Monthly Archives: September 2007

Ten Years From Now

Recently Bill Rempel posed the following question to me: Could you compare the total return of a 10-yr Treasury bought fresh and new anywhere from 1976-1980, and held to maturity (sending the coupons to cash) — to the total return from an equal-sized basket of stocks or residential real estate over the same time period? […]

So Where Are We Now — Normal?

Maybe things have normalized.  After all: Implied volatilities have fallen below long-run averages for equity indexes. The equity market is within spitting distance of a new high. The Fed is loosening (will they do more?) The discount window is largely vacant. Away from real estate, and real estate finance, things seem pretty chipper. The yield […]

Power Outage

Apologies for not posting last night.  A power outage hit our neighborhood, and ate my post.  It also ate a decent amount of the work I was doing to respond to some questions of Bill Rempel, aka NO DooDahs!  It seems that I am used to having the “autosave” on at work and not home.  […]

Why I’m not Jumping at the Investment Banks at Present

Three reasons: There are still significant areas of concern that have not unwound yet — residential housing exposure will increase as housing prices fall further, including lawsuits which will eventually prove not meritorious, and CDO exposure. It is my firm belief that their hedges hold in minor moves, but not major moves.  VAR modeling is […]

A Note on Contrarianism and Bubbles

There is a misunderstanding about contrarianism, that somehow if a lot of people think something, it must be wrong, so take the other side of the trade.  We can make an exception here for some financial journalists, because they are often late to catch onto a story, and thus, the magazine cover indicator often works. […]