"In that case, as one hedge fund manager was explaining to me last week, private sector creditors get devastated: because the EU and the ECB and the IMF won’t take any losses on their loans, all of the haircut, pretty much, will have to be borne by a private sector which accounts for only a fraction of the debt. So the private sector could end up with very, very little indeed."
So does this mean that the intention is to push out all the non-state sponsored/regional banks out of the market? If so, doesn't this just exacerbate the size and power issues inherent in the TBTF banks? Wow, very exciting stuff... lol.
Spanish PM Rajoy tells an audience he has "strong reasons" to believe EMU's issues will be resolved soon. "We need to give up more sovereignty," he says calling for EU fiscal union and member states to cede some control of fiscal policy. "We may have lived a little above our means ... those who criticize us lent the cheap money." [View news story]
absolute political rhetoric. easy to say this bulls$#@ when you're back's to the floor. and what the hell does he mean by the last sentence "... lent us the cheap money"?? pure and meaningless statement all in all, imho.
I disagree with your "few incidents at they've had" comment, Jeremy. Your comment actually misses the point of the article. This is truly a systemic/cultural problem at the firm (at many Ibanks actually). This recent example is perhaps the most egregious example. When a research analyst issues a negative outlook and that in turn is distributed to select clients, there are literally hundreds if not thousands of people involved. Senior management sure knows. So do the heads of research, investment banking, and sales and trading. And everyone underneath them who is involved in the deal is complicit as well. Investment bankers revealing it to select clients on the roadshow AND withholding it from other participants in the offering. Research by not disseminating it to public and revealing it to their select "in-the-know" clients. Salespeople and sales traders disseminating it to their select clients. And the brokers who have institutional money or even perhaps to select high net worth clients. So this is a huge deal, not just a rogue broker operating without regard to morality or the law. Like WORDS above states, this is a huge fault of the firm and its culture. Cheers!
With Prices Still Low, Homebuilders Will Rise [View article]
Taojaxx, Households does NOT equal ownership. It includes renters -- it is simply the number of families, or % change wise, the number of new families. If you extrapolate the data and multiply it by the average family size of 2.58, then it suggests 306 million people live in family owned homes, almost the entirety of the US population which we know is not true. However, the proof will be in the pudding. At least the people speculating one way or the other will realize the economic reality at some point. Cheers!
I appreciate your analysis, Chris. But how did you calculate your earnings decrease %s? In my experience, if I have one dollar and lose the entire thing, then I've lost 100%. Anything less and it's less than 100%. As an aside, then most troubling thing about this company is a certifiable plan to fully fund their pension obligations. I can't believe regulatory authorities didn't address this when it was problematic back in the '90s.
Netflix: With Hyper-Growth Gone, Investors Flee [View article]
Good point on the global expansion. It would seem to me they have pretty much saturated the American market -- meaning that growth opportunities are limited. Wouldn't global expansion be an easy way to cover up any erosion in mature markets? thanks!
Spain sells €3.2B of 12 and 18-month bills, the 12-month paper priced to yield 2.62% vs. 1.4% one month ago, and the 18-month 3.11% from 1.71% a month ago. The auction beat hopes for €3B in sales - as good as any of an excuse to buy sharply sold-off Spanish shares. Madrid +0.8%. [View news story]
This entire piece of news is a joke. If I'm not mistaken, the ECB is participating in these deals with a senior position over the private sector. They can thereby manipulate demand and amounts sold (and rates to a less extent) in all these deals. It's a sad state of affairs we've arrived at when governments in all developed countries become complicit in the unbridled manipulation of every aspect of the economy. It's rigged I tell ya, rigged! :=0
Back-Testing: Trading Google Options Pre-Earnings [View article]
Good stuff Jason! Quick question, I assume these were short-term options, maybe the next expiry date in duration? Based on your knowledge, how would these trades perform if using longer term options where theta isn't as big a factor and IV possibly doesn't move as much? Thanks!
The Right Decision Is For Greece To Finally Default [View article]
"So if a major US state is irresponsible and defaults on their munis, we should do what ? Bail them out ?"
Yes, that is exactly the precedent for "too large to fail states/cities" in the past. New York was bailed out in the early 80s to the tune of billions on the unknowing American taxpayer.
The Right Decision Is For Greece To Finally Default [View article]
"...do Germany and the European Union also bear responsibility for allowing the situation to go unchecked for so long and spiral out of control before finally doing something about it? Absolutely."
Good points, although I'm not sure all the facts are known to substantiate the statement above. If I'm not mistaken, the large investment banks (ie. Goldman, Merrill Lynch, Morgan Stanley, et al) were complicit in helping the Greeks issue debt/raise funds and hide/keep it off the balance sheet. I'm not completely up-to-date on all the details, but it's simply amazing that there is not more action being taken against the banks for their role in pushing some of these countries to the brink through knowingly deceptive and fraudulent reporting practices. However, more to your point, there clearly lacks a de facto centralized authority to oversee and audit the finances so that these kinds of shenanigans don't take place. Thanks for the info! Man, would I love to short some drachmas!!!
CMSA Tipping Its Hand Over General Growth Properties [View article]
I think what he means is... the original CMBS loans to GGP didn't contemplate the claims on the affiliates' assets by lenders to the downstream affiliates in event of a bankruptcy. In other words, lenders of the affiliate companies were contemplated as subordinate to even non-recourse lenders of GGP, so the CMBS lenders perceived a claim on assets that took priority over the downstream lenders. However, inclusion of the affiliates in GGP's bankruptcy at a quasi holding company level would essentially introduce a larger group of lenders with claims on the same amount of assets (because the assets of the downstream affiliates were contemplated at the holding company level whereas those lenders' claims were not). So this is how the assets are suddenly over collateralized/ overly encumbered.
Eight Reasons Bank of America Is Going to $20 [View article]
My biggest problem with this article and Jason's take on BAC is (1) there are no numbers/analysis provided to substantiate a $20 stock price and (2) the fact that he just sold his position based on a new data point that he cited on RealMoney. For me, it all goes back to the holding period he cited, which was one year (ie. long-term). It's one thing to cite your rationale and trade off it. It's quite another to say you're going to hold if for a year and then, upon a new revelation (which wasn't anything too surprising, or surely should have been included in a rational appraisal of the company based on info already available and potential risks to BAC equity holders in this environment), and dumping the stock. This essentially invalidates all the points you use to justify your thesis for buying the stock in the first place. Flipflopping so quickly is quite reminiscent of addict behavior. In any event, nice trade...
The Eurozone's Terrible Mistake [View article]
So does this mean that the intention is to push out all the non-state sponsored/regional banks out of the market? If so, doesn't this just exacerbate the size and power issues inherent in the TBTF banks? Wow, very exciting stuff... lol.
U.S. Banking System In Trouble? [View article]
My question is, if our nation quits "socializing losses", would your outlook possibly change?
Also, are you placing your faith behind analysts' estimates? Cause Bove sure has lost a lot of money for his followers in the last 1+ years.
Cheers and happy Saturday!!
Spanish PM Rajoy tells an audience he has "strong reasons" to believe EMU's issues will be resolved soon. "We need to give up more sovereignty," he says calling for EU fiscal union and member states to cede some control of fiscal policy. "We may have lived a little above our means ... those who criticize us lent the cheap money." [View news story]
Morgan Stanley Governance Issue [View article]
Cheers!
With Prices Still Low, Homebuilders Will Rise [View article]
Households does NOT equal ownership. It includes renters -- it is simply the number of families, or % change wise, the number of new families. If you extrapolate the data and multiply it by the average family size of 2.58, then it suggests 306 million people live in family owned homes, almost the entirety of the US population which we know is not true.
However, the proof will be in the pudding. At least the people speculating one way or the other will realize the economic reality at some point.
Cheers!
GM Could Sink Another 15% By 2013 [View article]
Netflix: With Hyper-Growth Gone, Investors Flee [View article]
Spain sells €3.2B of 12 and 18-month bills, the 12-month paper priced to yield 2.62% vs. 1.4% one month ago, and the 18-month 3.11% from 1.71% a month ago. The auction beat hopes for €3B in sales - as good as any of an excuse to buy sharply sold-off Spanish shares. Madrid +0.8%. [View news story]
Back-Testing: Trading Google Options Pre-Earnings [View article]
Quick question, I assume these were short-term options, maybe the next expiry date in duration? Based on your knowledge, how would these trades perform if using longer term options where theta isn't as big a factor and IV possibly doesn't move as much?
Thanks!
The Right Decision Is For Greece To Finally Default [View article]
we should do what ? Bail them out ?"
Yes, that is exactly the precedent for "too large to fail states/cities" in the past. New York was bailed out in the early 80s to the tune of billions on the unknowing American taxpayer.
The Right Decision Is For Greece To Finally Default [View article]
The Right Decision Is For Greece To Finally Default [View article]
Good points, although I'm not sure all the facts are known to substantiate the statement above. If I'm not mistaken, the large investment banks (ie. Goldman, Merrill Lynch, Morgan Stanley, et al) were complicit in helping the Greeks issue debt/raise funds and hide/keep it off the balance sheet. I'm not completely up-to-date on all the details, but it's simply amazing that there is not more action being taken against the banks for their role in pushing some of these countries to the brink through knowingly deceptive and fraudulent reporting practices. However, more to your point, there clearly lacks a de facto centralized authority to oversee and audit the finances so that these kinds of shenanigans don't take place. Thanks for the info!
Man, would I love to short some drachmas!!!
CMSA Tipping Its Hand Over General Growth Properties [View article]
Eight Reasons Bank of America Is Going to $20 [View article]