was on Bloomberg recently, talking about CDS and other regulatory issues. This clip is worth watching: he is the only politician or regulator who understands the dangers posed by CDS and inadequate regulation and is willing to talk about realistic solutions.Dinallo, as former NY State Superintendent of Insurance has first hand knowledge of the issues involved, due to the problems he dealt with on AIG, MBIA (MBI), Ambac (ABK) and other financial guarantors. He and NY Governor Paterson attempted to bring the CDS issue to a head by offering to regulate them as insurance, if the Federal government did not step in and do something. At the time, it seemed that Congress would be doing something, but more than a year later CDS regulation is still being debated and in the process whatever we get is going to be too watered down to resolve the issues. Dinallo makes some excellent points:Complete Story »

  Sol Palha submits:The wise man sees in the misfortune of others what he should avoid. ~ Marcus Aurelius; 121-80 AD, Roman Emperor, PhilosopherComplete Story »

  John Mauldin submits: Jump Point It's The Best of Times The Elements of Deflation It's More Than Half Full What's a Fed to do? We get talk about tightening and taking away the easy credit, but we got the fourth largest monetization on record last week. This week we examine the elements of deflation, look at some banking statistics that are not optimistic, and then I write a reply to my great friend Bill Bonner about why it's the best of times to be young. I think you will get a few thought-provoking ideas here and there.Complete Story »

  The combination of dropping prices and rising sales in the National Assocation of Realtors existing home data makes it difficult to figure out if the news for housing is really good or bad. You have to look at more that the topline data to figure out if there is any good news and how bad the bad news is. First the Good news: Existing home sales are no longer a bleeding wound in the economy. The total dollar sales from existing houses were final positive, at 0.8% ($0.8 billion) above September 2008 versus -7.8% (-$9.3 billion) in August. Total dollar sales is Average Price times number of houses sold and shows the total revenue generated by housing sales. This is an indicator that the housing economy is growing. Here’s how it looks by region:Complete Story »

  Zacks.com submits: The world’s largest fertilizer producer, Potash Corporation of Saskatchewan Inc. (POT), earned 82 cents per share in the third quarter of 2009, within its previously announced guidance of 80 cents to $1.20. Earnings were slightly better than the Zacks Consensus Estimate of 81 cents while it declined 79% from $3.93 per share reported in the same period of the previous year. The shortfall was based on lower demand and weaker fertilizer pricing, especially nitrogen and phosphate. The reported quarter’s sales totaled $1.1 billion, down 64% from $3.1 billion in the third quarter of 2008. The drop in sales and thereby earnings was driven by a decline in potash, phosphate and nitrogen sales volumes coupled with lower phosphate and nitrogen prices. The company blamed the global economic downturn for the drop in sales volumes and prices. However, it expects to see a strong rebound in potash sales volumes in 2010.Complete Story »

  Hao Jin submits:The market has spoiled investors over the past 7 months with one direction only: up. This Great Recession seems to turn into the Great Recovery. Are there any cheap growth stocks left for bargain-hunting investors? I use following 8 criteria to select undervalued growth companies:Complete Story »

  TheCarConnection.com submits: Speaking of the Tokyo Motor Show, hybrid vehicles, and executive pronouncements, Nissan's (NSANY) head honcho, Carlos Ghosn, has made some interesting statements about Nissan's technology plans. Speaking from the exhibition floor, Ghosn said that Nissan doesn't want to be a big player in the hybrid market, having chosen instead to set its sights further down the road: "We are not intending to play a leadership role in hybrids. One company already assumed leadership in the technology. We want leadership on EVs." Sounds a little reminiscent of Honda's (HMC) view on EVs versus fuel-cell vehicles -- although Ghosn gets points for standing firm instead of bending to marketplace demands. Complete Story »

  Dan Rayburn submits: On Thursday's earnings call, Netflix (NFLX) CEO Reed Hastings said that sometime this quarter, Netflix's streaming service will be coming to a new consumer electronics device. As a result of this forthcoming offering, Netflix said it was raising their guidance for the fourth quarter.Clearly, whatever device it is, it must have a lot of penetration in the market if Netflix thinks it will have that much of an impact on their earnings so quickly. While it could be the PS3 or the Wii, if it's a gaming console, my money is on the Wii. To date, Sony (SNE) has sold about 10M PS3 units in the U.S., while Nintendo (NTDOY.PK) has sold more than 25M Wii consoles. When Netflix streaming rolled out on the Xbox 360, 10% of Netflix's members used the service within three months, pushing more than 25M GB of video. Based on those numbers, I don't think the PS3 has a big enough install base to impact Netflix quickly enough.Complete Story »

  Joe Eqcome submits:CEF Weekly Review: The 13 closed end fund (CEF) types on average were up 0.6% for the week ending 10/23/09. On an aggregate, unweighted basis, the weekly average price change for 514 CEFs was up 0.7%. Complete Story »

  Dan Rayburn submits: On Netflix's (NFLX) Q3 earnings call, CEO Reed Hastings announced plans to take Netflix's digital offering international, sometime in the second half of 2010. Reed said Netflix plans to roll out a streaming only offering by starting small in one market, proving the model and then expanding into other countries. While such an announcement probably comes as no surprise to anyone and is simply the next evolution for Netflix, the company will have a difficult time generating profit from such a service.Without any details on how much Netflix plans to charge per month for their streaming only service, you can't figure out their exact costs. But you can come pretty close. Between the prices they pay to the CDNs to stream the videos, which could be a bit more expensive overseas, and the price Netflix has to pay to license the content, users who watch enough movies each month would actually cost Netflix money. With some popular content, licensing and delivery costs can be as high as $0.50 per stream, if not higher. At fifty cents per movie, ten movies streamed by a customer just cost Netflix five bucks.Complete Story »

  It is the end of the week and so we take a stroll through the sentiment meadows: Investors Intelligence This week the ChartCraft measure of stock newsletter editors sentiment was little changed from last week: 49.5% bullish and 23.1% bearish. That’s another week where twice as many are optimistic that the stock market will continue to rise. A remarkable long string of weeks but so far they have been correct.Complete Story »

  While I'm not a Dow Theorist who gives much relevance to the confirming action in the Dow Transports in relation to the Dow Jones Industrials, I could not help but be struck with the high-volume selling in the Transport group on Friday. Known for being an early indicator of economic strength and weakness, could the Transports high-volume break back below its 50 day moving average be one of the first indicators of an impending double dip in the economy?After nearly doubling from its February lows of 2146 to its most recent highs of 4045, the Transports seem to have become very toppy in here and should bear watching to see if recent multi-month support in the 3600-3700 range will hold. Conversely, any move through recent highs above 4045 would suggest that another up-leg is set to begin for the group.Complete Story »

  IPE at UNC submits: By Alex ParetsThursday's announcement by the Obama administration that they "will order the firms that received the most aid to slash compensation to their highest-paid employees" has drawn much criticism and discussion across the blogosphere, including right here on this blog.Complete Story »