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brachiosaurus

brachiosaurus
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  • Just How Large Is QEInfinity? [View article]
    Paulo Santos,
    In the current environment, do you really see QE as being inflationary? I realize a lot of things are over-priced, but I'm not exactly sure why you attribute this to QE. After all, QE adds cash into the private sector, but at the same time removes an equal amount of assets from the private sector. This leaves the private sector no wealthier (in a nominal sense), and in the current environment doesn't really light a fire of lending or spending.

    What exactly is the transmission mechanism that you see that causes QE to boost the SP 500? Is it psychological? The money that the Fed prints is not exactly leading to extra spending or lending in the economy, unless you are arguing that it induces the Federal government to spend substantially more than it would otherwise.
    Sep 20 03:08 AM | 1 Like Like |Link to Comment
  • Bernanke: "We're looking for something that brings unemployment down in a sustained way." Asked about further tools if QE3 doesn't work, he doesn't go beyond what's already been used: Communications, Treasury purchases, MBS purchases. [View news story]
    investor returns for the seniors will be better if the economy is stronger. I doubt the asset purchases will help all that much, however I think the forward guidance on interest rates is pretty powerful at revving up housing. Pushing down on mortgage rates even a little bit multiplies big time on the return on equity for housing investors. The stabilization in housing prices will hopefully curtail the de-leveraging we are seeing by households and bring the demand that you are calling for.
    Sep 14 02:51 AM | Likes Like |Link to Comment
  • Yes, There Is A (High-Yield) Dividend Bubble [View article]
    Fair enough! Given the issues you raise, I think it would be sub-optimal for the typical retail investor to try shorting PGP. My current trade with PGP, I'm not concerned about forced buy-ins, which are generally my greatest fear. (for me) there is a fair amount of alpha, and there is a small chance I could get lucky and be around for the premium to collapse. Nevertheless, it is such a small fraction of my portfolio, so it'll never be a slam dunk!

    Thanks for your warnings. Unfortunately, I've already learned them hard way!
    Aug 30 03:23 PM | 1 Like Like |Link to Comment
  • Yes, There Is A (High-Yield) Dividend Bubble [View article]
    i know where to get shares without having to pay the broker, but I'm not telling anybody here how. I don't think you get the point though--
    if the premium to NAV stays constant at 80%, then the total return on PGP will underperform its total return on NAV (which can be closely reproduced by PSOCX) by 8% per year. That is alpha, assuming the premium doesn't increase.

    It is precisely because the distribution is so high which makes it worthwhile to short closed end funds that trade at a monster premium. I love paying the dividend, because the dividend is the catalyst to getting value from the short. I wish they would double, or triple the dividend, or even make the dividend 100% of NAV. Then I'd extract the 80% premium to NAV immediately.
    Aug 30 01:04 PM | Likes Like |Link to Comment
  • Iron Ore Crash Worsens [View article]
    I'm specifically curious if this makes GNI even more overvalued. Is the market for taconite decoupled from this?
    Aug 29 06:24 PM | Likes Like |Link to Comment
  • Iron Ore Crash Worsens [View article]
    Hey Paulo, how does all this affect the price of iron ore in North America? How much does it cost to ship from Brazil or Australia to the US?
    Aug 29 06:19 PM | Likes Like |Link to Comment
  • Yes, There Is A (High-Yield) Dividend Bubble [View article]
    I don't mind paying a 10%/yr dividend if PGP has to liquidate 18%/yr of its assets to "sustain" its dividend.
    Aug 29 08:54 AM | Likes Like |Link to Comment
  • Yes, There Is A (High-Yield) Dividend Bubble [View article]
    all you need, to be short, is to hope that the premium doesn't increase. If the premium to NAV stays the same, PGP will leak something like 8-9% per year relative to its NAV. (approximately the difference between the yield on price vs yield on NAV).
    Aug 28 05:45 AM | 1 Like Like |Link to Comment
  • Sense And Nonsense About Fiscal Stimulus [View article]
    I am aware of the "article", and you completely misread it. They said the effect of lowering IOER would be small. Furthermore, they point out that there could be disruption to the money markets.
    Aug 28 02:40 AM | Likes Like |Link to Comment
  • Sense And Nonsense About Fiscal Stimulus [View article]
    fdic charges. other costs associated with holding/moving reserves.
    Aug 22 01:04 PM | Likes Like |Link to Comment
  • Sense And Nonsense About Fiscal Stimulus [View article]
    -11
    reducing the interest on reserves from 0.25% to 0%, will make how much of a difference? going from a negative real interest rate to a minutely more negative real interest rate?

    please explain that one to us
    Aug 22 04:17 AM | Likes Like |Link to Comment
  • U.S. oil demand fell to 18.062M barrels/day in July, reports API, off 2.7% Y/Y and the lowest monthly usage since September 2008. "(It's) a strong indication the economy is still faltering," says API's John Felmy. It's not all a weak economy, though, points out Citi's Tim Evans. Consumers are buying more fuel-efficient autos, thus tamping down gasoline demand. [View news story]
    is that total dependence on foreign oil? seems just like oil purchasers are exploiting the well documented surge in Saudi production.
    please let us know if the net number of imported barrels of foreign oil (in total, not just Saudi) has increased.
    Aug 18 12:46 AM | 1 Like Like |Link to Comment
  • U.S. oil demand fell to 18.062M barrels/day in July, reports API, off 2.7% Y/Y and the lowest monthly usage since September 2008. "(It's) a strong indication the economy is still faltering," says API's John Felmy. It's not all a weak economy, though, points out Citi's Tim Evans. Consumers are buying more fuel-efficient autos, thus tamping down gasoline demand. [View news story]
    Way to go America! this is the path to oil independence
    Aug 17 08:35 PM | 2 Likes Like |Link to Comment
  • Oil production in North Dakota hit 660K bbl/day in June, another record high, after average production in H1 jumped 67% higher than a year earlier. Oil companies drilled a record 7,100-plus wells in the state during the month. North Dakota recently passed California and Alaska to become no. 2 U.S. producer behind Texas (1.24M bbl/day). [View news story]
    'merica!
    Aug 14 05:45 PM | Likes Like |Link to Comment
  • Standard Chartered (SCBFF.PK +9%) agrees to pay $340M to NY State to settle charges it laundered hundreds of billions of dollars from Iran. "The parties have agreed that the conduct at issue involved transactions of at least $250B," says NY's Ben Lawsky. Anybody who bought on last week's initial airing of the charges is ahead more than 20% today. [View news story]
    that's among the reasons why setting stops is a terrible idea. I guess we all learn the hard way :( Better luck next time
    Aug 14 05:44 PM | Likes Like |Link to Comment
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