Erich Riesenberg

Cramer's Stop Trading! Cramer Calls a Bottom (3/26/09)

Because he is an nonsensical evil doer who represents a lot of what is wrong with America. Why shouldn't people point out well known people doing evil things?


On Mar 27 09:55 AM 107Sid wrote:

> If you guys feel so negative about Cramer's calls, why do you keep
> reading and commenting on them??

Hussman Gets It

It is so tedious to read comments throwing around terms such as socialism.

Protecting bondholders at the expense of the public is not socialism, it is crony capitalism. I understood it with Bush, he got rich by being given a baseball stadium in Texas built at taxpayer sales tax expense. Perhaps Obama is paying back Wall Street which so strongly supported him.


On Mar 20 06:57 PM User 270430 wrote:

> Good article.
>
> Let the counter parties fail. That is the capitalist solution. What
> we have instead is socialism, but for the rich and connected. This
> country can not survive by privatizing profits and socializing profits.
> At least, not for too long, in my opinion.
>

Could a Markopolos Blog Have Stopped Madoff?

Madoff actually sent out monthly account statements to direct investors. It seems obvious that if doubts were made public a few people would have taken the time to read the statements, possibly forward them to Markopolos, who would have proof.

A scheme like Madoff's is very different and much more definitive than arguing over accounting rules.

Berkshire's Puts: Not Such a Great Idea

I would like to give you $1, so that you too can experience the joy of an infinite ROIC.

Could you return the favor? Thank you.


On Nov 26 02:05 AM najdorf wrote:

> Alex: As has been discussed many times, they're European-style puts,
> exercisable only as expiration. The whole point of the investment
> was that the length of the option prevented any short-term market
> risks. BRK has sold someone an insurance policy against long-term
> stock market depreciation. As always, the company continues to operate
> as a moderately bullish long-term stock-market investor that attempts
> to take short-term volatiiity or risk in order for long-term profits
> in excess of what it will have to pay out in insurance.
>
> Of course BRK could have made more money selling puts today, but
> their invested capital/collateral is zero, meaning as long as stocks
> don't stay low for 20 years whatever profit they make will equal
> an infinite ROIC.

Berkshire Hathaway Credit Risk, Index Puts Are Overblown Worries

I understand the desire to be comfortable with everything Buffett, but still, even if these derivatives don't cost Berkshire too much money in absolute terms, isn't the timing of their sale a huge opportunity cost? Woudln't Mr Buffett's reputation be so much better if he were selling this insurance now, at higher prices?

And, I will not have a lot of faith in Buffett until I hear some attempt to explain why he so strongly supported the original Paulson Plan and Paulson. Buffett and Paulson did not even agree on the Plan (Pauslon wanted to pay above market for the assets) and Paulson did not even implement the Plan. Was Buffett wrong or dishonest?

If only CNBC had some hungry journalists who would ask worthwhile questions.

Is Buffett Really Losing His Touch?

The valid question which should be asked of Buffett is whether he was being dishonest or plain wrong when he supported the original bailout plan and Paulson. Has Buffett morphed into a crony capitalist?

How Safe Are Your Investments?

Wish this issue would get more attention.

From the Lehman press release: "In addition, fully paid securities of customers of Neuberger Berman are segregated from the assets of Lehman Brothers and are not subject to the claims of Lehman Brothers Holdings’ creditors."

Comparing Income Taxes: Clinton vs. Bush

There is such a gulf in the conversation. Regan2008 talks about millionaires as if they are the elite rich who are evading taxes. Ignorant. Someone with a net worth of a million dollars is likely paying a fair amount of taxes and is being cheated by the same elite rich who are profiting from so many lower income people.

The elite rich include the investment managers who make hundreds of millions of dollars in a year and pay a 15% rate because they claim it is capital gain, rather than earned income. They pay a lower tax rate than their administrative stafff.

The elite rich includes the pretense that social security tax does not flow into the general fund, which allows anyone who earns above that income limit to pay a lower tax rate than the poor saps paying it.

Until people start talking with each other honestly instead of trying to obfuscate issues, there can be no honest discussion about our broken government.

Hardball in Vallejo, California

User191239 is a fine example of what is wrong with America. There was a time when paying for things was considered a conservative concept, now it is referred to as part of the radical liberal agenda.

The Case Against Ethanol

It is pitiful that your political bias is so strong that you label ethanol a liberal program. It is simply crony capitalism, and dollar for dollar the majority flows to large corporations. If people would stick to the facts instead of name calling and political rhetoric the country would be better for it. I live in Iowa and when I have spoken with small family farmers, they generally recongize it as a wasteful form of corporate welfare.

How Safe Are Your Investments?

This is an interesting potential problem. I found this Treasury document which seems to state the same risk regarding street name assets. www.occ.treas.gov/ftp/... Search for the text SIPC to find a relevant paragraph. Great, another potential systemic shortfall to keep an eye on.

Comparing Income Taxes: Clinton vs. Bush

It is truly sad that someone, author Mark Perry for instance, considers a married couple making a total of $125,000 to be super rich. Dishonest and shameful.

Fortunately, Warren Buffett provided a more coherent analysis during a recent appearance on CNBC.

"QUESTION: EMAIL TEXT: You have stated that people, including you, aren't paying enough taxes. OK. So why don't you send some of your billions to the government? Douglas Smith, Alexandria, VA

BUFFETT: Well, I don't--I don't say generally people. I think the lower class, the middle class, even the upper middle class are paying more than they should be paying. I think that the super rich, like myself, you know, my tax rate was 17 and a fraction percent in 2006, and everybody else in the office was paying way more. I'm not advocating tax increases across the board at all. I'm advocating a redistribution to the super rich. In the last 20 years, the total wealth of the Forbes 400 has gone from 220,000,000,000 to a 1,540,000,000, seven for one. The average wage has gone no place in real terms, it's up about 80, 85 percent and that's exactly what inflation is. So the world has gotten tilted to the super rich, and I think that the middle class and even the upper middle class, I think they've been getting a very raw deal. So I would change their taxes and move them over to people like me. "

And, for these individuals to voluntarily pay extra tax does not, of course, solve the problem. It is a glib, unintelligent response to a serious question: why are the super rich entitled to lower tax rates than working people?

Thornburg's a Huge Bargain After Monday's Crash

Last year LUM was in much the same position. Hailed as having great management and high quality assets, while many of its loans were CA no or limited documentation. Margin calls quickly took down the company.

The last industry wide margin wreckage I recall which was much the same as it is now was during the Russian crisis. Some borrowers did sue lenders who had made margin calls, and a few, at least, won.

I haven't owned TMA and wouldn't buy it now, because it is just a guess on the value of the oustanding mortgages. However, the chap who compared it to Chrysler, with TMA, once the value of the mortgages has fallen, there is little chance they will recover. The market is flooded. Dow Jones reported the calls were due to UBS writedowns. Unlike Chrysler, there is little chance the market will soon push up the value of TMA's assets. If there is value in any equity, it will be in the preferreds, up to multiples of its stock price, yesterday or today. With Rainwater as an investor, at least there will be some oversight in court.

I still wouldn't buy any myself, knowing where these assets will end up being valued is not possible and likely to continue falling. The only way I considered taking a position here was going long the preferred and short the common, but never did. Generally, the first thing I would look for in a lender is its susceptibility to short term destruction.

Ambac's Announcement is a Joke; Disagreeing with Whitman on Monolines

This is quite a contrast, with Whitman recently buying into Ambac, MBIA, home builders and mortgage insurers. Investors disagree all the time, but it is interesting to see successful, fundamental value investors disagree so starkly.

One thing I am curious about is why those short MBIA and Ambac don't cover and sit it out, with the stocks down 70 - 90%. I realize if they go to zero it is still theoretically a 100% gain from here, but with so much desire to prop them up and holding and opportunity costs it seems like so much has already been made. If any financial companies are "too important" to fail, these seem to fit the bill.

Another problem for owners of Ambac specifically, Whitman apparently thinks they have value even in case of runoff, but with common stock dilution at these levels that value, if it exists, is being diluted.

Thornburg's a Huge Bargain After Monday's Crash

What's strange to me is why they purchased assets. I can understand if they want to fund loans to maintain a viable business, but buying someone else's securities doesn't seem a core business function, and they spent a billion in January alone.