Monthly Archives: November 2008

Regarding Leveraged ETFs

I am a skeptic on leveraged ETFs in one way.  My view is that the more levered they get, the less likely they are to replicate the behavior of their index, however levered. To get high amounts of leverage, they must rely on futures, options, swaps, and options on swaps, and the higher the amount […]

The Occasional Seemingly Free Lunch

hmf asks, “David – if possible, whenever you have a chance, could you please explain why there is any spread whatsoever between govt-guaranteed bank-issued debt (e.g., the GS TLGP bonds) and comparable treasuries.  It would seem they’re one and the same – thus no default risk.  Thank you very much!” I left a comment on […]

Issuing Debt for as Long as Our Republic Will Last

So Jimmy Rogers thinks the US dollar is going down?  He might be right.  There are few roads out of this crisis (more than one can be used): High inflation (raise the nominal value of collateral behind loans, maybe?) Internal Default (with depression) External Default (including currency controls, and forced conversion to a new currency) […]

The More Things Change, The More They Remain The Same

I’ve been asked by a number of readers for my opinion on the economic team being put together by the incoming Obama administration.  I’m not that excited, but then Bush Junior’s economic team was pretty consistently disappointing.  What we have is a bunch of Clinton-era retreads in Summers, Orszag, and Geithner.  Bob Rubin may not […]

Book Review: A History of Interest Rates

This book is big, very big at ~700 pages. It is a testimony to the idea that history doesn’t repeat itself, but it often rhymes. The book is arranged chronologically, and geographically within each time period.  Time is spent on each are roughly in proportion to the amount of unique data that we have from […]

The Citi was Asleep, is Asleep, and I Hope They Don’t Cause Us to Sleep

Time moves fast in a crisis.  It surprises me that it was only seven weeks ago that I wrote, What A Fine Mess You Have Gotten Us Into, where I commented: What the FDIC did with WaMu affects other banks like Wachovia.  Bidders will let the holding company fail, and bid for the operating bank […]

Book Review: The Only Guide to Alternative Investments You’ll Ever Need

I’m taking a brief break from “all crisis, all the time” writing.  I’m backlogged on book reviews, and it is time to write some. When I get a book on asset allocation, I suck in my gut and say, “Oh no, not another book that falls into the common traps of only relying on past […]