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  • Move Over Fed, California's Now Printing Its Own Money  [View article]
    Too bad so many people are unhappy with the California warrants. I'll help you out and take them off your hands for 90 cents US for each one dollar warrant tendered. Any takers? No? I wonder why.
    Jul 4, 2009. 10:18 PM | Likes Like |Link to Comment
  • Move Over Fed, California's Now Printing Its Own Money  [View article]
    Too bad so many people are unhappy with the California warrants. I'll help you out and take them off your hands for 90 cents US for each one dollar warrant tendered. Any takers? No? I wonder why.
    Jul 4, 2009. 10:18 PM | Likes Like |Link to Comment
  • Is Obama Selling Military Secrets to China for Debt Forgiveness?  [View article]
    I'm amazed at the number of people who take this story seriously and not as an obvious anit-Obama political rant by some unknown paid for hire right wing hack used to boost clicks to the web site. This is pure propaganda. Notice the banner ad next to this SA post and then notice the exact same banner ad at the site in question.

    What many of you do not realize is that by believing in this kind of crude propaganda you are contributing to the instability of the US government itself and not just Obama's adminstration. There are many in the world who would be happy at this development. Don't be one of them. How about we try "United we stand, divided we fall". Think it over.
    Jun 1, 2009. 10:45 PM | 7 Likes Like |Link to Comment
  • Be Prepared for S&P to Hit 350 by June 2010  [View article]
    Ryan, My take on your analysis that you're probably reversing cause and effect here. Advanta going out of business is not going to cause small businesses going out of business, since it was small businesses going out of business that probably caused Advanta going out of business. If that is true, Advanta will not appreciably effect much in the future since the small businesses going out of business are already going out of business no matter what Advanta does, and the ones that were not going out of business have or will have other sources of credit.

    Also, in my opinion, the call that the SP is going to 350 based on this analysis is just too "out of the hat" since it implies that the SP will be trading a something like five times earnings. Now we all like to bash analysts' consensus earnings as too optimistic, but man, you've set a record here. You sound like Joe Granville. And if you're old enough to know who that is, you're old enough to be wise enough to make money by listening to the market rather than telling the market where it has to go.
    May 28, 2009. 07:33 PM | 3 Likes Like |Link to Comment
  • Does a 58-Point Increase in the Philly Fed Forecast Index Signal the End of Recession?  [View article]
    While the Philly Fed's recent six month forcast in economic activity diffusion index has increased comparably to that in early 2001, you may note that stocks continued to decline for two years after that increase in 2001. If the 2001-2003 six month economic forcast-stock market association holds, we may expect stocks to begin the next bull market when? Ummm..... according to your chart, it seems like the end of 2010.

    I'm not trying to be critical. The stock market anticipated all previous recession recoveries except the last one. We don't know yet whether that case was a one-time exception or the begining of a new pattern. Personally, I find the official dating of the 2001 recession was suspect on a number of counts (which explains the anomolous stock market relationship), but that is for another post. Interesting chart though, thanks.
    May 22, 2009. 06:17 AM | 2 Likes Like |Link to Comment
  • The SPY-IWM Unwind, and Some Holes in the Beta Bucket  [View article]
    Michael Markov wrote <For those of you who are interested I explained what had happened to RIEF in my recent blog post here:
    markovprocesses.com/blog >

    Thanks for the link. Your work looks interesting although I'm not sure why you would use MSCI EAFE alone for the proxy international exposure (which seems to me a rather gross investment index) rather than say, regional indices or ETFs. Realistically (leaving aside the US, fixed income, and commodities), I am currently long China and the Australian Dollar and neutral on Europe which I do not think is well captured in the MSCI EAFE. Indeed, I do not see how you can accurately capture a complex portfolio position using only four gross indices of any sort. But I admit I am a novice at style analysis and not well read in the area. Again, thanks.
    May 20, 2009. 09:21 PM | Likes Like |Link to Comment
  • China and Brazil to Ditch U.S. Dollar? Hardly  [View article]
    I suppose it's a technical note, but the Chinese currency is the renminbi and not the "yuan", which is actually the unit of currency of the renminbi. To the Chinese this is like calling the US currency the dime or penny. Still, saying renminbi all the time is a bit of a tongue twister I'll admit, and since we're Americans let's just call it what we want!
    May 20, 2009. 06:31 AM | 2 Likes Like |Link to Comment
  • The SPY-IWM Unwind, and Some Holes in the Beta Bucket  [View article]
    How to weight a long-short portfolio is, of course, a perennial problem: beta, volatility, dollar, sectors, matrix correlations, etc. What I find hard to believe is that some hedge funds are simply shorting high beta, long low beta stocks, which unless I've missed something here, is just a market directional play, and in this case, one that was turned out wrong. I don't get it.
    May 19, 2009. 11:16 PM | 1 Like Like |Link to Comment
  • Call Spread Bets That S&P 500 Will Rise  [View article]
    I'm not sure why this plain vanilla call spread merits attention other than the size for the July open interest is nominally large. Still the amount of maximum gain or loss is small at +65250 -84750 so this is a small trader. OptionMaster is incorrect however that this spread at SPY price 91 eliminates time premium gain, since if the 87-93 call spread expires at 91, the spread will be worth $4 vs the purchase price of $3.39. This 61 cent gain to July expiry at SPY 91 is pure time premium gain since the time premium on the 93 call is $2.61 whereas only $2 on the 87 call. In other terms, the spread holder will make money if the SPY goes up or just stays right here by July.
    May 19, 2009. 09:45 PM | Likes Like |Link to Comment
  • Major Retailers Report Poor Earnings: Why Are Their Stocks Up 60%-100%?  [View article]
    I hold long-short positions in the retail sector and the run up in ANF JCP and JWN over the last several months has been reflected in almost all retail stocks, so obviously it has nothing to do with the specifics of the companies you mention. This highlights the danger of shorting individual companies without controlling for sector or market risk which long-short strategies allows one to do. For example, I am short JCP but have made money in the rally being long other retail stocks that have gone up even more.

    The average and median forward earnings multiple of the retail sector has increased during this rally, so the upward movement in prices is reflecting some belief that retail growth will return over the next several years. Indeed, looking at analysts' earnings and sales projections for these companies indicates that most are assuming a turnaround in or by the 4th quarter of 2009.
    May 17, 2009. 10:20 AM | Likes Like |Link to Comment
  • A Wall St. Economist on the U.S. and China  [View article]
    Economist Robert Barbera noted <China may buy fewer U.S. treasuries but other buyers will emerge – just the mix of owners will change.>

    Any thought on who these "other buyers" might be; that is, when they "emerge"?
    May 16, 2009. 08:29 PM | 5 Likes Like |Link to Comment
  • How Should We Improve Seeking Alpha's Comment Rating System?  [View instapost]
    Thanks for taking time to address an issue in need of reform. I would suggest several changes.

    * SA should really put into place a commentator block feature for each user. It would really be ideal if SA could monitor all the village idiots and ban them, but this is unrealistic since there is room for SA editors to make mistakes, it is more work for SA editors, it took several months (much too long) for SA editors to take action in recent cases, and even then there was apparently no banning so we’re still stuck listening to someone who is by admission immature, malevolent and probably unbalanced. Just let people decide for themselves and be done with it. The trolls can talk to themselves or have their own followers and no one else need be bothered.

    * Just get rid of the negative but keep the positive voting choice. I have noticed that many fine, well thought out comments are receiving net negative votes, and indeed the entire comment stream on several fine articles are net negative. Obviously, there are people out there who are curmudgeons or trying to manipulate scoring. Research shows that if you want to encourage creativity in groups, ban or get rid of negativity in discussions. Although I have not commented much, I have found it very discouraging to write a well thought out comment only to find it bashed with negative comments without the negative commentators caring to comment on why they find my comment objectionable. Negative voting is an easy way out; let the curmudgeons speak if they object or they can remain unheard. Positive votes still may be tallied.

    * If you are going to rank commentators on the number of positive votes (assuming now negative voting has been banned), several modifications are in order. Obviously raw number counts are inadequate since the more frequent commentators are more likely to be the top vote getters. This does not take into account quality. Dividing the total number of positive votes by the total number of comments gives a better quality representation. However, this suffers from small sample inaccuracies so that a commentator who has made one comment but received 20 positive votes (20:1) will be judged of better rank that someone who has generated 1000 positive votes over 500 comments (2:1), whereas the latter commentator, most would agree, should be ranked higher.

    This defect could be corrected by multiplying the positive/total comment stream ratio by the square root of the total comments made by the commentator. Thus, a commentator who has commented 100 times and received 400 positive votes (4/1 ratio) would receive a score of 40 (4 times the square root of 100). This same score of 40 would be received by a commentator who received 800 positive votes over 400 comments (2/1 ratio times the square root of 400). The logic here is that short term extremely high ratios are unstable and should be discounted accordingly. Anyone below 100 total comments should just not be ranked.

    I spent about 20 minutes thinking up this plan, but if a little more time is spent I’m sure you could improve upon it or come up with something better along the same lines.

    * Mr Freddo’s point about how to increase your voting score is well taken (write that “gold is going to $5000” or “AIG executives should be imprisoned”, etc), but I do not think this requires any adjustments by SA. Personally the state of public mania about these issues gives me information, and as always, information is the most important commodity. If I don’t wish to read these commentators I can use my new SA commentator blocking feature!

    Anyway, just some feedback on a Saturday morning to a fine website. Thanks.

    May 16, 2009. 09:29 AM | 5 Likes Like |Link to Comment
  • Zero Shorts: Beware 'Free Money'  [View article]
    Cicco wrote <I was able to find 500.000 shares to short GM. Why shouldn't I? I'm selling 500.000 shares at 1.19 and selling 5.000 (500.000 shares) Put options June Strike 2.00, Price 1.36. I've margins large enough for a X3, why not do it, company will be BK in 30 days>

    It looks like your trade will make about $80K at GM zero. With protection of the long 2 strike june call at .10, you still will make $30K. Without the long calls however your position risk is unlimited and you could blow out on a freak occurance.

    I've been on Wall st quite a while. I've known quite a number of millionares in the morning who were broke by the afternoon because they took unlimited risks for "sure things". Pretty much the same thing happened to Long Term Capital which should have known better. 99 times out of 100 you'll be right. But when you're wrong (and you will be wrong in the long run) it'll be your last trade.
    May 14, 2009. 09:11 PM | 1 Like Like |Link to Comment
  • Meredith Whitney Quitting Oppenheimer Shows Contrarian Indicators Still Work  [View article]
    Cetin wrote <Why do ppl keep flaming me?>

    If you are serious and want my advice: First, show respect to all people even those you don't like or think can't think. This is the golden rule and it works pretty well for most folks. Second, don't comment so much that its seems like spam or junk email. I find it irritating and I suspect others do as well. I get your points; you don't have to repeat the same thing day after day on every person's post. Third, if you do comment, make it more substantive and backed up with reasoning and facts. Not everyone who is "flaming" you disagrees with you. Rather it is the simplistic manner in which you post. Four, don't go on about your being the smartest or wisest person in the world. Maybe you are but humility works wonders.

    And speaking of that, perhaps I am wrong about all this, as I am not perfect either. But you asked for an opinion.
    May 12, 2009. 09:53 PM | 4 Likes Like |Link to Comment
  • Meredith Whitney Quitting Oppenheimer Shows Contrarian Indicators Still Work  [View article]
    Cetin Hakimoglu wrote <She's [Meredith Whitney] also way too young. Only 38. She needs to settle down and stop trying to get ahead. >

    Cetin, Let me get this right. Research on the internet I believe will show you are approximately 26-27, live with your mother who supports you, have no job other than posting about 30-40 comments on SA a day to extreme negative ratings, have been banned on other websites for abusive comments, have removed all your previous posts on other sites recommending the purchase of GOOG at over $700 a share a year or so ago, and yet you have the audacity to criticize a woman for honorably and well carrying our her professional responsibilities? Have you no shame? Are you autistic?
    May 12, 2009. 07:45 PM | 10 Likes Like |Link to Comment