QVM Group

Tax Loss Harvesting & the 'Wash Sale' Rule

jbmaria:

You may be correct that 2X funds use derivatives, but use of options, futures and convertible securities on the security you sold do not qualify under the wash sale rule, as I understand it. You should consult your personal tax advisor if you feel that is incorrect, othewise avoid 2X funds of the same index to replace 1X funds.

Richard Shaw

Bubbly Treasuries Will Disappoint

We have published a follow-up article on our blog to respond to the sense of concern that some have expressed in the comments here.

That follow-up is located at:
www.qvmgroup.com/inves...

Richard Shaw

Dollar/Oil Reversal

The charts in this article stimulated us to take a long-term look at the Dollar-to-Oil relationship to see what degree of inverse relationship might exist.

We posted an 18-year monthly chart of West Texas Intermediate Crude with an overlay of 18-years of the US Dollar index.

www.qvmgroup.com/inves...

Sometimes there is an inverse relationship, and sometimes not.

Tax Loss Harvesting & the 'Wash Sale' Rule

jbmaria:

Cautioning that I am not a tax advisor, that you cannot rely on my comments for tax decisions (only to stimulate further tax research by you, or to help you frame questions) and that you should consult your own tax advisor, I will offer my uncertified personal view that substituting a 2X fund tracking the same index as a 1X fund you sold for a loss does not qualify under the Wash Sale Rule.

Richard Shaw

Comparing China and the Dry Baltic Index

Well that would be a BIG discrepency. I got the cargo wrong, but would not BDI indicate import of raw materials to China, and would not reduced materials imports be a proxy for reduced exports? Thanks for that important observation.

Comparing China and the Dry Baltic Index

huangthomas;

Excellent point. The question would be whether the BDI indicated reduced export and if reduced export ripples through the balance of the economy to negatively impact the sectors you listed. If China is manufacturing dominated, but their tradeable public companies are not, are those other sectors insulated. Generally, we would expect them to be inter-connected. Clearly, domestic consumption would moderate the impact for the BDI fall should not be fully translated to the other industries, but those other industries do not operate in an economically isolated environment.

Relative Performance of Asset Categories

thank you granger -- very kind of you

Aid for Chrysler: Why I'm Saying NO!

re Cerberus -- Amen to that!

Major Two Day Rally: Hold Steady

Lobster:

"As for the war, it was brought to the WTC at New York City
on 9-11-2001. Don't you forget that ever.
You rather fight it inside the USA ? Won't be good. "

Please try to keep comments relevant to the topic of the article. This has nothing to do whatsoever with the article's content, purpose or meaning.

Richard Shaw

U.S. Capital Markets Composition

China is top holder of US Treasuries, with $600 billion. That puts them about approximately at a 1/8th position in the overall outstanding treasuries.

The Q3 Treasury net issuance was $178 billion.

SIFMA projects Q4 Treasury net issuance at $388 billion, and a 2009 federal budget deficit of $688 billion (presumably to be financed with additional net Treasury issuance).

If we combine 2008 Q3, Q4 and 2009, we get $1.554 Trillion net issuance beyond the June 2008 figure of $4.7 Trillion.

That would be a 33% increase in Treasury debt, and a tall order for market absorption.

Lower Prices Now- Massive Inflation Later?

nickgogerty

That is funny. I have had a few inquiries about the potential for hyperinflation. You are apparently not alone in your thought, tongue-in-cheek or not.

Could Capital Injections Save the Auto Industry?

Interesting comment by Cerberus from Bloomberg Nov 13:

* * * *

Cerberus Capital Management LP, the buyout firm that owns Chrysler LLC, would forgo any profit from a future sale of the automaker should it receive federal financial aid.

Cerberus founder Stephen Feinberg ``has basically gone on record saying he would forfeit'' profit on a Chrysler sale in those circumstances, Nardelli said. ``This would not be supporting a private-equity company with government funds.''

* * * *
Feinberg failed to mention that while profit on cost would not be taken, the bailout might prevent Cerberus from taking a massive loss. That's taking a profit in a way. Not a profit from cost, but a profit from current value. That is public money for private gain.

We may need to bailout the enterprise, but should not bailout the leveraged buy-out owner.

Lower Prices Now- Massive Inflation Later?

We mislabeled the Yen chart and have made both a chart and label substitution on our blog.

www.qvmgroup.com/inves...

Portfolio Expectations: What a Difference a Year Makes

'70s stagflation survivor.

Thanks, and very helpful charts on your site. I recommend other readers view them.

Bye-Bye Dividends

Ronald:

The stock price would suffer, because (1) we are psychological machines, not computing machines -- fear and doubt would rise, and (2) those who bought because the need/want the cash flow would rotate out and it is not clear that others would necessarily rotate in.

Your argument is about the math equivalency of two states, which even if scientifically true, is not the way individuals and crowds think behave.

If the government said "no more dividends for bank stocks" for a while, their natural constituency for buying shares would diminish, and concern about what the government would do next would cause a level of uncertainty that is never good for prices.