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Rakesh Saxena

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  • Will the Counterparty/Systemic Risk Relationship Undermine Banks? [View article]
    Mark, "eating away" was the phrase I was looking for. Thanks - Rakesh

    On Oct 04 07:56 PM Mark Bern wrote:

    > Excellent article! You have hit upon the question that has been swept
    > under the proverial rug by Wall Street, the Fed, and the Administration.
    > Ignoring the problem does not fix the problem. However, that is the
    > primary action that has been taken by our leaders in hopes that it
    > may go away or miraculously fix itself. It is, as you pointed out,
    > as systemic risk that won't go away. The web needs to be untangled
    > and chips fall where they will so that we can deal with the real
    > problem underlying our economy. As long as it is kept hidden, eating
    > away at bank solvency over time, it will continue to be a major drag
    > on any recovery. Without attending to the root of the problem, we
    > will be mired in a slow growth envirionment with inadequate credit
    > availability to sustain the level of new business formation needed
    > to create positive employment.
    > We must go through some pain and recognize the losses on worthless
    > (or near worthless) assets for the delveraging process to accomplish
    > the necessary cleansing of the economy. Without that step, we will
    > just continue to hobble along, with the government taking on more
    > and more debt against the future, making recovery to an economic
    > environment of real growth impossible.
    > Thank you for trying to keep us informed of what really matters.
    Oct 4 09:37 PM | 1 Like Like |Link to Comment
  • Will the Counterparty/Systemic Risk Relationship Undermine Banks? [View article]
    Thank you Swashbuckler.

    On Oct 04 04:29 PM Swashbuckler wrote:

    > Rakesh----Welcome back to SA. I always look forward to your posts.
    > Here's hoping you are doing well and will be able to continue posting
    > here for a long time.
    Oct 4 09:35 PM | 1 Like Like |Link to Comment
  • India Risk Rises as Pakistan Unravels [View article]
    Dear Juan77: I don't know of any short India ETFs--but perhaps you can search this site for more information on the subject or ask one of the SA editors. I could not agree with you more on the inflated asset values in India. Many thanks - Rakesh

    On Mar 13 02:12 AM juan77 wrote:

    > Hi Rakesh, thanks for another nice article.
    > I think the word hyper inflation sums up the situation in India -
    > because asset prices were super inflated fueled by hype!
    > Are there any short India ETFs?
    > I look forward to your articles ever since I read your article where
    > you predicted(very correctly) that BAC would fall to $5.
    Mar 13 02:26 AM | Likes Like |Link to Comment
  • India Risk Rises as Pakistan Unravels [View article]
    Dear Aalan: You raise a good question, and I should make two points in reply. Firstly, given my fundamental view that systemic risk globally has not been contained, and will not be contained for quite a while, I am not inclined to buy anything at this point. Secondly, since my core business is default risk and index put insurance pricing, I am assessing short selling windows all the time. I am not a value investor, and I don't as a rule make long-term "long" recommendations. I trust that provides the clarification you are seeking. Many thanks - Rakesh

    On Mar 13 01:57 AM Aalan wrote:

    > I wish I could say that I found this article informative and helpful.
    > However, every article I have ever seen by Mr. Saxena is a recommendation
    > to short. Mr. Saxena, if you have written articles in the past that
    > have pointed to long opportunities, please direct my attention to
    > them so that I can get some perspective. Identifying "risk" is an
    > important contribution; but why should I believe an analyst who says
    > everything should be shorted, any more than I should believe one
    > who calls everything a "buy"?
    Mar 13 02:23 AM | 2 Likes Like |Link to Comment
  • India Risk Rises as Pakistan Unravels [View article]
    DevKumar: If you were to become Prime Minister of India, then I may have to surrender to the Indian police also. You are scaring me. Please show some mercy.

    On Mar 12 11:59 PM DevKumar wrote:

    > Loser PROXIMO
    > Are you Rakesh Saxena ? why don't you surrender to Thai Police.
    Mar 13 01:01 AM | 2 Likes Like |Link to Comment
  • What, If Anything, Are CDS Spreads Telling Us? [View article]
    Fabian hug: You obviously don't read English very well. I am not suggesting that you base any strategy on the CDS marketplace; I am only pointing to what signals you can derive. Ignore them at your own peril. But do try to upgrade your writing skills so that you can write something sensible. - Rakesh

    On Mar 10 09:48 AM fabien hug wrote:

    > Sorry Sir but this is a load of crap. No volumes, no counter party,
    > no disclosing of participants, no nothing and we should base our
    > investment strategy on that! Great.
    > Now, some of these non-disclosed geniuses are willing to pay money
    > to protect themselves against a default of the US gvmt or even a
    > default of GE! Did you ever thought about who is going to fork the
    > bill when such default occurs? AIG or UBS or Merrill-Bofa?
    > To me it sounds like oil $ 200 before Xmas, nothing more.
    Mar 10 11:29 AM | 3 Likes Like |Link to Comment
  • Netting Derivatives: Slippery Slope Marred by Opaqueness [View article]
    Dear oapoki: FYI I have been working with ISDA contracts for a very long time, and have reviewed hundreds of such contracts when closing derivative transaction, though I am not a lawyer by profession. If you have read any of these contracts with precision you will realize the point I am making: that where the shift in the fundamental nature of the contract towards "insurance driven" coverage did not fully capture the risks involved and the counterparty risk. I am not suggesting that such contracts should be abandoned. - Rakesh

    On Mar 07 09:00 AM oapoki wrote:

    > It is sad to see you guys commenting on these, admittedly complex
    > issues, with no idea what you are talking about.
    > Has any of view taken a look at an ISDA contract? Has any view used
    > an ISDA contract in practices? Has any of view wlaked through the
    > process of netting in a bankruptcy?
    > I would simply state that "action talks and BS walks". It is not
    > accidental the the derivatives industry has grown to these levels
    > - they add value because they enables participants to hedge risks
    > - even if people misuse thes einstruments (like everything else).
    > In the absence of the ISDA agreement, with its associated actual
    > netting (not imagined as the author contends) benefits (as we have
    > seen in the case of Lehman), we would have chaos.
    > ISDA contacts have proven to be extremely robust in the face of extreme
    > conditions, and I hate to see what would have happened intheir absence.
    > So be acreful what you are wishing for!
    Mar 7 11:15 AM | Likes Like |Link to Comment
  • How Much Downside Could Still Exist? [View article]
    You make a very valid point--communism and socialism are not similar by any means, and the sooner we in the US realize this the better. - Rakesh

    On Mar 04 10:44 AM plumstupid wrote:

    > Soviet Union and E. Europe were Communist. Communism and Socialism
    > are not the same thing.
    Mar 4 01:22 PM | Likes Like |Link to Comment
  • How Much Downside Could Still Exist? [View article]
    Dear Professor: You obviously need to go to history school where you will learn how to place statistics in perspective. - Rakesh

    On Mar 04 11:56 AM Professorsnape wrote:

    > Random, self-indulgent tripe! Of course the markets are going lower.
    > However, to say the world is more interconnected today than in generations
    > past is erroneous. World trade as a percentage of GDP was higher
    > in the 1920s and 30s.
    Mar 4 01:19 PM | 2 Likes Like |Link to Comment
  • U.S. Government Recreating Leverage, Offering New Trading Windows [View article]
    Yes Robert, this T-Bill situation could be another window, given the CDS spreads on government risk. I'm looking at that now. Many thanks - Rakesh

    On Mar 04 10:04 AM robert.b.ferguson wrote:

    > When investors have fled to cash and many buisnesses that were leveraged
    > to the hilt have folded no one is willing to borrow money even when
    > it's available. Consumers and buisnesses alike are deleveraging as
    > quickly as possible. For credit to "Flow freely." people must be
    > willing and able to borrow and that does not seem likely any time
    > soon. At this juncture folks are begining to wonder if cash is safe
    > and those who are able are buying gold. T-bills are no safe haven
    > any more and buying ETFs shorting them is about the only money I'm
    > willing to put to work right now.
    Mar 4 10:35 AM | Likes Like |Link to Comment
  • How Much Downside Could Still Exist? [View article]
    Yes carey_jim, you are right about the various factors which shaped the 1929-1939 era. But the challenge remains to translate the political issues into economic terms. For example, was European fascism purely a political phenomenon or was it caused by the deterioration in economic conditions? Many thanks - Rakesh

    On Mar 03 02:11 PM carey_jim wrote:

    > Rakesh:
    > Here are some forces that often minimize purely economic and financial
    > explanations of human interactions, including the vicissitudes of
    > the economy and the production of goods and services:
    > Historical forces, e.g. grievances from past wars, revolutions, injustices,
    > new wars, etc.
    > Psychological forces, e.g. envy, greed, desire for power, lack of
    > concern for one's own health, the health of others and the planet,
    > etc.
    > Sociological forces, e.g. racism, sexism, class consciousness, caste
    > differences, language and cultural differences, mass hysteria, etc.
    > Political forces, e.g. revolutions, newly elected governments, imperialistic
    > wars, genocide, etc.
    > Technological forces, or the invention of new devices which make
    > the old way of life obsolete, e.g. railroads made rivers and river
    > barges much less important for moving goods. Milking machines and
    > other motorized and electrified farm machines lowered the demand
    > for unskilled farm workers. Today, the internet makes brick and mortar
    > stores much less important, etc.
    > The Great Depression was caused by many things including the historical,
    > psychological, sociological, political, and technological events
    > mentioned above.
    > Think of the rise of Hitler, the Russian Revolution, the German attack
    > on European Jewry, the mass hysteria produced by fascism and communism
    > and the dislocation produced by the electrification and motorization
    > of Europe and America. And I've only mentioned the most obvious.
    > Economics and finance are only part of the picture.
    Mar 4 12:14 AM | 1 Like Like |Link to Comment
  • How Much Downside Could Still Exist? [View article]
    Dear AntiCramer: The point I am making is that the systemic risks are fully priced with the S&P at 700, with the qualifier that risks emanating from the global marketplace have not yet been quantified. Many thanks - R

    On Mar 03 09:11 PM The AntiCramer wrote:

    > "From the prism of facts pertaining to previous recessions, the risks,
    > including systemic risks, within the broad American financial framework
    > are now fully priced."
    > Please justify that statement.
    Mar 4 12:11 AM | Likes Like |Link to Comment
  • How Much Downside Could Still Exist? [View article]
    Dear Jim: Have you actually read the texts you are citing? These are either ideological documents driven by a particular world view or simply attempts to analyze the 1929-1939 period without any clear and fundamental knowledge of systemic risks in a capitalist economy. In any event, I will address the definition of self-serving in a forthcoming article and will await your comments---but, in brief, a self-serving document for our purposes is one which is planned and executed within the prism of a pre-determined vision of the where we are today and where we are (or should be) headed. As far as my article is concerned, it is indeed self-serving. Take it or leave it, but I stand by it and I invite cogent challenges. And do read the various previous articles before you rush to comment--you may not have the courage to admit it, but I have been right all along, on the mark. Many thanks - R

    On Mar 03 01:56 PM Jim Hawthorne wrote:

    > Sure!
    > E. M. Jones & E. A Radice; An American Experiment, 1936
    > J. M. Keynes; A Treatise on Money, 1930 (before fame)
    > Caught Short! A Saga of Wailing Wall Street, 1929
    > Only Yesterday; Harper, 1931
    > Stock Exchange Practices, Washington Report, 1934
    > The Liberty Digest, June1, 1929
    > Bernard J. Reis; False security, 1937
    > Federal Reserve Bulletins; monthly, beginning in 1929
    > The list is long; but I can't wait to read your curious definition
    > of ' Self Serving'! Let's see if it applies to yourself as well,
    > shall we?
    Mar 4 12:09 AM | Likes Like |Link to Comment
  • How Much Downside Could Still Exist? [View article]
    Thanks Proximo: You are correct--this article actually summarizes the points made in previous months, in previous articles. I think people should be educated in how to use this information tool, i.e. SA. - Rakesh

    On Mar 03 12:29 PM PROXIMO wrote:

    > Rakesh--I enjoy all of your articles .Please keep posting. An observation.
    > If a portion of the energy expended today attacking you and this
    > article had instead been used to study virtually any of the 115 articles
    > you have previously posted in the past 8 months(and your recommendations),
    > there would be far less vitriol and far more gratitude. Thanks for
    > what you write. Prox.
    Mar 3 01:07 PM | 2 Likes Like |Link to Comment
  • How Much Downside Could Still Exist? [View article]
    Dear Jim: Can you cite me one text of the 1929-1939 period which you have read and which in your opinion is not self-serving? If we are to use this forum for a constructive discussion, then let's all do our homework. Otherwise, don't be ashamed to ask questions. Many thanks - Rakesh

    On Mar 03 05:51 AM Jim Hawthorne wrote:

    > I agree with Nikola;
    > In addition you ask, 'How much more downside is there?' and claim
    > there is lots based on a list of vague assumptions and generalizations.
    > Yet, in spite of this you have exited your short positions because,
    > based on your peerless research, the S&P reached the magical
    > number of 700, coupled with those flaws in the banks' balance sheets
    > that you oh so cleverly spotted!
    > And after predicting more downside, you suggest that you will once
    > again enter short positions if your once again vague set of conditions
    > are met!
    > You have the unmitigated gall to end this rambling river of drivel
    > by slamming 1929-1939 authors as 'self-serving'! What hypocrisy!
    > Your entire article is as self-serving as the proclamations of the
    > lowest CNBC shill; or a Time's Square pimp, for that matter!
    Mar 3 12:06 PM | 2 Likes Like |Link to Comment