Alex Filonov

Against Liquidity

I meant August 2007, of course.

Against Liquidity

What about unintended consequences? For example, repo markets are moving to the countries with no repo tax. Krugman in his article is right that there is one big clearing house for repo currency operations in London. Now. But it can easily move to Cayman Islands. Or Bahamas. Or Singapore. If clearing house doesn't move, traders will, they can create new clearing house.
Another Krugman's point: repo market helped to heat up mortgage backed securities market. Maybe. But MBS market crashed in August together with repo MBS market, not later. Again, such repo market can easily work outside of US jurisdiction.
The most interesting effect would be on banks. Many of them use overnight loans, including those from the Fed. Do we tax those as well? If not, why? If yes, we are all going to pay this tax, in form of higher interest rates on our loans or lower interest rates on our savings accounts and CDs.

Another Crisis Looms Right Around the Corner

Correction: all carry traders are using leverage, it's the name of the game. Before using dollars to buy something, carry traders borrow them.

Can the Fed Defeat Dollar Carry Trade?

Answer to this question is well known from Japanese experience: Hell, yes.


On Nov 25 06:13 PM sethmcs wrote:

> Good article. May I suggest a minor rewording of the article. From:
> Can the Fed defeat the dollar carry trade? To: Can the dollar carry
> trade defeat the Fed?

Why We Should Cap Interchange Fees

As far as I know, Visa explicitly forbids extra charges for use of Visa credit cards. Mr Steve Franklin should've reported this extra fee to Visa.

There is more problem with debit cards than with credit ones. One: if you are out of funds, you pay hefty overdraft fee. It's at least $15 per case and many banks charge more. Credit card over the limit charges are nothing compared to that. There is a legislation which should ban the practice, but it's not in force yet, AFAIK. Second problem with debit cards: unlike credit cards, they don't offer protection against unauthorized charges.

Credit cards are great tools. If you pay your balance in full and use no annual charge card, you're getting free credit for one month!

Can the Fed Defeat Dollar Carry Trade?

Small pop right now wouldn't be that bad. But carry trade can go on for decades (look at Japan), and when it pops after that, look for something big. But really, it's not my main concern. Carry trade creates fiction of "too many dollars", when country is still in deflation. Which affects way too many things, from commodity prices to bubbles in developing countries to constant cries here that dollar should be more expensive. In short, carry trade may create or amplify depression (again, look at Japan).

On Nov 25 06:44 AM chris coonan wrote:

> I think that the damage is already done, with regard to the carry
> trade. What we are just waiting for now is the popping sound.

Inflation Worries: Here's What We Can Learn from Japan

Cash in the mattress.


On Nov 25 06:50 AM prairiedog555 wrote:

> So, we know what investments work for INflation, but what specifically
> should investor consider for DEflation?

David Rosenberg: The Recession May Have Ended, But the Depression Has Not

If you take a look at Dow Jones in 1930s, it was going up since July 1932, when US was still in Great Depression. Even if we are in depression right now, it doesn't mean that stock market should go down.

I remain long term (18 months) bullish.

When Free Markets Fail

It's a two-way street: governments are trying to get more power, and industries are trying to get more government support. Everyone is so concerned about GM or healthcare and forgets hundreds of billions paid to agriculture businesses from budget every year. I'm no fan of government run businesses myself, but government isn't the only guilty entity here. Sport monopolies, alternative energy enthusiasts, ethanol producers are all depended on government support, they'll die without it.

In his weekly address, President Obama warned the U.S. should not return to credit-fueled growth, urging people to spend less and save more, while calling for a greater focus on exports to Asia. He also said it's important the upcoming jobs forum "not undertake any ill-considered decisions, particularly at a time when our resources are so limited."

Spend less, save more: recipe for disaster. We have consumer based economy. If consumers spend less, economy will stay depressed.

Looks like Obama's economic knowledge exists at 19th century level.

It's not a new secular bull market, says David Rosenberg, counting the differences from before - from P/E multiples to government policies to trade barriers.

And why the comparison to 1980s? Why not to 1930s?

It's a Large World After All

Actually, this information tells us that markets are efficient: they provide people with product they want (iPhone with wifi).

Rupert Murdoch: Stupid Like a Fox?

I wonder if FTC is already investigating you. If not, they should start right now. It's an attempt of collusion and price setting, plain and simple.

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Why I'm Long Helios Total Return Fund

I know that Helios holds a lot of junk bonds. So what? They are priced according to their status and pay bigger coupons. Yes, default probability is higher, but that's the usual risk/reward decision.

On Nov 13 04:04 AM Alan Young wrote:

> You seem not to have done your DD. According to the fund's quarterly
> fact sheet, www.brookfieldim.com/_...,
> 33% of this fund is in below-investment-grade bonds. The management
> fee of 1.26% (the additional .79% is interest expense, not management)
> is very reasonable for this kind of portfolio.
>
> If you want to do some real research, dig into that portfolio and
> find out what kind of junk is in it: they don't report any ratings
> below BBB, so it may be full of unrated or seriously impaired debt.

Why I'm Long Helios Total Return Fund

Thank you for comments.

GlobalTrekker, I agree with you, I'm planning a short-term holding of this fund. Yes, underlying notes pay 4.5% of nominal, but I don't think HTR paid nominal price for them. Current leverage is under 18%, not that bad.