seekingnormalcy

Is Dubai's Default a Black Swan Event?

Hmmm .. crispy aromatic black swan anyone?

Why a Market Crash Doesn’t Matter

1) 9 years price and EPS growth data
2) 20 years S&P average PE
ummm... why?
3) No one can predict markets ...
... but everybody can predict earnings?
4) What the market does shouldn't matter ...
... and why not? Billions of people are affected by market movements on commodity prices such as rice, oil, sugar, wheat, corn, etc.

You are obviously a rich fellow and perhaps a tad out of touch!

Whitney Gets Bearish: Will She Be Right Again?

I think your C chart speaks more than you think. Relative to where it was, the past few months has NOT been a rally - it's been a dead cat bounce. The flatliner that was the dow after the depression only looks that way relative to the pre-depression and post-reflation dow charts. If you look carefully, there were plenty of fortunes made within the flatline period.

By the way, I don't think it's inconsistent to hold C and also be a fan of Meredith. Given the dilution, C will have to make a lot more money than it ever did to look like a value play. In the current framework, that might be structurally impossible. As a result, the trade is binary - fail or not fail. C is a very liquid stock. To have people come out with very strong positive and negative opinions on the stock means great trading opportunities. Trade on!

Discretion and Financial Regulation: Always Doing the Wrong Thing

Regulate during good times: Big brother
Regulate during bad times: Traitor

I hate regulation but not as much as self-regulation.

How Bloomberg Fabricates U.S. Housing Numbers

3Q08 18.8m
4Q08 19m record
1Q09 18.95m new record

4Q08's rounded up 19m could have been anything between 18.81m and 18.94m. Don't see the problem.

On track to foreclose 5m and sell 1.5m
1) These are presumably "on track" for 2009. Why would they be added to 2008?
2) Whatever net foreclosures ocurred in 2008 would already be in the "empty" numbers.
3) Whether foreclosed but rented to previous (and unfortunate) owners is classified as empty is a good question to ask too.

Perhaps you should check the methodology of the sources Bloomberg quoted before making these assertions. You might also want to be more rigorous in your approach.

Not saying you're wrong but that your saying it wrong!

The Unsustainability of Debt-to-Equity Conversion

Depends on how they define "loan book" (does it exclude all defaulted debt?) and "mark down" (marking to market of a performing asset that will be held to maturity?). If not, then if e.g. 20% of the book's been marked to zero, the remainder has only been marked down by 38%.

John Carney notes one reaction from analysts to Goldman Sachs' (GS) earnings call - they don't think the bank is levered up enough - and cites CFO David Viniar's reasons Goldman has idle capital: market risk, regulatory risk and unwilling sellers.

Momentum analysts! Makes me feel sick.

Meredith Whitney's Goldman Sachs Call: A Little Late?

Interesting - I've had the same thoughts re: GS (i.e. so, the rest of the banks are below average?). Having said that, it could merely be wishful thinking as I'd hate to be labelled stupid (relatively stupid compared to a GS employee.


On Jul 14 07:35 AM Schweizer wrote:

> MW is a bear and got a better price to short the market with this
> bull trap move Monday. Well played Meredith.
>
> GS is also setting up to be the next Enron, and will be dissolved
> before this is all over with. Banksters of the worst kind. Just watch.

U.S. Deficit Tops $1 Trillion. What's the Big Deal?

In the old days (post WWII), the US had to lend money (soft loans) to kick start the old and beaten dog's (rest of the world) manufacturing. Otherwise, it would have no counterparty to deal with. Similarly, today - like it or not - the world will have to lend money to the US.

It's quite clear that a new order will form over the next decade or so. But that does not mean that the U$ and/or the USA is a basket case or will slip into oblivion. Why? The countries that formed the world order (that the US took over from post WWII) are still in existence and have had plenty of fun (and bad times) over the last 5-6 decades.

Random Walk Down What Is Definitely Not Wall Street

Ha ha - natural reaction to the uncertain times. This webpage is cathartic. Incidentally, do you think there'll be an oversupply of peanuts?

On Jul 14 01:46 PM handoverfist. wrote:

> you people are all nuts

Digging Deeper into Historical Market Data 1871-2009

Sigh - you could also take a look at the 80 year dow and conjecture there's going to be a +50% move over the next 2 years followed by a fall to oblivion as the (by then) 20 year (apparent) head and shoulders formation completes itself. It's a sign of my despair that I'm actually glancing at charts.

Random Walk Down What Is Definitely Not Wall Street

Heh heh. Thailand circa 1998 through 2005. The difference this time is we'll get help from ... umm ... outer space? The world's been through this before and every time vested interests (one more run and this time I'll stash all the money in a tin can under my mattress ...) will rely on the good old "caveat emptor" to assuage their conscience. Hmm ... didn't the roman empire decline because of lead poisoning?

The Looming Black Cloud of Government Debt

Stimulus
It is the month of August, on the shores of the Black Sea. It is raining, and the little town appears deserted. It is a tough time, people are in debt and everybody lives on credit.
Suddenly, a rich tourist comes to town. He enters the only hotel, lays a 100 Euro note on the reception counter and heads upstairs to select a room for the night.
The hotel proprietor takes the 100 Euro note and runs off to pay his debt to the butcher.
The butcher takes the 100 Euro note and speeds off to the pig famer to repay his debt.
The pig farmer takes the 100 Euro note and settles his feed and fuel supplier credit.
The feed and fuel supplier takes the 100 Euro note and runs to pay his debt to the town's prostitute who, in these hard times, has been providing her "services" on credit.
The hooker runs to the hotel and pays off her room charges.
The hotel proprietor then lays the 100 Euro note back on the counter so that the rich tourist will not suspect anything.
At that moment, the rich tourist comes down from inspecting the rooms, takes his 100 Euro note and leaves town as he didn't like any of the rooms.
No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism…
And that, ladies and gentlemen, is how the United States Government is doing business today and the main reason the rest of the world is messed up!

Bank of America raises its rating on Motorola (MOT) to Buy from Neutral, with a new price target of $9 vs. $7. Shares +3.8%.

MOT's been back before. Remember when they'd been all but written off in 02/03? Price was at similar levels if I recall correctly. Having said that, the CEO was all over the place talking about their handset rollouts (9 in 1 quarter alone if I recall correctly). I guess the question now is ... at current prices, are we getting the non handset business REALLY cheap?

CBL's Brief and Painful Stay on Goldman Sachs' Conviction Buy List

Whipsaw! I'm glad I haven't had a similar experience in all my years as an analyst.

It is unusual that his RNAV didn't change between March and June. RNAV is the net realisable value of a company assuming the disposal of assets based on any available information of achieved prices for similar assets in comparable locations. As a result, it changes from quarter to quarter (really depending on how much work the analyst wants to do). The analyst should build this RNAV data going back in time in order to build a historical P/RNAV chart. Using historical precedence, the analyst is then able to give the market an idea of how the stock might trade during e.g. a recession / financial crisis. His price target should be based on a forecast RNAV i.e. RNAV based on expected prices in 12 months time less disposal costs. If he's very sophisticated, he might even be able to apply the appropriate RNAV discount based on whether he feels the economy will be recessionary or expansionary in 12 months time.

I didn't see any of that metholody in the excerpts you provide which suggests this analyst might have been inexperienced (didn't know how to analyse the sector) or lazy (didn't bother to do the work - i.e. winging it) which would explain why he panicked and got whipsawed (if you don't know what something is intrinsically worth, you will easily panic when faced with market gyrations).