Following Latest Recall Shocker, GM Has Recalled 56% More Cars In 2014 Than It Sold In 2013

They don’t call them Government Motors for nothing. Over the weekend we titled our summary of GM’s unprecedented avalanche of recalls so far in 2014 – the year in which the company’s criminal practice of covering up its faulty products became a congressional scandal –  as follows: “GM Set To Surpass Total Recall Record This Year.” Three days later we are happy to report that while Detroit, we not only have a big recall problem, we also have a new record, after moments ago GM just announced another 4 recalls affecting 2.4 million cars. This brings the total number of vehicle investigations since the start of the year to 35, and with today’s four latest fiascos, has initiated a whopping 29 recalls. More importantly, this also means that the number of domestic recalls rises to 13.6 million, smashing the previous record of 11.8 million recalls in 2004, and brings […] Read More

Starting Monday, Billions In ETNs Are No Longer Marginable Collateral

When is marginable collateral not marginable collateral? When it is an ETN, or Exchange Trade Note: the cousin of the Exchange Traded Fund (ETF). The very mutated, and unabashedly evil cousin of the ETF that is. At least such is the view of US brokerage Interactive Brokers (and certainly not of the ECB where as is widely known blocks of feta cheese and olive oil are perfectly acceptable forms of collateral). First, what exactly is an ETN? Here is the IB definition: ETNs are not equity shares but rather a form of unsecured debt whereby the issuing institution promises to pay a return linked to a market index or other benchmark. As ETNs generally do not buy or hold assets like an Exchange Traded Fund (ETF), their returns are realized through holdings of derivative contracts such as options, futures and swaps. While ETNs trade on exchanges in a manner […] Read More

Bubble Babble – Why The Fed Is Clueless

Submitted by Jeffrey Schnider of Alhambra Partners, It is only one word, but it has been repeated so many times by FOMC members in the past year or so it has taken on the imprimatur of officialdom vernacular. Whenever speaking of bubbles, these policymakers inevitably include the word, “obvious.” Long is the list of internal literature that purports to place bubbles in the same category with the Supreme Court’s definition of pornography – we know it only when we see it. In that respect, “obvious” is the perfect qualifier that situates even the brightest of the PhD’s in the same herd as the little guy investor. It would be hard to blame them in disaster if that were actually the case since “everyone” else missed it too. According to St Louis Fed President James Bullard’s “obvious” bubble definition, there have been two “gigantic” bubbles in recent history. In his […] Read More