Vladimir Senkov's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/18373/comments http://seekingalpha.com/article/175438-59-billion-dubai-debt-default-could-have-much-wider-implications?source=feed#comment-780000 780000
Peter,
I'd love to know how you figured this out.
VIX certainly isn't at a five year low. It's not even at the two year low.
Dubai isn't news. If anything, it's an excuse. A lot of folks have been expecting a correction and some who clearly missed the rally even warned to expect march lows again.
This type of sentiment is what real contrarians shoulw be picking up on I don't believe it is subsiding just yet. There are still a lot of bears out there. Before any real crash is to come, they need to first be converted into bulls, just like they were converted into bears at the end of last year on in march this year. Until then we may see a few down days here and there and probably sideways to slightly down market for the rest of the year, but come January i'm expecting another run. Why? Because many managers and traders are done with this years' quotas, plans, etc and are sitting on the sidelines for now, but come next year they'll need to make next years quotas and the easiest way to do that is: don't fight the fed and go with the flow. It's not their money anyway so why should they stick their neck out? They're much more likely to go with the program.]]> Fri, 27 Nov 2009 18:22:03 -0500
Peter,
I'd love to know how you figured this out.
VIX certainly isn't at a five year low. It's not even at the two year low.
Dubai isn't news. If anything, it's an excuse. A lot of folks have been expecting a correction and some who clearly missed the rally even warned to expect march lows again.
This type of sentiment is what real contrarians shoulw be picking up on I don't believe it is subsiding just yet. There are still a lot of bears out there. Before any real crash is to come, they need to first be converted into bulls, just like they were converted into bears at the end of last year on in march this year. Until then we may see a few down days here and there and probably sideways to slightly down market for the rest of the year, but come January i'm expecting another run. Why? Because many managers and traders are done with this years' quotas, plans, etc and are sitting on the sidelines for now, but come next year they'll need to make next years quotas and the easiest way to do that is: don't fight the fed and go with the flow. It's not their money anyway so why should they stick their neck out? They're much more likely to go with the program.]]> http://seekingalpha.com/news/market_currents/post/35553?source=feed#comment-739837 739837 It is obvious today that financial well being of virtually everyone is dependent on US housing prices.
Wasn't it a good idea to hedge against those prices collapsing?
I think in this particular instance Goldman has demonstrated that risk management can actually work sometimes.

Yeah, I realize this comment will not be very popular and will probably bring plenty of "thumb downs", but grow up people! Goldman is well "connected" to say the least, is hated for that and it's fine.
But blaming them for hedging their bets? I think this is just too much BS. ]]> Sun, 01 Nov 2009 23:19:15 -0500 It is obvious today that financial well being of virtually everyone is dependent on US housing prices.
Wasn't it a good idea to hedge against those prices collapsing?
I think in this particular instance Goldman has demonstrated that risk management can actually work sometimes.

Yeah, I realize this comment will not be very popular and will probably bring plenty of "thumb downs", but grow up people! Goldman is well "connected" to say the least, is hated for that and it's fine.
But blaming them for hedging their bets? I think this is just too much BS. ]]> http://seekingalpha.com/article/168054-galleon-s-defense-insightful-vs-insider-information?source=feed#comment-728911 728911 You are arguing that in this case they are entitled to restitution? I think not. When they engaged in the business they engaged in they made choices. When you make choices you take risks. Risks are not limited to just breaking the law or not. Some business practices that may be legal could still create plenty of trouble for you down the road.
Yes, media attention can be bad for business, but it can also be good for business. Even "bad" attention can be good for business. Didn't the defendant in this case get bombarded with new insider tips as a result of these charges?

On Oct 23 07:40 AM fishluvrain wrote:

> With all of the media attention , allegations of wiretap evidence,
> will we really ever know the truth? One would believe as is often
> the case when the Media runs wild with a story, No. The defendant(s)
> were guilty when the ink hit the paper. I don't want to defend someone
> I don't know and am unlikely to meet. I would like to defend the
> right to defense. I am disturbed by the conviction of individuals
> before the trial has even begun. What would be repaired if the
> individuals in this upcoming case were exonerated. The investments
> shown legal and prudent. Who will replace the loss it will cause
> the individuals and the investors. The course of Justice is usually
> fair The course of trial by Media attack packs is not. Will these
> media sites, writers and others make restitution, I think not.]]> Sun, 25 Oct 2009 01:26:54 -0400 You are arguing that in this case they are entitled to restitution? I think not. When they engaged in the business they engaged in they made choices. When you make choices you take risks. Risks are not limited to just breaking the law or not. Some business practices that may be legal could still create plenty of trouble for you down the road.
Yes, media attention can be bad for business, but it can also be good for business. Even "bad" attention can be good for business. Didn't the defendant in this case get bombarded with new insider tips as a result of these charges?

On Oct 23 07:40 AM fishluvrain wrote:

> With all of the media attention , allegations of wiretap evidence,
> will we really ever know the truth? One would believe as is often
> the case when the Media runs wild with a story, No. The defendant(s)
> were guilty when the ink hit the paper. I don't want to defend someone
> I don't know and am unlikely to meet. I would like to defend the
> right to defense. I am disturbed by the conviction of individuals
> before the trial has even begun. What would be repaired if the
> individuals in this upcoming case were exonerated. The investments
> shown legal and prudent. Who will replace the loss it will cause
> the individuals and the investors. The course of Justice is usually
> fair The course of trial by Media attack packs is not. Will these
> media sites, writers and others make restitution, I think not.]]> http://seekingalpha.com/article/168054-galleon-s-defense-insightful-vs-insider-information?source=feed#comment-726191 726191
Have you had a chance to read the complaint itself? It sounds like you've been getting your information from the media instead. I'm not 100% sure but I get this impression from the general tone of your article.
Please correct me if I'm wrong.]]> Thu, 22 Oct 2009 20:48:30 -0400
Have you had a chance to read the complaint itself? It sounds like you've been getting your information from the media instead. I'm not 100% sure but I get this impression from the general tone of your article.
Please correct me if I'm wrong.]]> http://seekingalpha.com/news/market_currents/post/32944?source=feed#comment-686720 686720 I'm just rationalizing recent market behavior.
What Faber says might be true but one needs to be careful. Historically equity market _as_a_whole_ hasn't been a great inflation hedge. I mean, it's better than debt obviously, but still isn't very good.
However, in theory, if you buy equity in companies that will have strong pricing power in the event of inflation, you might do OK. I'm testing that theory at the moment.
So if that's bull then by all means call me a bull :)

On Sep 22 03:03 PM tunaman4u2 wrote:

> Vladimir is a bull... again the bull argument is solely based upon
> Fed stimulus lasting many years crushing the USD.
>
> No one is arguing against this, it seems a crowded thought now]]> Tue, 22 Sep 2009 18:38:35 -0400 I'm just rationalizing recent market behavior.
What Faber says might be true but one needs to be careful. Historically equity market _as_a_whole_ hasn't been a great inflation hedge. I mean, it's better than debt obviously, but still isn't very good.
However, in theory, if you buy equity in companies that will have strong pricing power in the event of inflation, you might do OK. I'm testing that theory at the moment.
So if that's bull then by all means call me a bull :)

On Sep 22 03:03 PM tunaman4u2 wrote:

> Vladimir is a bull... again the bull argument is solely based upon
> Fed stimulus lasting many years crushing the USD.
>
> No one is arguing against this, it seems a crowded thought now]]> http://seekingalpha.com/news/market_currents/post/32944?source=feed#comment-686513 686513 This isn't specific to cheer leaders. It applies to fear mongers just as well.

I'm not sure exactly where "have to get in" attitude panic level measurement is coming from, but when I often flip through CNBC and Bloomberg while in the gym and I must say during the last 3 weeks I hear nothing but constant warnings from folks who believe the march lows are coming. This sounds like someone with a "have to get in" but at march prices :)

I guess liquidity has improved and all this "extra money" is looking to be invested into something, anything. It could be dangerous, but it could also be "just the beginning" of a new bubble that won't blow up for a while. Bailouts always lead to bubbles. Unless liquidity goes away I'm not sure why this would stop now. There will always be corrections but people will seek to get a better return than the money market. Did I mention that money markets are a little bit riskier also, now that there is no government backing? Some of that money might flow into the equity markets as well.]]> Tue, 22 Sep 2009 14:58:46 -0400 This isn't specific to cheer leaders. It applies to fear mongers just as well.

I'm not sure exactly where "have to get in" attitude panic level measurement is coming from, but when I often flip through CNBC and Bloomberg while in the gym and I must say during the last 3 weeks I hear nothing but constant warnings from folks who believe the march lows are coming. This sounds like someone with a "have to get in" but at march prices :)

I guess liquidity has improved and all this "extra money" is looking to be invested into something, anything. It could be dangerous, but it could also be "just the beginning" of a new bubble that won't blow up for a while. Bailouts always lead to bubbles. Unless liquidity goes away I'm not sure why this would stop now. There will always be corrections but people will seek to get a better return than the money market. Did I mention that money markets are a little bit riskier also, now that there is no government backing? Some of that money might flow into the equity markets as well.]]> http://seekingalpha.com/article/161489-why-the-sudden-run-up-in-natural-gas-prices?source=feed#comment-678537 678537 1) don't try to analyze what happens based on what someone on CNBC said about what some traders said was above or below what they expected.
2) i think natural gas demand sucks at the moment vs supply. couple with UNG being fairly large this created a situation when the tail is wagging the dog. UNG premium had to go down in some way. instead of UNG falling like most expected, NG went up. this is tail wagging the dog.]]> Tue, 15 Sep 2009 22:55:55 -0400 1) don't try to analyze what happens based on what someone on CNBC said about what some traders said was above or below what they expected.
2) i think natural gas demand sucks at the moment vs supply. couple with UNG being fairly large this created a situation when the tail is wagging the dog. UNG premium had to go down in some way. instead of UNG falling like most expected, NG went up. this is tail wagging the dog.]]> http://seekingalpha.com/article/160048-ung-trading-101?source=feed#comment-664733 664733 First you tell us to hold on to UNG and then you argue about long term view.
UNG or anything else that rolls monthly can be very poor long term vehicle. All you need is a strong contango for a couple of months and you are done. And if that isn't enough to destroy your position, think of what would happen if for one reason or another tracking became an issue. Oh wait, it already is an issue.
If you believe NG will be higher 3 years from now, take a look at 3+ year futures and you'll find that many other traders believe so too. Let's even say for the sake of the argument that you are all correct about this. I think so too.
So what? You and I can't profit from this by holding UNG.

On Sep 05 12:18 PM vegastrader------ wrote:

> Hold onto UNG. People are in too big a hurry in America. It is all
> about supply and demand. Economics 101. We have huge supply of natural
> gas and very light demand, especially industrial demand in this recessionary
> period. Get your time horizon out about 3 years. With the growth
> poised to happen in Brazil, Russia, India, and China in the coming
> years, commodites will skyrocket and you will make money. It is about
> patience. The time to buy is when there is blood in the streets.
> The price won't stay down here forever. This too will pass.]]> Sun, 06 Sep 2009 23:07:50 -0400 First you tell us to hold on to UNG and then you argue about long term view.
UNG or anything else that rolls monthly can be very poor long term vehicle. All you need is a strong contango for a couple of months and you are done. And if that isn't enough to destroy your position, think of what would happen if for one reason or another tracking became an issue. Oh wait, it already is an issue.
If you believe NG will be higher 3 years from now, take a look at 3+ year futures and you'll find that many other traders believe so too. Let's even say for the sake of the argument that you are all correct about this. I think so too.
So what? You and I can't profit from this by holding UNG.

On Sep 05 12:18 PM vegastrader------ wrote:

> Hold onto UNG. People are in too big a hurry in America. It is all
> about supply and demand. Economics 101. We have huge supply of natural
> gas and very light demand, especially industrial demand in this recessionary
> period. Get your time horizon out about 3 years. With the growth
> poised to happen in Brazil, Russia, India, and China in the coming
> years, commodites will skyrocket and you will make money. It is about
> patience. The time to buy is when there is blood in the streets.
> The price won't stay down here forever. This too will pass.]]> http://seekingalpha.com/article/159042-natural-gas-etf-the-short-term-story?source=feed#comment-664192 664192 The fact that UNG is hard to borrow isn't good for (short term) shorts. It means a short squeeze is much more likely.
It IS good for the long term shorts, because the best opportunity to double down on your short is during a short squeeze. I'm not short UNG yet, but if there is a short squeeze and premium goes to say 30% I think I'll just have to be.

On Sep 03 09:22 PM Mook wrote:

> I have to say it borders on comical listening to all the back and
> forth on this topic from people who don't trade natural gas physical
> or futures.
>
> So just a few tidbits for you:
> 1)Today cash (aka spot) natural gas traded round 65 cents below the
> Ocotober futures. Indications for tomorrows trading for the weekend
> are much worse with cash indicated to be around $1.80.
>
> 2)There are several "unexpected" cargos of LNG showing up this month
> just when we don't need them.
>
> 3)The likely case is the futures contracts will trade down to cash
> versus cash up to futures over the next 1-2 months. Meaning this
> is going to get really UGLY.
>
> and drum roll for the biggie....
>
> 4)I'm short UNG through fidelity. They called today to inform me
> they were raising the carrying cost on the shares because they had
> become EXTREMELY had to find to short. I was paying a 2%/yr of NAV
> per year for the borrowed short shares. Today they raised it to
> 10%!!!!!!!!!!!! Think about it. They want me out so the smart money
> (ie institutional customers) can short more shares.
>
> Enjoy.!]]> Sun, 06 Sep 2009 13:43:28 -0400 The fact that UNG is hard to borrow isn't good for (short term) shorts. It means a short squeeze is much more likely.
It IS good for the long term shorts, because the best opportunity to double down on your short is during a short squeeze. I'm not short UNG yet, but if there is a short squeeze and premium goes to say 30% I think I'll just have to be.

On Sep 03 09:22 PM Mook wrote:

> I have to say it borders on comical listening to all the back and
> forth on this topic from people who don't trade natural gas physical
> or futures.
>
> So just a few tidbits for you:
> 1)Today cash (aka spot) natural gas traded round 65 cents below the
> Ocotober futures. Indications for tomorrows trading for the weekend
> are much worse with cash indicated to be around $1.80.
>
> 2)There are several "unexpected" cargos of LNG showing up this month
> just when we don't need them.
>
> 3)The likely case is the futures contracts will trade down to cash
> versus cash up to futures over the next 1-2 months. Meaning this
> is going to get really UGLY.
>
> and drum roll for the biggie....
>
> 4)I'm short UNG through fidelity. They called today to inform me
> they were raising the carrying cost on the shares because they had
> become EXTREMELY had to find to short. I was paying a 2%/yr of NAV
> per year for the borrowed short shares. Today they raised it to
> 10%!!!!!!!!!!!! Think about it. They want me out so the smart money
> (ie institutional customers) can short more shares.
>
> Enjoy.!]]> http://seekingalpha.com/article/159042-natural-gas-etf-the-short-term-story?source=feed#comment-655434 655434 Mon, 31 Aug 2009 18:37:46 -0400 http://seekingalpha.com/instablog/18373-vladimir-senkov/24021-the-efficient-life-hypothesis?source=feed#comment-654633 654633
Btw, amaranth went down after doubling down on natural gas spreads, not oil. I'm not sure how to calculate probability on those spreads. My understanding of what happened is that Hunter placed spreads hoping to gain on some sort of temporary disruption (hurricane, etc). When that didn't materialize he doubled down repeatedly, I'm not sure if he was trying to move the market on purpose but while he did move it for a while eventually it turned against him and by that time position sizes were out of control and margin calls came.
I think this was greed in combination with a lack of fear that is characteristic of certain "invincibility" feeling that Hunter must have had at the time, given he was previously successful and became "untouchable".
One can argue that what he didn't wasn't rational from the market point of view, but perhaps from his own it was quite rational. You bet big and if you lose - it's not your money so your personal loss isn't proportional to the bet lost. If you win - you're often rewarded proportionally to the bet won.
So perhaps his behavior (intentionally or not) was quite rational on some level, yet this doesn't help the market to be rational and is another example of how EMH makes a faulty assumption about participant rationality.

On Aug 30 10:29 PM nostradumass wrote:

> I think a fundamental weakness of EMH is indeed the "rational" participant
> assumption. EMH does not need everyone to be rational but assumes
> that the majority is capable of rational decisions over time. I have
> seen too many instances of irrationality both at the individual and
> group level to quite believe that. The problem is what does this
> leave us with in terms of modeling market behavior. Once we make
> an irrationality assumption, almost anything goes. Perhaps that is
> why significant sectors of the market display statistically rare
> behaviors. e.g. the move in oil (think it was close to a 5 sigma
> deviation ~= a few dozen in a million type of probability, if I am
> getting the math right) that brought down amaranth...]]> Mon, 31 Aug 2009 11:08:18 -0400
Btw, amaranth went down after doubling down on natural gas spreads, not oil. I'm not sure how to calculate probability on those spreads. My understanding of what happened is that Hunter placed spreads hoping to gain on some sort of temporary disruption (hurricane, etc). When that didn't materialize he doubled down repeatedly, I'm not sure if he was trying to move the market on purpose but while he did move it for a while eventually it turned against him and by that time position sizes were out of control and margin calls came.
I think this was greed in combination with a lack of fear that is characteristic of certain "invincibility" feeling that Hunter must have had at the time, given he was previously successful and became "untouchable".
One can argue that what he didn't wasn't rational from the market point of view, but perhaps from his own it was quite rational. You bet big and if you lose - it's not your money so your personal loss isn't proportional to the bet lost. If you win - you're often rewarded proportionally to the bet won.
So perhaps his behavior (intentionally or not) was quite rational on some level, yet this doesn't help the market to be rational and is another example of how EMH makes a faulty assumption about participant rationality.

On Aug 30 10:29 PM nostradumass wrote:

> I think a fundamental weakness of EMH is indeed the "rational" participant
> assumption. EMH does not need everyone to be rational but assumes
> that the majority is capable of rational decisions over time. I have
> seen too many instances of irrationality both at the individual and
> group level to quite believe that. The problem is what does this
> leave us with in terms of modeling market behavior. Once we make
> an irrationality assumption, almost anything goes. Perhaps that is
> why significant sectors of the market display statistically rare
> behaviors. e.g. the move in oil (think it was close to a 5 sigma
> deviation ~= a few dozen in a million type of probability, if I am
> getting the math right) that brought down amaranth...]]> http://seekingalpha.com/article/157691-investing-in-natural-gas-it-s-time?source=feed#comment-644482 644482
I agree natural gas trades at a good risk/reward at the moment. One might even say that it's cheap. However, I wouldn't call FSYS cheap. At almost 14% premium, I wouldn't call UNG cheap either.
If situation around UNG gets resolved, it may very well drop 14% in one day. You may argue that it's insignificant because you already set your sights on making 50% in six months, but I think it would be a mistake to pay for a remote possibility of 50% in six months with almost certainty of losing 14% in the next few weeks.
Why not open a futures account and setup a position in nat gas futures instead of gambling with UNG?
Is "convenience" really worth 14%?
Or are you a believer in the efficient market hypothesis according to which paying 14% premium must be a good deal?
If so, please consider the efficient life hypothesis :)]]> Mon, 24 Aug 2009 21:23:13 -0400
I agree natural gas trades at a good risk/reward at the moment. One might even say that it's cheap. However, I wouldn't call FSYS cheap. At almost 14% premium, I wouldn't call UNG cheap either.
If situation around UNG gets resolved, it may very well drop 14% in one day. You may argue that it's insignificant because you already set your sights on making 50% in six months, but I think it would be a mistake to pay for a remote possibility of 50% in six months with almost certainty of losing 14% in the next few weeks.
Why not open a futures account and setup a position in nat gas futures instead of gambling with UNG?
Is "convenience" really worth 14%?
Or are you a believer in the efficient market hypothesis according to which paying 14% premium must be a good deal?
If so, please consider the efficient life hypothesis :)]]> http://seekingalpha.com/article/157785-china-exactly-where-japan-was-in-the-1980s?source=feed#comment-644452 644452
> Yes, you hit the main points to contradict the article. But the main
> point to contradict your comment is that the Chinese government
> is not stable. They are creating a mess and therefore in for much
> pain, just not the kind of pain Japan is going through -- somewhat
> more intense short term pain.

Mess is a relative term. What happened in USSR when it attempted to transition from a planned economy (although not well planned) to a market one, that was a real mess and still is, btw. Chinese are doing much better, in my opinion.
You have to remember it's incredibly difficult to transition from a communist police state to an open society. It can't be done overnight, it will take a long time and it won't be done perfectly. And nobody can teach the Chinese how to do it. They'll have to do it on their own and then maybe they could teach others how to do it.

There is truth to what you are saying, but let's look at our own fiscal policies. China don't look all that crazy now does it?]]> Mon, 24 Aug 2009 20:53:29 -0400
> Yes, you hit the main points to contradict the article. But the main
> point to contradict your comment is that the Chinese government
> is not stable. They are creating a mess and therefore in for much
> pain, just not the kind of pain Japan is going through -- somewhat
> more intense short term pain.

Mess is a relative term. What happened in USSR when it attempted to transition from a planned economy (although not well planned) to a market one, that was a real mess and still is, btw. Chinese are doing much better, in my opinion.
You have to remember it's incredibly difficult to transition from a communist police state to an open society. It can't be done overnight, it will take a long time and it won't be done perfectly. And nobody can teach the Chinese how to do it. They'll have to do it on their own and then maybe they could teach others how to do it.

There is truth to what you are saying, but let's look at our own fiscal policies. China don't look all that crazy now does it?]]> http://seekingalpha.com/article/157785-china-exactly-where-japan-was-in-the-1980s?source=feed#comment-642455 642455 While I agree with several points you made and China is by no means "perfect", there are huge differences between China and Japan, so I have to disagree with your conclusions.

It's going to take a long time to compare China to Japan in any reasonable level of detail, but 50000ft view is:

Japan: imports substantially all commodities that it consumes.
China: has natural resources of its own

Japan: expensive labor
China: plenty of cheap labor

Japan: limited geographically
China: plenty of space to grow

Japan: limited militarily, must rely on the US to trade
China: has means to control seas and ports that it needs to control in order to trade]]> Sun, 23 Aug 2009 19:11:22 -0400 While I agree with several points you made and China is by no means "perfect", there are huge differences between China and Japan, so I have to disagree with your conclusions.

It's going to take a long time to compare China to Japan in any reasonable level of detail, but 50000ft view is:

Japan: imports substantially all commodities that it consumes.
China: has natural resources of its own

Japan: expensive labor
China: plenty of cheap labor

Japan: limited geographically
China: plenty of space to grow

Japan: limited militarily, must rely on the US to trade
China: has means to control seas and ports that it needs to control in order to trade]]> http://seekingalpha.com/instablog/18373-vladimir-senkov/24021-the-efficient-life-hypothesis?source=feed#comment-641335 641335 > two assumptions it makes. One that the participant has a choice with
> regard to participating. That is generally not true for ELH. You
> could have two equal opportunity paths but be always compelled to
> take at least one (as in need a paycheck) ..The other is the "rationality"
> of the participant. Being imperfect creature composed of other random
> particles and urges we humans almost never act on reason alone ...

I agree with both choice and rationality aspects.
However, I don't see major differences in how they affect both ELH and EMH. So if ELH can't exist, so can't the the EMH.

Market participants don't have a choice not to participate. If one has assets, one is in some market. I suppose one could donate everything and then not play, but that's not an option for most of us.
If one doesn't buy securities or real estate and keeps all savings in cash, one is long dollar or whatever the local currency is, so one is still participating.

I can't tell if market participants are more or less rational than life participants, but both have historically demonstrated significant degree of irrationality and that must affect both ELH and the EMH.]]> Sat, 22 Aug 2009 20:42:04 -0400 > two assumptions it makes. One that the participant has a choice with
> regard to participating. That is generally not true for ELH. You
> could have two equal opportunity paths but be always compelled to
> take at least one (as in need a paycheck) ..The other is the "rationality"
> of the participant. Being imperfect creature composed of other random
> particles and urges we humans almost never act on reason alone ...

I agree with both choice and rationality aspects.
However, I don't see major differences in how they affect both ELH and EMH. So if ELH can't exist, so can't the the EMH.

Market participants don't have a choice not to participate. If one has assets, one is in some market. I suppose one could donate everything and then not play, but that's not an option for most of us.
If one doesn't buy securities or real estate and keeps all savings in cash, one is long dollar or whatever the local currency is, so one is still participating.

I can't tell if market participants are more or less rational than life participants, but both have historically demonstrated significant degree of irrationality and that must affect both ELH and the EMH.]]> http://seekingalpha.com/news/market_currents/post/31082?source=feed#comment-640738 640738 Yes, speculators may be bidding up commodity prices at times and at other times they may be bidding them down. You don't hear too many people complain when prices go down while it may be just as harmful. So either way speculators tend to increase volatility, instead of providing liquidity and reducing volatility.
So the knee-jerk reaction is to restrict speculation because volatility is harmful.
However, we have to watch out where these ideas are coming from. Some of us dream of being financially secure instead of being in debt and servicing it paycheck to paycheck. For most of us that financial security isn't coming from golden parachutes and 100M dollar bonuses earned by being lucky when playing with other peoples money. And it's not likely to be inheritance either. For most of us that security can only come from our own personal savings.
When government prints their way out of another problem savings get hurt. Commodities may offer some protection in this situation.
If the government restricts speculation it forces you to borrow and spend and here goes your dream to be financially independent.
When real estate prices were driven up by speculators government didn't mind that too much. How are commodities different? Does that have something to do with the tax revenue that comes from real estate?]]> Sat, 22 Aug 2009 01:00:54 -0400 Yes, speculators may be bidding up commodity prices at times and at other times they may be bidding them down. You don't hear too many people complain when prices go down while it may be just as harmful. So either way speculators tend to increase volatility, instead of providing liquidity and reducing volatility.
So the knee-jerk reaction is to restrict speculation because volatility is harmful.
However, we have to watch out where these ideas are coming from. Some of us dream of being financially secure instead of being in debt and servicing it paycheck to paycheck. For most of us that financial security isn't coming from golden parachutes and 100M dollar bonuses earned by being lucky when playing with other peoples money. And it's not likely to be inheritance either. For most of us that security can only come from our own personal savings.
When government prints their way out of another problem savings get hurt. Commodities may offer some protection in this situation.
If the government restricts speculation it forces you to borrow and spend and here goes your dream to be financially independent.
When real estate prices were driven up by speculators government didn't mind that too much. How are commodities different? Does that have something to do with the tax revenue that comes from real estate?]]> http://seekingalpha.com/article/155945-wells-fargo-whatever-happened-to-bank-bears?source=feed#comment-629299 629299
> If we hit 9600 again, then it's time to get back into FAZ to recoup
> some losses. They pulled that 10 to one reverse split and it's lost
> half its value since then. I got smoked. However, what goes up
> must come down in this market. Benny Boy has a lot of persuasion
> and has manipulated this rally, but ultimately fundamentals ALWAYS
> win.

fundamentals eventually win but FAZ isn't an instrument that allows you time to wait for that eventuality.
unless your play is extremely short term you're likely to get smoked again with FAZ.]]> Thu, 13 Aug 2009 23:53:34 -0400
> If we hit 9600 again, then it's time to get back into FAZ to recoup
> some losses. They pulled that 10 to one reverse split and it's lost
> half its value since then. I got smoked. However, what goes up
> must come down in this market. Benny Boy has a lot of persuasion
> and has manipulated this rally, but ultimately fundamentals ALWAYS
> win.

fundamentals eventually win but FAZ isn't an instrument that allows you time to wait for that eventuality.
unless your play is extremely short term you're likely to get smoked again with FAZ.]]> http://seekingalpha.com/news/market_currents/post/29920?source=feed#comment-617340 617340 Those who cater to specific audiences or are otherwise useful (like WSJ) will be able to charge and will stick around, those who are useless ultimately won't be able to charge and will disappear, as there will still be better sources that will remain free or consumer will be more careful at choosing his sources once they aren't free.
At the end we'll get less free sources initially but as those journalists who work for useless political pushers find new jobs, everything will balance itself out.
There is only one problem with that: THIS WILL NEVER HAPPEN!
Political push and brainwash machinery will continue to be "free" and will continue to be pushed down our throats like there is no tomorrow, with occasional complaints about the fact that we ain't paying for it, while we actually are.]]> Wed, 05 Aug 2009 22:16:00 -0400 Those who cater to specific audiences or are otherwise useful (like WSJ) will be able to charge and will stick around, those who are useless ultimately won't be able to charge and will disappear, as there will still be better sources that will remain free or consumer will be more careful at choosing his sources once they aren't free.
At the end we'll get less free sources initially but as those journalists who work for useless political pushers find new jobs, everything will balance itself out.
There is only one problem with that: THIS WILL NEVER HAPPEN!
Political push and brainwash machinery will continue to be "free" and will continue to be pushed down our throats like there is no tomorrow, with occasional complaints about the fact that we ain't paying for it, while we actually are.]]> http://seekingalpha.com/news/market_currents/post/27250?source=feed#comment-573490 573490 I was with you almost 100% all the way untill you said "The markets have ...".
Market is trying to predict the future and so is everyone else. Everyone who pretends to have knowledge about what market has already discounted, what it still has to discount and where it will go from here, and what "magic levels" it has to "test" is looking increasingly silly these days.

There are many numbers and stats one could point to and argue that they have predictive power.
For example, I could argue that market moves are generally self re-enforcing and we had a significant move upward over the last few months, so we should expect that to continue unless some new information surfaces.
I don't think unemployment numbers are new information. I think we all heard officials warning that it will get worse before it gets better.
I could also argue that one should not fight the fed and should get with the program.

I'm glad you brought up Peter Schiff. In my opinion, he is a perfect example of an economist who analyzes well, comes up with conclusions that are mostly correct and then . . . still manages to lose money in the market :)

On Jul 03 05:01 PM Fighting Yoda wrote:

> David is on the money, he has been in the same leage as Meredith
> Whitney and Peter Schiff about this crisis:
> - diffusion index fell to 28.6 from 31, which means that nearly three-quarters
> of the corporate sector is still in the process of shedding jobs.
>
> - we should expect that the trauma exerted on household balance sheets
> will have triggered a long wave of attitudinal shifts toward consumer
> discretionary spending, homeownership and credit. The markets have
> a long way to go in terms of discounting that prospect.
>
> Yes the markets will fall a lot more highly likely to test the March
> lows]]> Fri, 03 Jul 2009 17:35:23 -0400 I was with you almost 100% all the way untill you said "The markets have ...".
Market is trying to predict the future and so is everyone else. Everyone who pretends to have knowledge about what market has already discounted, what it still has to discount and where it will go from here, and what "magic levels" it has to "test" is looking increasingly silly these days.

There are many numbers and stats one could point to and argue that they have predictive power.
For example, I could argue that market moves are generally self re-enforcing and we had a significant move upward over the last few months, so we should expect that to continue unless some new information surfaces.
I don't think unemployment numbers are new information. I think we all heard officials warning that it will get worse before it gets better.
I could also argue that one should not fight the fed and should get with the program.

I'm glad you brought up Peter Schiff. In my opinion, he is a perfect example of an economist who analyzes well, comes up with conclusions that are mostly correct and then . . . still manages to lose money in the market :)

On Jul 03 05:01 PM Fighting Yoda wrote:

> David is on the money, he has been in the same leage as Meredith
> Whitney and Peter Schiff about this crisis:
> - diffusion index fell to 28.6 from 31, which means that nearly three-quarters
> of the corporate sector is still in the process of shedding jobs.
>
> - we should expect that the trauma exerted on household balance sheets
> will have triggered a long wave of attitudinal shifts toward consumer
> discretionary spending, homeownership and credit. The markets have
> a long way to go in terms of discounting that prospect.
>
> Yes the markets will fall a lot more highly likely to test the March
> lows]]> http://seekingalpha.com/article/140166-why-selling-your-gm-stock-makes-sense-even-if-bankruptcy-is-averted?source=feed#comment-521283 521283 in reality, we all know that to end up with a million you have to start with two. so it will be more like 50B.
then you get the UAW strings attached and market cap goes straight to 1B.
stock is trading where it's at for a simple reason: pump and dump is going on. it's the usual penny stock game some people play.]]> Thu, 28 May 2009 11:27:40 -0400 in reality, we all know that to end up with a million you have to start with two. so it will be more like 50B.
then you get the UAW strings attached and market cap goes straight to 1B.
stock is trading where it's at for a simple reason: pump and dump is going on. it's the usual penny stock game some people play.]]> http://seekingalpha.com/article/139244-the-final-hours-of-gm?source=feed#comment-515016 515016
is wall st. to blame for GM's inability to become a profitable and sustainable business?
even if what you say is true, and I don't care if it is or isn't, what does it have to do with the simple fact that GM wasn't able to be and remain profitable?
who's fault is that?
GM's management for sure.
UAW leadership - maybe.
wall st? give me a break.

On May 22 05:33 PM Larry M. wrote:

> To GM's Bond Holders
>
> Ya know ........ the Various Wall Street Investment Banks Ratings
> Agencies have been Waging a WAR (Agains) GM for Years. There have
> been Endless Lies about the Wage Levels of UAW Represented Employees
> and in general the Public has Believed those LIES put out by various
> Wall Street Banks. Even the UAW Represented Skilled Tradesmen at
> GM peaked out at around $30 an Hour. Even if you count the Benefits
> of Hourly Wage Earners a Top of the Line Skilled Tradesman earned
> at most $45 an hour and Non-Skilled earned less than that. What did
> Toyota Employees Earn per Hour. About $45 an hour. And so the Wall
> Street Investment Banks and their Ratings Agencies Lied and Lied
> and Lied and Lied. These Banks stood by their belief that "If you
> tell a Lie often enough and Long enough the Public will eventually
> Believe the Lie."
> Sooooooooo Bond Holders .... you have the Wall Street Investment
> Banks to Blame for the Demise of your Bond Losses. IF it had not
> been for 30 years of Lies from Wall Street there is a Good Chance
> that GM would Not be in this Bankruptcy Situation that it is Currently
> in.
>
> Put the BLAME where it Belongs. On Wall Street.]]> Fri, 22 May 2009 18:50:50 -0400
is wall st. to blame for GM's inability to become a profitable and sustainable business?
even if what you say is true, and I don't care if it is or isn't, what does it have to do with the simple fact that GM wasn't able to be and remain profitable?
who's fault is that?
GM's management for sure.
UAW leadership - maybe.
wall st? give me a break.

On May 22 05:33 PM Larry M. wrote:

> To GM's Bond Holders
>
> Ya know ........ the Various Wall Street Investment Banks Ratings
> Agencies have been Waging a WAR (Agains) GM for Years. There have
> been Endless Lies about the Wage Levels of UAW Represented Employees
> and in general the Public has Believed those LIES put out by various
> Wall Street Banks. Even the UAW Represented Skilled Tradesmen at
> GM peaked out at around $30 an Hour. Even if you count the Benefits
> of Hourly Wage Earners a Top of the Line Skilled Tradesman earned
> at most $45 an hour and Non-Skilled earned less than that. What did
> Toyota Employees Earn per Hour. About $45 an hour. And so the Wall
> Street Investment Banks and their Ratings Agencies Lied and Lied
> and Lied and Lied. These Banks stood by their belief that "If you
> tell a Lie often enough and Long enough the Public will eventually
> Believe the Lie."
> Sooooooooo Bond Holders .... you have the Wall Street Investment
> Banks to Blame for the Demise of your Bond Losses. IF it had not
> been for 30 years of Lies from Wall Street there is a Good Chance
> that GM would Not be in this Bankruptcy Situation that it is Currently
> in.
>
> Put the BLAME where it Belongs. On Wall Street.]]> http://seekingalpha.com/article/139244-the-final-hours-of-gm?source=feed#comment-515012 515012
On May 22 04:18 PM Karen Consumer wrote:

> "Remember, it is the bondholders who are supposed to be paid first
> during a bankruptcy, they should have the right to protect their
> property given the fifth amendment right to due process under the
> law."
>
> You remember that, I remember that, but the administration doesn't
> care about that. But whom they do care about seems to be in doubt.
> ]]> Fri, 22 May 2009 18:47:04 -0400
On May 22 04:18 PM Karen Consumer wrote:

> "Remember, it is the bondholders who are supposed to be paid first
> during a bankruptcy, they should have the right to protect their
> property given the fifth amendment right to due process under the
> law."
>
> You remember that, I remember that, but the administration doesn't
> care about that. But whom they do care about seems to be in doubt.
> ]]> http://seekingalpha.com/news/market_currents/post/22596?source=feed#comment-477856 477856 if banks are so important that you can't let them down, NATIONALIZE them.
then split them into smaller, less FATAL institutions and sell them in pieces.
instead all you're doing is pretending that they are solvent by arranging illegal schemes in the back room.
why illegal? because shareholders who are supposedly controlling those institutions have no idea what the heck is going on and are completely ignored.

so here you have it. don't have to lie anymore.
and don't have to destroy the economy right away.
it will just suffer the huge debt for a while but that's inevitable one way or another.]]> Sun, 26 Apr 2009 11:43:32 -0400 if banks are so important that you can't let them down, NATIONALIZE them.
then split them into smaller, less FATAL institutions and sell them in pieces.
instead all you're doing is pretending that they are solvent by arranging illegal schemes in the back room.
why illegal? because shareholders who are supposedly controlling those institutions have no idea what the heck is going on and are completely ignored.

so here you have it. don't have to lie anymore.
and don't have to destroy the economy right away.
it will just suffer the huge debt for a while but that's inevitable one way or another.]]> http://seekingalpha.com/news/market_currents/post/22596?source=feed#comment-477850 477850
> Talk philosophy all you want, all your Rick Santelli wannabes, but
> look at the alternative course of action.

A liar always thinks that it's better to lie some more instead of letting the truth come out. The argument is always the same: if the truth comes out NOW, the outcome will be FAR worse, so better just lie a little bit more and then everything will return to normal. In your case you say it will come back to "normal" as soon as "in a few years".

Yes, it may work for a while, but the more you lie the further you are from the truth. Eventually things will really hit the fan and then what are you going to do? Nothing, because it will be someone else's problem then.
That's how our politicians generally operate.

Now the lie is pretending that we still have capitalism.
But it's not the first lie. Previous lie was that the banks were doing the right thing and making money. Prior to that there were many lies about wall st, economists, the magic wand of diversification, MODERN portfolio theory, pricing models, ratings agencies, etc, etc.
One specific example was that every person in the US can afford a house, no matter if they had a job or could balance their checkbook.
Before that there were many other lies.

So this particular lie we are discussing today is really no different from any other ones. Why should it receive a different treatment? You say it is because consequences are great. But the consequences are not just from this one lie, it's from a long sequence of lies.
Your point (if I understood it correctly) is that one can lie forever. That may be, but I have never seen it done. Truth always comes out eventually and the longer the string of lies the more painful the truth is at the end. ]]> Sun, 26 Apr 2009 11:40:25 -0400
> Talk philosophy all you want, all your Rick Santelli wannabes, but
> look at the alternative course of action.

A liar always thinks that it's better to lie some more instead of letting the truth come out. The argument is always the same: if the truth comes out NOW, the outcome will be FAR worse, so better just lie a little bit more and then everything will return to normal. In your case you say it will come back to "normal" as soon as "in a few years".

Yes, it may work for a while, but the more you lie the further you are from the truth. Eventually things will really hit the fan and then what are you going to do? Nothing, because it will be someone else's problem then.
That's how our politicians generally operate.

Now the lie is pretending that we still have capitalism.
But it's not the first lie. Previous lie was that the banks were doing the right thing and making money. Prior to that there were many lies about wall st, economists, the magic wand of diversification, MODERN portfolio theory, pricing models, ratings agencies, etc, etc.
One specific example was that every person in the US can afford a house, no matter if they had a job or could balance their checkbook.
Before that there were many other lies.

So this particular lie we are discussing today is really no different from any other ones. Why should it receive a different treatment? You say it is because consequences are great. But the consequences are not just from this one lie, it's from a long sequence of lies.
Your point (if I understood it correctly) is that one can lie forever. That may be, but I have never seen it done. Truth always comes out eventually and the longer the string of lies the more painful the truth is at the end. ]]> http://seekingalpha.com/article/132676-paulson-throws-bernanke-under-the-bus-backs-ken-lewis?source=feed#comment-476617 476617 Then, Paulson would set everything up such that everybody would blame the whole thing on some glasses wearing guy from the academia.
I'm not saying it's true or false as I don't know if Merrill was as large a counter party to Goldman as say AIG was.]]> Fri, 24 Apr 2009 20:39:18 -0400 Then, Paulson would set everything up such that everybody would blame the whole thing on some glasses wearing guy from the academia.
I'm not saying it's true or false as I don't know if Merrill was as large a counter party to Goldman as say AIG was.]]> http://seekingalpha.com/article/130441-taking-profits-on-the-euphoria-stampede?source=feed#comment-459637 459637
I believe SKF is attempting to reproduce amplified DAILY results. If that doesn't explain it check the prospectus for one of those leveraged funds that attempt to replicate DAILY results times X. I believe they give specific examples.


On Apr 10 08:54 PM montyman wrote:

> Could someone please explain to me how the SKF is at $64. The last
> time it was at these levels, the DOW was up on 14,000 and the financials
> were at stratospheric valuations. Thanks.]]> Fri, 10 Apr 2009 23:53:55 -0400
I believe SKF is attempting to reproduce amplified DAILY results. If that doesn't explain it check the prospectus for one of those leveraged funds that attempt to replicate DAILY results times X. I believe they give specific examples.


On Apr 10 08:54 PM montyman wrote:

> Could someone please explain to me how the SKF is at $64. The last
> time it was at these levels, the DOW was up on 14,000 and the financials
> were at stratospheric valuations. Thanks.]]> http://seekingalpha.com/article/129153-a-smarter-citigroup-play-preferred-shares-etf?source=feed#comment-452912 452912
UYG is a leveraged ETF attempts to replicate DAILY results. The important part is DAILY results. If you need more info on that please review a prospectus of any leveraged fund that attempts to replicate DAILY results, they all have examples that illustrate how they work.

I'm sure you didn't account for that in your calculation.

What I'm trying to say is that even IF the underlying return to the "levels of 2007", whatever that means, that does not mean that UYG would also return to those "levels of 2007".
]]> Mon, 06 Apr 2009 00:32:30 -0400
UYG is a leveraged ETF attempts to replicate DAILY results. The important part is DAILY results. If you need more info on that please review a prospectus of any leveraged fund that attempts to replicate DAILY results, they all have examples that illustrate how they work.

I'm sure you didn't account for that in your calculation.

What I'm trying to say is that even IF the underlying return to the "levels of 2007", whatever that means, that does not mean that UYG would also return to those "levels of 2007".
]]> http://seekingalpha.com/news/market_currents/post/20805?source=feed#comment-444341 444341 However, if I wrote an article on Intel selling new shares at $15 and then realized that this isn't what Intel is doing, I'd pull the article and issue a correction.
Nothing wrong with opining. Nothing wrong with being incorrect every once in a while. But mistakes must be corrected. Instead, some choose to ignore the obvious or switch the subject to something fud-looking like "why file now"?

On Mar 29 02:45 PM fatcat wrote:

> Welcome to the internet(tv,press,news... better be a cynic,anyone
> is allowed to opine.....and I mean anyone...]]> Sun, 29 Mar 2009 15:19:24 -0400 However, if I wrote an article on Intel selling new shares at $15 and then realized that this isn't what Intel is doing, I'd pull the article and issue a correction.
Nothing wrong with opining. Nothing wrong with being incorrect every once in a while. But mistakes must be corrected. Instead, some choose to ignore the obvious or switch the subject to something fud-looking like "why file now"?

On Mar 29 02:45 PM fatcat wrote:

> Welcome to the internet(tv,press,news... better be a cynic,anyone
> is allowed to opine.....and I mean anyone...]]> http://seekingalpha.com/news/market_currents/post/20805?source=feed#comment-444221 444221 en.wikipedia.org/wiki/...

The most likely possibility is that Intel anticipates that market conditions may improve in the next 2 years such that it will make sense to sell additional shares at that point of time. The price that Intel will sell those additional shares isn't determined at the moment and the shelf filing says nothing about the company thinking that the shares are overvalued or undervalued.
It is also not clear how the proceeds may be used. It could be for acquisitions or for anything else for that matter.

The article clearly makes several false claims:
1) States that the shares will be sold below current market value at a price that is determined now.
2) Draws incorrect conclusion from the filing and makes a shiny headline.

Basically an author just made a fool out of himself and should withdraw the article or issue a correction. It's great that we have freedom of speech in this country but I wish people would come out and apologize when they realized that they were speaking out of their A a little more often.
Otherwise it's a lot of "drive by shooting" in the media and the blog-o-sphere and you have to research every single thing everybody says before actually believing what they say. Makes a cynic like myself even more cynical, if that's even possible :)

On Mar 29 01:28 PM Ichsala wrote:

> Help me out here Vladimir - not following.]]> Sun, 29 Mar 2009 13:48:28 -0400 en.wikipedia.org/wiki/...

The most likely possibility is that Intel anticipates that market conditions may improve in the next 2 years such that it will make sense to sell additional shares at that point of time. The price that Intel will sell those additional shares isn't determined at the moment and the shelf filing says nothing about the company thinking that the shares are overvalued or undervalued.
It is also not clear how the proceeds may be used. It could be for acquisitions or for anything else for that matter.

The article clearly makes several false claims:
1) States that the shares will be sold below current market value at a price that is determined now.
2) Draws incorrect conclusion from the filing and makes a shiny headline.

Basically an author just made a fool out of himself and should withdraw the article or issue a correction. It's great that we have freedom of speech in this country but I wish people would come out and apologize when they realized that they were speaking out of their A a little more often.
Otherwise it's a lot of "drive by shooting" in the media and the blog-o-sphere and you have to research every single thing everybody says before actually believing what they say. Makes a cynic like myself even more cynical, if that's even possible :)

On Mar 29 01:28 PM Ichsala wrote:

> Help me out here Vladimir - not following.]]> http://seekingalpha.com/article/128279-big-banks-pulling-off-the-ultimate-bait-and-switch?source=feed#comment-444157 444157 But anyways, this isn't about me, this is about why a person may disagree with these plans even when he or she doesn't have an axe to grind.
When I go to a casino and play "no limit" roulette, I know that the odds are against me. But . . . If I could just double every time I loose, that changes everything! Even if the odds where 1/100 against me, I will still come out ahead, EVERY TIME! This is what I don't like about this plan.
Some private companies and individuals will become part of an entity that is REALLY too big to fail. Partnership with the freaking US Treasury with FDIC standing behind the scheme ready to provide leverage and a printing press in the next room ready to print more money if need be.
They can't loose people! They really can't!
The banks who get to dispose of their liabilities (there is no such thing as a bad asset. it's either an asset or a liability) also win, because they'll get 40 cents on the dollar instead of 7. Why not 7? Because if you give them 7 they'll be insolvent and you don't want that. So you'll give them 40 and they live happily ever after. Bonuses will grow bigger than ever. Everybody wins? Only if you really believe that you can have something for nothing. See, I don't, but I read more and more on the subject and it seems to me that most people actually do or want us to. They explain these elaborate schemes of moving things around, creating new entities, changing the rules in the middle of the game, etc, etc. And the expectation is that by the end of the day everything is fixed. I keep hearing these "5 years from now taxpayer gets all the money back + profit" type statements.
Nobody actually explains who gets the short end of the stick. Where are all these profits going to come from?
That's where I have a problem with these schemes and gimmicks that keep coming out of our government at an ever increasing rate. No, I don't have an axe to grind, yet. But it will be too late when we'll all become millionaires . . . like in Zimbabwe. It will be too late to grind the axe then. ]]> Sun, 29 Mar 2009 13:13:41 -0400 But anyways, this isn't about me, this is about why a person may disagree with these plans even when he or she doesn't have an axe to grind.
When I go to a casino and play "no limit" roulette, I know that the odds are against me. But . . . If I could just double every time I loose, that changes everything! Even if the odds where 1/100 against me, I will still come out ahead, EVERY TIME! This is what I don't like about this plan.
Some private companies and individuals will become part of an entity that is REALLY too big to fail. Partnership with the freaking US Treasury with FDIC standing behind the scheme ready to provide leverage and a printing press in the next room ready to print more money if need be.
They can't loose people! They really can't!
The banks who get to dispose of their liabilities (there is no such thing as a bad asset. it's either an asset or a liability) also win, because they'll get 40 cents on the dollar instead of 7. Why not 7? Because if you give them 7 they'll be insolvent and you don't want that. So you'll give them 40 and they live happily ever after. Bonuses will grow bigger than ever. Everybody wins? Only if you really believe that you can have something for nothing. See, I don't, but I read more and more on the subject and it seems to me that most people actually do or want us to. They explain these elaborate schemes of moving things around, creating new entities, changing the rules in the middle of the game, etc, etc. And the expectation is that by the end of the day everything is fixed. I keep hearing these "5 years from now taxpayer gets all the money back + profit" type statements.
Nobody actually explains who gets the short end of the stick. Where are all these profits going to come from?
That's where I have a problem with these schemes and gimmicks that keep coming out of our government at an ever increasing rate. No, I don't have an axe to grind, yet. But it will be too late when we'll all become millionaires . . . like in Zimbabwe. It will be too late to grind the axe then. ]]>