Category: Pensions

Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

Eurozone

 

  • Depression Deepens Greek Middle Class Despair With Crime http://t.co/PlMwTLpw They need to leave the euro & end early retirement $$ Dec 07, 2012
  • Global Shipping Industry?s Troubles R Threat for Biggest German Banks http://t.co/ZKojm5iZ During good times bankers forget cyclicality $$ Dec 06, 2012
  • All recent French Presidents are good examples of why the power of the office should be weakened & term shortened http://t.co/NbtxCyJY $$ Dec 06, 2012
  • Don?t Tax Our Wine Irish Cry as Austerity Finds Threshold http://t.co/HdL8bkLI Alcohol exists 2 prevent the Irish from ruling the world $$ Dec 06, 2012
  • Paris Faces Darkness as City Set for Illumination Ban http://t.co/sbmoaBEv French politicians r the worst enemies France has $$ #inthedark Dec 05, 2012
  • Paulson Said to Blame Bet Against Europe4 Most of Loss http://t.co/AHDHtUNK Betting on disaster is tough; getting timing right tougher $$ Dec 05, 2012
  • Merkel’s euro push leaves E. Germany out in the cold http://t.co/3T9Yw6Uu Angela faces weakness in E. Germany politically & economically $$ Dec 03, 2012
  • France Sexy No More for Entrepreneurs Escaping Hollande http://t.co/S8OVxgRu The “invisible foot” opposes increasing taxes in France $$ Dec 03, 2012

 

Central Banking

 

  • Fed Exit Plan May Be Redrawn as Assets Near $3 Trillion http://t.co/u4Ek0vbc The Fed will never significantly shrink its balance sheet $$ Dec 07, 2012
  • Bernanke Cliff Analogy Overstates Immediate Economic Harm http://t.co/dSQxcMtP After the cliff, 2014 will be a good year, &2015 better $$ Dec 07, 2012
  • At Press Conference After ECB Interest Rate Decision, Draghi Faces Frustrations & Mistrust http://t.co/nzpJhUE3 No magic, only illusions $$ Dec 07, 2012
  • How canceling central banks? holdings of government debt could be a useful thing http://t.co/mOdKposd I don’t agree, but worth reading $$ Dec 06, 2012
  • Fed holds lenders’ feet to the fire on mortgages http://t.co/PpeKIjQm Simple: absence of competition w/the lack of shadow banking $$ Dec 04, 2012

 

US Politics

 

  • Fannie and Freddie Are Not Piggy Banks http://t.co/8H5VVXg2 Tosh, Congress loves a slush fund, Fed’l Financing Bank, FHA, Ag credit sys $$ Dec 07, 2012
  • Obama?s Tax Increases Will Find the Middle Class http://t.co/8ai0z1ID @cabaum1 After all, that is where most of the income 2 tax is $$ Dec 07, 2012
  • Push to Curb Union Power Advances in Michigan http://t.co/Qiw3HyyU No one should be forced to join a union, or pay dues 2 get any job $$ Dec 07, 2012
  • The Real Reason Warren Buffett Should Pay More Taxes http://t.co/UOWtRvA9 Labor & Capital should b taxed @ same rate, w/no deferral $$ Dec 07, 2012
  • Obama?s Tax Plan Would Spare Many Affluent Families http://t.co/C33CRpGi Why the definition of income is more important than tax rates $$ Dec 07, 2012
  • Defense Industry Cuts Exceed 500,000 Workers Over Cliff http://t.co/065xIlv2 Living on the DC side of Baltimore, the effect will be big $$ Dec 06, 2012
  • Greenspan Says Painless Solution to US Debt is Fantasy http://t.co/fO15WZ1P This is one of the two times per day for this stopped clock $$ Dec 06, 2012
  • Medicare is unsustainable in current form http://t.co/WNoFEsKo “As it stands now, Medicare cannot keep its promises 2future seniors” $$ Dec 06, 2012
  • Deck the Halls with Macro Follies http://t.co/7gGKMN4R A new video from the guy who brought you Keynes vs. Hayek at EconStories.tv $$ Dec 06, 2012
  • Sallie Krawcheck should not run the SEC http://t.co/AECw2pun Her prior career does not suggest that she would be a good regulator $$ Dec 05, 2012
  • Elizabeth Warren would bring real smarts to the position. Now if we can find spots for Barofsky and Kauffman. http://t.co/sTf2Piy8 Dec 05, 2012
  • Wrong: Five States 2Increase Class Time in Some Schools http://t.co/BNY4Twj4 Little correlation btw class time & educational progress $$ Dec 04, 2012
  • Republicans Reprise 2011 Debt-Limit Threat in Cliff Talks http://t.co/njnFXhVO This is not a 2-player game but a 3-player game: t-party $$ Dec 03, 2012
  • Obama Bets Re-Election Gave Him Power to Win Fiscal Cliff http://t.co/1hA1Xn4j Think this idea is overplayed; players same now as b4 $$ Dec 03, 2012
  • +1 We need genuine capitalists, & not defenders of Wall Street & big business @ the SEC $$ @davidgaffen @footnoted @nminow @Reuters Dec 03, 2012

 

Pensions

 

  • Benefits Leader Reins In 401(k)s http://t.co/Z8foHZLK $IBM defers 401(k) match 2 yearend; if u leave early, except retiring, u lose $$ Dec 07, 2012
  • Baby boomers need annuity simplicity http://t.co/34gJlJKA SPIAs r good annuities don’t sell b/c agents never earn another commission $$ Dec 06, 2012
  • Milwaukee task force studies changes to pension system http://t.co/GHBuGNGf Will raise retirement ages & lower the multipliers 4 svc yrs $$ Dec 03, 2012
  • Officials call pension reforms a must http://t.co/64PzD8UI Kentucky reduces future pension benefits; good 4 taxpayers, bad 4 employees $$ Dec 03, 2012

 

Other

 

  • #FF @Fullcarry @KidDynamiteBlog @Convertbond @foxjust @EconOfContempt @GregorMacdonald @edwardnh @MatthewPhillips @srussolillo $$ Dec 08, 2012
  • To Quote Thomas Jefferson, ‘I Never Actually Said That’ http://t.co/mA9MzDbb Yogi Berra, “I never said most of the things I said.” $$ Dec 07, 2012
  • Big Test at Johns Hopkins (biz school) http://t.co/fbf5FeKP Scuttlebutt is that it is not doing so well w/their Int’l student focus $$ Dec 06, 2012
  • http://t.co/0fOBmunB “[Ransomware] is the new Nigerian email scam,? Mr Haley said. ?We?ll be talking about this for the next two years.? $$ Dec 06, 2012
  • The Insourcing Boom http://t.co/h67gWIA3 Can improve labor costs, morale, R&D, product quality, time to market. Wave of the future $$ Dec 06, 2012
  • My week on twitter: 42 retweets received, 3 new listings, 26 new followers, 65 mentions. Via: http://t.co/SPrAWil0 Dec 06, 2012
  • Dial-a-maid, get-a-slave in middle class India http://t.co/LRlkfbTg No, slavery is not dead yet & women bear the brunt of it $$ Dec 05, 2012
  • Hospital Incentives Help Babies Determine Own Birth Dates http://t.co/rAKVBv4X Washington State finds a way 2reduce caesarean-sections $$ Dec 05, 2012
  • While at RealMoney, Steve Smith & I tried 2 get Lenny Dykstra 2 explain the risks of his strategies; he never responded http://t.co/ynHZJgoa Dec 05, 2012
  • Deere Gets the Wright Stuff http://t.co/88RdyGkb My friend Bill Wright is now making standing lawn mowers 4 $DE ; both firms benefit $$ Dec 04, 2012
  • Warren?s Way http://t.co/cW8OQQq4 I respect Buffett a lot, but he is a hypocrite on taxes. Pay off the DTL, Sell $BRK shares, pay a div $$ Dec 05, 2012
  • Online Classes Mean No Dorm, Gym or Debt http://t.co/gPttIwpJ My wife thinks there is room 4a quality college w/o the frills $$ #worthatry Dec 03, 2012
  • Not news: Burying the “Fed model” http://t.co/BTCVsigi Have 2 decompose in2 real rates & inflation expectations. Result known since 1994 $$ Dec 03, 2012
  • Wall Street finds a foreign detour around U.S. derivatives rules http://t.co/4Ypf0atI Do foreign biz through their London subs $$ Dec 03, 2012
  • A Free-Market Fix for the Copyright Racket http://t.co/RDPofMPk Keep copyright protections, but limit them to 28 years $$ Dec 03, 2012

 

Fixed Income

?

  • Despite Risks, Investors Just Can’t Quit US Treasurys [sic] http://t.co/AefCG5rw One of the better deflation hedges out there $$ Dec 04, 2012
  • Talking Macro, Fixed Income, & the Strategic Alpha Bond Fund w/Loomis Sayles? Matt Eagan http://t.co/PTWJKX22 w/ @DavidSchawel Well done $$ Dec 07, 2012
  • California moves toward open source ratings for city bonds http://t.co/hn8GCnMa Researcher makes case here: http://t.co/r04PVuWA $$ Dec 06, 2012
  • Yield-Starved Investors Hoarding EM Bonds http://t.co/kvShvcx5 There is yield & their govts r running finances more orthodox way $$ Dec 06, 2012
  • We Were Stunned By The Brand New Patent That’s Been Awarded To Bill Gross http://t.co/zYuLDREM Easy ideas should not be patentable $$ Dec 06, 2012
  • Women analysts dominate muniland http://t.co/dQwgDg5U Funny, but when I was a corporate bond mgr, most of my analysts were bright ladies $$ Dec 06, 2012
  • BlackRock’s new bond plan http://t.co/rdUd5zmG $BLK does a kind of structuring of covenants (buyer’s due diligence) & coinvests in volume $$ Dec 05, 2012
  • Scrounging for Income http://t.co/hfFtkhm4 Okay advice, but if you can reduce need 4 income or harvest capital gains would b better $$ Dec 03, 2012
  • Leveraged loans return 0.31% in November; YTD return is 8.8% http://t.co/loDwDKW9 Interesting part of article is strength of CLO bid $$ Dec 03, 2012
  • The Great Yield Gamble http://t.co/fRspStAj When risk-free rate is being used as a policy tool, it is harder 2 make rational choices $$ Dec 03, 2012
  • Panasonic Swings Ruin Funds? Appetite for BBB Debt http://t.co/w36bv9nQ No notes rated <BBB+ by Japanese assessors offered in November $$ Dec 03, 2012
  • High Yield Exhaustion http://t.co/zLSy4GaC High yield feels tired between high supply, and potentially weakening demand $$ Dec 03, 2012

Rest of the World

 

  • China listings may soon flee US, expert says http://t.co/0EuxyoAC I usually don’t like when foreign listings leave; exception: China $$ Dec 06, 2012
  • Sellers in Toronto, Vancouver just say no as housing markets sink http://t.co/HUTgOVnh Feels like the US in late 2006 $$ Dec 06, 2012
  • Russia’s problem is not a petrified Soviet economics but corrupt politics impeding growth w/o fully blocking it $$ http://t.co/YL7QGR9j Dec 05, 2012
  • Top US Firms Are Cash-Rich Abroad, Cash-Poor at Home http://t.co/EZcwLITM Buy foreign businesses & hire clever transfer pricing accts $$ Dec 04, 2012
  • Are We Watching Another North American Financial Crisis Unfold? http://t.co/BmwRzIPp Canadian taxpayers r on the hook for >C$1T in mtges $$ Dec 04, 2012
  • Shangai broken dreams – changing gear? http://t.co/nWX3jIuz Argues Chinese mkt has broken support, but might have value 2 locals that dig $$ Dec 03, 2012

 

Companies

 

  • Cook Says Lives Enriched Matters More Than Money Made http://t.co/cJ7XWQkM Summary & Manufacturing Macs in US http://t.co/hyvQAdRB $$ Dec 06, 2012
  • Apple?s Halo Cracked http://t.co/EHrFjZGG $AAPL ‘s valuation requires that their products remain competitive for a long time to come $$ Dec 06, 2012
  • Banks book record profits off Fannie and Freddie http://t.co/Z4Ej4Zlu It’s more that much origination capacity is gone -> wide spreads $$ Dec 06, 2012
  • Freeport to Buy Plains, McMoRan for $9 Billion http://t.co/avB6cIII I prefer resource extraction firms to be focused, not diversified $$ Dec 05, 2012
  • Steak Price Rising as Cattle Seen 20% Higher at JBS http://t.co/58h0CsHp Combination of loose $$ policy & high feed prices from weather Dec 05, 2012
  • That fiscal cliff? $DOW Chemical says China’s a bigger worry http://t.co/H1viDTWR Not a good sign for commodity chemical producers $$ Dec 04, 2012
  • Trucks — Boats – Planes – Trains http://t.co/vFirg2PB Transports are hinting at more economic weakness $$ Dec 04, 2012
  • Diamonds Dug in Gusty Arctic Too Remote for Diesel Fuel http://t.co/AZiGApP4 How mining companies generate power in remote areas $$ #wow Dec 03, 2012

 

Insurers

 

  • Insurers’ Sandy Claims Estimates Show No Long-Term Damage http://t.co/HJq6Ufmk Prudent insurance underwriters & investors bounce back $$ Dec 06, 2012
  • Re: Principles based stat reserving. As a life actuary, I wonder what will happen to old blocks of biz that get reinsured 2 get new acctg $$ Dec 03, 2012
  • Insurers Add Reserve Power http://t.co/5X4htlOh Move 2 principles-based reserving 4 Stat acctg is a mistake; lower margin of safety $$ Dec 03, 2012

 

Retweets

 

  • Kind of fitting that $UBS discovered it $$ RT @graemehein: Swiss counter-intel is making Canada look good! http://t.co/394i35mW Dec 04, 2012
  • OTOH, many other schools r athletic progs glued2 educ charity $$ RT @carney: Is Harvard really just a giant hedge fund? http://t.co/9AgVniPZ Dec 07, 2012
  • I believe it has a small educational charity attached $$ RT @carney: Is Harvard really just a giant hedge fund? http://t.co/9AgVniPZ Dec 07, 2012
  • I think Andrea encourages him to get fresh air now & then $$ RT @ecchymosis2009: Who let him out of his crypt? Dec 06, 2012
  • Barofsky 4 SEC Chair RT @matthewstoller: Important statements from @neilbarofsky on how to reform the SEC. http://t.co/Tty50eQi $$ Dec 06, 2012
  • +1 Good news $$ RT @cate_long: .@matthewstoller reporting that Sallie Krawcheck seems to have been knocked out of the running as head of SEC Dec 06, 2012
  • Probably correct $$ RT @munilass: CalPERS likely 2 lose next court battle, San Bernardino bankruptcy observers predict http://t.co/QxsiiNUD Dec 05, 2012
  • You got it RT @James_Karn: @AlephBlog Don’t forget ethanol policy as a factor in high feed prices. Dec 05, 2012
  • UN = Useless Nations $$ RT @marykissel: Debacle-in-the-making: @UN takes a step toward regulating the #Internet http://t.co/tngedHds Dec 05, 2012
  • +1 true $$ RT @LorcanRK: congrats to whoever is running the @euromoney account these days. Has completely transformed a semi-dormant feed. Dec 04, 2012
  • RT @ritholtz: ENOUGH ALREADY! I propose the hashmark #CLIFFHYPE to mark conversations about the excess hype regarding the so called Fis … Dec 04, 2012
  • Incongruous, huh? Or maybe it takes a thief… $$ RT @felixsalmon: Bob Merton on a financial stability committee??? http://t.co/tnJvIOIJ Dec 03, 2012
  • Yes, & I lost some $$ on it last year RT @GaelicTorus: @AlephBlog panasonic is a value trap, imo $PC Dec 03, 2012
  • +1 For sure RT @footnoted: @joshuademasi @AlephBlog Well, nobody would accuse me of being a defender. That’s for sure. Dec 03, 2012
  • +1 RT @neilbarofsky: The more things change…Good for @benlawsky for voting no: New Rules for Life Insurers http://t.co/gVW1Zl80 $$ Dec 03, 2012
  • Had good ideas in 2001 now jumps shark $$ RT @LDrogen: Taleb should have quit while he was ahead, this is just nonsense http://t.co/rRPrCLLT Dec 02, 2012

 

Replies

 

  • @Ryknow16 Not yet.. I expect the Fed to overdo it until it is obvious that they have to shift & then some; when shift comes it will b brutal Dec 08, 2012
  • “Thanks for writing this… this will be an important signal when the Fed finally hints at tightening,” David_Merkel http://t.co/AXbhvTBv $$ Dec 08, 2012
  • @DividendMaster Granted, but I have a rule of thumb: Removal of policy accommodation always is tougher than the Fed claims & imagines $$ Dec 07, 2012
  • @DavidSchawel You are welcome. Excellent interview & ideas. I also follow Pettis & Lacy Hunt — I’m an information hound $$ Dec 07, 2012
  • @EddyElfenbein It was a good indicator, but now it is used for policy purposes in Operation Twist, making it useless as an indicator now. $$ Dec 07, 2012
  • “Challenge for Apple is perpetuating successful innovation. Difficult to continually get high ROEs?” ? David_Merkel http://t.co/WfTxOVbJ $$ Dec 06, 2012
  • @neilbarofsky I have a compromise proposal on MMFs that gives everyone 90% of what they want. Can I show it to you? http://t.co/uTaSQoIv Dec 07, 2012
  • @DoubleDeuce Women I was speaking of were investment analysts, not actuaries, but u r right there also; famale actuaries tend 2b junior $$ Dec 06, 2012
  • @USTreasury Don’t care if this came from McConnell or Paul Krugman. The executive is *not* supposed to have any power over spending. Dumb $$ Dec 06, 2012
  • @DoubleDeuce Yo, friend. Men tend to be better at the risk-return tradeoff. Women tend to be better at estimating risk. Dec 06, 2012
  • @ivorroy I won’t live longer; eating meat in moderation is good 4u, &enjoying your life prolongs life far more than avoiding a few toxins $$ Dec 05, 2012
  • @Dan_Dicker Wrote a piece similar 2your “Embrace the Cliff” http://t.co/pseXvwlP last June. “Might not be so Bad” http://t.co/pYICXUOq $$ Dec 05, 2012
  • @cate_long I have a compromise proposal b4 the SEC on MMFs. Talked w/senior lawyers there: http://t.co/OG4zyTQy Really tough 2do good $$ Dec 05, 2012
  • @cate_long Personally, I think running the SEC is beyond everyone. The $$, the politics, can’t easily fire/hire people, etc. Dec 05, 2012
  • @cate_long Only be Chairman of the SEC. Only difficulties r managing the politics & incompetence. I would be willing 2 help. Dec 05, 2012
  • @rszbt Maybe we should nominate Cate Long. never reada bad article from her. Dec 05, 2012
  • @CondorOptions Ted Kauffman, Sheila Bair, Neil Barofsky, (giggle) Harry Markopolous, David Merkel (who?), Jack Ciesielski, I have more $$ Dec 05, 2012
  • @nelson3748 I expect nonsense from academics. Dec 05, 2012
  • @nelson3748 How has she been a disaster for consumer banking, and local and regional banks? Many of her proposal seem reasonable. Dec 05, 2012
  • @AppFlyer Yes, I heard about that… thought it was more dumb than lying… it was lying, but I didn’t see how she would gain from it. Dec 05, 2012
  • @AppFlyer Maybe I’m out of it. How is she a liar & a cheat? Links welcome. Dec 05, 2012
  • ‘ @StockRealist Hello from another member of the penny stock truth squad. Article of mine: http://t.co/jJ79L4Ac Got $IMNG today #spitspit $$ Dec 04, 2012
  • .@drVTC It’s more what u do w/whatever time u spend w/kids, than the amount of time. I agree, tho; character is the most important factor $$ Dec 04, 2012
  • @paulvieira Typically u hear a few pops b4 the tree falls; inn the US that was mid-2007 $$ Dec 04, 2012
  • @EddyElfenbein Makes sense, thanks Dec 04, 2012
  • @buzzfeedben What r u looking for from someone to run your possible business vertical? I know of a lot of talent in financial writing… Dec 04, 2012
  • @EddyElfenbein your latest piece deals w/correlations — how well do the betas match up? Dec 04, 2012
  • @Fechtmeyer Thanks, I get it now. But technology is creative destruction, while Wall Street’s risk control methods were just wrong. $$ Dec 03, 2012
  • @Fechtmeyer SV? WS? Dec 03, 2012
  • @LDrogen “They that can give up essential liberty to obtain a little temporary safety deserve neither safety nor liberty.” Ben Franklin $$ Dec 02, 2012
  • @kyles09 That is, how much profit there is in the deal 4 the originator, whether in % upfront, or in the excess interest strip Dec 02, 2012
Behind the Curve

Behind the Curve

Posted on by David Merkel

If you were an actuary working for a Defined Benefit pension plan, or Social Security, you would develop an estimate of the stream of cash flows that you expect the plan to pay.? The expected cash flows are ultimately what matters.?? Estimates of what the cash flows are worth in the present are a sideshow, because the estimates of what the assets of the plan will earn are far less stable than the estimates of what will get paid, even over the long term.

Unless we get significant and prolonged inflation, the discount rates applied to the liabilities are unrealistic, even in Indiana, which has the lowest rates that I have heard of for major plans at 6.75%.? Discount rates should be in the 3.5-5.0% area.? It is very difficult to earn more than 1-2% over the long Treasury, or more than can be earned from long Baa/BBB bonds.

Thus, in my opinion,virtually every underfunded pension plan is behind the curve, and their underfunded status is underestimated.

So here’s the scandal.? As funds don’t earn enough to pay the benefits, their funded status worsens.? As their asset levels drop to Puerto Rican levels, they become forced to raise taxes to keep pace with the rising payments as Baby Boomers retire.? That’s the curve that they are behind: the curve of increasing retirement benefits.

Now, there are other strategies.? Reduce benefits to active employees.? Eliminate COLAs.? New hires only get a DC plan.? Play hardball with retirees, and get them to reduce vested benefits in exchange for greater certainty of payment.

I’m not optimistic here.? There will be cuts.? The only question is on whom the cuts will fall.

 

Young People Should Favor Low Discount Rates

Young People Should Favor Low Discount Rates

Posted on by David Merkel

Where should the discount rate for liabilities on a defined benefit pension plan be set?? This sounds like a boring issue that should be solved by bureaucrats or actuaries.? And yes it *is* boring, though nerds like me have a keen interest in the topic.

Here’s the issue, who should bear the costs?? Should it be future generations, or the generation that is receiving the benefits?? I am guessing that most people reading this agree with me, and argue that the generation receiving benefits should bear the costs, and pre-fund their retirements.

But that has not been the case.? Rather, the Baby Boomers and prior generations have pushed costs onto future generations.? How did they do it?? Parties that looked at the incredible returns of the 80s & 90s assumed that equity markets were magic, and always threw off large returns.? These same parties were reluctant to recognize the 2000s? We’ve had a lost decade-plus, which has caused most DB plans to go into deficit.

But the assumed investment rate was high going into it: 8-10%/year.? The is the danger of mindlessly importing returns from the past, without asking the question, “Was there anything special about he past that should lead us to adjust the past returns?”? P/E multiple expansion would mean-revert.? It usually does, and longer-term measures like the Q-ratio and CAPE10 showed that valuations at the peak were severely high.? Since then, the market has treaded water, as the companies in aggregate grow into their valuations.

Financial markets cannot forever outgrow their economies.? Eventually we rely on cash flows from businesses to validate the value of the underlying businesses.? Dividends, buybacks, and mergers and acquisitions serve to distribute the value of what companies do for those who own them.

The high assumed investment rates forestalled corporations and governments from contributing to their DB plans.? Why should they?? After all, they expected to earn a ton of money off their investments.

But imagine for a moment that they had been reasonable, and said “we shouldn’t expect to earn more than long Baa-rated bonds.? That’s still a little liberal for me, but an improvement on most current reasoning.

The effect today would be to have discount rates around 4.6%.? How many firms and governments do that?? (Why do I hear crickets?)

If governments had followed a formula like “use the Long Baa bond yield for the discount rate,” they would not have been as generous with pensions.

There is still time to make some Baby Boomers pay more in taxes (even me).? It would be wise for younger people to urge the boards that run the DB pension plans of their municipalities to adopt a long Baa bond yield as their discount rate.? The underfunding will be horrifying, but if investment return exceed that, contributions and taxes should decline.

Thus I say to the young; lobby for lower discount rates, that there might be more taxation in the short-run, and less in the long-run.

Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

Credit Markets

 

  • Credit Suisse Raises $802M CLO; Prudential Closes Fund http://t.co/RbXDgtPU Watch arb from creation of CDOs & CLOs: clue 2 bond rally end Dec 01, 2012
  • Caisse Thinks Bond Party Is Over? http://t.co/j6lWdJjA Shifting $$ from bonds 2 infrastructure; usually good though liquidity is underpriced Dec 01, 2012
  • Bond Yields May Fall Short of Corporate Pension Fund Needshttp://on.barrons.com/VkWekV Bonds in DB plans r4 risk reduction not just yield $$ Dec 01, 2012
  • My point is that it is difficult to tell whether we will be getting inflation or deflation. My bond portfolios are barbelled: long &short $$ Nov 30, 2012
  • Investors Unprepared for Bond Danger, BlackRock?s Rosenberg Says http://t.co/56kv1CrS B wary of owning 2 much or 2 little long bonds $$ Nov 30, 2012
  • Safe or junk, bonds in bubble trouble http://t.co/Nd5iEYPy Fuss told the summit in New York there was evidence of “a spread bubble” $$ Nov 28, 2012
  • Overnight Rates Surge in Fed?s Operation Twist http://t.co/xwvKCPGb Large supply of short Treasuries raises Repo rates over LIBOR $$ Nov 26, 2012

 

Muni Markets and Pensions

 

  • Bankruptcy threat back on the table in Pennsylvania city as filing ban ends http://t.co/NgMGQs2Z Will b tough to stiff muni bondholders $$ Dec 01, 2012
  • Calpers Seeks to Sue San Bernardino Over Pension Payments http://t.co/xv0OqQV9 Will have2show a place in CA law/constitution reqrng pmt $$ Nov 28, 2012
  • Fierce Debt Puts Pensions at Risk in Puerto Rico http://t.co/w2oGk8YW Future curse: May u starve like a Puerto Rican pensioner! Uh, yeh $$ Nov 27, 2012
  • Proponents of pension reform face steep hurdles http://t.co/n2AYvghT Choose: raise taxes, reduce services, attempt constitutional change $$ Nov 26, 2012
  • San Bernardino?s ?Toxic Politics? Snarl Calpers Debt http://t.co/N4YWPCTD Be careful what you put into your city’s Charter. $$ Nov 26, 2012

 

Market Dynamics

 

  • The Great 2012 Cashout http://t.co/i4lZvD0c Special dividends r coming fast & furious; last call 4 low tax rates; next stop: Caymans $$ Dec 01, 2012
  • Wells Fargo CEO: ‘Bad players are gone’ from finance http://t.co/AwSGY8gz FD: + $WFC | Sadly, false. There may be fewer, but not all gone $$ Nov 30, 2012
  • Nontraded BDC sales on a tear despite closing of first fund http://t.co/ML7oVkIu Poison, beware. BDCs are bad enough w/o the illiquidity $$ Nov 30, 2012
  • Beware the Smart Money: Hedge Funds Issue Sell Signal http://t.co/HXBKD5ZO When fast money is “all in” it just takes a jolt2make mkt fall $$ Nov 30, 2012
  • Home Equity Loans Make Comeback Fueling US Spending http://t.co/3WULRzOO We never learn, we never learn, we never learn, we never learn $$ Nov 27, 2012
  • Private-Equity Managers Make Moves as Tax Increases Near http://t.co/eKKsH5w6 refinancing investments, accelerating gains, etc. $$ Nov 26, 2012
  • The Faustian Bargain between States and Banks http://t.co/gGUHGWIa I lend 2u, u lend 2me. I lend 2u, u lend 2me. What could go wrong? $$ Nov 26, 2012
  • The Manufacturing Boom You Won’t Notice http://t.co/R62nFiae Productivity continues 2 improve -> more mfg in US, but not more mfg jobs $$ Nov 26, 2012
  • Overlooking Overvaluation http://t.co/nWfA1KMe Hussman interacts w/long-term valuation measures. He finds the market overvalued $$ #whatelse Nov 26, 2012
  • Everything You Know About Investing is Wrong http://t.co/v8wAYPg6 Single-vble measures of valuation fail in short-run, some in long-run $$ Nov 26, 2012
  • The prior BB article is a little deceptive, because regulated entities use them under regulation. Many r quite safe, like auto ABS, etc. $$ Nov 24, 2012
  • Shadow Banking Grows to $67 Trillion Industry, Regulators Say http://t.co/houN2uhM Many are SPV securities held by banks & ins cos $$ Nov 24, 2012

 

Companies

 

  • How a desperate HP suspended disbelief for Autonomy deal http://t.co/qv1vIWcQ If $HPQ had been focused on organic growth, wouldnta happened Nov 30, 2012
  • Berkshire Hathaway, CaixaBank Agree to Reinsurance Deal http://t.co/RDQqXhMl Berky hasn’t done well w/Life Re — I would be cautious $$ Nov 30, 2012
  • Google Has Officially Eaten the Newspaper Industry http://t.co/TGqEWK7T $GOOG now has more advertising revenue than all print media $$ Nov 28, 2012
  • Investors Demand CEO Face Time http://t.co/4CPugaAV CEO griping about time spent on investors is wrong; a good CEO is Mr. Outside $$ Nov 28, 2012
  • Global Steel Industry Faces Capacity Glut http://t.co/DhU7BaWa We need to see 20% of the steel industry fail b4 buying steel stocks $$ Nov 28, 2012
  • Lehman Sells Archstone in Deal Worth $6.5B http://t.co/f2V5K7tk Losses taken; Lehman more liquid; Sam Zell lives 2 gravedance $$ $EQR $AVB Nov 27, 2012
  • $AMZN ‘s bond offering will b a bit of a “museum piece.” I.e. unusual issuer unlikely to issue more; should get tight deal spreads $$ yld<2% Nov 26, 2012
  • $ICOA Says $GOOG Didn’t Acquire the Company http://t.co/y3XXagL7 Whoever put out the press release will be an easy target 4 the SEC $$ Nov 26, 2012
  • France to ArcelorMittal: if you don?t like losing money, get out of France http://t.co/gYQ31NOk Invisible foot punishes France 4 bad policy Nov 26, 2012
  • Flowers Foods Sizes Up Hostess http://t.co/4DYwu6p6 Might buy brands, marketing arrangements, factories., etc. Won’t hire unions $$ $FLO Nov 26, 2012

 

Central Banking

 

  • Japan?s Ill-Fated Experiment With Money Doctoring http://t.co/OgCSJ4KB Interesting tale of Asia conquest; what does it imply 4 the US? $$ Nov 30, 2012
  • The death of volatility? http://t.co/04RNO7z1 “Central bank puts have done a great job of removing tail risks.” for now h/t: @izakaminska Nov 29, 2012
  • When the Credit Transmission Mechanism Breaks? http://t.co/HvCddUDh While we r delevering monetary policy won’t work well. h/t: @pragcap $$ Nov 28, 2012
  • The Indiana Jones economy http://t.co/GqjOk5Ql @izakaminska explains how economic transmission mechanisms r short-circuited by hoarding $$ Nov 28, 2012
  • Brazil real jumps as central bank eclipses Mantega http://t.co/xUpU6tE2 Loose developed mkt $$ polcy forces choice: exports or inflation? $$ Nov 26, 2012

 

Politics & Policy

 

  • Mortgage interest rate tax deduction scores political points ? but little else http://t.co/xiaLfUkT Limit to $20K of interest $$ @hnmoore Nov 30, 2012
  • IMNSHO, the PPACA was designed to destroy the parts of the US health care system that worked well, in order 2 move 2a single-payer system $$ Nov 30, 2012
  • Unaffordable Cost Seen for Some Under Affordable Care Act http://t.co/iEPsMhdh When this law goes live in 2014, people will hate it $$ Nov 30, 2012
  • In D.C., Social-Media Surveillance Pays Off http://t.co/XkLcZ3nm What they glean from social media aids service to constituents $$ Nov 29, 2012
  • 10 Things the SEC Won’t Tell You http://t.co/QOfbkvhC 11) U r your own best defense; we can’t help u much if u r stupid, b skeptical $$ Nov 28, 2012
  • Going to college is not of itself a good thing economically. You have to choose something that will pay off if you dare borrow money $$ Nov 28, 2012
  • Federal Student Lending Swells http://t.co/Wvi2d6vT We need to eliminate student loans. They do more harm than good. $$ Nov 28, 2012
  • Time running out on debt ceiling http://t.co/iZ6BLqdP Follows months behind the “fiscal cliff.” Will probably cause as much angst. $$ Nov 27, 2012
  • “Y is the burden of proof on those who want 2 return 2 the proven statutory & regulatory approaches of the past?” http://t.co/GJuNCS1X $$ Nov 26, 2012
  • Disabled parents face bias, loss of kids: report http://t.co/SvW3g3Xn Found this 2b disturbing; govt should avoid meddling w/families $$ Nov 26, 2012
  • A Minimum Tax for the Wealthy http://t.co/THiT0YGK Let Warren pay tax on his deferred gains in $BRK.A shares, & pay the large DTL also $$ Nov 26, 2012

 

Rest of the World

 

  • China?s over-investment problem http://t.co/WJVLvnMD IMF working paper says what China skeptics have said for years: 2 much investment $$ Nov 30, 2012
  • China Mafia-Style Hack Attack Drives California Firm to Brink http://t.co/cmnb4qco Chinese hackers steal software & hack software firm $$ Nov 28, 2012
  • A UK Exit From EU Offers No Promise of Better Fortunes http://t.co/TBmi6as7 EU is a failed experiment; Y should the UK continue there? $$ Nov 28, 2012
  • French jobless total hits 14-yr high http://t.co/NYdjc6Rs Francois Hollande getting costly economics lessons, paid4 by the French people $$ Nov 27, 2012
  • China Wage Gains Hurt by Weaker Profit Damp Consumption http://t.co/tESRToBZ Malinvestment leads2 lower profits, then wages can’t grow $$ Nov 27, 2012
  • China?s nemesis: bribes, banquets and backslapping http://t.co/D7V7yF06 Difficult 2 develop highly when rule of law is not followed $$ Nov 26, 2012

?? Sovereign CDS trading plummets http://t.co/jKBj47bv Will eventually lead discretionary holders to lighten sovereign positions $$ Nov 26, 2012

  • Egyptian Army allowed Morsi in2 power 2 avoid riots & allow him 2 mess up, so that Egyptians would support military rule again. US wins 2 $$ Nov 26, 2012

 

Wrong

 

  • Wrong: Misconceptions 101: Why College Costs Aren?t Soaring http://t.co/nZWYKQSQ Doesn’t square w/the rise in delinquent student loans $$ Nov 28, 2012
  • Wrong: Obama To Meet Romney Tomorrow Amid Fiscal Cliff Talks http://t.co/2VfO7Fxz Doesn’t Obama realize Romney has no power in the GOP? $$ Nov 28, 2012
  • Wrong: Fed’s Easing Yields Hidden Benefit http://t.co/6bJejPB1 1994 is not 2013. The banks/financials/households were in good shape $$ Nov 28, 2012
  • Taleb Mishandles Fragility http://t.co/qIGbLQHl Taleb needs new ideas, but does not perceive that. He is mired in the past. $$ Nov 28, 2012
  • Russell Napier’s “Most Important Chart In The World” http://t.co/XYKdagZm While we’re at it let’s reprise the Nikkei vs Nasdaq charts $$ Nov 28, 2012

 

Other

 

  • THE FUTURE OF DIGITAL [SLIDE DECK] http://t.co/RabKP5EC Good but long piece from BI on the future of digital media $$ Nov 30, 2012
  • Alleged Insider Group Includes Website Editor http://t.co/Llnmz2aE In general insider info is a curse to the upright; ties your hands $$ Nov 30, 2012
  • Texas Feral Hog Wrecks Mark Losing Battle With Animals http://t.co/TMPpFNh6 This is Texas, no one said anything about losing. $$ Nov 29, 2012
  • He Carries On, She Likes to Check http://t.co/4D1Fd5Td Men and women are different when they fly. This explains it. $$ Nov 29, 2012
  • . @izakaminska is a favorite writer of mine. She helps me with the nuances of tightly nested markets, finding the variable that is valuable Nov 29, 2012
  • American Housing Casino Revives After Big Drop: Mortgages http://t.co/lZmmHo9s Setting up conditions for the naive 2 lose again $$ Nov 28, 2012
  • FHA?s Biggest Loser: No-Money-Down Mortgages http://t.co/bJgwTdtV Surprise! Lend2 someone w/nothing 2 lose & they default a lot more $$ Nov 26, 2012

 

Teaching Math

 

  • Helping Parents Score on the Homework Front http://t.co/7FPGjA0n 6-yr olds should not be doing fractions. Parents aren’t the problem $$ Nov 28, 2012
  • The push to think abstractly about math does not work w/kids. You can start with girls around 13, boys around 14; misguided idealism $$ Nov 26, 2012
  • Children learn math best through drill, giving way to problem-solving, giving way to algebra (abstraction), further abstraction Calculus Nov 26, 2012
  • A New Kind of Problem: The Common Core Math Standards http://t.co/VGxxQGqr This is as bad as the “New Math” of the 1960s; utterly idiotic $$ Nov 26, 2012

 

 

Retweets

 

  • RT @prchovanec: Market should be rooting for China to buckle down to real econ adjustment, not hit yesterday’s growth targets with yeste … Dec 01, 2012
  • Would put the fraction at 80%, but I agree $$ RT @GMRobertson: if they are risk free they are solely for risk reduction, IG is about 2/3 so Dec 01, 2012
  • Wow! RT @prchovanec: Chinese company debt climbed to 122% of GDP in 2012 from 108% last year, highest level in 15 years http://t.co/ujKmHpTx Dec 01, 2012
  • Probably $$ RT @merrillmatter: @hnmoore I think eliminating (slowly) the 2nd home tax deduction is more palatable and possible. Nov 30, 2012
  • Blameworthy RT @grossdm: anybody ask boehner about the time he voted for massive new medicare entitlement without a funding mechanism yet? Nov 30, 2012
  • +1 RT @jonsticha: as is mine. Large bets on rates either way are a bad bet IMO Nov 30, 2012
  • RT @MuniTrader: @AlephBlog completely agree. credit risk front end, high coupon quality on the back end. pretty obvious but best way to … Nov 30, 2012
  • RT @PlanMaestro: If you don?t know enough to know about the business instantly, you won?t know enough in a month or in two? ? Buffett H/ … Nov 29, 2012
  • Needs2meet an actuary RT @TheStalwart: James Galbraith is only economist who talks about lowering the retirement age http://t.co/3srMzYX3 Nov 29, 2012
  • Recognizing reality, & verbally shading down fwd GDP $$ RT @carney: What does the beige book change from “moderate” to “modest” growth mean? Nov 28, 2012
  • Thanks, still think Eurozone should dissolve, replace w/mere free trade zone $$ RT @euromoney: Another take (quick): http://t.co/WxSquHKf Nov 28, 2012
  • RT @John_Hempton: Nassim Nicholas Taleb is a humourless git… and his publishers censor the internet. Do not buy his book… http://t.c … Nov 28, 2012
  • RT @munilass: Over 300 drone strikes and 2,500 people killed without a policy in place for when such attacks should be authorized http:/ … Nov 27, 2012
  • To the best of my knowledge, never RT @merrillmatter: do humans ever (in toto, as a society) voluntarily deleverage? Nov 27, 2012
  • Sad but true RT @AppFlyer: we never learn. Nov 27, 2012
  • That’s a big gap w/Moody’s @ Baa1 – S&P looks at balance sheet, Moody’s at Income Stmt? $$ http://t.co/C4wCNzaM RT @jonsticha: AA- @ S&P Nov 26, 2012
  • Rated Baa1 $$ RT @SimoneFoxman: RT @chrisadamsmkts: Amazon is today set to issue its first bond in more than a decade http://t.co/k03iJNi4 Nov 26, 2012
  • That’s why we homeschool RT @Nonrelatedsense: @AlephBlog pull kids from public schools if you can afford it. Nov 26, 2012
  • Bigtime $$ RT @Pawelmorski: Though anyone who thinks Canada is bubble-free might care to follow @garthturner and read his blog. Nov 26, 2012
  • Can we get the PBOC to take Yellen? $$ RT @TheStalwart: I’m definitely on board with this Central Bank poaching/global market place thing… Nov 26, 2012
  • Wow. Whoever published the original release will be an easy target $$ RT @mickwe: @AlephBlog so did all these guys http://t.co/sdUtAnlN Nov 26, 2012
  • AP goofs RT @mickwe: oh… RT @allthingsd: Google Sources: Acquisition of ICOA Wireless Are ‘Not True’ -by @ahess247 http://t.co/aGVCteBf Nov 26, 2012
  • RT @mickwe: That wifi co Google just bought for $400m? Loses $ and ‘Cash and cash equivalents were $10 at June 30, 2012’ http://t.co/PXB … Nov 26, 2012
  • Warranties r usually ripoffs RT @danielckoontz: Anybody who’s ever bot an extended warranty should read this post twice http://t.co/Ryl1AkKn Nov 25, 2012
  • A good guy; I appreciate him $$ RT @PlanMaestro: Retail Industry’s Ninja Mind Tricks http://t.co/DxJfueu4 #biases Nov 25, 2012

 

Replies

 

  • @LSilverspar as @EpicureanDeal says: “Names will be changed to protect the innocent, if we find any.” Few clean hands among banks, S&Ls, etc Nov 30, 2012
  • @Frank_McG Consider it a different way… I think it would b more likely to see a case prosecuted over insider information w/ CDS trading $$ Nov 30, 2012
  • @Frank_McG I’ve never seen a case tried for insider information on bonds, because gains r less, but technically, legally it is possible $$ Nov 30, 2012
  • Congress controls the purse strings, not the Presidency, which is too powerful as an office already. Bad… http://t.co/iGBUVgtw Nov 30, 2012
  • But when she became CEO, she could have paid the ~$100MM breakup fee. She didn’t, so she is partly to blame. http://t.co/N1xiZ0mh Nov 30, 2012
  • @ritholtz Dear Barry, is that a real plus? We have increasing delinquencies there, in the face of nondischargability in bankruptcy $$ Nov 29, 2012
  • @danielckoontz Thank you, dear friend Nov 29, 2012
  • @munilass I’m no expert, but CALPERS would have2 point @ California statutes/constitution requiring the payment http://t.co/UJpO1m3T Nov 28, 2012
  • @williamalden Not surprising. Academics & pseudo-academics r easy to co-opt. Most of the members worked in finance & r its friends $$ Nov 28, 2012
  • @Sir_Strangelove Free trade is a simple concept, & is hindered by Eurocrats. Free trade means fewer laws & regulations, not more $$ Nov 28, 2012
  • @Sir_Strangelove No. The Euro is the worst of it, but nations need to have their own unique rules to function well, not standardization $$ Nov 28, 2012
  • @EddyElfenbein Funny in a way, because at the beginning of his career, his main research tools were S&P and Moody’s stock reports $$ Nov 28, 2012
  • “You have more to say than Taleb. He has not had a useful new idea in 10 years.” ? David_Merkel http://t.co/sSh4Qetw $$ @reformedbroker Nov 28, 2012
  • @JayLeonard So, more like $2.0-2.5T per year Nov 27, 2012
  • @JayLeonard I think they are wrong. Other statistics I have seen indicate the amount is 8% of GDP, or $1.2T plus whatever the current gap is Nov 27, 2012
  • @carney My comment: If you pay $400M to get $500M over 30 years, the IRR is 1.45%. Better to buy a ladder of muni or corporate bonds. $$ Nov 27, 2012
  • @AppFlyer Care 2 clarify? Nov 27, 2012
  • @BryanMortenson Thanks, appreciated. Nov 27, 2012
  • @BryanMortenson Has the latest Financial Report of the US Government come out yet? Due soon. Thought I was on the email list… Nov 27, 2012
  • @carney Best place to look would be Canadian Mortgage bubble articles like this: http://t.co/w1Zk7Uhc Nov 27, 2012
  • @TheStalwart This is why I don’t follow any monthly numbers for my investing: noise/signal is high. Even a year of data, noise swamps signal Nov 27, 2012
  • @richtoscano I largely agree. My main disagreement is that the majority says rates must go up, and for some time, but they don’t $$ Nov 27, 2012
  • @richtoscano They R the best comparisons that we have 2 the current situation. I respect U, Rich, but wht wld B a better comparison? $$ Nov 27, 2012
  • “You may have a long wait. Great Depression & Modern Japan went on over 10 years.” ? David_Merkel http://t.co/YlMSAU9c http://t.co/XVq1wgWO Nov 26, 2012
  • @jonsticha Used 2 manage corporates for Fidelity & Guaranty Life. I only guessed, but big rating gaps mean there r two stories told $$ Nov 26, 2012
  • @japhychron I don’t know. So many things are messed up that it is impossible to say… 🙁 Nov 26, 2012
  • “But Buffett’s tax proposal barely nicks him because he makes little income. His shadow income is?” ? David_Merkel http://t.co/7zWRb4SV $$ Nov 26, 2012
  • @mickwe Basically, $GOOG bot out a penny stock, $ICOA, virtually inactive & broke. Pays a ~nickel/share for something $.0001 Friday. Huh? $$ Nov 26, 2012
  • @BarbarianCap $HOGS Tough company to analyze; doubts as to the reality of assets, financials, according to some Nov 26, 2012
  • @GaelicTorus I’ve been through the social work system five times in my life, each time to rescue a child & adopt him. I am not naive. Nov 26, 2012
  • @Nonrelatedsense I knew that, but I still think that Taleb had great insights in his first book, and has not grown from there. Nov 25, 2012
  • @volatilitysmile A good warning to all of us who put our opinions forthto the public. Nov 25, 2012
  • “Taleb has jumped the shark” ? David_Merkel http://t.co/QNdVE57V Sorry to be so blunt $$ Nov 25, 2012
  • @PlanMaestro I have friends working in South Sudan on that. Bigger problem is a lack of tending the fields; the culture is not aggressive $$ Nov 25, 2012
  • @PlanMaestro One of the most important initial things a developing nation can do is get agriculture right; other things tend to follow $$ Nov 25, 2012
  • @moorehn I liked Taleb’s first book a lot. His insights since then have not increased. I think he is on his 16th minute of Warhol’s fame. $$ Nov 24, 2012
  • @Convertbond Is there a link for that? Investment dept @ ins co in 93 was reaching for yield through duration @ wrong time 94 bad year 4 dur Nov 24, 2012
  • @JamesGRickards If you’re in Baltimore/DC and want to talk, I would be interested in what you are thinking. Let me know. Nov 24, 2012
  • @JamesGRickards Too speculative. We should be happy saying that we don’t know. The Bible does not speak to the issue, nor do the Fathers. Nov 24, 2012

For what it is worth

  • My week on twitter: 51 retweets received, 3 new listings, 48 new followers, 106 mentions. Via: http://t.co/SPrAWil0 Nov 29, 2012

?

Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

 

Rest of the World

 

  • Wrong: Panic Spreading Across Nations Outranks Trade http://t.co/TbYGmdlL The panic is rational. 2 much debt that cannot b paid back $$ Nov 03, 2012
  • Hong Kong Taxing Homebuyers in Bubble Fight http://t.co/4xEwAl7R Would that other nations had tried this rather than encouraging debt $$ Nov 03, 2012
  • http://t.co/gj6va2hE China’s 18th Communist Party Congress convenes in Beijing on 11/8 4a once-a-decade leadership change $$ Infographic Nov 01, 2012
  • Hollande Ducks as French Industry Bleeds Jobs http://t.co/nyQ89HaH If France doesn’t change, the Eurozone eventually will fall apart $$ Oct 31, 2012
  • Italy in political chaos as election nears http://t.co/fAE84PLn Italy exists 2 flesh out dictionary definitions of corruption & instability Oct 31, 2012
  • Ortega Tops Buffett With Zara Fortune of $53.6 Billion http://t.co/2uE9xajS Tough 2 make that much $$ off retailing apparel but he did it Oct 31, 2012
  • Malaysian Gold Plans Flourish as Savers Seek Higher Yield http://t.co/4OTzlTIW When yields are too low, many bad income schemes arise $$ Oct 31, 2012
  • The EC can claim “success” in CDS regulation http://t.co/kufYPnpz @soberlook tells us how the EU solved sovereign CDS by killing it $$ Oct 29, 2012
  • WHOA: Japan Has Its Own Fiscal Cliff, And People Are Actually Talking About A Risk Of Imminent Technical Default http://t.co/b3ldTp0f $$ Oct 29, 2012
  • Europe’s Crisis Spawns Calls for a Breakup?of Spain http://t.co/RvC0ctZB more here: http://t.co/h1faG4Yd Will b tough 2 stay whole $$ Oct 29, 2012

 

Insurance

?

  • Berkshire Hathaway buying Oriental Trading http://t.co/997JvhOS Buffett buys an Omaha company that sells party supplies nationally $$ Nov 03, 2012
  • MetLife’s Big Annuity Charge Linked to Regulatory Concern http://t.co/mNbA192Z Reserving 4 guarantees on variable products can b weak $$ Nov 03, 2012
  • Hartford Moves to Offer Annuity Buyouts http://t.co/dGmfth2h also http://t.co/aUpA2l2X Annuity-holders: don’t accept $HIG ‘s low offers Nov 03, 2012
  • P/C Insurers Can Handle Sandy Losses; Flood Program 2 Bear Brunt http://t.co/4WqN1uq1 Watch $TWGP, maybe $CB, property-centric reinsurers $$ Oct 31, 2012
  • Insurers Won’t Get Whole Tab http://t.co/O7oFk9Wd Important 2c that much damage is not insured, & flood insurance not bot by many $$ Oct 31, 2012
  • Berkshire Extends Housing Bet With Brookfield Venture http://t.co/zquFTiB1 Buffett increases residential real estate sales presence $$ Oct 31, 2012

?

Sandy

?

  • Nomads in Queens Endure Life on the Line as They Forage4 Gas http://t.co/hzMnZnNT Many Running on Empty in Newark http://t.co/CF4LAHWu Nov 03, 2012
  • Many Affected by #Sandy Lacked Flood Coverage http://t.co/0AYx5xb2 Common in low frequency areas to not get the flood cover $$ #rolldice Nov 01, 2012
  • #Sandy Seen Lifting Insurance Prices Amid ?New Reality? http://t.co/13kHQUs6 Might have a small upward move in rates; shouldn’t b big $$ Nov 01, 2012
  • Sandy Delivers a Digital Wallop to Eastern US http://t.co/aGbvoUKv Many datacenters have gotten soaked/fried; hope the data was backed up Nov 01, 2012
  • As far as the US equity indexes are concerned, the two day break for #Sandy had little effect on the stock markets $$ Oct 31, 2012
  • New York Subway System May Take Weeks to Recover From Storm http://t.co/thkL5qca Will be difficult to get into NYC by many means $$ Oct 30, 2012
  • US Stock Trading Shut for Second Day, Joining Bonds http://t.co/wZzh2MTg Markets likely to reopen on Wednesday, things still uncertain $$ Oct 30, 2012
  • Behind Decision to Close Markets http://t.co/nhLOKRQT Contingency plans to operate exchanges remotely will be the rule in the future $$ Oct 30, 2012
  • Hurricane Sandy: Losses Estimated at $45 Billion http://t.co/dUZJ3cmi Seems high, but possible. More realistic: http://t.co/DgB638Ij $$ Oct 30, 2012
  • Sandy knocks out power to 82 percent of LIPA customers http://t.co/NkjJEbcU Astounding $$ Oct 30, 2012

?

Politics

 

  • The progressive case against Obama http://t.co/t8G5PsUL I may write “The Libertarian case against Romney,” b/c we really don’t know him $$ Nov 03, 2012
  • Disasters Create Bigger, Not Better, Government http://t.co/W91nFEqr The challenge is 2 decide in advance what risks r borne by whom $$ Nov 01, 2012

 

Energy

 

  • Mining Canada’s Oil Sands: Suddenly, Not a Sure Thing http://t.co/k77vrfOm High cost 2 produce vs tight oil from fracking in the US $$ Nov 03, 2012
  • Vladimir Putin Is The New Global Shah Of Oil http://t.co/MWckLbRY Putin gains control over Russian oil & gas; how will he use that? $$ Oct 30, 2012

 

Bonds

 

  • In Fixed Income, a Fight to Survive http://t.co/cOtfWbGB Investment banking in bonds favors a market structure w/6-10 major brokers $$ Nov 03, 2012
  • Low Rates Lure Yield Seekers Onto Thin Ice http://t.co/tMhYQOMr When amateurs reach 4 yield they usually don’t know the risks they take $$ Nov 01, 2012
  • Pimco?s Gross Says Quantitative Easing Not Leading to Investment http://t.co/WRlaCAqi Should not b a surprise, only affects HQ rates $$ Nov 01, 2012
  • Bond Sales Topping $3 Trillion Nears 2009 Record http://t.co/qkcYLj9f Corporate debt deserves its chance 2become a bubble. Will u help? $$ Nov 01, 2012
  • Who Loses When Fed Keeps Interest Rates Low? http://t.co/Umt8Wx6Q Savers, Banks, Insurers (Life more), Pensions, Endowments, & Trusts $$ Oct 31, 2012
  • Bernanke?s Cash Fueling Record Corporate Rally http://t.co/gHo8IfwT Corporate credit getting tempted to overissue from low yields $$ Oct 30, 2012
  • Hedge Funds Drawn to Fannie-Freddie Risk-Sharing Plan http://t.co/mQ5Muyum Creating new private mortgage securities in an unusual way $$ Oct 30, 2012
  • Bargain-Addicted Investors Ignore Perils of Low Rates http://t.co/datCWeCz Argues investors & borrowers underestimate economic weakness $$ Oct 29, 2012
  • Treasury Real Yields Turn Positive as Inflation Slows http://t.co/yDEc23uE I prefer the CPI and the GDP IPD 2 the PCE. #alphabetsoup $$ Oct 28, 2012
  • Cost of Bailing Out Fannie and Freddie Expected to Fall Sharply http://t.co/j4KSPeZj Looks more optimistic, so long as housing prices ^ Oct 28, 2012
  • Trusts, Bonds Lead Surge in Credit ‘Gambling’ http://t.co/TnTEmVTz Maturity & risk-based pricing only come after mkts have a failure event Oct 27, 2012
  • New Peril for Parents: Their Kids’ Student Loans http://t.co/tXaLTBNS Safer: Borrow directly & formal lend 2 yr kids $$ #dontcosign Oct 27, 2012
  • Here’s a Tip: Watch Those Pricey TIPS http://t.co/VRVNtqQC People are locking in increasingly larger losses vs the CPI, be wary $$ Oct 27, 2012
  • That said, the enhanced indexing is often a better strategy, but not everyone can do it; it would eventually distort the market $$ Oct 27, 2012
  • Is Your Bond Strategy Wrong? http://t.co/Aqa1zu3k Mkt cap weighting scales &is true idxing; other weighting schemes r enhanced idxing $$ Oct 27, 2012

 

Market Impact

 

  • Does Academic Research Destroy Stock Return Predictability? http://t.co/S8SbDy0r It reduces, but does not destroy; limits to arbitrage $$ Nov 03, 2012
  • Predicting the Next Shock to the Global Economy http://t.co/mMJS0uBu China, Fiscal Cliff, Oil price surge, European Bank failure, Earnings Nov 03, 2012
  • Sectors And Style: Which is the better way to view the market? http://t.co/WjpyjxyC Sectors. Been my view 4a while $$ ht: IndexUniverse Nov 01, 2012
  • Rich Stuck as Salient Curbs Withdrawals for Investors http://t.co/rBEjHpxs The sting of illiquidity at its finest; hedge fund halts w/d $$ Oct 30, 2012
  • THE REAL BEAUTY OF A BALANCED FUND http://t.co/vSxtlGYf “The beauty of rebalancing is that it forces us to do what we won?t want to do” $$ Oct 30, 2012
  • David Rosenberg Brought Down The House With This Depressing Presentation At A Conference This Week http://t.co/uFs8fSAB 2 wks dated $$ Oct 29, 2012
  • ?Misunderstanding Financial Crises?, a Q&A with Gary Gorton http://t.co/DPfiegyK I will b reviewing this book soon; disagree on policy $$ Oct 29, 2012
  • Signal failure:Why illiquidity in one asset can spread quickly to others http://t.co/6o9mSz94 Investors sell risk assets at same time $$ Oct 29, 2012
  • SEC Weighs Bringing Back Fractions in Stock Prices http://t.co/cxwNcah7 Probably a mistake; there r better ways2 solve trading issues $$ Oct 27, 2012
  • Your Fund May Be ‘Adopted.’ So What? http://t.co/uS1ReuFJ Doesn’t affect existing holders, usually done2increase marketing 2 new holders Oct 27, 2012

 

Pensions & Endowments

 

  • Also, it is very difficult 4 avg ppl 2 invest a lump sum over a long horizon; that’s even difficult 4 professionals, unless u have lotsa $$ Nov 01, 2012
  • GM Retirees Take Lump Sum Buyout http://t.co/uyXo5KJU Usually a bad idea to take a lump sum buyout; avg ppl don’t estimate value well $$ $GM Nov 01, 2012
  • Preliminary Data Indicate Educational Endowments Earned Investment Returns Averaging -0.3% in FY2012 http://t.co/QJaU4mZI Tarnished model $$ Oct 29, 2012

 

Companies

 

  • VMware, the bell tolls for thee, and Microsoft is ringing it http://t.co/ykt7oiEa Never thought $MSFT would ever threaten a company again $$ Nov 03, 2012
  • Sharp Says It Faces Material Doubt on Survival http://t.co/3fIHwx6b From Sharp minds come… never mind… tech is a cutthroat sector $$ Nov 01, 2012
  • Honda starts making small jets in US, aims for ‘Civic of the Sky’ http://t.co/BkBhRaqs FD: + $HMC Unique jet may offer many advantages $$ Nov 01, 2012
  • Abbott Labs $ABT Said to Ready a $10B+ Bond Deal http://t.co/4iEG0eX5 Remember bigger 1 in 2002 4 $GE Capital. I passed & it sank $$ Oct 28, 2012

 

Other

 

  • Are You Better Off Now Than You Were Four Years Ago? http://t.co/bCgRBbUU If u r reading @reformedbroker u r. Happy 4th blogoversary! $$ Nov 01, 2012
  • Unsaving the U.S. economy http://t.co/vj0ujChh Low savings rate may aid GDP in the present, at the cost of lower GDP in the future $$ Oct 30, 2012
  • Taming Stomachs With Fodmap Diet Spurs $8 Billion Market http://t.co/kyQlpvAA Eliminate a few sugars from diet & upset stomachs go away $$ Oct 30, 2012
  • Let?s Put America?s Bankers Out of Business Now http://t.co/ypHmnJiG I.e. not finance US debt via China & Japan, OPEC, etc. $$ #tough2do Oct 29, 2012
  • Counting das gold at Fort Knox http://t.co/ZEXNCooP This would be interesting if the Germans can audit it & no Americans can $$ Oct 29, 2012
  • A Dirty Investment http://t.co/vRLzHuhd Watch composition of the financing & get skittish when debt levels get hi4 new transactions $$ Oct 29, 2012
  • Great Ideas Bosses Never Hear http://t.co/lstKcyJF It’s a cultural thing. It’s easy to create a culture where new ideas r put down $$ Oct 29, 2012
  • Practice Makes Perfect?And Not Just for Jocks and Musicians http://t.co/mTlvuiBs Many disciplines benefit by making basics instictive $$ Oct 28, 2012
  • Windows 8 Success Hinges on $10 Component http://t.co/Q48L45Ic Hail the high-tech hinge! Variable friction for enhanced functionality $$ Oct 27, 2012

 

Comments

  • If states declare #Sandy not 2b a “hurricane” so hurricane deductibles don’t apply, expect 2c policy forms rewritten 4 future storms $$ Nov 01, 2012
  • It would be stupid2base your vote off the Friday jobs report. A related variable is better http://t.co/aqDsu4jY Labor Force Participation $$ Nov 01, 2012
  • “Sandy has not affected your ability to write trenchant posts, Josh. Well done.” David_Merkel http://t.co/KAhHWdbT http://t.co/U0KKS3Jm $$ Oct 31, 2012
  • It’s obvious that NYC and a number of coastal areas took some pretty bad whacks. Anyplace further inland get hit that badly? $$ #Sandy Oct 30, 2012
  • Sandy having her last hurrah in Baltimore. We are on the downhill slope from here. 20% of people lost power, much less than feared. $$ Oct 30, 2012
  • Trench on the uphill side of the yard is diverting water downhill and away from the house. Moderate winds & rain at present:Baltimore #Sandy Oct 29, 2012
  • If #Sandy has not turned toward the US Coast by 8AM ET, it will head out to sea. If so, will NOAA issue an apology? $$ Oct 29, 2012
  • Just tossing this out, but what if #Sandy doesn’t make landfall on the US Coast? Storm tracking east of predictions. $$ Oct 29, 2012
  • Men live in a dream world about women. Women live in a dream world about men. Sadly, they aren’t the same dream worlds. $$ Oct 27, 2012
  • And thus, good marriages require communication and compromise Oct 27, 2012

 

Retweets

  • Yeh, or Icahn’s son RT @valuewalk: or his son Nov 01, 2012
  • Carl only plays 4 Carl RT @srussolillo: Whitney Tilson Has ‘Mixed Feelings’ About Carl Icahn’s Netflix Stake http://t.co/r3TKOXK5 $NFLX Nov 01, 2012
  • RT @marketfolly: Tons of hedgies lately saying to avoid long-term treasuries. Makes sense, but contrarian move is obviously for them to … Oct 31, 2012
  • Y I never say IMHO RT @felixsalmon: RT @racheldodes: Observation: those who describe themselves as “humble” r usually the opposite of humble Oct 31, 2012
  • RT @cabaum1: My Bastiatian response to destruction-is-good crew: Why wait for natural diasters when we could nuke and rebuild cities all … Oct 30, 2012
  • +1 RT @Convertbond: I think we’ll see an a leak over to corporate CDS in #Europe as the sovereign short selling bad goes into effect #France Oct 30, 2012
  • RT @grossdm: Irony, and this is the last time I’ll use this pun. Biggest liquidity market to hit NY in decades causing historic illiquid … Oct 29, 2012
  • High required returns & unrealistic views of “alternatives” RT @The_Analyst: you mean illogical/delusional return assumptions, no? $$ Oct 29, 2012
  • Time to celebrate! RT @PragCapitalist: Minor miracle. Server transfer completed without destroying the website. Oct 28, 2012
  • I am with you there, I tell young ppl that RT @rossbrannon: Or don’t let kids get student loans at all. It’s the worst debt there is. $$ Oct 28, 2012

 

Replies

  • @jucojames Typically, I write about Buffett in the late Winter or early Spring, b/c I get the most data then. Quarterly releases r light $$ Nov 03, 2012
  • @jucojames Excellent 2 hear from you my friend. I hope your business continues 2 prosper. When I opened my doors 4 biz, I underperformed 🙁 Nov 03, 2012
  • @researchpuzzler The link to my article has extraneous stuff at the end does not work Nov 01, 2012
  • @BradErvin1 Not sure where you are going — this has cut across everyone, though men, young, old, & minorities more Nov 01, 2012
  • @michaellipson1 This is true, & it is one place where the average individual has an advantage over the actuarial tables; U know yr health $$ Nov 01, 2012
  • @crampell Politicians don’t like to admit that there r problems that r so big & complex that they can’t do anything about them $$ Nov 01, 2012
  • @TheStalwart It’s slower, I think. Many key internet nodes got knocked out by #Sandy. See: http://t.co/aGbvoUKv Nov 01, 2012
  • @merrillmatter @munilass What a cute kid. I don’t have any that small anymore. Kid #8 just turned 10, and she’s still cute, but they grow up Nov 01, 2012
  • @EddyElfenbein How do you dig these little gems up, Eddy? Oct 31, 2012
  • @carney Disasters don’t often happen on a correlated basis; people have cognitive bias 2 think they do; also shutting barn door after cow $$ Oct 31, 2012
  • @carney As a buyside insurance analyst back in 2006, everyone was saying what a bad disaster year it would be. I argued against it. $$ Oct 31, 2012
  • @PlanMaestro Challenge to govts is 2 set rates that reflect risk fairly, avoid permanent subsidy, & discourage efforts at non-compliance $$ Oct 31, 2012
  • @PlanMaestro They typically exist 4 low-frequency high-severity events & areas where insureds can’t or don’t take steps 2 avoid losses $$ Oct 31, 2012
  • @Alea_ Thanks, I get it, I think. Assets r more unbounded than processes like underwriting damages. Fair? Oct 31, 2012
  • @Alea_ But isn’t EVT better than alternatives when dealing w/questions like how do we size reserves 4 events larger than we have seen b4? $$ Oct 31, 2012
  • @finemrespice @carney “Most commercial policies provide flood coverage, though with some limits” http://t.co/UJPiQ8yV but homes, not $$ Oct 31, 2012
  • @joshgiersch The situation in China might be competitive, given the financial repression going on there. Oct 31, 2012
  • @joshgiersch You can say that again. When governments engage in financial repression, they tempt ppl to cut corners on safety 4 income $$ Oct 31, 2012
  • @JamesMarsh79 It’s not just ability, but willingness, and willingness is affected by politics as well as economics Oct 29, 2012
  • @real_taxloss Well done. That was well worth a read. Oct 29, 2012
  • @PlanMaestro I appreciate guys like you that I agree with half the time, and disagree with half the time. Makes me think. $$ Oct 28, 2012
  • @ColoradoCapital Nominally TIPS investor gets CPI – x if held to maturity. The nominal Tsy holder gets his yield [y]. Real: -x vs y-CPI $$ Oct 27, 2012
  • @munilass Is there a brief way to explain what incremental risks exist between a Puerto Rico GO & a generic state GO? Similar laws or not? Oct 27, 2012
Redacted Version of the October 2012 FOMC Statement

Redacted Version of the October 2012 FOMC Statement

Posted on by David Merkel
September 2012 October 2012 Comments
Information received since the Federal Open Market Committee met in August suggests that economic activity has continued to expand at a moderate pace in recent months. Information received since the Federal Open Market Committee met in September suggests that economic activity has continued to expand at a moderate pace in recent months. No change.
Growth in employment has been slow, and the unemployment rate remains elevated. Growth in employment has been slow, and the unemployment rate remains elevated. No change.
Household spending has continued to advance, but growth in business fixed investment appears to have slowed.? The housing sector has shown some further signs of improvement, albeit from a depressed level. Household spending has advanced a bit more quickly, but growth in business fixed investment has slowed.? The housing sector has shown some further signs of improvement, albeit from a depressed level. Shades up household spending.? Shades down business investment.
Inflation has been subdued, although the prices of some key commodities have increased recently. Longer-term inflation expectations have remained stable. Inflation recently picked up somewhat, reflecting higher energy prices.? Longer-term inflation expectations have remained stable. Shades up their view of inflation, blaming energy prices. TIPS are showing rising inflation expectations since the last meeting. (5y forward 5y inflation implied from TIPS.)
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. No change. Any time they mention the ?statutory mandate,? it is to excuse bad policy.
The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. The Committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. Emphasizes that the FOMC will keep doing the same thing and expect a different result than before. Monetary policy is omnipotent on the asset side.
Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. No change.
The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective. The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective. No change. CPI is at 2.0% now, yoy, so that is quite a statement.
To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.? The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.? These actions, which together will increase the Committee?s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative. To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.? The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of Treasury securities, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.? These actions, which together will increase the Committee?s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative. No real change.

Does not mention how the twist will affect those that have to fund long-dated liabilities.

Wonder how long it will take them to saturate agency RMBS market?

 
The Committee will closely monitor incoming information on economic and financial developments in coming months. The Committee will closely monitor incoming information on economic and financial developments in coming months. No change. Useless comment.
If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. No change.
In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases. The FOMC promises what it cannot know or deliver.
To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. No change.

Promises that they won?t change until the economy strengthens.? Good luck with that.
In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015. In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015. No change
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. No change
Voting against the action was Jeffrey M. Lacker, who opposed additional asset purchases and preferred to omit the description of the time period over which exceptionally low levels for the federal funds rate are likely to be warranted. Voting against the action was Jeffrey M. Lacker, who opposed additional asset purchases and disagreed with the description of the time period over which a highly accommodative stance of monetary policy will remain appropriate and exceptionally low levels for the federal funds rate are likely to be warranted. Lacker sharpens his hopeless dissent against a flock of doves.

?

Comments

  • No big changes.? The FOMC?s views on household spending and inflation have risen.? Note that the CPI is at their 2.0% line in the sand.
  • In my opinion, I don?t think holding down longer-term rates on the highest-quality debt will have any impact on lower quality debts, which is where most of the economy finances itself. When this policy doesn?t work, what will they do?
  • Also, the investment in Agency MBS should have limited impact because so many owners are inverted, or ineligible for financing backed by the GSEs, and implicitly the government, even with the recently announced refinancing changes.
  • The key variables on Fed Policy are capacity utilization, unemployment, inflation trends, and inflation expectations.? As a result, the FOMC ain?t moving rates up, absent increases in employment, or a US Dollar crisis.? Labor employment is the key metric.
  • GDP growth is not improving much if at all, and the unemployment rate improvement comes more from discouraged workers.

A Statement to Dr. Bernanke:

More debt will not get us out of this crisis.? The Great Depression ended when enough debts were compromised, paid off, or cancelled, which from my study is 1941, before World War two started.

Your policies further aid the growth of the budget deficit, and encourage malinvestment in housing and banking, two things in a high degree of oversupply.? The investments in MBS only help solvent borrowers on the low end of housing, who don?t really need the help.? Holding down longer-term rates on the highest-quality debt does not have any impact on lower quality debts, which is where most of the economy finances itself.

The problems with unemployment are structural, not cyclical.? Labor force participation rates continue to decline.? There is greater labor competition around the world, forcing down wages on the low end.? There is nothing that monetary policy can do to change this.? You can create stagflation through your policies, but not prosperity.

When inflation does arrive, the FOMC is going to find it very hard to raise Fed Funds or shrink its balance sheet.? The banks will not react well as you try to shrink, and the long rates that you have held down will react violently.

You haven?t thought through all of the ?second order? effects of your policy.? Even the ?first order? effects, which favor the rich over the poor, seem to elude you.? Assets rise, helping the rich.? Interest rates fall, helping the rich who can borrow.? Commodity prices rise, harming the poor.

Insanity is doing the same thing over and over, and expecting a different result.? When will you realize that the policies of the Fed aren?t helping, and need to be abandoned?

Set it and Forget it

Set it and Forget it

Posted on by David Merkel

This post is directed at people who don’t get the markets.? People who think they they are experts can stop reading now.

I’m the Chairman of the Pension Board of the Reformed Presbyterian Church of North America.? Yes, that long-lived but small denomination that never went through the controversies of modernism, still teaching that Jesus Christ rules everything on earth NOW, and we exclusively sing the psalms of David without accompaniment in our worship.

Here is something that is no surprise: most pastors who are serious students of Scripture don’t get financial markets.? Truth, that is true of most people who know their technical crafts, but don’t get how financial markets work.

What I am about to say should work for most people who don’t get investing — choose a blend of risky and less-risky assets.? Ask your self this question: how much are you willing to lose in a year at worst as a percentage of assets? Take that amount and multiply it by 2.0-2.5.? That is the maximum amount that you should allocate to risky assets.? (Strangely, that mostly corresponds to the current margin rules.)

Average people can’t monitor the markets, and even if they did, they would not know what to do.? Far better that they “set it and forget it,” than that they panic when things are are going bad, or get greedy when things are running hot.

Thus we encourage the pastors to buy blended funds.? I encourage them to buy one notch down on their risk tolerances, because the return give-up is small, but the likelihood of them not panicking is large.

For those who are uninformed, that is important.? Buy-and-hold is a good strategy if maintained at a risk level that avoids panic.

Now. I’m not crazy about the market at present.? I would shade allocations to the 2.ox side of risk, not the 2.5x side.? But what we have found at the pension board of the RPCNA is that the pastors do best who choose a blended fund that they can stick with through tough times.

My own pastor is squeamish with investing, but I looked at what he “should” do in investing, and told him to dial it back one notch.? It has been to his benefit.? He has not panicked, and has made decent money over the last 10 years.

Thus to summarize: estimate your willingness to lose money over a year, and size your allocation to risky assets appropriately.

Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

Federal Reserve Policy / Treasury Yields

 

  • Great Tips-pectations http://t.co/nHWsNAFf Future inflation expectations are rising. Twenty year TIPS are flat to expected CPI $$ Sep 22, 2012
  • ‘Titanic battle’ over deflation about to sink long bonds: Gross http://t.co/trPfwKj3 Didn’t he say this in 2011 & lose? Try, try, again? $$ Sep 22, 2012
  • Lacy Hunt at Hoisington called the trajectory on Treasury yields years ahead of time. http://t.co/4e4Bu12W Sep 21, 2012
  • Former FDIC chairman Sheila Bair: TARP wasn?t necessary http://t.co/m4zJMkc5 Would have been better to let stockholders get wiped out $$ Sep 20, 2012
  • Fed?s Fisher Says U.S. Inflation Expectations Rising http://t.co/Qk4rUrNI Definitely: http://t.co/ZVA74EmF QEternal moved the TIPS $$ Sep 20, 2012
  • Stephen Roach: Fed?s Asset Purchases Are A ?Charade? http://t.co/nX4xh3zt QE is a theory that has no successes; Y does anyone believe it? $$ Sep 20, 2012
  • No Exit in Sight from Fed’s Bond Buying: Gundlach http://t.co/ULz27Bj8 It will be very difficult 4 the Fed 2 exit from their “stimulus” $$ Sep 20, 2012
  • The Road to Recovery http://t.co/P6Uz7CGP John B. Taylor is the man who should have been our Fed Chairman, unlike the pretender Bernanke $$ Sep 18, 2012
  • Fed’s ‘QE Infinity’: 4 Things That Could Go Wrong http://t.co/6CGNO5Yr Moral Hazard4Washington &Wall St, Hurting Confidence, May not work $$ Sep 16, 2012
  • Bernanke?s Battle for Jobs Eclipses Inflation Concerns http://t.co/bhRvXhZD How QE-inf will produce jobs is a mystery; OTOH stagflation $$ Sep 16, 2012
  • Mortgage-Bond Spreads Fall to Record Low as Fed Starts Buying http://t.co/LqcIYQhb Fed breaks agency RMBS mkt; some OASs drop to zero $$ Sep 16, 2012

 

Credit Markets

 

  • Credit rollovers & rally monkeys http://t.co/z4KH46ky Feels like 2005 in corporates, but w/easier money, & fewer securitizations $$ Sep 22, 2012
  • Company bond sales in US in Sept-12 total >$135.8B, fastest pace 4 any September & exceeds $124.6B sold in Sept-09 $$ http://t.co/EoKYwXrQ Sep 21, 2012
  • Private Debt Is Crippling the Economy http://t.co/km06r7TW Deleveraging has not taken place 2 the degree needed 2make the economy healthy $$ Sep 20, 2012
  • Risk Aversion Falls to Lowest Level in 2 Years http://t.co/ljJICAKM When risk measures r low, it is time to start being conservative. $$ Sep 18, 2012
  • Junk-Bond Yields Drop Below 7% for First Time, Index Data Shows http://t.co/VQBCbmq3 This is significant. Watch 4 leverage 2 grow $$ Sep 18, 2012
  • ETFs Overtaking Swaps for Junk-Bond Speculation http://t.co/DzTtYnKY If this continues, I suspect it will lead 2 ETF underperformance $$ Sep 17, 2012
  • Cheaper Student Loans. Who Knew? http://t.co/ZYnRjQDl About 2.6% of all borrowers?are using income-based repayment $$ 15%, 15 years Sep 17, 2012

 

Rest of the World

 

  • China Slowdown Seen Longer Than in Crisis by State Economist http://t.co/At79Hrfn Will take a while reconcile a decade of malinvestment $$ Sep 21, 2012
  • Japan launches QE8 as 20-year slump drags on http://t.co/J6hwv6rd Poster child 4 the efficacy of unlimited QE 4 economic stimulation $$ 🙁 Sep 20, 2012
  • In Spain, economic crisis fans Catalan separatism http://t.co/amLe8qwU Good for them & may they create their own currency & not the euro $$ Sep 20, 2012
  • Deposit Flight From Europe Banks Eroding Common Currency http://t.co/MwYRtlU3 Wouldn’t u withdraw deposits from Greek & Spanish banks? $$ Sep 20, 2012
  • Missed Chances Stoke Skepticism Over EU?s Crisis Fight http://t.co/rvBEndvm Works other way: earlier the break-up, smaller the damage $$ Sep 20, 2012
  • Sword-Bearing Islamist Signals Peril 4 Arab Democracies http://t.co/AXYYmzWn “Islam is a religion of peace” Overheard in a DC bar $$ Sep 20, 2012
  • EU Track Record Casts Doubt on Crisis Fight as Draghi Rally Ebbs http://t.co/rvBEndvm You can’t solve debt problems with more debt $$ Sep 19, 2012
  • Europe Takes On Gazprom at Last, Now Must Hang Tough http://t.co/tvFrJZ1k New delivery methods & supplies lessen need 4 Russian natgas $$ Sep 19, 2012
  • Europe Banks Fail to Cut as Draghi Loans Defer Deleverage http://t.co/fEQdByYH Same thing for the Fed. $$ policy inhibiting delevering Sep 19, 2012
  • Kaiser’s Postulate: Bringing Free Market Economics to South America http://t.co/61GS08I0 Brings an Austrian perspective 2 S. America $$ Sep 18, 2012
  • US military suspends combat patrols with Afghan forces http://t.co/BaKxm4Xn In this chess game, there are some pieces that r gray. $$ Sep 18, 2012
  • A little problem of maturity mismatch http://t.co/cBtSR1pC Many Chinese firms have financed long assets w/short debt. But how big is it? $$ Sep 18, 2012

 

Companies

 

  • The guys at LTCM weren’t that good w/math. Part of being an applied mathematician is knowing limitations of your models http://t.co/ice9Diju Sep 21, 2012
  • July 2012 severe enforcement actions; Capital One units pick up 3 http://t.co/ahdVPlpZ Interesting improving graph: http://t.co/jqwWxgCR $$ Sep 20, 2012
  • Microsoft, HP skirted taxes via offshore units: Senate panel http://t.co/tT2F453n What u get 4 creating a complex tax code. FD: + $HPQ $$ Sep 20, 2012
  • Bored? Consider this Total risk-taking value play http://t.co/Fioj9kEg FD: + $TOT very diversified geographically, seems cheap $$ Sep 20, 2012
  • Insurers are middlemen. They just pass the costs on. They have no need to do climate research. $$ http://t.co/pekiI2V8 Sep 20, 2012
  • Dow Corning Offers Workers Cold Showers w/Bugs to Build Sales http://t.co/u9lJIRPI Fascinating tales of voluntary adventures @ Dow Corning Sep 18, 2012

 

Politics

 

  • Welfare Reform as We Knew It http://t.co/E4VuZ1js Inside the Obama work waiver: It’s worse than Romney says. $$ Sep 20, 2012
  • Tortoises Manhandled for Solar Splits Environmentalists http://t.co/KyaQK3x0 Solar works well in sunny deserts: solar or tortoises $$ Sep 20, 2012
  • Why the Current Account Deficit Helps Explain the Economics of QE3 http://t.co/QlsAejh1 Explains similarities between CA deficit & QE-inf $$ Sep 19, 2012
  • Don?t Stick Taxpayers With Underfunded Corporate Pensions http://t.co/xj1VQMEn Against the liberalization of DB plan funding rules Sep 19, 2012
  • Snip, snip, snip. Cutting up AARP membership cards. The Baby boomers ask for too much through Social Security & Medicare. $$ snip, done Sep 19, 2012
  • Should the Eligibility Age for Medicare Be Raised? http://t.co/XlrNI3hR Yes, & by more than the suggestions in the article $$ Sep 19, 2012
  • Election Uncertainty Raises Odds Of Fiscal Cliff http://t.co/jFJ8jSsB Regardless of who wins, there will be gridlock. $$ Sep 18, 2012
  • Harry Reid Has a Glass-House Quandary on Taxes http://t.co/FbR1nlxl Let Congress begin doing detailed disclosure of their taxes $$ Sep 17, 2012

 

Economics

 

  • Gold shines http://t.co/Mm98E660 & http://t.co/xVg4N2MI $$ Sep 21, 2012
  • Big Data Upends the Way Workers Are Paid http://t.co/HzfrxhA6 Basic kindness & fairness goes a long way in retaining competent staff $$ Sep 20, 2012
  • Do New Job Tests Foster Bias? http://t.co/lBSpwygr Maybe, but it does prevent many good people from getting hired. Ppl >> algorithms $$ Sep 20, 2012
  • Harvard Losing Out to South Dakota in Graduate Pay http://t.co/UQcL5W1T Economics is relative; different things r valuable @ diff times $$ Sep 19, 2012

?

Finance

  • Farmer?s Daughter Haugerud Reaps Riches on Drought-Struck Corn http://t.co/CVFuX7kZ Know I’ve read about her b4, can’t remember where $$ Sep 20, 2012
  • For Superfast Stock Traders, a Way to Jump Ahead in Line http://t.co/hhJwKEdD This is important & may explain HFT & its profitability $$ Sep 19, 2012
  • Fidelity’s Abby Johnson faces challenges on many fronts http://t.co/5UTmmfbm Fidelity not just mutual funds but retirement plan services $$ Sep 17, 2012
  • When Playing It Safe Means Taking On More Risk http://t.co/6BtHsksh Safety is a function of price paid vs value & intrinsic solvency $$ Sep 16, 2012

Other

 

  • 6 Reasons Why Evolution Isn’t A Sure Thing http://t.co/UQVZuzH0 7. Which evolution r u talking about? Many versions, low agreement btw them Sep 20, 2012
  • Heavy rain in Baltimore now; supporting efforts to ship it to the Midwest $$ Sep 18, 2012

?

Responses

  • RE: For areas where there is significant data, they do research. Lots of it.? The models are huge and complex. The e? http://t.co/M7L2ZbC6 Sep 21, 2012
  • .@OVVOFinancial Part of what I am saying is economists don’t understand macro well. Free lunches rarely emerge; hard2remove accommodation $$ Sep 21, 2012
  • @felixsalmon I give proportionate to income, so if I were in Romney’s situation, it is likely I would be giving more Sep 21, 2012
  • . @OVVOFinancial I’m a skeptic. Economists didn’t expect stagflation in ’70s; did not tag the great moderation properly, or call the bust $$ Sep 21, 2012
  • Why this doesn’t work: too many mortgages are inverted & there is too much supply that will appear as… http://t.co/iGzYEV6c Sep 21, 2012
  • @fundmyfund If you can infinitely defer income recognition, or reclassify income, the tax rates don’t matter much $$ Sep 21, 2012
  • “I want to clarify what I wrote on my your last post. It wasn’t one of my finer comments?” ? David_Merkel http://t.co/l620hATS $$ Sep 21, 2012
  • RE: @bloombergview This is another reason why the definition of income matters more than tax rates. Taxes deferred ar? http://t.co/Bkh3LGjT Sep 21, 2012
  • RE: @bloombergview How do you distinguish between Dworkin who lost to Flynt, Carol Burnett who beat the National Enqu? http://t.co/FPSNGIE5 Sep 21, 2012
  • @williamalden Interesting curiosity, but they don’t have much musical talent Sep 21, 2012
  • @ianbremmer Not too surprising, U would probably get the same result in Vallejo, Stockton, Jefferson County, AL, & other bankrupt places $$ Sep 21, 2012
  • “I hope they kill this one while it is little. Residential Rental Income ABS sounds like a disaster.” ? David_Merkel http://t.co/srTbHgyT $$ Sep 20, 2012
  • @e_d_sanders That wouldn’t surprise me, to me it is funny how we end up overriding law with administrative action Sep 20, 2012
  • “I’ve owned $CVX for a long time for clients. $BRKB is interesting; I really like what Buffett does?” ? David_Merkel http://t.co/l1GZGm3J $$ Sep 20, 2012
  • . @hassankhan Sometimes there is research, sometimes it is little better than a guess. And yes, new insurance biz has sometimes lost $$ Sep 20, 2012
  • . @hassankhan New coverages start with a guess. As claims emerge, pricing & terms adjust to reflect claim incidence & severity $$ Sep 20, 2012
  • @Fullcarry People want to lock in a smaller loss Sep 20, 2012
  • @dcarpenter14 Good point, thanks for making it Sep 19, 2012
  • @XQuickFixX investors that buy & hoard 4 DB plans, ETFs, commodity funds, etc, even the SPR, that speculation does affect prices Sep 19, 2012
  • @XQuickFixX Besides, prices r set at the margin — what it costs to get the next barrel. Last point, if speculators includes the commodity + Sep 19, 2012
  • @XQuickFixX But the evidence in the article is hearsay. The extraction cost of $11/bbl looks really low. It has 2b higher than that. Sep 19, 2012
  • @XQuickFixX 2 thoughts: 1) my reform for derivative markets is hedgers must initiate all trades. Speculators can’t trade with each other Sep 19, 2012
  • I don’t believe the oil market is manipulated. It’s too big;keep the bid price too high, they will sell you a lot of ? http://t.co/oKOTecFE Sep 19, 2012
  • @izakaminska Thanks, Izabella. My best to all at FT Alphaville. $$ Sep 19, 2012
  • @izakaminska I admire you all at ft alpha, you write about big things that many of us miss; I would work with u all if u wanted me $$ Sep 19, 2012
  • RE: Average people can’t invest well & can’t get longevity insurance at a fair price. DB plans r better than DC plans? http://t.co/ClMRmrUH Sep 18, 2012
  • RE: Sorry, public pensions are not included; their rules are weaker than this. Also, no PBGC for muni DB plans. $$ http://t.co/PHnzUlXi Sep 18, 2012
  • @moorehn The eyewitness accounts of the life of Jesus would have noted a wife; Peter had 1. http://t.co/TeIiDodQ Definitive scholarly book Sep 18, 2012
  • “I disagree, mostly. Value is often its own catalyst. People ignore many low P/E stocks just b/c?” ? David_Merkel http://t.co/spWdEhSn $$ Sep 18, 2012
  • @LDrogen low likelihood, high severity Sep 18, 2012
  • “”How long until a producer comes in yelling, ?wait?wait, he?s just a loud-mouth with a blog?” ? David_Merkel http://t.co/ww2r59BZ $$ Sep 18, 2012
  • @rcwhalen We had 3 & adopted 5. Used zone defense metaphor 2 explain it 2 guys. W/a zone u r rules-based; need more rules w/more kids. $$ Sep 18, 2012
  • @groditi The only thing that gives me pause is that my old friends from my bond manager days r still constructive on HY http://t.co/egOXLBWo Sep 18, 2012
  • “Exactly. I read the same piece, and for some reason I didn’t comment on their lack of understanding.” http://t.co/W2n3pwcQ $$ Sep 18, 2012
  • Exactly. Every asset they inflate, inflates liabilities for those who fund them.? Commodities rise due 2 financial re? http://t.co/0HL1L9cq Sep 18, 2012
  • @TheStalwart Pie charts provide the least information of any type of graph, I think that’s why the chart nerds like them less $$ Sep 18, 2012
  • @MikeLanter Yes, THE ELEPHANT! Sep 16, 2012
  • “Well said. My but the Fed has become an elephant in the agency RMBS market” ? David_Merkel http://t.co/FWZ5ngNu $$ Sep 16, 2012

?

Retweets

  • If we don’t get stagflation RT @OVVOFinancial @Vermeer1097 Martingale works for Fed playing w/o table limits and unlimited balance sheet. $$ Sep 21, 2012
  • RT @SullyCNBC: Instead of being angry at individuals for paying the least amount in taxes they legally owe..be angry at Congress for our … Sep 21, 2012
  • Double down, BABY!! $$ RT @Vermeer1097: @AlephBlog Bubbles Bernank simply using a very old betting system: the Martingale. Sep 21, 2012
  • You can either think binary or not $$ RT @daveinbawlmer: @AlephBlog @ritholtz a sort of binary way of thinking about being binary Sep 21, 2012
  • There r only 10 types of people in the world, those get binary & the rest RT @ritholtz: Either you believe the world is binary or you don’t Sep 21, 2012
  • RT @researchpuzzler: RT @DDInvesting: An Open Letter to CFOs Across America http://t.co/78ubGzqL ~ must read, for investors as well as C … Sep 19, 2012
  • RT @prchovanec: When will Chinese authorities figure out that developing new financing vehicles does not change underlying asset quality? $$ Sep 19, 2012
  • Bigtime $$ RT @historysquared: Chinese banks are ?the nexus for? all of this credit-driven investment.” ~ Jim Chanos Sep 18, 2012
  • What reputation? Perpetuating a bad idea $$ RT @credittrader: Tuesday Humor – *JUNCKER SAYS GREECE EURO EXIT WOULD HARM EURO REPUTATION Sep 18, 2012
  • +1 RT @ReformedBroker: ?When we encounter pain, we are at an important juncture in our decision-making process.? http://t.co/x8hjUYB4 $$ Sep 18, 2012
  • RT @groditi: @AlephBlog i’d much rather hold some decent stocks w/ good FCF/Earnings yields and an overweight cash position the the same … Sep 18, 2012
  • Well-stated $$ RT @felixsalmon: #Romneyshambles: the conservative take is no less damning. http://t.co/H6H3etqh Sep 18, 2012
  • You said it $$ RT @BoydRoddy: You get the feeling that @John_Hempton is having fun with $FMCN a la a Cat and a stalked mouse? Yeah, me too. Sep 18, 2012
  • You betcha. BTW, @soberlook has posted http://t.co/pfSscLH1 good stuff RT @merrillmatter: not buying any MBS here $$ Sep 16, 2012

 

Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

Life Insurance Secondary Guarantees

 

  • Hartford Mulls Client Buyouts to Cut Risk Buffett Called Ungodly http://t.co/Nv4jRlUC Advice: don’t take the Variable Annuity buyouts $$ Aug 10, 2012
  • The original: Buffett Says Insurers Took ‘Ungodly Amount of Risk’ http://t.co/pXfXv8ME Warren Buffett again is prescient cc: @PlanMaestro $$ Aug 10, 2012
  • @PlanMaestro Thanks4 flagging this. Together w/companies scaling back gtees 4 new prods, the buyout offers show the probs in the life biz $$ Aug 10, 2012
  • @PlanMaestro I am not in favor of peer review. Actuaries call themselves a “profession,” but they really technicians. Aug 09, 2012
  • @PlanMaestro Regulators not crazy for this, because they can’t understand it, & almost makes the companies self-regulating. Peer Review? $$ Aug 09, 2012
  • @PlanMaestro But actuaries are trying to get regulators to cmove to a Canadian-style principle based approach. In Actuaries we Trust! $$ + Aug 09, 2012
  • @PlanMaestro But the devil is in the details, and GAAP reserving does not always reflect antiselection. Stat tries to do that, but + $$ Aug 09, 2012
  • @PlanMaestro But you’re right, the 10Ks do contain approximate partial sensitivity data on economic value for most important variables $$ Aug 09, 2012
  • @PlanMaestro In 1999, I saw a VA that guaranteed 7% minimum return if held till death or annuitization $$ Aug 09, 2012
  • @PlanMaestro I said “Wow, how do you guarantee the better of 5%/yr and performance of the underlying 4 just 2.25%?” $$ Aug 09, 2012
  • @PlanMaestro I have a friend who is a $PRU agent. One day he showed me his hottest-selling VA product, and ask me how I liked it. $$ + Aug 09, 2012
  • @PlanMaestro Acctg can get really screwy if you hedge NPV or FMV; gets really noisy because the results pile up in the current year $$ Aug 09, 2012
  • @PlanMaestro hedging long-dated options, w/complex contingencies built into them. Do you hedge next few years, or NPV sensitivity? $$ + Aug 09, 2012
  • @PlanMaestro I was an ALM actuary for many years, typically we hedged partial durations; fixed income hedging is easy, what’s hard is $$ + Aug 09, 2012
  • @PlanMaestro many exposures are impossible to hedge b/c the contracts r long-term, and hedge instruments r usually far shorter $$ Aug 09, 2012
  • @PlanMaestro That’s one of my concerns about the life industry; secondary guarantees r virtually impossible to reserve, getting big now $$ Aug 09, 2012

 

Insurance Industry

  • @ReformedBroker Good post, same thing happens with young life insurance agents to a degree http://t.co/LbMyo48G $$ Aug 10, 2012
  • @Bonfire_Sherman P&C – P/TB vs ROTE, adjusted 4 business mix, reserve life & conservatism, mgmt quality, U/W cycle, never premiums $$ Aug 09, 2012
  • @Bonfire_Sherman Most of it is change in required capital. Life actuaries typically calculate “distibutable earnings” reflting stat & RBC $$ Aug 09, 2012
  • Anytime anyone talks about Financial Cos & tells u about Free Cash Flow, ask how they did the calc. C if they mention chg in req capital $$ Aug 09, 2012
  • Wrong: 3 Life Insurance Stocks Undervalued By Levered Free Cash Flows http://t.co/gF5HYRZb GAAP financials don’t have data4 FCF calcs $$ Aug 09, 2012
  • Aviva profits fall as it cuts the value of its US unit http://t.co/t816IjAZ Amerus IR was annoyed @ me 4saying the orignal deal expensive $$ Aug 09, 2012
  • @PlanMaestro HIG is next on my list Aug 09, 2012
  • @PlanMaestro Thanks, I know where to get them, but I have enough GNW on my plate for now, I took me two weeks to write my AIG piece. $$ Aug 09, 2012
  • @PlanMaestro Have not looked at HIG, after I am done with GNW may take a look. If u r looking at stat acctg, look @ pg 5 indiv annuities $$ Aug 09, 2012
  • @PlanMaestro That’s the thing, like AIG prior to the crisis, and Scottish Re, they are capital constrained; things have 2go right 4 them $$ Aug 09, 2012
  • @PlanMaestro & not so sure about the rest if investing for more than five years. $$ Aug 09, 2012
  • @PlanMaestro Aye, agreed. Oddly, my interest stemmed from a reader who asked me if I would invest in GNW bonds. Yes 4 GIC-MTNs + Aug 09, 2012
  • @PlanMaestro I’m going to write a broad piece about it, but follow it up, with a narrow piece focusing on the specific problems. $$ Aug 09, 2012
  • @PlanMaestro Intercompany surplus notes and preferred stock too. Aug 09, 2012
  • @PlanMaestro There’s a ton. Underreserving, capital stacking, capital interlacing, intercompany reinsurance, & I’ve ony been looking 2 hours Aug 09, 2012
  • @Bonfire_Sherman Good guess, I need to look at the life co stmts someday, esp. page 5 for Indiv annuities Aug 09, 2012
  • Ding! We have a winner! RT @RennieScinto: @AlephBlog gnw? Aug 09, 2012
  • I’m a fun guy, looking @ statutory statements of a major US insurer, though AIG in 2008 looked worse, this company doesn’t look good $$ Who? Aug 09, 2012
  • Online Dating for Homes Stumps Insurers http://t.co/R2fmztPa Y not have both deposit $$ w/the insurer plus a premium payment? #wouldwork Aug 08, 2012
  • Regulators Probe ‘Captives’ http://t.co/xbXQ5aYO How to bend life insurance reserves. Catch my comment: http://t.co/9WQWYZ3W $$ Aug 06, 2012
  • Berkshire Trims Municipal-Debt Bet http://t.co/9zhhbdtD Meredith Whitney, no. Buffett, yes. But even he is only selectively reducing $$ Aug 05, 2012

 

Poway School District

 

  • Article near issuance of Poway School District CAB http://t.co/kxAWCNxT Letter from CA AG: http://t.co/UiZM0j3K cc: @munilass @jamessaft $$ Aug 06, 2012
  • @jamessaft I’m not a muni expert like @munilass, but no, I would try to find another way to refinance prior debts. $$ Aug 06, 2012
  • Ideal buyer4the preceding bond would b Buffett, or a P&C company w/long-tail liabilities. Prospectus 4 wonks only http://t.co/nIKJvJje $$ Aug 06, 2012
  • Where Borrowing $105 Million Will Cost $1 Billion: Poway Schools http://t.co/IPaABoXY Paying 7.6% IRR at a duration of 25. Astounding! $$ Aug 06, 2012
  • @munilass Also, I found the prospectus here: http://t.co/nIKJvJje Last Q: Do county tax levies into a sinking fund ever fail to work? $$ Aug 06, 2012
  • @munilass I get the holder taxes now. Poway was structured as a series of zero coupon notes, followed by 2 series of long lottery bonds $$ Aug 06, 2012
  • @munilass Used to be an asset-liability manager, so I look for that. 1 question: do you know how holders are taxed on a deal like that? Aug 06, 2012
  • @munilass This is just a crude estimate, but the IRR on the Poway deal is around 7.7%, and is nonrefinancable. Duration estimate 25 years $$ Aug 06, 2012

 

Rest of the World

 

  • China Export Growth Slides as World Recovery Slows http://t.co/u4YEUPQB China sneezes & the world catches a cold? no, important anyway $$ Aug 10, 2012
  • India?s Biggest Corporate Loss Shows Singh?s Dilemma on Deficit http://t.co/6xl7lsZD Force oil company to lose $$, eventually lose oil co. Aug 10, 2012
  • Housewives With Frying Pans Protest Japan Tax Hike as Debt Soars http://t.co/z3aeqjEv Taxes to double; can’t keep borrowing 4ever $$ Aug 10, 2012
  • Virus found in Mideast can spy on finance transactions http://t.co/V2GgyjpV Can spy on financial transactions, email & social networking $$ Aug 09, 2012
  • Toronto Condo ?Roller Coaster? Peaks as Flaherty Acts http://t.co/c6sJ0CqE Is Canadian housing a basketball (sss) or a bubble (pop)? $$ Aug 08, 2012
  • Iran?s Big Crisis: The Price of Chicken http://t.co/WXlUIIdL Describes some the economic difficulties of Iran under sanctions $$ Aug 08, 2012
  • Article makes a good point. The industries where China has overcapacity are power-intensive & are shrinking. Simple. http://t.co/IzyV0Bxe Aug 08, 2012
  • China’s answer to subprime bets: the “Golden Elephant” http://t.co/MP7LviwT Illiquid investments touting high returns w/lousy business $$ Aug 07, 2012
  • RE: Things are getting less equal in the US, because we allow more freedom here.? Globally, things are getting more e? http://t.co/WeGEEJF9 Aug 07, 2012
  • Presidential candidate up by 15%+ in August will win. If merely ahead, 9 times out of 12 he will win the Presidency http://t.co/soCj7Kf9 Aug 08, 2012
  • Swiss Banks Face Slow Death as Taxman Chases Assets http://t.co/13I9NkiQ Life’s tough when u can no longer help people cheat the taxman $$ Aug 06, 2012
  • Germany has the most to lose from a meltdown http://t.co/9JTwRfii Basically encourages an inflationary “solution.” Prob won’t work $$ Aug 06, 2012
  • If policymakers are worried about this, they are worried about the wrong thing. EU does not have that big… http://t.co/eCBlZg5I Aug 06, 2012
  • Summary: greater structural unity, mutualization of sovereign debts and a weak euro $$ Tough order for the… http://t.co/KN9pc0Pt Aug 06, 2012
  • Rogoff Sees World Wishing It?s America Year After S&P Downgrade http://t.co/MpStm7ww Relative flexibility pays off $$ Aug 06, 2012

 

Fixed Income

 

  • Lending in the offshore markets developed because of bad regulations here. It is outside US control & we should not m? http://t.co/C8y9rVFw Aug 10, 2012
  • In hunt for yield, hybrids flourish anew http://t.co/GCugG6A6 Credit rally revsup ppl grab yield in exchange 4 higher poss loss severity $$ Aug 09, 2012
  • Please, no $$ RT @CapitalCityIFR: In hunt for yield, hybrids flourish anew http://t.co/ZWbdRRl5 Aug 09, 2012
  • For a bad 30-yr Tsy auction, nice rally since then $$ Aug 09, 2012
  • A Greek banker, the Shah and the birth of Libor http://t.co/ibvVs9mE ht: @alea_ Started w/a loan 2 the Shah. Inauspicious start 4a big # $$ Aug 09, 2012
  • Definitely a weak auction, surprised long end not selling off $$ RT @ritholtz: 30 yr bond auction weak as well http://t.co/1gU89HMb $$ Aug 09, 2012
  • “Credit default swaps are easily manipulated. Rather, watch the bond market; it’s much bigger. $$” ? David_Merkel http://t.co/tESmTJsK Aug 09, 2012

 

Politics

 

  • The Neocon War Against Robert Zoellick http://t.co/vZreHf1n If Romney wins, pragmatic Zoellick could be influential on foreign policy $$ Aug 11, 2012
  • Christie Does Tenure http://t.co/J8krPlim Tenure is one of those sacred cows that hides the intellectually weak from consequences $$ Aug 10, 2012
  • In New York City, Microsoft Really Is Watching You http://t.co/trNOkU2d Interesting partnership w/NYC & $MSFT Civil liberties? $$ Aug 09, 2012
  • Postal Service $1 Million-an-Hour Loss Puts Abyss in View http://t.co/FVXMn5Di Raise stamp prices & costs 2 $FDX & $UPS $$ #simple Aug 09, 2012
  • Here’s The Real Reason The Feds Are Furious At The NY Regulator Going After Standard Chartered http://t.co/OmpwBILH Made Feds look dumb $$ Aug 08, 2012
  • RE: @bloombergview Dream, the Republicans will block this because it favors blue states over Red. $$ http://www.bloom? http://t.co/jT7EmSS0 Aug 08, 2012
  • I think it is a fair tradeoff to lose 2% of GDP in 2013 in order to get the economy growing. I agree with… http://t.co/mwuvnogX Aug 07, 2012
  • The Numbers Inside a Hot-Button Issue http://t.co/Fwois4YN Something to make everyone unhappy. Me: Don’t focus on rates, but deferral $$ Aug 07, 2012

?

Pensions & Endowments

 

  • State Pensions Get High Fees, Low Profits-Study http://t.co/3LRIL23c Add to that the lack of adequate funding &you have a serious crisis $$ Aug 10, 2012
  • Cornell, MIT Scale Back Aid Even as Endowments Rise http://t.co/WUoWDLLB Endowments provide less when rates r low, future cashflows smallr Aug 10, 2012
  • Defined contribution assets hit all-time high despite conservative shift http://t.co/7s9Stabd Amazing 2c bond alloc rising w/low rates $$ Aug 06, 2012
  • U can say that again $$ RT @e_d_sanders: @AlephBlog now this is an issue I know something about. Public pensions for execs are a nightmare Aug 05, 2012
  • Police Chief?s $204,000 Pension Shows How Cities Crashed http://t.co/ZorpuSjX Sloppy pension negotiating leads2 L-T cash flow crises. $$ Aug 05, 2012

 

Energy

 

  • Let the market decide.? If people want to pay a lot for gas, let them.? Why is Obama discouraging consumer spending? http://t.co/VT8xCyU0 Aug 10, 2012
  • Refiners Awash in Shale Oil Offer 10 Times Exxon Returns http://t.co/IIw9xXlb Buy cheap shale oil, ship to coasts, refine, sell & make $$ Aug 10, 2012
  • Louisiana sinkhole roils local natural gas network http://t.co/IkZxHLAs Now, who could have seen that coming? Risk is pervasive. $$ #sloorp Aug 09, 2012
  • Coal stocks typically have a lot of debt, beware $$ RT @MKTWBurton: Don?t mine this coal stock – Chuck Jaffe – http://t.co/nCQWfYzQ Aug 09, 2012

 

Other

 

  • Passed 10,000 tweets today. I quit Twitter after my first month, but came back to it after I saw its usefulness. Thanks 4 reading me $$ Aug 10, 2012
  • Heavy rain in Baltimore w/sleet and sunshine. Really weird weather. Sleet is neat, is hard to beat & will repeat, to make me tweet. $$ #ugh Aug 09, 2012
  • After Moods & Markets, Bailout is my next book to review. http://t.co/zkioUQ5N Aug 09, 2012
  • 5 Questions Great Job Candidates Ask http://t.co/JpnpVWtu Questions show initiative, intelligence, & give u good jump pts 2 sell yrself $$ Aug 09, 2012
  • Novel Cure for Ailing Hearts http://t.co/RAiv4FYj Nanotech combines w/vascular endothelial growth factor to grow new heart muscle $$ Aug 09, 2012
  • Wrong: Business Is Booming in Empirical Economics http://t.co/aTNu4qfu U might get cute papers out of it, but nothing that generalizes $$ Aug 07, 2012

 

Companies

 

  • Yahoo Reviewing Business Strategy, Alibaba Proceeds; Shares Tumble http://t.co/ikk3dpeC Marissa Mayer has plans, & they require $$ Aug 09, 2012
  • Why Honda?s New Accord Looks Like the Old One http://t.co/6Ez8uL5i FD: + $HMC Designers tire of their designs long b4 users do $$ Aug 09, 2012
  • The WARN Act dilemma http://t.co/ilbxFsXD Defense, Fiscal cliff, DOL Guidance Letter saying ignore WARN act on 11/1, & elections $$ Aug 09, 2012
  • Hewlett-Packard?s Whitman Dismantles Hurd-Era Empire http://t.co/ySeeVM9w FD: + $HPQ She seems 2b evaluating each biz separately $$ #good Aug 09, 2012
  • The New York Times Is About to Say Goodbye to About,com http://t.co/frzrVlUq gives more details on the lossesv$$ Aug 08, 2012
  • New York Times Shares Rise on Deal to Sell About,com http://t.co/k5GarxXV Amazing how much $NYT lost on it, capital losses, neg income $$ Aug 08, 2012
  • Judge in Google, Oracle case seeks names of paid reporters, bloggers http://t.co/7vhmK5N3 Fascinating 4bloggers 2b paid $$ by corps quietly Aug 08, 2012
  • I do not get how http://t.co/ROsNYak3 could be worth $270M. What’s the revenue model? Ads? $$ http://t.co/n1ddWxvU Aug 08, 2012
  • Wrong: The PC looks like it’s dying http://t.co/IqeVAbi6 Like most tech, when it matures, it finds & stays there. Think of “dead” radio $$ Aug 07, 2012
  • Amazon Is No Wal-Mart…Yet http://t.co/cmEjPHHu Relatively neutral article on $AMZN by Martin Sosnoff; prob: treats AMZN as retailer $$ Aug 07, 2012
  • Why FedEx and UPS Want the Postal Service to Survive http://t.co/MAaCfOXQ Solution: raise stamp prices, and prices to $FDX and $UPS $$ #easy Aug 05, 2012

 

Monetary Policy

 

  • Fisher Says More Stimulus May Overburden Central Banks http://t.co/5ZMlKO5G 3-time winner of coveted “FOMC loose cannon award” speaks $$ Aug 08, 2012
  • Economic Musings – Fed eyeing a new kind of twist? http://t.co/aUezU2XE $$ Extending duration in MBS; creating larger losses later $$ Aug 08, 2012
  • RE: @bondtrader83 That’s not all that much different than the 1st Twist. It’s duration extension in MBS. Wait till ra? http://t.co/PrMHBSGh Aug 08, 2012
  • How about quantitative easing for the people? http://t.co/inHK9NF2 Would work better than current QE/Twist etc, but this frightens me. $$ Aug 08, 2012
  • Wrong: Bernanke to Economists: More Philosophy, Please http://t.co/9638QlHo Been down this road; utility theory doesn’t explain mankind $$ Aug 07, 2012

 

Housing & Related

 

  • Public-Housing Parking Lots Make Everyone Poorer http://t.co/2gensCd8 Set rates to achieve 15% vacancy; Rather than lots, have garages $$ Aug 08, 2012
  • Home Prices Climb as Supply Dwindles http://t.co/hMoZBsNZ Good news for the low end of the market, high end will take time $$ Aug 08, 2012
  • Fannie Mae profits rolled into rainy day fund http://t.co/bDWphSuE Good for Fannie & Freddie preferred, not worth anything 4 the common $$ Aug 08, 2012

 

Financial Companies & Markets

 

  • NYSE in talks with SEC to settle data probe http://t.co/FkxBtlbz Wow, faster data feeds 4 some special clients; level the playing field $$ Aug 09, 2012
  • Are Diamonds an ETF?s Best Friend? http://t.co/RHbSghCw Bad things happen when you take something illiquid and try to make it liquid $$ Aug 08, 2012
  • Richest Family Offices Seeing Fastest Growth as Firms Oust Banks http://t.co/NqY9650P UberWealthy get $$ talent; tax savings >> costs Aug 07, 2012
  • 4 ETF Lessons From Knight http://t.co/st6wbNgR Lead Market Makers matter, Markets Work, Settlement Works, Illiquid ETFs Need Helpers $$ Aug 06, 2012
  • Other problem: active etf gives away trading information it might rather not divulge, leading to front-running. $$ http://t.co/q4XXZwRv Aug 06, 2012
  • A Tale of Two Fund Giants: American Funds vs Vanguard http://t.co/46rFsL9e Key advantage for Vanguard was embracing ETFs early $$ Aug 06, 2012

 

Repos

 

  • Banks? Liquidity Hinges on Risky Assets http://t.co/45Iw5Dz9 Repo lending is subject2runs during credit panics which depress collateral $$ Aug 08, 2012
  • Good one $$ RT @pdacosta: Watch out for the grim repo-er RT @cate_long Banks? liquidity hinges on risky assets http://t.co/9lk0GjA0 Aug 08, 2012
  • The danger of repo http://t.co/mZDG9Ocb Repo is weak financing in crisis; 3-mo T-bills would b a better index 4 Tsy floating rate notes $$ Aug 06, 2012

 

The Equity Premium

 

  • That would get the advantage of stocks over high quality bonds down to ~1-2%/year. Outperforms with a *lot* of noise $$ Aug 11, 2012
  • Bill Gross Is Wrong About Stocks: GMO http://t.co/c6gJwfUB Truth inbetween; have GMO adjust 4 $$ -weighted returns, not time-weighted Aug 11, 2012
  • Bonds for the Long Run http://t.co/MmkoYk3U @ritholtz nails it. Advantage of stocks over bonds is ~1%/yr over the long haul. Limited data $$ Aug 10, 2012

 

 

Comments

 

  • @LDrogen After reading this, I have more certainty that airbnb has already worked out some of the bugs http://t.co/Xx3ztVZv $$ Aug 10, 2012
  • @LDrogen Fine, Leigh, I hope it works. When single party lending gave way to securitization, it was unstoppable, until lending stds died. $$ Aug 10, 2012
  • RE: @ldrogen Multiple party economic dealings have their issues.? Consider: http://t.co/Z2rRNeTS? http://t.co/gCrEYzX2 Aug 10, 2012
  • ‘ @TheOneDave In a word: depletion. Costs are rising to incremental barrels of oil, and ounces of gold. $$ Aug 09, 2012
  • @PlanMaestro $CLD LTD/E ~89%, take a look at $HNRG Hallador Energy. I’m not looking @ coal names until I see a few go BK, like steel 2002 $$ Aug 09, 2012
  • @PragCapitalist Depends on slope of demand curve 4 Tsys. Compare it2the former on-the-run. Jump of 6 bps high for that spot on the curve $$ Aug 08, 2012
  • @groditi Effective Yield series. Was trying to show that junk yields don’t compress as much when HQ-yields are low. Would have liked OAY $$ Aug 08, 2012
  • @PragCapitalist If it gets enough assets to survive $$ Aug 08, 2012
  • @footnoted …and maybe adjs for a year, but large writeoffs mean that prior earnings were overstated; testifies to bad mgmt quality $$ Aug 08, 2012
  • @footnoted That’s one reason why I tell investors to look at LT growth in BV + Divs rather than op income. I accept adjustments 4 a qtr + $$ Aug 08, 2012
  • RE: @bloombergview The single period cost to fix might be small, the continuous transfer cost would be considerably l? http://t.co/9gyFVvh4 Aug 08, 2012
  • RE: @bloombergview When games change from two players to three players, things get messy if no single player has most? http://t.co/TU09OZml Aug 08, 2012
  • Most pessimistic he’s been on China debts RT @groditi: Wow. I’m used to Pettis’ Euro-pessimism, but he’s not holding back here. U MAD, PROF? Aug 07, 2012
  • Always a great read RT @groditi: yaaaaaay new Pettis! Aug 07, 2012
  • @AnaCapMgmt Ain’t true. The foolish models of economists do not take into account political realities, and when inflation runs, no ammo. $$ Aug 05, 2012
  • @LisaCNBC Ask him how confident he is in India’s power grid. After that, the water supply. $$ Aug 05, 2012
  • ‘ @pvitha Gold moves inversely to real interest rates, a.k.a. cost of carry, that’s all I know. $$ Aug 06, 2012
  • ‘ @WTOP Romney shouldn’t worry about the Fed; they are out of ammo. QE is a joke, as is Operation Twist, and forward fed funds guidance. $$ Aug 05, 2012
  • +1 I like to say that 🙂 RT @BarbarianCap: “there are more debt claims than resources to pay them at par” Aug 05, 2012
Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

Monetary Policy

 

  • Central Banks Can?t Save the World http://t.co/SLzVcZ0r No duh, since printing $$ isn’t productive it can’t do anything to help us. $$ Aug 04, 2012
  • Another example of how loose monetary policy in the West inflates bubbles in the fringe economies. http://t.co/xA3cKNFh Aug 03, 2012
  • Central Banks Seek New Crisis Options http://t.co/z3pLZdbw Fed & ECB straining @ the political limits of what they can & should do $$ Aug 02, 2012
  • SNB-central bank or hedge fund? http://t.co/LFuad30w Policy makers err in thinking they can control markets: task beyond ability of mortals Aug 02, 2012
  • Ghost of 2008 Haunts Fed as Companies Take Short View on Risk http://t.co/Wl6KgzdS When policy is not sustainable, businessmen cautious $$ Aug 01, 2012
  • Ben Bernanke Could Lose for Same Reason as Olympic Sailor http://t.co/aPBZLuwN Strong growth resumes when bad debts are liquidated $$ Aug 01, 2012
  • Deflation Dismissed by Bond Measure Amid QE3 Anticipation http://t.co/pK0cLw5e Link2 5yr inflation 5yrs forward http://t.co/ZVA74EmF $$ Jul 30, 2012

 

Energy

 

  • Tesoro lifts volumes of Bakken rail project http://t.co/eKzsyOu2 Coastal v. central difference in oil prices incent rail delivery of oil $$ Aug 02, 2012
  • Buffett Railroad Beats Coal Slump With 75% Gain in Oil http://t.co/VK50miRq From coal to crude oil, frack sand, automobiles, pipes &c $$ Aug 02, 2012
  • Oil Can?t Go Down http://t.co/CV73DUqW Offers long term arguments that we aren’t finding cheaper-to-produce oil, short-run YMMV $$ Jul 30, 2012

 

Financials

 

  • Where Are the Move-up Home Buyers? http://t.co/MDlos0oL Low end of housing in good shape, will take a while for the high end 2 recover $$ Aug 01, 2012
  • Libor Punishment Could Be Worse Than the Crime http://t.co/jyRCvVtw There’s a lot to unscramble here, and first do no harm should apply $$ Aug 01, 2012
  • RE: @bloombergview First do no harm. LIBOR dampens volatility during a crisis vs market-derived measures, which are m? http://t.co/q7cLqTpI Aug 01, 2012
  • “Really doubt getting closer to zero will make banks lend. Fear >> Greed $$” ? David_Merkel http://t.co/ajgZ7K60 http://t.co/M2DtNp4p #fedup Jul 30, 2012
  • Bank Breakups: Not So Fast http://t.co/CB4TYM4o Think most of TBTF came from allowing interstate branching, not investment banking $$ Jul 30, 2012
  • 10 Things Credit Scores Won’t Say http://t.co/3KIeIqH0 More powerful than most people imagine, & less uniform, customized 4 diff uses $$ Jul 30, 2012

 

Investing

 

  • If I use your framework, that gets me to a 2% real return assumption for stocks. Current dividend yield is… http://t.co/ssMBpc2L Aug 03, 2012
  • Wrong: Verizon, AT&T, Altria Among Top CDS-Adjusted Dividend Stocks http://t.co/fHEfo9jF This is another misuse of CDS spreads $$ Aug 02, 2012
  • Fair disclosure for last tweet: Long $HPQ common Aug 01, 2012
  • Wrong: Debt Markets Aren?t Only Worried About HP, but Dell and Others, Too http://t.co/ho8hqt8R CDS mkt spooked, bigger bond mkt calm $$ Aug 01, 2012
  • RT @KidDynamiteBlog: hearing NYSE is reviewing trades from this AM. Cancelling them would be the worst thing they could possibly do. @r … Aug 01, 2012
  • “You need to learn more about bonds & CDS before you write about them.” ? David_Merkel http://t.co/zcTji7O6 $$ Aug 01, 2012
  • Seeing a weird inverted market in $PSX w/bid $1 > ask. Weird, why doesn’t it clear. FD: long $PSX for myself & clients Aug 01, 2012
  • Cult Figures http://t.co/7yDHHbqn Bill Gross explains why future equity returns won’t b as high as the past, unless it is due 2 inflation $$ Aug 01, 2012

 

International

 

  • The Crushing Burden of Old Debt http://t.co/SHXhIYbN True of many places; there are more debt claims than resources to pay them at par $$ Aug 04, 2012
  • Shock, Ore and Chinese Steel http://t.co/j7HBuIHI When you can no longer cover variable costs, time to shutter high cost capacity $$ Aug 02, 2012
  • RE: Europe hasn’t tried austerity yet. The debts are still growing as a % of GDP. $$ http://t.co/NbaAxKZN Aug 01, 2012
  • India’s Power Grid Collapses Again http://t.co/BmQKGyJZ “half of India’s population ? reportedly impacted” $$ Jul 31, 2012
  • Merkel Allies Harden Opposition to Granting Bank License to ESM http://t.co/cgca4EW4 Right hand taking back what left hand gave $$ Jul 31, 2012

 

TheStreet.com

 

 

Politics

 

  • The Bad History Behind ?You Didn?t Build That? http://t.co/Yd8vyYlA Obama was deliberately ambiguous; prime motive was 2 dis entrepreneurs Aug 04, 2012
  • Obama authorizes secret US support for Syrian rebels http://t.co/s0PJ8Hx1 US allies itself w/Turks & Saudis against Alawite dictatorship $$ Aug 02, 2012
  • California Says Tax Revenue ?at Risk? From Facebook Drop http://t.co/ZLzQuFHE Normal 4 bad surprises 2 happen 2 those w/liberal acctg $$ Aug 02, 2012
  • Protesters Break Into Nuclear Complex http://t.co/yhn1WRvV Gotta admire the tenacity of a bunch of aged Catholic old-style liberals $$ Aug 02, 2012
  • Republicans Buoyed by Freshmen Seek Rewrite of Tax System http://t.co/TE8HeV3s SImplify, flatten, elim deductions/credits 4 corp/indiv $$ Aug 02, 2012
  • Postal Service to Miss $5.5B Payment to US Treasury http://t.co/zcgaQDWa Raid Employee benefits, or raise stamp, $UPS & $FDX prices? $$ Jul 31, 2012
  • The Man Who Saved Capitalism http://t.co/6qBtGnXI Milton Friedman did many good things, but saying he saved Capitalism is hagiography $$ Jul 31, 2012
  • Indirectly, tax $$ would fund principal reductions RT @diana_olick: #Obama gets a big NO on slashing #mortgage debt: http://t.co/N1vHNnDj Jul 31, 2012
  • Punctuation Nerds Stopped by Obama Slogan, ‘Forward.’ http://t.co/uRjpoBdq An ! would have worked better. What state’s motto is Forward? Jul 31, 2012
  • Why Capitalism Has an Image Problem http://t.co/xQIwll6s We need to save capitalism from capitalists *&* the enemies of capitalism $$ 😉 Jul 30, 2012
  • US loves cops and firefighters – but not their pensions http://t.co/ioSglMne The pension cost is 2high, and politicians ignore the cost $$ Jul 29, 2012
  • @MikeImbery Then explain why we support anti-freedom governments that support our political aims. Israel, Egypt, Saudi Arabia, India, etc. Jul 29, 2012
  • That last tweet was meant to highlight the dual nature of US foreign policy, & while it is not lily white, it is better than alternatives $$ Jul 29, 2012
  • Charles Hill: The Empire Strikes Back http://t.co/9oY16P9A The US is an anti-empire providing freedom, so long as its aims endure $$ Jul 29, 2012

 

Other

 

  • I also don’t do #FF often but I ask my followers to follow @japhychron Aug 04, 2012
  • Just spent a fun 90 minutes discussing economics, banking, etc. w/ @japhychron in beautiful Ellicott City. It was a great time $$ Aug 03, 2012
  • WSJ home page is causing Firefox to lock up as it absorbs more and more memory until the system dies. Anyone else experiencing that? $$ Aug 03, 2012
  • This article reinforces the notion that the mainstream media does not understand conservative evangelicals. Chick-Fi? http://t.co/WoANS3bi Aug 03, 2012
  • Will Publishers Perish? http://t.co/2qveRV4I Arends: As self-publishing gets easier, the book business faces a major shake-out $$ #yup Aug 02, 2012
  • WSJ Olympic Medal Tracker http://t.co/P4kKLdcb #WSJLondon2012 Interesting graphical depiction of the Olympic Medal Standings $$ Aug 01, 2012
  • My Education in Home Schooling http://t.co/jXFF2BTT She makes more fuss than most homeschoolers do; it is easy to beat public schools $$ Jul 29, 2012

 

Comments

 

  • RE: @bloombergview Simplify: “Customer account segregation should never be compromised.” Fits in a tweet. $$ http://t.co/e6TnFVbT Aug 02, 2012
  • @kaylatausche Buffett doesn’t believe in the Sabbath, but likes high-margin focused entrepreneurs w/ethics. Many Christians buy there $$ Aug 01, 2012
  • @kaylatausche 1 logical buyer for those wanting 2 preserve corporate culture: Buffett. Has 1-2 retail businesses closed on the Sabbath $$ Aug 01, 2012
  • @izakaminska I though the same when I looked at the moon this evening over Ellicott City, MD. $$ Aug 01, 2012
  • @izakaminska I hear you, and think similarly. If nothing else, the “terms of Service” will become tighter. Love your work, Izabella. $$ Aug 01, 2012
  • @izakaminska Okay, it’s not a perfect solution, but it is good enough that 10% of the time, the account has been suspended when I try it $$ Aug 01, 2012
  • @izakaminska I regularly use the “block & report spam” feature of twitter to get rid of trolls and spammers, shouldn’t that solve it? $$ Aug 01, 2012
  • @sandbergadvisor Ding, you were the first to get Wisconsin’s motto, “Forward” $$ Jul 31, 2012
  • @felixsalmon On medals, original link: http://t.co/h8cEhIHo ultimately coming from story here: http://t.co/8C2vQR3P Jul 31, 2012
  • @felixsalmon “The value of the materials in the gold medal is about $644, silver about $330, and bronze about $4.71” http://t.co/6MWND6Mz $$ Jul 31, 2012
  • @felixsalmon The silver medal is 92.5% silver, the rest copper. Bronze medal is 97% copper, 2.5% zinc & 0.5% tin. S/b “Copper medal” $$ Jul 31, 2012
  • @felixsalmon oops, here’s the metallic composition: http://t.co/SP3zXzs9 The 2012 gold medal is 92.5% silver, 1.34% gold, rest copper. $$ Jul 31, 2012
  • @felixsalmon At the relative prices, that’s a gold medals table, assuming the medals are the same size and are purely that metal $$ Jul 31, 2012
  • “The solution is simple. Raise stamp prices, and the fees they charge UPS & Fedex for “going the?” ? David_Merkel http://t.co/0zaUbegb $$ Jul 31, 2012
  • @munilass I’ve reviewed enough crisis books that I can’t read them anymore; I scan 2c what they observe & ignore $$ http://t.co/Zy8nfeZh Jul 31, 2012
  • @TFMkts I agree; I’ve written about the problems w/levered ETFs. Kass is big enough, he can short bonds directly if he wants. Not hard $$ Jul 30, 2012
  • I know and agree; I’ve written about it. Suspect he shorts bonds directly RT @tradingpoints: you can’t hold $TBT on that time-frame – wow – Jul 30, 2012
  • “Small cap Japan: low valuations, low leverage, low expectations.” ? David_Merkel http://t.co/LfuLH8WD Jul 30, 2012
  • RE: @CharlesSizemore I think you gave a good summary.? Here’s my more bearish take: http://t.co/1gW2Js52? http://t.co/LVwWQEJj Jul 30, 2012
  • I disagree w/Kass here, though he is generally a clever investor. He is also more of a trader than most… http://t.co/BpynxRQR Jul 30, 2012

 

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