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Rakesh Saxena

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  • How Much Downside Could Still Exist? [View article]
    Dear raytayzmd: I suggest you get out of the "plantation mentality" and let facts guide your investments. - Rakesh


    On Mar 03 09:44 AM raytayzmd wrote:

    > .....hmmm, he is a "risk pricing specialist" at Quote Platform Syndicate
    > Group which "is part of an international network of risk buying pools
    > engaged in the pricing of credit default swaps, synthetic collateral
    > debt obligations, political risk insurance contracts, index put options,
    > far-forward FX contracts and asset securitizations."...in other words,
    > he helped create this mess to begin with...I vote we all get together
    > for a good old fashioned lynching -- anybody know his address?
    Mar 3 12:01 PM | 4 Likes Like |Link to Comment
  • How Much Downside Could Still Exist? [View article]
    Dear kruser53: You need to review my earlier articles and place the current one in context. Many thanks - Rakesh


    On Mar 03 11:16 AM kruser53 wrote:

    > Rakesh Saxena:
    >
    > You have written some good articles, but this is not one of them.
    > There are too many unelaborated generalities. One example: "And,
    > as far as systemic risk is concerned, Ben Bernanke’s definition is
    > proving to be entirely academic, restricted by numerous, self-serving
    > scholarly texts of the 1929-1939 era." What value does that statement
    > have without an explaination of "self-serving"?
    >
    > You have enumerated a number of the important issues for the current
    > time and coming years. But the value of the article stops there.
    > It's like you started to make a sandwich and stopped when all that
    > was done was to put out two slices of bread. Where's the beef?<br/>
    >
    > boats:
    >
    > You wrote: "There you go confusing freedom and capitalism. Capitalism
    > makes slaves of 99% of the population."
    >
    > If I accept your statement, then I would add to it. Communism makes
    > slaves of 99.9% of the population. But hunter-gatherers are 100%
    > free.
    Mar 3 11:59 AM | 3 Likes Like |Link to Comment
  • How Much Downside Could Still Exist? [View article]
    Dear morph: You raise a good point. The reason why I am reluctant to identify downside from these levels is that, in my opinion, there is likely to be gap between what the facts tell us on a "fully informed" basis and how investors trade in the midst of this ongoing discussion on the impact of rescues and bailouts. In brief, though I may consider 600 for the S&P500 as the next clear target based on facts, the market may not follow suit. Due to this "gap", I visualize a "trading" opportunity as opposed to a positioning. Many thanks - Rakesh


    On Mar 03 10:26 AM morph366 wrote:

    > Intrigued by the title to this piece I read through it but unfortunately
    > I am none the wiser as to how much downside still exists.
    Mar 3 11:57 AM | 2 Likes Like |Link to Comment
  • How Much Downside Could Still Exist? [View article]
    Dear Nikola: The details you are looking for have already been highlighted in previous articles posted on SA. The world being messy or not, we need to deal in facts, and many key facts have been cited earlier. Many thanks - Rakesh


    On Mar 03 05:26 AM Nikola wrote:

    > I liked the first two paragraphs. The rest is incoherent and non
    > sequitur.
    >
    > The paragraph about emerging markets is wide sweeping and isn't supported
    > by a single number.
    >
    > I suppose the argument is that the world is a messy place today and
    > so.... S&amp;P will go down. But world's been a messy place for the
    > last.... oh... twenty thousand years. Was the world more stable back
    > during the Cold War? Around the two World Wars? In 1800s Europe?
    > When?
    >
    >
    Mar 3 11:50 AM | 6 Likes Like |Link to Comment
  • The Eurozone's Winter of Discontent Approaches Shakespearean Proportions [View article]
    You are correct Sir. The East European situation wil get even more messy as we move along. - Rakesh


    On Mar 01 11:11 PM The Mad Hedge Fund Trader wrote:

    > Uh BBg While American banks have their subprime crisis, European
    > banks are being dragged under by their lending to emerging economies
    > in Eastern Europe. Ledd by UniCredit in Italy, Austria’s Erste Group
    > Bank and Raiffeisen International, France’s Societe Generale, Belgium’s
    > KBC, and Hungary’s OTP, banks have lent $1.6 trillion to companies
    > in these formerly communist countries at cheap rates, with minimal
    > documentation, and few questions asked. The easily available credit
    > caused local money supplies to explode, and sparked bull markets
    > in both stocks and currencies. Emerging Europe grew at rates double
    > and triple rates in the West, as local companies pumped up on steroids
    > became the master of leverage. Now $400-$600 billion is due for rollovers
    > this year from nonexistent credit markets, and the chickens….make
    > that vultures have come home to roost. Economic growth has fallen
    > off a cliff, with Poland’s seasonally adjusted industrial output
    > down in December a precipitous 7.4% YOY. The Polish stock market
    > fell 48% last year, and the zloty of off 40% again the dollar from
    > its June peak. The Central European Equity Fund (seekingalpha.com/symbo...)
    > has crashed 80% in eight months. The crisis is so severe, it may
    > postpone Poland’s entry into the Euro block, which had been scheduled
    > for 2011. Home mortgage borrowers are in especially bad shape. Up
    > to 50% of their loans were denominated in Swiss francs, so the collapsing
    > Polish currency has caused a near doubling of borrowers’ monthly
    > payments and principals since last year. Austria really has its knickers
    > in a twist, as these heavily syndicated loans account for 80% of
    > GDP. A 10% default rate could wipe out the entire banking system
    > there. Germany has the smallest loan exposure, but has the most to
    > lose, with 25% of its exports headed east. It is now in negotiation
    > with its partners in the EC to cobble together a bailout with the
    > help of the IMF to provide bridge financing for these loans, and
    > hopefully ward off a further economic collapse. It looks like the
    > headlines in Europe are about to get uncharacteristically sensational.
    Mar 2 02:36 PM | Likes Like |Link to Comment
  • The 'Stress Test' Challenge: Transparency and Intellectual Integrity [View article]
    Dear No Free Cake: I will comment on the stress test in a bit more detail shortly as I get more information on the components of the test. Many thanks - Rakesh


    On Feb 26 12:01 PM No Free Cake wrote:

    > Isn't the stress test basically a new regulatory system for banks
    > - although implemented without the normal comment and review periods?
    >
    >
    > The concept of this test implies that the current valuation methods
    > for regulatory capital don't work. If they did, there wouldn't be
    > any doubt as to which banks were sound.
    >
    > In the longer run, the stress test will either completely replace
    > the current capital regulations or be a partial overlay. It will
    > only add clarity if it becomes permanent and fairly rigid - the administration
    > has so far not ascribed it either of these attributes
    Mar 2 02:35 PM | Likes Like |Link to Comment
  • South Africa: Post-Apartheid Dream in Total Disarray [View article]
    Dear sasoros: Let's wait for the facts on SA to unfold---the next 3 months will be critical. My analysis is based on a complete knowledge of the country, which I have been tracking nearly two decades and, fyi, for personal reasons, I hope that the country does better than I forecast. Many thanks for your comment. - Rakesh


    On Feb 28 09:25 AM sasoros wrote:

    > Your comments are very general, and in many places not underpinned
    > by fact. As for growth, most of Africa, except maybe the oil producers
    > or failed states are likely to outgrow South Africa, which in turn
    > will outgrow most of the OECD. I suggest you visit eurasia.com
    > to be more informed on SA.
    Mar 2 02:33 PM | Likes Like |Link to Comment
  • The 'Stress Test' Challenge: Transparency and Intellectual Integrity [View article]
    Dear Seeking Truth: While I think that a valid stress test would entail a high degree of detail, I don't believe that it would be unduly "complex"--but, in any event, public diclosure of the underlying methodology would make the regulatory authorities more accountable (hopefully!!!). Many thanks - Rakesh


    On Feb 26 12:17 AM SeekingTruth wrote:

    > Rakesh, a well reasoned article, and I am at least as skeptical as
    > you are.
    > A major problem , is , however, a truly valid stress test is so incredibly
    > complex, that with even perfect transparency, few, except the most
    > advanced experts would understand it and be able to certify it as
    > legitmate and valid. A major dilemma to be sure.
    > This means that we would have to trust our officials and experts.
    > I do not trust Bernanke or Geithner, although I think they are basically
    > good people by most standards, I think their politically (and corporate)
    > motivated pressures and tendencies outweigh their prime objectivity
    > in these matters.
    > So it looks like more of the same 'ol same 'ol relative to ever knowing
    > the truth. Wonder how much of the taxpayers TARP money etc. will
    > end up in Swiss bank accounts, and elsewhere overseas?
    Feb 26 02:25 AM | 1 Like Like |Link to Comment
  • The 'Stress Test' Challenge: Transparency and Intellectual Integrity [View article]
    Dear Trading to Win: This policy of insuring bad assets is becoming an integral component of rescue plans everywhere. Essentially, taxpayer money is being put to risk. And the bet of course is that a turning tide in the economy will restore value to the bad assets. In my view, this is a dangerous, mathematically untested and trial-and-error policy. But where is the public outcry??? - Many thanks - Rakesh


    On Feb 25 05:30 AM Trading to Win wrote:

    > Hi Rakesh
    >
    > Any chance you could do a piece critiquing the UK's policy of insuring
    > c.£500 billion of rubbish assets - will it work or fail?
    >
    > Thank you
    Feb 26 02:21 AM | 1 Like Like |Link to Comment
  • Citigroup's Derivatives Reduce Bailout to a Non-Event [View article]
    Yes mr freddo, your views have merit, particularly when considered in the light of a shocking lack of disclosure, even at this late stage. Many thanks - Rakesh


    On Feb 20 12:21 AM mr freddo wrote:

    > Thank you for an excellent article and also thanks for some great
    > follow-up comments.
    >
    > I have always believed that what is different about this recession
    > are the derivatives that now link all of the major financial institutions.
    >
    >
    > Rumbles in "real" finance like sub prime, alt-a, arm, Eastern European
    > currencies, commercial real estate, create their own serious losses
    > that then tears through the derivative market magnifying losses to
    > unheard of levels.
    >
    > That is why if there is one more bankruptcy, the entire system will
    > fall like a house of cards, even with the netting effect!
    >
    > As Sugardaddy says 3% of $640 trillion is a lot of money.
    >
    > This financial crisis is a forest fire that will burn everything
    > to the ground. I don't believe that it can be saved. The losses will
    > be too large for the government to bail out.
    >
    > A year ago, I predicted that the banks would have to eventually write
    > off $1 trillion. That number seems quaint now. European Banks are
    > sitting on $24 trillion of toxic assets. US banks may eventually
    > lose $3-$4 trillion.
    >
    > There is no saving this system. It must be destroyed and built from
    > the ground up. Any money that is thrown into these institutions now
    > is throwing good money after bad.
    >
    > I have believed for some time
    Feb 20 01:47 AM | Likes Like |Link to Comment
  • The NPV Test: A Line in the Sand on March 4 [View article]
    Yes Proximo, a big group of so-called "value investors" who have been believing everything dished out by Wall Street (and CNBC) are now blaming everybody but themselves. They are still blind to the reality. And, to make matters worse, they don't want to deal in facts, even at this late stage. Many thanks - Rakesh


    On Feb 19 11:13 PM PROXIMO wrote:

    > The way comments are running today, I'm waiting for a poster here
    > to advocate capital punishment for short sellers.
    Feb 19 11:28 PM | 2 Likes Like |Link to Comment
  • The NPV Test: A Line in the Sand on March 4 [View article]
    Dear Poor Dude: You and "apppro" are scaring me. Can we settle at 25% on the windfall profit tax before your suggestions turn into a movement, like Obamanation? Many thanks - Rakesh


    On Feb 19 11:15 AM Poor Dude wrote:

    > I like the idea of a windfall profits tax on all gains made from
    > short positions! Except I'd probably make it 80 or 85 percent, instead
    > of only 65 percent. Our government will need that money to shore
    > up the banks being decimated by the short sellers. Needless to say,
    > we don't need laws which reward people for destroying the nation's
    > (and world's) financial systems and economies. Those people need
    > to be punished, not rewarded.
    Feb 19 01:52 PM | 2 Likes Like |Link to Comment
  • India's Budget Stimulates Votes amid Negative Growth [View article]
    Dear Yamu: Current budget-gap target is 5.5% of GDP. But many analysts predict dramatic revisions once the elections are over. For example, one BJP spokesperson indicated the need to increase defence spending further, by at least another 25%. Many thanks - Rakesh


    On Feb 17 08:24 AM Yamu wrote:

    > Any number on the budget deficit? At least they're using the mones
    > to stabilize their country and keep it together...
    Feb 17 10:55 AM | 1 Like Like |Link to Comment
  • General Electric: 'Buy America' Clause Severely Limits Downside Potential [View article]
    Dear John: No I have not been to those places. But the numbers from that region speak for themselves. Many thanks - Rakesh


    On Feb 16 09:20 AM john s. gordon wrote:

    > re third world countries - we have our own third world country right
    > here, it's called appalachia (generically) and west virginia (specifically).
    > have you been there?
    Feb 17 12:50 AM | Likes Like |Link to Comment
  • General Electric: 'Buy America' Clause Severely Limits Downside Potential [View article]
    Dear redsea: Rather than trying to provide you a brief here, I should direct you to the GE website where you should review the presentations, particularly those pertaining to GE's positioning in various manufacturers and producers in the developing world. In my view, no other American company has that type of reach; there is also the issue of GE's long-standing alliances in nearly 100 countries--those alliances should enable GE to access relatively cheaper goods required for domestic infrastructure. Of course, we will have to wait and see how GE capitalizes on its global presence--that is the reason I am not recommending any long positions on GE, just exiting shorts. Many thanks- R


    On Feb 16 12:39 PM redsea wrote:

    > "given the last-minute dilution in the Buy America clause, a good
    > portion of those foreign assets are likely to become a significant
    > advantage."
    >
    > Can you elaborate on this statement? If is not obvious how ge's foreign
    > assets are likely to become a significant advantage? An advantage
    > compared to what? compared to who? compared to when?
    >
    > Thanks
    Feb 17 12:49 AM | Likes Like |Link to Comment
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179 Comments
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