OTB Portfolio Update 09/22/11

The last OTB portfolio update was in June 2010. I've kept an eye on this portfolio and it has been deteriorating steadily. Since the end game may be afoot, it's worth an update. OTB stands for Obama-Turbo-Bernanke. These are the financial firms receiving some of the most direct aid from USG and the Fed: AIG, Bank of America, Citigroup, Fannie Mae and Freddie Mac. It was initiated on August 26, 2009. Here is a snapshot as of the market open on September 22, 2011:

OTB Portfolio Update 6/16/2010

Just an image this time, from the Yahoo! page. Everything is red as of today.

OTB Portfolio Update 6/16/2010

It's been a long time since I did an update on the Obama-Timmy-Bernanke portfolio. It was equally invested in 5 stocks: AIG, Citigroup, Bank of America, Freddie Mac and Fannie Mae. The portfolio was initiated on August 26, 2009 and it had an initial value of $1000.

Fannie and Freddie are down more than 40% today because they're being delisted from the NYSE.

Freddie (FRE) is now down more than 65% since portfolio inception, with Fannie (FNM) down more than 70%. The only winner is AIG, currently up 1.76%. The portfolio is down nearly 12% this morning thanks to the losses in Fannie and Freddie, and it is down 32% since inception.

OTB Portfolio Update 2010/01/28

It's been awhile since an update. The Obama-Turbo-Bernanke portfolio is down 33.5% since inception, with the bad performance led by 40% plus losses in Fannie (FNM) and Freddie (FRE). Bank of America (BAC) has the smallest loss, at 13%. AIG and Citigroup (C) have losses of 36% and 30%.

OTB Portfolio Update 2009/11/20

Obama-Turbo-Bernanke Portfolio lost 1.09% today and is down 22.88% since inception. Too bad we can't add the Federal Housing Administration, FHA. That's another winner, as per this NYTimes story, which features this quote:

“It was kind of crazy we could get this big a loan,” said Mr. Rowland, 27. “If a government official came out here, I would slap him a high-five.”

OTB Portfolio Update 2009/11/13

OTB had a mild 0.75% drop today, bringing the return since inception to -23.29%.
Fannie Mae and Freddie Mac have caused the bulk of the losses, down 45.95% and 44.33%, respectively, since inception. These government run companies are really sucking wind.

OTB Portfolio Update 2009/11/06

AIG and Fannie Mae (FNM) fell 9.7% and 7.1%, respectively, today.
The portfolio lost 3.97% and is down 23.35% since inception.

OTB Portfolio Update 2009/10/31

Obama, Turbo, Bernanke portfolio slides 5.80% on Friday as their attempt to get Americans to go deeper into debt to buy consumer goods seems to have hit a wall.

Portfolio now down 24.31% since inception.

OTB Portfolio Update 2009/10/27

Down 2.21% today, led by a 6% drop in AIG.
Overall, down 22.45% since inception, led to the downside by the 42% decline in Fannie Mae (FNM).

OTB Portfolio Update 2009/10/21

Fannie (FNM) and Freddie (FRE) had big rebounds and pulled the portfolio into positive territory, up 1.57% on the day. OTB Portfolio down 14.64% since inception.

OTB Portfolio Update 2009/10/20

I should have updated the Obama-Turbo-Bernanke special in the past few days because there was some great action in Fannie (FNM) and Freddie (FRE). They're both down close to 40% now, since inception. AIG remains on top, the only fund in positive territory, with a 7% gain since inception.

Today, the portfolio lost 2.71%, and is down 15.96% since inception.

OTB Portfolio Update 2009/10/07

Up 0.32% today to $975.40, down 2.46% since inception.
AIG and BAC gained over 2% today.
Since inception, AIG is up 21.78%, BAC is down 2.47%, C is up 0.22%, FNM is down 20.00% and FRE is down 11.82%.

OTB Portfolio Update 2009/09/29

Up across the board today, with Citigroup (C) out front, up 4.34%.
The portfolio gained 3.16% and is down 0.30% since inception.

OTB Portfolio Update 2009/09/25

Red across the board today with Fannie (FNM) and Freddie (FRE) down more than 3%.
Portfolio lost 2%, and is down 3.4% since inception. AIG is the only gainer, up 18% since inception. AIG currently accounts for 24% of the portfolio.

OTB Portfolio Update: 3 PM Fail

The OTB portfolio was on the way to big gains until 3 PM, when AIG plunged from $50 to under $46 at the close. It dragged the portfolio down 0.6% on the day, lowering the inception return to 1.86%.

Denninger lays out the debt picture

Get over to Market Ticker and read this post. Denninger does something that I can't recall having seen before—he shows where the debt comes from in each decade since the 1950s. This is important because a lot of folks point to the 1980s as the problem for debt, but in reality, most of that debt was business debt. It definitely reached a level that worried many, and several economic "prophets" forecast a Depression around 1990, but it never happened. What emerges in the 1990s and then explodes in the 2000s is financial debt (with government spiking at the end).

Denninger's latest theme is the spread between debt growth and GDP growth. If debt grows faster than GDP, it must later be balanced by GDP growing faster than debt. The last time GDP grew faster than debt? 1993. That's why OTB (Obama, Turbo Tim, Bernanke) need to defend the moribund banks and government corporations, but I repeat myself. Denninger lays it out:

THE ONLY WAY TO REPAIR THE FINANCIAL SYSTEM IS TO DRIVE THE PONZI INDICATOR POSITIVE AND HOLD IT THERE FOR A PERIOD OF MANY YEARS. THAT REQUIRES EITHER MASSIVE INCREASES IN GDP (IMPOSSIBLE GIVEN DEBT LOAD) OR MASSIVE DECREASES IN OUTSTANDING DEBT. SINCE WE CANNOT PAY DOWN THAT DEBT AS PROVED BY THE RAMPING DELINQUENCY AND DEFAULT RATES THE BAD DEBT THAT IS CURRENTLY BEING HIDDEN BY THE BANKS AND OTHER FINANCIAL INSTITUTIONS MUST BE FORCED INTO THE OPEN AND DEFAULTED.

Do you now recognize WHY Bernanke and the other so-called "economists" who have said (some of them under oath!) that "they never saw it coming", "subprime is contained", "housing prices represent fundamental strength in our economy" and other outrageous falsehoods?

Do you now understand why they're still spewing absolutely FALSE prognostications related to our economic outlook?

OTB Portfolio Update 2009/09/21

A 21% rally in AIG and gains for every holding except Bank of America (BAC) lifted the OTB Portfolio to a 7.97% gain and into positive territory since inception, up 2.47%. Freddie Mac (FRE) is 0.5% above its initial position value of $200, while AIG is up 28% and has delivered essentially all the portfolio's gains.

OTB Portfolio Update 2009/09/17

Down 0.66% today and 5.10% since inception. I should have added Lehman (LEHMQ) because it was up from $0.11 on Friday last week to $0.20 on Friday. I'm sure Obama, Turbo and Bernanke would argue that if we add Lehman in there, the returns look much better.

But I have some standards! No pink sheets. Sorry guys.

OTB Portfolio Update 2009/09/15

AIG down 5.62% and Citigroup down 8.85%
Portfolio down 4.42% on the day; down 7.19% since inception.

OTB Portfolio Update 2009/09/14

AIG up 9.48%, lifting the portfolio 1.92%
AIG is the only winning position at the moment, up 9.07%
Portfolio is down 2.89% since inception.