Research123

The Benefits of Dumb Regulation

Financial transparency should be the goal af any new regulations, including minimum Flesch-test requirements for all retail financial agreeements ( maybe for non-retail as well!) as well as full and complete disclusure of process and model inputs used to value complex financial instruments that are inlcuded in company balance sheets.

Insurable interest should be a base requirment for any and all financial derivitives, and credit insurance should be limited to the value of the financial intrument being insured.

The Ten Most Promising Net Cash Stocks

ATHX has almost no revenue and lost more than $4M per quarter during 2008. Unless magic happens pretty quickly, the chances seem pretty good that they will R&D themselves into C11, in which case equity will be zero..

In Defense of CNBC (Sort Of)

CNBC has been a 20 year chearleader for the Wall Street criminals who raped America's life savings. There is no plausible defense for their actions.

Want to Reform Wall St.? Bring Back Partnership Investment Banks

I agree with Cam's conclusion, and Redst8r is dead on regarding the ibanks going public.

What's really disgusting is the fact that institutionsal investors who should have known better bought in to the ibanks IPOs and enabled the expansion of WS greed.

50% Returns, No Risk?

Roger, that is the most idotic article I have ever read by someone who claims to be a financial advisor. You clearly called that one in from the golf course. I hope you spend more time and thought when you work with your paying clients.

Are Clawback Provisions an Admission of Poor Risk Management?

Current risk/reward metrics are weighted too much towards traders at the expense of those providing trading capital. Clawbacks are an imperfect but neccessary tool to re-tilt the playing field a bit.

Demonic Short Sellers

If you can prove your assertion (show your sources and work) I would be more inclined to believe you were on the up and up. Instead I think you are just one more short seller trying to change the subject.

Demonic Short Sellers

Hence the need for complete transparencey, particulary with respect to statements about the market or individual companies. When a noted hedge or mutual fund manager publlically opines that comapny A is (a) a great investment, or (b) is headed for the crapper, the opiner should be required to disclosue whether they are long or short the company, including the impact of CDS positions.

Financial media should be required to disclose their sources and source exposure to the comapny on which they are providing data. Period.

Demonic Short Sellers

The real problem with the CDS market is that buyers don't need to have an insurable interest when buying or selling a CDS. In the bad old days of individual insurance, this lack of insurable interest lead to speculators buying life insurance on some unsuspecting soul, then hiring someone else to do in the insured so that the policy ownere could collect.

Kind of like what seems ot be going on in the CDS space today, except that buyers of CDS coverage don't need to hire intermediaries to kill the insured. All they need to do is give away stories for free to the media who will happilly help kill any organization in return for eyeballs.

A CDS is not de facto a bad thing, but without transparency and a clear insurable inteerest, the CDS marklet is driving lots of unintended and perhaps quite evil consequences.

GM: Bankruptcy Is No Longer an Option

Alan, an excellent and absolutely correct analysis! If this is extended to the entire auto industry (Ford, Chrylser and the most closley connected supliers with UAW-type cost structures) as it must since that entire industry is in the same state of crisis, one component of a lasting solution should be to nationalize the pension problem in some way. Otherwise, the industry will be back in ten years with the same set of problems.

Detroit needs to rest its employee cost structure to more closely match Toyota et al.

The Right Kind of Bailout

In a perfect world that isn't already in crisis because of the Wall Street mess, Shelby woudl be right - let the auto's collapse and trust that the capital markets will fund a new, smaller and nimbler industry. But wait - the capital markets are's working now, so that woudl be an incredibly stupid thing to do woudln't it?

The auto industry needs an industry-wide horoic solution to the non competative legacy beneftis package that keeps dragging them down. Something like the rairoad retirement system that was established early in last century to resolve the legacy rairoad pension system.

The auto industry was THE significant driver in creating the post-WW II midle class. Think of the increase in the number of cars per capita over thr past 50 years and the establishment of the great American surban landscape. For better or worse, auto's were the driver, and the country can't just discard the aging workforce that was at the heart of this process.

Solution: a prepackaged reorganization of the entire industry that begins with a nationalized auto retirement system (income and health insurance), funded over a long future period by profit participation from the new unfettered re-capitalized businesses. Force the UAW to accept a radically restured work environment and wage structure in return for full government guarentees of the auto retirement system.

Comcast Looks Incredibly Cheap

Crappy dividend. Another baseball card.

Understanding Credit Default Swaps: A Case for Regulation

Imagine a market that would allow you to buy life insurance on a randomly selected individual. In fact, if you go back a hundred or more years, that market existed and lead to a fair amount of abuse as could well be imagined (like buying insurance on someone and then nudging them towards dangerous activities). The life insurance market evolved so that today you cannot purchase insurance on someone when you don't have an insurable interest in seeing them continue to be alive on this good earth.

It would seem to make perfect sense to limit CDS purchases using some sorrt of dynamic insurable interest standard that would limit the size of the CDS market to the amount of the investments being insured, and would require that an entity buying and holding a CDS has an ongoing equivalent insurable interest in the underlying security that is being insured through the CDS.

Credit Default Swaps, Part One: Origins and Implementations

If principal risk can be fully insured via a vibrant CDS market, why should there be a yield difference amongst corporate bonds with differnt credit grades, and for that matter why should coporate yields be significantly higher than Treasury yields?

Fundamental Valuation: How Low Could We Go?

It doesn't make any sense to look a price vs. book without interest rate context. For example, today risk-free long Treasuries are yielding half what they were in the early 1980's. Hence all other things being equal, current PE ratios could be twice what they were in the early 80's without being particulary out of wack.