Alex Filonov

http://muddlinginvestor.blogspot.com/
Total Rating:
+10 / -5

276 Comments

    • Wed Oct 29th 23:46 PM | Rating: 0 0
      Commented on:
      The Dollar's Not That Strong
      Agree. It looks like European economy is in worse shape than ours.

      Disclosure: long UUP.
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    • Wed Oct 29th 17:04 PM | Rating: 0 0
      Commented on:
      TARP vs. Non-TARP: Investing with Uncle Sam at a 60% Discount
      As far as I know, government didn't guarantee Fanny Mae and Freddy Mac preferreds. Why it would be different for said banks? Let's say, bank participates in TARP, fails anyway. Government steps in, guarantees all deposits and all bonds issued by bank with exception of preferreds. Bank is solvent but common and preferreds are wiped out. Is there any clause in TARP preventing that?
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    • Wed Oct 29th 14:16 PM | Rating: 0 0
      Commented on:
      Japan’s '80s 'Bubble' Has Completely Deflated - and Then Some
      Well, Toyota trades at 0.86 book value today. Triple buy? Not so fast. Company has huge, $143 billion dollar debt, of which as much as $62 billion is short term or current (data from Yahoo! Finance). Comes refinancing, and company most probably would have to pay through the nose, at least hundred basis points more than last year. Caterpillar last debt offering is telling: CAT paid about 180 basis points more this time than for their last offering.
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    • Wed Oct 29th 11:37 AM | Rating: 0 0
      Commented on:
      Safe Haven Investments: Imminent Danger and Opportunities
      To author: I'd rather like to know which of my statements are wrong.

      1. Norilsk Nickel did play dollar carry trade. They borrowed billions of dollars from Western banks and used them to buy companies and buy back own shares. Current financial situation of the company is not good, to put it mildly. If you don't believe me, just do quick Google search.

      2. Until 2000, price of platinum was close to the price of gold. Fast growth after that can be attributed to the EU laws requiring clean cars, which means catalyst converters using platinum or palladium. Price jump in the beginning of this year was caused by production shortages in South Africa. Now, when car production in US (and probably in EU as well) is falling off the cliff, who is going to consume that platinum and palladium? So far, platinum price returned to the long term trend, close to the price of gold. To have it go higher you need some new industrial use of platinum group metals. Fuel cells can be that, but for the fact that they are about 3 years to mass production for the last 10 years.

      3. Long term palladium price trend (you can get it here: www.platinum.matthey.c..., as well as platinum) tells me that in normal conditions, palladium price should be between $200 and $300. But these are not normal times: car production is way down and Norilsk Nickel, the biggest palladium producer, is squeezed for cash. As for PAL, It doesn't look good. If they have to close mines at prices below $200, can they survive at all?
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    • Wed Oct 29th 10:47 AM | Rating: 0 0
      Commented on:
      The Reykjavik Scenario (or How Interest Rates Can't Control Monetary Inflation)
      That's doom and gloom!

      But, several corrections:

      1. Hyperinflation is 50% or more in a month. 30% a year is high inflation, but not a total disaster. Zimbabwe has hyperinflation. Iceland is far from it, AFAIK.

      2. In normal times, interest rates do control money supply. You are right, these are not normal times.

      3. Inflation is a function of money supply and money velocity. What I see in Iceland is higher money velocity (nobody wants to hold local currency, people are trying to get rid of it as soon as possible). We have quite opposite situation in US right now: Everybody is hoarding dollars and doesn't want to spend them.

      And, of course, huge lesson to everybody: currency carry trade is not easy money. It's a complicated risky business.
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    • Tue Oct 28th 15:32 PM | Rating: 0 0
      Commented on:
      Safe Haven Investments: Imminent Danger and Opportunities
      Good luck with metals. Yes, palladium is way too cheap, but it just might happen that Russians are dumping it on the market. Norilsk Nickel played dollar carry trade and lost. They can't shut down production, because it's already sold by long term contracts. They can't even reduce production, because they need every dollar of liquidity they can get.

      As for platinum, only some breakthrough in fuel cell technology can save it. Long term price is no more than 1.4 of gold and sometimes it goes below gold. So, even at $800 it's not that cheap.
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    • Tue Oct 28th 13:36 PM | Rating: 0 0
      Commented on:
      Time to Short Airlines as OPEC Cuts Crude Output
      It's almost always good time to short airlines. No matter which way oil is going. Especially when they are up without good reason. As a good reason I perceive profits, not some moves in oil prices. There is only one consistently profitable airline in this country, Southwest. Airtran might be close. All others are going into bankruptcy once in 7-10 years, i.e. good short candidates.
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    • Tue Oct 28th 12:22 PM | Rating: 0 0
      Commented on:
      China Wants the U.S. Dollar to Drop Dead
      Oh yeah! China is the best, richest country in the world and because of that it feels like teaching the world how to live. Not. How about export dependency? What would happen to Chinese economy in the worldwide recession? Where is it going to export its products? Mars?

      China, unless it develops internal market, will never be richest economy in the world. You can't do it on export alone.

      As for losses of sovereign wealth fund, that's life. Nobody guarantees profit on bond or stock market. Every contract with brokerage has words: "securities may lose value". Same applies to real estate, although some people forgot that.
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    • Tue Oct 28th 12:14 PM | Rating: 0 0
      Commented on:
      Ultimate Economic Showdown: China vs. the U.S.
      Every time somebody wanted to "bury" USA, it became stronger. China might say whatever it wants, but it still supports dollar against own currency. Sharp growth of US dollar in the last three months tells you something too. When it hits the fan, everybody wants US treasuries, thus supporting US dollar.

      Disclosure: long UUP.
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    • Mon Oct 27th 17:42 PM | Rating: 0 0
      Commented on:
      Did the End of the Investment Banks Cause the Latest Sell-Off?
      Interesting. Even more interesting if it's true and if we can find out how much more money MS and GS are going to withdraw from hedge funds. Might just give some feel of where the bottom is. Right now hedge funds are the stock market.
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    • Mon Oct 27th 14:04 PM | Rating: 0 0
      Commented on:
      Dollar Strength: An Illusion
      World is in crisis. And in crisis money flows into the safest place. Which is US treasuries. To buy them you need to buy dollars. China and other countries can posture, but China can't let dollar down. China is way too export dependent. If dollar goes down and yuan up, China would be a producer without buyers. So China continues to prop up dollar, selling yuans for dollars and buying US treasuries. There were a lot of complains in US about it, but Chinese government didn't listen, they don't want to ruin their own export oriented economy.

      Disclosure: long UUP.
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    • Mon Oct 27th 11:52 AM | Rating: 0 0
      Commented on:
      Those Who Don't Learn from History...
      If somebody thinks that most mutual funds operate differently, I have a bridge to sell. They can't use leverage, that's the only difference. But they also use 100% OPM and take fees from the volume of money managed, no matter what profit or loss they make.
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    • Fri Oct 24th 16:09 PM | Rating: 0 0
      Commented on:
      The Recession Is Already Priced Into Stocks
      We might be heading into depression...
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    • Fri Oct 24th 12:45 PM | Rating: 0 0
      Commented on:
      Microsoft Chugs Along, But Online Is Its Achilles' Heel
      I am buyer of MSFT when (if) it declares spin-off of non-core businesses.
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    • Thu Oct 23rd 18:37 PM | Rating: 0 0
      Commented on:
      The Physics of Money
      Great article. Too many people don't understand the concept of money velocity. Even less people understand the horror of deflation.
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