Tom Brakke, the Research Puzzler, has started up yet another site to display bits of interesting information that he has run across — Research Puzzle Pieces.  His first piece was an interesting one, and I would like to give you my spin on it.

You may remember some of my writings in this area:

One major ploy of Wall Street is to induce people who need to stretch their income to buy a high yielding security that has weak protections.  All of the options are held by the bond seller.  They might think:

  • If things go really bad, we can default.  We’ll start another firm later; thank God for limited liability, and forgetful lenders.
  • If things go neutral-to-bad, and we need to conserve cash, we just pay with more bonds at a slightly higher rate.  In that scenario, there is no way we could borrow more at a similar rate, so we win there as well.
  • If things go okay, and we don’t have cash needs, we pay the coupon and bide our time.  (This is the only good scenario for bondholders.)
  • If things go really well, we call the bonds after the first year, paying off the investors who probably do not have great reinvestment options.

For the bondholder, the upside is capped, and the downside is 100%.  The optimal outcome is that you get paid principal & interest to the stated maturity from this bond that is deep in junk territory, CCC+/Caa1-rated, where the proceeds of the deal don’t increase the value of the firm, but are paid as a dividend to the equity holders.

As I said, the bond issuer holds all of the options here.  And what might you get as yield? 8.5-9.0%?  Given the risks here, that is not enough.

Problems of a Yield-Starved Market

PIK bonds and bonds from dividend deals tend to default with higher frequency and severity than equivalently rated deals lacking PIK and/or dividends.  But people invest, hoping that they will come out okay, even in the face of structural bond weakness.  They need the income, because they don’t have enough capital.

This is not a problem unique to investing.  As for PIK toggle bonds, securities underwriting is not all that much different from insurance underwriting.  In the first part of the bull phase of the cycle, pricing/risk margins decline due to competition.  After that, terms & conditions get weakened before the cycle turns.

It is common to see protections in debt securities decline as we get closer to the end of the credit/equity risk cycle.  We may have months to go here, or maybe two years to the peak at most, but we are living on borrowed time in the debt markets at present.  One more sign: premiums paid for loan participation and junk bond closed-end funds.  Most junk closed-end funds are at a premium, which means that there is an incentive to sell more junk debt.

What a world.  Let Bernanke know that his plan to make people take more risk is working, but when you do, tell him it is working for bad, not good.  As for my clients, we are reducing credit risk.

Who to Follow


  • #FF @researchpuzzler @newrulesinvest @felixsalmon @interfluidity @Alea_ I go through my follow list twice/yr & highlight those I respect $$ Dec 15, 2012
  • #FF @EddyElfenbein @ReformedBroker @smallcapanalyst @BarbarianCap @abnormalreturns @TheStalwart @The_Analyst @mickwe @marketfolly @bondscoop Dec 15, 2012


Stupid political things I have said


  • @jpgriffard When I say great, I mean “large.” I hate them both. Dec 15, 2012
  • @JoshForde Me too, thanks 4 interacting w/me Dec 15, 2012
  • @JoshForde Wrong time of year, and Congress is tied up with the budget, so I guess no. NYC mayor provoked me, demanding immediate action Dec 15, 2012
  • ‘ @JoshForde Yes. Unintended consequences. 9-11 and the wars it engendered r my leading exhibits there. The US messed up badly. Dec 15, 2012
  • @Borderscrossed No they don’t, have a good night. Dec 15, 2012
  • @JoshForde That I can agree with as well, w/rights come responsibilities, bigtime. Dec 15, 2012
  • @JoshForde Second-order effects; our policy usually omits those. Example: the Fed & Central Bank freedom; what if they act irresponsibly? Dec 15, 2012
  • @trmcloughlin I would agree with that also Dec 15, 2012
  • @incakolanews I would agree w/that Dec 15, 2012
  • @JoshForde Okay, but I’ve said that before on other topics… this has been a general position of mine on a wide # of issues, not just guns Dec 15, 2012
  • Auughh! Blam! Drones r another ethical issue that I hate $$ RT @Borderscrossed: @AlephBlog NSA has logged our tweets. Drones on the way. Dec 15, 2012
  • ‘ @jpgriffard He has two great achievements PPACA & Dodd-Frank Dec 15, 2012
  • @Borderscrossed Wait, you said “Obama” & “do something” in the same tweet. Isn’t that illegal? 😉 Dec 15, 2012
  • @JoshForde I’m willing to consider… what was insensitive? Dec 15, 2012
  • ‘ @ross_marketment I agree, freedom requires some laws, and here’s one to consider… liability for not securing your gun. Dec 15, 2012
  • Behind every economic view there is a political view. Unavoidable. All I know is that I get more grief from writing on politics. $$ Dec 15, 2012
  • @laGiocondaVinci That’s fine hope u do well Dec 15, 2012
  • My politics r complex; I am mostly a libertarian: I was against Iraq 1 & 2, Afghanistan. I did not like Bush 43, don’t like Obama either $$ Dec 15, 2012
  • RT @dpinsen: @AlephBlog The same people who now regret the TSA, the PATRIOT Act, etc. rushed through after 9/11 want to rush through mor … Dec 15, 2012
  • ‘ @Borderscrossed I am just saying 4 all legislation consider the second order effects; never act in heated emotion, consider all effects $$ Dec 15, 2012
  • ‘ @ross_marketment Again, 9/11 is my best example. It has harmed Americans more than our enemies. I have been against all our recent wars $$ Dec 15, 2012
  • @streetbrief Take care Dec 15, 2012
  • @ross_marketment Not sure. I am saying is consider wide range of effects from policy change; we do not typically do that & we get bad policy Dec 15, 2012
  • I’m willing 2c intelligent limits on firearms & some degree of liability 4 those that don’t secure them, but rushed policy is bad policy $$ Dec 15, 2012
  • @ross_marketment Problem: there may be fewer murders, but in the UK they have more “hot robberies” than we do; robbers have more 2fear in US Dec 15, 2012
  • ‘ @trmcloughlin What we don’t know is how many lives have been saved by firearms. We don’t hear the sound of one hand clapping. #2ndorder Dec 15, 2012
  • No doubt; I have 8 kids; 5 adopted – I feel sorry 4 the parents; grief RT @ross_marketment: and for the minority as well. 26 today Dec 15, 2012
  • And we get salvation through a plethora of ineffective statutes RT @JamesMarsh79: our society demands intervention $$ Dec 15, 2012
  • ‘ @ross_marketment I don’t own a gun, probably nevr will. I serve the Prince of Peace. I know that a few people ruin freedom 4 the majority Dec 15, 2012
  • So after a really ugly event like the killing of 6-7 year olds, we need to mourn, leave policy decisions 4 a calmer time, weighing +s/-s $$ Dec 15, 2012
  • 2 many people react 2 an ugly event saying, “This must never, Never, NEVER HAPPEN AGAIN!!” w/o considering what 2nd order effects will b $$ Dec 15, 2012
  • After 9/11, we made many policy decisions in haste that left us less free. Part of being a free culture –> we must accept some disasters $$ Dec 15, 2012




  • Wrong: Former HP CEO Shifts Blame for Autonomy Deal to Chairman No deal can get done w/o sponsorship of the CEO $$ Dec 14, 2012
  • Wrong: As Dollar Loses Reserve Status Central Banks Diversify Bad as the $$ is, no other currency is as investable $$ Dec 14, 2012
  • Wrong: Canadian Exceptionalism in Compensation France is no exemplar in paying bureaucrats a lot of $$ a % of GDP Dec 14, 2012
  • Wrong: Our Hero, Ben Bernanke: Why Central Bankers (Not Politicians) Are Saving the Global Economy First do no harm $$ Dec 14, 2012
  • Wrong: Mozilo Unbowed Says Countrywide Was ‘World-Class Company’ Big, yes, but horrible underwriting, 2much debt $$ Dec 14, 2012
  • Wrong: Bernanke Wields New Tools to Reduce Unemployment Rate No new tools, only wishful thinking $$ Dec 13, 2012
  • Wrong: Oil at $60 or $120 Doesn’t Prevent US Supplanting Saudi Arabia Decay curve 4 fracking means short advantage $$ Dec 13, 2012
  • Wrong: Krugman, Krauthammer and Their Implied Authors U r what u write; Just another aspect of your personality $$ Dec 11, 2012




  • And with that, I sign off Twitter 4 the evening (aside from robotic posts). One note b4 I go, $HPQ has not filed its 10-K @ its due date. $$ Dec 15, 2012
  • Apple Falls as UBS Projects Growth Slowdown Size is an enemy of growth. Channel check indicates slowdown 4 $AAPL $$ Dec 14, 2012
  • Hurd was an accounting manipulator; he boosted asset accrual items to paper over flagging profitability. $$ $HPQ Dec 14, 2012




  • Alberta-Quebec Oil Pipeline Reversal Study Done by June Let Quebec find its own oil then $$ Dec 14, 2012
  • Refiner Phillips 66 would support U.S. crude oil exports-CEO More important: infrastructure 4 LNG exports FD: + $PSX Dec 14, 2012
  • Tokyo Steel Shifts Output as Power Costs Rise Post-Fukushima There r real costs to doing w/o nuclear power $$ Dec 14, 2012


Federal Reserve & Central Banks


  • We would b better off in the long run if the central banks of the world stopped QE & low rates & let us work out bad debts 4 a decade $$ Dec 14, 2012
  • Houston We Have a Problem – The Abe Approach Fed adopts an approach similar 2 the proposals of Shinzo Abe $$ #FTL Dec 13, 2012
  • Inside the Risky Bets of Central Banks They talk together, but the central bankers of the world share ignorance $$ Dec 13, 2012
  • Biggest Opportunity Will Be Shorting the Bond Market: Dalio Shorting bonds is tough b/c of negative carry $$ Dec 13, 2012
  • RAY DALIO: The US Economy Is Facing A Rare Set Of Circumstances That Will Be Bad For Markets Bull mkt 4 cash & gold $$ Dec 13, 2012
  • BoE’s King warns of growing currency competition “Beggar thy neighbor” characterizes Central Bank policies globally $$ Dec 13, 2012
  • “Economists at the BIS, meanwhile, have grown more skeptical about the central bank tilt.” All lean the same way $$ Dec 13, 2012
  • “There is a lot we don’t understand,” said Donald Kohn, the Fed’s former vice chairman. You can say that again $$ Dec 13, 2012
  • Most interesting move of the day was watching long Tsy bonds sell off after Fed said it would buy more “Et tu, QE?” $$ Dec 12, 2012
  • PS: long a little bit of $TLT 4 me & bond clients, short a little bit of $SPY for hedged clients Dec 12, 2012
  • Love the DJ reporter asking about Fed forecast accuracy. The answer is they missed financial crisis, & have been shocked by slow recovery $$ Dec 12, 2012
  • Love those reporters who assume monetary policy can do anything, & that monetary policy can change unemployment w/a snap of the fingers $$ Dec 12, 2012
  • Change since September in Central tendency of Fed funds Fed forecasts 2013-2015 & longer run: 0.01%, -0.20%, -0.32%, -0.15% $$ Dec 12, 2012
  • Change since September in Central tendency of PCE inflation Fed forecasts 2013-2015: -0.08% -0.08% -0.05% $$ Dec 12, 2012
  • Change since September in Central tendency of Unemployment Fed forecasts 2013-2015: -0.27% -0.18% -0.05% $$ Dec 12, 2012
  • Long Treasuries not liking the Fed Statement, even w/the promise of additional buying FD: long $TLT Dec 12, 2012
  • Change in Central tendency of GDP Fed forecasts since September 2013-2015: -0.07%, -0.16%, 0.08% $$ Dec 12, 2012
  • Steve Liesman actually asks a decent question, wow. Dec 12, 2012
  • Here’s one year forward, one year inflation implied from TIPS over the last 40 days: moving up, currently @ 2.01% $$ Dec 12, 2012
  • Using TIPS, the figure for inflation between one and two years ahead is already 2.01%. Fed did not do its homework, again. $$ Dec 12, 2012
  • Fed Seen Pumping Up Assets to $4 Trillion in New Buying Doing same thing over & over & expecting different result $$ Dec 11, 2012


US Politics


  • How to Keep All of Huck Finn in the Classroom We need 2 eliminate the pseudo-intellectual “common core” standards $$ Dec 14, 2012
  • Dispatches from the public pension wars: & & End pension spiking $$ Dec 14, 2012
  • It really seems stupid to spend $151B to upgrade Acela when it only has revenue of $0.5B/year Slow trains r better $$ Dec 14, 2012
  • Whose job is it to stop an asteroid from hitting the Earth? Would need at least 2 years of lead time, preferably 5 $$ Dec 13, 2012
  • Big Banks Flunk OCC Risk Tests 2big2b effectively regulated; left hand doesn’t know what right does, centipede-level $$ Dec 13, 2012
  • Pimco’s Gross Says Fed Policy Means ‘Free’ Debt for Treasury Ah, seigniorage; it is good 2b king Dec 13, 2012
  • Amtrak Plans to Replace All High-Speed Acela Trains I like the Acela, but I can’t see how 2 recoup $151B 4 new trains Dec 13, 2012


Rest of the World


  • Islam in Egypt’s new constitution Kind of interesting; gives u a feel 4 different types of Islamic casuistry $$ Dec 13, 2012
  • Assad Losing Syria, Say Russia and NATO Could Chavez & Assad lose their power in the same week? $$ Dec 13, 2012
  • EU Reaches Deal on Bank Supervisor A lot of the details have 2b worked out; will b interesting 2c it in action $$ Dec 13, 2012
  • China’s Economy – weaker than we think The math is pretty clear: rebalancing will inevitably require lower growth. $$ Dec 13, 2012
  • What Mario Monti’s Exit Tells Us About Europe’s Debt Crisis Problems r cultural; politics can’t bring prosperity $$ Dec 13, 2012
  • “Reckless, Wrong-Headed” Pension Rules Could Savage Europe’s Economy Key Q: how large is the equity prem over Tsys? $$ Dec 13, 2012
  • US Schoolchildren Lag Asian Peers on Academic Tests Phonics & going back to the “old math” would help considerably $$ Dec 11, 2012
  • Argentine mom rescues hundreds of sex slaves In rescuing her kidnapped daughter, gains a quest & rescues hundreds $$ Dec 11, 2012
  • Germany displaces China as US Treasury’s currency villain Germany > China; biggest source of global trade imbalance $$ Dec 11, 2012
  • BIS: Policy measures and reduced short-term risks buoyed markets True now, but will make eventual tightening harder $$ Dec 11, 2012
  • Honey Laundering No way India is now producing so much honey. Imports from China, escapes duties, exports 2 US $$ Dec 11, 2012
  • Hitler Has a Following in India India dislikes the British enough, & desires a strong leader to save them, & thus $$ Dec 11, 2012
  • Sony Loses Science Talent as Student Resumes Go to Dairies Can’t obsolete food; shows caution among Japanese youth $$ Dec 10, 2012
  • Carson Block Goes Short Unafraid as Chinese Gangsters Chase Trying 2 hide information does not change negative FCF $$ Dec 10, 2012
  • China November factory output jumps to eight-month high And consumer inflation bounced off 33-month lows $$ Dec 10, 2012
  • Chinese Group Buys 80% of AIG Plane Unit for $4.2B Good 2c $AIG simplify. I suspect the seller is the winner here $$ Dec 10, 2012
  • Raging Oil Price Will Burn OPEC Suggests downward pressure on oil prices. Sell high-cost E&P, maybe $$ Dec 10, 2012
  • Slowing China Forex Reserves May Spell Trouble Suggests gold and Singapore $$ off of weakness & capital flight in China Dec 10, 2012




  • Those Diabolical Anonymous Commenters If we have to sign our names to what we write, we will b more judicious $$ Dec 14, 2012
  • The five most disruptive technologies of 2012 Pretty fascinating, particularly power storage & cheap internet $$ Dec 13, 2012
  • Finally did it. Joined the cult of Warren the Wonderful Now my clients & I can get a discount @ GEICO. FD: + $BRK.B $$ Dec 12, 2012
  • America’s Milk Business in a ‘Crisis’ Maybe if they got rid of the growth hormones, more people would want milk $$ Dec 11, 2012
  • Bloomberg Weighs Making Bid for The Financial Times Creating a more powerful Bloomberg, LP piece-by-piece $$ #FTW Dec 11, 2012
  • Green energy will come into existence without subsidies when crude is $200/bbl $$ Dec 11, 2012
  • They Know What You’re Shopping For Interesting. Shows how auto dealers get data on you $$ Get “do not track” $$ Dec 08, 2012


US Politics & Economics

  • When the CPI is up, journos point at the bogus “core” figure. When the CPI is down, journos point at the CPI. Bias $$ Dec 14, 2012
  • The Myth Of Cash On The Sidelines Remains A Myth Also have 2 count the cash that collateralizes derivative positions $$ Dec 13, 2012
  • Mortgage Rates in the US Drop to Near-Record Lows Attractive credit, if u can get it; hey, rhymes and scans $$ Dec 13, 2012
  • If u r a professional bond investor, researcher would like you 2 take survey on Investor Preferences for Climate Bonds Dec 13, 2012
  • Beef in America is plentiful & affordable, spun out in enormous quantities @ high speeds: bonanza w/hidden dangers. $$ Dec 13, 2012
  • States Faulted Over Teacher Pension Shortfall (non) Payback coming to teachers 4 negotiating 2 high pension bfts $$ Dec 13, 2012
  • How Republicans engineered a blow to Michigan’s powerful unions Hidden in plain sight; careful planning achieved it $$ Dec 13, 2012
  • For-Sale Signs Sprout in Heartland Likely sustainable as there are low levels of debt used to effect buys $$ Dec 13, 2012
  • I care more for how a man weighs ideas & opinions than what he weighs. Dec 12, 2012
  • “Ferri’s reasoning only looks easy in hindsight. I agree with Barry’s reasoning, though. Consistent w/Q-ratio, etc. $$ Dec 12, 2012
  • Before the public pension crisis ends, some states will remove pension protections in their constitutions, & retroactively cut benefits $$ Dec 12, 2012
  • $822,000 Worker Shows California Leads U.S. Pay Giveaway People r finally getting how big this problem is $$ Dec 12, 2012
  • Social Security – 2012 Results Social Security & Medicare get worse and worse; US Govt will not b able 2 afford them $$ Dec 13, 2012
  • Hawaii Real Estate Paradise Returns With Goldman Loan Japanese & Korean travelers driving hotel visits $$ Dec 11, 2012
  • LOOMING CRISIS: State Budgets Soon to be Under Siege Cash payments r curving up rapidly 4 public employee benefits $$ Dec 11, 2012
  • Don’t forget the unforced give up of stricter bailout terms, made when $$ was impossible to get; $AIG deal… Dec 11, 2012
  • Please ignore special tax benefits given $AIG & unforced renegotiation of original deal. A loss in economic terms $$ Dec 11, 2012
  • Better Gas Mileage, Thanks to the Pentagon As w/the space program, rarely we get positive spillover from Defense $$ Dec 11, 2012
  • 13 Insights From Paul Tudor Jones He is not only a successful hedge fund manager but a very original & clear thinker $$ Dec 11, 2012
  • $GOOG Revenues Sheltered in No-Tax Bermuda Soar 2 $10B Shock in Hamilton as NATO blockades, seizes shell companies $$ Dec 10, 2012
  • Hostess Maneuver Deprived Pension Multi-employer pension trusts r weak; PBGC coverage is < single-employer plans $$ Dec 10, 2012
  • Climate Treaty Hinges on Obama Making Case: Ex-Aides Obama doesn’t want 2 waste political capital on low odds win $$ Dec 10, 2012
  • Most Accurate Forecaster Sees Lethargic US Expansion Economic Lethargy girdles the globe, everything slowing $$ Dec 09, 2012
  • SEC’s Aguilar Warms Up to Money-Fund Overhauls Will destroy MMFs & won’t significantly help systemic risk $$ Dec 08, 2012



  • To the main point: High speed rail is a boondoggle. Slow will do. RT @finemrespice: @AlephBlog Dec 14, 2012
  • Not indice, index $$ RT @weigu: Shanghai Composite Index is the 2nd-worst performing stock indice in the world this year, just after Spain. Dec 13, 2012
  • RT @randy_cass: Hint #1 that we’ve gotten conditioned to stimulus. Journalist asked question and referenced ‘$45 Billion a month’ as ‘a … Dec 13, 2012
  • Inertia RT @AsifSuria: Why does Best Buy still pay a dividend? $BBY Dec 13, 2012
  • Here’s a graph of it for those who don’t know where 2c it: RT @TheStalwart: @AlephBlog tanked right at 8 PM ET $$ Dec 13, 2012
  • RT @Convertbond: Scary US Percentage of High Yield Bonds Trading ABOVE next Call Price 2012 40% 2011 30% 2010 22% 2009 0% 2008 5% 2007 … Dec 12, 2012
  • You said it RT @credittrader: umm benny – look at 5y5y fwds! come on man…. Dec 12, 2012
  • He can’t mean that $$ RT @davidgaffen: “I don’t think any policymaker, including the Fed, should respond to markets.” -BB 12/12/12 Dec 12, 2012
  • RT @Kathleen_Hays: CBS news guy asks Bernanke how does tying rate change to 6.5% jobless help economy? Bernanke says better communicatio … Dec 12, 2012
  • RT @LaMonicaBuzz: Where’s Chuck Barris? The Bernanke press conference is approaching the hour-long mark. Time for someone to ring a big … Dec 12, 2012
  • Muted response from $GLD, $TLT down, $SPY up/down since stmt RT @jamessaft: it is not the reporters who scare me, it is the investors $$ Dec 12, 2012
  • I assume we r both “persona non grata” there RT @cabaum1: @AlephBlog Use my name. It’ll get you a seat in the very back. Dec 12, 2012
  • You made me laugh; I applied to be in the press, they didn’t take me RT @cabaum1: @AlephBlog Be nice. He’s playing Helen Thomas. $$ Dec 12, 2012
  • RT @WildestFacts: Only 70% of people will understand the following: 2 + 2 = Fish. 3 + 3 = Eight. 7 + 7 = Triangle. RT if you get it. Dec 12, 2012
  • RT @tracyalloway: So long European aversion? Yankee bonds of European issuers now trading at pre-debt crisis levels, BarCap says: http:/ … Dec 11, 2012
  • Can’t make this up $$ RT @Alea_:[ pictures ]Mayan apocalypse: Chinese farmer builds survival pods in case of a disaster Dec 11, 2012
  • RT @MKTWBurton: What if the stock market is rigged? @abnormalreturns @felixsalmon @alephblog @bclund @nastrading: … Dec 11, 2012
  • +1 RT @fmanjoo: The University of California’s new logo is just unbelievably bad Dec 10, 2012
  • Faith too RT @Mctaguej: It’s the growing number of collectivists among us that most concerns me. American individualism is in steep decline Dec 08, 2012



  • @e_d_sanders But once they are set up, most of the costs are incurred already, even the externalized ones. Dec 14, 2012
  • ‘ @JonathanProber My advice to all investors is to be wary of asset accrual items that seem too big relative to assets & profits $$ Dec 14, 2012
  • @JonathanProber I grew up on life insurance acctg, which is probably the most complex acctg of any industry, except investment banking Dec 14, 2012
  • @bundesbank Die Buba ist jetzt auf Twitter. Feiern Sie mit! Holen Sie sich eine Currywurst, Sauerkraut und ein Bier! $$ 😉 Dec 14, 2012
  • @finemrespice Living near Baltimore, idea of turning it in2a toxic nuclear waste dump could b an improvement. Better 40 miles SW, though $$ Dec 14, 2012
  • @quartznews Queen: “At least we don’t have to worry about whether this gold exists. Pity about the colonies & Fort Knox…” Dec 14, 2012
  • @Pedant_Bot This *is* Twitter, u know. Often we use less than optimal words 4 space reasons. Or, r u referrring to a blog post of mine? $$ Dec 14, 2012
  • @ritholtz I’m agreeing w/u, Barry – there is less cash available 2b invested than most think, b/c much of it is encumbered Dec 14, 2012
  • @ReformedBroker Thanks, Josh. You have my respect; it’s tough to put out quality content w/frequency, variety & regularity Dec 13, 2012
  • @SimoneFoxman “At least we don’t have to worry about whether this gold exists. Pity about the colonies & Fort Knox…” Dec 13, 2012
  • @finemrespice Got me to laugh. Yeh, hedge funds r the financial equivalent 2 alchemists. Let them propose alternative math, c who buys it $$ Dec 13, 2012
  • @finemrespice Alas, but mathematics is a tough foe. Let alternative mathematics try to make $$ by outcompeting traditional math 😉 Dec 13, 2012
  • @TheStalwart Not much in today’s trading… why, is something happening in Asia? Dec 13, 2012
  • @LaurenYoung The saints will laugh, the sinners will cry Dec 13, 2012
  • ‘ @Healey_trades I think the market is adjusting to the idea of higher future inflation, the Fed will not be able to maintain its policy $$ Dec 13, 2012
  • @OVVOFinancial I’ve never agreed with that — that would be why median CPI or trimmed mean CPI would be preferred Dec 12, 2012
  • @OVVOFinancial And if you use chained CPI vs chained PCE, they are virtually the same over the last 10 years Dec 12, 2012
  • @OVVOFinancial Over the last 10 years that would shave 0.2% off CPI inflation Dec 12, 2012
  • @OVVOFinancial I understand that Fed uses PCE $ TIPS r CPI-based, but there are no objective forward measures for PCE Dec 12, 2012
  • @cate_long Here’s 1-yr forward, 1-yr inflation implied from TIPS over the last 40 days: moving up, currently @ 2.01% $$ Dec 12, 2012
  • @cate_long Here’s a graph for that: Dec 12, 2012
  • @TheStalwart Ready at the criticism turret! Dec 12, 2012
  • ‘ @Kevin_Holloway As the market has run, $$ has grown, approaching max cash limit; 1.2x BV $BRK.B is below; well-run, difficult to replicate Dec 12, 2012
  • @WildestFacts 70% sounds high, but the process is simple, flip one and paste over the other for a picture Dec 12, 2012
  • “4 of 6 companies graphed are housing related. $CLGX is not an insurer. Maybe you need to revise…” — David_Merkel $$ Dec 10, 2012
  • Many thanks to my 6000th Twitter follower @syedasyraf4 . Wherever you are, I pray things go well for you. Dec 09, 2012
  • ‘ @muffiehbs05 @carney I guess you’re right, Muffie, much more than a fund A home 4 student & alumni moral decay $$ Dec 08, 2012
  • .@historysquared The slow corruption of the last set of strong balance sheets in the US. Leverage is being substituted for organic growth $$ Dec 08, 2012



  • My week on twitter: 57 retweets received, 1 new listings, 54 new followers, 65 mentions. Via: Dec 13, 2012