Jake Berzon

Scary Numbers

Why is 600 such a magic number for S&P 500? Some very smart people have pondered 400 and even 250. Government actions are adding lots of uncertainty to an already bad situation, so anything is possible at this point. The worst may be over or it may be not - the key is to attempt to be ready for anything that comes next.

Wall Street Breakfast: Must-Know News

Looks like there are some inflationary signs already starting to emerge. Yet, recession is in full force. Looks like stagflation of the 70s has a good chance for a rerun, except deeper, stronger, longer.

We will need a new term for this mess that we are in. Here are some suggestions: "deepshitation," "bushobamation," "starvflation" and the listy goes on...

The Ecology of Investment Strategies

That's exactly right. To be a successful investor over a very long term, one must adapt their tactics with markets and players, which is easier said than done.

There are advantages to being small, as you can take advantage of opportunities that the big boys can't touch. On the other hand there are disadvantages, as well - you don't have economies of scale for top-notch research.

Oh well - you win some and you loose some. In the end the only thing that matters is how well you adjusted to the changes in the game.

Ken Rogoff Wants a Higher Inflation Target

We have just started deflating. Inflation is coming, but it doesn't look like it will be so soon.

Obama's Housing Plan: Elegant and Costly

It doesn't much matter that I would rather have seen free markets do their magic to get us over current economic problems. We have what we have - on the one hand massive efforts to reinflate the economy and on the other efforts to prevent further deflation in house prices.

Will it all work? I have a very bad feeling that the two plan will not reach their desired goals. As always, the devil is in the precise details and those are not coming for the Obama housing plan until March. Till then, let's hope for the best.

Book Review: Addison Wiggin's 'The Demise of the Dollar'

The trouble with the two funds the author bought for diversification: DBC and FXF is that they carry hidden risks. FXF, for example carries "a concentrated credit risk to JP Morgan’s London branch. A default could be messy, with different laws in the UK." (This according to David Merkel's Aleph Blog.) Thus, these funds can fail precisely when you need them most - when all hell breaks loose and the US dollar dives.

8 Possible Targets for Exxon's Cash

Exxon will probably acquire something strategically. Chesapeake Energy on the surface looks like a good candidate, but Exxon has for years been replenishing the oil reserves they use up with natural gas reserves and Chesapeake is not cheap enough to make up for their poor financial health. It is more likely that they go for somebody who controls oil reserves, or make a play for something green (if they can find something big enough, promising enough and viable enough).

10 Aspects of Our Current Market Troubles

Nice summary of what is bad and where not to put your money. I especially enjoyed the ETN/ETF risk summary - well done. I would ad that commodity funds have an additional risk of contract turnover losses due to contango - something that I didn't consider until very recently.

But also there must be some opportunities out there. In your next article, can you tell us what they are in your opinion?

How GE Compares to Other Banks

GE is clearly distressed, may loose its coveted AAA rating and can easily get to negative tangible common equity before the year is up. GE stock price has very likely not hit the bottom yet. However, it also appears rather clear that GE is one of the few companies that will survive the current downturn.

Geithner's Vagueness Explained

"The department made a strategic decision to limit input from the financial industry and other outsiders, aiming to prevent leaks and avoid a perception they were designing the plan for the benefit of big banks," only because that is exactly what they are doing...

They are designing a plan to benefit big banks, but don't want "the people" to realize that until it is too late.

Obama Talks Himself Into - And Out of - Bank Nationalization

The problem is that the big bank lobby is just too strong even for Obama. You should listen to the Bill Moyer's Journal interview with Simon Johnson on PBS. He explained it quite nicely.

Intrinsic Value Investing: Recognizing Potentially Mispriced Stocks

Chesspower, you don't need to subscribe to WSJ online to read the articles, you just need to access them from one of the preferred referrers, such as Digg.com . If the article isn't already on digg, you can just add it there and read in full, or you can simply spoof the referrer - there is even a free browser tool to do that.

The Kanjorski Meme, Mark II

Suppose the big guys figured out that there were potential problems ahead all at the same time. Suppose the Government was closely tracking the situation and knew exactly what was going on with redemption requests. Suppose Paulson could and did act quickly. Even then I find it difficult to believe that the big investors would have said yes to Paulson, and rescinded their redemption requests. What incentive were they given for doing that? Where they, perhaps, told that the Fed would start accepting asset-backed commercial paper as collateral before this was announced publicly?

Canada vs. U.S. - Whose Banks Are Safer?

I like Canada in general, and loonies (Canadian $) in particular. I am also quite weary of equities right now, but I like your Canadian banks idea and will keep my eye on them. Thank you.

BTW, does anyone know if Canadian bank deposits have an equivalent of FDIC insurance?

Currency ETF Charts

On top of the price charts it would be interesting to see dividend histories.

I got out of Yen when it just started its sideways action in December. I think Canadian and Australian $ look attractive and not just technically.