Heard at the Scuttlebutt

I heard a very disturbing rumor yesterday at the Castle Sidewalker scuttlebutt. I normally don't give much credit to rumors, but as you will see this one may have some legs.

The word out there is that Bank of America (BAC.N) may need some more money to stop from going belly up. It would be no great surprise to me, after their acquisition of Countrywide and then their forced ingestion of Merrill Lynch; I'm shocked they have managed to survive this long!

Previously I have commented about Bank of America's CEO Ken Lewis when he testified to Congress in the post Flaming Pantaloons in D.C. It came down to the fact that either Mr. Lewis, or Bumblin' Ben Bernanke the Federal Reserve Chairman was telling a massive whopper about the Merrill Lynch transaction. At the time it was a tough call to make, as Bumblin' Ben has a great portfolio of whoppers himself, including but not restricted to "...we have sub-prime contained" and denying the recession until we were a year into it.

It looks like Bumblin' Ben won that encounter as Ken Lewis is stepping down at the end of the year to concentrate on enriching a host of lawyers, as they try to defend him from the raft of lawsuits headed his way.

So as you can see there is no honor amongst this bunch of thieves. With their track record I can't dismiss any rumor I hear in the financial sector.

Will Bank of America be dipping their hand into my pocket once again? Hopefully not. Can I guarantee it won't happen? Definitely not!


-Luke Sidewalker
-Current balance $24.10

Peter Pan Recovery?

I love a good fantasy story just as much as the next man. Except that is, when this present fantasy becomes reality.

With the Federal Reserve saying the recession is over, and the S&P 500 up approximately 65% from the lows reached in March things definitely took better. But are they? With neighbors still losing jobs, and more and more mortgages falling delinquent; is this a Peter Pan recovery rooted in fantasy?

This week we have seen good earnings numbers from companies such as Coca-Cola (KO.N) and Caterpillar (CAT.N). However on closer inspection, these two companies like many others are creating earnings by cutting costs. Their biggest savings have been made by laying people off. There has been a big absence of revenue growth for these companies which is worrying going forward. When will the cost cutting tonic end? Well you can only cut costs to zero right? WRONG. It is possible to cut costs to below zero, if the company is the beneficiary of Government subsidies, which is even more worrying! As we are footing the bill.

So where do we go from here? When the cost cutting reaches it's natural conclusion and there is no revenue growth, do we fall back into the abyss? Or will the Government step in again with our money to create lots more "programs" to support the fantasy a little longer?

I'm not against companies making a profit, I'm against companies making profit on the back of Government gifts. When I see the Financials hit it out of the park playing with our money for free, it literally makes my stomach churn. All the while they give us prudent savers anemic yields on our savings. I know life isn't fair, but I didn't expect it to be this one sided...

My conclusion is that a jobless recovery is a feasible outcome for an inventory led recession, but not for a credit collapse led recession. But what do I know, I'm just a guy picking up coins in the street!


-Luke Sidewalker
-Current balance $23.72

Silence Please Ladies & Gentlemen

It is with great honor I stand before you today as the Chairman and Chief Bottle Washer of the Sidewalker Fund. It gives me great pleasure to welcome each and every one of you to this, the first meeting of the Sidewalker Fund Investment Committee.

For those of you that have been following my quest for some time, you will know that I have often mentioned this day. The point at which we now stand is where the Sidewalker monies have swollen to a total that they must now flee the relative safety (assuming my bank doesn't go belly up) of the Sidewalker checking account. These coins we brought in off the street, were first nurtured back to usefulness by an extended stay in the Sidewalker Change Jar before Jr. and I deposited them in the bank.

It is time these coins repaid my faith in them (and their free board & lodging at Castle Sidewalker), and to that end we must put them to work. It is at this juncture I realized that the burden and responsibility of controlling such funds was a task that could not fall on one man's (mine) shoulders. So I have drawn up a short list of possibilities to allocate the $21 and change. I urge you to look over my list with due care and attention, then leave your suggestion in the comments section please.

So, in no particular order here are the suggestions.

Option 1: An ING Certificate of Deposit
Pro - These CD's are FDIC insured up to $250,000
Con - The yield sucks and who is insuring the FDIC?

Option 2: Buy 5 shares of Citibank (C.N) at $4.50
Pro - With a 52 week high of $23.50 there could be lots of upside potential.
Con - Major perpetrator of today's financial mess. Next Lehman perhaps? Lots of downside potential.

Option 3: Buy 1 American Eagle Silver Coin .999 fine silver
Pro - I get rid of my dollars before the Federal Reserve Bank devalues them to zero.
Con - It is a shiny piece of metal with a nominal value of $1.

Option 4: I go to the Borgata in Atlantic City and put it all on Black
Pro - I get to feel like a rock star for the time it takes the ball to settle.
Con - Tough to explain to Mrs Sidewalker why two years of sidewalking has yielded nothing when it lands on Red.

Option 5: Buy a Mario's Pizza Value Card for $20 that is redeemable for $30 worth of pizza, and sell it for $25 to the Hoboken Paddler
Pro - An easy $5, my very own printing press.
Con - Slightly unethical, borderline illegal for dealing in unofficial currency.

So what option should I go for? Have I missed an option out? What say you?


-Luke Sidewalker
-Current balance $21.27

New Feature!

I have decided to run a new monthly feature, and it's going to be called "Shopping with Sidewalker". And I'm going to need your help as you will see later. Right now there is a battle raging in academia about whether we are entering a deflationary death spiral or are we on the threshold of hyperinflation? The deflationists cite the falling price of cars and housing, of which I may buy one every five years and maybe one a decade respectively! (I buy groceries once or sometimes twice a week, as I'm sure you do to.) The Inflationistas cite the money printing initiatives of the Federal Reserve to stabilize our economy. One thing is for sure these academics sitting in their ivory tower crunching numbers must never go grocery shopping, because us common folk know that is the true inflation litmus test. I have decided to put together a monthly shopping list of twenty everyday products and together we can watch my total spent for any signs of deflation/inflation. Now all I have to do is build that list. Below is my provisional list, and this is where I need your help. Is it suitably balanced, can you suggest any changes to be made to it? All input is welcome as always. Leave any suggestions in the comments section at the bottom of the post.

1. Half Gallon of store brand 2% Milk
2. 1lb Land O' Lakes unsalted butter
3. 1 dozen Eggland's Best large grade 'A' eggs
4. 10z Kraft Cracker Barrel Sharp Cheddar
5. 1 Can of Campbell's Chicken Noodle Soup
6. 2 Liter bottle of Coca-Cola
7. 5lb Perdue Oven Stuffer whole roaster chicken
8. 12 pack of Charmin Ultra Strong toilet paper
9. 1 loaf of Wonder Bread Classic White
10. 2.5 Gallons of Poland Spring drinking water
11. 6.4oz. Starkist Chunk Light Tuna in water
12. 1lb of 80% lean mince meat
13. 5.6oz. Aquafresh toothpaste
14. 4 pack Bounty White kitchen paper towels


I have left six slots open for suggestions from you. I know I need some fresh produce I'm just trying to figure out what to go with, and maybe some pasta or rice too. The final list will be revealed on Friday as I will be doing this "shop" on the 15th of every month, or the weekday closest to the 15th.


-Luke Sidewalker
-Current balance $16.22

Riddle me this?

The last eighteen months or so have been a torrid time in the financial markets, but it never fails to amaze me the amount of apathy I see from the general population towards this subject as I walk around. I have come to the conclusion that this apathy is born out of the main stream media's mediocre coverage of what has been unfolding in front of us. So with that in mind I thought today I would do a Sidewalker synopsis of the TARP program; hopefully this will bring some clarity to what can be a very difficult subject.

1) The banks became insolvent because they made too many poor performing real estate loans.

2) TARP was then created to float the banks. "Your money" (as a taxpayer) was given to the banks via the Treasury and Federal Reserve at very favorable rates ~0% to 0.25%.

3) The banks then lend "your money" back to you via credit cards, mortgages, loans etc. at rates ranging from 6% to 30% depending on your credit worthiness!

Are you still having a great day!? I'm not an activist, I will not be organizing any "Tea Parties" and the like. My goal writing about this subject is to provoke thought from the guy/gal in the street on what I consider to be a very important issue. This issue thus far appears to have fallen through the cracks somewhere between American Idol and their new iPhone.

I understand that my summary above is very brief, and laid out in the simplest of terms. If it is well received I will consider doing more posts like this to shine the Sidewalker flashlight of clarity on the murky world of finance. I leave you with this question, if you lent someone $10 interest free, how happy would you be if you went to borrow it back and they charged you 18% for the privilege? Now think in billions...


-Luke Sidewalker
-Current balance $15.59

Flaming Pantaloons in D.C.!

The Fire Department of Washington D.C. was stretched to the limit yesterday as a firestorm of spontaneously combusting pants broke out on Capitol Hill. The Washington D.C. Fire Chief said, "We are not sure who started the inferno, but we have narrowed it down to two possible sources, Ken Lewis CEO of Bank of America (BAC.N) and Ben Bernanke the Federal Reserve Chairman". In a bizarre move the Fire Chief went on to give the responsibility of concluding the investigation of the conflagration to the House Committee on Oversight and Government Reform. And these clowns want me to deposit the full $11.06 of the Sidewalker Fund in a bank!? Strange times indeed. The full story can be read here from CNN.

In other news, it gives me great pleasure to announce the first coin find by our very own Little Miss Sidewalker yesterday. I was in the middle of berating her for crawling around on the floor of a bar (before midnight) when she came up to me and spat a dime out of her mouth. Not the preferred Sidewalker method for retrieving a coin in that situation as I discussed in my post yesterday, but I have come to accept that Little Miss Sidewalker marches to the beat of her own drum. Ah the joys of fatherhood.

-Luke Sidewalker
-Current balance $11.06

I'm now a Pandit pundit

Yesterday was my best day in a while. Just three coins were found but the total came to 51 cents. The first time I have found two quarters in one day since the hospital find of March '08. The first quarter was at a bank of parking meters, obviously someone had missed the slot and just thought "nah can't be bothered picking that up". The second was in a mall,I imagine the person was too busy shopping to be worried about their errant quarter, to my gain.

In other news, Citigroup Inc. (C.N) topped their earnings estimates. But to be fair it is not hard to do that when the U.S. Treasury gave them money for nothing, then they deposit that money with the Federal Reserve who then pays them interest. I'm no Warren Buffet, but I could make money using the above funding strategy!

-Luke Sidewalker
-Current balance $7.42