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Tom Guttenberger

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  • Hedge fund Jana Partners says two of its five candidates appear to have gained enough votes to join Agrium's (AGU +1.4%) 12-member board. The 7.5% shareholder says its candidates appear to have attracted a combined 59M votes, with results of the proxy battle scheduled for release at AGU's annual general meeting tomorrow. [View news story]
    This is good for AGU. I think the downside value of it going into the proxy is probably $130 anyway, instead of the value-add-pad $90 number Jana provided.
    Apr 8 07:30 PM | Likes Like |Link to Comment
  • The China 25 Index ETF (FXI) falls 1.5% premarket as Beijing moves to break up the opacity of the shadow banking system with regulators demanding non-traditional wealth-management products be clearly linked to specific assets. Seems prudent. Citic Bank -6.8%, Minsheng Banking -7.9%. Banking ETF (CHIX) -6.1% YTD. [View news story]
    If the request is regarding non-traditional (securitized) assets being explicitly linked to specific assets (loans, CDS, etc.), this fear is that these banks will not be able to lend as much with their pass-throughs being restricted by the stipulation of having an asset actually backing it 1:1.

    This is opposed to securitization based on shared pools of collateral, which would basically allow the bank to promise the same loan receivables to a variety of different investors. This is the case witnessed in the western banking system -- coupled default times of these securities undermine the generally solvency of the institutions. IF loans go bad simultaneously, implementing transparency to identify 'who has bought what' is a positive preventative measure.

    This probably has a negative overall effect on these banks' cost of funds, as over-collateralized securities can be graded higher than those which are explicitly linked to a pool, and tranched down the waterfall.

    A negative reaction to this news item is completely unwarranted. The pessimist would have you believe that without a great expanse of shadow banking in China, home values will be decimated, borrowers will be in negative equity, and you get a whole unwind of the so called real estate bubble.

    Anyone who has followed the PBoC's policy actions knows that they would not knowingly do this to their own banks. They are simply trying to stem the issue. Are there person-to-person and other black market lending operations in China? I am sure there are. But that is beside the point. This is targeted at setting up regulatory frame-work around securitization, I believe. This is an important move revolving around something that is just burgeoning in China, and that has already been butchered in the United States.
    Mar 28 09:12 AM | 1 Like Like |Link to Comment
  • The China 25 Index ETF (FXI) falls 1.5% premarket as Beijing moves to break up the opacity of the shadow banking system with regulators demanding non-traditional wealth-management products be clearly linked to specific assets. Seems prudent. Citic Bank -6.8%, Minsheng Banking -7.9%. Banking ETF (CHIX) -6.1% YTD. [View news story]
    Who wants prudent? Market wants willful ignorance, high-flying earnings on excessive risk, and use of cash reserves for dividends and buybacks. It couldn't care less about whether the banks or the currency even exists in 10 years. It wants a good quarter, this quarter. We can all still scream and shout about fraud and ghost cities too.

    If I haven't personally taken a headcount of 1.2 billion people, they don't exist.
    Mar 28 08:21 AM | Likes Like |Link to Comment
  • Troubling to European shares (which had been higher in early trade) is Italy Democratic Party chief Pier Luigi Bersani saying he will not try to form a coalition government, and labeling as "insane" anyone who would try to govern in the current environment. Stoxx 50 (FEZ) -1.4%, with Italy (EWI) and Spain (EWP) both down a similar amount. S&P futures (SPY) -0.4%[View news story]
    Yes, trying to do difficult things is insane. Wonder what attitude got them in this mess in the first place..
    Mar 27 09:57 AM | Likes Like |Link to Comment
  • Yongye: When A Halt Is Just A Start [View article]
    Lol, my illiteracy and weak math skills have been exposed. Just like your understanding of conditional probability.

    I am neither long or short.
    Mar 26 10:56 AM | Likes Like |Link to Comment
  • Yongye: When A Halt Is Just A Start [View article]
    Despite all of the whistle blowing, noteably by yourself, no action has been taken against this company. Does that not count for anything?

    Among the entire universe of securities, you have written a total of 6 articles, all antagonizing YONG. Surely there must be other opportunites.
    Mar 26 07:44 AM | 1 Like Like |Link to Comment
  • The Nikkei dives 2.4% and the yen (FXY) strengthens 0.4% as new BOJ Governor Kuroda's ex-colleagues express doubt about his vows to hit a 2% inflation target. Included was the man formerly known as Mr. Yen for his ability to divine (and drive) the currency's moves - Eisuke Sakakibara - saying the inflation rate "will never reach 2% ... the deflation is structural." EWJ -0.6% , DXJ -0.4% premarket. [View news story]
    Well, the bond market has doubted it the whole time...
    Mar 22 09:55 AM | Likes Like |Link to Comment
  • They Really Do Care About Cyprus [View article]
    S&P 500 VIX is really amazing at these levels. Thy chairman has truly inspired the confidence he has aimed to...among the majority of participants, at least. I am currently positioned to gain if volatility rises.

    If I was in the business of selling options I would be selling puts against the yen. A major floating forex having volatility higher than ANY equity market volatility seems very rare, and even more favorable if the yen is moving out of the media microscope.
    Mar 21 10:04 AM | 1 Like Like |Link to Comment
  • Bernanke press conference: Banks can not only handle a sustained increase in interest rates, but should thrive, he says, as higher rates mean increased net interest margins and a higher franchise value. Suggestion for a follow-up: What if it's short-term rates which increase? [View news story]
    Fed funds rate will be at 0 forever.
    Mar 20 03:27 PM | 2 Likes Like |Link to Comment
  • Yes, Stealing Really Is That Bad [View article]
    I always appreciate getting your take in trying to form my own opinions. There are many big, complicated issues in finance today. I find myself in agreement far more often than not.
    Mar 20 01:42 PM | Likes Like |Link to Comment
  • Yes, Stealing Really Is That Bad [View article]
    "These days I wake up every morning half expecting to see commodities prices offered at zero."

    I second that. But as for the depositors, don't you think that people flooding any particular banking system still assume the risks of the banks' decisions? If they are going to lend at extreme margin and are playing within the rules of their own fractional reserve system, it should be within the depositors' due dilligence to know that they are assuming that risk, right? I know that in the 00s the EZ carry trade was super popular, so if any tiny spread existed whether through tax breaks or defaults/lending, shouldn't theory dictate that there were some market participants saying "not for me". Are deposits not a buyer beware situation too?
    Mar 20 11:11 AM | Likes Like |Link to Comment
  • EMU = Not Enough Monetary Union [View article]
    Marc, your coverage of this situation has been top notch. Succinct, informative reads on a complicated issue. I liked your point a few articles ago about the private loan restructuring. I am wondering if/when there could be a real estate recovery in some of the Cypriot banks' lending markets, namely Greece. While it might not be in the scope of the bailout, I am sure an improvement in the collateral would make a great impact in some way.
    Mar 20 10:44 AM | Likes Like |Link to Comment
  • Market recap: Stocks cut their losses late to close mixed after lawmakers in Cyprus voted against the proposed levy on bank deposits, but the modest volume yesterday and today makes the market action look like profit-taking rather than a fear-based trade. Despite a solid U.S. housing report, consumer discretionary, energy and materials seen as tied to economic growth led decliners. [View news story]
    VIX calls worked well, but I sold a tad early.
    Mar 19 11:17 PM | Likes Like |Link to Comment
  • A wake-up call for Lululemon (LULU)? A misfire on a large shipment of black stretch pants deemed too sheer (see-through) by the company not only will hit earnings, but could serve as a warning that it isn't quite ready for the bigger retail challenges down the road, warns analysts. Logistics and supply chain management are now in focus. LULU -5.6% premarket. [View news story]
    The iPhone of pants has been overdue for a sheering in one way or the other.
    Mar 19 07:59 AM | Likes Like |Link to Comment
  • Something That Amazon Did Well [View article]
    I admire your resolve still being short this company. A few of the traders that I talk to who used to place shorts here, but don't anymore, seem to have lost any confidence that the valuation here can ever come back to earth for AMZN.

    All the ratios have just been so out of whack for so long, it sort of conditions out any expectation of any sort of near-market price/earnings, price/sales, etc....the skeptical/burnt trader asks "what will the catalyst be to change this"? I question whether they necessarily need one.

    I would agree that their should be SOME innovation premium on this company, but nowhere even close to what this is now, right? Even if everything goes right with their business, I don't think it is unreasonable to think that a year or so from now this stock price is more than cut in half.
    Mar 15 11:01 PM | 2 Likes Like |Link to Comment