Monthly Archives: May 2009

Selecting a Buffett Biography: Lowenstein vs. Schroeder

By Ravi Nagarajan While there have been countless books written regarding Warren Buffett’s track record in business and investing, along with many books of variable quality seeking to find formulas to replicate his success, there are only two full fledged … Continue reading

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Street Fighters: Good Information and Good Fun

think not, but that is part of the fun. The reader can collect information — raw data — with real confidence. There will be many accounts of the financial crisis. Anyone seeking a complete understanding should consult many sources. The … Continue reading

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Feeling the Squeeze, Exclusive Country Clubs Get the Common Touch

Their standing dinner reservation at the country club is for 6:30 p.m., because at least that much never changes. Every Wednesday night, Charles and Mimi Cluss dress in pleated slacks and suit jackets and drive to the manicured playground where … Continue reading

Posted in A Saturday Break, Insolvency, Investment Portfolios, It Is Nice To Be Part of the Elite!, Let's Call What It Is - DEPRESSION, Our phony middle class, The New American Socialism | Leave a comment

Coal Conditions Coming

Recently I had occasion to watch an online debate between a clean-coal advocate and a robust, articulate green-energy blogger. The debate followed predictable contours. In one corner, the clean-coal advocate repeated a series of rather inflated achievements, supposedly gained over … Continue reading

Posted in Coal, Energy Alternatives, The Importance of Strategic Planning | Leave a comment

Ending the Fed: the rebirth of Jacksonian bankphobia

Onetime presidential hopeful and current Republican congressman Ron Paul has an interesting piece of legislation wending its way through the US capitol. HR1206 calls for “a complete audit of the Federal Reserve and removes any significant barriers towards transparency in … Continue reading

Posted in History of Finance, Jacksonian Democracy, The Financial Elite, The Geithner Resignation Watch, The excellent adventures of Ben Bernanke, Who Guarantees the Guarantor?-You Do! | Leave a comment

The basic story of China’s foreign portfolio is simple…..

Keith Bradsher’s New York Times story on the recent evolution of China’s foreign portfolio gets — at least in my view — the story right. Of course, that may be because I was — rather obviously — a source for … Continue reading

Posted in China and the Treasuries - A Dependency Relationship, Global Trade, The Global Economy, US Trade Imbalance, We Have Become Beggars To The World | Leave a comment

It’s Official: Worst Recession in Five Decades

This recession is now the worst since at least 1958, which is as far back as the index of coincident indicators stretches back. The Conference Board reported today that the index, which is intended to measure how the economy is … Continue reading

Posted in Back to the basics, Coming Social Unrest, Coup d'etat in America, History of Finance, Insolvency, Integrity and Responsibility, Let's Call What It Is - DEPRESSION, Negative Cash Flow, Political Chaos, The End of American Capitalism As We Know It? - Discuss, The Financial Elite, The Geithner Resignation Watch, The Global Economy, The New American Socialism, The excellent adventures of Ben Bernanke, Those Quarky Accounting Rules, US Trade Imbalance, Unemployment Catastrophe, Wage Deflation, We Have Become Beggars To The World, Who Guarantees the Guarantor?-You Do! | Leave a comment

Let the PBGC bailout talk commence

From Eric Lipton at the NY Times: Bankruptcies Swell Deficit at Pension Agency to $33.5 Billion The deficit at the federal agency that guarantees pensions for 44 million Americans more than doubled in the last six months to a record … Continue reading

Posted in Pension Crisis, Who Guarantees the Guarantor?-You Do! | Leave a comment

Mean Street: The Sorry State of Our Sorriest State, California

You live, you learn. Right? Well, not in America. Here we live, screw up and then go back to doing the same stupid things we did before. Apparently, it is just too hard for us to make the tough, necessary … Continue reading

Posted in A State of Distress, Even the Terminator Can't Help California | Leave a comment

ARMs Away!

Subprime is done. All the teaser rates are over, the interest rates have reset and the writing is on the wall. But in the coming quarters, the scenario will play out with other exotic mortgages, Option ARM (pick-a-pay), Alt-A, etc. … Continue reading

Posted in Lending Crisis, Mortgages, Negative Cash Flow, Our phony middle class, Residential Market, Sub-Prime anytime | Leave a comment

Beggars Are We All…..

http://jessescrossroadscafe.blogspot.com/ Bernanke’s wager is on a virtual free lunch by printing money. “Fed chair Ben Bernanke has long argued that central banks can bring down long-term borrowing rates by purchasing bonds “at essentially no cost”. His frequent writings rarely ask … Continue reading

Posted in Insolvency, Integrity and Responsibility, Let's Call What It Is - DEPRESSION, Negative Cash Flow, Patience is a virtue...Delusion is a vice, Political Chaos, Sub-Prime anytime, The End of American Capitalism As We Know It? - Discuss, The Financial Elite, The Geithner Resignation Watch, The excellent adventures of Ben Bernanke, We Have Become Beggars To The World | Leave a comment

With U.K. AAA Rating In Jeopardy, Is U.S. Next?

The UK’s AAA-rating is at risk. (Bloomberg, MarketBeat, EconomPic Data, Zero Hedge) Bye, bye miss american pie….. Don’t wait…..buy Gold and Gold Mine Stocks!

Posted in China and the Treasuries - A Dependency Relationship, Coming Social Unrest, Coup d'etat in America, Death of the Dollar, Global Trade, History of Finance, How do you dampen the inflation dragon? | Leave a comment

Out Of Control! Welcome to USAWagen

In for a dime, in for a dollar. “The GMAC funding is an illustration of how rapidly the government effort to rescue the U.S. auto industry is escalating in cost and scope.” (WSJ) GM Borrows $4 Billion From U.S. to … Continue reading

Posted in Political Chaos, The Disappearing Car Makers, The Geithner Resignation Watch, The New American Socialism, Want To Buy A Car? | Leave a comment

The Required Yield Theory of Asset Valuation

Is the Required Yield Theory better than the Fed Model? (CXO Advisory Group) What aggregate return thresholds are critical to investors in deciding whether to accept or reject equity and bonds for investment portfolios? In their December 2008 paper entitled … Continue reading

Posted in Back to the basics, Bond Market, Investment Portfolios | Leave a comment

The Danger Of Greed and Short Term Focus

An important question at Custerstock: Are activist investors to blame for horrible corporate balance sheets? (Clusterstock) On Squawk Box this morning, DealBook maven Andrew Ross Sorkin made some comments about the role investor activism played in getting companies to lever … Continue reading

Posted in Audit the auditors?, Back to the basics, Integrity and Responsibility | Leave a comment

I.P.O.’s Offer Encouraging Signs

“The creation of risk capital, of which I.P.O. demand is a leading indicator, is crucial to getting the economy back on its feet.” (Breakingviews) In the grand scheme of the global capital markets, half a billion dollars is a drop … Continue reading

Posted in I.P.O.s-The View | Leave a comment

All About Alpha?

There are funds that implement a so called 130-30 strategy. The strategy is to first put 100% into an index like the S&P 500. Then sell short 30% in stocks expected to do worse than the market. Take the proceeds … Continue reading

Posted in Investment Strategies | Leave a comment

However…..

The VIX:VXV ratio is flashing a warning sign for the stock market. (VIX and More) Note that while this basic interpretation of the VIX:VXV ratio sets parameters for long and short entries, it does not include recommendations about exits or … Continue reading

Posted in A Picture Is Worth A Thousand Words | Leave a comment

Lower Volatility?

“Wall Street will market the VIX as bullish no matter what it does.” (Daily Options Report also Trader’s Narrative, Freakonomics) We should take it as good news that after a substantial stock price run up on Monday, the VIX responded … Continue reading

Posted in A Picture Is Worth A Thousand Words, A Saturday Break, Analysis & Commentary | Leave a comment

Muni Rising

Muni bonds are back to pre-crisis levels. (TraderFeed) In a low interest rate environment, those tax-free yields have looked attractive to retail investors and, amidst hopes of economic stabilization, investors have been willing to move away from Treasuries and into … Continue reading

Posted in Bond Market, MUNIs | Leave a comment

Dollar Down and Out?

Do you believe the US Dollar is going to tank? Think international equities. (Barron’s, BusinessWeek)

Posted in Death of the Dollar | Leave a comment

Changing Strategies

For many investors their definition of diversification is changing. (NYTimes, Bull Bear Trader)

Posted in Market Strategies | Leave a comment

Is The Federal Reserve Overreaching?

A good article at Forbes:     http://www.forbes.com/2009/05/19/federal-reserve-ron-paul-fdic-sec-opinions-columnists-bernanke.html

Posted in History of Finance, It Is Nice To Be Part of the Elite!, Patience is a virtue...Delusion is a vice, TARP fruit loops, The End of American Capitalism As We Know It? - Discuss, The Financial Elite, The Joy of Being A Bank, The excellent adventures of Ben Bernanke | Leave a comment

Health Care Crisis

When President Obama won approval for his $787 billion stimulus package in February, large sections of the 407-page bill focused on a push for new technology that would not stimulate the economy for years. The inclusion of as much as … Continue reading

Posted in Health Care Crisis-The Discussion | Leave a comment

SEC in trouble?

From Bloomberg: May 20 (Bloomberg) — The Obama administration may call for stripping the Securities and Exchange Commission of some of its powers under a regulatory reorganization that could be unveiled as soon as next week, people familiar with the … Continue reading

Posted in Regulation - the Discussion | Leave a comment