Currencies – Page 4 – The Aleph Blog

Cato Institute 30th Annual Monetary Conference, Part 6

Posted on 15 November 2012 by David Merkel

Moderator: Tao Zhang
U.S. Bureau Chief, Caixin Media

Capital Freedom for China

Eswar S. Prasad
Tolani Senior Professor of Trade Policy, Cornell University

Renminbi as a reserve currency 3 conditions:

Internationalization
Capital Account Convertibility
Do other countries hold Renminbi assets as protection against payments crises. (DM: also, do you want to have a lot of debt for foreigners to invest in.

Much progress on #1, little on #2 and 3.

Second order effects of opening: Institutional market development, financial market development.? Try out experiments in Hong Kong.

Size of China, macroeconomic policy potentially allow for? reserve currency, but the banking and financial markets are not capable of absorbing the volatility.

PBOC creating Renminbi swap lines.? IMF more involved w/China; SDR basket membership coming.? Renminbi becoming a bigger factor in the global economy.

Yukon Huang
Senior Associate, Carnegie Endowment for International Peace

400 years ago, China was a reserve currency with 30% share of Gross World Product.

Being a reserve currency lowers trading costs, lends prestige.? Serves as a “Trojan Horse” for reform in China. Seiniorage.

Triffin dilemma, conflict between domestic and foreign goals, adds to currency risk.

China has partially internationalized with capital controls.

Also, reserve currencies are typically issued by democracies.

Chinese authorities use banks to motivate growth and development.? Not markets.

Capital flight happening.? Huang thinks that is good: diversification and other benefits.

Zhiwu Chen
Professor of Finance, Yale School of Management

Money used to settle increasingly more transactions in China, whether it is housing, wages, etc.? Everything is no longer tied to the government.? “Rise of the individual in China.”? McDonald’s in China originated “I’m loving it.”

As rule of law diminishes across Chinese industries, state ownership tends to rise.? The more free the movement of capital in Chinese industries, state ownership tends to fall.

China late to develop limited liability corporations in the late 19th century.

SOEs ran into major losses in the 1980s, and private corporations came back.? But most large firms are still controlled by the government.

Q&A

Possibility of democracy in China?

Prasad: No.? Communists have largely delivered the goods.? Regional problems.

Chen: Yes. Options for the Communist Party are limited. Change may be forced when the good can’t be delivered any more.

Huang: property rights are uneven, and Party members abuse their power.

Cato Institute 30th Annual Monetary Conference, Part 5

Posted on 15 November 2012 by David Merkel

Moderator: Mary Anastasia O’Grady
Member, Editorial Board, Wall Street Journal

Lessons from the Euro Crisis

Opens by saying that the Euro was started with good intentions.? (DM: low praise that it was not designed to fail.)

George S. Tavlas
Director, Bank of Greece

Euro was anticipated to reduce economic problems in Greece, and it worked for a while after 2001.? Interest rates fell and became stable.? Government deficits rose.? Net public saving fell.

Crisis hit. Yields screamed up. Real GDP falls 20% 2008-present, maybe another 6% next year.

Difficult to run large external deficits under a gold standard.? Relatively easy to do so in the short run in the Eurozone.? Mundell’s optimal currency union requiring flexible wages and prices is necessary but not sufficient.

Under a gold standard, credit spreads are high and restrain government borrowing.? Eurozone membership facilitated Greek overborrowing.

Can’t hold a peg without credible fiscal policies.

J?rgen Stark
Former Chief Economist, European Central Bank

ECB will ride to the rescue of European Governments.? This is not a sustainable policy.? Adjustments need to take place.

ECB — principles & rules based. (DM: somewhat subverted at present).? Some countries were allowed to join the Euro who really were not qualified.? Rules were not upheld. Countries did not get the practical impacts of sharing a currency.

Five points to overcome the crisis:

Stabilize and reduce govt debt
Structural reforms — flexibility
Reorganize & recapitalize banking sectors
Reform monetary union
ECB provides liquidity to banking sector

Crisis policies not well thought out, ad hoc, reactive, leaves too much to the ECB to do, too little done by govts

Wolfgang M?nchau
Associate Editor, Financial Times

OMT policy not started yet — will it work?? Fundamental problem of Eurozone: No bailout, no default, no exit (inconsistent).? Believes Greece will eventually be bailed out… would go easy on austerity as a policy in Greece.

Banking union necessary to get ECB out of the OMT problem.

Argues that low level economic reform necessary in order to create a economic union.? Political union would likely be needed.

Five conditions for a currency zone:

Real conversions and similarity
(sounded similar to 1)
Political consensus on fiscal & monetary union
Banking union
A willingness to bend political/fiscal priorities in a crisis

Thinks Eurozone will not break up.

Pedro Schwartz Giron
Professor of Economics, San Pablo University, Madrid

How the Eurozone could survive.? Quasi-gold standard — ECB was supposed to be independent from all.? No exploiting money illusion. No devaluation. No excessive debt.

Debt Intolerance: Debt> 90% GDP in developed countries. 60% in emerging markets.? Spain at 90%+ in 2013.

Monetary must be rules-based because we don’t really understand what monetary policy does in the intermediate-term

Inflation will happen instead of default or dissolution

Q&A

Tavlas: Argentina 2001 vs Greece now — like gold standard in Great Depression, those that left early did best.? Leaving euro: capital flight, new currency has extreme risks, foreigners would not accept new drachma, contagion effects.? Credit Anstalt failure turned a recession into a depression (DM: something would have failed… too much debt.)

O’Grady: Argentina: convertibility, not a currency board.? Very different.? Argentina has not had good results.

Stark: Latvia, Ireland austerity may be working.? Austerity fatigue in the south.

Munchau: Can Germany leave the EU?? Not likely and only Americans ever suggest it.? Unthinkable politically.

Stark: Anyone suggesting this does not understand European history or politics.

Basel II impacts on the crisis 1.6% capital lending to Greece, 8% to a German corporation?? Stark: this is not a key problem.

Book Review: How To Really Ruin Your Financial Life and Portfolio

Posted on 13 October 201213 October 2012 by David Merkel

Before I start, a thanks to all of my readers who have voted on my reviews. Note: if you have voted on many of my reviews favorably, further votes won’t help.? Amazon limits the effects of fans.? Onto the book:

For those unfamiliar with Ben Stein, he has done a series of books on “How to Ruin…” for example: How to Ruin Your Life and How to Ruin Your Financial Life. I have not read either of those two books, but after a glance at the table of contents of each book, I can say that what he wrote there is right, even if it is short.

If you can avoid making wrong moves, right moves will occur on average.

But… most of this is simple commonsense stuff reported from a negative angle.? If you have read the personal finance category at my blog, you would know what he has written and far more, and it is free.

There is no bad advice in this book, if you understand that it is offering you bad advice.? By telling you you to do stupid things, it incites you to do what is right.

Quibbles

The book is not worth $12 to those with a reasonable understanding of the markets.? It is worth a lot to the uninformed who think they know something but don’t.? This is a book you give; it is not a book that you buy.

Who would benefit from this book: ? This is the sort of book that you give as a gift to your clueless brother-in-law.? It has value there, to raise the awareness of those who are destroying their financial lives.? If you want to, you can buy it here: How To Really Ruin Your Financial Life and Portfolio.

Full disclosure: The publisher sent me a hard copy of the book, without my asking.

If you enter Amazon through my site, and you buy anything, I get a small commission.? This is my main source of blog revenue.? I prefer this to a ?tip jar? because I want you to get something you want, rather than merely giving me a tip.? Book reviews take time, particularly with the reading, which most book reviewers don?t do in full, and I typically do. (When I don?t, I mention that I scanned the book.? Also, I never use the data that the PR flacks send out.)

Most people buying at Amazon do not enter via a referring website.? Thus Amazon builds an extra 1-3% into the prices to all buyers to compensate for the commissions given to the minority that come through referring sites.? Whether you buy at Amazon directly or enter via my site, your prices don?t change.

Book Review: Visual Guide to Financial Markets

Posted on 28 July 201228 July 2012 by David Merkel

This is a good book and I recommend it to certain people.? Thus when you see the number of stars I give it at Amazon, know that for those whom the book is good, it is really good.? But there are some who will get less out of the book.

The author, David Wilson, is an excellent explainer of markets to those who are just learning.? He frequently does “The Chart of the Day” at Bloomberg, giving considerable insight to neophytes and professionals as he boils down complex topics into one graph.

As I began to read the book, I noted to myself, “Oh, in a number of places, they are using Bloomberg Terminal formats without mentioning it.? At the end of the book, they give a list of Bloomberg Terminal codes that would be useful to those who subscribe to the ~$2,000/month service. (Yeh, it costs that much, and it is worth it if you can afford/use it.)

I say this partly because I was a rare Bloomberg user that had expertise with all of the “yellow keys” of Bloomberg.? I’m intellectually curious, so when I first used a Bloomberg terminal back in late 1992, I played around with it to see what it could deliver.? It could deliver a lot, and it has expanded exponentially since then.? It is one amazing system.

But what if you could cobble together the most important 50% of what you get on a Bloomberg terminal, ad pay nothing?? That’s me.? It takes extra work, but you can do it.? I miss my Bloomberg terminal, because I can’t afford it now, but for those that can afford it, it is a wealth of information.

Thus, back to the book.? The book reads like one who imbibes both Bloomberg’s editorial ideals: “keep it simple. explain, give them the facts,” and teaching beginner users of a Bloomberg terminal on how to think about the markets.? Note that the terminal never gets mentioned until an appendix at the end.? But those that use a Bloomberg terminal to a high degree understand how the market is segmented.? We don’t ask the same questions with municipal bonds as we do with stocks.

This book is a very good book for beginners in the markets.? It explains a lot of things well, with reasonable detail.? It is not a good book for experts — you know all this, but if you want to get an introduction to some tangential areas you might not know, this could still help you.? This book brings you up to an intelligent beginner level in a wide number of areas.

What areas does it cover:

Stocks
Bonds (of many sorts — corporate, government, municipal, mortgage, etc.)
Money markets
Indexes
Commodities
Derivatives (options, swaps, futures, forwards)
Mutual Funds (open-end and ETFs)

The book highlights at the edges of its pages the main ideas, processes for using the information described, and definitions of financial terms.

Quibbles

When the book gives definitions, it is white on a vivid green background, and is hard to read.? The text should have been black against the vivid green.

The book implicitly assumes that people get quotes from a Bloomberg terminal.? Aside from professionals, few people do.? Until Bloomberg markets a retail service for individuals, offering the basics for 5% of the cost, there is little utility from explaining the nuances of a Bloomberg quote.

The title is slightly misleading, because the the book is no more “visual” than most.? There are a decent amount of graphs, but for a book that calls itself visual, I would have expected more.

Who would benefit from this book:?? This book is best for those that have access to a Bloomberg terminal, but are not expert in using it. Second best, it could help those without a Bloomberg terminal, but want to learn the basics of investing.? Dave is a good teacher.? Finally, for those with experience, this book is redundant.? If you want to, you can buy it here: Visual Guide to Financial Markets (Bloomberg Financial).

Full disclosure: The publisher asked if I wanted the book.? I said ?yes? and he sent it to me.

Book Review: The Decline and Fall of Europe

Posted on 21 June 201221 June 2012 by David Merkel

This book is written by a man who wants to see the European experiment succeed, but is not confident that it will succeed.? I think this is a fair book on the topic; it does not absorb all of my biases on why I think the Eurozone is hopeless: a) Currency unions have never worked; they must either become a nation, or break up.? b) I have a saying, “Governments are smaller than Economies, and Economies are smaller than Cultures.”

This saying puts things in their place.? Government can’t in the long run prevent things that are economically successful, those things fill human needs.? But cultures are bigger than economies; we don’t live to consume. We live for ideals.? Different cultures have different ideals, and it means that a purely individualistic or collectivist view of economics won’t be accepted in the Eurozone.? They muddle in the middle.

The Eurozone is a political and economic experiment, and was pretty successful and harmless until they began to seek a common currency.? Yes, there were other problems, bureaucrats in Brussels, seeking human perfection though regulation, helped to strangulate a previously more competitive Eurozone economy.? That said, the common currency offered some offsetting advantages of efficiency.

Other Troubles

But there are other troubles.? There are unaffordable pensions in many countries that lie behind that economic problems.? As one who is 51, and well off, why should anyone, aside from oil wildcatters, who endure a lot of physical stress retire at age 50 on the largess of the taxpayers, that is, if you have taxpayers.

Even retiring at age 60 is ridiculous, which France has recently reverted to from 62.? France will never be able to afford it as a nation.

But then there are cultural issues: do you care what your laws are?? Would you care if immigrants are ruled by Islamic Law?? Would you care if your grandchildren, a minority like the Maronites (Roman Catholics) in Lebanon, are ruled by Islamic Law?

The Main Economic Issue

After all of the strangu-regulation, what if economies can’t grow at levels sufficient to exceed the rates at which they borrow?? They slowly fail, as debts grow, and doubts about repayment grow.

In the Euro-zone this is particularly pertinent, because countries can’t depreciate; they must repay in Euros.? When the Euro was introduced it was heaven for many nations, because they could borrow cheaply.? Eventually, they had too much debt, and lenders rebelled.

This is the nature of an area that is not a natural currency area — the Eurozone.? This was an experiment doomed to fail.

Quibbles

None, but I would be a full Euro-sceptic.? This can’t work.? More effective human labor is always better than less.

Who would benefit from this book:?? If you want to learn about the problems in the Eurozone from someone that is fair, you will find it here.? If you want to, you can buy the book here: The Decline and Fall of Europe.

Full disclosure: The PR flack asked me if I wanted the book, and was kind enough to send me the book.

Sorted Weekly Tweets

Posted on 16 June 2012 by David Merkel

Eurozone

Spain Grazing Junk Status Fuels Contagion Risk http://t.co/bEvUbpcE Life is tough near the tipping point; EZone unstable by design $$ Jun 16, 2012
A Conversation on Europe’s Political Economy with George Friedman and John Mauldin http://t.co/HysUyF2N Can EZone politics work? $$ 9min vid Jun 15, 2012
ECB Tells Court Releasing Greek Swap Files Would Inflame Markets http://t.co/pASYdDNC All-wise ECB tells us we can’t handle the truth $$ Jun 15, 2012
Central Banks Warn Greek-Led Euro Stress Threatens World http://t.co/fwFSb7wr Central Bankers will dilute the curncys2pay bank ruptures $$ Jun 15, 2012
Draghi Hints ECB Is Ready to Act http://t.co/dG4QRLTE Nobody else is doing much, so Draghi takes the next step 2 $$ looseness #FTL Jun 15, 2012
Merkel?s options: Pay, inflate, or else? http://t.co/6iyl3f0H If the Germans want2keep EZone, must give up @ least 1 of their goals $$ Jun 15, 2012
Bond Parishioners Are Leaving The Euro Church http://t.co/szDlBJ5m “Liquidity never cures solvency problems which is exactly where we r now” Jun 14, 2012
David Rosenberg Channels Felix Zulauf http://t.co/7g7JN8e5 High debt levels combined w/inflexibility of Euro make solutions tough $$ Jun 14, 2012
Germany and Greece: a tale of estrangement http://t.co/2YFZ2xDY Greece was probably hopeless, but Germany raised/dashed expectations $$ Jun 14, 2012
Switzerland joining the Eurozone would have to join the EU; would not solve the currency problem but merely make the problem permanent $$ Jun 14, 2012
The Dangers of Switzerland’s Currency Strategy http://t.co/ryydgM5Q Switzerland should join the euro http://t.co/zdotnFSb $$ Jun 14, 2012
I would love to meet Angela Merkel & discuss the Eurozone w/her, but I know my limits, i am not important enough 4 that 2 happen $$ Jun 13, 2012
?German history teaches us compellingly that isolation would spell disaster,” I don’t agree, and think dissolving the Euro would b best $$ Jun 13, 2012
Spanish, Italian Yields Leap Higher http://t.co/KkIgKyYJ How long, to the point of no return? $$ Jun 12, 2012
Whole world feels soggy $$ RT @agnestcrane: So much for the Spanish bank bailout bounce. Dow down 1.24%, 10-Yr Tsy back below 1.6%. Jun 11, 2012
RT @historysquared: ?We cannot push through a banking union when the French have just cut their retirement age to 60 and we have raised … Jun 11, 2012
Greek Blackouts Risked as Power Companies? Cash Runs Out http://t.co/qtOOodzG When does Greece finally realize their nation has failed? $$ Jun 11, 2012
Italy Moves Into Debt-Crisis Crosshairs After Spain http://t.co/SDEe8FQm That’s the nature of contagion; In the EU contagion is ragin’ $$ Jun 11, 2012
+1 $$ RT @Queen_Europe: Well, the Spanish might be too big to bail but at least they hold their press conferences on time. #BeingGerman Jun 09, 2012

Energy

Venezuela’s Massive Oil Reserves ‘Irrelevant’? http://t.co/rhEZlZXJ Highlights Chavez’s mismanagement of industry, especially crude oil $$ Jun 15, 2012
Nationalised oil can deliver output growth http://t.co/o0ssVqXb Overly laudatory piece praising the virtues of state-run oil companies $$ Jun 15, 2012
Unconventional oil to alter geopolitical balance http://t.co/RABAp9FT Balance may get tilted, but I would not expect self-sufficiency $$ Jun 14, 2012

Financial Sector

Duke, GE Tempt Savers With Higher Yield Than Money Funds http://t.co/3HJ3BKzK I would be careful; single creditor risk w/no gtees $$ Jun 16, 2012
Jamie Dimon Welcomes You to the Next Financial Crisis http://t.co/6oyULAic Could $JPM make $$ anticipating EZone finl crisis? from @moorehn Jun 15, 2012
Why it’s time for higher interest rates http://t.co/xjmZMNub Sheila Bair takes on Paul Krugman & Ben Bernanke’s overly loose $$ policy Jun 15, 2012
Americans See Biggest Home Equity Jump in 60 Years http://t.co/Yq5nHxtn Another bright spot, but still lotta mtges r inverted $$ Jun 14, 2012
Large Institutions Discuss New Marketplace for Bonds http://t.co/t9j4sEtk Few holders, large lot sizes, usually self-liquidating $$ Jun 14, 2012
Private Equity Has 2 Much Money to Spend on Homes http://t.co/VPToSU8I Don’t get how many residences can b managed @ reasonable expense $$ Jun 14, 2012
@mickwe Thanks, Mick, I get it. I have “traded” illiquid securities in my life and have a feel for when claims r invalid. $$ Jun 13, 2012
Mortgages Beating Junk Bonds as Homes Top Europe http://t.co/HTjhcz7T Mkt more accepting of nonconforming mtge risk than Eurozone or junk Jun 13, 2012
‘ @GaelicTorus Cool, hexadecimal yields. There are only 10 types of people in the world, those that get binary, and those that don’t $$ Jun 12, 2012
Loophole at MF Global Is Headache for Regulators http://t.co/P1xUc1Y5 Except Corzine, senior execs weren’t registered w/regulators $$ Jun 12, 2012
Why do I get so many pump&dump scams in the mail? I’m getting tired of the liars that call themselves analysts who profit from promoting $$ Jun 12, 2012
In other words, the crisis hit people who thought they were well-off because of overpriced housing assets; this really isn’t news $$ Jun 12, 2012
Family Net Worth Fell Almost 40% Between 2007-2010 http://t.co/W4rfdy1o Effect largest on 2nd wealthiest quintile $$ Jun 12, 2012
Wrong: Hedges’ Assets: $5 Trillion http://t.co/1fcWfhWK Mkt habitat 4 HFs limited by relatively efficient mkts & volatility avoidance $$ Jun 12, 2012
Banks seek to offload risk on insurers http://t.co/6laka8hb Check my comment at the end; I am dubious that this would work. $$ Jun 12, 2012
Panel Finds U.S. and Europe Behind Schedule on Financial Rules http://t.co/zGlSjrG6 Not too surprising regulating financials is complex $$ Jun 11, 2012
Bond Bubble Dismissed as Low Yields Echo Pimco?s New Normal http://t.co/lRtwy360 How do you guarantee receiving value in the future? $$ Jun 11, 2012
Need Money? Just Ask Your Customers http://t.co/Ce6pj7QL Clever move by companies raising $$, but people who lend to them r patsies $$ Jun 11, 2012

Rest of the World

With Tax Deal, Japan Deals Initial Blow to Big Debt Problem http://t.co/U5srcgjK Japan still has to fight their population shrinking $$ Jun 16, 2012
Ex-Soros Adviser Fujimaki Says Japan May Default by 2017 http://t.co/n0G6TBAC Disagree that Japan will precede Eurozone $$ $FXY Jun 15, 2012
Rain, Pests Imperil India?s Wheat Crop as Warehouses Full http://t.co/Qib0xsck What 2do w/a bumper crop that came at the wrong time? $$ Jun 14, 2012

Political

Harvey Golub: A Simple Tax Code Is a Fair Tax Code http://t.co/hwUwbVfE Similar2my proposals: focuses on defn of income, not tax rates $$ Jun 15, 2012
Scalia represents the Constitution, which is against Obama and Bush’s Imperial Presidency views. He may be sarcastic? http://t.co/rEc5icLe Jun 15, 2012
Inequality: It?s Even Worse Than We Thought http://t.co/hMkbGXBp Highlights Warren Buffett’s ability to avoid capital gains taxation. $$ Jun 14, 2012
That said, inequality is unavoidable in a productive society, because some people work harder or smarter than others $$ Jun 14, 2012
@StockTwits It’s really difficult to get a muni bond to default. Ch 9 allowed in 48% of states, even then state approval sometimes needed $$ Jun 14, 2012
Medicaid Fraud Audits Cost Five Times Amount U.S. Found http://t.co/E3Z5d2zt Can’t win 4 losing here. How to fight Medicare fraud? $$ Jun 14, 2012
Romney Aide Oversees Fundraising That Makes Him Cash, Too http://t.co/mMQdDf7e Zwick definitely works hard, but he gets a lot for it. $$ Jun 13, 2012
‘ @FrankButcherr If something similar happened in an SEC-regulated context, charges could b brought. But I am not an expert here. $$ #CFTC Jun 12, 2012
Obama to Revisit Economic Debate http://t.co/AVbVrgzV A Presidency of Excuses http://t.co/6gv8rkT1 Is fiscal multiplier positive? $$ Jun 12, 2012
Odd if there is no CFTC regulation that says if you acting in a regulated capacity but you aren’t registered to do so, that’s not a crime $$ Jun 12, 2012
States Remain Cautious Even as Finances Improve http://t.co/hAHCBq8F Things better but c this pensions article http://t.co/RQ4PMswj $$ Jun 12, 2012
Familiar w/author; good guy knows his stuff RT @jasonzweigwsj: who is to blame for the state & municipal budget crisis? http://t.co/YMkU2a9h Jun 12, 2012
Obama?s formula for more economic growth? More government http://t.co/eMw5UYiR Obama only has hammer; everything looks like a nail to him $$ Jun 11, 2012
@lorriebarkins My friend Cody Willard would say,”flip it,” so I say, “teach them to vote against Republicans and Democrats.” Both r fools $$ Jun 10, 2012

Company & Industry News

Truckers as Leading Indicator Show Stable U.S. Economic Growth http://t.co/irRAJpNm Bright spot amid punk economic conditions $$ Jun 14, 2012
GM’s Chief Labors to Get Rebuilt Car Maker Into Gear http://t.co/dFmKObdy New $GM was not in bankruptcy long enough 2 kill old GM $$ Jun 12, 2012
RT @ampressman: @AlephBlog They’re saying it now so justices can point to it in fantasy opinions, just like the majority in Citizens United Jun 12, 2012
Wrong: Insurers Stand Firm on Benefits http://t.co/aQ0NxDiu These changes will disappear due2 competitive pressure post-strikedown $$ Jun 12, 2012
Patents may not be as valuable post-Posner’s ruling in the $GOOG – $AAPL trial. Can’t patent basic things. http://t.co/L4rIhlkc $$ Jun 12, 2012
Companies Shape Curricula in New University Partnerships http://t.co/LhkAI3qi Good in some ways; wonder if this limits creativity? $$ Jun 11, 2012
Best Time for Best Buy Bid Now as Founder Exits http://t.co/41B34pdm Really doubt $BBY goes private; deteriorating erns, internet competes Jun 11, 2012
+1 RT @StockTwits: Love This! – Famous judge spikes $AAPL v $GOOG case, calls patent *system ?dysfunctional? http://t.co/WXOjNmmi via @gigaom Jun 09, 2012

China

China one-child policy leads to forced abortions, mothers’ deaths http://t.co/JiwypM8q Yes, forced abortions in China & don’t care 4 moms $$ Jun 16, 2012

Market Factors

Foreigners Snap Up Properties in the U.S. http://t.co/4oeyYAey Offers wealthy foreigners options in a crisis & for vacations/college $$ Jun 12, 2012
Junk Yields Fail to Deter Investors Seeing No Recession http://t.co/YPeNc1HP Remember, the junk bond mkt works on a yield not spread basis Jun 12, 2012
@fuzzyinvesticle @dpinsen I put more trust in the Q-ratio, CAPE, Price/Resources, & @eddyelfenbein ‘s view stock market as a bond measure $$ Jun 12, 2012
The Two Reasons Stocks Won’t Get as Cheap as They Did in 1982 http://t.co/QXXjdUCc Reasons: low int rates, high buybacks. Not convinced $$ Jun 11, 2012
Counting on an Inheritance? Count Again. http://t.co/1Z0cnjkl Far more likely that u will support your parents than receive a bequest $$ Jun 11, 2012
Impressed w/ @saraeisenFX Asks great questions of Marc Faber http://t.co/pgDzHIhf & George Papandreou http://t.co/hgn8K Buy #video $$ Jun 11, 2012
@newrulesinvest I also admire and voted for Terrance Odean & Jason Zweig; they are bright men who deserve attention by all. $$ Jun 11, 2012
@BoydRoddy Thank you Roddy, and I am honored to be mentioned in the same sentence as the estimable @John_Hempton. $$ Jun 11, 2012
. @lorriebarkins I teach people about money so that they will b wiser; wise people r less easily taken by hucksters & popular fads $$ Jun 10, 2012

Miscellaneous

Just felt weird, but I laughed $$ RT @ReformedBroker: We Are All Rajat Gupta Now. Not sure what that means, just felt right. Jun 15, 2012
‘ @GaelicTorus It’s my opinion that markets don’t create liquidity; they reflect the native liquidity of the asset being traded $$ #testidea Jun 14, 2012
@Pfro That’s not my experience. We have come so far on racism in the US that my adopted black children haven’t experienced it. $$ Jun 12, 2012
RT @ToddSullivan: Keep hearing people tell High School Grads “these are the best years of your life” …what a terrible message to send … Jun 11, 2012
RE: @wstreetallstars Wow, Cody, very glad that you survived.? What an ordeal.? Praying for you, and those near you. http://t.co/HcuU6R89 Jun 11, 2012
@asymmetricinfo Brings meaning to the phrase “Lied like a finance minister on the eve of the devaluation.” Jun 11, 2012

Winding Down the Eurozone

Posted on 14 June 2012 by David Merkel

I write this realizing that the dominant reaction might be, “That won’t work.”? Well, I toss out ideas on things like this because they *might* work, amid a situation where things are ugly, and real solutions aren’t appearing.? If you explain to me why it won’t work, that will help me do better in the future.? I don’t respond to all comments due to time constraints, but I do read all comments and I consider them.

We have a lot of problems in the world today, but the one that is the most volatile at present is the Eurozone. The Eurozone has issues, because tries to have one currency across an area where levels of productivity, retirement policy, regulatory policy, etc., vary considerably.

The goals of having an “ever-closer union” are perhaps desirable, if naive. Two can only walk together if they agree on underlying issues — with 17 nations, it is far tougher.

The first step toward a solution, given that all nations have fiat currencies is to acknowledge that you made a mistake in creating the Eurozone.? If you are going to have a fiat currency, you should have some form of taxation authority behind it, and that is not true in the Eurozone.

The second step is to re-introduce individual currencies for each country in the Eurozone.? A Euro would be defined as a weighted average? of the individual currencies in the Euro; the initial weights would stem from the percentage of GDP for the Eurozone as a whole.? Local currencies would be used for local transactions, but the trade in currencies and Euro arbitrage would result in changes in the trading values of the local currencies.? Quarterly, the value of a Euro relative to the local currencies would be redefined by the percentage of GDP the country has compared to the whole of the Eurozone.

The third step is dealing with bankrupt nations.? Solvent nations should not bail out bankrupt nations, but instead, bail out local financial institutions with assets from bankrupt nations the right way — wipe out common and preferred shareholders, and junior debtholders, and make senior debtholders take a haircut.? Protect depositors, but others in the capital structure lose.

Fourth, when things have normalized, take Euros, and force an exchange into the underlying currencies.? The Eurozone is gone, and all of the problems that it created.? Send the Eurozone to the ash-heap of other currency unions; they don’t work.

There will be some complexity here, but the need to undo a major policy error — creating a common currency when there is not a common government, is a significant matter, and the effort to unwind the mess should be pursued.

And now, you can tell me why this won’t work.

Book Review: The Golden Revolution

Posted on 24 April 2012 by David Merkel

This book is highly optimistic that we will restore a gold standard to our world.? Much as I would like it, because it restrains the power of governments that increasingly behave like thugs, I don’t think a gold standard is likely to replace the status quo.

The book has many good areas to commend it, where it deals with history, explaining the problems of the past.? It trashes the concept of the SDR of the IMF, it is the Euro on an even weaker footing.

But the book is weak, because it does not recognize that the standard for money and the regulation of banks are separate issues.? Merely instituting a gold standard will not bring stability.? One must regulate heavily the degree that banks borrow short and lend long.? We had many crises during the gold standard in the 19th century, none as bad as the Great Depression, but they all stemmed from a lack of bank regulation.? I have no sympathy for the concept of “free banking.”? Anyone that is making a large number of promises needs to be regulated; he is a systemic risk.

Chapter seven is the critical chapter of the book, and it fails because it doesn’t go far enough.? In the chapter, Russia adopts a gold standard, and requires payment in gold for exports.? Fair enough, but as other nations attempt to adopt a gold standard, they would find their exporters objecting, leading to no adoption of a gold standard.

Chapter seven is the only thing that makes this book unique, and it is why I requested it from the publisher.? That makes this book a “fail.”

On the bright side, I now know that a gold standard would be difficult to appear, unless hyperinflation drove people to a commodity standard.? (And the odds of that are better than 20% over the next 20 years.

Quibbles

I do not recommend this book.

Who would benefit from this book: No one.? If you want to, you can buy the book here: The Golden Revolution: How to Prepare for the Coming Global Gold Standard.

Full disclosure: I asked the publisher for the book and he sent it to me.

Book Review: Currency Wars

Posted on 7 April 2012 by David Merkel

I sometimes call it “the race to the bottom.”? During a time where most nations are feeling economically weak, some decide to weaken their currency, so that their exporters can do better, which supposedly preserves jobs in export industries.

Producers have concentrated interests, and lobby well.? The interests of consumers are diffuse, and don’t gain favor from governments kowtowing to producers, who also find more effective ways of rewarding political friends.

If we were intelligent, we would know this is a loser of a battle, and we would realize that this simply leads to inflation globally.? Better to sit it out, ignore the debasement, and realize it will eventually burn out.? Unlike the current Federal Reserve, don’t add to the debasement, it just adds fuel to the global inflationary fire.

This book starts with a currency war-gaming scenario.? In the game, the author pursues a course where on one of the non-US teams decides to link their currency to gold.? Initially derided, they end up as one of the victors at the end of the game, even though no one else follows them.

The book continues with an examination of three eras where currencies were at war: 1) prior to the Great Depression until we leave the internal gold standard, 2) the inflationary guns and butter late ’60s to mid ’80s, encompassing the period where the US goes off the gold standard entirely, and global currencies float.? We go through a period of high inflation after that, followed by an extreme rise in interest rates. 3) The book examines the present time, where every nation wants to devalue, so that it exporters are not harmed.

If we left the gold standard to get stability, we did not get it.? If we left the gold standard to benefit the global or US economies, the benefit has not appeared.

But, from chapters 7 through 10, the book muddles.? It talks about a wide variety of ideas loosely related to the main thesis, but proving little one way or another.? The book does not build toward its conclusion in chapter 11, where it suggests a return to a gold standard.

A gold standard exists to preserve purchasing power, and takes power out of the hands of governments that want to favor one set of parties over another, whether favoring savers or investors, producers or consumers.? It takes many questions out of the hands of the government, and reduces the need for an expensive central bank filled with PhDs in Economics who really have no idea how economies work, because they are mathematicians, and don’t get the broader societal ramifications of what their policies encourage.

I enjoyed this book, and would recommend it. The book isn’t linear to its goal, but you will learn a lot along the way, even if it is circuitous.

Quibbles

Already given.

Who would benefit from this book:?? This book is for those frustrated with the way that our government are handling monetary affairs, and are looking for a better way.? If you want to, you can buy it here: Currency Wars: The Making of the Next Global Crisis (Portfolio).

Full disclosure: The publisher asked me if I would like the book.? I said yes, and they sent me a copy.

Sorted Weekly Tweets

Posted on 6 April 2012 by David Merkel

Valuations

High Yield Closed End Funds 68% over NAV, 3% avg premium. Loan Participation CEFs 40% over NAV, -1% avg discount. Conditions r medium hot $$ Apr 07, 2012
Why Stocks Look Too Pricey http://t.co/TWqZzGg3 Various Indicators Suggest the Market Is No Longer a Bargain, at best fairly valued $$ Apr 07, 2012
Contra: The alarming fall in syndicated lending http://t.co/hiGK9UoK With the high yield mkt running hot why not avoid restrictive banks $$ Apr 06, 2012
Not so new… Eddy Elfenbein said something similar 4 months ago: http://www.crossingwallstreet… http://t.co/mhIxGGwt Apr 04, 2012?(on inflation expectations driving stock prices in the short run)
Time to take some risk off the table http://t.co/sCuYxc6u Trends breaking globally, US looks okay. Humble Student has made good calls lately Apr 04, 2012
The Dangers of an Interventionist Fed http://t.co/thKsHa8J QE Removal: what happens to banks if Fed does & 2 inflation if Fed doesn’t $$ Apr 03, 2012
Junk Bonds ? Getting Risky for a New Reason? http://t.co/7bJ08JxT Record pace of junk issuance bodes ill 4 performance… 3 yrs from now. $$ Apr 03, 2012
Two Pros Weigh In on U.S. Stocks: Ben Inker’s Bearish View http://t.co/iJ7742P5 Katie Nixon’s Bull View http://t.co/Zn9jj503 $$ Apr 02, 2012
Eichengreen on Credit Bubbles http://t.co/bSs0MHPA Leading indicator of finl stress in em mkts: loan growth > 2x GDP growth 2 yrs earlier $$ Apr 01, 2012
Taking the High Out of High Yield http://t.co/WYIvHb0n Nonprofessionals are the ones buying junk at the margin. This won’t end well. $$ Apr 01, 2012

Central Banking

The ECB has completely lost control over the monetary policy for Greece http://t.co/MHNTXLHo Massive liquidity drain; total credit failure Apr 07, 2012
Post-war financial repression is back http://t.co/JGLo9Aic If the post-war experience is any guide, savers face many years of suffering. Apr 06, 2012
Bernanke – I’m Slowing Down the Ship http://t.co/TJcJl20n Stocks don’t like less inflation coming and so they fall. But bonds rally. $$ Apr 06, 2012
Draghi Scotches ECB Exit Talk as Spain Keeps Crisis Alive http://t.co/rREDdqrW LTRO can only go so far; can solve liquidity, not solvency Apr 06, 2012
The Market?s Obsessive Fixation on The Fed & QE http://t.co/W6kg1n7k Runs through a Fed tightening scenario, thinks Fed won’t sell bonds $$ Apr 04, 2012
Oest.. Nationalbank follows Bundesbank in refusing some periphery collateral http://t.co/96xx0xg7 Not so big in itself; Tear in EZ fabric Apr 04, 2012
Draghi Tested as German Pay Deals Add to Euro Divergence http://t.co/glKumOZx Inflation rising @ core? May even labor productivity some $$ Apr 04, 2012
@federalreserve Tried using your Data Download Program today http://t.co/vRroRPMt I managed 2get the data I needed, but it was tough 2use Apr 03, 2012
Bernanke – ‘The Fed never makes mistakes’ http://t.co/JBgRHqx2 He goes, speaks to soft audiences, argues that no one could have known #dope Apr 01, 2012

China

Coup Rumors in China Have Deeper Meaning http://t.co/QaoDxKFF Small fissures appearing in the Communist Party’s hold on power $$ Apr 07, 2012
Australia?s Export Slump Intensifies Rate-Cut Pressure http://t.co/sIDzeteW China sneezes, Australia catches a cold, mate. $$ Apr 06, 2012
China doomsayer sees crash coming http://t.co/2QatU1ps Hardly a crash, but GDP shrinking. Wait, that *is* a crash for China? $$ Apr 06, 2012
The Revenge of Wen Jiabao http://t.co/nw5qvCNa Long read. Eye-opening. Formal system of Comm Party eclipsed by family coalitions that war $$ Apr 04, 2012
The informal aspects of how China is governed relies on rival coalitions of elite families over the long run. Short-run, Comm party rules $$ Apr 04, 2012
China Accelerates Markets Opening as QFII Quota Doubles http://t.co/yrXVDcdR May prove 2b significant due to unintended consequences $$ Apr 04, 2012
China Manufacturing Gain Masks Exporters? Woes http://t.co/VyeN9AWF Goods unneeded by the rest of the World build up in China $$ #glut Apr 03, 2012

United States

When safe assets return http://t.co/QLUPuj1j Long piece on the status of money-like instruments, public and private. Many questions. $$ Apr 07, 2012
Income Inequality Is Killing the Economy, Obama Says?Is He Wrong? http://t.co/xrA4pGu2 Going up in developed world, going down globally $$ Apr 07, 2012
And I don’t get it as well, Josh.? I’m as Libertarian as they come, but with financial services, I know that trickery? http://t.co/lIJDCr1Y Apr 05, 2012
More woes in Fedl subsidized solar power: http://t.co/83ch2YUM & http://t.co/6XaEjl10 ht: @zerohedge | Send bureaucrats 2study physics? $$ Apr 04, 2012
The return of the US manufacturer http://t.co/75WCMyPi Manufactured goods represented 61 per cent of all US exports during 2010 $$ Apr 04, 2012
+1 RT @ReformedBroker: ADP is the Diet Arizona Iced Tea of Employment gauges. Like, we’ll take it if it’s there but no one’s looking for it Apr 04, 2012
When does the US Treasury bubble burst? http://t.co/8agHomQH “Pomboy pointed out that Treasury yields are less than current CPI rates” $$ Apr 03, 2012
Why Are the Fed and SEC Keeping Wall Street?s Secrets? http://t.co/bZYF3LgV Fed & SEC view those they regulate as their clientele $$ Apr 02, 2012
US consumers dipping into savings http://t.co/757XDPuW Implies that the recovery is weaker than presently posited, demand comes from savings Apr 01, 2012
Obama Campus Fervor Losing 2 Apathy as Students Sour on 2012 http://t.co/kcyQbWKI Students thought they were getting change, got Bush-plus Apr 01, 2012
How Stockton, California Went Broke in Plain Sight http://t.co/ggOzSOmV If you hand out benefit increases like they are candy… $$ Apr 01, 2012

Finance

Quants: The Alchemists of Wall Street http://t.co/L0CzLQVN Recommend this video, features Paul Wilmott, Matthew Goldstein, & more $$ Apr 07, 2012
The 401(k): Americans ?just not prepared? 2 manage their own retirement funds http://t.co/8Tr0wggt Conclusions similar http://t.co/etCEp8BT Apr 06, 2012
Hedge Funds Accomplishing Very Little in the Aggregate? http://t.co/pxqjw2kk HFs tend 2b volatility-averse, weaker funding than long-only $$ Apr 04, 2012
Ackman SPAC a nice touch, no? RT @ReformedBroker: Private Equity-held Burger King coming public again. “Hooray!” said no one to no one else Apr 04, 2012
Performance persistence in hedge funds http://t.co/zORfjAts How do hedge funds differ v unlevered value investors? $$ gets pulled vals drop Apr 04, 2012
ETN Double Dipping With GAZ? http://t.co/Uo9y1T5p Interesting piece. An ETN issuer can make more $$ stopping creation & lending shares Apr 04, 2012
Loan classes “season” over 10-30% of the life of loan… defaults/prepays stabilize. Large cohorts 4 bond issuance go bad in the 3rd yr $$ Apr 03, 2012
Merrill, Morgan Stanley seen losing grip on rich http://t.co/44mW7ki0 Top 4 brokers mkt share 56% in 2007, 45% in 2011 & still falling $$ Apr 03, 2012
Low Vol Underperforming http://t.co/NYqjw2Fp Every valid strategy has times when it doesn’t work, to shake out the weak hands $$ Apr 03, 2012
Corporate pension funds break away from equities http://t.co/EMPaDGea Yes, when yields r low, DB plans move 2 bonds. Brilliant. $$ Apr 03, 2012
Does Danger Loom for Multiemployer Pension Plans? http://t.co/VpfDZ04m Plans that are <80% funded must take steps 2 nurse plans 2 health $$ Apr 01, 2012
Credit Suisse Opened Volatility Bets to Small Investors http://t.co/ZLMGANXh Wall Street produces products 2 benefit itself, not retail $$ Apr 01, 2012
Keynes: One Mean Money Manager http://t.co/WJ2jESFE “The board of King’s College gave him uncontested authority to invest as he wished.” Apr 01, 2012

Japan

Just a guess, but after Japan’s Current Account goes into deficit for ~2 years, the big adjustment down in the Yen will happen. $$ #ouch Apr 06, 2012
@valuewalk Probably because so many have lost money shorting the yen, & some have made $$ long the yen, that many just trust the momentum $$ Apr 06, 2012
@valuewalk long-dated yen currency puts have fairly low vol 😉 Not doing that either, but… someone will. Apr 06, 2012
Yen Forecast: Xie Sees 40% Drop, Japan Bubble Bursting http://t.co/EjI7hytt Wow. Thinks Japan near tipping point 4 internal financing fail Apr 06, 2012
Japan?s Strongest Storm Since 1959 Slams Into Tokyo Region http://t.co/CCOVz7C6 Very unusual 4 Tokyo 2 have such strong winds w/no typhoon Apr 03, 2012
Yen Losing Most Since ?95 Not Enough for Toyota http://t.co/IT0g84s8 Japanese Industry cheerleaders 4 “penny parity” $$ #race2thebottom Apr 02, 2012

Insurance

Advisers, B-Ds retreat from Hartford http://t.co/garB6Bwn Not offering new annuities means can’t roll to $HIG products when surr chg ends $$ Apr 03, 2012
Agents will try to get holders of $HIG annuities to roll elsewhere when surr charge ends (new commission $$ ), but be careful if you own an+ Apr 03, 2012
annuity from $HIG, b/c one reason they are getting out of the biz, I think, is that some of the secondary gtees were 2 generous + Apr 03, 2012
there is probably a business in analyzing secondary gtees, b/c some r quite valuable, &u wouldn’t want 2get tricked into rolling it by agent Apr 03, 2012
Contra: Rising equity markets to drive US life insurers-Barclays http://t.co/S6JtPun7 Catch my comment at the end, didn’t get new DAC issue Apr 02, 2012
Insurance Fees, Revealed http://t.co/mLzhpT6V NY State says agents must disclose how compensated & offer to provide full details #woohoo Apr 01, 2012

Personal

Sinkhole at the bottom of my street after a water main break. The water is more than 5′ deep & and hollowing out the road beneath. Apr 07, 2012
Street is one way, so I took my son who is a Police Explorer 2 talk to the policeman there. They knew each other. It’s a one-way street so + Apr 07, 2012
I asked the policeman (who was short handed) if he would like us 2 block street 2 traffic. Gratefully “yes.” We set up the safety gear. Apr 07, 2012
This is the opposite of last summer where we didn’t have power 4 6+ days, but we had water. We have power but no water. Hope it won’t b long Apr 07, 2012
Three Year Anniversary http://t.co/0HDD3iyD Congratulations, Hunter! @DDInvesting is our internet guide to all distressed debt $$ Apr 04, 2012
LinkedIn Events: Towson University Investment Group – Markets Summit http://t.co/kpgkDTto I’ll b participating on a panel. See you there! $$ Apr 04, 2012
@Frank_McG @volatilitysmile As I said to my wife today, “Take care of your wife, and she will take care of you.” Worked for the last 25 yrs Apr 02, 2012

Miscellaneous

Reprise: The Elfenbein Gold Model http://t.co/r3rHvZw3 @eddyelfenbein at his best, I fully subscribe to his model, reflecting cost of carry Apr 06, 2012
Matzo Ball Soup, Check. iPad, Check. For Passover, Jews Try Techie Seders http://t.co/xUW3izZl I dislike technology in religion. Yuck $$ Apr 06, 2012
Flying Auto Reviving Dreams of Chitty Chitty Bang Bang http://t.co/WixQb8AV Cheap @ $279K, this one might actually work $$ Apr 06, 2012
This discussion has problems because there is no agreed upon definition of what “free will” means.? As with all quest? http://t.co/NoMpZf0U Apr 04, 2012
Here Come Tablets. Here Come Problems. http://t.co/ezFK4Wfu Five common mistakes: a slow rollout is better to get the bugs out. $$ Apr 03, 2012
Gene Maps Are No Cure-All http://t.co/JOLTtWTK Study Warns That DNA Scanning to Predict Disease Can Mislead; ‘Not a Crystal Ball’ $$ Apr 03, 2012
Ten Claims in Support of IFRS Adoption by the SEC ? & Why They are False http://t.co/nj2PZ1pd & http://t.co/4YrMSvaH & http://t.co/7lLtioGo Apr 03, 2012
The Mighty Mathematician You?ve Never Heard Of http://t.co/9Qp1NqOB Never heard of her & her impact on physics was as great as that of math Apr 01, 2012
Mangled Horses, Maimed Jockeys http://t.co/6Dl1gEmJ Maybe there is a public policy reason to close down racetracks, & after that boxing $$ Apr 01, 2012

Energy

Australia LNG Boom Threatened by US Shale Exporters http://t.co/qleN6sVd Cheap US Hydrocarbons invert prior economic certainties $$ #shale Apr 04, 2012
Shale oil: from curse to cure for East Coast refiners? http://t.co/MdlXvjIb US Shale oil is high quality; challenge is delivery2refineries Apr 04, 2012
Repsol Worst Debt Swaps on YPF Seize Threat http://t.co/BewpJA4p Argentina not 2b trusted; would buy $REP bonds on weakness, stock a ?? $$ Apr 04, 2012
Encana in Play as Petronas Seeks Natural Gas http://t.co/SEx832F1 Petronas looking long-term, b/c prospects for natgas pricing r poor $$ Apr 04, 2012
Why high gas prices at the pump? The answer is BICS http://t.co/LopjaesG Brazil, India, China, & Saudi Arabia have increased gasoline demand Apr 03, 2012
The rapidly shifting supply fundamentals in US natural gas http://t.co/myofZrQD Injection cycle starting early w/supplies high already $$ Apr 03, 2012

Rest of the World

Contra: The Buck Stops Here: A BRIC Wall http://t.co/RYykjXXr The BRIC nations r2 statist 2 link 2 gold. Good idea, doesn’t fit the politics Apr 06, 2012
Germany Asked to Forgo $1.3 Billion Deutsche Telekom Payout http://t.co/b8cvOOlB Interesting how Capex constrains euro-telcos, not US $$ Apr 04, 2012
Europe?s Ratings Revenge Founders on Market Reality http://t.co/D3dNu7sF Eurocrats stumble in dark; will return 2 old system; it worked $$ Apr 04, 2012
How A Baby Bust Will Turn Asia’s Tigers Toothless http://t.co/VE78u9tu Economic growth is partially population growth; sterile societies $$ Apr 01, 2012
Swedish High Street Rebound Ends Bets for Riksbank Cuts http://t.co/jYioq0NN A relative bright spot in Europe; having the Knonor helps $$ Apr 01, 2012

Company News

RE: @emergingmoney Never been crazy about firms that perpetually run w/neg working capital. Interesting idea, though. http://t.co/Xx6yFf8v Apr 04, 2012
Optical Delusion? Fiber Booms Again, Despite Bust http://t.co/9QiAmZOH Whouda thunk it? I knew this was getting close, demand 4new fiber Apr 04, 2012
Scarred Avon Is Takeover Target http://t.co/f2T9E7V7 Don’t think $AVP is a good takeover target: toss dist syst or incompatible syst $$ Apr 03, 2012
Technology obsoletes too easily, particularly in hot sectors. Very difficult to get to $1T of?Market Cap. Bit-by-bit? http://t.co/XjGU9ouG Apr 03, 2012
$AAPL ‘s War on Android http://t.co/ILGQVAZD Long, fascinating article; perversely, attempts to enforce patent can invalidate patents $$ Apr 02, 2012
Dude, is There any Value Left in $DELL ? http://t.co/iG5q5iea U know your marketing is stale when people reference advertising >10yrs ago $$ Apr 02, 2012

Housing

The rebound is now http://t.co/l4coNvgt Worth watching, but I would wait until the foreclosures have been mostly cleared, b4 saying bottom Apr 07, 2012
Home Prices Seen Dropping 10% in US on Foreclosures http://t.co/BBjzxKiU Once f/cs clear out, the market will normalize maybe even rise $$ Apr 03, 2012
McClellan on Lumber?s tendency to leading housing stocks http://t.co/cevWyVTs If past is prologue, housing prices are set for another dip $$ Apr 01, 2012

Funds

I’ve owned this in the past, but not now.? It’s been around for 19 years as a CEF — just have to watch the premium/d? http://t.co/XMVs6RBS Apr 06, 2012
Why I Won?t Be Buying TAGS http://t.co/2S8bqcQJ Expense ratio does not include the expenses paid on underlying ETFs owned by $TAGS $$ Apr 04, 2012

Financial Distress

Reddy Ice Considers Filing for Bankruptcy http://t.co/IgpYjHue Is it just me, or are we seeing an uptick in insolvencies? $$ Apr 04, 2012
Hostess Serves Up New Batch of Cuts http://t.co/fHBXwHes Future failure as people don’t buy so many of the “sugar fat bombs” 4 kids $$ Apr 02, 2012
Failures: Pinnacle Airlines http://t.co/BXkJ8v9j AFA Foods http://t.co/xs4wsFEE Airlines & Meat renderers r born 2 fail $$ Apr 02, 2012