kotika98

Anatomy of a Giveaway, Or Why Stocks Soared Yesterday

by the way, it is this "back-to-normal" scenario that Krugman so much hates... he would like to see the government to run the banks directly for many years to come, and thats just not going to happen with the new Geithner plan.

Anatomy of a Giveaway, Or Why Stocks Soared Yesterday

this analysis is right only in spirit, even though it offers up a long winded numerical example. Of course it is the taxpayer who is stuck with the losses, we knew that all along, since October at least. But the particulars are not correct. I think the assets are going to be sold for cents on the dollar, meaning less than the 500K in your condo example. Why would the bank agree, you ask? It gets a clean balance sheet, and sudddenly their equity is worth something. Most importantly, from the management point of view, they get to keep their job and to go back to normal. Thats what they call a "win-win-win" situation, except of course it is paid for with taxpayer money, though not precisely in the way Rolfe described it.

Chicago Skyscraper Construction: No Credit Crunch Here

your article is guilty of the same thing, the contents contradicts the title!!! In my opinion, 15% delinquency rate is indeed huge, but there is no need to argue on a pure number, as it all depends on what that figure was in previous downturns. Bottom line is, the world will not stop turning come a credit crunch, a world war, a chicken flu pandemic, and so on, but damn it - what a mighty recession this is.

The Unwinding Is in Full Swing

Barclays is selling the ETF unit not because it does not like the business, but because it needs the cash. The WSJ headline was "Barclays shops family silver...", much closer to the mark, imo.

'Long S&P 500 Overnight' Is Not an Advisable Strategy in Bear Markets

there is one little problem with Goldman analysis, and a big one with Raymonds.

I have a problem with Goldman, in that before a couple of years ago, SPY was listed on the AMEX, which means you did not get decent executions, specialists there were notorious crooks. Costs of this strategy would far outweight the benefits in those days. These days SPY is trading electronically so it would not be so hard to execute the strategy, but you get my point. I would check if this conclusions hold if you did it with futures, around 9:30am, and i am not too sure it would still be profitable. We are talking about an average alpha of less than 10 basis points per day here.

The second one is with Raymonds analysis - anyone who is serious about quantitative strategies would know that the way to cure the bear market performance is simply to be long during the night, and short during the day. Thats a very efficient and clear way to avoid the bear market, or in the jargon of the profession to capture "alpha" instead of "beta".

Book Review: The Complete Idiot's Guide to Active Trading

right, trust a guy who has written a dozen books on finance to tell you how to trade. very funny.

>I thought the book could have been brought to life more with real-life stories of active traders.

and this is even more hilarious... maybe the publisher should have started by asking someone who actually does trade to write the book.

Swiss Banking Secrecy - A No Win Situation

ohh, please. The difference between tax fraud and tax evasion, according to swiss understanding is this. Swiss and many other countries do not tax the earnings of their residents outside their borders, and considers the US to be overreaching when it tries to tax the interest on money held in switzerland. If you have legitimately earned money, on which tax has been paid, deposit it in switzerland, and earn interest tax free - thats "tax evasion". On the other hand, if the taxes on the money in question were not paid before they arrived to switzerland, for example if you are a CEO in New York and you ask your salary to be deposited into a swiss bank account that would be tax fraud, and swiss have always been willing cooperate on that.

U.S. Reassurances of Its Creditworthiness Should Make Us Uneasy

The chinese are slowly realizing that owning bonds of another government is a silly idea, regardless of credit. A country is not a household, it should not "save" in this way, and then use these "savings" in retirement or in hard times the way a household would. In reality, china keeps it labor cost down by keeping the yuan down, gets paid in dollars which they use to buy US treasuries. It is a really dumb economic policy for them and they are slowly realizing that.

On top of the dollars which they get for exports, they have accumulated hundreds of billions from american firms and hedge and especially private equity funds who come in to china to invest, and exchange their dollars for yuan at the artificially high exchange rate. So the funds had been getting a free ride on the chinese government for several years now. If you view it on a "us vs them" basis, you might say china instead of investing into its own fast growing economy allows the americans to do it, and collects the paltry 2-3% interest vs the funds making 15-25% per year in the investment starved chinese marketplace.

So the chinese are realizing it has been a rotten deal for them all along, the "concern" about US creditworthiness is just the latest twist.

Who Is the Messenger: Bernanke or Obama?

according to him, the markets will improve when economy recovers, and economy will recover when financial markets stabilize. i see a chiecken and egg problem there. :)

luckily this is not how the real world works - what happens is that at some point everyone who was swimming naked sinks already, and from then on things just get better.

A Bimodal, Metrocensual Model of Foreclosures

ok, so where is that bimodal distribution used in your model?

Second, you first have two scatterplots where you are trying to predict unemployment and then home depreciation using the foreclosure rate, and then conclude with a graph where you do it the other way around, trying now to predict the foreclosure rate by using the HDP and unemployment. So which quantity are you trying to "predict"?

Third, you are using monthly data for the period 2006-2008, where all three quantities happened to be steadily going up. So, regressions are bound to produce a high R^2 no matter what. I would be much more impressed if data from the last 25 years was combined, and i would trust the regressions much more even if you used yearly data instead of monthly.

Study Finds Few Hedge Funds Pocket Mythical '2 and 20'

> Management fees should be used to cover operating expenses only...

Indeed this would is a prudent mode of operation, if only because managers would be able to ride out a drop below watermark. As it is now, many are forced to close shop when they lose performance fees for a couple of years - the management fee is often not enough to keep going.

Insurance Industry in 2009: Race for Survival

nice analysis, bad spelling. in fact, so much incorrect grammar, one thinks its due to sloppy editing.

Case, Shiller and Michael Lewis

Here is where this stuff comes up short: it is based on the assumption that one is looking at the right statistic. The fact of whether or not the past bear market bottomed at 8 or 12 or 14 P/E is irrelevant to the current situation. The reason is that at the bottom, the P/E might turn out to really be a negative infinity. The stocks looked "cheap" at the top in 2007, and they will look "expensive" at the bottom in 2009.

It is all good and well that you mention P/E. The Barrons article speaks about some other ridiculous comparisons between recessions, which are not relevant at all - like the market value to GDP ratio. And how about the ratio of price of gold to the S&P500, now that is really ridiculous.

Researcher Finds Phony Credentials for Eight Executives

if we believe the cockroach theory, as in someone who lied once about something insignificant then they are likely lying about important things, why should we trust you? Besides, unlike those phony resumes your own transgression is much more serious, unless you are right that they smth more serious to hide.

More to the point, although lying and cheating are two of the original sins, they are not necessarily crimes according to the law. For example, lying to your wife about who you spent the night with is not a crime. In many cases cheating of various kinds is not criminal either, unless money is involved. In many such cases, there are no consequences even under civil law. This is how Bush or Clinton think they can get away with some of their behaviors - if it aint fraud it is ok. Personally, i dont endorse this point of view, but the culture in general is very permissive about these things.

Jeremy Siegel: More Right than Wrong

ok, wondeful. So, the 2008 S&P earnings are due to the large cap oilcos. That was the year oil went to $140, remember. Lets see how much they can make with oil at $35, while paying $600K every single day for those drilling rigs.