mahoney

Financial Blog Watch: Don't Believe Everything You Read

Excellent discussion of arbitrage, and a welcome critique of the critiques. Surely TD and Denninger will be the first to admit if/when they are wrong, or else logically demonstrate why they are not.

As for the ETF-underlying arbitrage, it seems you are right: as long as the two assets are fungible by virtue of the instruments themselves, then the arbitrage risk is independent of their market valuations.

I don't find the ETF "funding efficiency" theory particularly clear, however. But I'm just learning here. :-)

As an Investment, Gold's Just a Brick

That said, I share the prevailing scepticism about TIPS. Might make more sense to go for something like WIP and at least diversify across different governments' inflation data.

As an Investment, Gold's Just a Brick

I am glad somebody is making the bear case for gold. For all the gold fetish I see on SA, I still can't help but see gold as just another asset, whose relative valuation fluctuates just like the rest of 'em. Whether you measure the values of things against gold as your standard or whether you use some other standard like, say, the dollar, is irrelevant. All I care about is the relative valuation. And any prudent investor has to be aware of the downside. So again, thanks for the bear case.

Trade Wars Brewing: Those Pesky Canadians

Where is NAFTA in all this? Are there measures even legal?

Zero Hedge Exclusive: Whistleblower's Fight with Deutsche Bank over Definition of Risk

Eliot Spitzer would be qualified, and appears to be looking for the job:

www.slate.com/id/2213942/
www.ritholtz.com/blog/.../


On May 12 07:24 AM doubleguns wrote:

> Our entire financial system needs a good "special prosecutor" but
> unfortunately our politicians are so deeply involved with these very
> same banks through campaign contributions it wont happen.

Time to Forsake Stocks for Bonds? Arnott and Arends Square Off

Mad Hedge Fund,

I'm also taking a hard look at TBT, but my worry is that the Fed is going to keep buying up Treasuries as part of their quantitative easing strategy. Wouldn't that keep the Treasury bond prices high (at the expense of the US dollar)? Does anyone have any thoughts on this?

An Investor's Guide to Corporate Bonds

Thanks for the primer. The big risk that is keeping me away from bonds right now is that with all these aggressive central bank moves, inflation seems unavoidable.

Should Investors Forget About Equities for Now?

Roger i think you may have misunderstood my previous comment. I'm agreeing with you that it's a bad time to buy bonds. I was just further pointing out that the chart that was being used to push bonds, actually makes stocks look more attractive than bonds. For the record i think both bonds and stocks are headed south from here.

Big vs. Little: Bigger Banks Aren't Better

Brilliant brilliant brilliant. You hit the nail on the head.

Should Investors Forget About Equities for Now?

Doesn't that top chart just say that we should switch to bonds and walk out along that little blue line from each stock market top? Rather self-evident. The real question is whether those straight blue lines would look so good if they left from the bottoms or the midway points between tops and bottoms. If you do that, this chart makes the case for stocks, not bonds. Or am I missing something?

We Need to Break the Banks

Good article. The financial crisis would have been much attenuated if the investment banks weren't 'too big to fail.' No bank should be allowed to achieve that status again.

Quantitative Easing: Money Supply Is Actually Decreasing

Thanks for this article. Everyone seems to merely assume there has been a net increase in the money supply without any reference to the massive destruction of money (credit) that has been taking place. It's hard to know which way the tide is going, but nice to see someone is pointing to both sides of the equation.

Is It Time to Short Bonds?

I like TBT too. The way I see it, we are either going to see deflation or major inflation over the next few years. It seems to me that TBT wins in either case. Deflation compounds US government debt, which diminishes the credit-worthiness of T-Bills. Inflation, on the other hand, makes the puny yield on T-Bills unattractive. Either way the 30-year bond looks overpriced. I am by no means confident about this analysis, however, and I would appreciate any commentary, especially with regards to the deflationary scenario.

Berkshire Hathaway Down Nine Days in a Row

It seems a little odd to start a post with "no offense to the author" and end in "DUH!!!"

GM in the Global Dow - What Gives?

"BTW: There are plenty of interesting things you could do with a bailout. What if we put in place eco/energy conditions—not minor CAFE standard stuff, but conditions that would create a Manhattan project for improving fuel efficiency in the U.S. auto industry? What if we gave the auto industry cash but required a massive investment in natural gas-powered cars, or required a complete conversion to a hybrid fleet?"

I think that is the way to go. Consider it a New Deal-type project, a long-term investment to help produce a foundation for an industry likely to thrive 10-15 years down the road. The only question is whether GM (and Ford) can last long enough to return to profitability.