Fred Pollack's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/105992/comments http://seekingalpha.com/article/175600/comments?source=feed#comment-781413 781413 MGM) are partners in this project. Here is a link to an overview that I found:
www.lvrevealed.com/art...]]> Sun, 29 Nov 2009 09:47:43 -0500 MGM) are partners in this project. Here is a link to an overview that I found:
www.lvrevealed.com/art...]]> http://seekingalpha.com/article/161153/comments?source=feed#comment-674230 674230
Unfortunately, buyers of UNG think they are buying Natural Gas, but they are really buying the near term futures. Usually, this is the same thing. The exception is when there is significant contango. And, now the contango is severe. The November futures are now priced $1.05 over the October futures ($4.01 vs. $2.96). From UNG's prospectus, over the next 4 days, starting Monday (September 14th), UNG will sell its October futures and buy November Futures. If you do the math, you will see that UNG will then own 25% less natural gas. Or stated differently, for UNG's NAV to remain the same over the next 4-5 weeks, spot prices of Natural Gas have to increase by ~$1.

There are valid reasons for NatGas to get back to $5+. But the current storage situation suggests that this seems unlikely in the short term (next 1-2 months, if not a little longer). Unfortunately, neither UNG nor the futures make this easy. For example, the January futures are already priced at $5.06.

To understand the dangers of investing in UNG, when there is severe contango, you need only read page 16 of the UNG prospectus (pg 22 of the PDF download). You should read the 1/2 page on this, but here is just one sentence: "In the event of a prolonged period of contango, and absent the impact of rising or falling natural gas prices, this could have a significant negative impact on USNG’s NAV and total return."

Disclosure: I have short position in UNG, via being short uncovered calls for Sep, Oct, and Jan.]]> Sun, 13 Sep 2009 09:07:01 -0400
Unfortunately, buyers of UNG think they are buying Natural Gas, but they are really buying the near term futures. Usually, this is the same thing. The exception is when there is significant contango. And, now the contango is severe. The November futures are now priced $1.05 over the October futures ($4.01 vs. $2.96). From UNG's prospectus, over the next 4 days, starting Monday (September 14th), UNG will sell its October futures and buy November Futures. If you do the math, you will see that UNG will then own 25% less natural gas. Or stated differently, for UNG's NAV to remain the same over the next 4-5 weeks, spot prices of Natural Gas have to increase by ~$1.

There are valid reasons for NatGas to get back to $5+. But the current storage situation suggests that this seems unlikely in the short term (next 1-2 months, if not a little longer). Unfortunately, neither UNG nor the futures make this easy. For example, the January futures are already priced at $5.06.

To understand the dangers of investing in UNG, when there is severe contango, you need only read page 16 of the UNG prospectus (pg 22 of the PDF download). You should read the 1/2 page on this, but here is just one sentence: "In the event of a prolonged period of contango, and absent the impact of rising or falling natural gas prices, this could have a significant negative impact on USNG’s NAV and total return."

Disclosure: I have short position in UNG, via being short uncovered calls for Sep, Oct, and Jan.]]> http://seekingalpha.com/article/157796/comments?source=feed#comment-651631 651631
Ron2008: Agree that in the next month or 2, Nat Gas prices are likely to stay low or fall. Bloomberg article is interesting: www.bloomberg.com/apps...]]> Fri, 28 Aug 2009 17:50:45 -0400
Ron2008: Agree that in the next month or 2, Nat Gas prices are likely to stay low or fall. Bloomberg article is interesting: www.bloomberg.com/apps...]]> http://seekingalpha.com/article/157796/comments?source=feed#comment-642140 642140
To RalphD: I am not bearish on NatGas prices. In fact, I think that it is reasonable for the price to rise to $5 over the next 3 months. This is already priced into the December Futures contract. So, if I shorted that contract today, I would not make any money.

To NoLeafClover: If UNG actually owned NatGas, it would be a good way for the small investor to participate in this commodity, but it doesn't - it owns the futures contracts, which are priced well above the spot price, and UNG is currently priced 14% above its NAV. If the futures prices were not under severe contango, and UNG was selling at NAV, then it would be a reasonable investment.]]> Sun, 23 Aug 2009 14:43:11 -0400
To RalphD: I am not bearish on NatGas prices. In fact, I think that it is reasonable for the price to rise to $5 over the next 3 months. This is already priced into the December Futures contract. So, if I shorted that contract today, I would not make any money.

To NoLeafClover: If UNG actually owned NatGas, it would be a good way for the small investor to participate in this commodity, but it doesn't - it owns the futures contracts, which are priced well above the spot price, and UNG is currently priced 14% above its NAV. If the futures prices were not under severe contango, and UNG was selling at NAV, then it would be a reasonable investment.]]> http://seekingalpha.com/article/156291/comments?source=feed#comment-631531 631531 www.unitedstatesnatura...

It is also interesting to look at the amount of Nat Gas in Storage vs. the last 5 years. That can be found here: www.eia.doe.gov/oil_ga...

Every month UNG has to rollover its future and swap contracts from one month to the next. This is done over 4 consecutive days - 2 weeks before contract termination. We are now 1/2 through this 4 day period.

Additional info is available in my blog entry: fredpollack.wordpress..../]]> Sun, 16 Aug 2009 09:07:15 -0400 www.unitedstatesnatura...

It is also interesting to look at the amount of Nat Gas in Storage vs. the last 5 years. That can be found here: www.eia.doe.gov/oil_ga...

Every month UNG has to rollover its future and swap contracts from one month to the next. This is done over 4 consecutive days - 2 weeks before contract termination. We are now 1/2 through this 4 day period.

Additional info is available in my blog entry: fredpollack.wordpress..../]]> http://seekingalpha.com/article/156062/comments?source=feed#comment-631525 631525 www.unitedstatesnatura...

It is also interesting to look at the amount of Nat Gas in Storage vs. the last 5 years. That can be found here: www.eia.doe.gov/oil_ga...]]> Sun, 16 Aug 2009 08:58:56 -0400 www.unitedstatesnatura...

It is also interesting to look at the amount of Nat Gas in Storage vs. the last 5 years. That can be found here: www.eia.doe.gov/oil_ga...]]> http://seekingalpha.com/article/156062/comments?source=feed#comment-631023 631023 fredpollack.wordpress..../]]> Sat, 15 Aug 2009 13:03:08 -0400 fredpollack.wordpress..../]]> http://seekingalpha.com/instablog/114885-don-dion/22860-stop-trading-ung?source=feed#comment-630956 630956 fredpollack.wordpress..../]]> Sat, 15 Aug 2009 11:33:16 -0400 fredpollack.wordpress..../]]> http://seekingalpha.com/article/154729/comments?source=feed#comment-620930 620930
In 2010, the available TAM for nVidia’s integrated graphics chipsets decreases over time (due to Intel's Arrandale, Clarksdale, Pine Trail, and Sandy Bridge). By mid-2011, if not sooner, it will be ~0. Also, the TAM for discrete graphics (starting in 2010) will decrease over time, but not as dramatically, due to significant improvement in Intel’s graphics integrated with the processor. And then starting in ~1Q2010, AMD and nVidia will have a new competitor in Intel’s Larrabee. Over the next 2 to 3 years, Intel could become the market leader in discrete graphics.

For more details, see my blog post at: fredpollack.wordpress..../]]> Sat, 08 Aug 2009 09:47:50 -0400
In 2010, the available TAM for nVidia’s integrated graphics chipsets decreases over time (due to Intel's Arrandale, Clarksdale, Pine Trail, and Sandy Bridge). By mid-2011, if not sooner, it will be ~0. Also, the TAM for discrete graphics (starting in 2010) will decrease over time, but not as dramatically, due to significant improvement in Intel’s graphics integrated with the processor. And then starting in ~1Q2010, AMD and nVidia will have a new competitor in Intel’s Larrabee. Over the next 2 to 3 years, Intel could become the market leader in discrete graphics.

For more details, see my blog post at: fredpollack.wordpress..../]]> http://seekingalpha.com/article/50903/comments?source=feed#comment-99526 99526
Here are the best parts of the 2Q07 10-Q.

"Total loans and mortgage-backed securities, including those we hold for sale, declined $818 million during the current quarter to a total of $12.4 billion or 83.2% of total assets at June 30, 2007."

"As set forth in the following table, $8.9 billion or 76% of our residential one-to-four unit loans held for investment were subject to negative amortization at June 30, 2007, of which $377 million or 4.2% represented the amount of negative amortization included in the loan balance subject to negative amortization. The amount of negative amortization increased by $20 million during the current quarter, as borrowers took advantage of the flexibility of this product. During the current quarter, approximately 29% of our loan interest income represented negative amortization, down from 31% in the first quarter of 2007 but up from 26% in the year-ago second quarter. At origination, these loans had a weighted average loan-to-value ratio of 73%. In addition, $2.3 billion or 19% of our residential one-to-four unit loans held for investment represented loans requiring interest only payments over the initial terms of the loans, generally the first three to five years."

From the table on page 52 of the PDF (numbered page 34 in the 10-Q): $9.3B of their option ARMs had a balance greater than the original loan amount. Over the last year, they have increased their "fixed-rate" loans; however, these are mostly interest-only for the first 3-5 years. There are $1.6B of these.

"We have other credit risk elements within our real estate loans held for investment besides loans subject to negative amortization or loans with interest-only payments. At June 30, 2007, these other credit risks included:


89% of our real estate loans were concentrated and secured by properties located in California, principally in Los Angeles, San Diego, Orange, Santa Clara and Riverside counties;


82% of our residential one-to-four unit loans were underwritten based on borrower stated income and asset verification and an additional 8% were underwritten with no verification of either borrower income or assets; and


the loans are relatively new and unseasoned, as 11% of our residential one-to-four unit loans were originated in 2007, with an additional 28% originated in 2006 and 33% in 2005."

Their weighted average FICO score for their residential loans is 695. They break it down. 29% is below 660.

]]> Tue, 23 Oct 2007 17:56:32 -0400
Here are the best parts of the 2Q07 10-Q.

"Total loans and mortgage-backed securities, including those we hold for sale, declined $818 million during the current quarter to a total of $12.4 billion or 83.2% of total assets at June 30, 2007."

"As set forth in the following table, $8.9 billion or 76% of our residential one-to-four unit loans held for investment were subject to negative amortization at June 30, 2007, of which $377 million or 4.2% represented the amount of negative amortization included in the loan balance subject to negative amortization. The amount of negative amortization increased by $20 million during the current quarter, as borrowers took advantage of the flexibility of this product. During the current quarter, approximately 29% of our loan interest income represented negative amortization, down from 31% in the first quarter of 2007 but up from 26% in the year-ago second quarter. At origination, these loans had a weighted average loan-to-value ratio of 73%. In addition, $2.3 billion or 19% of our residential one-to-four unit loans held for investment represented loans requiring interest only payments over the initial terms of the loans, generally the first three to five years."

From the table on page 52 of the PDF (numbered page 34 in the 10-Q): $9.3B of their option ARMs had a balance greater than the original loan amount. Over the last year, they have increased their "fixed-rate" loans; however, these are mostly interest-only for the first 3-5 years. There are $1.6B of these.

"We have other credit risk elements within our real estate loans held for investment besides loans subject to negative amortization or loans with interest-only payments. At June 30, 2007, these other credit risks included:


89% of our real estate loans were concentrated and secured by properties located in California, principally in Los Angeles, San Diego, Orange, Santa Clara and Riverside counties;


82% of our residential one-to-four unit loans were underwritten based on borrower stated income and asset verification and an additional 8% were underwritten with no verification of either borrower income or assets; and


the loans are relatively new and unseasoned, as 11% of our residential one-to-four unit loans were originated in 2007, with an additional 28% originated in 2006 and 33% in 2005."

Their weighted average FICO score for their residential loans is 695. They break it down. 29% is below 660.

]]> http://seekingalpha.com/article/46644/comments?source=feed#comment-95495 95495 DSL)'s recent 10-Q:

$8.9 billion or 76% of our residential one-to-four unit loans held for investment were subject to negative amortization at June 30, 2007, of which $377 million or 4.2% represented the amount of negative amortization included in the loan balance subject to negative amortization. The amount of negative amortization increased by $20 million during the current quarter, as borrowers took advantage of the flexibility of this product. During the current quarter, approximately 29% of our loan interest income represented negative amortization, down from 31% in the first quarter of 2007 but up from 26% in the year-ago second quarter. At origination, these loans had a weighted average loan-to-value ratio of 73%. In addition, $2.3 billion or 19% of our residential one-to-four unit loans held for investment represented loans requiring interest only payments over the initial terms of the loans, generally the first three to five years.
. . .
89% of our real estate loans were concentrated and secured by properties located in California, principally in Los Angeles, San Diego, Orange, Santa Clara and Riverside counties.


]]> Sat, 08 Sep 2007 07:50:12 -0400 DSL)'s recent 10-Q:

$8.9 billion or 76% of our residential one-to-four unit loans held for investment were subject to negative amortization at June 30, 2007, of which $377 million or 4.2% represented the amount of negative amortization included in the loan balance subject to negative amortization. The amount of negative amortization increased by $20 million during the current quarter, as borrowers took advantage of the flexibility of this product. During the current quarter, approximately 29% of our loan interest income represented negative amortization, down from 31% in the first quarter of 2007 but up from 26% in the year-ago second quarter. At origination, these loans had a weighted average loan-to-value ratio of 73%. In addition, $2.3 billion or 19% of our residential one-to-four unit loans held for investment represented loans requiring interest only payments over the initial terms of the loans, generally the first three to five years.
. . .
89% of our real estate loans were concentrated and secured by properties located in California, principally in Los Angeles, San Diego, Orange, Santa Clara and Riverside counties.


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