Stocks enter the final hour mixed following volatile early trade on little real news. The WSJ OpEd page has a morally and intellectually bankrupt piece penned by Arthur Laffer, creator of the Laffer Curve, that attempted to illustrate that as taxes were reduced economic activity increased resulting in higher net tax revenues. The Laffer curve was thoroughly discredited in the post Regan era. Mr. Laffer goes on to cherry pick the data and actually makes some stuff up in an attempt to support his position, confusing causation with correlation and ignoring history along the way. Some of his more glaring “ahem” misstatements include, “Bill Gates and Warren Buffett—hold the bulk of their wealth in the nontaxed form of unrealized capital gains?” True but they are also held in tax-free charitable foundations for the most part. It goes on from there but Mr Laffer and the WSJ do a disservice to their readers and the investing and economic community publishing guano like this. An example of why I rarely read the Journal or pay much attention to most mainstream media outlets as their journalistic quality and integrity are most charitably described as lacking.
Goldman Sachs continues to provide a stunning demonstration of hubris after revelations that it defrauded its clients and behaved in an unethical manner, perhaps rapacious is a better description. Following a billion page document dump on The Financial Crisis Inquiry Commission investigating its business practices. This netted a subpoena and a strongly worded rebuke from said commission, I guess the concept of quitting when your ahead doesn’t figure into their corporate culture.
RMBS continue to see improving delinquency rates as Alt-A fell for a second month, while Sub-Prime delinquency rates slipped for a third month, Prime delinquency rates continue to increase. Suggesting some stabilization in the real estate securities markets. That said roll rates are increasing again and as per the report by Fitch’s ratings who went on to note that risks from modified loans redefaulting continue to weigh on the price recovery of RMBS. For the record these make up a good percentage of the so called toxic assets and have seen significant value impairments of as much as 80 odd percent despite being issued with an investment grade rating.
Hi and welcome to The Profit Motive, I’m your host Caleb Lawrence. Once upon a time in America the media acted as the watchdog of the corporations and the state. In the modern era it’s all about ratings and profits, opinion has been substituted for news and frequently is presented as fact. 
