Reggie Middleton

http://boombustblog.com

25 Comments

    • The Great Global Macro Experiment: Revisited [view article]
      Thanks. I have yet to get to Central America with all of the things going on in the more developed economies. I plan on getting around to it, though. I will be releasing my personal results soon, both on an absolute basis and on a risk adjusted basis. Stay tuned. Oct 10 01:24 PM
    • Morgan Stanley Appears a Little Too Desperate for Cash [view article]
      I have nothing out for MS at all (they were my blog's first corporate subscribers). I was, and am, short and bearish on MS for nearly a year, thus I just state the facts as my independent research bears them out - something that is hard to come by these days. Do a search on my blog for GGP and you will see a similar and very interesting story coming to its final conclusion.

      Define "cash-like" assets. Is that like the reserve fund money market product that was just frozen and is the subject of this article? Or is it like the alleged "liquid assets" that JP Morgan held in custody for Lehman right before they froze those actually illiquid assets and sent Lehman into bankruptcy over the weekend (I sure hope Morgan doesn't clear through JP Morgan!).

      "That leaves them with $180 billion, more than enough to cover all of their Level 3 assets, senior unsecured debt, preferred securities, and liquidity 6 months into the future."

      How do you know that when so much is stuffed away in unconsolidated VIEs, consolidated but opaque VIEs, and other SPEs?

      Do you have an insider track to MSs off balance sheet activities that I may have overlooked?

      Come on over to the BoomBust where we go through these companies' numbers with a fine tooth comb that features a built-in radio microscope :-)       Oct 09 08:21 AM
    • Morgan Stanley Appears a Little Too Desperate for Cash [view article]
      P'OD: I don't get it. What research did you want me to do? If you have some light to shed on this, please do. The Reserve fund is the fund that broke the buck, remember? They are alledgedly the ones that found the money market fund, and literally locked up their customer's money when they took a huge loss due to exposure to Lehman Brother's short term debt. They are trying desperately to revert to pure cash so as to return funds to their clients and are in litigation. It would be nonsensical for them to roll over debt when in emergency liquidation mode, and even if they weren't in such a mode, Morgan Stanley wouldn't be the firm to do it with. It appears as if MS couldn't cough up the cash, but we don't know for sure do we, which is why I put this query out to the public.

      I would also suggest you do some additional research. You cannot fully calculate MSs leverage without taking into account their VIE's whose economic risk is more than negligible, as well as those financial instruments which lend significant implicit leverage but whose leverage is note explicitly exposed on the balance sheet. Much of this info is opaque and not available. It appears as if you are repeating what you heard in the media without doing your own independent research. May I suggest my blog:

      The Riskiest Bank on the Street
      boombustblog.com/conte.../

      The Riskiest Bank on the Street, Update
      boombustblog.com/conte.../

      MS Q1 review
      boombustblog.com/index...

      What Morgan and Lehman had in common, Shenanigans know as hide the sausage
      boombustblog.com/conte.../

      A perusal of the site will reveal more. Notice that much of the research was performed many months ago, before the market was aware of MSs and Leh's problems. Thus the trades were highly profitable. The reason, I performed my own extensive research with independent verification. Research, indeed....       Oct 08 11:43 PM
    • MetLife: No Longer Bankruptcy Candidate Material [view article]
      The post was a couple of days ago for my site's research subscribers. SA's post was this morning, not mine. I do not post directly to SA, it is an aggregation service. My content will probably lag at least a day or two if viewed here.

      MET has had extreme price movement, but we shoot for home runs over at BoomBustBlog, ex. Bear Stearns, Goldman, Morgan Stanley, Lehman, GGP, Countrywide, WaMu, etc. We are looking for potential bankruptcies and fraud to short. Met would have been a strong short two weeks ago, but I was late to the party and there are plenty weaker companies to go after at this point.

      I invite you over to the blog to peruse the track record and methodology. I am sure you will be impressed.       Oct 08 07:23 PM
    • Bank of America's Acquisitions: What Was Ken Lewis Thinking? [view article]
      Thanks, all who are positive, at least. I understand the try to get too big to fail thesis, but I think what many are missing is that the government - particularly with democratic control on the horizon, but even now - will wipe out the equity holders before they rescue. If they rescue. Ask FNM, freddie man, BSC, LEH, AIG common and preferred share holders.

      Again, I query: What was Ken Lewis thinking. The over the weekend due diligence of Merrill is a farce. I have seen the docs, takes a weekend just to wrap your head around 1 CDS agreement's legalities, then to assess the credit, market and economic risks... Which nobody really knows anyway - so he might as well just pulled the trigger over the weekend...       Oct 08 10:33 AM
    • Bank of America's Acquisitions: What Was Ken Lewis Thinking? [view article]
      Thank you JEC. Seeking Alpha seems to have the occasional pundit who indiscriminately bashes without knowing who it is they are bashing.

      To Investor1:
      This so-called "Journalist" has been most accurate in his writings throughout this whole crisis. Why don't you go through the older posts I made on Seeking Alpha and take a look-see.

      Better yet, come to my site where the real meat is. I can guarantee you that just my written opinion should be enough to gain an objective man's respect. The free research that I published on my blog has outperformed ALL of the hedge fund category indices published by Barclay's (encompassing over 2600 funds), the S&P 500, and the MSCI world index, by at least 300% - both in the past year and year to date. The research model would have done so with much less risk as well. See boombustblog.com/index... Take note that these are just research models and not my proprietary results, which are private, but I am happy :-)

      I took the liberty of comparing the results to many of the name brand "non-journalists&... who I am sure you would not have hurled such an insult at. Don't fret, I forgive you. I normally never comment on SA due to the amount of negativity abound, but I am in a good mood and JEC took my back. Thanks bud!

      So, don't bash all journalists because they right with flair and wit. One or two of them just might have an inkling of what they are talking about.       Oct 07 07:16 PM
    • Morgan Stanley Shorts Brought the Short Ban [view article]
      I have to break rank here and totally disagree with you. Morgan Stanley had a very bad earnings report that was dressed up in lipstick, just like Palin's pitbull soccer moms. Are you saying that MS had a good quarter because you actually went through the numbers yourself, or are you just repeating what you heard others say?

      * Morgan Stanley's reported revenues increased 1% y-o-y to $8,049 mn. However excluding a pre-tax gain of $745 mn and $1.5 bn impact of widening credit spreads on firms own debt, revenues declined 27% to $5,804 mn in 3Q2008 over 3Q2007.
      * As result of slowdown in capital markets activity, Morgan Stanley's M&A transactions, global IPO and debt volumes declined 63%, 66% and 46%, respectively.
      * Morgan Stanley's leverage declining to 23.5x in August 2008 from 25.1x in May 2008. However Morgan Stanley's level 3 assets-to-total assets increased from 6.7% as of May 2008 to 8.0% as of August 2008.
      * As of August 2008, Morgan Stanley's exposure towards U.S. subprime mortgage stood at a 44.3% of its shareholder's equity.

      Does this sound like a good quarter or earnings report to you???

      For more on why Morgan Stanley was really shorted, learn from someone who actually put his money to work to short Morgan: boombustblog.com/index... and most importantly, be careful about repeating what you hear without verifying it for yourself.       Sep 22 10:40 PM
    • How the Absence of Incentive Fees Can Give Investors an Olympic-Sized Headache [view article]
      You did everything but broach the question of the day, "Which approach garners the highest risk adjusted return for investors?" IMO, the obvious answer is the one which aligns greed (selfish interest, or whatever you want to call it) with performance. Although one can consider the incentive pay a free option, if one were to charge 0/50, then the option, although explicitly free according to your article carries a heavy opportunity cost, and a requisite heavy reward as well. If I were to manage money according to the research that I publish from my blog, using a 0/50 fee scheme, I would have outperformed nearly every registered fund tracked by Morningstar on both and absolute and risk adjusted basis. You don't need to be a sophisticated investor to know which offers a better deal. All you need is a calculator. Aug 28 08:16 AM
    • Don't Believe the Lies: Ride the Bank Stocks Bull [view article]
      Prescient:
      I stopped posting on Seeking Alpha because they no longer want my material. They often edited my material by changing the flavor and meaning of the content against my wishes, and one day caught me in a bad mood. I aired it out in their comments section and they didn't like that, and have never published anything since. It is probably for the best. SA sends a lot of traffic my way, but I truly don't believe my type of analysis and opinion fits in well with the rest of the content that they carry - with the article above being a prime example. I am a hardcore fundamental investor that specializes in forensic analysis. As a result, innuendo, unfounded sensationalism and speculation tends to rub my instincts the wrong way.

      The boat ride was a LOT of fun. For those who are in the industry, financial media or the UHNW circles, I will be holding another one in NYC with an associated party in the meat market. See pics from the last one - boombustblog.com/conte.../ . I'll even invite the Seeking Alpha founder if he agrees not to alter my content :-)

      As for this buy the banks stuff, to each their own - but I am reticent to take the word of anyone who does not supply any empirical evidence to back their assertions. I have had my staff perform a lot of historical and analytical research on the current bank problem, especially in comparison to the S&L crisis. We have, in real terms, already surpassed the losses of hte S&L crisis, and I doubt we are even half way through it yet. Many tend to compare the end result of the previous crisis with the onset of this crisis, and lament off of the favorable comparison.

      Take a look at how we got to where we are now:the securitizaton crisis, part 1 - boombustblog.com/conte.../
      HELOCS and rose colored glasses - boombustblog.com/conte.../
      Capital, Leverage and loss in the banking sysem: boombustblog.com/conte.../
      The infamous Doo Doo 32 banks - boombustblog.com/conte.../
      The upcoming muni crisis borne from Asset Securitization - boombustblog.com/conte.../

      Etc. etc. There are more than 30 articles on this topic as well as drill downs and individual company forensic analyses showing the Bear view of companies from the allegedly untouchable Goldman Sachs and American Express to GGP and Wells Fargo. I wll be moving away from the financials this week and into the next step of my investment thesis which will show the results of these banks imploding. It is much more serious than most understand. The banking system is the oil of our economic machine, and without it running properly, the machine crashes to a halt. The Government can't bailout everybodey.

      I have fairly strong track record following the bubble formation and the bubble bust, but lord knows I can be wrong, and we all make mistakes - which is why I aggressively follow the logic and research of opposing trades. It is when the opposing trades lack a thoroughly researched logical prospective that I feel overconfident and ramp up my positions.

      I welcome any and all to my blog to join me in the unfolding of the next step of my investment thesis.       Aug 17 11:14 AM
    • Don't Believe the Lies: Ride the Bank Stocks Bull [view article]
      I no longer post or contribute to Seeking Alpha, but felt compelled to jump in here. One of the readers from my blog pointed this article and comments out to me. I'll keep it polite and professional, but I disagree with the author and the commentator who states that banking is all about the spread. If that was the case, then the drop in the Fed Funds rate would have saved everybody. Instead, 4 banks went out of business and many, many more are up to bat. Many in the commercial and investment banking industries are effectively insolvent - plain and simple. There will be assets to pick up after the blow up, but going in now will be throwing good money after bad, just ask all of the brand name value investors and the sovereign wealth funds.


      Aug 15 08:09 PM
    • Lehman: The Lying Lemon Lemming Anecdotal Timeline? [view article]
      I meant 30 page forensic analysis reports, not 3 page. One of the biggest faux pas in my work is copy editing:-) Jun 05 08:18 AM
    • Lehman: The Lying Lemon Lemming Anecdotal Timeline? [view article]
      For some reason, the editors at seekalpha decided to link to a pdf generation tag, rather than the actual article, which has significantly destroyed the value of the message trying to be delivered. See the post here: boombustblog.com/compo.../
      and the follow up to it here: boombustblog.com/compo.../.

      I would like to make it clear that the content of my articles are often modified without my consent by the seeking alpha editors. For and unadulterated version of anything that I write, always refer to my blog: boombustblog.com. It may come a time where the diminishing returns of the exposure on SeekingAlpha may be outweighed by the dilution of the percieved content as is modified, and filtered through, the seekinglpha business model.

      There is actually an interesting dialog about this here: seekingalpha.com/artic... and I have many of the same complaints and positive observations that have been brought to light in that forum.

      Of course, I find my content to be of unusual value (at least it is for me), for my analysis and opinion is generaly significantly more documented and indepth than most of what is freely available on the Internet and free (or pay) blogs. It also has (knock on wood) and uncannily accurate and profitable track record. Since I feel this way, I am concerned about dilution of brand. More than once credit for my work had been given to SeekingAlpha versus Reggie Middleton or BoomBustBlog.com, despite the fact that there is scarcely any 3- page forensic analysis reports to be had here outside of what I post - and most of it is rejeced due to its complexity.

      I am curious to see how, if at all, the SA business model wil morph to retain contributors who deliver higher end commentary and analysis, since that is what will ultimately enable them to deliver the valuation to command a truly profitable buyout.       Jun 05 08:16 AM
    • Reggie's Asset Securitization Crisis Analysis Roadmap (to date) [view article]
      Whenever you need access to any thing that I do, always refer to my site. Seeking Alpha only carries about 20% to 30% of the stuff that I release to the public anyway.

      boombustblog.com is where you will be guaranteed to find the meat.       May 28 08:10 PM
    • These 32 Commercial Banks and Thrifts May See the Dung Hit the Fan [view article]
      You guys are funny. This is one of a 15 part series, and each and every point you have made has or will be covered in complete detail. Do you guys mean to tell me that you have read all of the links and text in the article before you posted these comments?

      There is much to learn. Be sure you come by the blog for the last five installments.       May 23 02:21 PM
    • Don't believe Paulson: S&L 2.0, the Bank Failure Redux [view article]
      This is the correct link to the counter party risk article: boombustblog.com/compo.../

      I also suggest reviewing the logic behind my PNC short. I will be expanding upon this for a while: boombustblog.com/compo.../

      Re: e2800
      Many a broke person has assumed that they can just consider fundamental analysis moot. Think back to the dot com bust, the housing bust, credit bust, tulip mania, the list can go on for some time. The markets are not truly efficient, and thus in the short time it is quite possible for market movements and fundamentals to diverge. That is how the more knowledgeable and more resourceful make money. One could never buy an undervalued stock not short an overvalued stock if the market instantaneously reflected the accurate fundamental value of a company's share price. Guys like me would always be broke!

      Over time though, history has never shown where the market fails to converge with the fundamentals, and sometimes quite violently.

      In addition, ust because one does not fully grasp the fundamentals behind a price does not mean that those fundamentals do not exist.       May 18 07:42 PM
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