Yes, I wrote them both, but they complement each other.? Yes, most average people get skinned investing in common stocks, but if you apply yourself assiduously to investing, it will improve your performance in other jobs, by broadening your skill set.
The latter of (part 1) these was my highest day and month for access of my blog.? I came close to eclipsing the monthly total last month, but missed by 2%.? These pieces take up asset allocation via valuation, and momentum.
A story of how Roy and I disobeyed orders a little, and created a lot of growth for the company that we served.? Personally, I think this is a great story… I never created more value than when I worked for Provident Mutual.
The smaller the range of choices is, the better people do in choosing.? One way to facilitate that is to break down decision making into a series of choices with each having few options.
Rapid money supply growth with no consumer price inflation can only really occur within the confines of an asset price bubble, or else, where does the money go?? Interest rates are low at such a time because of the incredible liquidity, and complacency of lenders that they will get an equal amount of purchasing power back.? Perhaps another possibility is when a country?s currency is being used more and more as a shadow currency, like the US in the Third World.? But even that will come home someday.
This is probably one of the most important articles I have written, because investment returns are lumpy, and we need to learn to live with it.? For those of us that are smart, we need to take advantage of it.
Now after all of this, it?s not so much a question of rationality but ethics.? Who will do the right thing for the one he ultimately serves?? Working for those people is a joy, and is beneficial to those that own. Doing right does well for many.
I am going to say something that I rarely say: I am grateful that this book was written.? Why am I grateful?
It highlights the idea that people, even really bright people, do not behave rationally, but imitatively — they follow recent price action — they mimic.
It validates the concept of a “crowded trade,” one that offered high returns in the past, may presently offer low returns to a “buy and hold” investor, but will deliver negative returns in the near future, because the holders of the trade are relying on the trade to deliver positive returns in the short run, and will bail if it doesn’t happen.
It points up the nonlinearity of markets, and invalidates the efficient markets hypothesis; it validates the concept of the boom-bust cycle both in micro and macro.
It teaches us to not take on too much debt, even if we are really, really smart.? We aren’t as smart as we think we are.
In short, it sums up a lot of my philosophy at The Aleph Blog.? Real risk control thinks long term, and considers what will happen if liquidity dries up.? Real risk control knows that large positions in any asset relative to the market must be regarded to be “Buy-and-hold” regardless of what your trading intentions are.? False risk control assumes that markets always function, and that your relative size versus the market does not matter.
The author of the book has led a storied life.? He was a quantitative analyst hired to work in risk control for Long Term Capital Management [LTCM] near its inception, and continued with them through the failure.? After that, he worked for Rydex, built FOLIOfn, and worked for the Bank of International Settlements, and Schroders.? He now works as a professor of finance at the University of San Francisco, after having gotten a PhD from MIT.? He knows the markets both practically and experientially, like me, though he is better than me.
LTCM is a great example of what happens when some really smart guys find clever ways to make money in the markets, and then overplay them.? The trade that has a buy-and-hold yield of 10% is genius.? When it is 8% it is bright.? At 6% it is average, why are you playing?? At 4% it is dopey.? But what happens when your trade gets big relative to the market?? The rules change, much like JP Morgan recently.? When you are big enough that you are moving the market as a normal practice, that indicates danger.? You have become the market, and are distorting it.? It will eventually come back to bite you, as JP Morgan recently learned.
The failure of LTCM may have been the template, but the author goes on to explain other disequilibrium situations such as:
The quantitative equity panic of August 2007
The failure of Bear Stearns.
The failures of Fannie and Freddie (free money brings out the worst in all of us)
The failure of Lehman Brothers.
The failure of the banking system both in the US & Europe
The failure of LTCM progeny in 2008 (no, we don’t learn)
The Flash Crash
The failure of the Eurozone, so far. (It is performance art.? How can we create the biggest failure ever?? We will eclipse the Great Depression! Oui! Ya!)
I’ve written about most of these, and I can tell you the author does a good good job.? Aside from that, he took time to interview primary sources as to their own view of the events that happened, particularly at LTCM and its progeny, and it adds to what we know about the crises that he wrote about.
People need to understand that crises are a normal aspect of markets.? Until you understand that crises are normal, you will always take too much risk.
This is an excellent book; buy it and avoid losses.
Quibbles
In the beginning he got the name of Cramer’s firm wrong.
I would have eliminated the appendices if I were the editor, the audience that can benefit from the math is too narrow to be worth printing it in the book.? Better you should put a PDF out on the web, and put out a slimmer book.
Full disclosure:The PR flack asked me if I would like the book and I assented.
If you enter Amazon through my site, and you buy anything, I get a small commission.? This is my main source of blog revenue.? I prefer this to a ?tip jar? because I want you to get something you want, rather than merely giving me a tip.? Book reviews take time, particularly with the reading, which most book reviewers don?t do in full, and I typically do. (When I don?t, I mention that I scanned the book.? Also, I never use the data that the PR flacks send out.)
Most people buying at Amazon do not enter via a referring website.? Thus Amazon builds an extra 1-3% into the prices to all buyers to compensate for the commissions given to the minority that come through referring sites.? Whether you buy at Amazon directly or enter via my site, your prices don?t change.
What does Washington, DC care about more — people or corporations?? Do you have to ask? DC favors corporations, and all three branches of the government support this.? Both parties favor this.? Why is this so?
The corporations, and those that own them are a more effective means of raising funds to maintain their hold on the offices that the occupy.? Beyond that, there is an attitude that economic policy needs to be carried out through laws that address corporations.
So whether you come from the t-party, Occupy, or someplace else, you might harbor resentment against the status quo: big government in league with big corporations, and wealthy people.
I wish it weren’t so, but the Constitution takes a back seat to “pragmatic” concerns, especially when a “crisis” happens. It should not be that way, but that’s the way it is.
So, what if you drop an idealistic guy, the author, Neil Barofsky, into the job of watchdog for the TARP?? [SIGTARP: Special Inspector General of the Troubled Asset Relief Program] He objects to the uncontrolled nature of how money is being handed out to banks, with few checks as to how the money will be used.
Now, the author could have made a stronger argument.? The FDIC, where does it pump in cash to failed institutions? They protect depositors — that’s the lowest level of the capital structure.? But where did the TARP add capital?? At the highest level of the capital structure; they bought stock and warrants.
Constitutionally, the government has no authority to own corporations.? Further, even if the government had that authority, if it was trying to preserve the soundness of the banking system, the proper way to do it would be to make senior secured loans.? That would guarantee the banking system, but let the common and preferred stockholders, and bondholders go broke before the taxpayer coughs up the first dime.
As it was, the author found himself adrift in DC, cleverly fighting to bring some rules to what was a giveaway to the banks, many of which did not need the bailout, and certainly did not want the limits on executive pay.? He found that DC was a place where the bureaucratic government fights itself.? No one wants to look lazy or foolish, so when someone alleges a crime against a party that another branch of the bureaucracy is supposedly investigating, they fight back.? Applying the principles of Peter Drucker, our government could be smaller, and more effective — there would be fewer turf wars.
Were the Bailouts Wrong?? Did they Fail??
The author makes the case that the bailout has failed. When he says that he is not saying that the bailout as a whole lost money. (I would note that the bailouts have lost money on the home if you include Fannie and Freddie, the auto companies, along with all of the financial institutions including AIG.) He is saying that the problem of too big to fail banks has not only not been solved, is actually gotten worse since the crisis. The big five banks now have around 50% of the deposit base in US. “Too big to fail” is a problem unsolved that still threatens our financial system. This problem is solvable; the US government broke up AT&T (then allowed it to recombine again). Interstate branching could be limited, or ended.
The second problem with bailout is that engenders moral hazard. Because you have done it once, it would be expected next time, which when the financial system once again enters a bull cycle, the bankers will know that the federal government has its back and will not be inclined to limit risk to the same degree that they otherwise might.
The third problem with the bailout is that it was uneven. A logical question for any person harmed by the crisis is, “Where’s my bailout?” Even if bailing out the banks in order to preserve financial systemic integrity was needed, there were other ways to do it, such as being lender of last resort at a penalty rate, or giving vouchers good to reduce debts to every household in America. Particularly that last option would have been viewed as fair by the American people. That could have saved some of the pain felt by those with mortgages, and help the creditworthiness of loans at the banks. Instead, the Obama administration created programs like HAMP, which did little good for most, and actually harmed some.
The fourth problem with bailout and monetary policy that accompanied it was that it was a large transfer of wealth savers to banks. It doesn’t do much for the economy, if the banks have zero cost on their deposits, and all they do is invest in ultrasafe securities, clipping a small, but safe profit.
What was it Like to be There?
More often than not, the Treasury Department did not want to have the Special Inspector General interfering with their plans.? There was a lot of stonewalling, and nondisclosure of pertinent data.? It got fairly contentious at times, and often required members of Congress to intervene on behalf of SIGTARP.? The relationship probably got worse over time, because those working at SIGTARP knew that they would have no influence, no changes would be made, unless they convinced the media that something was wrong, and thus prodded Congress to push for change at Treasury.? The worst that that could happen would be that the President would fire the Special Inspector General, and appoint a new one.
Another part of challenge was realizing the need to build a talented team of lawyers, analysts, PR professionals, etc., to do the work analyzing how TARP funds were being spent, and write reports that would grab attention, and change the terms of the political debate.
That challenge was made more difficult by a lack of adequate facilities.? The initial staff was relegated to some pretty poor accommodations at the Treasury building.? I met with the SIGTARP staff over the AIG bailout in June of 2010 over a paper that I wrote that exposed aspects of the weakness at the domestic insurance subsidiaries.? (For Amazon readers, there is a link to my report at my blog.)? The accommodations that they had were some of the poorest I ran into in DC.
I know from personal experience that the US Treasury was sensitive to any criticism of the TARP.? At the first blogger summit at the Treasury, the officials were prickly over any questioning on the topic.? It did not help that GMAC got another dollop of cash that morning.? (links here, and here)
There were some ugly controversies.? One of the SIGTARP reports noted that if every potential program had been fully tapped the US would have expended $23.7 Trillion.? The report caveated that figure heavily, but it was seized upon by Republicans for partisan advantage.? They took a lot of flak for totaling figures that were in some sense apples and oranges.
On page 190, the question from Democrat Stephen Lynch to Tim Geithner, ?Why didn?t he try harder to cut a better bargain for the American people?? was never answered by Geithner.? Truth, Treasury was making it up as they went, with counsel from money managers and banks, which left the US Treasury vulnerable to those more technically proficient at finance who had at least some degree of conflicts of interest.
One more limitation of SIGTARP, they had no ability to bring cases ? they had to convince the Department of Justice or another prosecutor to take action.? That brought another level of negotiation and bureaucratic infighting.
The end came for the author after he realized that the TARP was winding down, and he was tiring of the Washington scene, and the corrosive effect it was having on his own character.
That leaves me with one closing question: What good did the author and his team do?? In one sense, not a lot.? The current financial regulatory environment post-Dodd-Frank continues business as usual with a more complex bureaucracy, with likely more infighting between competing regulators.? My view is when many are responsible, no one is responsible? that is certainly not the fault of SIGTARP, but we are probably in a worse regulatory environment than prior to the crisis.
That said, SIGTARP gathered data on the TARP, which led to a decent number of small and medium-sized fraud cases, and constrained the open-handed nature of the US Treasury toward financial companies, which could have result in a lot more fraud, and/or higher costs to the taxpayer.
Quibbles
Small mistake on page 173, where the author mentions PNC acquiring City National Bank instead of National City Bank.
The book reads a little disjointedly.? It is mostly chronological, but topical by chapter, so sometimes it feels like two steps forward, one step back as far as the time flow goes.
Who would benefit from this book:??This book will benefit anyone who wants a first person account of what it was like to be the Special Inspector General of the TARP.? It is also for those who want to see how dysfunctional politics can be in DC, and how resistant the Treasury Department was to any limits on their autonomy.? Finally, it shows how difficult it is for anyone to change the system in DC.? The author survived in DC for 2+ years as a change agent; that?s difficult enough, but he is gone now, though SIGTARP soldiers on.?? If you want to, you can buy it here: Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street.
Full disclosure:?I asked the author to send me data on his PR flack, who I asked to send the book to me.
If you enter Amazon through my site, and you buy anything, I get a small commission.? This is my main source of blog revenue.? I prefer this to a ?tip jar? because I want you to get something you want, rather than merely giving me a tip.? Book reviews take time, particularly with the reading, which most book reviewers don?t do in full, and I typically do. (When I don?t, I mention that I scanned the book.? Also, I never use the data that the PR flacks send out.)
Most people buying at Amazon do not enter via a referring website.? Thus Amazon builds an extra 1-3% into the prices to all buyers to compensate for the commissions given to the minority that come through referring sites.? Whether you buy at Amazon directly or enter via my site, your prices don?t change.
I have wanted to write this article for some time, but decided to sit on it in order to consider the matter more closely. What caused the financial crisis of 2008?
In my writings at RealMoney, I anticipated much of the crisis, though not all of it, and certainly not the severity of it. The prime cause of the financial crisis was a buildup of private debt encouraged by the tax code and the Federal Reserve. But let me go through the causes of the financial crisis one by one:
Causes
One) During the Greenspan era, recessions were not allowed to do their job of reducing bad debts. Recessions ended early, and expansions went on too long. This encouraged firms and individuals to borrow too much, and foolishly went under the moniker of the “Great Moderation.”? Monetary policy was too loose 1986-2005.
Two) China wanted to build its industries through exporting. To do that they had to keep their currency cheap. To keep their currency cheap, they had to buy financial claims from the US, so they bought our bonds. This kept our interest rates low, and allowed people to buy houses with low monthly payments, putting them into a larger house than they could afford, should the economy turn down.
Three) Partly because of monetary policy, a risk culture developed for economic actors took more and more risk because they thought that the Fed would rescue them in a crisis. During that era, I saw all manner of unorthodox ways that took a lot of risk to earn excess returns. Examples: leveraged non-prime commercial paper, selling short term at the money volatility, and taking exotic bets on the long side with subprime residential mortgage-backed securities, to name a few.
Four) This probably generates the most controversy, but the crisis was partially driven by total return or yield hogs. Having been a bond manager, I learned that the easiest error to fall into is to always add yield. In the short run, adding yield boosts your performance. The time before the crisis offered many opportunities for bond managers to add yield in structured securities that were rated AAA. Many economic players, especially European banks did so. These yield hogs were the enablers of the investment banks who structured some really crummy deals. Without the yield hogs, those deals could never have been done.
What’s that you say? The yield hogs were duped? I say no. Excluding AIG, most US-based insurance companies avoided those yield hogs securities. Conservative investing kept the insurance industry away from the areas that were going to get killed. If you are an institutional investor, it is incumbent on you to do the due diligence necessary, and not simply trust what the rating agencies say, nor what the underwriters say.
Five) Lenders lent too much against residential real estate. Borrowers borrowed too much. The two go together. Lending terms became too loose as far as underwriting goes. At the same time, loans were made to subprime borrowers who could only afford the “teaser rate,” and not the ultimate rate they would pay.
If you look at graphs that show the amount of equity underlying homes with mortgages, it should have been obvious by 2004 that we were in a bubble. We had never seen this level of indebtedness on housing Italy since the Great Depression or maybe the Panic of 1871.
Six) The GSEs helped facilitate this growth in debt. They charged a low amount to guarantee residential mortgage debt. They did not think it was low, but like the actuary of legend, they were driving looking through the rear view mirror. Past is prologue, and they decided that the future would be like the past, only more so.
Someone with real modeling capability would have developed a dynamic model that would’ve looked at debt service coverage under a variety of real estate pricing scenarios. When I was mortgage bond manager I did that for CMBS, from 1998 through 2001.
The GSEs were under-reserved if housing prices started to fall. We knew that at the hedge fund that I worked for, and waited for housing prices to fall.
Seven) Because banks originated mortgages in order to securitize them, underwriting quality went down. When you originate a loan to hold it, you are far more careful about credit quality.
Allowing depository institutions to choose their regulator enabled them to choose weak regulators. What could be dumber policy? Far better that a depository institution is assigned a regulator by the government.
Nine) Though deposit insurance avoids runs on the bank, the repo market allowed for new sort of run on bank. By financing securities short term through the repo market, those financing securities left themselves open to the risk that lending terms change against them. As the crisis progressed, those financing in the repo market were forced to put up more capital against their positions, until they ran out of capital, and defaulted. The same was true for portfolio margining requirements. As financial companies were downgraded by the rating agencies, it created a “cliff” for the financial companies, which made their decline more precipitous.? As more capital was needed for margin requirements, less free capital was available, leading to further ratings downgrades, and eventual insolvency.
Ten) In general, capital regulations for banks were too loose. Banks probably needed to have twice the level of capital going into the crisis than they did. Also, rather than trusting banks? internal models of risk for regulatory purposes, it would have been better to have a series of dumb rules that would limit the ability of banks to deal in areas where risk exposures are unclear.
Eleven) Derivatives are regulated wrong. They should be regulated like insurance. They should be regulated by the states. The doctrine of insurable interest should be enforced. In short, those who need to hedge may initiate trades; speculators may not initiate trades.
If rules like this had been in place, the derivative market would never have gotten so big, and only economically necessary trades would’ve been done.
Twelve) We need to move investment banks back to what they used to be: partnerships. That will reduce the amount of risk they take, as senior partners see their retirements in jeopardy if too much risk is taken. The same is true of commercial banks, where the doctrine of double liability should be reinstituted, and managers of banks could lose their personal wealth if the bank takes significant losses.
Thirteen) If we want to end ?too big to fail,? we need to end interstate branching of banks. Make it uneconomic for banks to be big. And, let the states regulate banks. State regulation is good regulation. It is far harder to co-opt 50 state regulators than a single federal regulator, much less several federal regulators that the banks can choose.
Let me put it this way, echoing Francois Mitterand on Germany: ?Don?t get me wrong, I like Bank of America.? In fact, I like Bank of America so much; I think there should be 50 of them, one for each state.?? That will end ?too big to fail.?
This is a bigger factor in the crisis than the repeal of Glass-Steagall, which was a small factor in the crisis.? But if you make the commercial banks smaller, they will not be able to have large investment banks attached to them.
Fourteen) Securitization, aside from warping loan origination incentives, created opaque assets that were difficult to rate and price.? This hindered the recognition of losses as conditions deteriorated, and led to securities that were either ?money good? or a ?zonk? in the midst of the crisis, with a thin tipping point in-between.
Fifteen) The crisis would have happened regardless of what the government would have done with Lehman.? Note that all of the major institutions that were bailed out, bought out, or failed had large exposures to residential mortgages: Bear, Fannie, Freddie, AIG, Merrill, Washington Mutual, Wachovia and Lehman.
What was not part of the Crisis
One) The rating agencies, much as they profited from it, were forced to rate structured finance, because the regulators needed the ratings to calculate capital charges.? They didn?t do well at it, because the rating agencies always do badly with a new asset class ? they don?t have any data to work with.? Don?t blame the rating agencies, blame the regulators that allow their firms to invest in unseasoned securities.
I have often said that ?free money brings out the worst in people.? (Please send the memo to Ben Bernanke, who creates free money.)? Everyone in the crisis points the finger at others, but not at themselves.
The sad truth is that the financial crisis resulted from people speculating on increases in housing prices, and commercial and investment banks that did the same thing, and ignored common sense, which sadly, is not common.
Note: Tomorrow (Saturday) I will be on WBAL Radio at 8:30 AM Eastern with local radio host Jimmy Mathis, talking about the markets.? If you are up, they do stream the broadcast.
Market Dynamics
Six Weeks of Green: Stocks Quietly Creep Higher http://t.co/XYxAfaOj Markets move up at half the speed they go down http://t.co/d09QUp8y $$ Aug 18, 2012
Premiums dominate in HY CEFs & loan participation CE funds, even the investment grade funds r seeing discounts fade. Too hot. $$ #yieldlust Aug 17, 2012
T. Rowe Price Small Cap Fund Veteran Preston Athey to Exit in 2014 http://t.co/Y6BRCnmW One of $TROW ‘s finest takes a less active role $$ Aug 17, 2012
Paulson Steps Up Gold Bet to 44% of Firm?s Equity Assets http://t.co/5ESGLVdl Makes me bearish on gold. Bad mkt could b a forced seller $$ Aug 17, 2012
What should I do with my money now? http://t.co/xqXtnPqb My view is this, if acctg is conservative, buy stocks P/TB < 1.5, P/E < 10 $$ Aug 17, 2012
Usage: That was a real Facebook of an IPO! 2) We really Facebooked the IPO buyers! 3) Avoid this IPO, it’s going 2b a real Facebook! $FB $$ Aug 17, 2012
Facebook puts follow-on on ice http://t.co/d2CMGLvl Avoiding adding insult to injury. Lousy IPOs in the future will be called “Facebooks” $$ Aug 17, 2012
It’s usually a bad sign when locals are selling, and foreigners buying. How do foreigners have more knowledge? $$ http://t.co/mhOHunFj Aug 16, 2012
Man overrides machine to tackle low bond yield risk http://t.co/IDTSByMr Momentum isn’t everything w/bonds, eventually mean reversion. $$ Aug 16, 2012
Whenever you mention CDS spreads, could you do us the favor of citing that spreads bonds are trading at? You are, aft? http://t.co/o3StHaG0 Aug 15, 2012
You Are Now About to Witness the Strength of Street Knowledge http://t.co/jV4bxWc4 Having a revenue model is an aid to stock performance $$ Aug 15, 2012
As Corporate-Bond Yields Sink, Risks for Investors Rise http://t.co/WeET5vWD Maybe. Debt-deflation has a funny way of persisting $$ Aug 13, 2012
Rest of World
Mexico’s big oil problem http://t.co/e3b6V19s Yrs of abuse &non-investment by PEMEX, milked by the govt, oil production declining fast $$ Aug 18, 2012
Iranian Currency Traders Find a Haven in Afghanistan http://t.co/Bcw8l03A Sorta fitting that Afghans make $$ breaking sanctions on Iran $$ Aug 18, 2012
Rate Cuts on the Cards for Norway and Sweden http://t.co/REReXdiF We need a new Gresham’s Law on Monetary Policy. See in next tweet $$ Aug 17, 2012
Bad monetary policy drives out good monetary policy when large countries inflate, & exporters in small countries complain about losses $$ Aug 17, 2012
You can say that again $$ RT @saraeisenFX: More signs of worsening credit quality in China http://t.co/KLAApyBy Aug 17, 2012
Aramco Says Virus Attacks Network, Oil Output Unaffected http://t.co/o0p8Rb94 What shall we call this? The Cold Techno-War? $$ Aug 16, 2012
The only way out for China: Andy Xie http://t.co/ROaF0C2S Problems only going2get worse as long as government interferes $$ #chinacrash Aug 15, 2012
Beijing Loan Guarantee Firm Teeters on the Edge http://t.co/XtapRo8W A sign of things to come, and how will China deal with the defaults? $$ Aug 15, 2012
China?s money outflow continues in July http://t.co/xpMby8WI The wealthy of China send capital abroad, so that they can survive anything $$ Aug 15, 2012
German Provinces Struggle to Lure Skilled Workers http://t.co/yN61QTaJ Europe can find work, but will have to find it in Germany $$ Aug 14, 2012
Correlation Breakdown as Proxies for Risk Boost Aussie, Kiwi http://t.co/4zQMFGQd Countries w/good $$ policy draw funds, harming exporters Aug 14, 2012
Africa’s pirates have demands – and letterhead, too http://t.co/GKbc4Jcm Not intimidation, merely “making you an offer you can’t refuse” $$ Aug 13, 2012
Mursi Sidelines Egypt?s Top Generals Amid Power Struggle http://t.co/KAOWGQdE Push is coming to shove; Military vs Muslim Brotherhood $$ Aug 13, 2012
US Economy
The case for supply-side tax cuts http://t.co/EYfStM7t Tax increase of 1% of GDP reduces output over the next 3 years by nearly 3% $$ Aug 17, 2012
London Firings Seen Surging as Finance Firms Add NY Jobs http://t.co/D0to5HSo Finance jobs grow where the regulations are lowest $$ Aug 17, 2012
Farmland Prices Surge Across the Plains States http://t.co/we6hZAcP Poss causes: hi grain prices & widespread use of crop insurance $$ Aug 16, 2012
The Downside of a Recovery in Housing http://t.co/BfzmDdYr “potential uptick in inflation measures, of which housing is a big component” Aug 16, 2012
Will births come back with the economy? http://t.co/sYqJjBXm Yes, people have more children when they are optimistic about the future $$ Aug 15, 2012
Wrong: What if baby boomers don’t live forever? http://t.co/kRLnHqrA Even if mortality does not improve @ prior rate, makes little $$ diff Aug 15, 2012
Mathematically Possible http://t.co/ziQNoQx4 Correcting the false assumptions of Obama’s tax gurus | Govt in DC is always dishonest $$ Aug 14, 2012
Clarity of communication is not the Fed’s problem. If you have bad policy, it doesn’t matter how you present it. http://t.co/C27MJ2QX Aug 13, 2012
Pensions
Unions protest Democrats at Illinois State Fair http://t.co/uU7twsOK Govt workers learn hard reality. Benefits not protected by ERISA + $$ Aug 18, 2012
Which means underfunded benefits may never b paid at the level promised. Taxes can’t b raised enough to make it work, either. Sorry $$ 🙁 Aug 18, 2012
@mckpartners There r 3 parties not getting blame here aside from the standard ones: 1) accountants that dreamed up lousy funding rules + $$ Aug 18, 2012
@mckpartners 2) Actuaries didn’t pushback on investment assumptions & 3) Union negotiators thot they were smart trading salary 4 pensions $$ Aug 18, 2012
Annals of dubious research, 401(k) loan-default edition http://t.co/LDLsN0f1 401k loan defaults r 2% of what widely-cited study claims $$ Aug 13, 2012
GSE Bailout Change
Fannie?s and Freddie?s Forgettable Friday http://t.co/kvfNkBcI Investment whose value is dependent on unknowable government policy $$ Aug 18, 2012
GSEs expected to unload delinquent loans after Treasury change http://t.co/2g7tiIxI Portolios to shrink through prepays/writeoffs 15%/yr $$ Aug 17, 2012
Anybody have guesses as2what $FNMA $FMCC $FNMAT $FMCCK should be worth? Pfds ~ 2 coupon pmts? Common stock ~ 0? Prob(going-away present)? $$ Aug 17, 2012
Treasury to wind down GSEs faster, only to be replaced with (insert solution here) http://t.co/mAtyKpHs Future of the GSEs in question $$ Aug 17, 2012
Treasury to Amend Terms of Fannie, Freddie Bailout http://t.co/iZcCdXML Cancels 10% div, all profits go2 Tsy. Comm stocks down 20-25% $$ Aug 17, 2012
Fannie, Freddie Pfds Sink As Treasury Amends Bailout Terms http://t.co/3pGEjsrF Down 52-55% today. That was the crunch you heard $$ Aug 17, 2012
Municipal Bonds
Bondholders, insurers challenge San Bernardino bankruptcy http://t.co/WE2vRb6e They allege SB finances are not in a state of emergency $$ Aug 18, 2012
That really stinks, can’t comment there also $$ RT @Tubulus: @munilass I think your head will slam into your desk – http://t.co/8G1e0plE Aug 16, 2012
Looking for Higher Yields? Try ‘Junky’ Municipal Bonds http://t.co/qo9DfZKt Safer than corporate junk, but less liquid. Be careful $$ Aug 13, 2012
Other
Apple judge: ?I see risk? and 7 more newsmaker quotes http://t.co/wyBoToT7 Notable quotes in the business world $$ Aug 17, 2012
The Valley of Free Food: How One Firm Caters to California’s High Tech Giants http://t.co/cijDNgdC Companies r armies; travel on stomach $$ Aug 17, 2012
Texas Seeks Seizure of Life Partners http://t.co/MWofrEv2 ‘Bout time. Life settlements should b illegal; no insurable interest $LPHI $$ Aug 17, 2012
More trial, less error: An effort to improve scientific studies http://t.co/i2PLAD5h Why I am skeptical of much biometric research $$ Aug 16, 2012
when $AMGN ‘s scientists tried to replicate 53 prominent studies in basic cancer biology … they were able to confirm the results of only 6 Aug 16, 2012
Mobile pay war: Wal-Mart and others vs. Google http://t.co/Q30PZQGP So much innovation in payment systems; wonder which will win? $$ Aug 15, 2012
Nassim Taleb: Stay Out of the Investment Industry http://t.co/ZyomTwjB Superinvestors of Graham & Doddsville r @ work & still making $$ Aug 15, 2012
Deep ocean lure grows as high-tech drilling pays off http://t.co/P4UP4ZWs The technology for extracting oil grows ever more complex $$ Aug 15, 2012
Buyers Beware: The Goodwill Games http://t.co/eA7XEXjr Check the cash from operations. Should exceed earnings if Goodwill is valid. $$ Aug 14, 2012
CLEAN UP THE BALANCE SHEET: GET RID OF DEFERRED TAXES http://t.co/DTfT8bRg Future income or losses can’t be assured, so not asset or liab $$ Aug 13, 2012
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Comments
@BarbarianCap The firm I was with sold $AIG the day it went into the Dow. Close to a “top tick.” $HIG , did not do hearly as well 🙁 $$ Aug 18, 2012
@The_Dumb_Money @pkedrosky is a bright guy. Many got it right, but fads suck people in. Aug 17, 2012
RE: @boingboing Not too surprising. Many corporations pay low taxes b/c of govt incentives. Relationship 2 mgmt pay s? http://t.co/KoChJizm Aug 17, 2012
@Breakingviews The sooner the euro dissolves, the less will be the pain for all involved. It was a mistake from the start. $$ Aug 17, 2012
@pelias01 Many thanks for the many times you have asked people to follow me. I really appreciate it. Aug 17, 2012
@JimPethokoukis I’m reading it now; that’s a fair assessment. Beyond that, it reinforces how hard it is to do anything in DC $$ Aug 16, 2012
RT @PragCapitalist: Pushing up stock prices does not make underlying assets more profitable. The whole premise of the Bernanke Put is f … Aug 16, 2012
@FeeOnlyIndy I try to be fair, I don’t always succeed, and I do have my biases, so take me with a grain of salt, but thanks $$ Aug 16, 2012
@izakaminska Whenever I go to Boston, I always take the Water Taxi from the airport. Lets me off in Downtown –beautiful view of the city $$ Aug 15, 2012
@munilass Glad u said: “The Fed really ought to be embarrassed that it published something like this.” I didn’t say that & should have $$ Aug 15, 2012
@The_Analyst true… too much quantitative talent went to Wall Street, applied the wrong model: physics, rather than right model: ecology $$ Aug 15, 2012
My friend Eric Hovde sadly didn’t win the Wisconsin Republican Senate primary; Eric would’ve shaken up DC. Thompson is business as usual $$ Aug 15, 2012
“Proppants prop open cracks when hydraulic fracturing is done. $$” ? David_Merkel http://t.co/OuqTSMAc Aug 14, 2012
?I wasn’t that impressed w/Inker’s analysis. Does not take into account dollar-weighted returns. $$ http://t.co/C5Gh0pOl Aug 13, 2012
@nancefinance I was pretty nerdy, though not withdrawn, back then. My mom was a self-taught investor. I caught the bug from her. $$ Aug 13, 2012
When I was a teenager, I remember looking through the bond tables, noting that almost all prices were below 100. Today it is the opposite $$ Aug 13, 2012
@japhychron @Peter_Atwater You were more than mostly right, it’s a great book. Only wish it could have been bigger. $$ Aug 12, 2012
Central Banks Can?t Save the World http://t.co/SLzVcZ0r No duh, since printing $$ isn’t productive it can’t do anything to help us. $$ Aug 04, 2012
Another example of how loose monetary policy in the West inflates bubbles in the fringe economies. http://t.co/xA3cKNFh Aug 03, 2012
Central Banks Seek New Crisis Options http://t.co/z3pLZdbw Fed & ECB straining @ the political limits of what they can & should do $$ Aug 02, 2012
SNB-central bank or hedge fund? http://t.co/LFuad30w Policy makers err in thinking they can control markets: task beyond ability of mortals Aug 02, 2012
Ghost of 2008 Haunts Fed as Companies Take Short View on Risk http://t.co/Wl6KgzdS When policy is not sustainable, businessmen cautious $$ Aug 01, 2012
Ben Bernanke Could Lose for Same Reason as Olympic Sailor http://t.co/aPBZLuwN Strong growth resumes when bad debts are liquidated $$ Aug 01, 2012
Tesoro lifts volumes of Bakken rail project http://t.co/eKzsyOu2 Coastal v. central difference in oil prices incent rail delivery of oil $$ Aug 02, 2012
Buffett Railroad Beats Coal Slump With 75% Gain in Oil http://t.co/VK50miRq From coal to crude oil, frack sand, automobiles, pipes &c $$ Aug 02, 2012
Oil Can?t Go Down http://t.co/CV73DUqW Offers long term arguments that we aren’t finding cheaper-to-produce oil, short-run YMMV $$ Jul 30, 2012
Financials
Where Are the Move-up Home Buyers? http://t.co/MDlos0oL Low end of housing in good shape, will take a while for the high end 2 recover $$ Aug 01, 2012
Libor Punishment Could Be Worse Than the Crime http://t.co/jyRCvVtw There’s a lot to unscramble here, and first do no harm should apply $$ Aug 01, 2012
RE: @bloombergview First do no harm. LIBOR dampens volatility during a crisis vs market-derived measures, which are m? http://t.co/q7cLqTpI Aug 01, 2012
Bank Breakups: Not So Fast http://t.co/CB4TYM4o Think most of TBTF came from allowing interstate branching, not investment banking $$ Jul 30, 2012
10 Things Credit Scores Won’t Say http://t.co/3KIeIqH0 More powerful than most people imagine, & less uniform, customized 4 diff uses $$ Jul 30, 2012
Investing
If I use your framework, that gets me to a 2% real return assumption for stocks. Current dividend yield is… http://t.co/ssMBpc2L Aug 03, 2012
Wrong: Verizon, AT&T, Altria Among Top CDS-Adjusted Dividend Stocks http://t.co/fHEfo9jF This is another misuse of CDS spreads $$ Aug 02, 2012
Fair disclosure for last tweet: Long $HPQ common Aug 01, 2012
Wrong: Debt Markets Aren?t Only Worried About HP, but Dell and Others, Too http://t.co/ho8hqt8R CDS mkt spooked, bigger bond mkt calm $$ Aug 01, 2012
RT @KidDynamiteBlog: hearing NYSE is reviewing trades from this AM. Cancelling them would be the worst thing they could possibly do. @r … Aug 01, 2012
“You need to learn more about bonds & CDS before you write about them.” ? David_Merkel http://t.co/zcTji7O6 $$ Aug 01, 2012
Seeing a weird inverted market in $PSX w/bid $1 > ask. Weird, why doesn’t it clear. FD: long $PSX for myself & clients Aug 01, 2012
Cult Figures http://t.co/7yDHHbqn Bill Gross explains why future equity returns won’t b as high as the past, unless it is due 2 inflation $$ Aug 01, 2012
International
The Crushing Burden of Old Debt http://t.co/SHXhIYbN True of many places; there are more debt claims than resources to pay them at par $$ Aug 04, 2012
Shock, Ore and Chinese Steel http://t.co/j7HBuIHI When you can no longer cover variable costs, time to shutter high cost capacity $$ Aug 02, 2012
RE: Europe hasn’t tried austerity yet. The debts are still growing as a % of GDP. $$ http://t.co/NbaAxKZN Aug 01, 2012
India’s Power Grid Collapses Again http://t.co/BmQKGyJZ “half of India’s population ? reportedly impacted” $$ Jul 31, 2012
Merkel Allies Harden Opposition to Granting Bank License to ESM http://t.co/cgca4EW4 Right hand taking back what left hand gave $$ Jul 31, 2012
Thanks for writing this, Josh.? Cramer gave me my start in investment writing; I will be really bummed if $TST doesn’? http://t.co/g9QTXIWG Jul 30, 2012
The Bad History Behind ?You Didn?t Build That? http://t.co/Yd8vyYlA Obama was deliberately ambiguous; prime motive was 2 dis entrepreneurs Aug 04, 2012
Obama authorizes secret US support for Syrian rebels http://t.co/s0PJ8Hx1 US allies itself w/Turks & Saudis against Alawite dictatorship $$ Aug 02, 2012
California Says Tax Revenue ?at Risk? From Facebook Drop http://t.co/ZLzQuFHE Normal 4 bad surprises 2 happen 2 those w/liberal acctg $$ Aug 02, 2012
Protesters Break Into Nuclear Complex http://t.co/yhn1WRvV Gotta admire the tenacity of a bunch of aged Catholic old-style liberals $$ Aug 02, 2012
Republicans Buoyed by Freshmen Seek Rewrite of Tax System http://t.co/TE8HeV3s SImplify, flatten, elim deductions/credits 4 corp/indiv $$ Aug 02, 2012
Postal Service to Miss $5.5B Payment to US Treasury http://t.co/zcgaQDWa Raid Employee benefits, or raise stamp, $UPS & $FDX prices? $$ Jul 31, 2012
The Man Who Saved Capitalism http://t.co/6qBtGnXI Milton Friedman did many good things, but saying he saved Capitalism is hagiography $$ Jul 31, 2012
Indirectly, tax $$ would fund principal reductions RT @diana_olick: #Obama gets a big NO on slashing #mortgage debt: http://t.co/N1vHNnDj Jul 31, 2012
Punctuation Nerds Stopped by Obama Slogan, ‘Forward.’ http://t.co/uRjpoBdq An ! would have worked better. What state’s motto is Forward? Jul 31, 2012
Why Capitalism Has an Image Problem http://t.co/xQIwll6s We need to save capitalism from capitalists *&* the enemies of capitalism $$ 😉 Jul 30, 2012
US loves cops and firefighters – but not their pensions http://t.co/ioSglMne The pension cost is 2high, and politicians ignore the cost $$ Jul 29, 2012
@MikeImbery Then explain why we support anti-freedom governments that support our political aims. Israel, Egypt, Saudi Arabia, India, etc. Jul 29, 2012
That last tweet was meant to highlight the dual nature of US foreign policy, & while it is not lily white, it is better than alternatives $$ Jul 29, 2012
Charles Hill: The Empire Strikes Back http://t.co/9oY16P9A The US is an anti-empire providing freedom, so long as its aims endure $$ Jul 29, 2012
Other
I also don’t do #FF often but I ask my followers to follow @japhychron Aug 04, 2012
Just spent a fun 90 minutes discussing economics, banking, etc. w/ @japhychron in beautiful Ellicott City. It was a great time $$ Aug 03, 2012
WSJ home page is causing Firefox to lock up as it absorbs more and more memory until the system dies. Anyone else experiencing that? $$ Aug 03, 2012
This article reinforces the notion that the mainstream media does not understand conservative evangelicals. Chick-Fi? http://t.co/WoANS3bi Aug 03, 2012
Will Publishers Perish? http://t.co/2qveRV4I Arends: As self-publishing gets easier, the book business faces a major shake-out $$ #yup Aug 02, 2012
WSJ Olympic Medal Tracker http://t.co/P4kKLdcb #WSJLondon2012 Interesting graphical depiction of the Olympic Medal Standings $$ Aug 01, 2012
My Education in Home Schooling http://t.co/jXFF2BTT She makes more fuss than most homeschoolers do; it is easy to beat public schools $$ Jul 29, 2012
Comments
RE: @bloombergview Simplify: “Customer account segregation should never be compromised.” Fits in a tweet. $$ http://t.co/e6TnFVbT Aug 02, 2012
@kaylatausche Buffett doesn’t believe in the Sabbath, but likes high-margin focused entrepreneurs w/ethics. Many Christians buy there $$ Aug 01, 2012
@kaylatausche 1 logical buyer for those wanting 2 preserve corporate culture: Buffett. Has 1-2 retail businesses closed on the Sabbath $$ Aug 01, 2012
@izakaminska I though the same when I looked at the moon this evening over Ellicott City, MD. $$ Aug 01, 2012
@izakaminska I hear you, and think similarly. If nothing else, the “terms of Service” will become tighter. Love your work, Izabella. $$ Aug 01, 2012
@izakaminska Okay, it’s not a perfect solution, but it is good enough that 10% of the time, the account has been suspended when I try it $$ Aug 01, 2012
@izakaminska I regularly use the “block & report spam” feature of twitter to get rid of trolls and spammers, shouldn’t that solve it? $$ Aug 01, 2012
@sandbergadvisor Ding, you were the first to get Wisconsin’s motto, “Forward” $$ Jul 31, 2012
@felixsalmon “The value of the materials in the gold medal is about $644, silver about $330, and bronze about $4.71” http://t.co/6MWND6Mz $$ Jul 31, 2012
@felixsalmon The silver medal is 92.5% silver, the rest copper. Bronze medal is 97% copper, 2.5% zinc & 0.5% tin. S/b “Copper medal” $$ Jul 31, 2012
@felixsalmon oops, here’s the metallic composition: http://t.co/SP3zXzs9 The 2012 gold medal is 92.5% silver, 1.34% gold, rest copper. $$ Jul 31, 2012
@felixsalmon At the relative prices, that’s a gold medals table, assuming the medals are the same size and are purely that metal $$ Jul 31, 2012
“The solution is simple. Raise stamp prices, and the fees they charge UPS & Fedex for “going the?” ? David_Merkel http://t.co/0zaUbegb $$ Jul 31, 2012
@munilass I’ve reviewed enough crisis books that I can’t read them anymore; I scan 2c what they observe & ignore $$ http://t.co/Zy8nfeZh Jul 31, 2012
@TFMkts I agree; I’ve written about the problems w/levered ETFs. Kass is big enough, he can short bonds directly if he wants. Not hard $$ Jul 30, 2012
I know and agree; I’ve written about it. Suspect he shorts bonds directly RT @tradingpoints: you can’t hold $TBT on that time-frame – wow – Jul 30, 2012
Once I was talking to my boss at Provident Mutual about exotic options, like barrier, knock-out, and knock-in options.? As I described them to him his reactions were:
Why would I want to take that risk?
But when describing the other side of the trade, he would say “That’s an attractive proposition.”
And vice-versa.? He was a bright guy, but I don’t think his opinions were very different from what most people would think who have a moderate knowledge of the markets.? Asymmetric payoffs are typically favored by those that can earn a lot, even if the odds are small.
The same is true of Credit Default Swaps [CDS].? There are a lot of players that want to speculate on the demise of companies, hoping for a big payout, even if the odds are small, partly because the amount they pay to gamble on the risk is also small.
The markets for single company CDS are thin because there are few natural counterparties that want to nakedly go long credit risk. Those wanting to nakedly short credit risk therefore have to pay a premium to do so, usually higher than the credit spread inherent on a corporate bond of the same maturity.
And if one or two hedge funds want to do it “in size,” guess what? The dealers in the CDS market will back off considerably, and make them pay through the nose. No dealer wants to take the risk that an informed trader knows something he doesn’t.? They will raise the levels that one would have to pay to bet on the risk so high that some others might be willing to take the other side of the trade.
Now some investment journalists naively think that there is a strong correlation between CDS prices and probability of default.? The CDS market is a thin market, for reasons mentioned above.? Before I would say that there is a “creditor panic” going on, I would look at the corporate bonds of the company in question, and see if the yield spreads are “blowing out.”
Typically, the CDS market is quick to react, but with a lot of false signals.? The corporate bond market is slow to react, and sometimes misses problems.? The stock market is in-between, which is why I would look at the stocks of the companies when I was a corporate bond manager.
I say to myself, “What is happening in the corporate bond market? Is it panicking?”? The CDS markets say this:
But when I look at the corporate bond market for the same names, I see no panic. Here is the yield for a similar maturity HPQ bond:
And for a similar maturity DELL bond:
and for a similar maturity Xerox [XRX] bond:
Finally, for a similar maturity Lexmark [LXK] bond:
Aside from the Lexmark bond, there is no hint of trouble.? Lexmark is a small company, with two small bond deals, and as such is more volatile. Still, there is no real panic there.? Panic means the prices of the bonds is below $80, and these bonds still trade over $100.
In most cases, you could short the corporate bonds, and offer credit protection through CDS, and make risk free profits.
There is no panic going on in the technology company bond market, aside from Lexmark, of those names that have been mentioned.
It’s hard to spook the bond market for a liquid bond issuer; it is easy to spook the CDS market.? That’s why I don’t trust? appeals to rising CDS spreads if the bond market does not validate them.? Big markets do not need small markets for validation; rather, small markets need big markets for validation.
An Appeal to Journalists
When talking about default, you need to spend more time on the bond market and less time on the CDS market.? Yes, the CDS market tends to lead the bond market, but this relationship has a lot of noise, and offers a lot of false positives.? Far better to look at the bond market.? When the bonds of any company drop below $80 per $100 of par, there is trouble, and usually a juicy story, with considerable concern as to whether the company can survive.
The CDS market is driven by speculators who are probably right more often than wrong, but not by a large margin.? Avoid using that market to write stories, because it only lends to sensationalism, and does not reveal imminent trouble, unless the bond market agrees.
Final note: it is easy to go over to FINRA TRACE and get the bond yield data, even easier then getting CDS data if you don’t have a Bloomberg terminal.
This is a good book and I recommend it to certain people.? Thus when you see the number of stars I give it at Amazon, know that for those whom the book is good, it is really good.? But there are some who will get less out of the book.
The author, David Wilson, is an excellent explainer of markets to those who are just learning.? He frequently does “The Chart of the Day” at Bloomberg, giving considerable insight to neophytes and professionals as he boils down complex topics into one graph.
As I began to read the book, I noted to myself, “Oh, in a number of places, they are using Bloomberg Terminal formats without mentioning it.? At the end of the book, they give a list of Bloomberg Terminal codes that would be useful to those who subscribe to the ~$2,000/month service. (Yeh, it costs that much, and it is worth it if you can afford/use it.)
I say this partly because I was a rare Bloomberg user that had expertise with all of the “yellow keys” of Bloomberg.? I’m intellectually curious, so when I first used a Bloomberg terminal back in late 1992, I played around with it to see what it could deliver.? It could deliver a lot, and it has expanded exponentially since then.? It is one amazing system.
But what if you could cobble together the most important 50% of what you get on a Bloomberg terminal, ad pay nothing?? That’s me.? It takes extra work, but you can do it.? I miss my Bloomberg terminal, because I can’t afford it now, but for those that can afford it, it is a wealth of information.
Thus, back to the book.? The book reads like one who imbibes both Bloomberg’s editorial ideals: “keep it simple. explain, give them the facts,” and teaching beginner users of a Bloomberg terminal on how to think about the markets.? Note that the terminal never gets mentioned until an appendix at the end.? But those that use a Bloomberg terminal to a high degree understand how the market is segmented.? We don’t ask the same questions with municipal bonds as we do with stocks.
This book is a very good book for beginners in the markets.? It explains a lot of things well, with reasonable detail.? It is not a good book for experts — you know all this, but if you want to get an introduction to some tangential areas you might not know, this could still help you.? This book brings you up to an intelligent beginner level in a wide number of areas.
What areas does it cover:
Stocks
Bonds (of many sorts — corporate, government, municipal, mortgage, etc.)
Money markets
Indexes
Commodities
Derivatives (options, swaps, futures, forwards)
Mutual Funds (open-end and ETFs)
The book highlights at the edges of its pages the main ideas, processes for using the information described, and definitions of financial terms.
Quibbles
When the book gives definitions, it is white on a vivid green background, and is hard to read.? The text should have been black against the vivid green.
The book implicitly assumes that people get quotes from a Bloomberg terminal.? Aside from professionals, few people do.? Until Bloomberg markets a retail service for individuals, offering the basics for 5% of the cost, there is little utility from explaining the nuances of a Bloomberg quote.
The title is slightly misleading, because the the book is no more “visual” than most.? There are a decent amount of graphs, but for a book that calls itself visual, I would have expected more.
Who would benefit from this book:?? This book is best for those that have access to a Bloomberg terminal, but are not expert in using it. Second best, it could help those without a Bloomberg terminal, but want to learn the basics of investing.? Dave is a good teacher.? Finally, for those with experience, this book is redundant.? If you want to, you can buy it here: Visual Guide to Financial Markets (Bloomberg Financial).
Full disclosure: The publisher asked if I wanted the book.? I said ?yes? and he sent it to me.
If you enter Amazon through my site, and you buy anything, I get a small commission.? This is my main source of blog revenue.? I prefer this to a ?tip jar? because I want you to get something you want, rather than merely giving me a tip.? Book reviews take time, particularly with the reading, which most book reviewers don?t do in full, and I typically do. (When I don?t, I mention that I scanned the book.? Also, I never use the data that the PR flacks send out.)
Most people buying at Amazon do not enter via a referring website.? Thus Amazon builds an extra 1-3% into the prices to all buyers to compensate for the commissions given to the minority that come through referring sites.? Whether you buy at Amazon directly or enter via my site, your prices don?t change.
Six ways big banks screwed Grandma http://t.co/ltisCJ2P Poorly argued. It’s as if LIBOR could be manipulated without reaction. $$ Jul 28, 2012
Fidelity Joins BlackRock in Weighing Libor Action Against Banks http://t.co/9DKR48NY This isn’t as easy as it seems; much 2 prove $$ Jul 26, 2012
Eurozone
Draghi Said to Hold Talks With Weidmann on Bond Purchases http://t.co/SunXLadO If the Buba plays ball, the sky is the limit. $$ #inflation Jul 28, 2012
Draghi Says ECB Will Do What?s Needed to Preserve Euro http://t.co/xc4iQ9ji Uncertain that the ECB will buy lots of Italian & Spanish debt Jul 26, 2012
Europe Is Cheap?So Why Can?t I Pull the Trigger? http://t.co/yHGHjmoN Wait until things stop getting worse $$ Jul 25, 2012
Spanish, Italian Notes Rise on Bets for ESM Enhancement http://t.co/3CBLXOmK ?The idea of making the ESM a bank is a game changer,? $$ #no Jul 25, 2012
Spain to struggle to fund 2012 debt crunch http://t.co/iOefCfxz How long until the next last minute rescue? 10-yr yields over 7.5% $$ Jul 25, 2012
Europe Stymies Private Equity as Corporate Buyouts Stall http://t.co/QXNGEnQj If the banks won’t lend, private equity deals don’t fly $$ Jul 24, 2012
Hollande Transaction Tax Drives Investor Quest for Loopholes http://t.co/hDvZnQfL New trans tax drives investors2use contracts4difference Jul 24, 2012
Euro-Zone Government Debts Hit Record http://t.co/o9lXW7f1 Govt debt / GDP 4 whole E-Zone goes from 87.3% @ 12/11 -> 88.2% @ 3/12 $$ Jul 24, 2012
Greece Back at Center of Euro Crisis as Spain Yields Soar http://t.co/GLCWfi9e IMF/Core begins to doubt ability to hold it together $$ Jul 23, 2012
YIKES: Spanish Yields Are Surging To Record Highs http://t.co/qIQhvlUE Time 4 the Germans to buy summer homes in Spain $$ #evercloserunion Jul 23, 2012
US Politics
There. MMF reform that works, fit into a single tweet. $$ 🙂 Jul 27, 2012
Let MMFs keep a stable NAV, pass through losses thru unit reduction if real NAV<.995, reset real NAV @ 1.0025. Runs would strengthen NAV $$ Jul 27, 2012
Why Investors Are Dumping Money Market Funds For Short-Duration ETFs http://t.co/TNEpH9F9 My point: treat MMFs like modified ETFs $$ Jul 27, 2012
Maryland Governor Defends ‘Millionaires’ Tax’, Denies Job Losses http://t.co/yqfVRYCB Can bend rules, since MD is next 2 DC, which slurps $$ Jul 27, 2012
Drilling Strains Rural Roads http://t.co/2tUr6bJY Simple solution: tell energy companies you will not repair roads. They will do it $$ Jul 27, 2012
Treasury Eyes Funds Hidden Overseas http://t.co/g38s8z1c IRS goes after foreign trusts, seems 2ba piddling amount of money 2 go after $$ Jul 27, 2012
Wrong: How2Break NRA?s Grip on Politics: Michael R. Bloomberg http://t.co/I9vm6KKg The Ethanol lobby is a lot weaker than the gun lobby $$ Jul 27, 2012
Estate Tax: Ezra Klein is Wrong! http://t.co/1o5sumfN Never trust anyone whose profession starts w/an “A.” 😉 Accts, Attys, Advisors &c $$ Jul 26, 2012
Making the Rich Poorer Doesn?t Enrich the Middle Class http://t.co/fvsUgDfk The govt exists to grow itself until we die. Sad but true $$ Jul 26, 2012
The gender wage gap is a myth http://t.co/cNpTi1uZ Diana Furchtgott-Roth makes the same case that many economists have since the 70s $$ Jul 26, 2012
New Geithner disclosures further cloud his record http://t.co/heblaDAH Geithner was point man 4the Fed on derivatives. Dropped ball $$ Jul 26, 2012
Justice Scalia Disputes Accuracy Of ‘Leak’ http://t.co/OMVCtlAg Wide-ranging interview of Scalia, whose juridical impact may outlive him $$ Jul 25, 2012
Former Citigroup CEO Weill Says Banks Should Be Broken Up http://t.co/zftFGEQ6 Good, he changed his view, my view changed on that also $$ Jul 25, 2012
10 Everyday Items That Cost Way More Because of US Taxes http://t.co/KjXUu8Im Interesting list, mostly comprised of protectionist taxes $$ Jul 25, 2012
The hidden Mitt Romney http://t.co/rPVcQR7C Romney & Obama have one thing in common: the more you know about them, the less you like them $$ Jul 24, 2012
Romney to Attack Obama on Leaks, Defense Cuts http://t.co/hiCrTCtX ?the greatest force for good the world has ever known? US naivete $$ Jul 24, 2012
Scalia Offers Up 57 Varieties for Interpreting Legal Texts http://t.co/sSdqUE1m His manifesto on originalism/textualism $$ Jul 23, 2012
China
Lies, Damned Lies, and China’s Economic Statistics http://t.co/Fqpn8YMS I have some skepticism to US statistics, how much more China? $$ Jul 27, 2012
Xi Jinping Millionaire Relations Reveal Fortunes of Elite http://t.co/iFz7e6dg Communist Party members have access2loans & IPO allocations Jul 27, 2012
Capital Outflows Chime With China?s Bears http://t.co/GIaMbM8g “any currency exchange >$2,000 needs to have a prior reservation made.? $$ Jul 25, 2012
Companies
Alierta Abandons Dividend Penchant to Save Telefonica http://t.co/AHhbFucX Now more interested in $TEF, good cashflow, div shld resume $$ Jul 26, 2012
Unilever Warns of Worsening Economy http://t.co/wscXplAV Global economy is weak, even for staple goods. $$ Jul 26, 2012
Zynga?s ?Draw Something? Isn?t a Pretty Picture http://t.co/nSrHWTG3 Always be wary of fads that have no balance sheet $$ Jul 26, 2012
Sanofi Dengue Vaccine Is Promising http://t.co/7EFL5ioC Good news. Perhaps Dengue Fever may be conquered for the good of mankind $$ Jul 26, 2012
Industrias Bachoco Announces Second Quarter 2012 Results http://t.co/n0amblWp Tough read, Q looks good, US acq prob paying off FD:+ $IBA $$ Jul 25, 2012
Assurant Reports Second Quarter 2012 Financial Results http://t.co/jdaB09Kh FIring on all cylinders, & shrinking share count FD: + $AIZ $$ Jul 25, 2012
Warren Buffett: Great Investor, Lousy Insurance Salesman? http://t.co/4KfZNNP3 Poor article; Buffett is very intelligent insurance exec $$ Jul 25, 2012
link 4 last tweet: http://t.co/sj75tC5q You could short the 2.6% bonds and go long default protection for an almost risk-free profit. $$ Jul 25, 2012
Someone Is Getting Really Nervous About HP?s Debt http://t.co/Zqj1xEhp If you look at bonds vs CDS, bonds aren’t panicking. FD: + $HPQ $$ Jul 25, 2012
Contra: Campbell Chases Millennials With Lentils Madras Curry http://t.co/MBdpXGsJ @ $3/pouch I don’t c a mkt 4 gourmet instant soup $$ Jul 24, 2012
Google buys Sparrow for ‘new Gmail project’ http://t.co/q0i3TfZv Sell your company 2 $GOOG 4 $$ . Get new tasks while old technology dies Jul 24, 2012
Iraq blacklists Chevron for Kurdish oil deals http://t.co/23opiYYs Not as big as it seems $CVX has no biz in Arab Iraq $$ FD: +CVX Jul 24, 2012
Rest of the World
North Korean Mystery Woman Is Leader Kim Jong Un?s Wife http://t.co/CK8seZPc I find it optimistic that he wants to live a normal life $$ Jul 26, 2012
Global economy?s cure is worse than the disease http://t.co/isJuL3rn Indirectly suggests the best policy would be benign neglect $$ Jul 25, 2012
Cyber Attacks on Activists Traced to FinFisher Spyware of Gamma http://t.co/ZITxw1bu Practice safe computing; scan for rogue processes $$ Jul 25, 2012
Public Radio
Public Radio International acquired by Boston public broadcaster WGBH http://t.co/Mck9Gx0n Interesting when a non-profit corp gets bought $$ Jul 26, 2012
If it is the same, could NPR or the Corporation 4 Public Broadcasting sell out also? Buffett could give them a good home. Or the Kochs 😉 $$ Jul 26, 2012
Grew up in the insurance world, so I’ve seen non-profit (mutuals) buy another mutual or stock company, but is it the same w/WBGH buying PRI? Jul 26, 2012
Renaming 2 Private Radio International 😉 RT @timjeby: Big Public Radio News: WGBH in Boston to acquire Public Radio International #pubmedia Jul 26, 2012
Municipal Bonds
For further reading consider: Some perspective on the recent California bankruptcies by @munilass aka Bond Girl $$ http://t.co/2jwUeNOX Jul 26, 2012
Muni Blues Worry Investors http://t.co/r4VvKP4g Municipalities aiming4 strategic default face challenges in courts; favor bondholders $$ Jul 26, 2012
Some perspective on the recent California bankruptcies http://t.co/RFAgUt5u @munilass on how unusual wud b4 muni bonds 2not pay principal $$ Jul 24, 2012
Federal Reserve
Bernanke the unready http://t.co/6ppUDOMl Fed is impotent, but can’t admit it. Bernanke is wrong on monetary policy near 0%. $$ Jul 26, 2012
Fed strives to replenish depleted toolkit http://t.co/Yhy4pMy2 Doing the same thing, over & over again, but expecting different results $$ Jul 25, 2012
Fed Sees Action if Growth Doesn’t Pick Up Soon http://t.co/2TddWIZz Doing the same thing over&over again&expecting different results $$ Jul 24, 2012
Coming: The End of Fiat Money http://t.co/jHhnlPs0 Nice try. Lot of good stuff 2 read here, but no clincher 4 the return of gold $$ Jul 23, 2012
US Housing
By October of 2005 the prices of residential real estate peaked, which led to most of the leverage unwind that was about to happen. $$ Jul 25, 2012
Office of Financial Research Annual Report http://t.co/w9Xm4i9J Pp 8-9, first difficulty: by 2005 it was too late to stop the crisis $$ Jul 25, 2012
Is This What a Housing Bottom Looks Like? http://t.co/pSwtryX4 Lazy recovery, as people sell when they can avoid losses $$ Jul 27, 2012
Wrong: Reverse mortgages as popular as IRAs in 10 years http://t.co/pp7qoG63 Must have equity & creditworthy rev mtge lenders. Complex 2 $$ Jul 25, 2012
Home Values Post First Year-Over-Year Increase Since 2007 http://t.co/VHFnG83k Prices rising on the low end; higher priced problematic $$ Jul 24, 2012
Subprime Rally Building as Dealers Sop Up Supply http://t.co/s7BVK0v2 Combination of yield lust & rising housing prices drive up bonds $$ Jul 24, 2012
Miscellaneous
Pig Tissue Seen Fixing Injury That Sidelined Lin http://t.co/ys0kWDNb New tech uses pig tissue undoes painful damage from torn meniscus $$ Jul 27, 2012
Can a Food for Cows Make Healthier Snickerdoodles? http://t.co/o8vF4h5e Adding some DDG 2baked goods adds protein & fiber, good yes? $$ Jul 26, 2012
Closing In on a Cure for Vision Loss http://t.co/QCNZohN7 Testing “gene therapy, stem-cell therapy & a modified version of vitamin A” $$ Jul 24, 2012
Will the world’s greatest startup machine ever stall? http://t.co/R1wFzGsM Long interview w/President of Stanford re Silicon Valley ties $$ Jul 24, 2012
Breadbaskets of Last Resort See Once-in-a-Lifetime Prices http://t.co/A0AePuJx Focuses on upper Midwest; great time to have good corn $$ Jul 24, 2012
MIT Researchers’ `Cool’ Idea http://t.co/SMPitSjO Way cool, allowing 4 cheaper, better milk in rural areas where power is spotty. $$ Jul 24, 2012
Contra: The One Capitalism That Dare Not Speak Its Name http://t.co/jaZfeluf State Capitalism more prone 2 bubbles than laissez-faire $$ Jul 24, 2012
THE DEFINING DECADE: Why You Can’t Afford To Waste Your Twenties http://t.co/8gl9RqGG Early success compounds; so does early failure $$ Jul 23, 2012
Lobbying Works! Big Spenders Reap Big Stock Gains Says Trennert http://t.co/2vsJyEXB But what happens if the US Government has to shrink $$ Jul 23, 2012
Who Really Invented the Internet? http://t.co/LkvW1xwM Many did, & they were standing on the shoulders of giants. $$ #ittakesavillage 😉 Jul 23, 2012
Market Dynamics
Fidelity Targets Securities Lending http://t.co/stEvATII The buyside is beginning to fight back against the trust & investment banks $$ Jul 27, 2012
Study: High-Speed Trading Hurts Long-term Investors http://t.co/ZhMhkiCG This probably affects those w/higher turnover more $$ Jul 27, 2012
Currencies: from Nullifying to Negative http://t.co/lxqwZZKw What is the game? To make money, or avoid losing a lot? Neg int rates a pain $$ Jul 25, 2012
Bond Trading Loses Some Swagger Amid Upheaval http://t.co/l93Vp7xL Except 4 the most liquid corporates, need broker2find liquidity/bonds $$ Jul 25, 2012
Comments
Our Olympic Gold in Wit $$ RT @TheLondonWhale: RT take a bow @ReformedBroker: Switzerland tough to beat in gold vaulting Jul 28, 2012
“Cultural change cannot be achieved by outsiders, in 1 generation, no matter how much $$ gets spent.” ? David_Merkel http://t.co/5eBdsBlO Jul 27, 2012
@brettsimonson Think the direction I would have headed was public policy, which involves a finer view of asset/liab mgmt, run avoidance etc Jul 27, 2012
@brettsimonson Hi Brett, no part 2 from what I can see. Very disorganized that week — no power for a week Jul 27, 2012
Ditto, well-deserved $$ RT @ReformedBroker: we love you, simone RT @SimoneFoxman: Yay, 5K! Thanks for following, everyone!! Jul 27, 2012
@munilass Also, if a kid was disconsolate for a while, before 2AM it was mine. After, it was hers. Jul 27, 2012
@munilass When the family was young, my wife & I had a deal. I took midnight feedings, she took the early morning feedings. Jul 27, 2012
@munilass My house works like this: I work late b/c it is quiet. My wife who homeschools the kids gets up early b/c it is quiet. Jul 27, 2012
@munilass I know many classes of bonds and other fixed income instruments. But I only know enough about munis to be dangerous. Thus I ask. Jul 27, 2012
@munilass Decided to review the book “Investing in the High Yield Municipal Market” by Triet Nguyen. If I have Qs, can I ask you? Jul 27, 2012
@e_d_sanders Both parties stand for different shades of nothing. They give rhetoric to their bases, do little, and cling to power. $$ Jul 27, 2012
RT @Convertbond: Sell the US equity rally hard when Spain’s 2s \ 10s curve starts to re-flatten #Government #Bonds 2 year & 10 year … Jul 26, 2012
“”Of course this food is organic. We used Organic Chemistry to create it.”” ? David_Merkel http://t.co/CvYhIQ7p $$ $DF Jul 26, 2012
Happy 2b your 1st subscriber $$ RT @SNLFinancial: Follow SNL Financial reporters so you?re always in the know: http://t.co/Rbwi9Jn3 Jul 26, 2012
“Why we need to dismantle the Democrat & Republican parties: the national budget slaves for local interests” Merkel http://t.co/gllFMcec $$ Jul 26, 2012
A weather forecaster for either WBAL or WTOP said that Maryland gets a derecho once every 5-10 years. Two in one year? Hope not. $$ Jul 26, 2012
Just what we need, another derecho $$ RT @BloombergNews: Severe storms, possible derecho forecast for Northeast US http://t.co/XPGdJQoC Jul 26, 2012
RE: Loads of 12% coming out mean that only 88% of the money is going to work for the investor.? Doesn’t matter where ? http://t.co/hJgSPGrT Jul 26, 2012
Commented on The Economist | Monetary policy: Bernanke the unready http://t.co/rsqLZm7A Jul 26, 2012
“Marriage civilizes, & gives us some hope that he will normalize N. Korea. He lived outside NK 4?” ? David_Merkel http://t.co/uxDl62iM $$ Jul 26, 2012
RT @ReformedBroker: RT @jamielissette: *MOODY’S CHANGES OUTLOOK ON 17 GERMAN BANKING GROUPS TO NEGATIVE Jul 25, 2012
“For what it is worth, that’s the way Canada does it. Income taxed @ FMV @ death. No estate tax.” ? David_Merkel http://t.co/lQx4RjYN $$ Jul 25, 2012
RE: @CSMonitor The book “Hungry Ghosts” documents The Great Leap Forward very well. Worth a read. $$ http://t.co/LQ5dChjQ Jul 25, 2012
“It would be cleaner to tax unrealized capital gains at death, and eliminate the estate tax.” ? David_Merkel http://t.co/GqPiMZ5r $$ Jul 25, 2012
“Rating agencies are supposed to be behind the curve. They rate over the full credit cycle?” ? David_Merkel http://t.co/z80RTQCv $$ Jul 25, 2012
@e_d_sanders He could have included 1 or 2 more words & it would have been crystal clear. I think the ambiguity was deliberate. I cud bwrong Jul 25, 2012
“Don’t open suspicious attachments. Use procexp to review processes. Disable processes you can’t?” ? David_Merkel http://t.co/PUaCZKOf $$ Jul 25, 2012
“When computers screen applicants, a skills shortage emerges. Computers seek current perfection, not?” David_Merkel http://t.co/HVRm6HOP $$ Jul 25, 2012
“A case where so many things went wrong, it is amazing that they almost won. Really, they were?” ? David_Merkel http://t.co/hJcw4tCX $$ Jul 25, 2012
@e_d_sanders I’m voting third party; I don’t like the GOP either; it’s obvious that no one man builds infrastructure; not a point 2 make Jul 25, 2012
@e_d_sanders It’s not a misquote. Read the two paragraphs in context; he is downplaying individual initiative. Jul 25, 2012
@havocp I copied the quote from the WH website. Given what O said in the above that, both interpretations are legitimate. Could b clearer. Jul 25, 2012
@havocp and I appreciate your comment. I like those that comment, and even those that disagree with me highly. Jul 25, 2012
@havocp Doesn’t matter to me. Concentrating effort is significant and deserves a reward, not condescension. $$ Jul 25, 2012
RT @pdacosta: Crisis contained, to inhabited areas. RT @SJosephBurns: “The Subprime Crisis will not affect the economy overall.” – Ben B … Jul 25, 2012
RT @ritholtz: WSJ reporting ?Federal Reserve moving closer to action to spur growth” Bond buying, rate guidance, lower reserve rate amon … Jul 24, 2012
RE: @bloombergview You’re still going to need LIBOR, however calculated, for existing contracts. Replacement will be ? http://t.co/smOdgXbd Jul 24, 2012
“Ethics comes before competence. Doesn’t matter how good you are, if you are unethical. The?” ? David_Merkel http://t.co/6bgcT6nT $$ Jul 23, 2012
RT @AmityShlaes: “The post office ought to be self supporting. At present business men are deluged with useless mail.” — Calvin Coolidg … Jul 22, 2012
@niubi No, b/c many babies do not sleep through the night @ 3 months Jul 21, 2012
If I could ship the rain in Maryland 2 the Midwest, I would. But Maryland farmers r having a good year. Corn looks normal & prices r high $$ Jul 21, 2012
Indebted Valencia asks Spain government for help, markets jolted http://t.co/lDkPC9U2 Better to let a region fail, than bail them out $$ Jul 21, 2012
Favoring the French, a lesson in perception from bonds http://t.co/qa5CJEgL France’s advantage: big, which is weak 4 creditworthiness $$ Jul 21, 2012
Estonia is admirable for their courage, though I can’t imagine why you would want to be part of the Eurozone NOW $$ Jul 20, 2012
Krugmenistan vs. Estonia http://t.co/1tJssWqG Post private debt bubble, Estonia froze pensions, lowered govt wages ~10% & + VAT by 2% $$ Jul 20, 2012
Demand for Spanish Debt Continues to Evaporate http://t.co/TMdIV05Y Piecemeal solutions continue to fail as 10-year rises over 7% $$ Jul 19, 2012
Merkel Says Bailout Liability Undecided http://t.co/HuggOawS “We always get the majority we need,” Ms. Merkel said. $$ Jul 16, 2012
US Economic Policy
FSOC Supports Overhaul to Trim Risk of Money-Market Runs http://t.co/nD1CKeqv Federal Govt owned by the banks, who want to axe a rival $$ Jul 21, 2012
Let States Do the Tax-Collecting Dirty Work http://t.co/Uq1LmPwI States could decide how to tax & remit to the Feds. +1 $$ Jul 21, 2012
How the Elites Built America?s Economic Wall http://t.co/ifCcBhX6 Interesting take on how some “blue state” policies promote inequality $$ Jul 20, 2012
Treasury Auctions 10-Year TIPS at Record Low Negative Yield http://t.co/XvnQmLtg Lock in a loss against CPI to avoid a poss bigger loss $$ Jul 20, 2012
The Coming Defense Crack-Up http://t.co/JKZycDO4 If it forced us to reprioritize Defense & other Federal spending, could b good thing $$ Jul 19, 2012
D&R parties are rival teams @ same country club $$ RT @ampressman: @AlephBlog Yeah, who else would do such a thing? http://t.co/yN4GyGat Jul 19, 2012
The GOP’s Solyndra Wing http://t.co/eNvLU1Wb Republicans who love corporate welfare; this is not merely a problem of the Democrats $$ Jul 19, 2012
Post Office Might Miss Retirees’ Payment http://t.co/YvpRVLWe Draining pension funds is a stopgap, not a real solution. Raise prices. $$ Jul 19, 2012
QE, negative yields and the paradox of thrift http://t.co/oUM0hkI0 QE not only raises asset prices, but liability values as well $$ #fail Jul 18, 2012
At a Wharton conf 22 years ago, I said neg rates were possible b/c of deflation combined w/need to pay to store cash. Instructor laughed. $$ Jul 18, 2012
U.S. Public-Pension Shortfall $4.6 Trillion, Budget Group Says http://t.co/Y4fq7tj0 Probably a little high; Tsy discount rates severe $$ Jul 18, 2012
How Much Could States Benefit From Online Sales Tax? http://t.co/9d3eYZz4 Would bail out a decent amount of many states’ deficits $$ Jul 18, 2012
Wrong: Industrial Production in U.S. Rises in Sign of Resilience http://t.co/RfNT4hM6 Data revisions > current period estimates beat $$ Jul 17, 2012
Ponzi Scheme? http://t.co/kU4Yx1CW Cities r going BK b/c they didn’t adequately project their funding needs?will community ass’ns b next? $$ Jul 17, 2012
Calpers Misses Big on Investment Target http://t.co/HIRzXnw1 Assets < Liabs; A: +1% L: +7.5, plus val adj from 7.75%. Assets <<< Liabs $$ Jul 17, 2012
Romneyconomics – Good but incomplete http://t.co/6n869J9j Generally agree, but shoddy logic in the middle about GDP & debts $$ Jul 16, 2012
Treasuries Doomsday Is Four Years Away for Vanguard http://t.co/nAz67Q3k Vanguard is largest private owner of US debt @ $148 billion $$ Jul 16, 2012
Miscellaneous
I get amused when people misspell Warren Buffett’s name as Buffet. But a high profile organization: @Bloomberg? $$ http://t.co/NRsc8plk Jul 20, 2012
New Sleeping Pill Thwarts Brain?s Up-All-Night Neurons http://t.co/6I0LglFG $MRK Blocks a tiny group of receptors that keep body alert $$ Jul 20, 2012
Fore Sale http://t.co/mkUeWlVb On the plunging prices for houses where you also have to pay annual membership dues for the golf club $$ Jul 20, 2012
Task named editor in chief of Yahoo Finance http://t.co/7aiATNa6 Congratulations 2 @atask ! Great job @ important financial web resource $$ Jul 19, 2012
New Yahoo CEO Mayer is pregnant http://t.co/Kq7ICTcD Happy for the couple; risk to put off kids into late 30s; hope her delivery is easy $$ Jul 17, 2012
Contra: The Secret Behind Romney?s Magical IRA http://t.co/uQHbSbWc Misses preferred shares & valuation issues; better work elsewhere $$ Jul 16, 2012
Rest of the World
Japanese Consumers Reconsidering Rice Loyalty http://t.co/W4WuhvKj Food grown in Japan is suspect since Fukushima; foreign rice limited $$ Jul 20, 2012
Fast slowdown $$ RT @Thevalueteam: China?s steel and concrete sectors are indicative of something potentially wrong http://t.co/ufK0Vaob ^KM Jul 17, 2012
China’s Version of ‘Too Big to Fail’ http://t.co/tNKduuPn Never knew China had a CDO mkt; also suggests a private equity bubble in China $$ Jul 16, 2012
Market Dynamics
Here?s Another Indicator Pointing Toward Recession http://t.co/c3ImTeZF Sharp cuts in earnings estimates indicate a recession coming $$ Jul 21, 2012
Mortgage Bonds Yield Hopeful Signs on Housing Recovery http://t.co/gzm1Fefi A lot of disagreement over proper credit loss assumptions $$ Jul 20, 2012
Plotting a Securitization Sequel http://t.co/WE0uhTYI Don’t think securitizing rental payments will work. no property behind cashflow $$ Jul 20, 2012
Economic Fears Hurting Obama, Poll Indicates http://t.co/vq7JzIEe No surprise, there are few policies that work against debt deflation $$ Jul 20, 2012
Everyone Hates Treasurys Now http://t.co/LGYAIcTU That’s what makes it such a great trade @carney, w/many needing2invest 4 long liabs $$ Jul 20, 2012
Failing to Connect the Boom to the Bust http://t.co/jrKGIVKs Surges in debt r associated w/booms in asset prices, vice-versa 4 busts $$ Jul 19, 2012
CMBS Leverage Most Since ?07 as Standards Loosen http://t.co/1R5FYTwb 4a long time I was a realtive fan of CMBS, but now I say: AVOID $$ Jul 18, 2012
They got hit by the shalestorm $$ RT @PlanMaestro: Wilbur Ross Says U.S. Coal Is Facing Years Of Headwinds http://t.co/2TJMPDQ8 Jul 17, 2012
Contra: Libor Flaws Allowed Banks to Rig Rates Without Conspiracy http://t.co/khuqkHTr Does not proves its case; just hypotheticals $$ Jul 16, 2012
Negative Real Interest Rates: The Conundrum for Investment and Spending Policies http://t.co/OTDe5p9Y Policies should follow nomnl yields $$ Jul 16, 2012
Companies
Marissa Mayer: Google?s Chic Geek http://t.co/Ge3zFk1l Good background piece on new CEO of $YHOO. Q: Can a technologist make a good CEO? $$ Jul 16, 2012
Buffett Empowers Deputies by Raising Funds to $8 Billion http://t.co/6C3YO1Ml Note: buying smaller companies than WB does but still big $$ Jul 16, 2012
Comments
@jake_f My original tweet stems from CMBS-like structures that did not fare well, b/c underlying property economics was too volatile $$ Jul 20, 2012
@jake_f That’s a good point; if they use that structure, could work, but will they have high enough “interest rates” to absorb losses? $$ Jul 20, 2012
@jake_f @DavidSchawel It’s probably a little of both; housing prices improving on low end, but there is a huge demand for yield now $$ Jul 20, 2012
@historysquared US paid down much of their debts post-WWII, inflated away more Jul 20, 2012
RT @AmyResnick: RT @SimonCYWong: Entertaining cartoon primer on #Basel 3: What it is & why it is needed http://t.co/rM0zPNkM via @fo … Jul 20, 2012
“We home school. We replace the teacher. Superior to the public schools because one-on-one?” ? David_Merkel http://t.co/Hia2soVu $$ Jul 19, 2012
“Good for you, KD. Glad you are safe, and powered. I grew up in Wisconsin, so I was used to the?” ? David_Merkel http://t.co/FjYt10DN $$ Jul 19, 2012
@jdstein I’m not saying those things aren’t in the LDS; those exist in other religions 2. It’s not what makes the LDS distinctive. Jul 19, 2012
@jdstein I am referring to the eighth and ninth paragraphs of the original article. Jul 19, 2012
RE: @bloombergview The virtues of Mormonism that the author thinks exist are not core to Mormonism. Romney knows well? http://t.co/qj5VH9gZ Jul 19, 2012
@kyles09 I’m in the Austrian School w/slight modification from the Santa Fe Institute Jul 19, 2012
@Jesse_Livermore @PragCapitalist Total share to wages down, profits up, well known since 1990. Profit margins will mean-revert someday $$ Jul 19, 2012
@Jesse_Livermore @PragCapitalist Ok, I get it, though my wage figure is a little higher. Real GDP rising @ 2.5%/yr vs real avg wages @ 1%/y Jul 19, 2012
@Jesse_Livermore @PragCapitalist You might need to spill the calculation for me, I don’t see that. Jul 19, 2012
@PragCapitalist At least for the average, no not stagnant, maybe not as good as post WWII, & it might be worth looking at median vs mean. $$ Jul 19, 2012
@PragCapitalist and the CPI-U average is 2.51%, looks like about 1% real average wage growth, which doesn’t seem unreasonable. Jul 19, 2012
@PragCapitalist looking at the AWI tables, http://t.co/Xy1cg1VZ it has almost doubled over that period – 3.47%/yr compounded $$ Jul 19, 2012
RE: @marketfolly They are all ruling out a depression scenario. Long Treasuries continue to rally; very contrarian. http://t.co/GumjLkeJ Jul 18, 2012
RE: @bloombergview Thanks for the old news; trouble is, kids need downtime, and our schools aren’t very good — your ? http://t.co/XBEWunfe Jul 18, 2012
@stockspot2000 Interesting, have not seen evernote before. Thanks. Jul 18, 2012
@footnoted Pension and healthcare systems will not be able to fund the obligations; lesser benefits will be paid. $$ Jul 18, 2012
Could we audit the gold at Fort Knox, also? Amazing secrecy there. http://t.co/cclHfpLk Jul 17, 2012
@mattyglesias Heard you on NPR this evening, please review http://t.co/kvzJmCXQ because it explains Romney’s IRA strategies. $$ Jul 18, 2012
RE: @bloombergview Fail: you did not mention the preferred stock. You did not do your homework. This is a perfect e? http://t.co/74HUrube Jul 16, 2012
@BarbarianCap I’m glad you like it; it works out to a minute per every 4 tweets — making it 1 of my shorter writing efforts for my blog $$ Jul 15, 2012
@BarbarianCap So far I have turned down a few book deals, mainly 4 time use reasons: asset management biz doesn’t support the family yet $$ Jul 15, 2012
