liongterm investor's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/238510/comments http://seekingalpha.com/article/114588-how-safe-is-ken-lewis?source=feed#comment-354606 354606 Tue, 13 Jan 2009 12:45:44 -0500 http://seekingalpha.com/article/95356-the-1-7-billion-payday-how-bill-gross-made-a-killing-on-the-bailout?source=feed#comment-254143 254143
The Treasury should have offered the debt holders 20 cents on the dollar along with diluting the shareholders 5 to 1. This was in no way a bailout of the shareholders, but a bailout of sophisticated debt investors that understood how to game the system. This includes the US Treasury who protected their own ability to access capital cheaply.]]> Sun, 14 Sep 2008 13:15:21 -0400
The Treasury should have offered the debt holders 20 cents on the dollar along with diluting the shareholders 5 to 1. This was in no way a bailout of the shareholders, but a bailout of sophisticated debt investors that understood how to game the system. This includes the US Treasury who protected their own ability to access capital cheaply.]]> http://seekingalpha.com/article/95047-bailouts-slope-slippery-and-expensive?source=feed#comment-251806 251806 Thu, 11 Sep 2008 13:44:11 -0400 http://seekingalpha.com/article/94189-rescuing-frannie?source=feed#comment-246864 246864
If these companies are in fact really owned by the government, then buy out the equity holders at the full value they held before the housing bubble collapsed along with the debt holders.

It appears that the way that this is happening, there will be little market discipline to the "bond investors", therefore they will be willing to try again soon with some other creative financial products that the government will have to bail out.

I need to have Gross teach me how to game the system.
]]> Sat, 06 Sep 2008 10:21:08 -0400
If these companies are in fact really owned by the government, then buy out the equity holders at the full value they held before the housing bubble collapsed along with the debt holders.

It appears that the way that this is happening, there will be little market discipline to the "bond investors", therefore they will be willing to try again soon with some other creative financial products that the government will have to bail out.

I need to have Gross teach me how to game the system.
]]> http://seekingalpha.com/article/94095-bill-gross-pick-me-pick-me?source=feed#comment-246212 246212
However, when an investors buy DEBT, they also assumes risk - whether an individual, a large bond fund or even foreign countries in the case of FRE and FNM.

IMO coming to the rescue of Gross and other holders of
the debt is a worse moral hazard than saving the shareholders. After all, it was the debt markets that exhibited the risky behavior. I suspect that most of the FNM and FRE shareholders held the stock because they thought it was a conservative investment. The big traders of debt knew what they were doing and deserve to go down with the ship, right along with the holders of the equity if those companies fail. Otherwise the debt traders, now free of any pain and with some assurances that they will be held harmless in the future, will once again resort to the risky behavior that got them into trouble in the first place.]]> Fri, 05 Sep 2008 11:00:00 -0400
However, when an investors buy DEBT, they also assumes risk - whether an individual, a large bond fund or even foreign countries in the case of FRE and FNM.

IMO coming to the rescue of Gross and other holders of
the debt is a worse moral hazard than saving the shareholders. After all, it was the debt markets that exhibited the risky behavior. I suspect that most of the FNM and FRE shareholders held the stock because they thought it was a conservative investment. The big traders of debt knew what they were doing and deserve to go down with the ship, right along with the holders of the equity if those companies fail. Otherwise the debt traders, now free of any pain and with some assurances that they will be held harmless in the future, will once again resort to the risky behavior that got them into trouble in the first place.]]> http://seekingalpha.com/article/89203-obama-wants-to-robin-hood-exxon?source=feed#comment-223394 223394 Tue, 05 Aug 2008 15:09:41 -0400 http://seekingalpha.com/article/89080-auto-sales-are-cause-for-optimism?source=feed#comment-223084 223084
GM car sales in the US would likely drop by another 30% or so. IMO this is why GM will struggle harder than most companies to avoid bankruptcy. Maybe they will ultimately find it necessary. If they do, they will return as a much smaller company, at least in the USA. I do not believe that the willingness to do that is in their coporate culture gene pool.]]> Tue, 05 Aug 2008 10:12:16 -0400
GM car sales in the US would likely drop by another 30% or so. IMO this is why GM will struggle harder than most companies to avoid bankruptcy. Maybe they will ultimately find it necessary. If they do, they will return as a much smaller company, at least in the USA. I do not believe that the willingness to do that is in their coporate culture gene pool.]]>