Send Message
View as an RSS Feed
  • Looking At The Bond Markets: Growing Weaknesses?  [View article]
    I spent 25 years on fixed income management and never saw the "spread" between Treasuries and corporates measured as a ratio. It was always measured as the difference in the 2 yields measured in basis points. I had to do a double take on the yield ratio comment. Things must have changed since I retired a couple of years ago!
    Oct 14, 2015. 11:13 AM | 1 Like Like |Link to Comment
  • CPI, Housing Prices, and the Great Stagflation  [View article]
    Try telling the 8.5mm people thrown out of jobs during your boom times in 2008-2010, that it wasn't a recession. Also, is the GDP deflator (for personal consumption) calculated in a similar manner as the CPI?
    Dec 20, 2011. 05:00 PM | Likes Like |Link to Comment
  • A Deflationist's Nightmare  [View article]
    This is a bit late.... The analysis stumbles on the issue of rising credit risk causing investors to want a bigger risk premium. Yes, in a steady state this is true. A deflation is not steady state, just look back at the last time the US suffered deflation back in the Great Depression. Credit was not available, in fact banks were calling loans. Asset prices deflated and interest rates fell. Interest rate spreads may well have increased (mainly for corporates).
    Sep 24, 2011. 11:49 AM | Likes Like |Link to Comment
  • So Where Did All That QE Money Actually Go?  [View article]
    I agree with MikeZZ that the intent of QE2 (at least) was to boost asset prices. Getting banks to lend would have happened if the increase in asset prices caused investors to invest in productive assets - plant and equipment.
    However, I find it hard to imagine that the foreign banks had the wherewith all (cash) in the first place, to buy the $600mm worth of new Treasuries and then turn around and sell them to the Fed. More likely, they would have had to sell other assets to raise the cash. So there would have been other changes in their balance sheets to reflect this. There has been no discussion about the rest of their balance sheet changes.
    Also, it's not clear to me how the foreign banks would have been able to shore up the parents' balance sheet and keep the cash on hand on their foreign subs' books (in the US).
    Call me skeptical; I think there are some holes in the ZH story.
    Jun 14, 2011. 01:20 PM | Likes Like |Link to Comment
  • Why Imposing Oil Position Limits Is a Big Mistake  [View article]
    Curiously, comparing a price chart of crude oil against the net number of long/short contracts of the non commercial big specs, shows no correlation whatsoever. So, what's the fuss? Showing this evidence to a class of stats 101 students would leave them scratching their heads.
    There are markets that do have positive correlations, but not here.
    Perhaps the issue is that the composition of the large non commercials is incomplete? If this has some baring on the matter, why can't someone show it?
    Jan 20, 2010. 10:08 AM | 2 Likes Like |Link to Comment
  • Citi's TARP Convert and Chrysler's Indiana Bond Holders  [View article]
    Surely if the GSEs' stocks might one day have some value, Citi's might too?
    Jun 11, 2009. 12:25 PM | Likes Like |Link to Comment
  • 45 Cheap Repurchasers of Stock  [View article]
    With a screen of 0.4x D/E, how do the financials make the list? Maybe the screen picks up only LTD?
    May 18, 2009. 10:45 AM | 1 Like Like |Link to Comment
  • The Strange Death of American Capitalism: A Review of 'Bailout Nation' by Barry Ritholtz  [View article]
    Penn Central was a 1970 bailout and Lockheed followed the next year. The 70's were an active bailout period, which included NYC.
    May 18, 2009. 09:28 AM | 1 Like Like |Link to Comment
  • What's Behind the Sell-Off in USD/CAD?  [View article]
    The Loonie bounced higher the same day the Opposition leader announced his party would support the Government's Budget. Reduced political turmoil=stronger currency.
    Jan 31, 2009. 08:28 AM | Likes Like |Link to Comment
  • Review of "100 Years of Corporate Bond Returns Revisited"  [View article]
    Perhaps the favourable Treasuries' return of the 25 years ending in 2005 may have something to do with with Volker's successful attack on inflation in the early '80's which saw Treasuries peak near 14%. The subsequent rate decline created much in the way of capital gains.

    Current Treasury rates are "good" only in the sense that we may be facing a financial armageddon. If we muddle through, today's rates may cause investors much distress. GNMA's would be relatively better investments in this case, as spreads would likely narrow.
    Dec 5, 2008. 09:37 AM | 2 Likes Like |Link to Comment
  • The Ag Industry: Another Credit Crisis Casualty?  [View article]
    Farming is all about commodities. Fertilizer is a commodity too. The recent price spike reflects that. When the fertilizer companies see reduced demand, fertilizer prices will decline, just like food prices have. This decline in input prices will help cushion farmers and reduce their required financing needs.But it will be awhile before banks extend credit.
    Dec 1, 2008. 01:39 PM | Likes Like |Link to Comment
  • Lehman's CDS Mess: Who's on the Hook?  [View article]
    The DTCC knows how much the money flows will be on Oct 21, and I assume they know the names attached to these flows. It's surprising this list hasn't been leaked out yet.
    Oct 19, 2008. 12:35 PM | Likes Like |Link to Comment
  • Bond Expert: Tuesday Wrap  [View article]
    How well are Fanny/Freddie doing with respect to their $225B rollover by month end? Has recent activity been essentially very short term in nature? And finally, what's the rollover need for Q4?
    Sep 3, 2008. 11:42 AM | Likes Like |Link to Comment
  • Homebuilder Bankruptcies: Who Might Be Next?  [View article]
    maeve3333 has what one would say, is an "interesting question", for poretz. I'd love to see his answer.
    Aug 5, 2008. 11:43 PM | Likes Like |Link to Comment
  • The Beginning of the End of the Credit Crisis?  [View article]
    Yes, the market is probably just taking a rest awaiting the next shoe to drop. Will the banks suffer real loan write-offs? And what about the increase in ABX prices; will they hold and inspire mark-to-market write-ups. What an unnerving spectacle that would be.
    May 15, 2008. 09:51 AM | Likes Like |Link to Comment