Alan Young's Comments

Those Evil Synthetic CDOs

Thu, 31 Dec 2009 12:57:32 -0500

The reason the CDOs imploded has a lot to do with the completely unsupportable AAA ratings they were given. But AFAIK, the story of how the ratings agencies arrived at that evaluation has not become public (yet?). One must suspect that the sausage-makers, i.e. GS, put some pressure on the agencies to get the ratings they wanted to sell.

So, staying short on a product you sell do a client may be sleazy, but not illegal. But conspiring to misrepresent what's in the product is clearly criminal. And no one has said a word about this?

18 U.S. Stocks that Could Constitute Foreign Asset Portfolio Diversification

Wed, 30 Dec 2009 09:48:23 -0500

It's a sad old song. Wall Street doesn't want to lose its customers to better markets, so they have these apologists come out to explain why buying US stock is really the best way to own foreign markets.

But the evidence is clear. In the last 10 years or so, a Brazil index fund has gone up 700-800%; in the same decade, KO, to use the author's own example, has gone nowhere, while PFE is down almost 50%!

Thanks for reminding me NOT to try this strategy.

China's Rare Earth Metals, Destructive Mining Techniques and a New Trend

Wed, 30 Dec 2009 09:28:52 -0500

Right, except GWMGF is the US ticker for Great Western.

On Dec 30 06:33 AM jimp wrote:

> Lynas Corp (LYSCF) per there website: Lynas owns the richest deposit
> of Rare Earths in the world at Mt Weld.
>
> Avalon rare metals (AVL) has a very large deposit of heavy rare earths
> in canada. Heavy rare earths at this time seem to be more valuable
> compared to lighter rare earths.
>
> Great Western minerals (GWM) Is a fully integrated rare earth miner
> in canada that recently purchased a heavy rare earth mine in South
> Africa.

Palladium and Platinum Could Triple on New ETF Approval

Tue, 29 Dec 2009 01:44:37 -0500

What is the ticker of this Platinum/Palladium ETF? Who is sponsoring it? When will it start trading? Your suggestion is tantalizing but not actionable without better sourcing.

CDS Spreads: How to Profit from the Sovereign Debt Crisis

Mon, 28 Dec 2009 11:08:26 -0500

Back up, please. You talk about "profit opportunities" but you can't profit on CDS spreads unless you can trade the CDS. If this is a product available to retail investors, it's news to me.

Where to Get Commodity Exposure via ETFs in 2010

Sun, 27 Dec 2009 23:07:39 -0500

iPath is the Barclay's product which has been sold to BlackRock in a highly-publicized deal. I don't know why they still have the AIG name on the index, but AIG is not the counterparty, and I'm amazed that anyone would assume that it is. What have YOU been smoking?

On Dec 25 09:15 PM HunterGVL wrote:

> Are you kidding??? Buy an 'ETN', from AIG?? I guess you feel there
> is a negligible counter party risk in AIG? They are not already insolvent?
> The government has bailed them out to the tune of $400 billion and
> that covers just 0.08% of their liabilities estimated at a cool $55
> Trillion. What in the hell have you been smokin?

10 Emerging Market Financial Titans

Sun, 27 Dec 2009 13:12:12 -0500

Why are bank stocks with negligible dividends considered good investments by anyone?

Fannie / Freddie - What Does Treasury Know?

Fri, 25 Dec 2009 17:00:35 -0500

@j-dub: what do you think an election is going to accomplish? Can you get rid of the party that bailed out the FREak brothers in 2008 AND the party that is keeping them afloat in 2009? And even if you could, what would you replace them with?

On Dec 25 09:52 AM j-dub wrote:

> This is not my America and it pains me to say it might never be again.
> I do however look foward to the 2010 elections.

Is There a Goldman CDO Scandal?

Fri, 25 Dec 2009 16:08:27 -0500

Again, Mr. Moon's analysis is impeccable.

Felix, I usually agree with your POV, but here your analysis is flawed. GS was not a neutral broker; they structured the product; they knew its aptitude for failure better than any customer could. If a company marketed a stock or bond this way, they would be sued for failure to disclose. No one is likely to be able to nail GS for this, but that's no reason to declare them innocent.

Stealth ETF Can Potentially Deliver Big Results

Fri, 25 Dec 2009 15:59:40 -0500

Wall St neglect is one element of a possible search for great value plays. But if it's the ONLY criterion, I don't think I'd buy it. Add maybe some earnings growth, and it would be much more convincing.

Many Reasons to Launch a Global Generic Drug ETF

Fri, 25 Dec 2009 15:56:03 -0500

I agree. I was holding TEVA and RDY for awhile on this same thesis, but and ETF would be preferable.

California Asks Rest of Nation's Taxpayers to Help Pay for Its Unbalanced Budget

Fri, 25 Dec 2009 15:46:12 -0500

I agree that it makes no sense to pay someone more for not working than for working--that formula is screwy. But I don't know where the numbers come from; I'm sure there are only a few exceptional cases of this. From what I've seen, CalPERS pension only pays 50% of the highest salary the worker was ever paid. That's clearly not enough for most people to live on--and remember, that's instead of, not in addition to, social security.

w/r/t the headline: California, unlike Texas and most smaller states, has been paying WAY more in federal taxes than it has gotten back in benefits for decades now. If we have been subsidizing the rest of the country, I don't see what's wrong with calling to get some of it back. It may be fiscally imprudent, but please don't start with moral-high-ground arguments. There is none.

My TIPS, Treasuries and Inflation Model

Thu, 24 Dec 2009 11:49:18 -0500

My sentiments are with "oldman." The problem is not "small brain" but lack of specialized experience that would translate these trends into one or more investment theses. Can someone translate?

5 ETFs to Play the NASDAQ

Wed, 23 Dec 2009 10:23:16 -0500

All these choices, yet all the $NDX-based products are large cap funds. Regrettably, there is still no product for tracking the NASDAQ Composite index ($COMP), which is far more small-cap oriented.

International Stock Investing: Diversified Timing on Country ETFs

Mon, 21 Dec 2009 14:46:28 -0500

Some of these country ETFs are very thinly traded. As a consequence, when you suddenly needed to get out, there are no buyers. And since European stocks (especially) are also highly correlated to one another, you may face this problem in several funds simultaneously. Seems to me that increases risk (or at least one kind of risk) rather than decreasing it.

Thoughts on How Foreign Investing Might Evolve in the Next Few Years

Mon, 21 Dec 2009 13:57:27 -0500

JSE, did you fail to understand the words "at some point", which Roger used twice in the suggestion about Iran? The implication of that phrase, in case English is not your first language, is "in the future" and he specifically said, "assuming it stabilizes politically." Read before you react. Oh, I see--too busy watching football to read. Okay, then...

15 years ago, the idea of investing in Russia would have been regarded as sheer madness, Today's Russia is next decade's Iran.

On Dec 21 11:25 AM jse17 wrote:

> Regarding Iran as a future investment destination, does a reasonable
> investor genuinely wish to embrace a theocratic, unstable, climate
> where yesterday’s “profits” may disappear instantly with a stroke
> of a Mullah’s saif? Perhaps profits are possible in such an environment
> but at what cost to the investor’s quality of life profile.
>
> The value of restful sleep, tranquility, and serenity cannot be underestimated.
> Capsulizing, as per the ESPN Monday Night Football crew, “C’mon Man!”

Solar: The Clouds May Be Parting

Fri, 18 Dec 2009 17:21:02 -0500

I'll be glad to sing along with you, Guy--this movie was a childhood favorite of mine, too. But I'm not so sure about investing with you. There's still a lot of political risk in solar stocks, unless you can see exactly how much their business depends on various government subsidies.

High Yield Telecom Stocks Are Calling

Fri, 18 Dec 2009 17:16:21 -0500

IWA is not a credible choice, as noted above. But CTL may be. I didn't know it was in the $SPX. And there's a lot of institutional buying. I will be watching it; thanks for the idea.

California Issuing

Fri, 18 Dec 2009 16:55:54 -0500

California's credit-worthiness is maintained at the expense of having any future, as infrastructure and education are sacrificed to service the debt. What we need is to completely revamp the political system, which currently prevents any reasonable steps toward government solvency with its combination of prohibitions on reliable state AND LOCAL revenue measures and mandatory spending. It would be better to dissolve the state entirely than to try to muddle through this mess for another 10 years. Maybe a constitutional convention could repair the system, but even that is dubious.

Finding the Most Undervalued Green Energy Company

Thu, 17 Dec 2009 17:25:11 -0500

Future earnings estimates are notoriously unreliable. To use this as the ONLY metric of value is folly.

Which Green Stocks Will Be the Last Standing?

Thu, 17 Dec 2009 17:18:42 -0500

Gee, Mark, I hope the headline wasn't your idea--your message is just the opposite, isn't it? I'd like to know if there are any buy-and-hold-worthy green stocks, but here you are all about short-term trade.

An animated game show (video, 2:10) featuring some very discouraged workers helps show why the headline unemployment figures are always a little sunnier than reality. (via)

Fri, 04 Dec 2009 22:54:09 -0500

Nice little video; tells the story as it is.

@Hyper: you "well known fact" is complete nonsense. By your definition, there was no poverty before 1917, when Socialism first became a real political factor. A 3-year-old has better reasoning power than this.

Understanding the Dollar's Reversal: Who Will Feel the Pain?

Fri, 04 Dec 2009 17:11:52 -0500

One day spike, and you're talking about reversing a year-long trend? That's a bit premature.

Reappointing Bernanke

Fri, 04 Dec 2009 17:08:42 -0500

I agree, especially with the last sentence .

Reserve Currency: There Can Be Only One

Fri, 04 Dec 2009 16:52:13 -0500

1929 doesn't tell us much. Now banking all over the world is instantaneous, so currency behaves a bit differently.

Still, I think it could be very instructive to ignore the (inapt) headline here, and contemplate possible ways for world finance to function with ambiguity. There's no absolute value, anyway; if everything is relative, why only one reserve?

The Betting Line on Bernanke

Fri, 04 Dec 2009 09:34:35 -0500

No bet. An unknown candidate would have to be vetted, which would be tedious and politically risky. Of the known competitors, no one has Ben's placid telegenic appearance, which is so reassuring in times of crisis.

Besides, mastery of "Great Depression avoidance strategies" is about the best qualification you could ask for these days. Other than actually giving a damn about what happens to America outside a small circle of plutocrats, and you can hardly expect to find that quality in anyone who can talk Banking convincingly with millionaire Senators.

Bunning vs. Bernanke

Fri, 04 Dec 2009 00:54:39 -0500

Bernanke works only for the too-rich-to-care class, of which 95% of the Senate are either members or indentured servants. He also has the advantage of looking good on TV (unlike Geithner, for example). There's nothing that could threaten his job.

The Right Reform for the Fed

Wed, 02 Dec 2009 10:56:28 -0500

Is the problem that the Fed is not "independent" of political interests, or that it has conflicts of interest? Being free from congressional influence doesn't help, if it acts as if its mission is to protect Vampire Squid et al.

Bernanke's job is secure, neither because he does it so well, nor because he's a political toady, but because he has such an outstanding TV presence and calming demeanor. If Geithner or Summers had his job, they would drive us crazy with worry.

China Provides a Tailwind for Wind Energy ETFs

Wed, 02 Dec 2009 09:43:11 -0500

Funny "tailwind" that shows a 10-week downtrend. If you'd posted this article 6 months ago, it would have been useful.

Is a Deficit-Neutral Stimulus Possible?

Tue, 01 Dec 2009 21:49:45 -0500

A deficit-neutral stimulus would take funds away from programs that low stimulus value and reallocate them.

War has low stimulus value, since most of the spending is on materials and overseas support services, not on domestic goods and labor. So, with the escalation in Afghanistan, Obama is now moving in exactly the wrong direction.