Dante311

Jeremy Grantham: Reinvesting When Terrified

"...based on an assumption of a 7-year move from today’s environment back to normal conditions."

I agree that the market at some point will recover but I think that it's dangerous to use the phrase normal conditions. The market's more stabilized form of the future will look much different from the one we have seen over the last decade as regulation and the manner of doing business changes. One item that could drastically change the returns to expect could be altered philosophies on how much leverage is too much. And without the high leverage it will be more difficult to provide such high returns.

What's a Dollar Worth? More than Citi

I still remember back when everyone was spouting how great Citi was about 3-4 years ago. It is almost impossible to imagine what the future landscape of banking and finance will be as it doesn't look to include many of the banks that have been part our vernacular for so long. It really begs the question of if this sad day for some is the beginning of great opportunites for others.

GE Can't Catch a Break

"Stock prices are currently being determined by a bunch of trend-trading lunatics (and probably by a fair number of computer algorithms). Someday fundamentals will matter again...but not yet."

If this statement is true and the stock prices are completely incorrectly priced by trend traders wouldn't it be safe to say that is could indeed be vastly undervalued?

Ashamed of AIG

"2. Since the government is "80% owner of the company", it should immediately vote out all the members of the Board of Directors, put in their own directors, who should in turn, terminate and replace all top executives."

Although, I am vehemently against the whole bailout/bonues situation with AIG, I am weary of the ability for the government to replace AIG's top directors and executives. My main concern stemming form the fact that the current CEO, Edward Liddy, was appointed by the government and was the very person that has approved these bonuses in question!

Grant Thornton: Urgent Action Needed to Stem Decline of Publicly Traded Companies

"lays the blame on low cost electronic trading and increased regulation such as Sarbanes-Oxley."

This is actually not the case. They never propose that the blame should be placed on SOX. Here is a snippit from the report:

"Grant Thornton argues that the root cause of 'The Great Depression in Listings' is not Sarbanes-Oxley, as some will suggest."

Grant Thornton: Urgent Action Needed to Stem Decline of Publicly Traded Companies

One thing that I am curious about is whether or not the amount of registered companies in the US is also declining. Is it possible that firms are making trend towards staying private because of regulatory complications or possibly because of the exposure to traders? I am currently looking into this more but was interested to see if others have thought about similar rationals.

Sources: Google in Talks to Acquire Twitter

I will have to second the fact the I just don't see what all the hype about Twitter is about. I joined to try it out and have yet to see the value. It's amazing to me that someone can create such a simple product that basically already existed under facebook and be looking at $500M deals!

Geithner Regulates: After the Carrot, A Stick for Banks

I think that a broader coverage of the financial institutions whether it be banks, hedge funds, or private equity firms is a necessary step as those who wished to avoid regulation simply side stepped it by change the legal identity. I don't see why you would avoid monitoring unless you were concerned about the safety of the risks you were taking.

I also agree that fostering a environment of long-term planning in corporations and government is the right mentality to have and that those who provide for the long-term growth of the their company should be rewarded instead of those who only try to insure short term profits at the expense of future ones.

I do worry though about the costs of overseeing the entire finance industry and if it will be able to be achieved. Pay is much higher at private institutions and the ability to hire the best will stack the odds in favor of private firms. Those who know what's going on best may be more interested in staying in the private sector.

Current Financial Crisis Is a Black Swan

I also have read the book in question. I think that the overall recession/credit crisis is somewhat of a black swan when viewed from say 4 years ago. I think that although some people may have saw it coming the majority of the world did not and if they truly believed that they did they would have better prepared. Just because one can expect that certain outcomes are conceivable by the general population doesn't mean that they reasonably expected them to happen.

For the Global Credit Boom, the End Is Near

"Would things really be better if our monetary policy was limited by gold? Yes we would be more stable, but we could not have wide spread economic prosperity."

Is why spread economic prosperity followed by extreme recessions better than slow stable growth? Difficult to answer but surely there are those who have profited greatly from the volatility (up and down) in the market.

Getting Ready for... Anything

I think this market is a great example of why funds need to be balanced. Funds that would have been 100% equity without protection against market declines surely have gotten hurt the most in this bear market. It seems that a portfolio that would have had small allocation into gold and T-bills would have weathered the storm better than most. Just what comes to my mind though.

Why the Bailout Bill Alone Won't Solve the Credit Crisis

I am afraid that throwing $700,000,000,000 at the problem does not really solve it. We are talking about a credit swap market that is around 100 that size or near $70 Trillion. Huge leverage and bad decisions were made and I don't think that pumping money into the system is going to solve these fundamental problems.

I also do not see how changing mark-to-market rules will help us going forward either as the market can determine prices in a normal (possibly abnormal) context much better than a small group of individuals.