June 19, 2018

The JDA and Michael Panzner Discuss the Year Ahead

Thumbnail image for 2010.jpgEditor’s Note: Want more JDA? You can see all of her posts for GC here, her blog here and stalk her on Twitter.
The last time I spoke to Financial Armageddon’s Michael Panzner for Going Concern, it was about how to prepare for the worst (while not necessarily hopinin September of last year. This time around, it’s the beginning of the year so even though I’m late, it’s time to discuss the 2010 outlook.
Panzner can also be found writing at
When Giants Fall and Huffington Post and if you don’t know his bio, it’s here.
First of all, before we could get to anything I had to have him explain his strong dollar policy again:
“There are a number of reasons why I expect a technical rally in the dollar even though my long-term view remains quite negative,” he said, “The fact is that even if the fundamental outlook is poor, prices can still rise in the short run if too many people — speculators and investors — are short or if other factors temporarily gain in importance.”
This explains why he seemed spooked by recent market behaviors, like everything from March 2009 on. You know, when things started getting wonky. Panzner is a classy bastard so he’s not about to make conspiratorial statements about the behavior of markets but let’s just say his feeling is that they’re performing less rationally these days. No shit. Might be all that fishy stuff going on but who am I to speculate?


He points to massive speculation and gigantic stockpiling in commodities, specifically oil. Gee, wonder who is behind that. He recognizes that China is at least attempting to clamp down on speculation.
He also admits to having underestimated how people will behave with free money. I find that statement incredible; didn’t we see the houses, big screens, and Hummers? It was obvious at the time and it feels obvious now. “Last time they speculated like there was no tomorrow, they were worried tomorrow would never come,” he says. Again, this from the man who brought us Financial Armageddon.
Interestingly, Panzner says if he could do the book over, he would have better predicted the contagious nature of the financial crisis. It scared the shit out of me when I read it for the first time in 2008. It didn’t seem sluggish at all the way he’d imagined it. In fact, I’ve been waiting for the bottom to drop out for months now after seeing how he painted it.
As far as threats go, he pretty much agrees with most of what I identify as the largest (the Fed’s dumb behavior, sociopolitical pressures, blahblahblah) and adds a few. He’s with most of us who feel CRE still has to drop, which places additional pressure on smaller banks. There are also the usual suspects; conflicts in the Middle East putting pressure on energy markets and municipal debt problems. Birmingham, Alabama is not an isolated incident, in other words.
I know Caleb gets pissed when I write too much so I think we’re good on the economic outlook for now, lest he come flame me as Guest. Whatever. Back with Part 2 on Monday: What comes after?

Thumbnail image for 2010.jpgEditor’s Note: Want more JDA? You can see all of her posts for GC here, her blog here and stalk her on Twitter.
The last time I spoke to Financial Armageddon’s Michael Panzner for Going Concern, it was about how to prepare for the worst (while not necessarily hoping for the best) in September of last year. This time around, it’s the beginning of the year so even though I’m late, it’s time to discuss the 2010 outlook.
Panzner can also be found writing at When Giants Fall and Huffington Post and if you don’t know his bio, it’s here.
First of all, before we could get to anything I had to have him explain his strong dollar policy again:
“There are a number of reasons why I expect a technical rally in the dollar even though my long-term view remains quite negative,” he said, “The fact is that even if the fundamental outlook is poor, prices can still rise in the short run if too many people — speculators and investors — are short or if other factors temporarily gain in importance.”
This explains why he seemed spooked by recent market behaviors, like everything from March 2009 on. You know, when things started getting wonky. Panzner is a classy bastard so he’s not about to make conspiratorial statements about the behavior of markets but let’s just say his feeling is that they’re performing less rationally these days. No shit. Might be all that fishy stuff going on but who am I to speculate?


He points to massive speculation and gigantic stockpiling in commodities, specifically oil. Gee, wonder who is behind that. He recognizes that China is at least attempting to clamp down on speculation.
He also admits to having underestimated how people will behave with free money. I find that statement incredible; didn’t we see the houses, big screens, and Hummers? It was obvious at the time and it feels obvious now. “Last time they speculated like there was no tomorrow, they were worried tomorrow would never come,” he says. Again, this from the man who brought us Financial Armageddon.
Interestingly, Panzner says if he could do the book over, he would have better predicted the contagious nature of the financial crisis. It scared the shit out of me when I read it for the first time in 2008. It didn’t seem sluggish at all the way he’d imagined it. In fact, I’ve been waiting for the bottom to drop out for months now after seeing how he painted it.
As far as threats go, he pretty much agrees with most of what I identify as the largest (the Fed’s dumb behavior, sociopolitical pressures, blahblahblah) and adds a few. He’s with most of us who feel CRE still has to drop, which places additional pressure on smaller banks. There are also the usual suspects; conflicts in the Middle East putting pressure on energy markets and municipal debt problems. Birmingham, Alabama is not an isolated incident, in other words.
I know Caleb gets pissed when I write too much so I think we’re good on the economic outlook for now, lest he come flame me as Guest. Whatever. Back with Part 2 on Monday: What comes after?

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The Art of Bank Failures

alan_greenspan_pancake.jpgDeutsche Bank wins the prize for the most well-capitalized art collection, racking up 53,000 works in one of the largest corporate art collections in the world – as of 2004, worth an estimated $124 million (USD). Does that fall under PP&E? How does one depreciate a Cezanne hanging in a corporate office anyway? Oh wait, you don’t.
In honor of the year anniversary of Lehman’s fall, we find it worth noting here that Lehman’s Dick Fuld and his wife found that when you’re in desperate need of a capital infusion and facing epic failure, pawning off your precious fine art pieces works in a pinch.
More, after the jump


Guardian UK:

The bankrupt investment bank Lehman Brothers wants to sell at least $8m (£5.2m) worth of the art collection that once decorated its offices. The news comes as $20m of postwar art, put up for sale by the former Lehman boss Richard Fuld and his wife Kathy, goes on the block tonight at Christie’s in New York.

That’s got to hurt.
But Dick isn’t alone. If only banks would have considered these precious assets while spiraling down the toilet.
Portfolio has a do-not-miss on the art collections left behind by bank failures:

From coast to coast, millions of dollars of corporate art that once hung in the offices of well-known banks has itself become entangled in the fallout from the financial crisis. The fate of that artwork is still being sorted out, along with the assets involved in many of the unprecedented bank failures and resulting mergers that took place last year. Some of the surviving financial institutions appear to be holding onto the valuable artwork for their own collections, despite the chance to cushion their coffers with its sale. Others are selling the art or donating it to local museums and nonprofits.

Well, wait a minute, will this art have the same fate as the $4 billion in WaMu deposits the failed thrift is fighting to get back from JP Morgan? Just sayin.
This is nothing new. In 1991, the FDIC netted a cool $250,000 for the art collection of failed Boston Trade Bank. Though that was a pathetic catch in comparison to the $800,000 the collection of 219 pieces was estimated to be worth but hey, every little bit helps.
Wonder why no one’s thought to tap AIG for some precious paintings? Surely General Motors has a few pricey pieces lying around corporate offices, let’s use that to recoup that $23 billion American taxpayers may never see again!

The CPA Exam for Commitmentphobes

Editor’s note: Adrienne Gonzalez is founder and managing editor of Jr Deputy Accountant as well as regular contributor to leading financial/investment sites like Seeking Alpha and GoldmanSachs666. You see all of her posts for GC by going here. By day, she teaches unlicensed accountants to pass the CPA exam, though what she does in her copious amounts of freetime in the evening is really none of your business. Follow her adventures in Fedbashing and CPA-wrangling on Twitter @adrigonzo but please don’t show up unannounced at her San Francisco office as she’s got a mean streak. Her favorite FASB is 166.
The first time I addressed the CPA exam here on Going Concern, I may have given the firms a little too much credit. Keep in mind that I write from the perspective of a CPA Review Project Coordinator; in other words, I’ve heard every excuse in the book.
I need more time on my course. Work got really busy and…
Continued, after the jump


Listen, I understand that the CPA exam is a serious commitment. I also understand that first and second year new hires get worked like slave labor. What I do not understand is why this should be my problem 2 years after the student’s course expired with not a peep in between. Can you use this excuse in college? “Yeah, sorry I didn’t make it to my Final… um, I know it was 3 years ago but can I just take it again? I got really busy.” I dare you to try.
What I’ve learned from my time in the CPA Review trenches – something that I will take with me for the rest of my life – is quite simple. In the time it takes to come up with reasons why you don’t have the energy, time, knowledge, or ability to pass the CPA exam, you could have already passed it.
Yes, you. You could have passed this thing years ago. All of a sudden you’re staring down a promotion and realize that there’s no way you’ll be able to make the leap with that obnoxious colleague who passed the exam in 4 months. How can you possibly compare?
Well you can’t, first of all. Second of all, I’m willing to bet my entire inventory of Wiley CPA Review books that he’s full of shit. So is the guy who said he had an hour and a half left when he walked out of FAR, as is the chick who says she got a 95 on BEC (she’s our student, you know, and she got three 60s before that, not to mention cussed out by me for an hour before she finally passed). They are not you. And you, little CPA exam candidate, are the only person who matters in all of this.
Not your parents, not your boss, not your firm and not even your significant other. You. Is this what you want to do with your life or not?
If it was, you’d be at the Prometric center in full war paint ready for battle 45 minutes before they open, not calling me trying to explain how complicated your life got in the two years since I’ve heard from you. Apparently you forgot that you friended me on Facebook and I can see you filling out 79 quizzes in just three short hours.
What exactly are you waiting for? Time? Trust me, you’ll never have it.