Category: Pensions

Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

Bond Markets

 

  • TIPS 20-Year 3.375 04/15/2032 166-21? / 0.00 -0-02+ / 0.002 15:09; They are trading flat to CPI 4 next 20 years http://t.co/2sJ5NEDK $$s Jul 13, 2012
  • Buffett Says Muni Bankruptcies Set to Climb as Stigma Lifts http://t.co/WBYjoUW1 Buffett’s claim is modest, but current trend is down $$ Jul 13, 2012
  • Indeed excellent RT @munilass: Excellent discussion of CA bankruptcies from @randalljensen http://t.co/iSEudKw5 Jul 13, 2012
  • Big Dealers Sweat as Swaps Face Reckoning http://t.co/iAmp2p4X Interest rate swaps should be vanilla enough to clear on exchanges $$ Jul 10, 2012

 

Politics

 

  • Financial Advice for Presidential Candidates http://t.co/MUqMOWNv Tips from Brett Arends for politicians on how to handle money. $$ Jul 14, 2012
  • Too clever $$ RT @hblodget Here’s One Of The Clever Financial Tricks That Mitt Romney Used To Become Dynastically Rich http://t.co/frz1hkxP Jul 13, 2012
  • Condi for VP? Mitt’s Done It Before http://t.co/ns1Kj6s7 Article makes a good case that MR could pick someone unexpected, as before $$ Jul 13, 2012
  • Chavez Hits Campaign Trail in Bid to Prove He?s Cancer-Free http://t.co/dQCPHEU2 Dream, Hugo; ur dying as your goals on Earth r dying $$ Jul 13, 2012
  • In Kansas, Stronger Mix of Ethanol http://t.co/Iv7LrQpA Economically and environmentally, corn-based ethanol is one big boondoggle $$ Jul 12, 2012
  • Peugeot to Close Plant http://t.co/uUvm4vNK If u make it difficult 4 employers 2 terminate workers, they will hesitate 2 create jobs $$ Jul 12, 2012
  • Social Security Hole Overwhelms Taxes, Cuts http://t.co/DLbk9MgD Analysis right, prescription wrong. Dumb comments by innumerate readers Jul 12, 2012
  • Company to acquire part of Marcus Hook refinery http://t.co/VTXySbbv Spending $75,000/job saved is dumb, even if you lock Braskem in. $$ Jul 12, 2012
  • A New, Improved Draft? No Thanks http://t.co/wH8fcpHx Conscripted labor of youths would be a false economy; work would b poorly done $$ Jul 11, 2012
  • And that leaves aside the constitutional & legal aspects of conscription in peacetime; I do not favor reviving the draft. $$ Jul 11, 2012
  • FBI warned Labor Department data might be leaked http://t.co/KpsZplxo Until DC pays up 4 some good quants, lots of games won’t b caught $$ Jul 11, 2012
  • Helpless President, Hopeless Congress http://t.co/aVq8gq5d Becomes difficult as the # of factions expands. t-party fractures consensus $$ Jul 11, 2012
  • No Sign of Voter Polarization Waning http://t.co/7FXzckao Good smile from Obama; dee red, dey get redder, dee bloo, dey get blooer $$ Jul 10, 2012
  • Obama Intensifies Tax Fight http://t.co/GG0C1Eo5 Looks like a recipe 4 gridlock. BTW, Obama needs2work on his smile, very pouty pics $$ Jul 10, 2012
  • “It is the regulators who require ratings, largely for purposes of measuring risk at financial institutions.” $$ http://t.co/nPGJNhjy Jul 10, 2012
  • America Already Is Europe http://t.co/BCK8nfnI similarities: growing government & equalizing incomes, cronyism, Uninformed electorate $$ Jul 10, 2012
  • LBJ?s Lessons for Obama http://t.co/ILtH9ZH9 Politics is the art of avoiding making permanent enemies & Obama is aloof 2 his enemies $$ Jul 09, 2012
  • States Interpret Ruling to Cut Medicaid Now http://t.co/ArPTMDPp File this under “unintended consequences;” some poor lose some care $$ Jul 09, 2012

 

LIBOR

 

  • NY Fed does not deserve much credit here. They only began investigating after leverage began collapsing… http://t.co/5WHt8Rrt Jul 13, 2012
  • They only began investigating after leverage began collapsing with bank off-balance sheet vehicles. $$ Jul 13, 2012
  • They were more concerned w/LIBOR being viewed as2high as primarily a systemic risk issue, & secondarily as a “is LIBOR accurate” issue. $$ Jul 13, 2012
  • In Libor Scandal, a Push For Criminal Charges http://t.co/eBkV0926 Outside the mainstream here; I don’t think criminal charges will work $$ Jul 13, 2012
  • Fed knew of Libor issue in 2007-08, proposed reforms http://t.co/hHUdUXnP The Fed moves slowly on regulatory issues. Very slowly. $$ Jul 11, 2012
  • Exactly & few say that $$ RT @carney: Running the numbers on March 13, 2006 Libor. I don’t see how Barclays could have manipulated it. Jul 11, 2012
  • So I Need To “Be An Adult” About Fraud Eh? http://t.co/t8owUMbU Yes Karl, being adult means waiting until fraud is proven b4 rash speech $$ Jul 10, 2012

 

 

Eurozone

 

  • Spanish Bank Borrowing from ECB Surges http://t.co/3cIvgaZu Feel sorry for the ECB; politicians do little so they try2do it alone $$ Jul 13, 2012
  • Euro-Zone Banks Still Hoarding http://t.co/3cIvgaZu The ECB can solve it all; just ask them they’ll tell you $$ Jul 13, 2012
  • Euro-Split Case Drives Danish Krone Appeal in Binary Bet http://t.co/tgPPZgKW People r willing to lock in losses 2 avoid bigger losses $$ Jul 11, 2012
  • Euro zone fragmenting faster than EU can act http://t.co/GpqSfYht “Deposit flight from Spanish banks has been gaining pace” $$ Jul 09, 2012
  • German anti-euro backlash gathers pace http://t.co/ZK57rBp3 The compromises hammered together r starting to come apart at the seams $$ Jul 09, 2012
  • Hollande Urged to Deliver Competitive Shock By Executives http://t.co/oZj9D7Jt Strange brew. Socialist pushes labor productivity rise $$ Jul 09, 2012
  • Spain Braces for Renewed Austerity as Tax Take Hemorrhages http://t.co/EIhmTfja I don’t suppose reducing govt size is an option here? $$ Jul 09, 2012
  • Spanish Yield Hits 7%, Stocks Slip http://t.co/QD7icJSX Okay, what new “baby step” toward mutualizing debts will the EZone try now? $$ Jul 09, 2012

 

Residential Housing

 

  • Blackstone, Hovnanian in Land Banking Deal http://t.co/KGx60uQs Too much $$ on the sidelines waiting to play in residential real estate Jul 13, 2012
  • Americans Living Larger As New-Home Sizes Defy Economy http://t.co/KjPRALro 1st ping I’ve seen on improvement for high-end home demand $$ Jul 13, 2012
  • Shadow inventory should also include those inverted on their mortgages, and will sell when prices are high enough. $$ http://t.co/HMT2rdci Jul 13, 2012
  • Housing Passes a Milestone http://t.co/x1rch8KR Lows seen in some areas, in low-end housing, look4those who waited4better prices2sell $$ Jul 12, 2012

 

 

Market Impact

 

  • Hedge Funds Trail Vanguard as Elliott Returns Atypical http://t.co/y91Uboqf Hedge funds seek yield & shun volatility, need fair weather $$ Jul 13, 2012
  • Watch income producing investments w/care RT @stockspot2000: $$ A Big Captain Hook in DividendLand http://t.co/mF9i6wnX $DVY $FED $PCEF Jul 12, 2012
  • Contra: Financial conditions are actually quite normal http://t.co/zSHolTk2 W/long Tsys yielding little, conditions r anything but normal $$ Jul 11, 2012
  • Not surprising in a time of debt deflation $$ RT @sm_sears: Finding a reliable counter party on Wall Street is becoming a rare commodity. Jul 11, 2012
  • Wall Streeters Lose $2 Billion in 401(k) Bet on Own Firms http://t.co/68BGLh8l They should know better $$ Suffering from proximity bias… Jul 09, 2012

 

Pensions

 

  • Common when low funded RT @BobBrinker: “San Bernardino has seen its workers? pension costs more than double since 2006” http://t.co/CLX7jhkC Jul 13, 2012
  • The new retirement age: 70 http://t.co/SdIVhjwE That is, if it isn’t 70+. Too few years to accrue savings vs many to spend over $$ Jul 11, 2012

 

Companies

 

  • Activist Investor Sets Sights on P&G http://t.co/5kGN1m5W $PG too big; Ackman bites off more than he can chew, IMO. $$ Jul 13, 2012
  • What went wrong at Supervalu (plenty) and who could buy it? (um?) http://t.co/9GfsQZZ6 Wonder what $SVU bulls @ Seeking Alpha r saying? $$ Jul 12, 2012
  • Apple Quitting Green Registry Leads to Purchasing Fallout http://t.co/Y4vOZ9Vm Interesting article, but the comments section is rabid $$ Jul 12, 2012
  • Silicon Valley’s Biggest Secret Technology Company — 7 Clues http://t.co/35rQYQuy One more clue: Its name starts with a “V.” $$ $V Jul 11, 2012
  • Billionaire Forrest Leads BlackRock Buying Iron Ore http://t.co/XNP3FGXv Only invest what u can afford2lose 4 an industry in oversupply $$ Jul 11, 2012
  • Patriot Bankruptcy May Leave Peabody Liable for Expense http://t.co/S0Upoai8 W/low natural gas prices, many coal companies suffer $$ Jul 11, 2012
  • Chesapeake retreat ends American energy land grab http://t.co/k7TsqNz3 Fracking creates new energy ecology, lower prices, less coal use $$ Jul 10, 2012

 

Central Banking

 

  • That’s what I thought also $$ RT @Alea_: so employee of Markets Group of the New York Fed doesn’t know how to use bloomberg #brilliant Jul 13, 2012
  • John B. Taylor: Monetary Policy and the Next Crisis http://t.co/9ajScehv Argues Fed kept rates2low in 2000s, leading2current crisis $$ Jul 11, 2012
  • What’s Wrong With the Federal Reserve? http://t.co/JxFpBArR ALLAN H. MELTZER explains y activist monetary & fiscal policies r failing $$ Jul 10, 2012
  • What if the Fed Throws a QE3 and Nobody Comes? http://t.co/kU3N83aX Hussman:”The way out is2restructure bad debt instead of rescuing it.” $$ Jul 09, 2012
  • Dealers Declining Bernanke Twist Invitation http://t.co/ZGVObmE1 Fed eats large % of long Tsys, dealers get into act front-running them $$ Jul 09, 2012
  • Fed Weighs Revamped Monetary Report as Guide to Policy http://t.co/PXGKNfSv No, @federalreserve, ur not unclear 2 us; just bad $$ policy Jul 09, 2012

 

Miscellaneous

 

  • Anne-Marie Slaughter on having it all http://t.co/bz7oQly4 No one can have it all; life is a series of choices 4 men & women $$ Jul 13, 2012
  • The death of cash http://t.co/aCoVfmsP Few technologies die totally; we have phonographs, tube mikes, AM radio. $$ will continue smaller Jul 12, 2012
  • Agreed, cash is a form of freedom RT @DavidBCollum: @AlephBlog Cashless society should be feared. Jul 12, 2012
  • Cocoa Grader: Hard Job, Sweet Perks http://t.co/wn8YXGVt Becoming a cocoa beans grader is ~4x harder than passing the NY State Bar exam Jul 12, 2012
  • A Cut Above: In These Knife Fights, Only Pride Gets Wounded http://t.co/xPvWlxA9 Very American & weird. Very, very weird. $$ #enjoy Jul 12, 2012
  • Wall Street’s Secret Weapon for Getting an Edge http://t.co/UJtMPEJu Testosterone injections to feel great & b dumb as a teenage boy $$ Jul 11, 2012
  • Climate was HOTTER in Roman, medieval times than now http://t.co/cc5fNyyI “cooling effect of orbital shifting on the climate” $$ Jul 11, 2012
  • Congratulations to one of the best financial bloggers still active $$ RT @EddyElfenbein: Crossing Wall Street turns seven years old today. Jul 11, 2012
  • Does This Smell Clean to You? http://t.co/pT1qlfxg There r many new scents giving sense of clean: ginger, hibiscus, greens, jasmine.. $$ Jul 11, 2012
  • Air Conditioning, Blessed Invention http://t.co/TSvTonfJ A most significant invention; no server farms w/o air conditioning $$ Jul 11, 2012
  • Interesting posts at Pepsico blogs in how $PEP is trying to sell snacks in China http://t.co/U6S3rGoT & http://t.co/IpkmsmKL $$ Jul 11, 2012
  • Last Amateur Bannister Is No LeBron Chasing Olympic Ideal http://t.co/Nwi4173U Last of the true amateurs, he breaks the 4-minute mile $$ Jul 11, 2012
  • Living Cells Show How to Fix the Financial System http://t.co/li0tmyHJ Healthy biological systems inspire economics systems $$ Jul 11, 2012
  • How the Mormons Make Money http://t.co/BAi5CF9W Really about how the Mormon “church” has significant businesses that make lots of money $$ Jul 11, 2012
  • Game Written by a 14-Year-Old Passes Angry Birds as Top Free iPhone App http://t.co/fAGtex2A Bubble Ball popular & Mom helps out $$ Jul 09, 2012

 

Rest of the World

 

  • Banks play cat-and-mouse with Beijing to comply with rules http://t.co/Nin3k8xH Banks are the weak link of the Chinese economy $$ Jul 12, 2012
  • Hit at home, China’s ghost fleet sails high seas http://t.co/aGSF13Ue Are there any more ways to increase oversupply of shipping? $$ Jul 11, 2012
  • Canadian Banks Seen Superior by Regulator Surviving Global Shock http://t.co/rKNfUc2M When housing prices fall in Canada will b tested $$ Jul 11, 2012
  • Eric Schmidt: The Great Firewall of China will fall http://t.co/N3vm0IuL You can’t build a sophisticated economy… w/active censorship $$ Jul 10, 2012
  • Norway Banks Under Pressure as Asset-Bubble Risks Swell http://t.co/BcHyayIQ Norwegians have never had such a high % of debt/net income $$ Jul 09, 2012
  • Tokyo Considers Buying Islands China Claims http://t.co/vWUmR6Zr Another potentialflashpoint in Asia, though war is impossible 😉 $$ Jul 09, 2012

 

Economics

 

  • Contra: The problem with ?structural? explanations for U.S. unemployment http://t.co/32zfqXyW Foreign competition limits job creation $$ Jul 11, 2012
  • Low-Paid Grads On Tight Budgets Switching to Discounters http://t.co/v4kEfPMq B4 going to college, ask what future employers might like $$ Jul 10, 2012
  • Murdoch, Moguls Head to Sun Valley as Mobile Shapes Media http://t.co/YFVQcQwm Content is King, can u squeeze dat onto my dinky device? $$ Jul 10, 2012
  • Fracking claims an unusual victim $PCX $$ RT @BloombergNews: BREAKING: Patriot Coal Bankruptcy Filing Said To Come as Soon as Today Jul 09, 2012
  • Patent ‘Troll’ Tactics Spread http://t.co/MECQeMFO Tour through grand diversity of games companies play w/patents 4 offense & defense $$ Jul 09, 2012

 

Finance Companies

 

  • SAC?s Cohen Joins Loeb Starting Reinsurer for Capital http://t.co/8aSjsa3w Adv: Captive $$. Disadv: Can lose $$ if underwriting is poor 🙁 Jul 10, 2012
  • JPMorgan Silence on Risk Model Spurs Calls for Disclosure http://t.co/btmeSkbM Banks should share their risk modelsw/regulators yearly $$ Jul 10, 2012
  • Indentured Students Rise as Loans Corrode College Ticket http://t.co/VvNosGcC Students tricked into debt-slavery “pursuing their bliss” $$ Jul 09, 2012
  • Price of Plastic Going Up? Merchants May Get Surcharge Rights http://t.co/e2wXuCC5 Will make4interesting competition & ppl hold more $$ Jul 09, 2012

 

Comments

 

  • Commented on Banks Defend Against Libor Lawsuits By Asking “Libor? Who Uses Libor, Anyway?” / Dealbreaker http://t.co/oIRzvh72 Jul 13, 2012
  • Fun fact: Take the current $VIX, divide it by the square root of 52. That’s the market’s one standard deviation forecast for the next week Jul 12, 2012
  • RT @EddyElfenbein: Fun fact: Take the current $VIX, divide it by the square root of 12. That’s the market’s one standard deviation forec … Jul 12, 2012
  • “Very low value analysis. Did a computer write this?” ? David_Merkel http://t.co/pUs2DJaj http://t.co/zmt4cMgf $$ Jul 12, 2012
  • “Banks feel more confident to foreclose when they can sell the property for a small loss at worst.” ? David_Merkel http://t.co/z3EUOoRk $$ Jul 12, 2012
  • “?Everyone needs to lighten up.? No, everyone needs to *tighten* up, and respect the rights of the?” ? David_Merkel http://t.co/yVrsu4jc $$ Jul 12, 2012
  • “On the new highs list, look at all the bond CEFs, ETFs, preferreds, etc. Everyone is grabbing income!” ? David_Merkel http://t.co/8ek4vm4E Jul 11, 2012
  • @Royal_Arse @LDrogen definitely think it doesn’t make sense LT, but long Tsy yields could go lower b4 a rather nasty whippy reversal $$ Jul 11, 2012
  • low quality $$ RT @jsphctrl: It’s unconventional, certainly. (Bloomberg:) *Urpilainen: One Collateral Option Is Shares From Spanish Banks Jul 11, 2012
  • @LDrogen with interest, even $JNK made $$, I’m not saying it is the only signal, but $TLT shows a demand4long certain cash flow FD: +TLT Jul 11, 2012
  • @LDrogen 1 yr price return only $JNK -2%, $LQD +7%, $TLT +32%. I would argue that indicates economic weakness FD: +LQD, +TLT 4 me&clients $$ Jul 11, 2012
  • “I think they are dreaming. China overbuilt its steel industry & they are losing $$ now.” ? David_Merkel http://t.co/RyQOw5tD Jul 11, 2012
  • @izakaminska @TheStalwart Problem happening w/Danish bonds also http://t.co/tgPPZgKW Ppl willing 2 lock in a loss 2 prevent larger loss $$ Jul 11, 2012
  • “Because those that are politically powerful in Europe have their own Swiss Bank accounts. Can’t?” ? David_Merkel http://t.co/8F93WNQm $$ Jul 11, 2012
  • +1, we r starved 4 news $$ RT @Fullcarry: FED minutes today probably not that important since BB had a presser after the meeting. Jul 11, 2012
  • Cat bond sales double in H1http://reut.rs/Nm0whV More alternative reinsurance capacity. Diversifies junk portfolios; invites catastrophes $$ Jul 10, 2012
  • @historysquared trouble is, few cat bonds have ever triggered, looks like free $$ to many HY bond mgrs, terms will tighten 2deliver losses Jul 10, 2012
  • When I look at the data for 3/13/06, Barclays actions had no effect on 3M LIBOR. It was excluded from the… http://t.co/gbEPYIXN Jul 10, 2012
  • “Life actuaries reveal their models annually to the regulators, though not to the public. The same?” ? David_Merkel http://t.co/pTqT1F2L $$ Jul 10, 2012
  • @randomroger Congratulations on the AdvisorShares Global Alpha & Beta, Roger! $RRGR $$ Jul 09, 2012
  • ‘ @Nonrelatedsense 4 mkt val measures: Q-ratio, CAPE10, Price-Resources (Michael Alexander), & @eddyelfenbein ‘s stocks as a bond measure $$ Jul 09, 2012
  • “P/E has been an unreliable measure of value for the market as a whole. Why rely on it?” ? David_Merkel http://t.co/B4ZuMOLz $$ Jul 09, 2012
  • Commented on The Economist | The LIBOR scandal: The rotten heart of finance http://t.co/qvSysBKt Jul 08, 2012
  • Commented on The Economist | The LIBOR scandal: The rotten heart of finance http://t.co/Y7JVFkDP Jul 08, 2012
Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

A note to all of the actuaries in the audience, all three of you 😉 : an old friend from my GIC days is seeking a multi-talented actuary to work in the stable value business.? Must understand how wraps work, etc.? If interested, drop me a note, and I’ll send you the contact info.

On with the tweets:

=-=–=-=-=-=-=-=-=-=-=-=-=-==–=-=-==-=-=-=–==–=-=-=-==–=

Eurozone

 

  • May not last long $$ RT @John_Hempton: @AlephBlog Spain imposing on bank junior bonds but prefs in Santander still trading at par! Strange. Jun 23, 2012
  • Buying Europe Banks Is Easy for Herro as Cheap Stocks Fall http://t.co/gfCOhY8q Key question here is accounting quality; not a buyer $$ Jun 23, 2012
  • Spain Said to Weigh Imposing Losses on Junior Bank Bondholders http://t.co/cD1hoAVa Fine, but they won’t fund jr debt for 20yrs or so $$ Jun 23, 2012
  • Spanish Aid Plan Is Flawed, Says IMF http://t.co/9V2FJ0Xc IMF doesn’t like the complexity of the E-Zone, wants it 2 behave like a nation Jun 23, 2012
  • Debt crisis: Angela Merkel defies Latin Europe and the IMF on bond rescue http://t.co/qTKEAr5O She who pays the $$ calls the tunes Jun 23, 2012
  • What?s So Special About the Euro Currency Area? http://t.co/oJWyrLAk Currency unions don’t work; must centralize or die $$ Jun 21, 2012
  • Merkel Balks at Sovereign Debt Purchases to Overcome Crisis http://t.co/UfuN4ae8 Physically, the crisis looks like it is wearing on Angela Jun 21, 2012
  • Spanish short-term debt costs reach alarm levels http://t.co/Dm8d2bsv Yields high enough that Spain unlikely to grow out of the debt $$ Jun 21, 2012
  • Cyprus Said to Face Europe Pressure for $13 Billion Aid http://t.co/z0etJBlX Who wants to maintain influence in Cyprus? Russia, E-zone? $$ Jun 20, 2012
  • ‘ @aarontask He might b right. Key Q is how much Germans/Nordics/Dutch view themselves as Europeans 1st rather than Germans/Nordics/Dutch $$ Jun 20, 2012
  • Greek Leaders Poised to Agree on Three-Way Coalition http://t.co/JvAaPDDj It will be difficult for that coalition 2 hold together $$ Jun 20, 2012
  • Ma?ana-nomics at Los Cabos http://t.co/GtlAj4lY Weak Europoliticians blame US, when their banking system was overlevered & malregulated $$ Jun 20, 2012
  • G20 summit: perils of a half-baked rescue for Spain and Italy http://t.co/7E6jPK4W E-zone not ready 2 take strong actions; don’t force it $$ Jun 20, 2012
  • Is Spain past the point of no return? http://t.co/zCRF7qKo ??I suspect the ECB will have to be the buyer of last resort for Spanish bonds.?? Jun 19, 2012
  • Saddling Spain With Bank Burden Repeats Irish Error http://t.co/dWgYAUht Protect deposits, not bank bonds, preferreds, or stocks $$ Jun 19, 2012
  • “Which is why $JPM had the hedge there in the first place $$” http://t.co/o61frAFX Dimon Says ?Firewalls? May Halt Spread of Europe Crisis Jun 19, 2012
  • Germany set to allow eurozone bailout fund to buy troubled countries’ debt http://t.co/OEFi9UI9 Last refuge of scoundrels:blame speculators Jun 19, 2012
  • Fran?ois Hollande said meeting btw Ezone & Obama rescheduled4this morning2brief Americans on “mechanisms that allow us to fight speculation” Jun 19, 2012
  • Spanish Yields at 7% Show Investors Slamming Door http://t.co/JxGxNHDn Spain is slowly passing the “tipping point” into hopelessness. $$ Jun 18, 2012
  • Where is the relief? RT @jennablan: Where is the relief rally? Jun 18, 2012

FOMC Meeting/Press Conference

 

  • Fed Seen Extending Operation Twist and Avoiding Bond Buys http://t.co/qFOSA0rf Fed can’t do nothing, so it does something that is nothing Jun 21, 2012
  • RT @ezraklein: Hypothesis: Bernanke doesn’t do more because he doesn’t think he can. He says otherwise is because he doesn’t want the ma … Jun 20, 2012
  • Dr. Bernanke: Couldn?t increased unemployment be structural, after all, there is a lot more competition from labor in emerging markets? Jun 20, 2012
  • That’s all folks!!! Jun 20, 2012
  • Dr. Bernanke, Isn?t stagflation a possibility here? I mean, no one expected it in the ?70s either. $$ Jun 20, 2012
  • Q for Bernanke: If the Fed ever does shrink its balance sheet, what effect will it have on the banks? $$ Jun 20, 2012
  • Stocks trading off — correlated with future inflation rates; long Treasuries rallying nominal yields falling -> real rates stable-ish $$ Jun 20, 2012
  • What Bernanke is describing in terms of hedging and risk management has to be done in the insurance industry; actuarial risk analyses Jun 20, 2012
  • W/MBS rates, those mtges that are underwater don’t benefit, same for Alt-A & Jumbo; low rates don’t help many in residential real estate $$ Jun 20, 2012
  • Effect of Tsy ylds on corporate yields is stronger 4 AAA-A bonds, moderate 4 BBB bonds, little 4 junk & the effects get weaker w/maturity $$ Jun 20, 2012
  • That’s the wrap up for the central tendencies and averages of the FOMC’s additional data release. Anyone find those summaries useful? $$ Jun 20, 2012
  • Changes in Avg Target Federal Funds Rate at Year-End 2012-2014, Longer -0.07%, -0.10%, -0.22%, -0.09% $$ Levels: 0.30%, 0.50%, 1.11%, 4.11% Jun 20, 2012
  • Average appropriate timing of policy firming moved out 1.6 months to November 2013 $$ Jun 20, 2012
  • Changes in PCE Inflation central tendency 2012-2014, Longer -0.4)%, -0.07%, -0.12%, 0% $$ Levels: 1.48%, 1.76%, 1.77%, 2.00% Jun 20, 2012
  • Changes in unemployment central tendency 2012-2014, Longer +0.18%, +0.20%, +0.24%, +0.03% $$ Levels: 8.10%, 7.71%, 7.28%, 5.60% Jun 20, 2012
  • Changes in real GDP growth central tendency 2012-2014, Longer -0.50%, -0.37%, -0.11%, -0.04% $$ Levels: 2.13%, 2.57%, 3.28%, 2.44% Jun 20, 2012
  • +1 RT @bondscoop: Steve Liesman is the Fed’s Helen Thomas Jun 20, 2012
  • Fed wants to see long TIPS up in price relative to long nominal Treasuries. http://t.co/X5Gjt6jI Jun 20, 2012
  • @TheStalwart #FOMCGuesses OT extended, no QE3, central tendencies move back to where they were in January, shades lang down GDP, CPI, etc $$ Jun 20, 2012
  • C?mon, Ben, Just Say It; Please, Just Say QE3 http://t.co/ksIKxZ6C Sad that equity guys beg 4 stimulus; think OT extends; no QE3 yet $$ Jun 20, 2012

 

Rest of the World

 

  • Glencore Protests Bolivia’s Move on Mine http://t.co/OcIzatJ5 Bolivia has Venezuela envy; won’t end until Morales is shown 2b a fail. $$ Jun 23, 2012
  • Children of Mao’s wrath vie for power in China http://t.co/pWzj4Dbq All of the current ruling class survived the Cultural Revolution $$ Jun 22, 2012
  • Riskier Bets Pitched to Asia’s Rising Rich http://t.co/P6PjFqyR Yield is the oldest scam in the books; Asia’s brokers fleece clients $$ Jun 21, 2012
  • China warns its rare earth reserves are declining http://t.co/ve2e6PQq I doubt this, but if true -> significant scarcity of rare earths $$ Jun 20, 2012
  • Britain doomed, apparently http://t.co/WdvPCsxs Countries that don?t reset their systems through default, will experience money decay $$ Jun 20, 2012
  • Suicides, Arrests Show Trouble at Korean Savings Banks http://t.co/aP1fu6KS Pride drives suicides, rather than confession of wrongdoing $$ Jun 19, 2012
  • The UN’s Internet Power Grab http://t.co/LE704S74 Never surrender an advantage for no gain; does the Obama administration get that? $$ Jun 18, 2012
  • The Return of Egypt’s ‘Deep State’ http://t.co/i1IkbmMq Islamists & liberals checkmated by Egyptian Army 4 now. Liberals s/b glad $$ Jun 17, 2012
  • @dpinsen Agreed, better H/L would have been: “Egyptian Army reveals full control, ends show that played w/democracy 2 smoke out enemies” $$ Jun 17, 2012
  • Noda Ends Japan Nuclear Freeze, Risking Voter Backlash at Polls http://t.co/Jcoxl91Z He does the right thing, but will the voters agree $$ Jun 17, 2012

?

Banks

 

  • A History of Money Funds http://t.co/KXCpfCDz Let the critics of money market funds apply the same2banks; mark2market accounting. $$ Jun 23, 2012
  • Bank Investors Dismiss Moody?s Cuts as Years Too Late http://t.co/5cOsGOyG True. Moody’s should’ve done it in 2008; did politics stopthem? Jun 23, 2012
  • Citigroup Faces $5 Billion on Dollar?s Rise, Peabody Says http://t.co/5HZtJfvx So, on the heels of $JPM, $C has a currency mismatch? $$ Jun 21, 2012
  • Eminent domain for underwater mortgages could have biggest impact on banks http://t.co/NK9W0PyO Comments at end; disagreement welcomed $$ Jun 20, 2012

 

Central Banking

 

  • Bernanke Acknowledges Tsy Strategy @ Odds W/Fed Policy http://t.co/MqW6qda2 “Thx, Unca Ben 4letting us issue morre 30s” Ben:”Arrrgh!” $$ Jun 23, 2012
  • The Fed?s second best solution http://t.co/YJhiHbNd “collateral damage will mount, making the next policy steps even more excruciating.” Jun 21, 2012
  • Fed Born of Morgan?s Bailout Under Scrutiny After Dimon?s Loss http://t.co/7EHPlSvM How significant is it 4 Jamie D 2b on NY Fed board? $$ Jun 19, 2012
  • Krugman’s Intellectual Waterloo http://t.co/brrRB3CP Suggested possible Fed stimulus: blow housing bubble 2replace tech bubble $$ Jun 17, 2012
  • Also, the last H/L could have been: “Bernanke?s GDP View Invalidated as Economy Slows” FOMC has been lousy economic forecasters lately $$ Jun 17, 2012
  • Bernanke?s Inflation View Validated as Commodities Fall http://t.co/pjRKhXWv Median & Trimmed mean CPIs mot falling, better measures $$ Jun 17, 2012

 

Asset Management

 

  • Pimco?s Gross Warns of Risk Assets as Aberdeen Avoids Stocks http://t.co/pcqnMis6 Bill Gross signs on to deflation late & promotes it $$ Jun 23, 2012
  • Private Equity Has Too Much Money to Spend on Homes http://t.co/VPToSU8I Big buyers need to stay quiet if they want 2 make good returns $$ Jun 22, 2012
  • Simon Lack responds to AIMA’s hedge fund cheerleading http://t.co/VQq4s1O8 Backfill bias, IRR vs Buy&Hold, high fees, survivor bias $$ Jun 21, 2012
  • At 40,000 feet, Fidelity’s Danoff ponders Groupons http://t.co/BwOKJR8X Danoff is a survivor; he’s right it’s lonely 2b a stockpicker $$ Jun 21, 2012
  • Very good point. Wall Street is a 1-note Sam RT @chadstarliper: Has there ever been a time when Wall St didn’t think stocks were “cheap?” $$ Jun 20, 2012
  • Wall Street says stocks are bargains, but that assumes surging profits http://t.co/0c0iDdK6 Or at least growing sales w/flat profit mgns $$ Jun 20, 2012
  • America?s $8T corporate debt market faces liquidity drought as banks retreat from the trade http://t.co/rvXwFsjW Shouldn’t b that bad $$ Jun 19, 2012
  • Equities entail less risk than ?haven? investments http://t.co/u3befAMT Ain’t necessarily true; think of the Great Depression or 1871 $$ Jun 19, 2012
  • Valuation Matters…. Equity vs Bonds Edition http://t.co/23IikMDJ Earnings ylds v Tsy ylds unstable; Q-ratio, CAPE10, Price/resources bettr Jun 19, 2012
  • Biggest Stocks Beat S&P 500 Most in 13 Years as Valuations Fall http://t.co/7vLxG6VN Once valuations get so low, they must go up $$ Jun 18, 2012

?

Companies

 

  • DuPont selling Conoco at oil mkt trough $$RT @BarbarianCap: “Delta seals deal to buy Pennsylvania refinery” > hasn’t that been tried before? Jun 23, 2012
  • DuPont buying Conoco at oil mkt peak $$ RT @BarbarianCap: “Delta seals deal to buy Pennsylvania refinery” > hasn’t that been tried before? Jun 23, 2012
  • J.C. Penney Falls After Francis Leaves Amid Strategy Flop http://t.co/jfAVGj3V Rare setback 4 Ackman/Pershing on $JCP; retail is tough $$ Jun 20, 2012
  • Buffett Extends Real-Estate Bet With ResCap Pursuit http://t.co/ZsN6J0Pm Buffett is early, in my opinion, but has the capital to do it $$ Jun 18, 2012

 

Pensions

?

  • US public retiree benefits gap grows to $1.38T http://t.co/7bZ18GRB Gap widened by $120 billion since last year; thx Ben 4 low discnt rates Jun 20, 2012
  • Joe Nocera Is Wrong About Woonsocket’s Crisis http://t.co/Z3RM9UGO Harder2discharge muni “pension” bonds than renegotiate muni pensions $$ Jun 20, 2012
  • GM Seen Fueling Pension Deals as Employers Face Shortfall http://t.co/noz9auU0 Hope $MET & $PRU survive; guaranty funds limited in size $$ Jun 19, 2012
  • Terminal funding of DB pension plans will be a growing phenomenon if corps/states bite bullet and kick in more $$ to fund annuity purchases Jun 19, 2012
  • Problem to annuitants is companies can go broke; no PBGC coverage of annuities, and state guarantees r usually limited 2 $100,000 total $$ Jun 19, 2012

?

Media

 

  • Love the Leaker, Hate the Leak http://t.co/wiY7RwJU Value of releasing sensitive govt data to the public is in the eye of the beholder $$ Jun 21, 2012
  • How David Weidner Changed My Life http://t.co/g9LVJIWD @reformedbroker – how getting on @davidweidner ‘s Top 10 list gave him a big boost $$ Jun 19, 2012
  • +1 won’t watch RT @ReformedBroker: Bloomberg PR pushing their Meredith Whitney interview video hard today. They haven’t gotten the memo yet. Jun 19, 2012
  • Wrong: 20 rules that can save you from the Doomsday Cycle http://t.co/jLB0s2pL Why does Marketwatch give Paul Farrell space 2 write? $$ Jun 19, 2012
  • So long, suckers ? I?m leaving Wall Street http://t.co/x1Ju1fmZ David Weidner: Some lessons from 15 years observing the industry $$ Jun 19, 2012

 

Miscellaneous

 

  • Liquidity, Noise, and Signal http://t.co/cV15Mr2z Shorter the time period-> higher ratio noise/signal; leads2bad trades @ turning points $$ Jun 21, 2012
  • ‘ @JATranfo Never criticized ECRI when out of favor; FWIW, I reverse-engineered their main model: industrial commod pxs & credit spreads $$ Jun 21, 2012
  • Lawmakers Push for Overhaul of IPO Process http://t.co/qhh7tX1V Every “fix” creates its own set of problems. Mania can hit auctions 2 $$ Jun 21, 2012
  • Yes $$ RT @Fullcarry: A point I have made many times in the past: the drop in yields the past decade is mostly due to a drop in real rates. Jun 20, 2012
  • Housing Starts in U.S. Fall 4.8% in May on Apartments http://t.co/PhMFwHQL Interesting contrary data; $EQR chart http://t.co/vleXkVAM $$ Jun 19, 2012
  • Asians Top Immigration Class http://t.co/Sir2IFxQ Certainly noticeable here in Ellicott City; most businesses have signs in Korean $$ Jun 19, 2012
  • Poorly reasoned: Court-Ordered Care ? A Complication of Pregnancy 2 Avoid http://t.co/DqmhsvkU Mothers w/child in womb uniquely affect child Jun 18, 2012
  • Please follow @jarrodwilcox, He has taught me many things, and I respect him a great deal #FF Jun 17, 2012
  • A Jewish-Asian Couple?s Union Leads to a Scholarly Interest in Intermarriage http://t.co/U3jfPkyK Both ethnic groups prize education $$ Jun 17, 2012

 

Comments

 

  • DavidMerkel’s discussion on “The New Yorker’s Newest Writer Is a Big Self-Plagiarist” http://t.co/g1i0YeF4 Writing belongs2those that paid Jun 20, 2012
  • “High energy particle physics is only a small part of science, and not adequate to measure the?” ? David_Merkel http://t.co/T4BrvWBj Jun 20, 2012
  • “Please, accidents per passenger mile would be better, rather than: “He also pointed to the fact?” ? David_Merkel http://t.co/Yg6r5N3X Jun 20, 2012
  • RE: @bloombergview Maybe DC city govt should start a reality TV show, w/prizes 2 the official who commits the most cr? http://t.co/lIXL6eMi Jun 20, 2012
  • RE: @bloombergview ?How will you deal with deferral of individual taxes on investment from DC plans, unrealized CGs, ? http://t.co/NY0Q3Ia5 Jun 20, 2012
  • “Cool picture, Ed. Thanks for sharing it.” ? David_Merkel http://t.co/Mg9lx0ij Jun 19, 2012
  • “Hitting the fiscal cliff won’t happen, and that’s too bad, because we need to discuss long-term imbalances” ? D_Merkel http://t.co/csiaLXlV Jun 19, 2012
  • “Here is a proposal for how rating agencies could be eliminated: http://t.co/rLrOK4vu…” ? David_Merkel http://t.co/q2mxmhpW Jun 19, 2012
  • “I trust ratings agencies more than mismanaged governments. Ratings are needed to provide?” ? David_Merkel http://t.co/vOdPJvzv Jun 19, 2012
  • “If this is representative of what the ruling Greek coalition will do, the government will fail?” ? David_Merkel http://t.co/HEe4GwHt Jun 19, 2012
  • “Much as we may dislike financial fraud, suggesting that those in the US that mismanaged their banks?” ? David_Merkel http://t.co/fEZQIo0h Jun 19, 2012
  • ‘ @FilmCriticOne You say u want tax reform, but ur willing2let value grow untaxed through deferral? Get real; ability2defer is the issue $$ Jun 16, 2012

 

Dimon for Fed Secretary

 

  • @dlevineMW @moorehn and pay cut. The same rumors were applied to Hank Greenberg $AIG 4 Tsy Secretary user Bush, Sr. Said the same then $$ Jun 19, 2012
  • Jamie kind2let us live in his world 😉 RT @ReformedBroker He’s hedging the Senate w/the House right now, y’all r just pawns in a bigger game Jun 19, 2012
  • Why should Jamie accept the demotion? $$ RT @moorehn: This is just Jamie practicing for confirmation hearings as Treasury Secretary, right? Jun 19, 2012

 

Tax Policy

 

  • Tax Panels Turn Focus to Investments http://t.co/sq6AnHdE Best poss is lowering corp tax rates, equalizing all tax rates for individuals Jun 23, 2012
  • How to Kill the Corporate-Income Tax http://t.co/T5MgnVuD Evens out personal income tax rates by class. Good, but what about deferral? $$ Jun 20, 2012

 

 

 

Strong Hands

Strong Hands

Posted on by David Merkel

When I started writing this blog, my Major Article List was a big thing to me.? I wrote some pretty good things at RealMoney.com, and I wanted to have a record of the best of that.? I only wish I had done the same thing for my Columnist Conversation comments, because many of them were far better than most articles at RealMoney.? Give TST credit, they would frequently take my best comments, and turn them into posts, and pay me for them.? They did not have to do that.

But, I would love to republish many of my best timeless posts here.? I offer a deal to RealMoney: In exchange for being able to republish old posts and comments of mine here, I will offer you new posts of mine, or the best of my old posts at my blog, so long as they are timeless.

Regardless, when I was at RealMoney, I wrote a series that dealt with the motives of various investors as it stemmed from their balance sheets.? For those that have access to RealMoney, here are the articles (note: I wrote different titles than what was used):

Managing Liability Affects Stocks, Pt. 1
Separating Weak Holders From the Strong
Get to Know the Holders? Hands, Part 1
Get to Know the Holders? Hands, Part 2

The main idea is this: There are a wide variety of investors, and they have differing abilities to hold assets.? Why should investors have differing abilities to hold assets?? And why should that matter?

When will you need the cash?? That should be a central question for every investment adviser, dictating asset allocation.? This is basic asset-liability management.? This gets neglected in investing more often than most imagine.

  1. Mutual funds know that money will be pulled if they underperform.? This forces them to be more short-term in investing.? An exception can be closed-end funds, since they have captive capital, so long as the discount to NAV doesn’t get too great, and they attract activist investors.
  2. Same thing for hedge funds; they tend to be volatility-averse on average; and their investors may be technically more sophisticated than mutual fund investors, in practice, they make the same mistake of chasing performance.
  3. Average individual investors chase trends; that is very short-term.
  4. ETPs react to the market.? Indexed investing amplifies a market as it grows, and muffles a market as it shrinks.
  5. Endowments can resist short-term underperformance for a few years, then the trustees get antsy.
  6. Same thing for Defined Benefit [DB] pension plans, but more so.
  7. Most banks and insurers have short liability structures so they can’t allocate that much to long duration assets like stocks and esoteric illiquid assets.? Life insurers could invest there, but the risk-based capital regulations make it unworkable.? That leaves P&C insurers writing long-tailed business; many of them are value investors, and use the long-duration liabilities (as Buffett calls it “float”) to invest in a wide number of cheap assets where it may take a while for value to be realized.
  8. Trusts, limited partnerships, etc., hinge on how much leverage they employ and how often the terms of the leverage shift, as well as any limitations on when capital must be distributed.? Sometimes that’s not obvious, as in the failure of many mortgage REITs when the repo haircuts got boosted in the midst of the financial crisis, leading to forced selling, as they did not have enough capital to post as margin against all the assets that they held.? The forced selling led to falling prices for mortgages, which led to further increases in the repo haircut, which created a self-reinforcing spiral until a new class of investors held many of the mortgages, and many mortgage REITs were bankrupt or broken.

With respect to institutional investors, my experience is the more of the investment is done internally, the more patient the capital tends to be.? Perhaps that’s the illusion of control, but I tend to think that investors have more trust in their own reasoning than in the reasoning of external managers.

The longer the time that you can invest and wait for returns, on average, the more aggressive you can be in investing.? The investor that can “Buy-and-hold” can take on the most difficult situations if there is a sufficient discount in the price to make the wait worthwhile, and avenues that allow for change to be encouraged.

So, when I think of how my investment is affected by those that invest alongside me, I divide them up this way:

  • Strong Hands — long liability structures, excess capital, experienced, patient, never compelled to do anything; they can live with short-term losses.
  • Weak Hands — no balance sheet or short liability structures, have to make a certain return each year, less experience, leveraged; they can’t live with short-term losses.

When I go through 13F filings, I note the quirkiness of the assets held, and often held for a long time.? Almost all of the 13Fs that I track I would classify as strong hands.? They don’t care about the next quarter; they are thinking about the next 3-5 years.? They care about the growing underlying value of the businesses; they wouldn’t care if stock market was only open one day per month.? Some, like Seth Klarman, do little on the long side when opportunities are not compelling.? Like underwriters at well-run insurers, when an insurance market is nuts, you stop writing business, and spend time improving your skills.

So for my own investing this past period after I finished my 13F analysis, I took the companies that had:

  • The 100 largest increases in my 13F investors
  • The 100 largest increases in cash invested as a fraction of market cap
  • The 100 with the greatest number of my 13F investors
  • and the 100 largest positions as a fraction of market cap,

and put them in as competitors in my ranking system, against my current portfolio.? Because of redundancy, it was about 320 companies in all.? I think it was a good exercise, because it made me think about a bunch of companies that I would otherwise never consider.? Anyway, the process is complete, and the equity portfolios have some promising new names with good prospects, and fellow shareholders that are for the most part “strong hands.”

Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

Eurozone

 

  • If Greece Quits Euro, Its Ruin Will Be Pointless http://t.co/2DotggME Suggests Greece will face more pain if leaves E-zone than stays $$ May 17, 2012
  • Experts Try to Chart Path for Exit From Currency http://t.co/dtIAoo3g Let’s see, where is that manual for unscrambling eggs? Mmm… $$ May 17, 2012
  • On the E-zone: the politicians, like sorcerer’s apprentices, thought they could reshape Europe; end up fighting forces beyond their power $$ May 17, 2012
  • The Running of the Bank Depositors http://t.co/WC7aN5LP Governments r smaller than economies, which r smaller than cultures $$ #fightgravity May 17, 2012
  • Governments are smaller than economies, which are smaller than cultures.? The Eurozone is a huge experiment that igno? http://t.co/YUqGTSLN May 17, 2012
  • Greek President Told Banks Anxious as Deposits Pulled http://t.co/mx5626V2 If u thot u faced a conversion 2 new drachmas, ud w/d euros2 $$ May 16, 2012
  • ECB Said to Stick to Current Crisis Stance as Tools Reviewed http://t.co/vSKBTnax No worries; ECB policies r meeting the challenge $$ 😉 May 16, 2012
  • Bet on Greek Bonds Paid Off for ?Vulture Fund? http://t.co/nrka09y7 While Greece is in disarray, makes full pmt2 hedge fund Dart Management May 15, 2012
  • Lightning Strike Delays Hollande Trip http://t.co/G0hgIGsP Weird, but he gets to Germany anyway to have a disagreement w/Merkel $$ May 15, 2012
  • Hazardous Greek-Exit Scenario http://t.co/LZooTMlf WSJ goes through the steps and effects of an orderly Greek exit, should there b1 $$ May 15, 2012
  • European Officials Warn Greece http://t.co/WJ4Wmk5B No way to kick Greece out; what do you do if they refuse to pay? $$ #enduredefault May 14, 2012

?

Rest of the World

 

  • Hugo Ch?vez’s Enemy No. 1 http://t.co/LtdZXcM7 Henrique Capriles, governor of Miranda state & candidate selected by the united opposition May 19, 2012
  • Kolatch Bullish on Argentina?s Debt http://t.co/8dfUoRdv When someone is willing to cheat others, he is more likely to cheat you $$ #FTL May 17, 2012
  • Iranian Rapper Fears for His Life After Fatwa http://t.co/AD27SHZY Interesting how killing ceases 2b murder after cleric issues fatwa $$ May 16, 2012

 

Bond Markets

 

  • US insurers seek $300 mln cat bond cover http://t.co/rNw0b4hu There’s a hard property reinsurance market, so alternatives r attractive $$ May 18, 2012
  • Junk-Debt ETFs Set Markets ?Abuzz? After Record Trades http://t.co/Zzq4BHV2 New ways of putting biggish HY positions on/off quietly $$ May 18, 2012
  • @Fullcarry @munilass At least the Treasury yield curve is “out of this world.” Have long Tsys on as a hedge in my bond strat, when2punt? $$ May 17, 2012
  • Every two years, the annual shareholder filing for the iShares Trust, which holds the big bond ETFs, doubles in size: now 20MB $$ May 15, 2012
  • RT @Munisrgood: @munilass More room to go. If you subscribe to Hoisington’s predictions, (I do to an extent) 30 yr tsy could be 75-100 l … May 15, 2012
  • +1 Needle in red zone $$ RT @groditi: HY CEF wavg premium 15%; min -8.27 max 67.3%; +1.1stdevs; sample-size: $11B (40 funds) #YieldChase May 14, 2012
  • Euro-Zone Fears Drive Bund Yield to Record Low http://t.co/sNntlOYU Opposite risk: Germany might leave EZone; ECB actions disliked $$ May 14, 2012
  • Euro Officials Begin to Weigh Greek Exit as Euro Weakens http://t.co/nERx6dAG Note the shift, indicates the bailouts may b over 4Greece $$ May 14, 2012

 

Elderly Poverty

 

  • See pg 26 4 details http://t.co/NnS2Jyo2 Figure is low IMO b/c 25% “don’t know” what they have saved. They r prob below $50K, so ~60% <$50K May 17, 2012
  • Report says “Overall, slightly more than one-third have saved less than $50,000.” http://t.co/NnS2Jyo2 Still thought the % was higher, ~50% May 17, 2012
  • Same here RT @ballenmo: @AlephBlog @fundmyfund 20%? I?m surprised the number is so low. May 17, 2012
  • +1 that’s what I think RT @fundmyfund: @AlephBlog 20% of 50 and 60 yr old dont have 50K to their name, not to mention saved for retirement May 17, 2012
  • Expected worse RT @MoneyMag_Penny 20% of workers in 50s & 60s have saved less than $50,000 for retirement: Transmerica http://t.co/PqWIm74w May 17, 2012

 

JP Morgan

 

  • Lawrence Lindsey: Why Washington Hates Jamie Dimon http://t.co/dZEzVnOq Not a diplomat & does not perform kowtows to politicians $$ $JPM May 18, 2012
  • For JP Morgan Trader, From ‘Caveman’ to ‘Whale’ http://t.co/U2iXH2uJ It is often dangerous to win, next step is try to win big & fail $$ May 17, 2012
  • Romney Vowing Dodd-Frank Repeal Hits JPMorgan Risky Trades http://t.co/Y9aMyHR0 Tough sell; existing law had enuf pwr, but regs didn’t use May 14, 2012
  • The core problems with JPMorgan’s failed trades http://t.co/HktxLRnq When that illiquid, putting positions into runoff only solution $$ May 14, 2012
  • Dimon Fortress Breached as Push From Hedging to Betting Blows Up http://t.co/Rc5TXU9E $JPM too big relative 2market; hard2mark prices $$ May 14, 2012
  • Bank Order Led to Losing Trades http://t.co/00llzrIO $JPM ‘s Efforts2Shield Itself From European Market Fallout Prompted Disastrous Bets May 12, 2012

Buffett & Newspapers

 

  • Why Warren Buffett is buying newspapers http://t.co/a6qVZAet It certainly isn’t for economic reasons; he overpaid, plain & simple. $$ $BRK.B May 18, 2012
  • Warren Buffett buys into ‘declining’ newspapers http://t.co/BYmAmiZT $MEG does have TV and data businesses, not sure how much that helps. May 17, 2012
  • Berkshire Buys Media General Newspapers for $142 Million http://t.co/ISIniNZG add in a $400 million term loan with an rate of 10.5% $$ May 17, 2012

(As an aside, if you read any of my comments on Buffett, newspapers, and Media General, I made the mistake of think that he had bought Media General, when he bought most of their newspapers, a portion of the company, and lent them $400 million at 10.5% with a first priority of payment in bankruptcy.? Now that I realize my mistake, I can?t say whether Buffett got a good, bad, or indifferent deal.? Apologies for the mistake.)

 

US Economy

 

  • ?One Recession Away? From Next Bull Market ? John Mauldin http://t.co/WwOL8nj7 5 min interview, short-term bearish, long-term bullish $$ May 17, 2012
  • Paul Krugman’s Simple — or Is It Simplistic? — Reasoning http://t.co/0lmcAVSQ Is there any level of govt spending or debt that is2much? May 17, 2012
  • North Dakota Tops US States in Credit Ranking as Florida Rises http://t.co/cttmsatF Amazing what energy & the influx of elderly will do $$ May 17, 2012
  • North Dakota Tops Alaska in Oil Output http://t.co/Ulo7jzcU The US potentially has more hydrocarbons than Saudi Arabia. TX, ND, AK $$ May 17, 2012
  • RE: @bloombergview The two papers look pretty good, but would the bureaucracy have the guts to rein in a boom based o? http://t.co/mvScOD74 May 16, 2012
  • Tom Frost: The Big Danger With Big Banks http://t.co/414ZAkTV Fine, but it was mortgage lending that led the crisis, not invt banking $$ May 16, 2012
  • When I used to mix sound, there was a knob on my board called “contour.” That’s what QE is to the Fed.? When I would ? http://t.co/DC0O0kjS May 17, 2012
  • Midwest Sees a Sand Rush http://t.co/815yYdBQ Fracking Spurs Demand for the Stuff, Sparking a Mining Boom?& Vexing Some #midwestboom $$ May 14, 2012

 

US Politics, Regulation, and Culture

 

  • SEC Probes Role of Hedge Fund in CDOs http://t.co/wMUFuoPt Don’t forget the blame due the yield hogs 4 their inadequate due diligence $$ May 17, 2012
  • Dental Abuse Seen Driven by Private Equity Investments http://t.co/QzEb161T Long article on unscrupulous dentists that harm poor kids 4 $$ May 17, 2012
  • The creeping disaster for USPS is that as they cut services, they become irrelevant. The internet changes everything? http://t.co/ION20cep May 17, 2012
  • School-Test Backlash Grows http://t.co/RIiaRg1Z Some Parents, Teachers & Boards Rebel, Saying Education Is Being Stifled $$ #room4both May 16, 2012
  • Please apply the same logic to the liberal justices of the court, who have flouted the Constitution for far longer. http://t.co/gEsZGazC May 16, 2012
  • Jerry Brown vs. Chris Christie http://t.co/T0uyb6iC More states r realizing that the road2fiscal hell is paved w/progressive intentions May 15, 2012
  • California Deficit Swells to $16 Billion, Governor Says http://t.co/LJT9Dl1s & http://t.co/2Rg8E98K CA in self-reinforcing neg spiral $$ May 14, 2012
  • Obama Hits Romney on Bain as He Raises Wall Street Money http://t.co/09M2hhHK “The pot calls the kettle black.” $$ (has 2ba better phrase) May 14, 2012
  • Midnight Was Movie Hour, Nap Time in New York Air Tower http://t.co/cNT0C080 Long piece; parts of the FAA r seriously messed up $$ #unions May 12, 2012
  • Trouble in Coal Country for Obama http://t.co/dJoko2Aj If persists, could mean Obama wins popvote, Romney win the election $$ #kingcoal May 12, 2012

 

Companies

 

  • Tsst… $COP is no longer in the refining biz, it spun of $PSX which is.? FD: +COP, +PSX $$ Oh, and selling the comp? http://t.co/LxFTP91s May 17, 2012
  • Facebook ($FB) announces that they will no longer accept General Motors ($GM) cars in exchange 4 advertising exposure $$ 😉 #lamejoke May 15, 2012
  • Avon Shares Tumble After Coty Pulls Bid http://t.co/SVZ4zZgN Coty might b better off creating the parts of $AVP it wants organically $$ May 15, 2012
  • Margin Call: The Most Exposed http://t.co/4v2IsU16 Interesting what CEOs have borrowed against shares of the companies that they run $$ May 15, 2012
  • Yahoo CEO’s resignation spotlights tech action http://t.co/mUF19hRa We keep the board of $YHOO around 2make that of $HPQ happy. FD +HPQ May 14, 2012

 

Miscellaneous

 

  • Paper Plane Champ Watches His Record Fly, Fly Away http://t.co/zdPMR62e Division of labor in design & tossing-> paper airplane record $$ May 18, 2012
  • @ReformedBroker You really had lunch w/Mauldin? Cool, I know he is friends w/ @ritholtz ; I just reviewed his recent “Little Book.” $$ May 17, 2012
  • When people get 2 deep into a sliver of knowledge, they get dumb RT @jasonzweigwsj: is your sense of self an illusion? http://t.co/PHUXLmdB May 17, 2012
  • 5. They sometimes bring specialized knowledge of the topic at hand. 6. They tend to write for users, not reviewers o? http://t.co/T3oElbxQ May 17, 2012
  • Going for Gold?or Whatever http://t.co/F6kSto8O Secret to an Aging Olympian’s Endurance: Don’t Let Training Get in the Way of Fun $$ May 16, 2012
  • When you show up DD, you usually make me smile $$ RT @DoubleDeuce: Wisdom: “try to convince, don?t gripe” by @AlephBlog http://t.co/kDwSKgYJ May 15, 2012
  • ?Trigger-Happy? Investors Boost IPO Insurance Through Litigation http://t.co/GQKdNia3 Looks like Errors & Omissions coverage applied 2IPOs May 14, 2012
Elderly Poor?

Elderly Poor?

Posted on by David Merkel

There will be elderly poor.? Look at page 26 of this PDF.? I interpret those that don’t know or declined as being well below $50K in assets.? That means 60% of those reaching “retirement age” will have less than two years income stored up.

That said I feel more sorry for younger workers who have to pay high amounts into Social Security/Medicare, and they will not get out of program what they put in.? There’s a longish article here, excerpting from a recently released book on the topic.? In general, the older you are, the sweeter the deal was for those who received payments from Social Security, at least until 2026 when benefits will be cut by 25%, or taxes raised.

What this means is that in aggregate, Americans don’t save enough, particularly the Baby Boomers, of which I am one, but not a negligent one.

We are heading for elderly poverty/work for a large portion of Americans.? I suspect that many older people will continue to work, solving their problem but taking jobs from those who are younger.

This should be no surprise.? Incomes should be declining for lower skilled people in the US, because there are more people who can do that work abroad.? My advice to all readers is to make sure you cannot be obsoleted by foreigners.

One more note: don’t expect the asset markets to bail you out.? Returns to financial assets will do poorly as so many begin to sell them to pay for living expenses, whether directly as individuals, or indirectly as defined benefit plans pay retirement benefits.

This is on top of the problem that when high-quality long interest rates are so low, it is typically a bad time to try to make money in financial assets, because returns on risky assets are typically only 0-2% percent higher than the yield on long BBB/Baa debt over the long run.

All for now…

The Best of the Aleph Blog, Part 15

The Best of the Aleph Blog, Part 15

Posted on by David Merkel

This stretches from August 2010 to October 2010:

The Education of a Corporate Bond Manager, Part VII

On the value of credit analysts.

The Education of a Corporate Bond Manager, Part VIII

On price discovery in dealer markets, and auctions gone wrong.? I never knew that I could haggle so well.

The Education of a Corporate Bond Manager, Part IX

On the vagaries of bulge-bracket brokers, and how a good reputation helps on Wall Street.

The Education of a Corporate Bond Manager, Part X

On how we almost did a CDO, and how it fell apart.? Also, how to make money in the bond market when you reach the risk limits. 😉

The Education of a Corporate Bond Manager, Part XI

On my biggest mistakes in managing bonds.? Also, on aggressive life insurance managements.

The Education of a Corporate Bond Manager, Part XII (The End)

On bond technical analysis, and how to deal with a rapidly growing client.?? Also, the end of my time as a bond manager, and the parties that came as a result.?? Oh, and putting your subordinates first.

Queasing over Quantitative Easing

Queasing over Quantitative Easing, Redux

Queasing over Quantitative Easing, Part III

Queasing over Quantitative Easing, Part IV

Queasing over Quantitative Easing, Part V

Queasing over Quantitative Easing, Part VI

The problems with the Fed’s seemingly “free lunch”strategy.? Pushes up asset prices and commodity prices, benefiting the rich versus the poor.

The Economic Geography of Publicly-Traded Companies in the United States by Sector

The Economic Geography of Publicly-Traded Companies in the United States by Sector (II)

Shows what US states have diversified vs concentrated economies by sector, and what states dominate each sector.

Portfolio Rule One

Industries are under-analyzed, relative to the market on the whole, and relative to individual companies. Spend time trying to find good companies with strong balance sheets in industries with lousy pricing power, and cheap companies in good industries, where the trends are not fully discounted.

Portfolio Rule Two

Purchase equities that are cheap relative to other names in the industry. Depending on the industry, this can mean low P/E, low P/B, low P/S, low P/CFO, low P/FCF, or low EV/EBITDA.

Portfolio Rule Three

Stick with higher quality companies for a given industry.

Portfolio Rule Four

Purchase companies appropriately sized to serve their market niches.

Portfolio Rule Five

Analyze financial statements to avoid companies that misuse generally accepted accounting principles and overstate earnings.

Portfolio Rule Six

Analyze the use of cash flow by management, to avoid companies that invest or buy back their stock when it dilutes value, and purchase those that enhance value through intelligent buybacks and investment.

Portfolio Rule Seven

Rebalance the portfolio whenever a stock gets more than 20% away from its target weight. Run a largely equal-weighted portfolio because it is genuinely difficult to tell what idea is the best. Keep about 30-40 names for diversification purposes.

Portfolio Rule Eight

Make changes to the portfolio 3-4 times per year. Evaluate the replacement candidates as a group against the current portfolio. New additions must be better than the median idea currently in the portfolio. Companies leaving the portfolio must be below the median idea currently in the portfolio.

The Portfolio Rules Work Together

How the portfolio rules work together to create a “margin of safety.”

The Rules, Part XVIII

When rules become known and acted upon, the system changes to incorporate them, making them temporarily useless, until they are forgotten again.

When a single strategy becomes dominant, it can become temporarily self-reinforcing.? Eventually, it will become self-reinforcing on the negative side.

A healthy market ecology has multiple strategies that are working in separate areas at the same time.

The Rules, Part XIX

There is room for a new risk model based on the idea that risk is unique among individuals, and inversely related to the price paid for an asset.? If a risk control model has an asset becoming more risky when prices fall, it is wrong.

?The Rules, Part XX

In the end, economic systems work, and judicial systems modify to accommodate that.? The only exception to that is when a culture is dying.

?Managing Illiquid Assets

Illiquidity is an underrated risk.? Most financial company failures are due to illiquidity, which usually takes the form of too many illiquid assets and liquid liabilities.? Adding to the difficulty is that it is generally difficult to price illiquid assets, because they don?t trade often.

Of Investment Earnings Assumptions and Century Bonds

If we could turn back the clock 65 or so years and set up a more conservative method of accounting for pension liabilities, we would be much better off today.

Who Dares Oppose a Boom?

This piece won a small prize, and in turn, I received three speaking engagements.

Fairness Versus Economics

Fairness Versus Economics (2)

People care more about fairness than improving their own economic/social position.

Earnings Estimates as a Control Mechanism, Flawed as they are

Earnings Estimates as a Control Mechanism, Flawed as they are, Redux

Earnings estimates have their problems, but they exist to give us a flawed method of estimating the future performance of companies.

-==-=-=-=-=–=-=

That’s all for now.? Never thought I would do so many long series when I started blogging.

On Distribution Formulas

On Distribution Formulas

Posted on by David Merkel

Before I get started this evening, I would like to offer an apology to those that read my recent piece, Simple Retirement Calculator.? I didn’t define all of the terms in the piece, and so here are the definitions:

  • DB plan — defined benefit plan, a pension plan that offers a certain benefit, and the cost of funding that benefit varies.
  • DC plan — defined contribution plan, a pension plan that allows for a certain level of contributions, and the benefit achievable varies.
  • 100% J&S — 100% Joint & Survivor.? In an annuity, its payment is the same regardless of who dies first.? The one surviving does not see any reduction in payments.? In 50% J&S, the one surviving get only half the payment after the first spouse dies, which allows for a higher initial benefit than 100% J&S.
  • CR — cash refund.? Some people getting an annuity hate, really hate the idea that the insurance company might make money off of them if they die early.? The cash refund option says that heirs receive the difference between the premium paid and benefits paid.? The cost of this option is a slightly lower benefit.
  • Indexed — the annuity benefit rises with inflation, usually the CPI.

Now the table in the article tried to show how much of a person’s salary would be replaced at retirement, given a certain level of saving.? Another way of viewing it would be how many years of income would the accumulated value of savings be relative to their final salary at age 70.? That’s the “Accum Years Ending Pay.”? It’s surprising how few years of ending pay a person accumulates unless they save a lot.

That’s all.? Other questions, forward them my way, but please, ask, don’t demand…

-=-=-==–=-=-=-==-=–=-=-=-==–=-==–=-==-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-

Now there was one more item from my piece Simple Retirement Calculator, the line that read 4% — i.e., pay out 4% of the lump sum annually, an assumption that has fairly broad acceptance for managing a lump sum without annuitizing it.? I myself came to endorse the 4% rule in 2001, after doing a series of analyses using what I thought was a good risk, inflation, and asset allocation model, concluding that the average person had 95% odds of not going bankrupt if they took just 4% of the initial sum invested, adjusted for inflation annually, as a distribution.

The data through 2000 did not allow for a “lost decade” like the one we have recently experienced.? During such a time, marginal returns on capital became very low.? GDP growth slowed, and yields on Treasuries fell.

Going back to Ben Graham, who when bullish never let his asset allocation go above 75% stocks (risky assets), and 25% bonds, and when bearish never let his asset allocation go below 25% stocks (risky assets), and 75% bonds, in the same sense, I use this to offer a new distribution rule for those that don’t annuitize and have to manage a lump sum:

As a percentage of your assets, spend no more than the 10-year Treasury yield annually, plus:

  • 0% if the situation is bearish (risk assets are highly priced)
  • 1% if the situation is neutral
  • 2% if the situation is bullish (risk assets have depressed prices)

As for determining risk posture, I would use things like the Q-ratio, Shiller’s CAPE, and the difference between Moody’s Baa and Aaa spreads to be my guide.? At present, by those measures it would leave me halfway between neutral and bearish in the intermediate-term, and so I would be look to distribute only 2.5%/year from endowments as income.

Chintzy?? Today yes, but it respects the idea that depressionary conditions may persist longer than we might otherwise expect.? It also adjusts as inflation rises, to the degree that it gets reflected in Treasury yields, which may be held down by the Fed.? In such a case of the Fed constraining longer Treasury yields, gold prices and the prices of other materials may rise dramatically, because there is no penalty for holding commodities in real terms.

This views the asset markets through the eyes of a conservative but clever bond investor, who realizes that future equity returns are highly correlated with Baa-rated bond yields, and future bond returns are highly correlated with Treasury yields.

But, think of what this formula would have done in the early ’80s, when endowments were constrained, and they took little as income.? This formula would have anticipated the future, and allowed endowments to spend more aggressively, anticipating the recovery.

So let Treasury yields, the Q-ratio, Shiller’s CAPE, and the difference between Moody’s Baa and Aaa spreads be your guide in distribution formulas.? Better to distribute less now, than find yourself or your institution impoverished later.

Simple Retirement Calculator

Simple Retirement Calculator

Posted on by David Merkel

Sorry that I have not been posting much of late.? April is always rough for me.? Taxes play some role in April, because I get a certain amount of my tax data late, but the main reason stems from some charitable boards on which I serve, which meet in/near April.

One of the questions that came to me was how we could educate some of the workers to put away more of their income for retirement, because we don’t have a Defined Benefit plan.? After a little discussion, I said that I could give them good friendly advice.? As most committees go, when someone volunteers to solve a problem, discussion ends.

Now, what I have done is pretty simple, and violates one of my rules — I don’t believe in constant compound interest.? Markets don’t work that way, but for some perverse simplifying reason, retirement planning models do.

What I have done is create a model for retirement income, attempting to express it in terms that someone non-knowledgeable could understand.? You can download the Simple Retirement Calculator (free to download) that I created.

My base case assumes 3% inflation, pay keeps pace with inflation, and the real return on investing is 2% over inflation.? Other assumptions: one works for 45 years from age 25 to 70, and that the options for payout are limited to those that respect spouses and heirs.

So what can one 25 years old expect from saving over a 45 year period of time?

Savings Rate
Salary Replacement 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15%
J&S 100% Cash Refund 22.9% 27.5% 32.0% 36.6% 41.2% 45.8% 50.4% 54.9% 59.5% 64.1% 68.7%
J&S 100% CR Indexed 15.1% 18.1% 21.1% 24.1% 27.1% 30.1% 33.1% 36.1% 39.1% 42.1% 45.2%
4% year 14.6% 17.6% 20.5% 23.4% 26.4% 29.3% 32.2% 35.2% 38.1% 41.0% 43.9%
Accum Years Ending Pay ?? 3.66 ?? 4.39 ?? 5.13 ?? 5.86 ?? 6.59 ?? 7.32 ???? 8.06 ???? 8.79 ???? 9.52 ?? 10.25 ?? 10.99

This table expresses what is needed in order to have effective income during retirement.? The average investor can’t control asset returns.

J&S 100% Cash Refund -> Spouse gets 100% after death of annuitant, heirs get a payment annuitants got less than the lump sum value at retirement.? Indexed benefits increase at the rate of the CPI.

With a 2%% real return, it takes a lot of saving to replace current income in retirement, even over 45 years. Note that the real return assumption has the largest impact on the results.

Much as I think DB plans are superior to DC plans for the average person, most companies in the present environment will not subsidize a DB plan to the degree that will allow a person to retire at the same level of purchasing power that they had while employed.

There are many ways that I could improve the results of this model, but the improvements would only be incremental.? The main point of this model indicates that most people do not save enough, if all of their retirement outcomes rely on a defined contributions plan.

Let me know what you think? in the comments below.? Thanks.

Weekly Sorted Tweeets

Weekly Sorted Tweeets

Posted on by David Merkel

Federal Reserve

 

  • Long Term U.S. Credit Boom Chart http://t.co/Ywub8HQH By bailing out short-term credit cycles, the Fed created a big asset bubble $$ Apr 28, 2012
  • Quantitative Deleting: The Fed’s $400 Billion ‘Gift’ http://t.co/qavtYcQy Fed’s actions lower cost of funding the US Treasury’s deficit 4now Apr 26, 2012
  • Bernanke Takes On Krugman?s Criticism Ignoring Own Advice http://t.co/AZ37nx1W Blind & Blinder $$ Apr 26, 2012
  • I think Ben needs one too. Barkeep, make that a double for the the Fed Chairman! $$ RT @soooouuuuurrrrr: @AlephBlog I need a drink. Apr 25, 2012
  • That’s all folks — the FOMC show is over!! $$ Apr 25, 2012
  • Stocks loving Bernanke, who says he doesn’t act to please markets, but I think that he does, b/c he aims to reduces rates & spreads $$ Apr 25, 2012
  • Good Qs on Labor force participation rate and the “bond bubble.” Bernanke obfuscates. Apr 25, 2012
  • But the real canard here with the enhanced guidance is that the Fed is poor at forecasting & consistently drags toward current conditions $$ Apr 25, 2012
  • When will Fed “transparency” finally be understood to not mean “increased reliability?” Apr 25, 2012
  • Interesting that long Treasuries r rallying off of the FOMC second stmt after falling on the first. Not much difference between the 2. $$ Apr 25, 2012
  • So, short-term inflation up, LT unch. ST Unemp down, LT unch. ST GDP up, 2013-4 down, LT unch. Tightening 6 mos closer than Jan, FF path up Apr 25, 2012
  • Central tendencies and ranges of economic projections, PCE average change 2012-14 +0.22%, +.10%, +.09%, longer run 0% (natch) $$ Apr 25, 2012
  • Central tendencies and ranges of economic projections, unemployment average change 2012-14 -0.40%, -.21%, -.08%, longer run -.01% $$ Apr 25, 2012
  • Central tendencies and ranges of economic projections, GDP average change 2012-14 0.16%, -.08%, -.24%, longer run 0% $$ Apr 25, 2012
  • The enhanced guidance of the FOMC is causing more confusion than enhancing understanding $$ Apr 25, 2012
  • Overview of FOMC participants’ assessments of appropriate monetary policy; Appropriate Timing of Policy Firming 6 months sooner than Jan12 Apr 25, 2012
  • Target Federal Funds Rate at Year-End average change 2012-2014, +.015%, +.044%, +.206%, long-run -.015% $$ Apr 25, 2012
  • PDF isn’t as friendly as HTML… but that’s probably intentional on the part of the Fed. $$ Apr 25, 2012
  • here they are, Economic Projections of Federal Reserve Board Members and Federal Reserve Bank Presidents http://t.co/OzeYZbRa $$ Apr 25, 2012
  • Clocks must be slow at the Fed’s website… Apr 25, 2012
  • Bond/stock trading bots set loose within the next minute! Apr 25, 2012
  • @bondscoop When the FOMC said they would do this, I said “Do they really get what they are setting themselves up for?” Tight coupling. Apr 25, 2012
  • @bondscoop Thanks. I’ve got the ancillary data loaded into a spreadsheet to make a quick comparison Apr 25, 2012
  • @bondscoop That’s not out yet, right? Apr 25, 2012
  • Redacted Version of the April 2012 FOMC Statement http://t.co/wJbPNf5P Shaded up views on housing, inflation & global financial risk. $$ Apr 25, 2012
  • Of course, that can only last so long as inflation stays low. Brian Wesbury thinks inflation might be rising http://t.co/YfLFURA3 $$ Apr 24, 2012
  • Gundlach Says Fed Won?t Preemptively Raise Rates http://t.co/YTfjQ6Wj W/debt building up 1 thing saving us: interest rate collapsing $$ Apr 24, 2012
  • There r historical accidents. The worst that we r dealing w/is Ben Bernanke as Fed Chairman with his mistaken views on the Great Depression! Apr 24, 2012
  • Awash in money and piles of debt http://t.co/C9hbSWmf Up next: More QE, financial repression, inflation, deficit spending -> stagflation $$ Apr 23, 2012
  • $$ Coming soon +1 RT @ReformedBroker: Hilsenrath: After-Hours Sell-Off in Netflix Pushes Fed Governors Toward to Further Easing… $NFLX Apr 23, 2012

 

China

 

  • Are these companies feeling the Chinese slowdown? http://t.co/bIO0m2vF Machinery companies: Volvo, ABB, $CAT seeing China orders fall $$ Apr 26, 2012
  • China Internet Crackdown Silences Another http://t.co/ukw0qzWg More closure of accts found 2b spreading ?malicious political rumors.? $$ Apr 26, 2012
  • Why Wukan Will Remain a One-off http://t.co/LO3tK7kT Optimistic piece shows when there is enough pressure in China, change can happen $$ Apr 26, 2012
  • China Tire Demand Slows as Economy Decelerates, Bridgestone Says http://t.co/yUK3UEye Q is how much things slow for the Chinese economy $$ Apr 26, 2012
  • China Escalates Crackdown On Internet Amid Scandal http://t.co/QblN4v3S China wants the internet 4 its economy, but not its politics $$ Apr 26, 2012
  • China and Social Media Today vs. Japan bubble in 80s http://t.co/0uxQ40xV Vitaliy Katzenelson shares his reasoning on bubbles $$ Apr 26, 2012
  • Why China’s Economic Policies Are a Failure: Andy Xie http://t.co/WZjILv4J Building redundant capacity, cronyism, recipe for disaster $$ Apr 25, 2012
  • China Hidden Liabilities for Central Government Seen @ CNY10.94Trl http://t.co/gaqD4suu Opaque governments w/lots of debt can b trouble 2 $$ Apr 25, 2012
  • Shide Group Mired in Financing Crisis, Massive Debt http://t.co/Iws3h9Ec Beware complex companies w/lots of debt. Default probs higher $$ Apr 25, 2012
  • The Startling Plight of China’s Leftover Ladies http://t.co/WWK3en7R Leftover Chinese men r not good enuf 4 them, even w/sex ratio tilted $$ Apr 24, 2012
  • Behind a Chinese City’s Growth, Heavy Debt http://t.co/6eKX3kJp Bo Xilai leaves behind a legacy of debt 4 taxpayers to fund $$ #surprise Apr 23, 2012
  • Cities get a sinking feeling: report http://t.co/xQE2d46k If China’s cities aren’t careful about their water tables, they’re sunk 😉 $$ Apr 23, 2012
  • Can China Reflate the Housing Market? http://t.co/rMtYHX0Y Maybe one more time, but eventually you can’t resuscitate a corpse $$ Apr 23, 2012
  • US barnyards help China super-size food production http://t.co/38GkPJ0T China builds protein industry by purchasing live animals from US $$ Apr 23, 2012
  • Beijing’s Cracked Consensus http://t.co/1Xep2j6s Don’t assume the fall of Bo Xilai 2b 2big; the CC Party still fights 4 the CC Party $$ Apr 23, 2012
  • Farmers Retool to Feed China http://t.co/c0loHf82 Dairy processors make longer-lasting milk powder 2sell2 China. They like almonds 2 $$ Apr 23, 2012
  • China May Finally Let Its People Move More Freely http://t.co/fiTQgY5c Of hukou: how China uses household registration 4 control purposes Apr 23, 2012
  • The End of China’s One-Child Policy? http://t.co/dK7sUMTq China is getting old before it gets rich. Toxic combo. Watch wages rise. $$ Apr 23, 2012
  • The China Rising Leaders Project http://t.co/QuKsr7w2 Very long piece giving very detailed info on next generation of China’s leaders $$ Apr 23, 2012
  • China?s Biggest Banks Are Squeezed for Capital http://t.co/uveB69fJ Too much and overaggressive lending strains their balance sheets $$ Apr 24, 2012

 

Eurozone

 

  • Spain’s current unemployment rate exceeds the US rate during the Great Depression http://t.co/bj86umZp Ugly chart: http://t.co/M6uchbAx $$ Apr 28, 2012
  • Why Spain Won’t Reform http://t.co/aIuYUctZ Cultural argument that Madrid historically does not act on problems outside of Madrid $$ Apr 28, 2012
  • Rising Italy-to-Spain Yields Keep Banks on Life Support http://t.co/kSdshke5 Many banks simply cannot refinance their maturing debt $$ Apr 25, 2012
  • Continuing flow of capital out of Greece http://t.co/psvzWbJk E.g. Greek refineries r unable to obtain credit & rely on Iran for crude $$ Apr 25, 2012
  • Spanish property crisis will require Ireland-style banking system recapitalization http://t.co/pDLNF2X7 But who has the money 2do it? $$ Apr 23, 2012
  • Bundesbank?s Weidmann Says What No EU Politician Wants to Hear http://t.co/ecLHlLIJ EZone monetary policy loose; fiscal union negligible Apr 23, 2012
  • Holland, Not Hollande, Is Europe’s Latest Worry http://t.co/AeQtOIVv If Dutch don’t care 4 austerity, little hope 4 rest of the EZone $$ Apr 23, 2012

 

Pensions

 

  • How Retirement Benefits May Sink the States http://t.co/oIEsAWhh Companies emigrate 2 states where future tax pressures r lower $$ #bye Apr 28, 2012
  • Point Man on Pensions http://t.co/DaXsdkgx PBGC director has experience in restructuring; serves him well negotiating w/dud companies Apr 23, 2012
  • Tidbit in last article: FV of DB pension liabs for $SWY > market cap. Actuarial profession goofed on DB plans valuations; ests r liberal $$ Apr 23, 2012
  • The Multiheaded Pension Monster http://t.co/oBDNBZYN Multiemployer DB plans- not enough coverage: moral hazard, low PBGC guarantees $$ Apr 23, 2012

 

Energy

 

  • Chevron sticks with oil. And it pays off. http://t.co/uUlsjbBK FD: + $CVX | That said, buy & hold conventional NG could b good idea now $$ Apr 28, 2012
  • Tough Talks Loom at Chesapeake http://t.co/OkMGyu8J Having a CEO who has differing interests from common shareholders is a risk $CHK $$ Apr 28, 2012
  • Saudi oil puzzle, continued http://t.co/z76fSKTZ Prices r high, but the Saudis keep stockpiling oil. Why? $$ #idunno #gouging #painfreak Apr 25, 2012

 

Information Issues

?

  • Saudi Clerics Out-Tweet Liberals Forcing King to Balance http://t.co/A1TcHeSJ Don’t underestimate the influence of Wahhabi Islam. $$ Apr 26, 2012
  • Google Stores, Syncs, Edits in the Cloud http://t.co/BrRSauno Walter Mossberg likes $GOOG Drive, thinks $MSFT Skydrive worth a try $$ Apr 25, 2012
  • PGP Creator Phil Zimmermann Has a New Venture Called Silent Circle http://t.co/KNJQJ4X4 There?s also a promise of no backdoors 4 anyone $$ Apr 24, 2012
  • A New Email Encryption App Your Network Admin Might Not Like http://t.co/7b967z7e Enlocked can encrypt email w/a click, could go viral $$ Apr 24, 2012
  • Surveillance State evils http://t.co/BKkmM78J Don’t say anything that you don’t want the government 2 know. Repeal the Patriot Act! $$ Apr 23, 2012
  • Astounding. Reprogram it $$ RT @AnnieLowrey: This essay awarded a perfect score by a robo-grader is just delightful. http://t.co/Vc1ORC8T Apr 23, 2012

?

Company Issues

 

  • Heat Turned Up on Falcone http://t.co/zaiW1Jzu The deal w/the devil comes due for payment; Falcone faces checkmate or LS bankruptcy $$ Apr 28, 2012
  • Woes at Law Firm Deepen http://t.co/to4dZbJY Dewey & LeBoeuf’s troubles w/debt & revenue shrinkage. Law does not work well 4 big biz $$ Apr 28, 2012
  • Health Insurers to Give Back $1.2 Billion, Goldman Says http://t.co/VX0V9sL9 health overhaul limits <20% premium for expenses & profit $$ Apr 26, 2012
  • US Airways Said to Approach AMR Bondholders on Merger http://t.co/iArkC4nq The unsec bondholders r the economic equity of $AAMRQ now $LCC Apr 25, 2012
  • Genworth Credibility Eroded as Australia Plan Shelved http://t.co/oyJJ4OCC I’ve almost always ben a sceptic on $GNW. Toxic lines of biz $$ Apr 24, 2012
  • Google Unveils Drive Storage Service http://t.co/5R1CAkR0 I use Microsoft Skydrive as a real time backup of my files. $$’ Apr 24, 2012
  • MGIC Posts $19.6 Million Loss as Borrowers Struggle on Loans http://t.co/fvoY6cZN Regulators should halt $MTG’s ability 2 write new biz $$ Apr 23, 2012

 

Rest of the World

 

  • Bubble Down Under? http://t.co/jk4UBFzA ?Name a credit bubble built on a commodity bull market built on a bigger Chinese credit bubble?? Apr 26, 2012
  • North Korea Poised to Rattle Region With Nuclear Blast http://t.co/MJmALgYi Will believe when it happens; NK always seems 2 get tech wrong Apr 26, 2012
  • Swiss housing market inching towards bubble http://t.co/KCbYrs6x Makes me wonder when the Swiss Central Bank will break its Euro peg $$ Apr 24, 2012

 

Financial Markets

 

  • Conference Notes http://t.co/VF5FIPOg On 4/13, Chicago Booth held its 7th Annual Distressed Investing & Restructuring Conference. $$ Apr 26, 2012
  • No surprise when they only put 3.5% down $$ RT @pdacosta: Falling home prices drag new buyers under water http://t.co/bayZVELO Apr 26, 2012
  • TARP Profit A Myth, Claims TARP Inspector General Christy Romero http://t.co/iv77kkne Q is related to foreclosure prevention aid & GSEs $$ Apr 26, 2012
  • My Sister?s Pension Assets and Agency Problems by Jeremy Grantham http://t.co/ANDMdZae On the value of a non-constrained mandate $$ Apr 25, 2012
  • Force Fed by Ben Inker of GMO, last 3 pgs of http://t.co/ANDMdZae Goes through the problems of Asset Allocation with yields so low $$ Apr 25, 2012
  • Wall Street Promotes Junk Bonds as Europe Erupts http://t.co/5kIRG7Oi grabbing for yield — it’s the national pastime! $$ Apr 25, 2012
  • US 10 Year Bond Yielding 0.5% http://t.co/Zrnj9zdL Japan scenario for the US? The 10Y at 0.5% seems farfetched, but everyone hates bonds $$ Apr 25, 2012
  • REITs Spring an Unnerving Surprise http://t.co/qgStDii0 I’ve warned b4 on Private REITs http://t.co/liQr20vq More bad surprises coming $$ Apr 25, 2012
  • So, if Egan-Jones did do ABS & governments, that would have been news to me. Surprising to see the SEC going after them $$ Apr 25, 2012
  • Credit Rater Egan-Jones Lied, SEC Charges http://t.co/c1ym3feC Firm was known 4 its corporate bond ratings by a contingent claims model $$ Apr 25, 2012
  • Misleading ETFs http://t.co/Z8uKHfA7 Buyer beware, read your prospectuses and semi/annual reports; go to the sponsor websites 4 more data $$ Apr 24, 2012
  • Who Gets the Equity Risk Premium? http://t.co/gqdPYexG LT holders, brokers, taxes, firms that issue & retire shares at inopportune times $$ Apr 24, 2012
  • Commodities don’t provide “diversification” in a crisis http://t.co/7ue9vvjJ Commodities provided diversification when few did it; no more Apr 23, 2012

 

Catastrophe Bonds

 

  • @merrillmatter If I ran a life insurance portfolio, a closed end fund, an open end HY fund, I would buy cat bonds, u need a balance sheet $$ Apr 24, 2012
  • @merrillmatter With all the goofy ETFs issued, surely someone could create $CATB, the Cat bond ETF. Would b very tough 2 source bonds 4 $$ Apr 23, 2012
  • @merrillmatter That’s why many high yield funds buy them w/both hands. Also special hedge funds that tear Cat bonds apart 2 get the best $$ Apr 23, 2012

 

The Perils of Sitting

  • On the sitting kills you piece, would like to get a copy. Est’d increase in death rate from 0.76% to 1.06%/yr. Big %, not so big absolute $$ Apr 23, 2012
  • Confirmed: He Who Sits the Most Dies the Soonest http://t.co/aif1e8xX I found this article worrisome. I sit > half of my waking hours. $$ Apr 23, 2012

 

US Economy

 

  • New Mad-Cow Discovery Stirs Fears http://t.co/DPm6aLzI This story will have legs, 4 2b exact. 😉 Beef will b down until scope clears $$ Apr 25, 2012
  • On the Social Security 2012 Report to Congress http://t.co/RPG3qz1p Age <53 today can expect to get 75% of the value a baby boomer got $$ Apr 24, 2012
  • Rosenberg: U.S. Clients View Canada as ?51st State? http://t.co/EqVvLFpX Careful, w/rates so low, housing is looking bubbly & banks?? $$ Apr 24, 2012
  • Fees and Anger Rise in California Water War http://t.co/9GjE5jwx Bad geography to get water to, unless you want to try desalinization. $$ Apr 24, 2012
  • @moorehn Heidi, I was 1 of the 8 bloggers @ the 1st blogger summit at the Treasury, & not 1 of the noisier ones. I spoke twice in the 90mins Apr 24, 2012
  • @moorehn So here is my Q4 Geithner: How do we get out of the entitlements crisis? We have promises equal to 4-5x GDP!? [Amid the deficit] $$ Apr 24, 2012
  • Housing market no longer yours for a steal http://t.co/xb2E2JIy Low end res RE is not accepting lowball offers to buy as it used to $$ Apr 23, 2012
  • You Won’t BELIEVE How Bearish Investors Are On Treasuries http://t.co/q9t2sZdE 2% bullish, 81% bearish in Barron’s poll. FD: + $TLT $$ Apr 23, 2012

 

Miscellaneous

 

  • US College Education Bubble, Planning for the Wrong Future http://t.co/BScEbQJI But many smaller job fields req college & pay well. $$ Apr 28, 2012
  • Hong Kong Glued to ?Bride Wannabes? http://t.co/6p9RCs0X Reality TV aids lovelorn 30-something women, ending w/a mass marriage 4 some $$ Apr 26, 2012
  • But really, with Agriculture doing so well in the US, isn’t it time to finally cut farm subsidies? And beef up (oops) USDA food safety? $$ Apr 25, 2012
  • Government Keeps Picking Winners, Losers on the Farm http://t.co/PKiJBHIp Farmer complains healthy food gets less subsidy than unhealthy Apr 25, 2012
Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

Busy week last week.? Here’s the economic and other news:

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China

 

  • Bloomberg: Inflated Notions http://t.co/hvMoIFH6 Patrick Chovanec questions whether Chinese economic statistics are correct. $$ Apr 22, 2012
  • China?s Political Stability Questioned, while Deposit Withdrawals Accelerate http://t.co/X9kJ9oZb Deposits exit China’s banks; many worry $$ Apr 22, 2012
  • Asia dominates new treasury purchases http://t.co/BXvgGQRi If you want to favor your exporters, you have to suck in the debts of the buyers Apr 22, 2012
  • China?s Achilles heel http://t.co/3TPxHEvL Very difficult to change the practice of having fewer children once it is entrenched $$ Apr 22, 2012
  • Son is a good man, more worthy than Dad $$ RT @mprobertson: & the first wife had a son. http://t.co/dFzgm1kp extra extra, read all about it Apr 19, 2012
  • Chinese Move to Wealth Products May Undermine Bank Stability http://t.co/bYK4qImP Disintermediation happening increasing shadow bank risk $$ Apr 18, 2012
  • Chinese Officialdom Indulges in the Almost-Free Lunch http://t.co/tTMkP8JK A modest subsidy/perk looks big if the 1 looking in is poor $$ Apr 18, 2012
  • The Power Shift in China http://t.co/bgxN7t8h Shifts: 1.weak leaders < strong factions 2. government < interest groups 3. party < country $$ Apr 18, 2012
  • More Chinese get US green card http://t.co/ZU30ahwF They know where they’ve got it good, not in the Socialist worker’s paradise! $$ Apr 18, 2012
  • So many Chinese officials r arrested 4 embezzling funds through Macau that 2 scholars devoted a study to the subject http://t.co/YZbDqX57 $$ Apr 18, 2012
  • That?s Governor Zhou to you http://t.co/AkXcHbPZ Check out chart of central bank balance sheet growth http://t.co/VG0bySGA China leads $$ Apr 18, 2012
  • China widens the range 4 currency fluctuations. Is it really making x-rate more flexible? http://t.co/Rv79vI0q PBOC still targets x-rate $$ Apr 18, 2012
  • Rotting From Within http://t.co/vAwKBTzb Investigates the massive corruption of the Chinese military; makes corruption in the US look small Apr 18, 2012
  • Bo Xilai’s first wife gets her revenge at last http://t.co/UsrGejSF Some Chinese r very good @ maintaining a grudge 4a long time $$ Apr 18, 2012
  • China Doubling Yuan Band Signals Drive for Convertibility http://t.co/FK9OohMh Importance overstated; will not have a big effect on x-rate Apr 18, 2012
  • China Adds Treasuries for Second Month on Reserve Growth http://t.co/Ev9Fqi8s Export earnings have 2b invested somewhere $$ is best of bad Apr 18, 2012
  • China New Yuan Loans Surge in March as Money Supply Quickens http://t.co/DmXg6QB5 Sounds inflationary, if not 4 goods, then 4 assets $$ Apr 18, 2012

 

Energy

 

  • Peak oil goes mainstream (again) http://t.co/BijPuVFG Oil & Gas will never run out, but the price to get them could get high $$ Apr 22, 2012
  • Feeling peaky http://t.co/4mefPCBR “But there is a simpler explanation: that supply is inadequate to keep up with rising demand.” $$ Apr 22, 2012
  • Could US natural gas run out of storage capacity? http://t.co/8R1aYxjM Yes, it could, and we could see the price of spot gas go 2 zero $$ Apr 22, 2012
  • Delta?s Oil Refinery Plan Flies Against Economic Sense http://t.co/0xAnIV2z It rarely makes sense to be vertically integrated. $$ Apr 22, 2012
  • Obama’s oil market plan more politics than substance http://t.co/w2vwKhNx Crude oil market is so big; would be difficult 2 game secretly Apr 18, 2012

 

Eurozone

 

  • Odds of bankruptcy http://t.co/v0xBexrW Short table of bankruptcy odds: European banks = E-Zone Fringe > US Banks > Other nations $$ Apr 22, 2012
  • The bank-sovereign linkage in the Eurozone http://t.co/9q7Sx9cn Not 2 surprising; governments & banks comprise most systemic risk $$ Apr 22, 2012
  • Spain’s loan delinquencies accelerate http://t.co/3Nlf2QDu Really ugly graph: http://t.co/iJVux7fj The Spain issue is not dead $$ #ezonedead Apr 22, 2012
  • Paulson Said to Short Europe Bonds Amid Spain Concern http://t.co/hJQwSc9n This one isn’t as easy as shorting subprime. Be careful $$ Apr 18, 2012
  • Modell Deutschland ?ber alles http://t.co/DtrBNHDL Suggests EZone imitate German labor rules, but not austerity $$ Apr 18, 2012
  • French Campaign Enters Final Week With Hollande Extending Lead http://t.co/whQhmUb1 & widening recently; could make Ezone matters messy $$ Apr 18, 2012
  • Downgrades Loom 4 Banks http://t.co/EdDRDGQa Moody’s Weighing Ratings Cuts to 114 Institutions in 16 European Countries $$ #lookoutbelow Apr 18, 2012
  • Spanish Minister Asks ECB to Buy Bonds as Crisis Deepens http://t.co/cUcLRHLW Things r calmer now but this is the path of least resistance Apr 18, 2012
  • Spain?s Surging Bad Loans Cast New Doubts on Bank Cleanup http://t.co/QQT2BSsB NPLs /totallending jumped to 8.16% in February, <1% in 2007 Apr 18, 2012
  • Weidmann says not ECB job to tackle Spain’s problems http://t.co/kRUWSfyQ Famous last words $$ ECB only entity w/flexbility 2act fast Apr 18, 2012
  • Ray Dalio’s Bridgewater Says Spain Is Worse Off Than It Was Before The LTRO http://t.co/nVMDpG5c It’s a solvency, not a liquidity problem Apr 18, 2012
  • GEORGE SOROS: The Euro Crisis Just Entered A ‘Less Volatile But More Lethal Phase’ http://t.co/uzIev7nm LTRO papers overinsolvency probs Apr 18, 2012

 

Rest of the World

 

  • Argentina’s shadow FX rate shows total loss of confidence http://t.co/RVRicp1p Dishonesty in one area makes others distrust u elsewhere $$ Apr 22, 2012
  • Cristina: she is not alone http://t.co/gBWcllwU Many nations engage in expropriation from foreigners. $$ Apr 22, 2012
  • Pakistan And India To Go To War Over Water? http://t.co/2mx9a7u9 Whiskey’s for drinking, water’s for fighting over — Mark Twain $$ Apr 18, 2012
  • Unlikely but never say never RT @SCMITHA: @AlephBlog Sir No chance of war bet India & Pakistan both Nuclear Army Chief Kayani wants peace Apr 18, 2012
  • Mexico Manifesting its Own Destiny http://t.co/kLwx5A6l “Mexico has clearly stood out to me for its relative and absolute strength.” $$ Apr 18, 2012
  • Japan?s Teachers Fund to Start Investing in REITs, Hedge Funds http://t.co/9nKnY0zM Trend following; late to the alternative assets party Apr 18, 2012


US Tax Policy & Pensions

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  • Congress Eyes 401(k)s Again http://t.co/nRL9IkeO Interesting article on some possible/unlikely proposals to change 401(k)s $$ Apr 22, 2012
  • How to Pay No Taxes: 10 Strategies Used by the Rich http://t.co/ljjgefpc The main problem is defining income, not tax rates on the rich $$ Apr 22, 2012
  • Occupy defined-benefit pension funds! http://t.co/eQooNetC Employees would be better off with DB plans, even if had to fund them themselves Apr 22, 2012
  • New Suits Over Do-It-Yourself IRAs http://t.co/B6UYpG5m They aim for the wrong target; the custodian is only a conduit, not a referee $$ Apr 22, 2012
  • As population ages, institutions reduce equity holdings http://t.co/rPfescwH A first: US pensions have allocated more to bonds than equities Apr 18, 2012

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Miscellaneous

 

  • The New York Times Company in 2015 http://t.co/qp451VDA An optimistic view of $NYT three years from now. I will not buy it. $$ Apr 22, 2012
  • Joel Kotkin: The Great California Exodus http://t.co/WOvr2BFE Y California is in deep trouble & will shrink as better places r found $$ Apr 22, 2012
  • Contra: Climate Change Has Nothing to Do With Al Gore http://t.co/GO0S60J3 Misinterprets Lk 16:2, & I am to believe he is a Christian? $$ Apr 22, 2012
  • The Celestial Event That Sparked a Revolution http://t.co/Kn3E9XJb Fascinating tale on the transit of Venus across the Sun $$ #June6th Apr 22, 2012
  • The Downside of Cohabiting Before Marriage http://t.co/a1fFySzW For a man & woman 2 live together long run requires decisive commitment $$ Apr 18, 2012
  • Amazon’s knock-off problem (35 Shades of Grey, anyone?) http://t.co/oRJNKhVB Fascinating that some r knocking off books & selling on $AMZN Apr 18, 2012
  • Median age for first marriage spikes to record, holding back family formation http://t.co/Uf2SbCTI Long-run effect on society won’t b good Apr 18, 2012
  • To Pay Off Loans, Grads Put Off Marriage, Children http://t.co/G72NieZI Far better to skip college than put off marrying & children $$ Apr 18, 2012
  • The 101 Finance People You Have To Follow On Twitter: http://t.co/pIaCWK1n A good list, but where’s @moorehn, @interfluidity, @edwardnh $$ Apr 18, 2012
  • Dark Meat Getting a Leg Up on Boring Boneless Breast http://t.co/7BDSaTru “Every single day we have shortage of dark meat.” Who knew? $$ Apr 18, 2012
  • ?Pink Slime? Furor Means Disaster for U.S. Meat Innovator http://t.co/uGwKSIhw The other side of the story; fighting bacteria in beef $$ Apr 18, 2012
  • RAIL TRAFFIC CONTINUES TO SOFTEN http://t.co/EnhWT7Ay Economy slowing; just another straw blowing in the wind. $$ Apr 18, 2012
  • Freeport Deal Talk Intensifies on Cheap Copper http://t.co/DH26Nf1s Would be a big deal & difficult to pull off; Interesting idea tho $$ Apr 18, 2012
  • Taxes are filed and now I have some time to tweet, making up for lost time… Apr 18, 2012
  • @danprimack Private Investment Limited Partnership. Features: asset & profit-based fees. Limited liquidity & information. Aims high gets low Apr 17, 2012?(DM: defining ?hedge fund? in 140 chars)

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Economics & Finance Theory

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  • Is modern portfolio theory bunk? http://t.co/NrplQvbp Low volatility anomaly says bunk; if you didn’t know MPT was bogus alre ady-> #hopeless Apr 22, 2012
  • U.S. money supply growth offers bullish signal http://t.co/aqV6oP0c It is bullish in nominal terms for risk assets; not bullish for the rest Apr 22, 2012
  • Slump Taught Profligate Americans Value of Saving http://t.co/22jWf3OL Having slack assets & not being in debt is a virtue not a vice $$ Apr 22, 2012
  • The Great Depression as a Credit Boom Gone Wrong http://t.co/OBXRGeY2 Until the great depression is viewed as the bust after a credit boom + Apr 22, 2012
  • …we won’t get policy right. The credit cycle is real, & the Fed ignores it, providing liquidity as if it were not a structural problem. $$ Apr 22, 2012
  • El-Erian Breaches The Final Frontier: What Happens If Central Banks Fail? http://t.co/pRcdN42N Goal: print enough credit until promises -> 0 Apr 18, 2012
  • Deflation Does Not Lead to a Depression, suggests Research http://t.co/2VTu2bAd Separate probs; falling inflation vs systemic impaired debts Apr 18, 2012
  • Depression is a choice http://t.co/F4YdBn8x Every creditor wants 2b paid off @ par; many debtors would like compromise, enabling econ growth Apr 18, 2012
  • Difficulties in forecasting the impact of shadow inventory on the housing market http://t.co/xcALioOb Mtge > value makes sales slow, $$ low Apr 18, 2012

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Financial Markets

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  • Are fixed income ETFs the new “securitization” product? http://t.co/6qo2U7Zg Shows the many ways that sponsors make $$ off of ETFs Apr 22, 2012
  • Time for the SEC to institute new disclosure rules on CEO leverage http://t.co/nMJZslXg Insider CEO deals r material & should be revealed $$ Apr 22, 2012
  • Fear Barometer Bubbling http://t.co/HjXre23p Puts getting more expensive relative to calls on the S&P Apr 22, 2012
  • Is This the Book that Inspired Jamie Dimon’s Warnings About Regulation? http://t.co/ikzuXwlD Regs make banks behave alike ->systemic risk $$ Apr 22, 2012
  • @historysquared One question I always ask is how mgmt/directors treat outside passive minority shareholders. Do we ride the back of bus? $$ Apr 18, 2012
  • @historysquared Yeh, don’t let management control audit, nominating, or compensation committees. Split Chairman & CEO, etc., etc., etc… $$ Apr 18, 2012
  • Regulators should encourage more diversity in the financial system http://t.co/xhfvsTlS Consistent regs create less diversity forces conform Apr 18, 2012
  • In New Funds, Old Flaws http://t.co/h931mglc Some have high fees, longer-term tracking error, hidden counterparty risk, enable stupidity Apr 18, 2012
  • Why Investors Should Pay Attention to the JOBS Act of 2012 http://t.co/kk9seYVH Here’s what Hunter thinks are the positives of the JOBS Act Apr 18, 2012
  • Fannie Mae Fix Said to Retain Some US Mortgage Role http://t.co/YPAFyygs Crazy people @ UST. 2much debt on housing in general->instability Apr 18, 2012
  • Wells Fargo, JPMorgan Label More Junior Liens as Bad Assets http://t.co/QpwE2S43 Wow, this took a long time to finally happen $$ #reality Apr 18, 2012
  • Structured-Note Fees (etc) http://t.co/rYf5WXBS IBs must disclose likely value of securities, fees incurred in creation of the notes $$ Apr 18, 2012
  • Citadel, Millennium Above $115 Billion With Rule Change http://t.co/j53AMUGG Many hedge funds have borrowed lots; now we know how much $$ Apr 18, 2012
  • Year’s first outflows from HY bond funds http://t.co/mUmIq0Yw May eventually lead to $$ weakness Apr 18, 2012
  • Green Light for Hedge-Fund Ads Means Caution on Main Street http://t.co/4mh9LNgW Most people will not fare well w/complex investments $$ Apr 18, 2012
  • Doing the Right Thing: Upside? Zero. Downside? Financial Ruin? http://t.co/eZlNDJJA We aren’t paid 2b sheriffs a la: http://t.co/egqIsb9V $$ Apr 18, 2012
  • Do Jubilee shares make any sense? http://t.co/2LxtggJ1 I don’t think so. Unnecessary complexity; increased illiquidity; would not work $$ Apr 18, 2012
  • 12 Intriguing Insights on Mutual Funds http://t.co/6U3JZegh Interesting mutual fund trivia from Morningstar $$ Apr 18, 2012
  • Interesting post. But a successful spec on 1 risk can morph into credit risk post-crisis. … http://t.co/Vzlb5xdT Apr 17, 2012
  • Falcone looks like a one-trick pony who made one lucky bet and won. Now he loses regularly. http://t.co/dsivgMCs Apr 16, 2012

 

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