Search Results for: Break up AIG

Call Me When You Have A Real Insurance Company!

Call Me When You Have A Real Insurance Company!

Posted on by David Merkel
Photo Credit: eflon?|| The?title of the article comes from a comment Greenberg supposedly made to Buffett when AIG was much bigger than Berkshire Hathaway — times change…

============================

The?title of the article comes from a comment Greenberg supposedly made to Buffett when AIG was much bigger than Berkshire Hathaway [BRK] — times change…

It’s come to this: AIG has sought out reinsurance from BRK to cap the amount of losses they will pay for prior business written. ?It’s quite a statement when you are willing to pay $10 billion in order to have BRK pay 80% of claims over $25 billion, up to $20 billion in total. ?At $50 Billion in claims AIG is on its own again.

So what business was covered? ?A lot. ?This is the one of the biggest deals of its type, ever:

The agreement covers 80% of substantially all of AIG?s U.S. Commercial long-tail exposures for accident years 2015 and prior, which includes the largest part of AIG?s U.S. casualty exposures during that period. AIG will retain sole authority to handle and resolve claims, and NICO has various access, association and consultation rights.

Or as was said in the Wall Street Journal article:

The pact covers such product lines as workers? compensation, directors? and officers? liability, professional indemnity, medical malpractice, commercial automobile and some other liability policies.

Now, AIG is not among the better P&C insurance companies for reserving out there. ?2.5 years ago, they made the Aleph Blog Hall of Shame for P&C reserving. ?Now if you would have looked on the last 10-K on page 296 for item 8, note 12, you would note that AIG’s reserving remained weak for?2014 and 2015 as losses and loss adjustment expenses incurred for the business of prior years continued positive.

For AIG, this puts a lot of its troubles behind it, after the upcoming writeoff (from the WSJ article):

AIG, one of the biggest sellers of insurance by volume to businesses around the globe, also said it expects a material fourth-quarter charge to boost its claims reserves. AIG declined to comment on the possible size. Its fourth-quarter earnings will be released next month.

For BRK, this is an opportunity to make money investing the $10 billion as claims on the long-tail business get paid out slowly. ?It’s called float, which isn’t magic, but Buffett has done better than most at investing the float, and choosing insurance business to write and reinsure that doesn’t result in large losses for BRK.

I expect BRK to make an underwriting profit on this, but let’s assume the worst, that BRK pays out the full $20 billion. ?Say the claims come at a rate of $5 billion/year. ?The average payout period would be 7.5 years, and BRK would have to earn 9.2% on the float to break even. ?At $3.75B/yr, the figures would be 10 years and 6.9%. ?At $2.5B/yr, 15 years and 4.6%.

This doesn’t seem so bad to me — now I don’t know how bad reserve development will be for AIG, but BRK is usually pretty careful about underwriting this sort of thing. That said BRK has a lot of excess cash sitting around already, and desirable targets for large investments are few. ?This had better make an underwriting profit, or a small loss, or maybe Buffett is ready for the market to fall apart, and thus the rate he can earn goes up.

All that said, it is an interesting chapter in the relationship between the two companies. ?If BRK wasn’t the dominant insurance company of the US after the 2008 financial crisis, it definitely is now.

Full disclosure: long BRK/B for myself and clients

At the Cato Institute?s 34th Annual Monetary Conference (Panel 1)

At the Cato Institute?s 34th Annual Monetary Conference (Panel 1)

Posted on by David Merkel
Luis Guillermo Pineda Rodas Follow
Photo Credit: Luis Guillermo Pineda Rodas?

Moderator: Craig Torres -?Financial Reporter, Bloomberg News

John A. Allison?-?Former President and CEO, Cato Institute, and former Chairman and CEO, BB&T Bank

Mark Spitznagel -?President and CEO, Universa Investments, LP

James Grant -?Editor, Grant?s Interest Rate Observer

John Allison: Talk about Monetary vs Real economic effects. ?Wall Street did not cause the crisis. ?Was a combination of CRA and the GSEs, aided by the Federal Reserve.

When the dot-com bubble deflated, Greenspan ran monetary policy too loose, and deliberately inflated a housing bubble. ?Greenspan (DM: Bernanke) talked about the global savings glut. ?When rates rose, they rose rapidly in percentage terms rapidly.

Bernanke inverts the yield curve, incenting banks to take undue credit risk. ?Bernanke said that there would be no recession amid all of the bubbles. ?Many mainstream businessmen felt fooled by the Fed.

Average businessmen expect businessmen expect inflation, but it is not happening. ?Now they behave conservatively.

Regulation was worse than monetary policy. ?Risk-based capital. Privacy act. Sarbox.

A big deal, and I am the only one talking about it: Early ’80s: attacked bad banks and they failed — a good thing. ?Good banks kept operating. ?This time regulators saved bad banks and regulated good banks more heavily — perverse. ?Totally irrational.

Sheila Bair should not be viewed as a hero. ?Closed barn door after cow got out. ?Later “solutions” not useful.

Bernanke’s book: on the verge of global armageddon… JA thinks contagion was far smaller than perceived.

Liquidity requirements are restraining lending. ?Thinks that banks can’t aid in creating jobs. ?Lending standards are tight.

Likes a bill coming out that would loosen matters. ?Talks about the ’90s when BB&T opposed regulation on supposed racial discrimination in lending.

(DM: What a dog’s breakfast of clever and stupid)

Mark Spitznagel — management and hedging of extreme risks.

Mises — No laboratory experiments can be performed with respect to human action.

Talks about equilibria, correcting processes, etc. ?(DM: Loquacious, not going anywhere… boring.) ?Mentions Tobin’s q-ratio.

(DM: I remember that I didn’t give his book a good review. ?His talk validates that review.)

Tobin, a Keynesian, looked at the q-ratio as a monetary policy tool. ?But investment doesn’t get affected much by the q-ratio.

Shows how the q-ratio is negatively correlated with future returns, and the left tails get bigger as q-ratios get higher.

Trump can stimulate, but crashes will bring correction.

James Grant: Gruber, Obamacare founder said that it passed because the American people are stupid.

New ideas: what to do now after the election? Grant suggests older policies that existed over one century ago. ?Or, more modern: Taylor Rule? ?Friedman’s constant growth rate of money…

Monetary policy has been debated for the last 250 years… the Fed was viewed as a solution to the Money Trust, but brought its own problems. ?Pension fund problems…

The Fed has paid no price for its manifold failings. ?Double Liability would be a better method. ?Bank shareholders should bail out, not taxpayers. ?Monopoliies: PhD economists w/tenure, Federal Reserve.

$15 Trillion of government bonds have been sold with negative yields. ?A promise to store fiat money at a loss.

Panics used to occur at 10-year intervals, w/gold backing and double liability. ?The economy grew rapidly then.

Overstone: “the trouble with money is credit, and the trouble with credit is people.”

We like being spared volatility. ?How many truly want to have a Old Testament-level bear market?

Swiss National Bank? Creates francs to tamp down the currency and buys up euros, dollars, then stocks.

QE is a cautionary tale. ?It failed politically because it did not work. ?Failure of the PhD standard will lead to new thinking.

Q&A

Mark Q1: Trump sounds monetarist, not radical. ?Who will bring change? ?Who will swim against the tide of Statism?

Grant: Will swim against statism. ?Yeah!

Q2: Could gold trading be viewed by the US as a currency exchange? (lower taxes)

Grant: would be easy to do, but difficult to get done politically.

Q3: Isn’t the cost of funny money low productivity growth? ?(True everywhere it has been done)

Allison agrees. ?So does Spitznagel.

Q4 Julie Smith: recent events in India — the war on cash. ?Comments?

Grant talks about Ken Rogoff, and remove $50 and $10 bills so that negative rates can prevail. ?Someone picked up a copy in India — and it will be self-destructive. ?It murders the cash system, which is the real banking system in India.

Q5: Alex Billy Grad Student at Georgetown: Did the Mexican crisis in 1995 have an impact on future developments?

Allison: big New York banks got bailed out of an irrational risk. ?The cure for too big banks is to let them fail. ?Wall Street was bailed out at the cost of Main Street.

Bert Ely Q6: Support for Basel III is sagging. ?What would the effects be?

Allison: Great. ?Let’s just have a leverage ratio.

Me Q7: ?Risk based capital vs liquidity Life insurers vs Banks?

Allison: doesn’t see it that way. ?Insurers are very different than Banks. ?Buying too much MBS at banks as a result.

Q8: “Ships are safe in harbors, but that is not what ships are for.”

Grant: agrees. Goodhart: Banking and the finance of trade in New York. ?Banks had to remain liquid and well capitalized in order to survive. ?It was a good system.

Q9 (Torres): What should we do now?

Allison: Modify Dodd-Frank such that bank with a 10% leverage ratio could opt out of Dodd-Frank.

Grant: How to modify the Fed: End Humphrey-Hawkins. ?Don’t take a poison chalice… reform wisely after there has been a real crisis and want real solutions.

Spitznagel: end low rates so that economic actors don’t take marginal risks.

Another Year in Buffett’s House

Another Year in Buffett’s House

Posted on by David Merkel
Photo Credit: TEDizen || Buffett's house is a humble abode -- mine is dumpy
Photo Credit: TEDizen || Buffett’s house is a humble abode — mine is kind of dumpy

Last year, when BRK [Berkshire Hathaway] reported their annual earnings with the letter, report, and 10K, I concluded:

From an earnings growth standpoint, there was nothing that amazing about the earnings in 2014. ?A few new subsidiaries like NV Energy added earnings, but existing subsidiaries? earnings were flattish. ?Comprehensive income was considerably lower because of the lesser degree of unrealized appreciation on portfolio holdings.

On net, it was a subpar year for Berkshire Hathaway. ?The annual letter provided a lot of flash and dazzle, but 2014 was not a lot to write home about, and limits to the BRK business model with respect to float are becoming more visible.

What I said one year ago would be a good summary for this year, though Buffett was more upbeat about outcomes this year, with BRK’s book value advancing while the S&P 500 fell on a total return basis.

Overall, BRK had a mediocre year. ?Insurance wasn’t that great. ?Here are my summary points:

  1. BRK is reducing reinsurance — i suspect they aren’t getting the rates that they want. ?There are too many reinsurance wannabes attempting to write business to generate float that they can invest against. ?Typically, writing insurance in order to invest usually doesn’t work out. ?People forget how much money was lost writing marginal insurance business in soft markets thinking they would more than make up the losses with investment income. ?BRK is showing some discipline here — good.
  2. Aside from new lines of business (specialty insurance), growth is slowing; BRK is trying to remain a conservative underwriter.
  3. Reserving conservatism has not changed.
  4. Asbestos position has not materially changed.
  5. GEICO had a bad year for claims — maybe they grew too much, and maybe picked up a lower class of auto driver.
  6. Profit margins falling
  7. Float growth slowing
  8. Continued problems with workers’ comp and long-term care at Gen Re. ?Also problems with payment annuities (blames FX, should blame longevity) and Life Reinsurance.

A few?quotes from the 10K on insurance issues:

“We define pre-tax catastrophe losses in excess of $100 million from a single event or series of related events as significant. In 2015, we recorded estimated losses of $136 million in connection with a property loss event in China.”

and on GEICO:

“Losses and loss adjustment expenses incurred in 2015 increased $2.7 billion (17.1%)?over 2014. Claims frequencies (claim counts per exposure unit) in 2015 increased in all major coverages over 2014, including property damage and collision coverages (three to five percent range), bodily injury coverage (four to six percent range) and personal injury protection (PIP) coverage (one to two percent range). Average claims severities were also higher in 2015 for property damage and collision coverages (four to five percent range), bodily injury coverage (six to seven percent range) and PIP coverage (two to four percent range). We believe that increases in miles driven, repair costs (parts and labor) and medical costs, as well as weather conditions contributed to the increases in frequencies and severities.”

Regarding Gen Re:

“The property/casualty business generated pre-tax underwriting gains in 2015 of $944 million compared to $1.4 billion in 2014. In 2015, we incurred losses of $86 million from an explosion in Tianjin, China. There were no significant catastrophe losses in 2014. Underwriting results in 2015 included comparatively lower gains from property catastrophe reinsurance and the run off of prior years? business.”

I found the mention of two large loss events in China interesting — maybe it was just one event of $136 million, but they could have been more clear.

Float Note

Before I leave the topic of insurance, I do want to set the record straight on how valuable float is. ?This is my best article on the topic. ?Buffett is a bit of a salesman in his annual letter, but generally an honest one.

Float is only as good as the insurance business generating it. ?If it is generating underwriting losses, the investments will have to earn at least as much per year as the losses divided by the average duration of how long the float will exist in years, in order to break even.

We’re coming off of years where there have been no underwriting losses, so float is?magical — but the P&C insurance industry is getting more competitive, and float will no longer be costless.

Widespread use of float for financing is like trying to finance off of other seemingly costless liabilities — in the hands of some?investors, that can lead to disaster — after all, consider all of the disasters that I have written about where people finance short to invest long.

Conservative insurers invest their premium reserves in cashlike instruments, and their loss reserves they invest in bonds of a similar duration. ?They typically don’t invest float in equities, and certainly not whole businesses.

Buffett has done just that and done well. ?That said, he runs his insurers at lower levels of leverage than most insurers, to allow room for taking more investment risk.

Note that BRK doesn’t guarantee the debts of BNSF, BHE, etc., but does guarantee the debts of the finance arms.

There is room for another article on float and cost of capital — not sure when I will get to it, but it will be a WACC-y article. 😉

Final Notes:

1) Note that Buffett keeps profits overseas also. Quoting the 10K: “We have not established deferred income taxes on accumulated undistributed earnings of certain foreign subsidiaries. Such?earnings were approximately $10.4 billion as of December 31, 2015 and are expected to remain reinvested indefinitely.” ?My guess is that he will use them to buy a foreign subsidiary.

2) BRK Pays taxes at about a 30% rate.

3) Regarding his comments on goodwill amortization — he thinks some of it is economically valid, and some not. ?Buffett has the option of putting more data on the income statement if he wants. ?Or put it in note 11 (goodwill). ?He already does that by breaking apart revenues and expenses by corporate divisions on the income statement. ?Do us all a favor, BRK, and split the goodwill into what you think is economically valid, and what is not.

4) Buffett gives an extended defense of Clayton Homes lending. ?In general, I thought his points were good — even before Buffett, Clayton was the “class act” in manufactured housing, and financing it.

5)?Even BRK has underfunded pension plans, and it has a relatively conservative 6.5% expected return on assets.

6) I note a modest change in 10K risk factors — BNSF and the automatic braking issue. ?BNSF will have to spend a lot of money to deal with the need to stop runaway trains remotely. ?True of all?US and Canadian railroads.

 

7)?BRK has less free cash flow to invest in new projects because more of their businesses are capital-intensive. ?BRK invested $16B in property, plant and equipment.

8 ) BNSF had a good year. ?BH Energy had a good year, mostly from a new Canadian Transmission utility, and their home brokerage arm.

9) BRK bought Precision Castparts, Van Tuyl (auto dealerships), and AltaLink (the Canadian Transmission utility). ?Also bolt-ons to existing subsidiaries.

10) Kraft merged with Heinz.?Heinz preferred will be redeemed.

11) The big four publicly traded firms owned by BRK didn’t have a good year. AXP, KO, IBM, WFC — he bought more of IBM and WFC. ?Buffett argues that the retained earnings of the firms benefit BRK. ?I’m dubious. ?IBM has particularly been a dog — look at free cash flow. ?Much of the earnings at IBM?aren’t real. ?You can’t use what they don’t dividend.

12) Quoting Buffett from his section?on optimism about the US, he tempered it by saying: “Though the pie to be shared by the next generation will be far larger than today?s, how it will be divided?will remain fiercely contentious.”

Well, you can say that again, but fairness is a squishy concept. ?Is fairness:

  • Even division (from each according to his ability, to each according to his needs)
  • Proportionate to productivity
  • Equal to what you negotiate
  • Derived from the formula of a bureaucrat
  • What you can negotiate through the political process
  • Impossible
  • Or something else?

Buffett worked with the easy stuff, and waved his hands at the hard stuff. ?I’ll phrase it this way: in general, the US has done well because we have not wrangled as much as the rest of the world over distribution issues, and have left a lot of room for people to?gain a lot from their own productivity. ?That has led to a lot of wealth, and in general, a growing pie for everyone to benefit from.

Productivity goes in waves, and labor plays catchup with capital after technological progress. ?We have seen people redeployed from agriculture and servanthood/slavery in the past 150 years. ?We will see them redeployed from manufacturing in the next 100 years. ?They will provide services to their fellow men, should there continue to be peace and tranquility, allowing labor income to catch up with that of capital.

Full disclosure: long BRK/B

 

Prices Have Changed; Not Much Else Has Changed

Prices Have Changed; Not Much Else Has Changed

Posted on by David Merkel
Photo Credit: Moyan Brenn || My, now doesn't that look peaceful...
Photo Credit: Moyan Brenn || My, now doesn’t that look peaceful…

There is the temptation when market prices move fast after they have been at recent highs to assume that things are going to fall apart. ?Well, guess what? ?That could happen.

I don’t think it is likely though, if falling apart means a scenario like 2008-9,?2000-2 or 1973-4. ?In order to have a significant drawdown in the market, you have to have a lot of leverage collapse, whether that is financial or operating leverage.

Financial leverage is bad debt. ?We have areas of that — student loans, agricultural loans, a modest amount of subprime lending for autos, and a decent amount of lending to junk-rated corporations, but not enough to create a self-reinforcing situation where bad debts can’t be borne by lenders, and lenders then collapse.

Operating leverage is bad assets — building up too much productive capacity such that there will not be enough demand to absorb it for the foreseeable future. ?Or, building capacity that isn’t productive… either way, assets will have to be written down.

There have been a number of parties kvetching about a lack of investment from US corporations, but let’s take this a different direction. ?There hasn’t been a lot of bad investment from US corporations… and part of that may be due to dividend and buyback policies. ?Yes, there are some IPOs that have come out that look marginal. ?I’ve looked at a variety of spin-offs where the underlying business is attractive, but they loaded the spin-off with a sizable slug of debt in order to pay a final dividend to the parent company saying farewell. ?But on the whole, I don’t see a lot of money being wasted by corporations on investments. ?That is another reason why profit margins are high.

Now, a lot of the furor in the markets stems from China, and the effects that slowing growth and/or bad debts in China will have on the US economy. ?Personally, I don’t think this is an issue to worry about, unless you have a lot of investments in China and other emerging markets. ?In general, US markets don’t get deeply hurt by slowdowns or even crises in other countries. ?Even if it means a slowdown in revenue growth for large US corporations, it would also likely mean that US interest rates might fall, which would often make equities fall less as bonds rally.

Also, for foreign affairs to affect the US in a big way, the US would have to have a lot of lending exposure to those nations that are struggling. ?(Think of the LDC nations in the early ’80s.) ?Maybe this is one of the benefits of running current account?deficits — we don’t have money to lend to foreign countries from our net export earnings.

Think of all the significant foreign crises of the last 30 years. ?LDC crisis, Plaza Accords leading to Japan’s lost decades, Mexico, Asian Crisis, European Union difficulties with their fringe nations, Iceland, Greece, Greece, Greece, China, etc. ?There was always temporary indigestion in US markets, but when did it ever weigh on the US markets for a long period? ?Really, it never did. ?So why are we concerned over China?

Regarding the Fed, I abstract from this old post, which quoted a 2005?piece on Fed policy at RealMoney.com, and what blew up at the end of each tightening cycle. ?I list blow-ups up to that point, and mention that I think US Housing is next:

  • 2000 ? Nasdaq
  • 1997-98 ? Asia/Russia/LTCM, though that was a small move for the Fed
  • 1994 ? Mortgages/Mexico
  • 1989 ? Banks/Commercial Real Estate
  • 1987 ? Stock Market
  • 1984 ? Continental Illinois
  • Early ?80s ? LDC debt crisis

So it moves in baby steps, wondering if the next straw will break some camel?s back where lending has been going on terms that were too favorable. The odds of this 1/4% move creating such a nonlinear change is small, but not zero.

But on the bright side, the odds of a 50 basis point tightening at any point in the next year are even smaller. The markets can?t afford it.

Position: None

Or, these two posts, which you can look at if you want? one suggested that housing was the next bubble (in 2004), and the other critiqued Bernanke?s reasoning on monetary policy.? (Aaron Task has an interesting rejoinder to the latter of these.) — [DM: these links are dead now.]

 

Some worry now about future Fed policy — what will blow up when the Fed tightens too much? ?I would encourage everyone to relax. ?First, we don’t know that the Fed will do anything soon. ?Second, we don’t know if they will do anything much. ?Third, we don’t even know if the Fed has a coherent theory of monetary policy anymore. ?Face it: Yellen has never tightened rates once. ?Bernanke never tightened rates aside from finishing out Greenspan’s plan to invert the yield curve at the beginning of his Chairmanship. ?Almost no one on the FOMC has any significant practical experience with tightening rates. ?What will guide them out of their zero interest rate policy? ?What will be enough?

Even so, tightening cycles usually end with something blowing up. ?Maybe this time it is the emerging markets. ?I don’t see a large concentration of US-based bad debt that the Fed might inadvertently blow up, at least not yet. ?(Maybe the day will come when the US Treasury might complain about rising financing rates. ?After all, debt is high, but affordable while rates are low.)

Valuation is the main issue as I see it at present, as I commented in my recent piece “Stocks or Bonds?” ?When stocks are priced at a level that discounts 4.5%/year returns over the next 10 years, you don’t have a lot of margin for error, especially when you can create a safer bond portfolio that yields the same.

Now, since I wrote that piece, the S&P 500 is down around 10.5%. ?The bond portfolio is down around 4.5% (it was a risky portfolio, and some of the emerging markets bonds hurt), while the Barclays’ Aggregate is up 1%. ?High-yield bond spreads have widened over that time by ~1.2%.

The anticipated return on the S&P 500 has maybe risen by 1%/year over the next 10 years, to 5.5%. ?That said, so has the yield on the risky bond portfolio. ?I see the selloff as being in-line with the yields of risky debt, which at some higher level of spread, will attract buyers, given that there have been no significant defaults recently.

The US stock market could go down another 20% from here, but I think it will be less. ?My main point is that we shouldn’t get a big washout, but just a correction of valuation levels that got too high relative to other risky assets, like junk bonds.

So don’t panic. ?You could still move some assets from stocks to bonds if you want to sleep better, but don’t do anything severe.

On Negative Interest Rates

On Negative Interest Rates

Posted on by David Merkel
Photo Credit: Alcino || What is the sound of negative one hand clapping?
Photo Credit: Alcino || What is the sound of negative one hand clapping?

As with many of my articles, this one starts with a personal story from my insurance business career (skip down four paragraphs to the end of the story if you want):

25 years ago, when it was still uncommon, I wanted?to go to an executive course at the Wharton School for actuaries that wanted to better understand investment math and markets. ?I went to my boss at AIG (a notably tight-fisted firm on expenses) and asked if the company would pay for me to go… it was an exclusive course, and very expensive compared to any other conference that I would ever go to again in my life. ?I tried not to get my hopes up.

Lo, and behold! ?AIG went for it!

A month later, I was with a bunch of bright actuaries at the Wharton School. ?The first thing I noticed was aside from the compound interest math, and maybe some bond knowledge, the actuaries were rather light on investment knowledge, and I would bet that all of them had passed the Society of Actuaries investment course. ?The second thing I noticed were some of the odd investments described in the syllabus: it was probably my first taste of derivative instruments. ?At the ripe old age of 29, I was learning a lot, and possibly more than the rest of my classmates, because I had spent a lot of time studying investments already, both on an academic and practical basis.

I had already studied the pricing of stock options in school, so I was familiar with Black-Scholes. ?(Trivia note: an actuary developed the same formula for valuing optionally terminable reinsurance treaties six years ahead of Black, Scholes and Merton. ?That doesn’t even take into account Bachelier, who derived it 73 years earlier, but no one knew about it, because it was written in French.) ?At this point, the professor left, and a grad student came in to teach us about the pricing of bond options. ?At the end of his lesson, it was time for the class to have a break. ?I went down to make a comment, and it went like this:

Me: You said that we have to adjust for the fact that interest rates can’t go negative.

Grad student: Of course.

Me: But interest rates could go negative.

GS: That’s ridiculous! ?Why would you ever lend money and accept back less than you gave them, and lose the time value of money?!

Me: Almost of the time, you wouldn’t. ?But imagine a scenario where the demand for loanable funds leaves interest rates near zero, but the times are insecure and violent, leaving you uncertain that if you stored your cash privately, you would run too large of a risk of having it stolen. ?You need your cash in the future for a given project. ?In this case, you would pay the bank to store your money.

GS: That’s an absurd scenario! ?That could never happen!

Me: It’s unlikely, I admit, but I wouldn’t say that you can never have negative interest rates.

GS: I will say it again: You can NEVER have negative interest rates.

Me: Thanks, I guess.

Well, so much for the distant past. ?Here is why I am writing this: yesterday, a friend of mine wrote me the following note:

Good evening.? I trust you had a blessed Lord’s Day in the new building.?

Talking bonds today with my Econ class.? Here’s our question. Other than playing a currency angle why would anyone buy European debt with a negative yield?? The Swiss and at least one other county sold 10 year notes with a negative yield.? Can you explain that?? No interest and less principle [sic] at the end.

Now, I didn’t quite get it perfectly right with the grad student at Wharton, but most of it comes down to:

  • Low demand for loanable funds,?with low measured inflation, and
  • Security and illiquidity of the funds invested

The first one everyone gets — inflation is low, and few want to borrow, so interest rates are very low. ?But that doesn’t explain how it can go negative.

Things are different for middle class individuals and large financial institutions. ?Someone in the middle class facing negative interest rates from a checking or savings account could say: “Forget it. ?I’m taking most of my money out of the bank, and storing it at home.” ?Leaving aside the inconvenience of currency transaction reports if the amount is over $10,000, and worries over theft, he could take his money home and store it. ?Note that he does have to run a risk of theft, though, so bringing the money home is not costless.

The bank has the same problem, but far larger. ?If you don’t invest the money, where would you store it? ?Could you even get enough currency delivered to do it? ?if you had a vault large enough to store it, could you trust the guards? ?Why make yourself a target? ?If you don’t have a vault large enough to store it, you’re in the same set of problems that exist for those that warehouse precious metals, but with a far more liquid commodity.

Thus in a weak economic environment like this, with low inflation, banks and other financial institutions that want certainty of payment in the future are willing to pay interest to get their money back later.

Part of the problem here is that the fiat currencies of the world exist only to be?units of account, and not stores of value. ?Thus in this unusual environment, they behave like any other commodity, where the prices for futures are often higher than the current spot price, which is known as backwardation. ?(Corrected from initial posting — i.e. it costs more to receive a given cash flow in the future than today, thus backwardation, not contango.) ?The rates can’t get too negative, though, or some institutions will bite the bullet and store as much cash as they can, just as other commodities get stored.

To use another analogy, a while ago, some market observers couldn’t get why anyone would accept a negative yield on Treasury Inflation Protected Securities [TIPS]. ?They did so because they had few other choices for transferring money to the future while still having inflation protection. ?Some people argued that they were locking in a loss. ?My comment at the time was, “They’re trying to avoid a larger loss.”

Thus the difficulty of managing cash outside of the bond/loan markets in a depressed economy leads to negative interest rates. ?The financial institutions may lose money in the process, but they are losing less money than if they tried to store and protect the money, if that could even be done.

Book Review: The Big Con

Book Review: The Big Con

Posted on by David Merkel

9780385495387This is an unusual book for me to review. ?This is a book about Confidence Men, first published in 1940, and recently republished in 1999. ?It was written by David W. Maurer, who was a professor of linguistics, and used his skills to analyze the slang of the underworld.

This book deals with Con Men — men who try to gain the confidence of another man in order to get him to hand over money to them.

I have often said, and many grifters would agree, that it is very hard to cheat an honest man. ?Honest men know that there are no easy pickings in life, and if there are some holes in the system, no one will share them with you for free. ?Grifters trick those who think that the world is unfair, and want to be cut in on the inside action.

Sam Israel was tricked in that way in the book “Octopus.” ?Clever actors convinced him that there was easy money to be made, and they milked him and his hedge fund clients, while he lost it all.

This book takes you through the human systems that con men create in order to convince their targets that they can make easy money, until the con men fleece them. ?The two key characters are ropers, who attract victims, and the insiderman, who is the boss and is the one who directs the whole scam.

They design a system that delivers a few small wins to the victim, who gets greedy and puts up a lot of money, and then the rigged system delivers a loss, cheating him of his money. ?Mot often, since the victim was an willing participant in an illegal scheme, even though he was cheated, he will not be willing to press charges, even though was cheated, because he wants to protect his reputation.

The book describes the many players involved as actors, to make the enterprise look legitimate. ? It also describes the?games that they played, and how they would entice a victim?into an unfair scheme in which they would profit off others, but end up cheating the victim. ?The book talks about how the justice system was often bought by the insiderman, thus protecting the activities of those he employed.

It also describes how the ropers would figure out whether a victim would go along with a scam or not. ?It gives the history of confidence games — how they developed, and how some faded, and others grew, at least for a time.

Along with all of that, it describes the lives of the grifters, and how few of them truly prospered. ?Most wasted the money that they earned in riotous living. As Proverbs 13:11 says, “Wealth obtained by fraud dwindles, But the one who gathers by labor increases it.” [NASB]

To the Modern Era

Breaking from the book review, is our era so much different, or do we have the same problems in different ways?

I’ve been down enough roads in the investing world to know that there are a lot of parties who try to get people to take bad deals. ?It can be as simple as guys who use the “straight-line” pitch to get people to invest with them. ?It can be institutional investors who try to trick naive institutions.

It can be seminars with shills and other accomplices like Rich Dad and their ilk. ?We still have Nigerian Scams and other Scams on the Internet, many of which involve identity theft. ?We have promoted penny stocks, structured notes, and Ponzi schemes. ?I have written about all of these. ?Is the current era less prone to con men than the era from 1890-1940?

I would argue no, though it was more colorful and personal in the past. ?Today’s scams are more virtual and anonymous, leaving aside Madoff’s Ponzi Scheme which was highly personal, and psychologically design to harvest money from those that wanted a high yield with safety.

Why you should consider this book

By reading about all of the ways that people get cheated, you will be deterred from greed, and distrust those who incite greed. ?These problems are alive and well today. ?Can you learn that there are no free lunches, and no free money? ?If you can learn that, you are well on the way to not being cheated.

Quibbles

The book is repetitive. ?It does not condemn the grifters for the sins they commit against others. ?The book is almost amoral. ?At least, it posits a human morality, where there is a code of honor among thieves, but thievery is not in itself wrong if the victim is a greedy person.

Summary

This is a classic book that if you read it should make you more skeptical about “sure things,” and “get-rich-quick schemes.” ?Away from that, it is a commentary on the human condition, showing how many men are willing to compromise their ethics in order to make a lot of money. ?Anyway, if you want to, you can buy it here:?The Big Con: The Story of the Confidence Man. ?It’s not expensive for what you get, and it is a colorful book.

Full disclosure: I bought a copy with my own money.

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.

 

A Stream of Hot Air

A Stream of Hot Air

Posted on by David Merkel

Let’s roll the promoted stocks scoreboard:

Ticker Date of Article Price @ Article Price @ 6/27/14 Decline Annualized Splits
GTXO 5/27/2008 2.45 0.022 -99.1% -53.9%  
BONZ 10/22/2009 0.35 0.001 -99.8% -72.7%  
BONU 10/22/2009 0.89 0.000 -100.0% -83.4%  
UTOG 3/30/2011 1.55 0.001 -100.0% -90.7%  
OBJE 4/29/2011 116.00 0.083 -99.9% -89.9% 1:40
LSTG 10/5/2011 1.12 0.011 -99.0% -81.6%  
AERN 10/5/2011 0.0770 0.0001 -99.9% -91.3%  
IRYS 3/15/2012 0.261 0.000 -100.0% -100.0% Dead
RCGP 3/22/2012 1.47 0.080 -94.6% -72.4%  
STVF 3/28/2012 3.24 0.430 -86.7% -59.3%  
CRCL 5/1/2012 2.22 0.013 -99.4% -90.7%  
ORYN 5/30/2012 0.93 0.026 -97.2% -82.2%  
BRFH 5/30/2012 1.16 0.620 -46.6% -26.1%  
LUXR 6/12/2012 1.59 0.007 -99.6% -93.3%  
IMSC 7/9/2012 1.5 1.000 -33.3% -18.6%  
DIDG 7/18/2012 0.65 0.047 -92.8% -74.2%  
GRPH 11/30/2012 0.8715 0.077 -91.2% -78.6%  
IMNG 12/4/2012 0.76 0.025 -96.7% -88.8%  
ECAU 1/24/2013 1.42 0.047 -96.7% -90.9%  
DPHS 6/3/2013 0.59 0.008 -98.7% -98.3%  
POLR 6/10/2013 5.75 0.051 -99.1% -98.9%  
NORX 6/11/2013 0.91 0.110 -87.9% -86.8%  
ARTH 7/11/2013 1.24 0.213 -82.8% -84.0%  
NAMG 7/25/2013 0.85 0.087 -89.8% -91.5%  
MDDD 12/9/2013 0.79 0.097 -87.7% -97.8%  
TGRO 12/30/2013 1.2 0.181 -84.9% -97.9%  
VEND 2/4/2014 4.34 2.090 -51.8% -84.5%  
HTPG 3/18/2014 0.72 0.090 -87.5% -99.9%  
6/27/2014 Median -96.7% -87.8%

 

My, but aren’t they predictable. ?Onto tonight’s loser-in-waiting Windstream Technologies [WSTI]. ?This is another company with negative earnings and net worth, though it has a modest amount of revenue.

Think of it for a moment: this company has a “breakthrough technology,” and yet they were a hotel company within the last year or two. ?That’s not how real businesses work. ?I you have an incredible technology, but little capital, private equity investors will happily fund you. ?You won’t try to do it in some underfunded corporate shell which tempts crooked financial writers to write fantasy.

Now, you might look at the disclaimer in the glossy brochure which came to my house, which in 5-point type takes back all of things that they about in bold headlines and readable text. ?For example:

  • It begins with:?DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND IN THIS REPORT.
  • The Wall St. Revelator is neither licensed nor qualified to provide financial advice. As such, it relies upon the “publisher’s exclusion” as provided under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws.
  • The Wall Street Revelator and/or its publisher, Andrew & Lynn Carpenter, dba The Wall Street Revelator has received a total amount of twenty five thousand dollars [DM: $25,000] in cash compensation to assist in the writing of this Advertisement, as well as potential future subscription and advertising revenues, the amount of which is not known at this time with respect to the publication of this Advertisement and future publications.
  • Mandarin Media Limited paid nine hundred thousand dollars [DM: $900,000]?to marketing vendors to pay for all the costs of creating and distributing this Advertisement, including printing and postage, in an effort to build investor and market awareness.
  • Mandarin Media Limited was paid by non-affiliate shareholders who fully intend to sell their shares without notice into this Advertisement/market awareness campaign, including selling into increased volume and share price that may result from this Advertisement/market awareness campaign.
  • The non-affiliate shareholders may also purchase shares without notice at any time before, during or after this Advertisement/market awareness campaign.
  • Non-affiliate shareholders acted as advisors to Mandarin Media Limited in this Advertisement and market awareness campaign, including providing outside research, materials, and information to outside writers to compile written materials as part of this market awareness campaign.

The disclaimer exists to cover the writers from legal risk, and what it tells us is that there are largish shareholders looking to profit by running up the stock price as a result ?of the advertisement, enough to cover the $925,000 cost.

Such it is with a pump and dump. ?One thing is virtually certain, though. ?This is not a stock to hold onto. ?Look at the stocks in the table above. ?No winners, and most are almost total losses in the long run. ?Manipulators love working with stocks that have no earnings and no net worth, because they are impossible to value for the grand majority of people. ?New buyers, if they come in a group, can create a frenzy that raises prices.

That’s the goal of the advertising campaign: a short term “pop” that the sponsoring shareholders can sell into, letting a bunch of muppets take losses.

Again, never buy promoted stocks. ?If they have to buy the services of others to promote the stock, it is a fraud. ?Good stocks do not need promotion. ?It’s that simple.

PS — the pretentiousness of the word “revelator” should be replaced by the simpler “revealer.”

Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

US Politics & Policy

  • The Potential Bubble the Federal Reserve Cares Most About http://t.co/tp1Ug7YcaR?Worrying about a bubble in the bond mkt $$?May 03, 2014
  • The Weekend Interview: The Investors at War With Political Power?http://t.co/MuEvV0DQcC?Courts protect our liberties from bureaucracies $$?May 03, 2014
  • Detroit Homeowners Gun Down Burglars as Police Wait for Cars?http://t.co/Dkg7YEct4g?This is the future of many US cities w/tight budgets $$?May 03, 2014
  • Railway exec: Keystone debate not about rail versus pipes?http://t.co/bVKjkcvnq0?Aiming 4 safer tank cars & separating out natgas liquids $$?May 02, 2014
  • Xerox CIO Fixing Nevada Health Exchange, as Tough Decisions Loom?http://t.co/brbP5LD0Ru?Bad job by $XRX but at least they trying 2 fix it $$?May 02, 2014
  • For Now, Justice Ginsburg’s ‘Pathmarking’ Doesn’t Include Retirement?http://t.co/xduXEt5OUV?Interesting piece on liberal SCOTUS leader $$?May 02, 2014
  • The Supreme Court’s EPA Ruling Dims Lights on Coal Power Plants?http://t.co/eAIlagHyqe?This will eventually be reversed when shale fails $$?May 02, 2014
  • The Coming Two-Tier Health System?http://t.co/xpIMjPnvhc?The longer PPACA goes on the more people will c benefits limited & costs rise $$?May 02, 2014
  • California City of Torrance Grapples With Toyota Relocation to Texas?http://t.co/OljCzROHlq?Despite denials this happened b/c hi CA taxes $$?May 01, 2014
  • The Missing Benghazi Email?http://t.co/amNnz6KAWT?New evidence that Ben Rhodes told Susan Rice and Hillary Clinton to blame the video $$?May 01, 2014
  • Shifting Demographics Tilt Presidential Races in US Burbs $$?http://t.co/Ut6WAHwu91?Demographic effect politics will shift when OASDI chokes?May 01, 2014
  • Half of people living in Illinois and Connecticut want to get out?http://t.co/ewsu2wu8HT?Maryland #3 b/c of high taxes $$ $SPY $TLT?May 01, 2014
  • Yellen Concerned Fed Model Fails to Predict Price Moves?http://t.co/P1NXGaHY6w?Been true 4 a long time; Neoclassical Macroeconomics fails $$?May 01, 2014
  • U.S. on Highway to Flunking Out?http://t.co/yvRybDP3Bp?@Ritholtz Maybe US gasoline taxes could b dedicated to infrastructure & fix this $$?May 01, 2014
  • Property-Tax Collections Rising at Fastest Pace Since US Crash?http://t.co/GoC12zZltE?My, but that was a short respite from hi prop taxes $$?May 01, 2014
  • Student-Debt Forgiveness Plans Skyrocket, Raising Fears Over Higher Tuition?http://t.co/ZaHVqZG6ft?Forgiveness programs abused 2milk Govt $$?May 01, 2014
  • Lawyers Sue Stock Market for Being Rigged?http://t.co/ntCxkptCw8?@matt_levine tells us about a plaintiff suing every broker & exchange $$?Apr 30, 2014
  • Will the Fed s Capital Rules Interfere with Monetary Policy??http://t.co/UpWnLNwIff?Leverage affects banks short-run-> margins adjust up $$?Apr 30, 2014
  • The Economic and Environmental Costs of Wasted Food?http://t.co/3YqsPbZzJv?Difficult to avoid; need for inventories, transport costs high $$?Apr 23, 2014

?

Financials

  • Treasuries Irresistible to America?s Banks Awash in Cash?http://t.co/wHjk3cRPn2?Clip a small interest margin, take little risk $$?May 03, 2014
  • Big US Banks Make Swaps a Foreign Affair?http://t.co/5DD7en8pBG 5 banks intermediate 95% of derivatives $$?May 03, 2014
  • Fidelity Reaps Rewards as Banks Lose Bond Muscle?http://t.co/mSTelgwh0d?If the sell side does not provide liquidity, the buy side will $$?May 03, 2014
  • Bank of America Lost $2.7B in a Maze of Accounting?http://t.co/K05aIQBhQE?Acctg gets screwy when you mix fair value & book value elements $$?May 02, 2014
  • Traders Join Exodus as Forex Probes Add Pressure on Costs?http://t.co/Aqlsb6vElW?Difficult to dominate such a big mkt, but maybe they did $$?May 02, 2014
  • Warren Buffett Does Not Understand the J.P. Morgan Derivatives Positions?http://t.co/poMfOnAhOS?He acts to protect Berkshire vs bad debts $$?May 02, 2014
  • Fed Citing Wall Street Lapses Leads Drive on Bonds as Pay?http://t.co/Ad2DOnjZYl?Light version of the old “double liability” regime $$ $XLF?May 02, 2014
  • Stress Tests Forecast $190B in Losses at $FNMA, $FMCC in Severe Downturn?http://t.co/UA9S5Jj13a?also this article http://t.co/Wh2QlFzqZh $$?May 02, 2014
  • Traders Denied M&A Payday as Firms Use Cash?http://t.co/hSw2BGNjWh?Global firms buy assets in native currency, thus don’t need FX traders $$?May 01, 2014
  • Fixed-income houses double down?http://t.co/1rm6QHbjgc?Less yield to fight over makes the fight all the tougher $$ $TLT?May 01, 2014
  • Easier Homeowner Credit Compelling $WFC?http://t.co/AzcGHepiJJ?Cut min credit score 4borrowers of $FNMA & $FMCC loans 660->620 $$ FD: + $WFC?May 01, 2014
  • Wall Street Bond Dealers Whipsawed on Bearish Treasuries Bet?http://t.co/S6X2QhUgRV?Caught leaning the wrong way as US economy weakens $$?Apr 30, 2014

?

China

  • Chinese Bad-Loan Ratio Rises ?Significantly,? Huarong Says?http://t.co/Eu5AAeyGp5?Costs of prior malinvestment weigh on China $$?May 03, 2014
  • Xi?s Squeeze Leaves China?s Heartland Missing Boom?http://t.co/Bt0L96guqH?Efforts to constrain bad bank loans slows Chinese economy $$ $FXI?May 03, 2014
  • Wealthy Chinese replace Russians as top apartment buyers?http://t.co/zEWVg7dOOC?Better to buy in NYC than Shanghai, Hong Kong, Singapore? $$?May 02, 2014
  • How Women Lost as Out China’s Property Market Boomed?http://t.co/MXkG2udq0t?China lacks law protecting married women’s property interests $$?May 02, 2014
  • Green Batteries? Graphite Adds to China Pollution?http://t.co/rxZufzpj9H?Buy a $TSLA or a $HMC Prius, send polluted rain to China $$ $SPY?May 01, 2014

 

Rest of the World

  • Poland?s Tusk Proposes Energy Union 2 Break Russian Hold on Gas?http://t.co/CzDr3evIhe?Wishful thinking as infrastructure 2 deliver lacks $$?May 03, 2014
  • More Italian Women Are Choosing to Have No Children?http://t.co/fSghk0oKwP?A nation that does not have children is irrelevant $$?May 03, 2014
  • Portugal Grabs Cheap Bond Deal With Eye on Bailout Exit?http://t.co/9gEDWEIuYh?Debt problems r not resolved, but mkts feel better 4 now $$?May 03, 2014
  • German Ship Captain Swamped in Debt Underscores Bank Risk?http://t.co/eP7Xhvj67X?Current EU economic policies hide bad debt risks $$?May 03, 2014
  • GoldenTree Goes Bold in Buying Russian Corporate Bonds?http://t.co/d0nvYJ7Ah2??Russia, it?s a strong credit in a difficult environment,? $$?May 03, 2014
  • One Missing Jet, One Sunken Ferry, Two Responses?http://t.co/I1ZgkwQyLo?@WilliamPesek compares Malaysia & S. Korea & responses 2 disaster $$?May 02, 2014
  • Turkey’s Erdogan: 1 of the World’s Most Determined Internet Censors?http://t.co/12ALhoW2i3?#twitterisblockedinTurkey $$ #internetchangesall?May 02, 2014
  • German Businesses Urge Halt on Sanctions Against Russia?http://t.co/bJho1CvvIP?Is business so global that major wars can’t be fought? $$?May 02, 2014
  • How Canada?s Flirtation w/a China Oil Market Soured?http://t.co/h5HPS7pnM8?Why Canada will NEVER ship crude to China via a Pacific port $$?May 02, 2014
  • Georgia Pushes for Fast Path 2 NATO on Russian Threat?http://t.co/bYY8LK1pla?Is Georgia worth annoying Russia? Avoid entangling alliances $$?May 02, 2014
  • US sanctions raise concerns for foreign investors?http://t.co/XWbwvPXyir?Or, maybe not: http://t.co/rhsqIHCafl $$?May 02, 2014
  • Google Warning on Russia Prescient as Putin Squeezes Web?http://t.co/pVedAtqcAx?Social Media has its downsides if Govt uses it against u $$?May 02, 2014
  • Liquidity Trap Hitting AAA Bonds Has ATP CEO Sounding Alarm?http://t.co/bhWlb1EjxQ?Curbing speculation has led 2 decreased bond liquidity $$?May 02, 2014
  • Israelis Without ABCs Unready2Power Startup Nation?s Economy?http://t.co/q2V1IwGrIZ?He that doesn’t teach his son a trade teaches him2rob $$?May 01, 2014
  • Tokyo Inflation Quickens to Fastest Since 1992?http://t.co/khjhBvHgWT?Worth watching, as inflation is not the friend of Japan ultimately $$?May 01, 2014

 

US Economy?

  • Colleges, Employers Rethink Internship Policies?http://t.co/RMievOB82U?Unpaid internships often don’t lead to jobs, just use your time $$?May 03, 2014
  • Apprenticeships Help Close the Skills Gap. So Why Are They in Decline??http://t.co/pCnZCgXqAr?If they weren’t tied 2 labor unions… $$?May 03, 2014
  • Calculated Risk: Ranking Economic Data?http://t.co/l4X9wcjrEw) Bill McBride gives his opinions on what economic data is most important $$?May 03, 2014
  • Union Blasts Staples-Run Postal Outlets?http://t.co/qmmc4iXhIS?Of course, they don’t want the competition $$?May 03, 2014

?

Energy

  • Energy Future Junior Creditors Test Bid for Fast Bankruptcy Deal?http://t.co/ZFgWCteuh0?A warning to those doing big LBO deals in a boom $$?May 03, 2014
  • Shale Drillers Feast on Junk Debt to Stay on Treadmill?http://t.co/qG9WwN63V0?Fascinating look many junk-rated E&P companies paying 5.4% $$?May 02, 2014
  • Valero to Suncor Shun Overseas Imports in Eastern Canada?http://t.co/dco5QQdox4?Oil imports falling in Eastern N.America, Brent spd eases $$?May 02, 2014
  • Berkshire Hathaway Energy Buys AltaLink Power-Transmission Company?http://t.co/K95RDCbYM8?Buffett wants long-lived infrastructure assets $$?May 02, 2014
  • Shale Revolution Lures Trading Houses 2US Energy Assets?http://t.co/6WTGDZNLzl?If u can understand physical flows, there?s a value chain $$?May 01, 2014
  • Drones Are Becoming Energy?s New Roustabouts?http://t.co/e2OBYmeV48?Can cover more area and c things that a person could not c & record $$?May 01, 2014
  • Challenges Lie Ahead for North American Oil Production?http://t.co/m7vvemlw6m?We’re running out of cheap crude oil $$?Apr 22, 2014


Market Impact

  • Defensive Value ETF Races to New Highs?http://t.co/KOKo14nkDk?This isn’t defense; many people throw $$ at stocks that offer dividends?May 03, 2014
  • Chile CEF?s Premium a Case of Yield Lover?s Mirage?http://t.co/blhZjCHLzN?Be wary: not all distributions indicate recurring yield $$?May 03, 2014
  • Hedge Funds Short Small Caps Most Since ?04?http://t.co/2hLYbzM521?Dangerous trade, b/c mkt can b insane longer than u remain solvent $$?May 03, 2014
  • Howard Marks’ Brilliant Observation On What It Takes To Be A Great Investor?http://t.co/yeJnpION8s?Be different, & right often enough $$?May 02, 2014
  • Junk Loans Pulled as Buyers Say No After Fed Voices Worry?http://t.co/lCDRdfFvV6?Junk-loan MFs had their 1st outflow in week ended 4/16 $$?May 02, 2014
  • Why This Bull Market Feels Familiar?http://t.co/8JXl7JGwMe?Low earnings in tech IPOs, momentum & loose monetary policy $$ $SPY?May 01, 2014
  • Why Investors Love Hedge Funds?http://t.co/uFjN76R9KT?@Ritholtz teaches us about high fees, & decrasing effectiveness as they grow large $$?Apr 30, 2014

?

Companies

  • Ballmer Becomes Largest Individual Microsoft Shareholder?http://t.co/DvWSRZAb1Z?Bill Gates always had an exit strategy from $MSFT $$?May 03, 2014
  • Apple Sells $12B of Bonds to Keep Cash Overseas?http://t.co/FiSK8eJS5C?Avoiding the tax hit is more important leverage across borders $$?May 03, 2014
  • Berkshire Meeting, Now ?Woodstock for Capitalists,? Had Humble Start?http://t.co/wbYCcKc8yr?Nobody goes there anymore; it’s too crowded $$?May 02, 2014
  • Buffett Wants Tough Questions? How About These??http://t.co/m36vBV6VIe?Ask him about the Harney Investment Trust, his shadowy creation $$?May 02, 2014
  • Verizon Loses Cellphone Customers for First Time?http://t.co/6DbXOm993W?Interesting, wonder if it is a trend… $$ $VZ?May 01, 2014
  • IBM End to Buyback Splurge Pressures CEO to Boost Revenue?http://t.co/D657Dc27mX?Buybacks can only do so much; organic growth needed $$ $IBM?May 01, 2014
  • FM Global CFO: Know Your Supply Chain?http://t.co/dBTc6MYXXY?Real disasters happen when multiple things go wrong at the same time $$ $SPY?May 01, 2014
  • ‘I Think Google’s Pretty Dangerous and Thuggish. I?ve Always Said That.’?http://t.co/jYZBaewNjZ?Trying 2 defend yourself; not saying much $$?Apr 28, 2014

 

Personal Finance

  • Does Anyone Play It Straight in Markets??http://t.co/MRZY1ro2as?@ritholtz warns u that many in the mkts r trying to separate u & your $$?May 03, 2014
  • Feeling Cool About A Hot Personal Finance Book?http://t.co/hwFULepE8v?When someone tries to sell u insurance 4 a savings need, go away $$?May 03, 2014
  • 4 Alternatives to Reverse Mortgages?http://t.co/6Wmd2kYQmz?Refinance, Home Equity Loan, Sell the Home (maybe to your kids) $$ #sell?May 02, 2014
  • Work and Live, Retire and Die @Ritholtz?http://t.co/t1YWHoG6NO?People plan to retire later than they actually do & life interferes $$ $SPY?May 02, 2014
  • How to Choose the Right Mutual Fund?http://t.co/4kvyh8rZZK?Omits active share, good mutual funds typically look un-indexlike $$?May 01, 2014
  • If You’re Not Saving, You’re Losing Out?http://t.co/QtG87rNHPF?It’s not the money u make, it’s the money u keep that counts $$ $SPY $TLT?May 01, 2014

 

Other

  • The Questionable Link Between Saturated Fat and Heart Disease?http://t.co/32pwYj4Z6i?There has never been more disagreement over food $$?May 03, 2014
  • Will That Golfer Choke? New Field of Mental Analytics Tees Up Answer?http://t.co/B8dxIYL1Jf?Can analytics make u think better in sports $$?May 03, 2014
  • Cyber security: business is in the front line?http://t.co/RXkfEDaPu0?This isn’t a soft cost anymore; the need to secure IT is vital $$?May 03, 2014
  • Remember Life Before Antibiotics? No? Wait, It’ll Come to You?http://t.co/g9uQajBJJL?Antibiotic resistance grows, obsoleting some drugs $$?May 02, 2014
  • How the ‘Jesus’ Wife’ Hoax Fell Apart?http://t.co/Kdswi39oZr?Hoaxes & apochrypha have circulated since the Apostles. They always crumble $$?May 02, 2014
  • Why Some MBAs Are Reading Plato?http://t.co/ltj9Y8QYyV?Schools Try Philosophy to Get B-School Students Thinking Beyond the Bottom Line $$?May 01, 2014
  • Does Baseball Have to Be So Slow??http://t.co/8PRcoei9Ua?Dawdling by batters & pitchers, & an increase in strikeouts makes games drag $$?May 01, 2014
  • The world’s smallest magazine cover is 2,000 times smaller than a grain of salt?http://t.co/o4H7mfHCDE?Nanotech: we do it because we can $$?May 01, 2014
  • Why Militaries Mess Up So Often?http://t.co/39NKx6YPUn?Officers trained during peacetime tend not to take the risks necessary in wartime $$?May 01, 2014

 

Wrong?

  • Wrong:Nontraded REIT returns: Where to put cash now??http://t.co/EPykRK8e7S?Avoid illiquidity unless u r paid 4 it. Avoid big commissions $$?May 03, 2014
  • Wrong: China’s Century Starts Now @BloombergView?http://t.co/UUziinXlqJ?Wait until after the banking crash & recovery, then write this $$?May 01, 2014
  • Wrong: Money-Market Funds As Safe as Banks, Except When They’re Not?http://t.co/7S2TEDpk7Q?Banks fail more often & losses r more severe $$?May 01, 2014

?

Retweets, Replies, and Comments?

  • “Ask Buffett about the Harney Investment Trust:http://t.co/KUHnslWBFv…” ? David_Merkel http://t.co/bLVAj6OY7O $$?May 02, 2014
  • Commented on StockTwits: Whoops, and I should have gotten that one right?http://t.co/nB9lRK14kb?May 01, 2014
  • “Paul, try valuing BRK off of increase in book value per share, and the metric comes out to a more?” ? DavidMerkel?http://t.co/cm2Rdhkzfn?$$?May 01, 2014
  • “Now try to explain how long yields fell the last time the Fed tightened.” ? David_Merkel?http://t.co/MwJL3d6KQX?$$ FD: + $TLT?May 01, 2014
  • “If citizens are not created/educated by 18, you won’t have good citizens.” ? David_Merkel?http://t.co/TzfQsJULED?$$ http://t.co/eiOLPqNuub?Apr 29, 2014
  • “This may be a game of “Who has the stronger balance sheet?” $HLF or Ackman?” ? David_Merkel?http://t.co/2QCjheaJjd?$$?Apr 29, 2014
  • @Peter_Atwater @Minyanville @Socionomics Thanks, Peter. Means a lot coming from you.?Apr 28, 2014
  • @ReformedBroker @ritholtz feel free to repost it (w/credit to me) if you like?Apr 28, 2014
  • RT @felixsalmon: For the record, I never said, nor do I believe, that text is over. I?m still going to be writing lots of text!?Apr 28, 2014
  • RT @victorricciardi: @researchpuzzler @AlephBlog @jciesielski @tobyshute Tom Great meeting you Thanks for your ideas for promoting my new b??Apr 25, 2014
  • RT @researchpuzzler: thanks to CFA Society Baltimore @AlephBlog @victorricciardi @jciesielski @tobyshute for the great exchange of ideas?Apr 25, 2014
  • RT @ppearlman: summer must read – “@reformedbroker: CLASH OF THE FINANCIAL PUNDITS: COUNTDOWN BEGINS NOW!?http://t.co/iZqYTs8OFt“?Apr 25, 2014
  • RT @abnormalreturns: Had to Google ?cable network Fusion??RT @felixsalmon: It?s out: I?m going to Fusion?http://t.co/B1EK0eJmc8?Apr 24, 2014
  • RT @ChemistryVines: Mercury(II) thiocyanate (Hg(SCN)2)?https://t.co/Ar2yhIlOwo?Apr 23, 2014
  • @Calvinn_Hobbes I don’t know. We all want to grow up, until we do grow up. Only the foolish regret growing up.?Apr 22, 2014
Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

Stocks & Industries

  • Invest In Stubs, Spin-Offs And Liquidations For Alternative Returns?http://t.co/ccezep0K9Y?Cites a Gabelli article http://t.co/xTrqEfmQeq $$?Apr 19, 2014
  • Real Estate Management Better Than Owning Real Estate??http://t.co/IFaDLiwTRa?Sometimes yes, sometimes no. Definitely adds more leverage $$?Apr 19, 2014
  • Wells Fargo Securities Lending Lawsuit Ends in Settlement?http://t.co/w3lSY4Cw8D?Low margin business that can go badly wrong in a crisis $$?Apr 19, 2014
  • Makani, a $GOOG subsidiary makes an airborne wind turbine that dramaticlly increases power generation efficiency?http://t.co/0Fug49o7gC?$$?Apr 18, 2014
  • Google to Buy Titan Aerospace as Web Giants Battle for Air Superiority?http://t.co/HjJ8wKtnjM?Makes me think $GOOG has 2much $$ 2spend?Apr 18, 2014
  • Profit Tastes Like Chicken in Hunt for Cheaper US Meat?http://t.co/drgQbwEiKR?With recent rise in beef & pork prices people substitute $$?Apr 18, 2014
  • Roads Versus Rail:The Big Battle Over Public Transportation?http://t.co/ydBxEglexC?Makes case that American will own fewer cars in future $$?Apr 18, 2014
  • Barclays Ups $LNC To Buy, Says $MET , $PRU Are Undervalued – Stocks To Watch?http://t.co/c7yNaVZqdp?Stock Market sensitive insurance cos $$?Apr 18, 2014
  • Bidding War Looming for Aspen? Analysts Say Don?t Count On It?http://t.co/iMotqyAgHv?Offer 4 $AHL looks pretty full 2me, dont look4more $$?Apr 18, 2014
  • Biggest LBO Demise Poised to Put Oncor in Play?http://t.co/d30djwOa5M?Buffett is unlikely 2 enter into bidding in a competitive sale $$?Apr 18, 2014
  • Target of Naked Short Sellers Is Angry, Confused?http://t.co/I3ZZDn5JNp?@matt_lavine takes on imaginary naked shorting in $LPHI $$?Apr 18, 2014
  • Radioactive Waste Is North Dakota’s New Shale Problem?http://t.co/BiMkO0ZdgK?Significant amounts of low level radiation from radium $$?Apr 18, 2014
  • The death of mortgage lending?http://t.co/u8uQBvZCuS?Loan yields must rise in order to compensate for higher required capital at banks $$?Apr 19, 2014
  • Kochs? Flood Insurance Opposition Becomes Campaign Issue?http://t.co/b1iuvoVhZK?1 of the few businesses the Kochs’ aren’t in is insurance $$?Apr 18, 2014
  • Office Markets Strengthen Where Tech, Energy Jobs Are?http://t.co/sESuHUeAVr?Helps explain the spottiness of commercial RE prices $$ $CMBS?Apr 18, 2014
  • Labor Shortage Threatens to Bust the Shale Boom?http://t.co/R1TctaTelD?Can’t find a job? Consider learning to weld; monotonous but pays $$?Apr 18, 2014
  • Koch Brothers Net Worth Tops $100B as TV Warfare Escalates?http://t.co/XgH0M6CNIR?Almost as wealthy as extended Walton family $$ $WMT $SPY?Apr 18, 2014
  • Big Banks Ramp Up Business Lending?http://t.co/83dMAPIQia?Signs of life spotted in big corporations, but r they just buying back stock? $$?Apr 18, 2014
  • How Can Yahoo Be Worth Less Than Zero??http://t.co/sr3owwkyNE?@matt_levine argues a breakup of $YHOO makes sense even if core biz loses $$?Apr 18, 2014
  • Wal-Mart Undercuts Rivals With New U.S. Money Transfer Service?http://t.co/a4vq0HYALi?Useful if u need 2 transfer $$ inside the US $WMT $SPY?Apr 18, 2014
  • How Chick-fil-A Spent $50M to Change Its Grilled Chicken?http://t.co/Q9kpXoSIbF?The marinade matters, but the grill design was the key $$?Apr 15, 2014
  • Small US Colleges Battle Death Spiral as Enrollment Drops?http://t.co/nHRhO4Gc1R?Too much capacity & affordability is a problem $$ $APOL?Apr 14, 2014

Outside the US

  • China GDP Gauge Seen Showing Deeper Slowdown?http://t.co/ntIxxdXcpO?If China increases consumption GDP growth will fall faster still $$ $FXI?Apr 18, 2014
  • Housing Trouble Grows in China?http://t.co/Z4tKUuqLFd?Overbuilding by Real-Estate Developers Leaves Smaller Cities W/Glut of Apartments $$?Apr 18, 2014
  • Suddenly, Europe Is Taking a Harder Line on Russia Sanctions?http://t.co/MnzxvMP3pe?Nations can solidify when they face a common threat $$?Apr 18, 2014
  • Las Bambas Copper Mine Purchase Shows China’s Still in the Hunt for Commodities?http://t.co/h1cqGERGCu?China may not b changing much $$?Apr 18, 2014
  • Forgetting How to Speak Russian?http://t.co/D0UwT6unki?Among former Soviet republics knowing Russian is less important for business $$?Apr 18, 2014
  • The Middle East War on Christians?http://t.co/BW1NwCAXuH?Israeli Ambassador 2 UN argues Israel is tolerant of Christians, not like some $$?Apr 18, 2014
  • Britons Struggle to Save for Home Down Payments as Prices Surge?http://t.co/M6vH0vDlDs?Space is constrained in London & foreigners buy $$?Apr 18, 2014
  • US Said to Warn Money Managers of More Russia Sanctions?http://t.co/rB8AUQTsnc?Putin knows Iran survived worse sanctions; Russia tougher $$?Apr 18, 2014
  • China Sentences Four Activists on Disturbing Public Order Charge?http://t.co/Tx95rrhWsb?Mostly, US has rule of law, China has rule by law $$?Apr 18, 2014
  • US govt isn’t perfect, but in principle the govt is subject to the Constitution & laws, & not merely able 2 use law 2 enforce its will $$?Apr 18, 2014
  • Frontier Fund Buyers Find It Pays To Look Under The Hood?http://t.co/JQ6khwYllJ?2much $$ is being thrown @ frontier mkts; crowded trade $FM?Apr 18, 2014
  • Why iShares? ?FM? Is About To Get Better?http://t.co/4FiqlfW0YS?Diversifies out of Middle East, but frontier market vals r stretched $$ $FM?Apr 18, 2014
  • Putin’s 21-Year Quest to Be Russian Guardian Began in Estonia?http://t.co/5oelLBHCmN?Father was betrayed by Estonians in WWI, almost died $$?Apr 15, 2014

Market Dynamics & Fundamentals

  • Bridgewater Founder Says 85 Percent Of Pensions will Go Bankrupt?http://t.co/YknEmyGgfJ?9% pension returns required, 4% is most likely $$?Apr 19, 2014
  • The Fitch Fundamentals Index Dashboard?http://t.co/OzI6KWUFfs?Interesting little utility 4 understanding where we are in the credit cycle $$?Apr 19, 2014
  • Rich Start-Ups Go Back for Another Helping?http://t.co/ZbFbpLVgmM?When capital is plentiful, bad decisions get made. expected returns low $$?Apr 18, 2014
  • Stumbling S&P 500 Reaches Worst Stretch of Election Cycle?http://t.co/zgJTynu2od?Interesting timing, wonder whether past is prologue? $$?Apr 18, 2014
  • How a 56-Year-Old Engineer?s $45K Loss Spurred SEC Probe?http://t.co/3HfdH2aqxK?Always read the risk factors in the prospectus or 10K $$?Apr 18, 2014
  • High-Speed Traders Said to Be Subpoenaed in NY Probe?http://t.co/2qxmrxeVd7?What level of technology is legitimate 2 gain an advantage? $$?Apr 18, 2014
  • Nuggets of Corporate Governance Wisdom From Charlie Munger?http://t.co/gMFIE9jlRM?Also c this paper: http://t.co/033v0bgdYr $$ $BRK.B $SPY?Apr 18, 2014
  • Global stock rally: World market cap reached record high in March, &is $2.4T above pre-recession, pre-crisis level?http://t.co/iMq0IoBhch?$$?Apr 18, 2014
  • Speed?the only HFT advantage? Not so fast?Flash?Boyshttp://www.cnbc.com/id/101586488?Algorithms may also be an advantage w/price patterns $$?Apr 18, 2014
  • Investor Alert – Exchange-Traded Notes?Avoid Unpleasant Surprises?http://t.co/NqhUr2whsJ?A helpful reminder 2b wary of exotic ETNs $$ $SPY?Apr 18, 2014
  • Americans Sold on Real Estate as Best Long-Term Investment?http://t.co/La4UROU0ie?Helps explain y retail investors lose on average $$ $GLD?Apr 18, 2014
  • Destroying Smart Beta 2: Ground Rules?http://t.co/uecYqZLCEe?Smart beta is a trendy but vapid concept, factors should be part of alpha $$?Apr 18, 2014
  • Gross Loses to Goldman in Hot Bond Strategy as Pimco Lags?http://t.co/VWv7UC72bS?Series of bad bets makes Pimco a laggard as AUM flees $$?Apr 15, 2014
  • Trillion-Dollar Firms Dominating Bonds Prompting Probes?http://t.co/RXZNkNwtFs?Concentrated markets can lead to bond pricing distortions $$?Apr 15, 2014

US Politics & Policy

  • What’s the Matter With Illinois??http://t.co/wmDiyWDN1e?They r the exemplary state for shortsightedness & corruption $$?Apr 19, 2014
  • Heartbleed Hackers Steal Encryption Keys in Threat Test?http://t.co/dYfezfXe8A?>6 people were able to extract private key of a website $$?Apr 19, 2014
  • Elijah Cummings, W/IRS, Targeted Tea Party Group True The Vote?http://t.co/TE5A1zTM0y?I live in his gerrymandered district; kick him out $$?Apr 18, 2014
  • Yellen Lays Groundwork for Rules on Short-Term Credit Markets?http://t.co/z03MWlpsqI?Fed doesn’t regulate the banks well, y try 4 more? $$?Apr 18, 2014
  • Schooling on a ‘Debit Card’?http://t.co/wwixbB0pqy?Arizona created a program so that special needs kids can get specialized schooling $$?Apr 18, 2014
  • IRS Among Agencies Using License Plate-Tracking Vendor?http://t.co/HTs5aEMNtK?Howard County Police use it & catch people 4 old crimes $$?Apr 18, 2014
  • Wealth Effect Failing to Move Wealthy to Spend?http://t.co/R3vfD5i94J?Wealth effect, if it exists, is small, FOMC is pursuing illusions $$?Apr 18, 2014
  • NSA Said 2 Exploit Heartbleed Bug for Intelligence for Years?http://t.co/9XvcLX9ZTE?NSA quietly knows security vulnerabilities; uses them $$?Apr 15, 2014
  • The Wall Street second-chances rule: scandal makes the rich grow stronger?http://t.co/8HhscWJjMN?What does not kill us makes us stronger? $$?Apr 14, 2014

Practical

  • How well do you know your insurance policy??http://t.co/szp3G8H4kN?Know what is covered & what isn’t, how much is covered & options $$?Apr 19, 2014
  • Attention Shoppers: Fruit and Vegetable Prices Are Rising?http://t.co/MMdPOLry9A?As are meat prices & most food prices $$ #agflation?Apr 18, 2014
  • How to start investing?http://t.co/yGyziE8Tac?Good advice from a credible source $$?Apr 18, 2014

Other

  • El Nino Signs Detected, Presaging Global Weather Change?http://t.co/D1uDLS9aJ0?El Nino exists 2 give us something 2 blame when frustrated $$?Apr 18, 2014
  • More People Pick Elimination Diets to Discover Food Sensitivities?http://t.co/ftQkzs3PxP?Fad and Science of Not Eating Entire Food Groups $$?Apr 18, 2014
  • SAT Adopts Real-World Questions and Jettisons Obscure Words?http://t.co/Mspw9EG3OV?In 2016, changes from intelligence to achievement test $$?Apr 18, 2014
  • Scientists Make First Embryo Clones From Adults?http://t.co/e5qlwyiWwj?Cloned cells 2create early-stage embryos, matching DNA tissue $$?Apr 18, 2014

Comments, Replies & Retweets

  • RT @howardlindzon: Funds still paying up (I say silly overpay) for private over public, this is spooking IPO ‘s for sure?http://t.co/mclSd9??Apr 15, 2014
Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

Market Impact

 

  • Companies Squeeze 401K Plans From Facebook to JPMorgan http://t.co/2glTizHOjm This should not surprise, many companies shrink labor costs $$ Feb 15, 2014
  • Wells Fargo edges back into subprime as US mortgage market thaws http://t.co/s8AJCKuzOH Isn’t a problem now, problem comes w/imitators $$ Feb 15, 2014
  • Homebuyers Get Break as Loan Rates Defy Fed Tapering http://t.co/i7PdmGThdz Housing & general economy weakened, so mortgage rates fell $$ Feb 13, 2014
  • Pension politics http://t.co/3NaaI61AxM @felixsalmon points out how defined benefit plans r in general better 4 workers. Mind the PBGC $$ Feb 13, 2014
  • Colleges Raise Record $33.8B Exceeding US Peak in 2009 http://t.co/PRjlMrKM9i Donations always follow creation of unrealized cap gains $$ Feb 12, 2014
  • Some Lines Say Maybe the Stock Market Will Go Down http://t.co/FdkJdRT9qe @matt_levine correctly criticizes the 1928-9 $SPY graph overlay $$ Feb 13, 2014
  • 1929 Stock Market Crash Chart Is Garbage http://t.co/PyPIulerCH Unequal left & right scales make the relationship look tighter than it is $$ Feb 12, 2014
  • ?When to Ignore the Investment Experts http://t.co/K2vyHgb1gv ?When all the experts &forecasts agree ? something else is going 2 happen.? $$ Feb 11, 2014
  • Comparing Economic Recoveries http://t.co/5za6QtEFKD In 1984-2006, growth was borrowed from future by increasing debt levels-> #payback $$ Feb 11, 2014
  • Aluminum Lines Still Trouble the London Metal Exchange http://t.co/f5OyWC5EHC Aluminum inventories will b a prob, til short intrates rise $$ Feb 11, 2014
  • Top Anecdotal Signs of a Market Bubble http://t.co/MavPhxB6vZ Good piece, like one of mine: http://t.co/bON7nJJFfk Watch the credit cycle $$ Feb 11, 2014
  • Ten Stocks to Own During a Market Correction http://t.co/RzBdaNf1ff Good list. I own a few of them. $$ Feb 11, 2014
  • Does trend-chasing explain financial markets? http://t.co/3Mkg4R99dx Partly. Difference between investment IRR and total return is big $$ Feb 10, 2014
  • ?Security. Safety. Stability.? http://t.co/VfKVcGgMRJ from @reformedbroker Gold is useful at certain points, but only when it is hated $$ Feb 10, 2014
  • Flows Don?t Follow Value, They Follow Performance http://t.co/9oIJ4M7HMo @reformedbroker wrote this little gem. Learn & internalize it $$ Feb 10, 2014
  • Long Term Charts 2: Western Markets Since The Middle Ages http://t.co/lsBfIot8pi Interesting charts from very messy data at Zero Hedge $$ Feb 10, 2014
  • Most Expensive Place to Find Out Who You Are http://t.co/szQfeKFZxT @jasonzweigwsj : Your reaction 2 minor crisis shows yr risk tolerance $$ Feb 10, 2014

?

Companies & Industries

 

  • AIG Takes $832 Million Charge on Death Bets as Hedge Funds Gain http://t.co/JmI7hBy9MH Life settlements should b illegal $$ $MET $AIG $PRU Feb 14, 2014
  • To Stop the Coffee Apocalypse, Starbucks Buys a Farm http://t.co/CPkyVAUnsR $SBUX helps create a variety of rust resistant Arabica trees $$ Feb 13, 2014
  • Former BlackRock Manager Finds Billions on Rice Energy http://t.co/aBPTo3u4Ky Few investment mgrs have operating talent; Daniel Rice does $$ Feb 13, 2014
  • Buffett’s Pal Munger Heads a Very Weird Company http://t.co/ztr3XizpKM Growth of $DJCO thru investing leads 2 # of growing pains & 13F $$ Feb 13, 2014
  • Here?s Why the Biggest Cable Company in the Country Thinks It Can Get Bigger http://t.co/04cdg1J9VP Feds tolerant of cable re antitrust $$ Feb 13, 2014
  • Why AOL ended up spending millions on ‘distressed babies’ http://t.co/d2lWs8eJit $AOL chose 2b in healthcare biz 4 its employees & lost $$ Feb 13, 2014
  • 3 High-Yielders To Buy On The Pullback http://t.co/8SUBI1M0ut In total $SNH issues more stock than it pays in divs. Divs -> cap losses $$ Feb 13, 2014
  • Who is John Thompson? A look at Microsoft’s new chairman http://t.co/W7SrXqxtwm May have right stuff to protect new CEO from meddling $$ Feb 10, 2014

 

US Politics & Policy

 

  • Runaway Drones Map Land, Film ‘Wolf,’ Knock Down People, FAA Gives Chase http://t.co/rcTnjug8w1 Drones r here 2 stay; time license them $$ Feb 15, 2014
  • Teacher Tenure Put to the Test in California Lawsuit http://t.co/XP5fx6HpR3 Tenure has outlived its usefulness; older teachers can b lazy $$ Feb 15, 2014
  • Lincoln’s Foreign Policy in Today’s World http://t.co/t2RELj7uRB Kept England & France from joining Civil War; otherwise pragmatic $$ $SPY Feb 15, 2014
  • What Would Lincoln Do? http://t.co/hi6n4Rb8hl A clever man w/principles, who did not cease to be pragmatic pursuing 1 main goal – Union $$ Feb 15, 2014
  • Harvard Professor Attacking Google Thrives as Web Sheriff http://t.co/g1W7KXH94K At some point, lack of disclosure will blow up on him $$ Feb 14, 2014
  • The $2.2B Bird-Scorching Solar Project http://t.co/hIYWhJpUwQ Get used 2 idea: almost every form of energy imposes environmental costs $$ Feb 13, 2014
  • Obamacare Damage-Control Teams Seek to Calm Complaints http://t.co/bPU95rVMxM Things r tough when u r trying to avoid media embarrassment $$ Feb 13, 2014
  • Billionaire Musk Gets Brownsville to Pay for SpaceX http://t.co/eoAiygs9mq Like a football owner bargaining 2 get taxpayers buy a stadium $$ Feb 13, 2014
  • Snowden Swiped Password From NSA Coworker http://t.co/1mJ5D6vGH3 & it cost him his job. Snowden denies it; NSA is Not Saying Anything $$ Feb 13, 2014
  • Puerto Rico Legislators Amend Bill Calling for Bank-Deposit Shift http://t.co/fMaCvMi7ab Provincial govt’s attempt 2raid cookie jar stopd $$ Feb 13, 2014
  • Obamacare Will, in Fact, Encourage Employers to Cut Jobs http://t.co/D3vaCFHOZY As the employer mandate comes into force, jobs will b cut $$ Feb 12, 2014
  • Tea Party Scorns Republicans as House Lifts Debt Ceiling http://t.co/fPohsF6Kbi t-party can b “pure” as Dems raise ceiling w/few GOP $$ $TLT Feb 12, 2014
  • A Lame Duckish Calm Falls Over the Capital http://t.co/u6bG2cg1nL Parties in DC act as if the next event is the November elections $$ $TLT Feb 12, 2014
  • Obama Rewrites ObamaCare http://t.co/Ym3CtHt3pI Another day, another lawless exemption, once again for business; WSJ bangs populist drum $$ Feb 11, 2014
  • The US Senate Again Insists on USPS Saturday Mail Delivery http://t.co/YnzmKE5Xrh 2 timid; end Wednesday & Saturday delivery $$ $UPS $FDX Feb 11, 2014
  • US firms ?paid effective tax rate of 2.2% in 2011? http://t.co/f2T5Qnrhri More than a tax haven, Ireland helps insurers shave reserves $$ Feb 11, 2014
  • No Honeymoon for Janet Yellen http://t.co/86QPfTcVE0 QE withdrawal will bite, & what will become of all the deposits? $$ Feb 11, 2014
  • Please Hold Your Bernanke Applause http://t.co/DCKPttFHNU Remember, when Greenspan left, he was viewed as a success, same as BB now $$ $TLT Feb 11, 2014
  • Sounding the Tax Alarm, to Little Applause http://t.co/r9JQmmaeLB IRS stiffs whistleblowers who often lose employability 4 being a tipper $$ Feb 10, 2014

 

Rest of the World

 

  • Putin is Playing a Game of His Own http://t.co/19Arh0aJOH Not so fast. Russia has significant resources & influence in Eastern H’sphere $$ Feb 15, 2014
  • Boy?s Life Hanging on 8-Hour Trip Shows Why Venezuelans Protest http://t.co/8G8CgGwGST Socialism is like a cancer that spreads til death $$ Feb 14, 2014
  • Let’s Watch Venezuela Destroy Itself http://t.co/g1Uy3zk1W3 Logical extreme of Socialism falls apart; pity that Chavez never lived 2c it $$ Feb 14, 2014
  • Chinese Join Winklevosses in L.A. Luxury Home Hedges http://t.co/TUdw4AItw8 Amazing what the wealthy will pay 4a fancy foreign retreat $$ Feb 14, 2014
  • Next crisis won?t come from the emerging markets http://t.co/Jei7oKJ8BD Argues France, Germany, Britain, Australia & Canada-> 2 much debt $$ Feb 13, 2014
  • Mister Donut, Pan Am and Friendster Found Alive and Well http://t.co/vDaGi33cEN Old brands never die, they just move overseas & make $$ $SPY Feb 13, 2014
  • Bank of England points to 2015 rate rise, blurs guidance http://t.co/AWhyd8GZmd More precision than 1 can know; the world is messy $$ $FXB Feb 13, 2014
  • Italy Pays Record Low to Sell 3-Year Debt at Auction http://t.co/PWmUhXufjb Let the leverage build for the next crisis $$ Feb 13, 2014
  • Fink to Mobius Touting Emerging Stocks Fails to Stem Outflow http://t.co/8PFKbOH8Lg A time 2 nibble, not a time 2 gulp $$ $EEM Be wary Feb 13, 2014
  • Greek Truckers Show Plight as Groceries Show Up Frozen http://t.co/XgAM737A7h Freeing up the labor market will work as attitudes change $$ Feb 13, 2014
  • Tunisians Bolt Doors Even After New Constitution Passed http://t.co/lBhXz8iqWb Constitutions cannot create cultural change; asks 2 much $$ Feb 13, 2014
  • Israel Desalination Shows California Not to Fear Drought http://t.co/BFidhnEF7S When resources r tight there are incentives 2 create tech $$ Feb 13, 2014
  • London Walkie Talkie Owners to Shield Car-Melting Beam http://t.co/76TP0u2tuT Reflective parabolic curve of building melts cars @ a spot $$ Feb 12, 2014
  • Rouhani Seeks Economic Fix as Iran Commemorates Revolution http://t.co/EDNL5WLOvB Will have to get the agreement of unelected true rulers $$ Feb 11, 2014
  • Argentina to Replace Bogus Inflation Index to Mend IMF Ties http://t.co/iSzQizrgnF Argentina tries 2 find cheapest way out of this mess $$ Feb 11, 2014
  • Who Should Pay for Trusts that Go Bust? http://t.co/aOXFbDltCZ If China is smart, protect depositors, but let banks & WMP holders fail $$ Feb 11, 2014
  • Iceland Girds for Fight as Suit Targets Half $14B GDP http://t.co/hX6M12PZ48 Icelandic taxpayer will refuse the bill; UK will b stiffed $$ Feb 11, 2014
  • Mobius Says Emerging-Market Rout Near End as Valuations Lure http://t.co/MMLjlAmN49 I dunno, a 4% earnings yield premium seems small $$ $EEM Feb 11, 2014
  • Rehabilitating Portugal http://t.co/tFy3GnIwRQ Long; Argues that a Greek-style bailout should b done, or Portugal will eventually default $$ Feb 11, 2014
  • Iranian TV Shows Rare Broadcast of Band Playing Music http://t.co/jTBFNcRsHJ Christianity has always been easier on music than Islam $$ Feb 11, 2014

 

Work Trends

 

  • Sheep-Shearing Wells Fargo Banker Bridges US Income Gap http://t.co/utMe1ekmir Sells coffeemakers too; many in US work multiple jobs $$ $TLT Feb 13, 2014
  • Workers Shed Caution, in a Healthy Sign for Labor Market http://t.co/zTq0NgbO0f When workers r willing 2 quit, labor mkt is healthy $$ $TLT Feb 11, 2014

 

Practical

 

  • A Little Valentine’s Day Straight Talk http://stks.co/j0I6p Sage counsel 2 younger women if they want to get married: start early $$ Feb 15, 2014
  • The Sex Question Readers Want Answered Most http://t.co/kRhYIgwI2Z Even Long-Married Happy Couples Ask, ‘How Can We Have Sex More Often?’ $$ Feb 11, 2014
  • Ten Ways You’re Probably Leaving Money on the Table http://t.co/KkjetkJsp9 Simple list of ways to save money for avg upper-middle class $$ Feb 11, 2014
  • Why Mom’s Time Is Different From Dad’s Time http://t.co/0Xr4IMsFfs Husbands, u can win if u reduce chaos for your overburdened wives $$ Feb 11, 2014

 

Other

 

  • US Scores Fusion-Power Breakthrough http://t.co/h6wDtXHcVj Bad news is Tritium very expensive @ $100K per gram; takes much energy 2 make $$ Feb 13, 2014
  • If Ocean Heat Pump Switches On, Expect to Feel It http://t.co/FlsYni5c62 Speculative; we don’t understand climate or hurricanes well $$ Feb 11, 2014
  • Who is Steven Reisman? Meet Hip-Hop VIPs’ Favorite Lawyer, The Man With The $2 Bills http://t.co/B3v87YDWrt Weird. Very, very weird $$ $SPY Feb 11, 2014
  • What Really Happened to Flappy Bird? http://t.co/3IiBxSIhYx Beware the success u wish 4? Also: http://t.co/ld6A2XaiKs Still a puzzle $$ $SPY Feb 11, 2014

 

Wrong, etc.

?

  • Skeptical: Blackstone-Fueled Single-Family Home Boom Lifts Chicago http://t.co/sETcWifBGx In past hi levels of investor ownership bearish $$ Feb 15, 2014
  • Wrong: Pros Panic, Retail Investors Stay Cool on Emerging Markets http://t.co/QXXpOcqKYw Too short a period time to judge $$ Feb 14, 2014
  • Wrong: Social norms: The indignity of no work http://t.co/6isHJo9fkw New technologies will create new jobs & make the whole world better $$ Feb 13, 2014
  • Wrong: Warren Buffett is laughing at you for selling http://t.co/S5LFS3jUk5 Poorly thought-out piece glues 2unrelated ideas together $$ $EEM Feb 13, 2014
  • Wrong: The #1 High-Yield Investment Of America’s Elite http://t.co/FUVyBblQpZ Spammy article that talks about REITs as if they r a secret $$ Feb 11, 2014

?

Replies, Retweets & Comments

?

  • 10 miles west of Baltimore, MD, we got ~15 inches of snow over the last last 2 days. #snow #weather #pax $$ Feb 14, 2014
  • “I made this comment six months ago: http://t.co/a82j8TRxm1… & then, I tipped the SEC. ?” ? David_Merkel http://t.co/gthPe5eQoA $$ $DJCO Feb 13, 2014
  • “Administrative Services Only” plus individual stop loss protection is in general the smart way2?” ? David_Merkel http://t.co/fPV6fQo1i1 $$ Feb 13, 2014
  • “This is a common confusion in statistics — you can have a high correlation and a low beta. Second?” ? Merkel http://t.co/sa6PLqEhdU $$ Feb 13, 2014
  • RT @Pawelmorski: Scary parallel my foot. http://t.co/omyovAKQaX Feb 12, 2014
  • @davidgaffen that would only be a temporary fix. I wrote this 3.5 yrs ago on the topic: http://t.co/q3lbyELN9d The internet eats USPS Feb 11, 2014
  • @quakkelaar I miss you too. If you are ever near Baltimore/DC, let me know; we can get together, brother. Last few years have been hard Feb 11, 2014
  • RT @ReformedBroker: Please explain how the wording of this investment advertisement on the Washington Post site could be legal: http://t.co? Feb 10, 2014
  • ‘ @quakkelaar Hail old friend. Yes, same old mistakes, b/c those wishing to retire are making the money sweat, until it rebels on them $$ Feb 09, 2014

?

Theme: Overlay by Kaira.