The Sky is Not Falling

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    • Sun Feb 24th 20:37 PM | Rating: 0 0
      Commented on:
      The Market is the Price, Silly!
      You seem to be confusing "pricing or mispricing" with "liquidating"... C has repriced their mortgage backed assets - actually to below depressed market prices, such as they are. Pricing is not liquidating, although liquidating would certainly give you a very reliable price.

      Anyway, by your logic no one should ever buy an investment asset since the only reason you buy an investment asset is because you believe it will appreciate in price.

      C believes its mortgage backed asets will either i) appreciate in price or ii) pay-out as expected or certainly better than the market expects and therefore the market price will become irrelevant as the assets are naturally unwound instead of liquidated. Now if you disagree with C that these assets market prices are in fact an accurate, then that is fine. Except that you in no way made or supported this argument.

      Your argument is simply that an assets value is its market value and never more. Which again, means no one should ever invest in any asset (at least at market prices) since the assets value can never appreciate above market value. Care to clarify?
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    • Tue Feb 19th 20:24 PM | Rating: 0 0
      Commented on:
      No Underwriter Support For Failed Muni Auctions
      I don't understand the last part about the leveraged mutual funds suddenly liquidating? If they held a bond, that technically went into default, but in reality suddenly went from paying 5% to paying 12%, it seems to be they must be very, very happy. These are very low risk bonds paying great returns. They hit a windfall.

      Furthermore, I do not feel a bit of sympathy for these organizations. They should have locked into long term, fixed rate bonds. Otherwise, they took a risk that markets would change. Markets changed. These are adults being paid a lot of money to obtain funding for their organizations without gambling to take advantage of what had been very low short term interest rates. Shame on them.
      View article »
    • Tue Jan 1st 14:21 PM | Rating: 0 0
      Commented on:
      No End in Sight to Banking Crisis
      This is some very illogical writing. A few examples:
      *****
      If Ken expects the slowest growth since our last recession, why doesn’t he expect a recession? That logic doesn’t pass the laugh test.
      ***
      So, by the author's logic, there is no year between successive recessions when the growth rate is still positive but lower than all of the other positive years. The natural conclusion of this twisted logic is that we are always in a recession, otherwise we would have to be between recessions, but that is not possible. Hmmmmm. Nice logic.

      Next:
      *****
      And if Pzena sees short-term downside risk [in owning Citi], why recommend shares here?
      ********

      Ummm, because EVERY INVESTMENT has short-term and long term downside risk EVERY INVESTMENT. EVERY. You just have to weigh the down-side risks against the upside potential and that is what Pzena was doing. Now, if the author had said that "it is obvious the downside risks outweigh the upside risks", then he would have stated something at least logical. But his analysis is laughable. We have someone pretending to understand investing but claiming that any investment with a down-side risk is not a good investment. He doesn't even graso the investing 101 concept that all investments are about weighing upside potential against downside risk.

      There are other examples of this author's clear lack of understanding of basic investing concepts. What a joke.
      View article »
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