Friday, May 10, 2013

Alan was the last of a dying breed. The beacon of hard-hitting journalism had begun to dim in the late 1970s, when Woodwardbernstein wannabes fresh out of J-school began to replace journeyman reporters. Alan kept the lamp burning. As an occasional contributor to Barron’s in the mid- to late 1990s, I pitched some articles to Alan that no other paper would have touched, including a deflationist think-piece that was considered loony-bin stuff at the time. I feel blessed to have had an opportunity to work with him. Barron’s lost a hard edge it never quite regained after it shifted Alan from his managing editor’s job. He continued to work out of his suburban NYC home. Alan did not ‘do’ e-mail, preferring instead to communicate via typed messages. Banging out his weekly column on a typewriter, he remained one of the most influential voices on Wall Street as well as a mentor to some of the best reporters every to ply the trade. He will be deeply missed and mourned by many.

While most bank stocks are trading far below their highs, Wells appears headed into the ozone.  Their all-in bet on residential mortgages has paid off as the housing bubble, er, boom washes away any vestigial notions about real estate being risky.  From a technical standpoint, the stock looks bound for a minimum 39.85 over the near term. Although that would still leave it $5 shy of the 44.52 peak achieved before the Great Financial Crash of 2008-09, the peak would likely become magnetic once WFC has broken the $40 barrier.

We wrote here recently that Wall Street seems to be revving up for The Mother of All Blowoffs. The banks are evidently trying to stoke a mania of their own, judging from the mail we get each day. A typical batch now includes no fewer than three or four teaser offers to borrow money for practically nothing.  Just today we heard from Wells Fargo (“Enjoy 0% APR on balance transfers for 15 months…”);  Discovery (“Get a fresh start on your home loan. Refinance and lock into a rate as low as 3.09% APR today!”); AT&T Universal Card (“0% Promotional APR on transferred balances until 6/01/2014”); and Chase Freedom (two fabulous offers: “0% promotional APR through your billing cycle that ends in 08/2014’;  or, “1.74% promotional APR through your billing cycle that ends in 01/2015”).  And that’s just a single day’s worth.  Add up all of the offers we’ve received in the last month and they tally more than a half-a-million dollars’ worth of instant borrowing power – all at interest rates ranging from zero to 3.09%. It’s tempting to imagine all of the things we could do with the money.  For starters, we could trade in a 13-year-old Lexus for a new model. Buy new ski equipment while it’s on sale. Build a new patio in the back yard. Take the family to Europe this summer. And there’s plenty of room in the basement for a home entertainment center and a billiard table. What’s left could help defray the awesome after-tax expense of having two boys in college. Maybe the best play would be to parlay the entire sum in the stock market. With 11,000 stocks to pick from, surely there is at least one surefire winner in the bunch. When Rates Turn Lethal Alas, the banks, more desperate than