Suddenly, it's the least attractive job in the country.

Bank of America has been searching for a new CEO for months, ever since battered Ken Lewis announced that he was stepping down.  But no one wants the job. 

Why not?

Because they'll have to listen to annoying government bureaucrats vilify them all day, says analyst Dick Bove of Rochdale Securities.  Because they'll be unable to hire top people because of pay constraints.  Because they'll be forced to chop up the company instead of reaping the rewards of scale.  Because they'll be limited to a pay package that would make the average dime-a-dozen Wall Street managing director go bitching to his boss about how he was being underpaid.

All of which means, Bove says, that Bank of America's board once again looks incompetent. ...

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From The Business Insider, Nov. 19, 2009:

The White House finds itself in a pickle: How to extend the TARP bank bailout without so enraging voters that incumbent Dems get the heave-ho next year.

And here's one creative solution on the table: Use the rest of the TARP to reduce the national debt!

Doesn't that sound good?

Well, of course it does.  Except that it's ridiculous spin.  The government borrowed money for the TARP.  Using what remains to "reduce the national debt" would simply mean giving our lenders (some of) their money back.

Meanwhile, however, other legislators are desperate NOT to return the TARP money to lenders but to use it for additional stimulus--this time of the allegedly job-creating variety.

David Cho, Michael D. Shear and Lori Montgomery, WaPo: The Obama administration is poised to extend the life of the highly unpopular $700 billion financial bailout and, to display a commitment to fiscal responsibility, is planning to use much of the leftover funds to reduce the national debt, government sources said.

Administration officials are grappling with how best to announce the extension of the Troubled Assets Relief Program at a time when the economy is struggling and the unemployment rate is at its highest point in 26 years. The officials are hoping that by putting roughly $200 billion toward paying down the $12 trillion national debt, they could mitigate the political fallout, the sources said.

No final decision about the fate of the bailout has been made, and officials are keenly aware that their preferred course contains risks.

Keep reading >

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In recent months, Goldman Sachs made a good run at becoming The Most Hated Company In The World.

How?

By nearly going bust last fall, getting a cash bailout from the taxpayer, immediately denying that it ever needed any help, and then minting so much money over the next twelve months that it will pay 2009 bonuses in excess of $20 billion.

A couple of weeks ago, Goldman CEO Lloyd Blankfein then compounded the problem by going on a PR offensive in which he said Goldman was doing "God's work."

Goldman does provide a lot of valuable services, but it's hard to imagine in what universe they would deserve that description.

Americans are very forgiving. As long as public figures (and firms) express gratitude for help and contrition for perceived wrongs, Americans are happy to move on.

Americans also love winners--and Goldman is a major winner.

So we--and our guest Howard Lindzon, CEO of StockTwits--expect that the Goldman hatred has passed its peak and that the world will now move on.

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Timing is everything in the investment business, and bad timing has caused more market gurus to be carried out on stretchers than just about any other forecasting mistake.

Last year, in 2008, Gary Shilling of A. Gary Shilling & Co. was as right as anyone could ever hope to be.  Just about every one of his (bearish) predictions came true--and he was one of the few forecasters who saw the collapse coming.

This year, Gary has had a rougher go of it.  The market tanked in the winter, as he expected, but since then it has gone on a 60+% rocket ride.

Whenever the market moves in the opposite direction than you expect, you have to ask yourself whether you're just early...or wrong.

Gary has asked himself this question, and, for now, he still thinks he's just early.  We asked him what would get him to change his mind.

Resumed profligate spending by consumers, Gary says.

Key to Gary's thesis of slow growth for the next decade...

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A argument broke out this summer when house prices unexpectedly began to rise again.

"Recovery!" shouted the bulls, who declared that the two year housing crash was over and prices would begin a long rise back to old highs. "Head fake!" shouted the bears, who attributed the summer price rise to seasonality and predicted that the housing crash would resume this fall.

Who was right?

We don't know yet. The main house-price index, Case Shiller, appears several months after the fact, so the most recent national data we have is for August. As of then, house prices were still rising.

Our guest Dan Alpert of Westwood Capital sides with the bears.

Why?

You can't borrow your way out of a debt problem.

That's the key message from our guest Charles Ortel of Newport Value Partners.

The U.S. and other developed countries have lost the discipline they once had and are now trying to borrow and spend their way out from under the mountains of debt they accumulated in recent years. In the process, they're prolonging the agony and moving closer to defaulting.

The U.S., at least, won't actually default, says Ortel, but as our situation worsens, the value of credit default swaps (insurance against default) should rise. So Ortel continues to recommend CDSs to his clients.

5-year credit default swaps on U.S. soverign debt currently trade for about 25 basis points (which means it costs $25K per $10M of notional value). How does that compare to other countries or states?

Investors always need to be terrified about something.

Eight months ago, it was that the world was about to end: Stocks were down 60% from their highs, the economy was tanking, unemployment was soaring, and commentators everywhere were talking about a second Great Depression.

Now, there's a new concern: We're in the early stages of another humongous asset bubble.

Another BUBBLE? Didn't we just learn our lesson about those?

Well, yes, we did. But then we learned that there is one thing that's WORSE than a bubble, and that's global economic collapse. So, faced with those two alternatives, governments the world over are opting for door No. 2.

Specifically, governments have stomped down on the monetary and fiscal accelerators with both feet, and they show no signs of letting up.

And will this cause another bubble?

From The Business Insider, Nov. 11, 2009:

Goldman CEO Lloyd Blankfein tried a new tack in his PR offensive about the massive bonuses Goldman is about to pay.

Gone, thankfully, were the cringe-inducing remarks about the firm doing "God's work."

Now it's all about how Goldman is mopping the Street with its hapless competitors and how Goldman employees are the most productive in the world.

This tack is less grating, but it won't work, either.  It will just remind people about how angry they are that Goldman is shelling out $20+ billion after having its butt saved by taxpayers a year ago.  It will also be heard as "Goldman people make more than you because they're better than you."  Taxpayers won't want to hear that, either.

What SHOULD Blankfein do?...

More coverage from The Business Insider:

Goldman's God's work comments are "truly unsettling"

Lloyd Blankfein says he's doing God's work

From The Business Insider, Nov. 9, 2009:

Gold smashed through an all-time high of $1,100 an ounce on Friday, bringing some solace to gold bugs who have been losing money on the metal since the 1980s.

Gold still hasn't come anywhere near its late-1980's peak on an inflation-adjusted basis ($1,800 or so), belying the general theory that it's a great inflation hedge.  As the world gold frenzy really takes hold, however, $2,000-an-ounce predictions are coming fast and furious, so there's always hope.

The NYT surveys the gold landscape, checking in on the ultimate symbol of the rush--the bars on sale at the counters of Harrods:

[L]ast month, Harrods, the 160-year-old London department store, began selling coins as well as gold bullion ranging from tiny 1-gram ingots to the hefty, 12.5-kilogram, 400-Troy-ounce bricks that are so often featured in movies and stocked inside the vaults of Fort Knox. Harrods’s lower ground floor, where the gold is peddled, has been packed with interested shoppers.

“The response has been astounding,” said Chris Hall, head of Harrods Gold Bullion. “Bars are definitely more popular than coins. The 100-gram is the most popular.”...

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