glassbox

123 Comments

    • ON: Sat Oct 11th 00:22 AM
      Commented on:
      Amity Shlaes: Paulson Plan Bring On Accounting Deja Vu
      The problem with mark to market and short selling and the hosts of like mechanism is that it attempts to establish a price for that asset based on the last done transaction. We all know that one sparrow does not make spring but this is exactly what is happening to the capital markets. We have allowed the proliferation of tools that has completely distorted pricing all in the name of efficiency. How else could we have have done this? I really don't know but I do agree with formerhawk that the market integrity as a efficient and optimal allocator of capital and resource (for the longer term) should be re-established. We have allowed traders and short term casino mentality to take over, to the detriment of everyone - including the same people who are proponents of this mentality.

      Casino thinking should be restricted to the casino and not get into people's 401Ks and pension.
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    • ON: Wed Oct 8th 21:56 PM
      Commented on:
      The $60 Trillion Nightmare of Credit Default Swaps
      Just declare this market illegal for those who cannot prove insurable interest. Its only good for those who need it for genuine hedging purposes and even for that - one gotta draw the line to where hedging ends and speculating starts.

      Meanwhile, I don't understand why they have done anything shut it down up till now?
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    • ON: Wed Oct 8th 21:52 PM
      Commented on:
      News Flash to BofA's Lewis: Demand Isn't Problem - Supply Is
      I think when Lewis says revenues are going to be harder to come by, he is probably referring to non-interest revenue. Banks and financial institutions have done themselves a great disservice in the last 10 years by failing to self regulate and allow certain practises to go to the extreme. I've heard many people say that they have stopped trusting bankers. Frankly, banking and financial services will still continue but the ease of asking one to part with their money is no longer going to be the same - Wall Street has lost the trust of many - including themselves.

      As for all of the rest who are here on this board spouting cynisim about Tom's analysis - let me have this to say: its precisely this cynism and high horse (I know better and you should have known better) attitude that has brought Wall Street to its knees. Prosperity is brought about by great men and women who are prepared to counter the current flavour of the day and look upwards and ahead - not backwards and down.

      Tom, I'm an optimist by nature and do hope that things will recover. I'm sure it will, its just we will have to go thru a lot of pain before it happens. Its about time to just take the pain (instead of keep talking about it) and move on.,...
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    • ON: Tue Oct 7th 20:04 PM
      Commented on:
      Will TARP Cover Both Ambac and MBIA?
      Fulldeck

      I did check up their debentures before. They are very very illiquid and very hard to get at. The float is small to - I believe its not even US$300MM in total isze. In fact, I was looking for bonds of bond insurers to buy earlier this year as I was concerned about dilution risk. And this led me to realise that the bond insurers are not funded by borrowings but rather by equity - quite a difference from all the bond and preferred offerings we have seen issued by the other financials.


      On Oct 07 09:36 AM Fulldeck wrote:

      > Tom-
      > If you're that bullish, i.e. ABK to $15, why wouldn't you rather
      > buy their 100-year debentures- AKF and AKT? That are now selling
      > at $5-ish, yielding in the 30% range, have a call value of $25, and
      > would be senior to the common in a (brrr..) bankruptcy! They have
      > the same 5-bagger potential, more safety, and pay 30% while you're
      > waiting!
      View article »
    • ON: Wed Oct 1st 15:27 PM
      Commented on:
      Does Warren Buffett Think Goldman Is More Creditworthy Than GE?
      Both deals tells u nothing about what Warren Buffett thinks of creditworthiness but it does show you that GE is likely to be much more desperate than Goldman.
      View article »
    • ON: Wed Oct 1st 02:17 AM
      Commented on:
      'No Shorts' Outperforming
      GKM, its such a stretch to call shorts pre-booked buyers. Don't you know that most shorts that stay short don't intend to 'pre book' a buy - they intend to stay that way until the company goes under.

      And by the way, the no shorting rule only applies to new short position established. Given that this rule was only announced when short interest in the market is at the peak, its really silly to even make any conclusion out of this. I will make a conclusion if the rule also applies to all who shorted before it- then, it will be fair to say what the rule has achieved.
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    • ON: Fri Sep 26th 09:32 AM
      Commented on:
      FBI Investigates Victims of the Financial Fallout
      jum92, I feel exactly like you. I've been in this capital markets for the last 18 years and gone thru a couple of other crisis - one of which is the Asian Financial crisis. The extend of unethical trading taking place these days is amazing, its even more depressing to hear that many of these traders (perhaps like monday1929 who posted before you) think that they are just being 'honest speculators'. Frankly, many of these 'honest speculators' who think they are contributing to market efficiency are just being used as pawns by those in the know to bring down a company. Its saddens mean to hear of people saying that they are 'investing' when they are shorting a stock. How can anyone use that word 'investing' and think they are building themselves a future - its complete fallacy.

      View article »
    • ON: Thu Sep 25th 07:24 AM
      Commented on:
      FBI Investigates Victims of the Financial Fallout
      Tom, thank you for putting everything into perspective so eloquently and in language people can understand. It amazes me that no one has dared say the things you are saying now. Perhaps part of the problem is that no regulator would like to say that they were wrong to start with. Certainly hope that a few good men are still around to stand up for what is right!
      View article »
    • ON: Tue Sep 23rd 20:42 PM
      Commented on:
      Paulson/Bernanke: $700 Billion at 'Hold to Maturity' Pricing
      I am not an American citizen but am interested in what is going on simply because American's financial system is so interwined in this global system that what happens there also happens to where I come from.

      I lived through the Asian crisis - right in the middle of it. Whilst small in size vs the current crisis, I am amazed at how lacking a leadership and urgency the American people and Congress has showed in dealing in this whole affair. I watched the hearing last night and it came across that most were more interested in putting blame rather than finding a solution. There is still a lot of self denial going on and intention to fix a blame rather than find a solution.

      On just looking on the various articles and comments from SA's forums, it seems like most Americans have lost hope and have turned very cynical. Yes, perhaps its right and natural to turn cynical on misdeeds of the past but with such attitude, how do you expect your regulators and leaders to act in the country's best interest. In fact, I see that many commentators likes to continue to paint a doom and gloom scenario - yes, perhaps its time America went down the drain and perhaps its constituents deserve it - not for the lack of ideas to deal with the current crisis - but for the lack of hope and respect in herself and ability to deal with it in the future and this insatiable need to keep looking back and pinning blame.

      At this rate, the US will definitely be in the Great Depression - in fact, with the attitudes I see displayed here at SA, its already here.
      View article »
    • ON: Tue Sep 23rd 12:13 PM
      Commented on:
      The Family Foresight Thought Experiment
      What held value in 1500?? We are talking about 500 years here. Real estate boomed only because of industralization and urbanization.
      View article »
    • ON: Tue Sep 23rd 11:05 AM
      Commented on:
      The Family Foresight Thought Experiment
      Hahaha... maybe you should spend the billion to send trees to the moon with enough to keep the trees alive for the next 500 years. And if we go by how we humans have the tendency to blow ourselves and environment up every now and then, perhaps some real trees from the moon may actually be worth US$5BN in 500 years time!!
      View article »
    • ON: Tue Sep 23rd 11:03 AM
      Commented on:
      The Family Foresight Thought Experiment
      I like this little puzzle - its a good distraction...:)

      I would ask the sentinel from the future to take my US$1BN to the future and leave it with a fund manager there that can give a return of at least 30% a year. I would assume she doesn't need to use her US$5BN immediately. Of course, if she thinks its not enough - then, too bad...she'll have to find the other US$4BN herself. But US$1BN should hopefully be a good start.

      Better the US$1BN in cash in the future than the devil of a financial sector today. With the current understanding of how our Wall Street smarties and regulators have screwed up the whole financial system - the $1BN today may be worth nothing 500 years later if its locked up in a bank.
      View article »
    • ON: Tue Sep 23rd 02:49 AM
      Commented on:
      Bank of America: 'Paulson Plan Benefits Mostly Goldman, Morgan'
      Can someone tell me how much Paulson has in Goldman shares and options? Am I see a massive conflict of interest here?
      View article »
    • ON: Tue Sep 23rd 00:15 AM
      Commented on:
      Ambac, MBIA: Moody's strikes again
      CDS market regulation - long long overdue!
      View article »
    • ON: Mon Sep 22nd 21:57 PM
      Commented on:
      Ambac, MBIA: Moody's strikes again
      buddhatt

      I wished SEC would have disclosure rules that require disclosure of stocks lent by longs and disclosure of shorts and where they borrowed their scrips from. This woudl minimise any opportunities to create stinking trades.
      View article »
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