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Elliott R. Morss

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  • Sovereign Debt: The Default Debate [View article]

    It would certainly help if the EU saw the writing on the wall. Back in 2011, I wrote a letter to the weak Euro finance ministers on how to get out on their own -

    Still relevant today....
    Aug 9 08:30 PM | Likes Like |Link to Comment
  • Sovereign Debt: The Default Debate [View article]

    Let's be clear here. Both Greece and Argentina defaulted on their debts.

    Neither had a clause saying if X% of creditors agree to new terms, all creditors have to accept.

    And for Argentina, that led to the messy situation they are now in.

    What did Greece do? It retroactively re-wrote its original debt agreements and said that all creditors must accept the new terms. Nice to have good friends in powerful places. And Greece will have to do this again: their 170%+ of GDP debt is non-sustainable, not is it for Greece to stay in the Eurozone -

    Aug 7 11:08 PM | Likes Like |Link to Comment
  • Sovereign Debt: The Default Debate [View article]

    Interesting the bad press Argentina is getting versus Greece who "retroactively" changed its terms to require all creditors to accept new terms.
    Aug 7 05:12 PM | Likes Like |Link to Comment
  • Argentina Default Q&A [View article]
    It seems to me the main problem is the overreaching US judge who believes he should be the arbiter of another country's debt problems.

    That is why I believe Argentina should:

    1. Say it has defaulted,

    2. Negotiate new terms with creditors,

    3. Include a clause in new debt agreement saying that when 60% of creditors agree, it is binding on all;

    4. Wait until the RUFO clause expires (end of this year)

    5. Start paying again.

    Sovereign defaults never good, but it would help if Argentina made its intentions clear.

    The future for Argentina is not grim. The world needs its food.
    Aug 4 08:42 AM | Likes Like |Link to Comment
  • What I Bought Over The Last 4 Months, And Why I Bought It [View article]

    Your article spurred a lot of comments from others that believe, like you, they can beat the market with stock picks.

    It is a dangerous game that the big money managers never play. Instead, they talk of asset allocation, target date strategies, risk transfer, et al. Mention a stock? Never!

    Paul Samuelson wrote his dissertation on stock prices. He, like Burt Malkiel later (A Random Walk) made a pretty convincing case that all available information on a stock is reflected in its price. The consequence, if true, is that a stock pick is pretty random, e.g., whatever you pick will do about as well as the average stock in the market does.

    Samuelson and Malkiel might be wrong. But let me suggest to you and your commenters:

    List your stock picks, the ones you believe will perform best for the next 12 months and 3 years.

    I will write them down and write up the results for SA articles in 12 months and 3 years.

    I reluctantly pick stocks, mutual funds, and ETFs. In doing so, I follow the Peter Lynch recommendation - invest in things you know a lot about which in my case are developing countries....
    Jul 30 08:59 PM | 1 Like Like |Link to Comment
  • An End To Our Relationship With Yahoo, A New Era For Equity Research [View article]
    I don't like the move. SA pays peanuts to authors and for payment requires that you give them your piece on an exclusive basis. I publish my articles on other sites and want the exposure they provide. Consequently, I have never submitted a premium pice to SA.

    Rather than pay a little more to authors, I would prefer to see SA stop paying authors and put more money into more exposure for us, like through TYahoo Finance.

    Another thought: SA should do a series of fee to attend conferences on differing topics and pick up the tab for their best writers on each conference topic to attend.

    If done well, it should be good for SA and authors.
    Jul 25 08:41 PM | 3 Likes Like |Link to Comment
  • An End To Our Relationship With Yahoo, A New Era For Equity Research [View article]

    I emailed this suggestion to Hoffmann when I read his announcement:

    You (EH) said:

    "Starting next week, we'll be searching through our long and short idea archives looking for outstanding stock ideas that played out, and awarding two $2,500 "Outstanding Performance" prizes every week. Details about how articles will be selected can be found here."

    I have had a similar thought. However, I would not be awarding prizes.

    I believe Paul Samuelson was right when he said the stock market was pretty random (an idea that Burt Malkiel popularized). So I would be interested in looking at the recommendations of your most prolific "recommenders" to see how they stood up over time. My hunch? They performed about the same as the S&P 500. In terms of dates, I was thinking, maybe for Long Ideas, to look at recommendations made around the time the S&P bottomed out in early 2009. How have they fared?

    I believe full disclosure would be far more interesting to your readers than just awarding prizes. Sure, you would ruffle some feathers but what I am suggesting would be far more balanced than what you are proposing. Too avoid ruffling feathers unnecessarily, you could define a sample (like 30 most prolific long recommenders) and only mention names of the "stars".

    There are very few who beat the market over an extended period of time. Peter Lynch did when he was running Fidelity's Magellan and currently, John Reese's Validea's Hot List is special.
    Jul 25 08:21 PM | 4 Likes Like |Link to Comment
  • Sovereign Debt: The Default Debate [View article]
    Econ data on the Eurozone region can be found at the IMF
    Jul 21 08:33 PM | Likes Like |Link to Comment
  • Sovereign Debt: The Default Debate [View article]
    I have been arguing that Greece should leave the Eurozone for some time -
    Jul 21 10:54 AM | 1 Like Like |Link to Comment
  • Sovereign Debt: The Default Debate [View article]
    Sorry, I did not completely explain my self in my previous comment.
    What determines the strength of a currency? The demand for and supply of the currency. People buy a currency to buy a county's goods. They sell their currency to buy another country's goods. A positive and growing trade balance means more people are buying than selling the currency, and this in turn will strengthen the currency.

    The Eurozone has a positive and growing trade balance. The fact that Germany is not growing as rapidly as projected means the Germany import demand will be less, thereby strengthening the Euro further.
    Jul 18 01:32 PM | Likes Like |Link to Comment
  • Sovereign Debt: The Default Debate [View article]
    Ladies and Gents:

    Thanks for your interesting comments. I have a few reactions:

    David at IB
    "A pari passu clause ought to mean that holdouts have no leverage. Either they get paid the same as everybody else or they don't get paid at all."

    Maybe it should. But who knows what some US Appellate Judge will do if:
    1. Argentine settles with holdouts on better terms than those who accepted 2005 and 2010 deal and
    2. 2005 and 2010 settlers sue under pari passu clause for equal treatment?

    CR Barker
    "Argentina simply did not include a restructuring clause (permitting changes with a supermajority vote of bondholders) in its original indenture."

    Keep in mind that when you are trying to borrow money, you want the terms to look attractive to potential borrowers - putting in a clause saying the debt terms can be renegotiated makes the deal look a lot less attractive to potential lenders.

    "Simple fact is that countries should be treated on credit worthiness the same as any other entity and the consequences for misjudgement the same."

    I agree. And it is amazing that the Euro bank regulators told banks that sovereign debt was equivalent to Euros in calculating required reserves. Anyone that took the time to look at Greece's economic condition early on in 2009 would realize things were bad and soon would get much worse.

    James Hanshaw
    "I have a query - if Greece defaults again where does that leave the euro?"

    Value of EURO has little to do with Greece or other "weak sisters".

    It will stay strong because Germany is strong.

    Fred S
    "Of course one has sympathy for the Argentines who live under an inept and corrupt government who doesn't/won't/can't manage the economy successfully".

    I have spent time living and teaching in Argentina and don't have as much sympathy as you for the people. They live in a democracy which means if they really cared, they could use the vote to install a sound government. Maybe because they have lived under military dictatorships for so long, they feel they can't make a difference....

    Fred S:
    "Argentina should default on the old and new bonds."

    Interesting idea.

    "One doesn't have to be a supporter of the Argentine government to be concerned by the business model of NML. That same model - buying up sovereign debt cheap and then suing and using strong-armed tactics - is used against very, very poor countries whose debts were incurred by dictators and who are now desperate for debt relief."

    I disagree. In the article, I say forgiveness for donor loans that took them in the wrong direction. But the "predatory vultures" provide a market for creditors who want to get out.

    Jul 18 10:02 AM | Likes Like |Link to Comment
  • Don't Cry For Kirchner - And 2 Defaults Compared: Argentina And Greece [View article]

    Part of the explanation is in the devaluation. Before the devaluation, there was the fear that a devaluation would cause losses. For example, if you used dollars to buy Argentine stocks, those dollars would first have to be exchanged into Pesos at $1 = 5 Pesos. When you sell, you get dollars back at an 8 Pesos to $1 rate. So you lose by the amount of the devaluation. After the devaluation occurred, that fear disappeared, so there was more buying.
    Jul 3 02:00 PM | Likes Like |Link to Comment
  • U.S. Energy: Myths/Realities And The 2 Elephants In The Room [View article]
    JD and Kertch:

    A little knowledge is a dangerous thing. And both of you, like me, are not the scientists who actually know something about the causes of global warming.

    JD is trying to make the case most scientists make but K disagrees. Ok. And positions have been staked out. Enough.

    But here is the interesting followup issue:

    What can you agree on?

    If we drop the claim that at least some warming derives from man's actions, what is left?

    I THINK we can all agree:

    1. Focusing primarily on non-renewable sources of energy makes little sense for the long run;

    2. Energy pollutants of all sorts should be carefully managed;

    3. energy-saving technologies can pay huge dividends;

    4. There is a major role for governments to play because the oil industry, controlling both oil and natural gas, is in a monopoly position And it won't want to "liquidate" their inventories of non-renewable polluting fossil fuels.

    My last one might be a stretch. But

    5. Scientists predict that with changing weather caused by man or nature, it would be prudent to prepare for more extreme weather. At least, let's have the government stop subsiding home insurance for people rebuilding houses on the ocean.
    Jun 23 09:41 PM | 1 Like Like |Link to Comment
  • Income Inequality: The Fundamental Reason It Is Growing [View article]

    An interesting study on income inequality was just published by the OECD - If you click on "figures and data in xxs", you will see that income inequality is growing for most developed countries....
    Jun 19 05:42 PM | Likes Like |Link to Comment
  • U.S. Energy: Myths/Realities And The 2 Elephants In The Room [View article]
    S: Actually, I agree with you about doctors - not a good analogy.
    Jun 17 09:29 AM | 1 Like Like |Link to Comment