Seeking Alpha

Avery Goodman

View as an RSS Feed
View Avery Goodman's Comments BY TICKER:
Latest  |  Highest rated
  • Hidden Benefits of a Greek Debt Default [View article]
    Rampole, If you know German (or other non-English speaking) media outlets, which desire to run this article, they may do so, so long as they attribute the work to the author. Better still if the article is translated into the appropriate language.
    May 2 06:16 PM | 1 Like Like |Link to Comment
  • Jail Time for Wall Street's Derivatives Writers? [View article]
    The issue is with the use of FICO scores for an impermissible purpose. Its use in structuring REAL mortgage backed bonds is allowed under the Act. Its use in structuring synthetic derivatives that have nothing to do with the existing loan is not allowed.
    Apr 27 04:47 AM | 1 Like Like |Link to Comment
  • Jail Time for Wall Street's Derivatives Writers? [View article]
    FICO scores are generated from credit reports. It doesn't matter whether the information about the score first passed through a mortgage originator, loan servicer, or an investment bank before it made its way to the final person structuring a synthetic derivative. The fact that the information originally came from a credit report means the Fair Credit Reporting Act applies.
    Apr 25 09:51 AM | 7 Likes Like |Link to Comment
  • Why Goldman Sachs May End in a Lehman Style Collapse [View article]
    I suggest that you read the SEC complaint before you comment. The evidence cited in that document appears to be very strong, and includes emails exchanged between the parties which reflect exactly what each party to the transaction knew, didn't know and was trying to convince the other parties to believe. The media reports you are relying on are misleading you.
    Apr 23 12:57 AM | 1 Like Like |Link to Comment
  • Why Goldman Sachs May End in a Lehman Style Collapse [View article]
    These were NOT resold mortgages. The right to disclose financial data to a subsequent mortgage buyer is set out in the mortgage documents. However, these were synthetic derivatives outside the chain of contract between mortgagor and mortgagee. There are a number of federal and state laws that would prevent such information from being made available beyond the underwriter of the collateralized bonds. Just because something can be done does not confer a legal right to do it. Pulling someone's credit report, for example, may be easy to do, but it is an illegal act, punishable as a crime, when it is done without authorization.
    Apr 22 09:11 AM | 6 Likes Like |Link to Comment
  • Are SEC Charges Against Goldman More Serious Than Market Understands? [View article]
    "Paulson and his hedge fund are likely to be named defendants in most of civil lawsuits."

    Let me proactively correct myself by correcting this.

    "Paulson and other hedge funds are likely to be named defendants in many of the civil lawsuits involving CDOs in which they worked closely with investment banks to take short positions."
    Apr 21 11:57 AM | Likes Like |Link to Comment
  • Option Trader Friday Outlook: Is the Dollar Going UUP? [View article]
    I agree that the dollar is about to rally, and commodities, including gold (to some degree), are going to take a temporary beating. However, I disagree with your reasons why, and your idea that money disappears from the system simply because debtors default. The fundamentals are far more complex than that.

    A $700 billion stimulus, especially when combined with TARP, TALF, and various Fed credit provisions is certainly NOT "piddly". Federal Reserve printing programs represent a real and important threat to the long term stability of the financial system.

    I believe and hope that the Fed is about to drain some of the funny-money. However, if they don't, and, instead, add more funny-money, they will be putting our Republic in jeopardy. They will cause a spiral of negative opinion toward the dollar that will prove extraordinarily expensive or impossible to control, in spite of the current demand for dollars overseas. In that scenario, we will face the toxic fallout of hyperinflation, of the same type that created Hitler, after the Wiemar period.
    Nov 8 12:59 PM | Likes Like |Link to Comment
  • Silver Prices Are About to Fall [View article]
    Silver is likely to go up in price over the very long term. I have very clearly stated, many times, in this article and others, that silver is an excellent very long term investment. It is better to buy it when it is cheaper, however, rather than when it is more expensive.

    As a long term silver investor, you will need to grit your teeth as it gets periodically clobbered. The reason for the volatility is a topic for a book, or, at minimum, an article, because historically silver and gold are the most stable commodities. Not anymore. Without a long explanation of why, we can simply say that lack of effective regulation of the futures markets casino clearly has something to do with it.

    Decent men do what they can to make the world a fairer place. But, practical men will also deal with the world as it is. Practical men will not engage in swordfights against windmills. It is not always pleasant to deal with reality.

    One reality that an author on seekingalpha must deal with is the requirement of disclosing long or short positioning, I DO NOT endorse the idea of people taking short positions in silver. Generally, that should be left to people who have the knowledge to do it without putting themselves at risk. One can be both hedge existing silver investments, or become overtly short silver in many ways, including buying puts.

    The essence of this article is simply an explanation of why I reversed my opinion, temporarily, on a bullish speculative trade suggested in an article I wrote in early March. Nothing more.
    Nov 8 05:00 AM | 1 Like Like |Link to Comment
  • Silver Prices Are About to Fall [View article]
    This piece was intended as presenting some thoughts on a speculative trade. It was never intended as a primer on investing strategy. A very limited part of anyone's portfolio, in relation to overall wealth, can be devoted to speculative trades. The risk of being wiped out is too high to devote a large part of your portfolio to this type of activity. Remember, your family must eat, regardless of whether you win or lose in the market.

    A long term "core" position is very different. Long term, you may choose to hold stocks, bonds, metals, and so on. You've determined that the long term positions are worth sticking to for a very long time, regardless of whether they move up and down a bit, while you are holding them. Income can be generated from long term holdings in the form of dividends, and/or by selling covered calls at appropriate times.

    In contrast, speculative trades are short-term ones that have a reasonable likelihood of resulting in a spectacular gain. You take a big chance, and are willing to lose the value of the entire investment in exchange for the prospect of a big gain. You should not bet any more money than you can afford to lose on speculative trades.

    Acting on the opinion that silver was going to soar, back in March, and, now, acting on the opinion that silver is about to go down substantially, are both examples of speculative trades.
    Nov 5 11:48 AM | 16 Likes Like |Link to Comment
  • 3 Oligarchs Dominate the Housing Market, Backstopped by You [View article]
    Excellent points, and well made with a sense of humor. If we look carefully at the foolishness of the folks in Washington DC and New York, if don't laugh as they destroy our beloved country, we would have to cry.
    Sep 21 02:09 PM | 1 Like Like |Link to Comment
  • Can a Market Crash Save Us from Hyperinflation? [View article]
    Hopefully, by next year, having learned that this type of so-called "stimulus" costs much more than it is worth, the government may back off from the insanity and allow the economy to recover more naturally. Obviously, the mistakes that have been made are severe. However, with the much lower current account deficits that are prevailing, even now, a fundamentally great nation, like the USA, could still have hope of true economic recovery if only the foolishness stopped here. But, in all likelihood, you are right that it won't. The NY Fed may to supply endless "liquidity" to juice the markets.

    On Jun 30 03:52 AM Egg wrote:

    > Ok, what about next year's bonds? And the next year's after that?
    > And so on and so on?
    Jun 30 05:40 AM | 4 Likes Like |Link to Comment
  • The Truth About Unemployment Numbers [View article]

    If Fox Business News is covering news in the honest forthright fashion that is going out of style, that is good news.

    On Jun 22 08:33 AM Mark Lieberman twitter/foxeconomics wrote:

    > You should be following emlployment / unemployment reports on Fox
    > Business Network. We regularly not the widening gap between those
    > collecting benefits (including extended benefits) and those reported
    > as unemployed by BLS. That gap is now over 5 million.
    > The other concern is the impact on businesses who contribute to unemployment
    > insurance funds. Those contributions are based on experience factors
    > (the number of former employees collecting benfits) and could mean
    > employers will be making higher contributions long after a labor
    > recovery -- on a greater number of employees.
    Jun 22 03:27 PM | Likes Like |Link to Comment
  • Break Up the Big Banks [View article]
    Clearly, you did not read this article, as I do not support Henry Paulson's policies.

    I would have allowed banks to fail, put them into receivership, removed managements entirely (without severance pay or golden parachutes), sold them off piece by piece to more responsible people, and held my breath as I printed as limited an amount of money that was needed to pay off depositors (if necessary) and/or transfer deposits to a new institution. I certainly would not have supplied government subsidized funding, in the form of FDIC guarantees for bank bonds, to back up high risk investment banking activity.

    My policies would have put the nation into severe recession. However, we will now enter a much more severe depression (inflationary depression), over a far longer period of time, because of Paulson/Bernanke policies. I fear that the coming problems may put the very existence of the United States of America at risk.

    The amount of money that will now be printed will be many times greater than it would have been had insolvent banks been liquidated. The U.S. government is now forced to print money based upon the gross values of leveraged bets, rather than close to the monetary base by replacing deposits.

    It is now impossible to liquidate insolvent banks. The U.S. government has erroneously made legally binding investments that will bankrupt us if we liquidate the banks, at this point. These investments ARE NOT limited to, or mostly, in the form of TARP allocations. The situation is far worse than it would have been if correct measures had been taken from the beginning.

    We must make sure that this cannot happen again. That is why systemically important banks must be broken up into more manageable sized units that pose little risk to the nation and the world.

    On May 21 06:50 PM another pissed off banker wrote:

    From another pissed off banker,
    If I didn't know better I'd think you were related to Paulson. You
    iddiots wanted us to take money to buy failing institutions with
    certain requirements placed by you on the front end only to start
    changing the terms after we accepted it.
    May 21 10:44 PM | 1 Like Like |Link to Comment
  • Break Up the Big Banks [View article]
    The problem is that government, and its taxpayers, are being forced to step in and bail out these banks. That being so, it follows that government also has the right to initiate a "preemptive strike" to prevent being forced to bail them out.

    While it would be better if no one ever got bailouts, I think that, politically, voices that oppose bailing out irresponsible large institutions will always be squelched, as they have been over the last year.

    Accordingly, there is no choice but to approach this problem from an anti-trust viewpoint, and break up any bank that poses a systemic risk, before the risk manifests itself.
    May 21 02:55 PM | 2 Likes Like |Link to Comment
  • Break Up the Big Banks [View article]
    Oligopolies do not fail even though they may suck the life blood out of the society in which they reside. They prevent free markets from existing, and, hence, the "free market" cannot eliminate them. Look at any banana republic and you will see oligopolic conditions that have been in place for hundreds of years. The oligarchs, in those countries are still in control, and the countries, themselves, are basket case economies because of that. The USA will join them if we do not correct this situation very soon.

    With respect to the "banking" industry, I am not referring to the type of community bank that makes loans and accepts deposits in their local community, nor to the branches of big banks that may do the same thing. Although it would be better for people to follow the Home Depot management's example, and become self-funding, such banks are the salt of the earth, and critical for the communities they are in.

    When we break up big banks, the first thing we will do is free those divisions from liability to the irresponsible risk-taking of the other, more malevolent, parts of the bank. You are absolutely correct that some banks are still profitable. Perhaps, I did not make it clear, but I am discussing breaking up banks which pose a "systemic risk", not community banks, and not banks that simply operate on a national basis.

    The banks, or parts of banks, that you are referring to do not pose a systemic risk. The "bad boys" I speak about are the ones who habitually work closely together and with the Federal Reserve, and engaged in securitization, payments to ratings services to give AAA ratings to toxic waste debt instruments, and the ones who continue to engage in what most prudent people would see as reckless high risk derivatives sales and guarantees. These big banks pose a risk to the entire system, and that is why many people felt it was necessary to bail them out, although some disagree about that necessity.

    Anti-trust action is a traditional, well worn, and effective means of dealing with this problem. We need active enforcement and, perhaps, Congressional reinforcement of those laws to help them work.

    Thank you for your comments.

    On May 21 10:35 AM greedcanbgood wrote:

    Your first premise here is that the banking industry is controlled
    by a handful of banks and by extension competition is limited. I
    challenge you to demonstrate where this is the case. Go to nearly
    any town in the US and right by your BofA, Wells, Citi, Chage, USB
    (pick your big bank here) is a small community bank who offers products/services and rates that are at least as competitive. Most of them are making money and doing well. Where’s the “oligarchic consortium”?
    May 21 11:23 AM | 3 Likes Like |Link to Comment