lavalyn's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/202321/comments http://seekingalpha.com/news/market_currents/post/31713?source=feed#comment-657511 657511 Tue, 01 Sep 2009 21:44:51 -0400 http://seekingalpha.com/news/market_currents/post/31512?source=feed#comment-652448 652448
Tax cuts give more incentive for business owners to cut costs (as they retain more of those cost-cutting benefits) more.]]> Sat, 29 Aug 2009 12:47:11 -0400
Tax cuts give more incentive for business owners to cut costs (as they retain more of those cost-cutting benefits) more.]]> http://seekingalpha.com/news/market_currents/post/25703?source=feed#comment-539781 539781
Either they don't mark them, or they do still screw up badly at times. Bizrate should never be the top relevant link. ("Hard drive comparison")


On Jun 09 08:27 PM lavalyn wrote:

> Bing has come a long way versus Live Search; its results are very
> good, even facing Google. Of course, I still won't switch over for
> regular searches, but that's because Bing doesn't mark sponsored
> links as such.]]> Tue, 09 Jun 2009 20:49:57 -0400
Either they don't mark them, or they do still screw up badly at times. Bizrate should never be the top relevant link. ("Hard drive comparison")


On Jun 09 08:27 PM lavalyn wrote:

> Bing has come a long way versus Live Search; its results are very
> good, even facing Google. Of course, I still won't switch over for
> regular searches, but that's because Bing doesn't mark sponsored
> links as such.]]> http://seekingalpha.com/news/market_currents/post/25703?source=feed#comment-539762 539762 Tue, 09 Jun 2009 20:27:42 -0400 http://seekingalpha.com/news/market_currents/post/25564?source=feed#comment-536416 536416 Sun, 07 Jun 2009 20:21:57 -0400 http://seekingalpha.com/article/129200-the-fed-s-busy-monetizing-debt?source=feed#comment-449910 449910 Thu, 02 Apr 2009 16:10:12 -0400 http://seekingalpha.com/article/126765-leveraged-etfs-is-tracking-error-really-so-troublesome?source=feed#comment-432718 432718
You'd actually expect the 0.5x tracker to consistently slightly outperform half the index, on "interest" for the other half. Similarly, a 2x tracker should consistently slightly underperform on "interest."]]> Thu, 19 Mar 2009 15:54:25 -0400
You'd actually expect the 0.5x tracker to consistently slightly outperform half the index, on "interest" for the other half. Similarly, a 2x tracker should consistently slightly underperform on "interest."]]> http://seekingalpha.com/article/122848-canadian-banking-system-an-oasis-of-financial-calm?source=feed#comment-404431 404431 Thu, 26 Feb 2009 10:20:13 -0500 http://seekingalpha.com/article/122565-yet-another-bank-behaving-badly?source=feed#comment-402876 402876 Wed, 25 Feb 2009 10:05:49 -0500 http://seekingalpha.com/article/98048-nixing-mark-to-market-won-t-solve-the-problem?source=feed#comment-270944 270944
When you have the public distrusting the balance sheet, no amount of mark to model numbers will help you. See also: Enron.]]> Wed, 01 Oct 2008 18:29:40 -0400
When you have the public distrusting the balance sheet, no amount of mark to model numbers will help you. See also: Enron.]]> http://seekingalpha.com/article/97546-next-victim-please?source=feed#comment-266020 266020 Fri, 26 Sep 2008 11:57:58 -0400 http://seekingalpha.com/article/97446-another-day-without-precedent?source=feed#comment-265471 265471
You could have 0% Fed rate and still have frozen credit if nobody in the banking system trusts anybody else.]]> Thu, 25 Sep 2008 23:52:58 -0400
You could have 0% Fed rate and still have frozen credit if nobody in the banking system trusts anybody else.]]> http://seekingalpha.com/article/96991-bernanke-gives-up-on-reverse-auction-idea?source=feed#comment-263026 263026
The major consumer manufacturing that's done in the US is now itself on the verge of collapse, as Americans are finally moving towards higher fuel efficiency vehicles over ridiculous and unnecessarily gas-guzzling behemoths.]]> Tue, 23 Sep 2008 21:02:05 -0400
The major consumer manufacturing that's done in the US is now itself on the verge of collapse, as Americans are finally moving towards higher fuel efficiency vehicles over ridiculous and unnecessarily gas-guzzling behemoths.]]> http://seekingalpha.com/article/96991-bernanke-gives-up-on-reverse-auction-idea?source=feed#comment-262972 262972
For those here that say there are no "concrete" alternatives, I would say "analyze this:"

Using Case-Schiller data, we can see how much a home is worth in various locales... we can use that calculate how much a 30-year mortgage costs per month for a conforming loan on an average home in that locale. Proposal: the government guarantees mortgage payments for mortgages issued from (reasonable periods, Q2 2005 to Q2 2007?) equal to 80% of that payment size for prime mortgages, 45% for subprime. The resulting setting of a floor price for the mortgage paper immediately sets a bottom value for the papers in question.

This is very expensive, to be sure, but so is the $700 billion being used to currently bail out only the banks with no help to Main Street. Lower income homes are less likely to be foreclosed, keeping the average Joe in their homes, as the return on foreclosure (with certainty in payments from the government versus the uncertainty of home prices today) is lower. Prime mortgages are also less likely to foreclose for the same reason.

It's a truly Keynesian school of thinking, but I'd rather help both Main Street and Wall Street than just the fat bankers.]]> Tue, 23 Sep 2008 19:21:36 -0400
For those here that say there are no "concrete" alternatives, I would say "analyze this:"

Using Case-Schiller data, we can see how much a home is worth in various locales... we can use that calculate how much a 30-year mortgage costs per month for a conforming loan on an average home in that locale. Proposal: the government guarantees mortgage payments for mortgages issued from (reasonable periods, Q2 2005 to Q2 2007?) equal to 80% of that payment size for prime mortgages, 45% for subprime. The resulting setting of a floor price for the mortgage paper immediately sets a bottom value for the papers in question.

This is very expensive, to be sure, but so is the $700 billion being used to currently bail out only the banks with no help to Main Street. Lower income homes are less likely to be foreclosed, keeping the average Joe in their homes, as the return on foreclosure (with certainty in payments from the government versus the uncertainty of home prices today) is lower. Prime mortgages are also less likely to foreclose for the same reason.

It's a truly Keynesian school of thinking, but I'd rather help both Main Street and Wall Street than just the fat bankers.]]> http://seekingalpha.com/article/96719-short-selling-myths-and-facts?source=feed#comment-261493 261493 Mon, 22 Sep 2008 11:36:59 -0400 http://seekingalpha.com/article/96719-short-selling-myths-and-facts?source=feed#comment-261487 261487 Mon, 22 Sep 2008 11:33:50 -0400 http://seekingalpha.com/article/96497-we-ve-crossed-the-line-from-capitalism-to-socialism?source=feed#comment-261000 261000
The underlying conditions must all be resolved before you can really see improvement again:
1. Housing prices need to stabilize - and that's a function of the average Joe, not the bankers on the Street holding those subprime mortgage papers.
2. Banks need to deleverage - this new bill does that.
3. People have to regain their confidence in the economy - that will take a great deal of time.

It would also be nice if:
4. Irresponsible behaviour is punished. Fundamental to our capitalist free market philosophy is that the market will mete out its rewards and punishments by the worthiness of your own actions.
5. Those that need the bailout get it. Why can't you or I get bailed out on our debts (credit cards, mortgages, HELOCs) when we make stupid decisions, and yet the rich bankers on the Street with their 6 and 7 digit bonuses get to gorge from the taxpayer trough?

I'm unconvinced that this bailout is going to do more than the inevitable... from my perspective, the inevitable is a high inflation level (to wipe bad debts away) and a dramatic decrease in US consumption.]]> Sun, 21 Sep 2008 22:12:24 -0400
The underlying conditions must all be resolved before you can really see improvement again:
1. Housing prices need to stabilize - and that's a function of the average Joe, not the bankers on the Street holding those subprime mortgage papers.
2. Banks need to deleverage - this new bill does that.
3. People have to regain their confidence in the economy - that will take a great deal of time.

It would also be nice if:
4. Irresponsible behaviour is punished. Fundamental to our capitalist free market philosophy is that the market will mete out its rewards and punishments by the worthiness of your own actions.
5. Those that need the bailout get it. Why can't you or I get bailed out on our debts (credit cards, mortgages, HELOCs) when we make stupid decisions, and yet the rich bankers on the Street with their 6 and 7 digit bonuses get to gorge from the taxpayer trough?

I'm unconvinced that this bailout is going to do more than the inevitable... from my perspective, the inevitable is a high inflation level (to wipe bad debts away) and a dramatic decrease in US consumption.]]> http://seekingalpha.com/article/96449-hank-paulson-buy-sider?source=feed#comment-260294 260294 Sat, 20 Sep 2008 20:11:25 -0400 http://seekingalpha.com/article/96272-should-the-sec-force-hedge-funds-to-disclose-short-positions?source=feed#comment-259729 259729 Fri, 19 Sep 2008 22:26:28 -0400 http://seekingalpha.com/article/96151-idiotic-idea-of-the-day-sec-edition?source=feed#comment-258008 258008
Seriously speaking, all the negative force focused at the short sellers is just smokescreen. Investors of the fundamentals should be *delighted* that the short sellers are willing to give them good deals on good stocks. Oh wait, they weren't actually good fundamentals? That's not the short sellers' problem.

The inability to short sell even with locate is going to make the options markets interesting, to be sure. When the market-makers can't hedge, the market-makers will have to take market risk, and that will only cause rising premiums for that risk... and also a more unstable (and downward moving) asset market as investors become unable to hedge their risks and demand higher return for their capital.

This decoupling of the options and the spot market will cause a rout much reminiscent of 1987.]]> Thu, 18 Sep 2008 11:34:00 -0400
Seriously speaking, all the negative force focused at the short sellers is just smokescreen. Investors of the fundamentals should be *delighted* that the short sellers are willing to give them good deals on good stocks. Oh wait, they weren't actually good fundamentals? That's not the short sellers' problem.

The inability to short sell even with locate is going to make the options markets interesting, to be sure. When the market-makers can't hedge, the market-makers will have to take market risk, and that will only cause rising premiums for that risk... and also a more unstable (and downward moving) asset market as investors become unable to hedge their risks and demand higher return for their capital.

This decoupling of the options and the spot market will cause a rout much reminiscent of 1987.]]> http://seekingalpha.com/article/95918-aig-america-s-insurance-giant?source=feed#comment-256884 256884
A testament to how we can actually become more free by adding regulation.]]> Wed, 17 Sep 2008 09:54:50 -0400
A testament to how we can actually become more free by adding regulation.]]> http://seekingalpha.com/article/95918-aig-america-s-insurance-giant?source=feed#comment-256851 256851
I'm sorry, but this blanket statement will be the one that will topple the entire banking system. The entire point of banks is to borrow short term and lend long term. What are bank deposits if not demand liabilities? What are mortgages if not long term and illiquid debt? And more to the point, how in the world did the banking industry exist before the wave of securitization, when you couldn't even repackage mortgages to, say, Fannie Mae?]]> Wed, 17 Sep 2008 09:28:12 -0400
I'm sorry, but this blanket statement will be the one that will topple the entire banking system. The entire point of banks is to borrow short term and lend long term. What are bank deposits if not demand liabilities? What are mortgages if not long term and illiquid debt? And more to the point, how in the world did the banking industry exist before the wave of securitization, when you couldn't even repackage mortgages to, say, Fannie Mae?]]> http://seekingalpha.com/article/95764-the-real-risks-of-deleveraging?source=feed#comment-256222 256222
With that, all your venting about FAS 157 and 159 go poof in a little cloud of smoke. The alternative to an environment where we must value assets on balance sheets according to fair market value is one where we need not value assets to fair market value. And that is an environment where we can mark to whatever we want. Historical price, discounted future cash flows, a number that I thought up a few seconds ago, you name it.

If anything, FAS 159 showed the world how financially unhealthy Wall Street had become.]]> Tue, 16 Sep 2008 16:06:37 -0400
With that, all your venting about FAS 157 and 159 go poof in a little cloud of smoke. The alternative to an environment where we must value assets on balance sheets according to fair market value is one where we need not value assets to fair market value. And that is an environment where we can mark to whatever we want. Historical price, discounted future cash flows, a number that I thought up a few seconds ago, you name it.

If anything, FAS 159 showed the world how financially unhealthy Wall Street had become.]]> http://seekingalpha.com/article/95751-witnessing-history?source=feed#comment-256147 256147 Tue, 16 Sep 2008 14:57:51 -0400 http://seekingalpha.com/article/95507-four-questions-about-how-we-got-here?source=feed#comment-255255 255255
Given that the Bear Stearns, and then Fannie Mae/Freddie Mac bailouts created a reputation that the "Fed has your back," a collapse is definitely necessary. Systemwide, worldwide, maybe some sense can be put back into credit worthiness review, instead of letting the US Treasury subsidize every ailing company.]]> Mon, 15 Sep 2008 16:56:29 -0400
Given that the Bear Stearns, and then Fannie Mae/Freddie Mac bailouts created a reputation that the "Fed has your back," a collapse is definitely necessary. Systemwide, worldwide, maybe some sense can be put back into credit worthiness review, instead of letting the US Treasury subsidize every ailing company.]]> http://seekingalpha.com/article/95507-four-questions-about-how-we-got-here?source=feed#comment-255118 255118
The very meaning of the phrase Seeking Alpha is an underlying belief that superior research, superior reasoning, and superior decision making results in superior returns. The flip side of that is that inferior decision making results in inferior returns.

Lehman Brothers made inferior decisions, choosing first to hide their assets and refrain from deleveraging in April, then continuing to try to hide their assets in "Level 3" in July. They chose to redouble their bets when they had a good base of capital (share price) that they could have deleveraged with instead. They chose to ask too much of a price of the Korean Development Bank in June. And in doing so, they totally forgot that they were a bank, a wholesaler of financial risk. The role of a bank is to *manage financial risk*.

Equity holders deserve nary a penny for holding to the end like this. Debt holders deserve, as dictated by insolvency law, that they will get priority recovery on those debts. Why should they get more, at your and my expense?]]> Mon, 15 Sep 2008 14:27:12 -0400
The very meaning of the phrase Seeking Alpha is an underlying belief that superior research, superior reasoning, and superior decision making results in superior returns. The flip side of that is that inferior decision making results in inferior returns.

Lehman Brothers made inferior decisions, choosing first to hide their assets and refrain from deleveraging in April, then continuing to try to hide their assets in "Level 3" in July. They chose to redouble their bets when they had a good base of capital (share price) that they could have deleveraged with instead. They chose to ask too much of a price of the Korean Development Bank in June. And in doing so, they totally forgot that they were a bank, a wholesaler of financial risk. The role of a bank is to *manage financial risk*.

Equity holders deserve nary a penny for holding to the end like this. Debt holders deserve, as dictated by insolvency law, that they will get priority recovery on those debts. Why should they get more, at your and my expense?]]> http://seekingalpha.com/article/94328-frannie-bailout-private-profit-socialized-risk?source=feed#comment-248381 248381 Mon, 08 Sep 2008 11:38:21 -0400 http://seekingalpha.com/article/94328-frannie-bailout-private-profit-socialized-risk?source=feed#comment-248249 248249 Mon, 08 Sep 2008 10:17:01 -0400 http://seekingalpha.com/article/94328-frannie-bailout-private-profit-socialized-risk?source=feed#comment-248224 248224
Shareholders are getting zeroed. Is a zeroing of the shareholders punishing? Certainly. Would the common man be able to get away with that? No, a common man 1) would never be ABLE to get into this situation, as banks do credit checks, 2) would lose much more than their investment. They'll lose their house, their car, everything. Put it this way, if I had any semblance to a government guarantee of my loans, I'd be investing it left right and center, on every investment, high risk or low risk. If a corporation I owned had such a guarantee, it'd practically bet the entire bank on the 00 in roulette. It wins, big bonuses to upper management. It loses, who cares. Seems to be what happened in 2005 for FNM.

The bailout protects debtholders. Should they be protected? I'd be inclined to say no. It is that default risk which keeps securities fairly valued. Do you think it's "fair" that GSE debt traded at a premium to US Treasuries, payouts made to Chinese and Japanese bondholders above US Treasury yields, while being fully backed (implicitly) by the government/taxpayer?

My take? I would have left Fannie and Freddie to its own defenses. Explicitly deny any sort of bailout. Expand Ginnie Mae, which is explicitly backed. If FNM and FRE hypothetically survives that ordeal, so much the better for everybody. But if they're going to be privately held, with private profit, they (and their creditors) should be taking private risk as well.]]> Mon, 08 Sep 2008 10:03:45 -0400
Shareholders are getting zeroed. Is a zeroing of the shareholders punishing? Certainly. Would the common man be able to get away with that? No, a common man 1) would never be ABLE to get into this situation, as banks do credit checks, 2) would lose much more than their investment. They'll lose their house, their car, everything. Put it this way, if I had any semblance to a government guarantee of my loans, I'd be investing it left right and center, on every investment, high risk or low risk. If a corporation I owned had such a guarantee, it'd practically bet the entire bank on the 00 in roulette. It wins, big bonuses to upper management. It loses, who cares. Seems to be what happened in 2005 for FNM.

The bailout protects debtholders. Should they be protected? I'd be inclined to say no. It is that default risk which keeps securities fairly valued. Do you think it's "fair" that GSE debt traded at a premium to US Treasuries, payouts made to Chinese and Japanese bondholders above US Treasury yields, while being fully backed (implicitly) by the government/taxpayer?

My take? I would have left Fannie and Freddie to its own defenses. Explicitly deny any sort of bailout. Expand Ginnie Mae, which is explicitly backed. If FNM and FRE hypothetically survives that ordeal, so much the better for everybody. But if they're going to be privately held, with private profit, they (and their creditors) should be taking private risk as well.]]> http://seekingalpha.com/article/94328-frannie-bailout-private-profit-socialized-risk?source=feed#comment-248140 248140
This bailout is the taxpayer stepping in to cover for mistakes made, which is already dubious... and that's before upper management taking in millions in bonuses, shareholders getting dividends... and them then not giving back. In the interest of "limited liability." The GSEs have been riding the implicit (and now apparently explicit) government backing, while not giving the taxpayer/government any return for it.

Your argument that the public benefitted from the GSEs is irrelevant. Wal-Mart benefits the public, by being a retail store and generating jobs (low-paying, sure, but they likely as a result hire more minorities).]]> Mon, 08 Sep 2008 08:47:42 -0400
This bailout is the taxpayer stepping in to cover for mistakes made, which is already dubious... and that's before upper management taking in millions in bonuses, shareholders getting dividends... and them then not giving back. In the interest of "limited liability." The GSEs have been riding the implicit (and now apparently explicit) government backing, while not giving the taxpayer/government any return for it.

Your argument that the public benefitted from the GSEs is irrelevant. Wal-Mart benefits the public, by being a retail store and generating jobs (low-paying, sure, but they likely as a result hire more minorities).]]>