PIMCO - IO Feb 2009 Gross Beep Beep

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PIMCO - IO Feb 2009 Gross Beep Beep: "The current financial and economic crisis is difficult to appreciate, not only for the drop in elevation, but because of the swiftness of the declines. It’s been a Wile E. Coyote 12 months – straight down like a dead weight. A year ago, global equity prices were nearly twice today’s levels and recession was only a whisper on the lips of the gloomiest of economists. Today, descriptions drawing parallels to the Great Depression make it obvious that a major shift in economic growth and its historic financial model, as well as policy prescriptions for its revival, are underway. Most of the world’s connected economies and its citizens are in shock, conscious but not fully aware of the seismic shifts that will unfold in future years.

PIMCO’s thesis for several years has held that the levered global economy long ago morphed from a banking-dominated regime to one that hid behind securitized lending and structures resembling a “shadow banking” system. SIVs, hedge funds, CDOs and increasingly levered mortgage and investment banks fueled asset appreciation in all investment markets, which in turn propelled real economic growth and employment to unsustainable levels. But, with U.S. housing prices as its trigger, the delevering process did a Wile E. Coyote and headed over the cliff in"

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B of A to defer some bonuses over three years

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Bloomberg.com: Worldwide: "Bank of America Corp. is deferring payment of 2008 bonuses of $50,000 or more at its capital markets and investment banking units over three years, according to people familiar with the matter.

Employees who had expected a bonus this month based on their 2008 work will instead get most of it in three annual installments, starting in February 2010, said the people, who declined to be identified because the plan isn’t public."

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Good Gracious! - Barrons.com

Image via WikipediaGood Gracious! - Barrons.com: "On Sept. 11, his 91st birthday, Tripp ended a 30-year relationship with his financial advisers at Lehman Brothers' private banking division, Neuberger Berman -- just days before Lehman went under. 'I was verbally assured that my assets were safe,' he recalls, 'but I know when things are falling apart, funny things can happen.' He yanked his money and sent it to another bank.

Plenty of other rich investors are just as dismayed, a result of dismal investment performance and mounting concern about the strength of financial institutions. More than 80% of wealthy investors in one survey said they planned to withdraw at least some of their money from their private bank, and more than half plan to dump their banks altogether.

Many of the respondents probably were venting, rather expressing actual plans. But it's clear that private banks -- outfits that cater to the wealthy and are owned by banks, brokerages and others -- haven't been immune to the turmoil of the past year. Assets under management at the top 40 private banks increased just 4.3% in the year through June 30, versus 20%-plus in each of the previous two years, according to an annual study by Barron's. See nearby table for a ranking of the top 40, based on assets in $1 million-plus accounts."

Insider's Perspective on the Credit Crisis

Amid a deepening international credit crisis and a rapidly decelerating global economy, global real estate markets are feeling the real-time effects of a tightly interlinked world that remains increasingly vulnerable. The markets have shifted from a virtuous cycle to a vicious cycle. The dramatically changing environment began with the U.S. subprime mortgage meltdown 18 months ago and then spread rapidly through the global financial system and now into all aspects of the economy.

Jones Lang LaSalle's capital markets experts share their insights and predictions on the current state of the global economy. Click here for a full report.

For additional information contact

Jack Minter Investment Sales jack.minter@am.jll.com
Kenneth Rudy Corporate Capital Markets kenneth.rudy@am.jll.com
Bart Steinfeld RE Investment Banking bart.steinfeld@am.jll.com

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Dividend Stocks - The Dividend Daily » Blog Archive » The Bailout Precedent was Set in 1998, but That’s Not the Point

Dividend Stocks - The Dividend Daily » Blog Archive » The Bailout Precedent was Set in 1998, but That’s Not the Point: "It has become abundantly clear that no one learned a single thing from the collapse of Long-Term Capital Management. Every single entity involved in our current crisis should be absolutely ashamed of themselves, from the Fed that insisted on a record number of consecutive interest rate cuts, to the mortgage lenders who forgot the most basic rule of lending, to the investment banks that used huge leverage with derivatives schemes to game a clearly inflated housing market, to the insurers like AIG who backed the mortgage products that weren’t worth the paper they were printed on.

The precedent of government intervention had already been set, but the most egregious part of this situation is that no one learned their lesson afterward."

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