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SA Editor Colin Lokey

 
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  • JPMorgan Loss Estimates Reach $9 Billion; The Real Risk Remains In Play [View article]
    Chris,
    Your comments are both well-thought out and constructive. Thank you, as I think your opinion does a good job of presenting the other side of the story for anyone reading my articles. My only concern here is what happens if the ECB steps in with another risk-eliminating facility like the LTRO 1 and 2 and JP Morgan is still holding that original tranche hedge. It's not so much that losses in this scenario would present some kind of crippling problem for JPM as much as it is those potential losses on top of $6-9 billion in current losses, and on and on. How far does it go before it becomes material? As the estimates of the loss go from $2 billion to $4 billion to $6 billion to now perhaps $9 billion, and all the JPM proponents keep saying "dont worry about it, its nothing" "it's not material", its a "tempest in a teapot", and so on, how long before someone finally comes out and says "you know what, this is a big deal, there's no getting around it, it IS material and it has the potential to become even more of a big deal." Anyway, thanks for reading and thanks for your constructive comments.
    Jun 28 11:34 AM | 5 Likes Like |Link to Comment
  • Short Sellers And Seeking Alpha [View article]
    Please understand that we receive over 5,400 comments on Seeking Alpha each day (!). As such, it's impossible for us to monitor each and every comment that comes in. We depend, to a certain extent, on users to report abuse when they see it. Once we identify a particular comment thread where the discussion has devolved into personal attacks, we can then monitor that thread for repeated abuse. We appreciate your help in our efforts to keep the discussion civil. Also, feel free to reach out to me directly with any questions or concerns about moderation. colin@seekingalpha.com
    Aug 2 09:56 AM | 4 Likes Like |Link to Comment
  • Seeking Alpha Strikes A Victory For Free Speech [View article]
    Hi Larry,

    We try to strike a reasonable balance here. If a user (any user, it need not be a contributor) posts a link to his or her paid service and that link goes to an article, chart, table, etc. that is relevant to the article on which the comment was posted, we'll generally allow it to stand (for example if the link goes to a free article on the user's site and at the bottom of that article there's a signup option). Conversely, if the link goes to something that's entirely unrelated to the topic under discussion and is thus simply a blatant attempt to solicit business, we will generally remove the link from the comment. I would also note that we are far more lenient on this with StockTalks. While hard and fast rules are important, part of moderation is an art not a science and I try to ensure the team is evaluating each report on its own merits while still preserving the spirit of our community guidelines and our site TOU.
    Jul 8 06:04 AM | 4 Likes Like |Link to Comment
  • Why Hyperinflation Is A Myth (And What It Means For Gold Prices) [View article]
    What about the $100 billion per month contraction in shadow banking... What happens to inflation when the velocity of collateral picks back up... There is another dynamic at play here in shadow banking that has an enormous effect on keeping inflation subdued. See my article: http://seekingalpha.co...
    Feb 12 10:04 AM | 4 Likes Like |Link to Comment
  • Dow 14,000: Are You The Sucker? [View article]
    "Growth is +4% nominal"

    You should check that data point for the fourth quarter.
    Feb 6 10:51 AM | 4 Likes Like |Link to Comment
  • Reality Bites: Economy Begins To Shrink As Fed Goes Broke [View article]
    ...and again Tack, I'm not sure you read the actual response articles. You say you read the entire piece and the comments. Did you read the actual articles I wrote that responded to the article you cited?
    If not, just click on my articles and read Repo Part 2 and Repo Part 3. They explain the market making/prop trading issue in detail.
    Jan 31 02:02 PM | 4 Likes Like |Link to Comment
  • Reality Bites: Economy Begins To Shrink As Fed Goes Broke [View article]
    And I assume you haven't read my last article or the Feds own white paper where it essentially says "we're going broke."
    Jan 31 12:35 PM | 4 Likes Like |Link to Comment
  • Repoed, Part 3: Proof Deposits Are At Risk And A Disappearing Act Explained [View article]
    When did I say anything about the size of a balance sheet? When did I say that Treasury bonds were interchangeable with cash? When did I say that the bank had more 'assets' after QE (I said they had more cash). Excess cash IS excess cash and that cash isn't any different (in terms of its being cash) if it comes from the Fed than if it comes from depositors. The idea of whether or not it expanded the balance sheet was never mentioned (well, until you mentioned it). So no, I'm not 'wrong' to say that cash is cash. In fact, "cash is cash" is a tautology (i.e., it can't be wrong by definition). In short, you are now making straw men at nearly every turn so you can attack them and claim I don't understand this or that which is amusing, albeit pointless. This is a common tactic in these comment sections: press the author with comment after comment constructing straw men along the way by slightly modifying the argument in each successive comment until, eventually, by sleight of hand, you have backed the author into a corner at which point you can claim they don't know what they're talking about and thereby discredit the work. Unfortunately, you won't get there with me.

    That said, I see where you are going...here, I think, is what you are saying: "why didn't the banks just repo the Treasuries they had in the first place.... they don't need to sell them to the Fed first, then buy more treasuries with their new money, only to pledge them as collateral in the same repo market they could have pledged their original treasuries....That's just extra, unnecessary steps!"

    Here's answer to that fairly well reasoned argument. The Fed needs to buy THOSE treasuries (the ones on the banks' books). It can't buy them directly from the Treasury department because that would be overt financing of the deficit. It must INdirectly finance the deficit via the purchase of 'deficits of the past' so to speak, or, existing treasury bonds. In other words, the Fed is going to buy those Treasury bonds because that's what the FOMC said. It's not like the banks can just say, well, I don't think I want to sell those to you today, I'd rather repo them out and make derivative bets with my cash instead. So when you say

    "If you have received cash from the Fed via QE, as per your example, and you go out and "buy collateral and repo it", that is no different to having the "treasuries, govies, etc" in the first place and repo'ing them."

    It is a bit different in the fact that the Fed isn't in the equation anymore in your example. But they must be in the equation. This whole thing is a circular funding scheme: The Fed funds the deficit indirectly by buying banks' treasuries, the banks fund the deficit directly when primary dealers bid at auction with what is essentially the Fed's cash, meanwhile regulators require a certain amount of risk free assets to be held on the books which they are, in record amounts, and some portion of those assets can be pledged out for cash while a portion isn't and remains available for the Fed to purchase, and around we go.
    If this chain is interrupted at any point (i.e. if banks stop playing the game as you seem to be suggesting), the financial repression music stops.
    Jan 22 10:06 AM | 4 Likes Like |Link to Comment
  • Heads We Win, Tails You Lose: Hedge Funds Love Greek Bonds [View article]
    "It's not what you buy, it's what you pay for what you buy".

    With due respect to the commenter, this is very dangerous advice and I would encourage investors to think twice about using that logic to justify an investment. That only works when you are absolutely positive that you have properly assessed and valued the security in question. Otherwise, you are catching falling knives as Hans Humes learned the hard way in May.
    Nov 4 09:45 AM | 4 Likes Like |Link to Comment
  • Emperor Bernanke, 3 Castles, And An Inevitable Unwind [View article]
    This an entirely spurious comparison since incomes are paid in dollars not gold. The average teacher's pay is up 13,000% while the purchasing power of what that teacher is paid in is down 96%.
    Sep 15 05:25 PM | 4 Likes Like |Link to Comment
  • Emperor Bernanke, 3 Castles, And An Inevitable Unwind [View article]
    As Jim Rogers sarcastically said a few days back on CNBC: "Yeah, you know you Ivy League guys are just smarter than the rest of us". Ha

    http://bit.ly/PmtBhh
    Sep 15 03:14 PM | 4 Likes Like |Link to Comment
  • Why Quantitative Easing Is Clearly Working [View article]
    Debt writedowns? Total debt outstanding is near its all time high.

    http://1.usa.gov/OtoQ8E
    Sep 13 06:59 PM | 4 Likes Like |Link to Comment
  • Bernanke Responds To Congressman's Tough QE Questions: Examining The Exchange [View article]
    No, that should say 'de'flation. Correction request has been submitted.
    Aug 24 05:50 PM | 4 Likes Like |Link to Comment
  • The Greek Opportunity [View article]
    I think this might be an understatement:
    "At this point, [Greek debt] it is a risky investment"
    Aug 16 11:29 PM | 4 Likes Like |Link to Comment
  • The Consequences Of Financial Repression [View article]
    Although the media says this topic is getting more attention, it's not. All investors should understand what financial repression means because it's the only way the U.S. government is going to get out of the mess it's in debt wise
    Aug 14 09:55 AM | 4 Likes Like |Link to Comment
COMMENTS STATS
463 Comments
608 Likes