ubuy2w

Fairfax Financial: Applauding the Insider Trading Crackdown

Uncle Jim an ""honest hedgie"" excuse me while I choke on my wheaties. Front running analysts reports, paying for the publication and distribution of knowingly false research , orchestrating journalists negative articles yes this is part of the price discovery mechanism that Chanos and co. provide to the markets as alledged in the fillings of the Fairfax suit against Chanos et al.

Money Supply: The Myth of Hyperinflation

Just what consummer prices are you speaking about that are going up. Number one consumer item housing down a ton transportation down a bunch have you priced a new or used car lately. Fuel and heat ,less see oil is 1/2 of what it was Nat gas 1/6
clothing cheaper across the board it costs less to eat out or eat at home, vacations, hotel rooms, airfares flat screen tv, cell phones computers every thing but taxes and health care which I see as interchangible anyway are markedly lower than they were 12 months ago. The only thing that is costing a lot more is gold which seems to be the pessimists go to investment. It seems to me that hyper inflation while possible is no slam dunk as many here posit.


On Sep 03 02:48 PM CC_Gold wrote:

> Here we go again with the deflation and inflation babble.
> Here's what you college trained Keynesians don't realize.....
> Consumer price inflation or deflation is a direct result of the printing
> press and asset inflation or deflation is a direct result of credit
> contraction or expansion. When consumer prices are inflating and
> asset prices are deflating, you have disinflation. The FED is leveraging
> monetary inflation against asset deflation to reinflate the asset
> bubble. They are attempting to do this by using a zero interest rate
> policy, removing "toxic" assets from the lenders, and liquifying
> the banks with cheap money. This plan is not obviously working. That's
> why you still see deflation in asset prices and rising consumer prices.
> The best way to reinflate the asset bubble is to give consumers the
> money instead of the banks. The banks are at the bottom of the funnel
> not the top. They are like the drain in a sink and the consumer is
> the water. If the water dries up, the drain is sucking air.

Money Supply: The Myth of Hyperinflation

A very inciteful comment over all and the real reason why velocity has collapsed. That said not ALL banks are no good at making loans for their own account only some are. I also believe the securitization business will return with a vengence albeit not in the form of the opaque toxic smelly stuff that was foisted on investors in the past. Wall street, capitalism and the human species have all thrived because they-we are masters of adaption. We are uable to overcome our manic depressive, fear -greed reflexes which I suspect is at the root of all bubbles and collapses and economic swings, that said ,I think cautious optimism rather than the agressive pessimism so many here are counselling is likely to be the high alpha trade.


On Sep 06 02:33 AM If_then wrote:

> Cannot agree with you on any of your ideas
>
> 1) On what evidence do you state that Fed ENCOURAGES banks to deposit
> their funds at the Fed? This is exactly where Fed is failing in injecting
> the liquidity into real economy. Commercial banks recycle the fund
> back to the Fed not to earn the tiny interest, but because they see
> no credible lending opportunities, and as argued in 3) below, they
> have forgotten how.
>
> 2) Indeed, the slow speed of money is preventing the massive new
> liquidity Fed has injected from reaching the real economy and causing
> inflationary pressure TODAY. However, the more Fed sees the low RATE
> of utilization of money, the more money it prints in the hope that
> more NET money will be utilized as the result. This is like building
> a bigger and bigger dam. The risk is that no way one can tell if
> the dam, although today only trickling water to the down stream,
> will not burst down at some point in the future, and whether when
> it happens, Fed has extremely powerful tool to contain the ensuing
> flash flood.
>
> 3) Fed has not realized that the low speed of money today is largely
> a structural issue rather than a cyclical one. The monetary policy
> is the wrong policy for the structural problem. In the past 3 decays,
> the US financial market has gone through the transformation in which
> Commercial banks have largely been replaced by the securitization
> market as the main lending institutions of US. This has been known
> as Bank dis-intermediation. By 2006, 75% of the US C&I loans
> and 90% of the US consumer loans have been financed by securization
> market. Leveraged loan issuance used to be $1 tri yr as of 2006,
> so is the subprime + card + auto loans + student loan market, all
> issued in the form of securitized debts. Now, these markets are close
> to zero on issuance. Fed DOES NOT UNDERSTAND that US banks have not
> been doing lending for over 20 years!!!!!. They originate and package
> and sell to a vast and diverse capital market. It takes another discussion
> to argue on the merits and evils of this mechanism, but nevertheless
> this has been the hallmark of the US financial market for the past
> 30 years. The dismantling of this system is the reason of the low
> utilization of money that is transpiring today. This is why shuffling
> liquidity to the banks will not increase lending. The banks simply
> are not good at it anymore!

Money Supply: The Myth of Hyperinflation

Depression and serious deflation were avoided by Fed policy and monetary actions and in the future hyper-inflation and a collapse of US currency can and likely will be avoided by future Fed policy and monetary policy. For all of you who will only be satisifed by extreme outcomes and this type of article seems to be of intense interest and debate with the Apocolypse Now crowd the future will likely continue to disappoint you.

Much Ado About Commodity ETFs

Me thinks we do not need to worry so much about the big dumb ETF manipulating the mkt. I think we need to worry about the parties on the other side of the trade eating the speculators capital on each and every roll. I suspect there is a very large short oil long gas trade that is being squeezed right now.

No End in Sight to the Housing Bust

Ed, Case Schiller is the best index published which is purporting to track what is going on with residential resale prices. However it is about as usefull as reading goats entrails in forecasting future price trends. The author gleefully reports that house prices are still falling and then quickly concludes that prices will continue to fall. The simple fact is that except for the few contracts that trade which use Case Schiller numbers as a reference point it means nothing. If you are considering a home purchase as a homeowner or as an investor you only consider one thing. What is the value of the home I am purchasing worth now and what is it likely to be worth at some point in the future. All I know is that there are some smoking deals in entry level homes in many areas of the country especially in areas like Phoenix, that the combination of very depressed pricing 60 - 70 percent less than they sold for 3 years ago plus multi generational low mortgage rates plus government incentives to purchase for first time buyers make the purchase decision very easy for any one who has an outlook longer than next weeks headlines.
PS For some reason positive commentary on real estate seems to attract a lot of negative feed back from readers


On May 26 03:24 PM Ed Hynes wrote:

> I personally think the S&P Case-Shiller index is pretty good.
> It may not measure what you think is important, but what it measures,
> it appears to do it well.
>
> You're right, it is not a measure of how many houses are being kept
> off the market. It also does not measure "price changes" for new
> construction, as by definition there was no previous price and therefore
> no price change.
>
> However, you are wrong about distressed sales. As long as the sale
> occurred on an arms length basis, it is included.
>
> The good thing about this index is it does drill down on every sale,
> creating sales-pairs and then calculates an average. In your example
> of a house purchased for $1.5 million it not clear if you mean the
> sale has happened. If it is "now selling" and still on the market,
> it's not counted as only closings are counted. However, if you mean
> the sale has closed at $750,000, it certainly is included. If the
> purchase for $1.5 was one year ago, it would go into the calculation
> as a decline of 50%.
>
> You should go back and study this index in more detail.

A View on Sovereign Risk

Think about it why would one purchase a cds on a US treasury do you think if the US treasury defaulted there would be ANY counter party left to make good on the trade. It makes much more sense to buy a south sea island if you want to hedge against the end of the world as you know it.

On May 18 06:52 PM wheelbarrelsofcash wrote:

> So how does the US only have 1.9 Trillion of net CDS exposure? Seems
> very low when one considers the expansion of the Treasuries balance
> sheet by 1 trillion USD and the reported 9 trillion of off balance
> sheet transactions of the Federal Reserve.

California First Time Home Buyer Affordability Surges in First Quarter

Wow from the comments it is clear that not many people think that affordability has any implications what so ever in terms of peoples home purchase decisions. I guess all of those people who sat on the sidelines during the real estate bubble and built up there savings and are now purchasing homes at 70 percent off from their prices of 3 years ago and less than half of replacement costs with long term mortgage rates at the lowest levels in 50 years are really dumb. I mean only a crazy person would buy a perfectly good home with a mortgage payment fixed for 30 years at 600 per month right

Insurance Stocks May Finally Pay Off

Excellent article, I am a long term fan of the mgmt. of FFH I recently purchased some more shares of FFH I expect that I will be sitting on a 300% profit on these shares in 5 short years if the market hardens and Prem works his usual magic. This company looks more and more likely an extremely well managed hedge fund disguised as an insurance company without the 2 and 20 vig.

Short-Selling Hedge Funds Started the Fire

If you bothered to read the article it was NAKED short selling which the author believes contributed to Lehmans demise. The game was being played daily, buy the CDS's in weak financials start selling the stock without borrowing the stock spread a few rumours... How to blow up the capitalist system for fun and profit. No credible mkt observer thinks that LEGAL shorting is not an all round good thing for creating good deep and functioning mkts. NAKED shorting and unregulated CDS' and other derivatives however are an recipie for disaster in the hands of little hedgies with a penchant for pyromania to use the authors analogy.

On May 14 12:36 PM Gardener wrote:

> Very naive to blame short sellers. Shorts kick the tires and provide
> the markets with critical information as to the health of companies.
> Enron is am excellent example. Those who don't understand how vital
> short selling is to free markets should really spend more time in
> the library than posting silly articles with childlike understanding
> of markets.

Sacramento, California: Reaching Prices Where There is Demand

Greg, Great article, I have been seeing the same sort of trends in many of the hardest hit ares of the country Phoenix ,Las Vegas, Miami etc. Investors and prudent first time homebuyers are snapping up foreclosed entry level homes at discounts of 60 to 70 percent of what they traded for 3 short years ago. The standard advice offered by the sky is falling contingent is forget buying a home they are still highly overvalued and have a lot further to fall. I strongly disagree the combination of very attractive long term mortgages plus extremely depressed pricing makes entry level home ownership a no brainer right now.

10 Highest Paid CEOs for 2008: Unbelievable

And just for the record I think he did one heck of a job for the shareholders over the last ten years better than most my entire point is he got paid very well for what he did .

10 Highest Paid CEOs for 2008: Unbelievable

I absolutely agree with you on it is the boards fault that Aubrey gets overcompensated however you are extremely naive if you think that boards have anything thing to do with shareholder democracy. Aubrey hand picked every board member and do you have any idea how much it costs to launch a proxy fight if you are interested in changing the board . If institutional shareholders started acting like owners things might change but to date nothing. The little sweet heart deal that Aubrey made with the company and his map collection would turn your stomach as well, perhaps next he will be asking the company to take some of that high priced Maui real estate he is trying to unload.


On May 05 03:12 PM Mmarrkk wrote:

> Here's where I stand: if they are truly "overcompensated", then the
> shareholders would hold the BOD's responsible. The BOD's are voted
> on by the shareholders and elected by a majority. Now, am I not correct
> in saying that a majority of shareholders VOTED FOR the BOD? So,
> that would say that the BOD has the approval of a majority of the
> shareholders. SO, if what they did is SOOOOOO bad, I would envision
> the BOD getting voted out next election. But that isn't going to
> happen because a MAJORITY OF SHAREHOLDERS AGREE WITH THEIR ACTIONS!
> And this is a majority rule situation. Heck, I can't stand the actions
> being taken by Obama, but he was elected by a majority.

10 Highest Paid CEOs for 2008: Unbelievable

You are so out to lunch Aubrey was extremely well compensated for the long term growth he generated at CHK, through previous options and bonuses granted by the board Aubrey attained life time membership in the billionaires club. Because of a combination of greed and hubris he lost those billions I will never buy shares in a company that so egregiously compensates mgmt. on a heads I win tails you lose model as CHK has done


On May 05 08:59 AM Mmarrkk wrote:

> You are so out to lunch. McClendon brokered deals for CHK that netted
> over $10 billion at a peak in the market. These deals sealed the
> prosperity for CHK stockholders for years to come. You, and many
> others, have one big problem: you look at stock price over months
> or a year. The way to judge a company and a CEO is not to look at
> the stock price over the last 12 months. That's typical MBA grad
> school crap! Look at it over the next five years. Has the companies
> assets been set up to succeed? In CHK's case, they are a dominate
> player in the U.S. natural gas industry, they hold huge acreage positions
> in all of the big growth plays, and given Aubrey's unbelievable deals
> in 2008, they have 3 companies that will be paying much of the capital
> for drilling over the next 1-2 years.
>
> Why has CHK's stock price fallen? Quite simply, look at a chart of
> natural gas prices. Do you see ANYTHING there?? Like a drop from
> $13 to #3?? Hello! Anyone in there? Of course the stock price of
> a natural gas company is going to go down when the price of their
> product crashes like that. When nat gas was $13, CHK was selling
> at $70. Now that nat gas is at $3, simple math would tell you CHK
> could be as low as $16-17. Well its higher than that. The CEO of
> CHK doesn't control the price of the commodity.
>
> Quit looking at stock performance over 3 months or 12 months. Start
> thinking long term and then start looking at the fundamentals of
> a company. Look at CHK's acreage under lease, their proven and unproven
> resources, their positions in 3 of the hottest natural resource plays
> going, their technical advantages to identify these plays well in
> advance of others, their ability to take acreage they purchased at
> $500/acre and then turn for over $20,000 per acre, while still retaining
> over 50% of the interests, and to get the buyer to carry their drilling
> costs for a year or so. Come on, didn't they teach you anything in
> grad school other than how to read a stock chart and a financial
> statement?

Buffett: I Wouldn't Buy Newspapers 'At Any Price'

market sniper I get your point but not being in the airline business is a bad thing ? Perhaps they understood it all too well. I suspect Thompson Reuters understands better than most what business they are in which is information and news distribution Thompson sold almost all of their papers almost a decade ago and have stayed ahead of the curve.


On May 04 12:47 AM Market Sniper wrote:

> Newspapers now have the same problem that the railroads did. They
> do not know what business they are really in. Newspapers are not
> in the newspaper business, they are in the information business.
> Railroads thought they were in the railroad business. They weren't,
> they were in the transportation business. Because they did not really
> know what business they were really in, you never heard of Union
> Pacific Airlines, did you?