Reclined's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/95267/comments http://seekingalpha.com/article/136622-when-private-equity-funds-try-to-get-around-bank-ownership-rules?source=feed#comment-496948 496948 Sat, 09 May 2009 15:22:47 -0400 http://seekingalpha.com/article/133506-peak-oil-as-a-function-of-earth-s-volume?source=feed#comment-480519 480519
Also, in the beginning it should probably read cubic kilometers as a measure of volume.]]> Tue, 28 Apr 2009 08:40:44 -0400
Also, in the beginning it should probably read cubic kilometers as a measure of volume.]]> http://seekingalpha.com/article/129006-the-aig-bank-counterparty-scandal-escalates?source=feed#comment-448911 448911
"I understand the importance of honoring foreign obligations BECAUSE OF THE NEED FOR US TO CONTINUE TO RECEIVE A FLOW OF FOREIGN INVESTMENT."

So is he telling us that it's not important to honor contracts for their own sake? It is the basis of functioning capitalism. It would be much better to let the courts deal with it in an orderly and impartial manner.]]> Thu, 02 Apr 2009 07:23:19 -0400
"I understand the importance of honoring foreign obligations BECAUSE OF THE NEED FOR US TO CONTINUE TO RECEIVE A FLOW OF FOREIGN INVESTMENT."

So is he telling us that it's not important to honor contracts for their own sake? It is the basis of functioning capitalism. It would be much better to let the courts deal with it in an orderly and impartial manner.]]> http://seekingalpha.com/article/126959-the-latest-bad-idea-government-sponsored-vouchers-for-car-purchases?source=feed#comment-434170 434170
you wrote "Germany has been doing the voucher deal on cars since last Fall. From what I read, it only applies to German made cars."

The second part is not true. The deal applied to all cars (starting this year). It actually made foreign car sales increase from around 30% share to 50% (not exact numbers, I would have to look them up).

I believe protectionism would be the last drop to move us into a severe depression. I hope governments will be so wise as to minimise moves towards protectionism despite widespread public requests to do so.]]> Fri, 20 Mar 2009 20:28:28 -0400
you wrote "Germany has been doing the voucher deal on cars since last Fall. From what I read, it only applies to German made cars."

The second part is not true. The deal applied to all cars (starting this year). It actually made foreign car sales increase from around 30% share to 50% (not exact numbers, I would have to look them up).

I believe protectionism would be the last drop to move us into a severe depression. I hope governments will be so wise as to minimise moves towards protectionism despite widespread public requests to do so.]]> http://seekingalpha.com/article/124370-why-jeremy-siegel-s-s-p-earnings-analysis-is-wrong?source=feed#comment-415056 415056
1) The S&P represents the AGGREGATED market capitalization of the included companies
2) Therefore one needs to divide by the AGGREGATED earnings to arrive at a P/E for the S&P as a whole

This is exactly the same way one would calculate a P/E for a large company using the value and the earnings of its divisions.

Of course, one can debate whether one would rather have the non-weighted average P/E (taking a P/E per company and averaging over the number of companies). It would lead to all kinds of strange behaviour in case of mergers, divestments etc. but why not.

Siegel's suggestion, however, to weigh earnings by market cap and still use the aggregated market cap on top of the division does not make any sense at all (from a mathematical point of view). ]]> Thu, 05 Mar 2009 18:46:03 -0500
1) The S&P represents the AGGREGATED market capitalization of the included companies
2) Therefore one needs to divide by the AGGREGATED earnings to arrive at a P/E for the S&P as a whole

This is exactly the same way one would calculate a P/E for a large company using the value and the earnings of its divisions.

Of course, one can debate whether one would rather have the non-weighted average P/E (taking a P/E per company and averaging over the number of companies). It would lead to all kinds of strange behaviour in case of mergers, divestments etc. but why not.

Siegel's suggestion, however, to weigh earnings by market cap and still use the aggregated market cap on top of the division does not make any sense at all (from a mathematical point of view). ]]> http://seekingalpha.com/article/123807-credit-market-overview-lessons-learned-from-germany-and-china?source=feed#comment-411020 411020 Tue, 03 Mar 2009 10:23:48 -0500 http://seekingalpha.com/article/118333-predicting-60-decline-for-manhattan-property-tarp-for-trump?source=feed#comment-377394 377394
what German cities with house prices declining by 60% from 91 to now are you talking about? I can't comment on the other markets you're citing but at least for the cities I am familiar with (Berlin, Hamburg, Munich, Cologne, Stuttgart, Düsseldorf) your statement does not hold true. While there hasn't been a large increase there weren't any large decreases either.

And, maybe interestingly, in Germany the relation between income and house price has been and still is around 4-5. (To us, houses in the US outside the biggest cities seem inexpensive). Most people expect to be mortgage free just before entering retirement.

Regards]]> Thu, 05 Feb 2009 15:27:07 -0500
what German cities with house prices declining by 60% from 91 to now are you talking about? I can't comment on the other markets you're citing but at least for the cities I am familiar with (Berlin, Hamburg, Munich, Cologne, Stuttgart, Düsseldorf) your statement does not hold true. While there hasn't been a large increase there weren't any large decreases either.

And, maybe interestingly, in Germany the relation between income and house price has been and still is around 4-5. (To us, houses in the US outside the biggest cities seem inexpensive). Most people expect to be mortgage free just before entering retirement.

Regards]]> http://seekingalpha.com/article/83262-counterparty-risk-could-spread-beyond-credit-markets?source=feed#comment-196297 196297 Mon, 30 Jun 2008 22:27:34 -0400 http://seekingalpha.com/article/82455-rating-agencies-target-guarantors-to-deflect-subprime-blame?source=feed#comment-191842 191842 You have a point regarding the short-sightedness of the agencies' evaluation game. Unfortunately being right here does not help MBIA/ABK since they have too much leverage to gain back credibility in these confusing times. As always in the short term it does not matter whether you will be able to pay and survive but only whether people believe you'll be able to. Might be a big difference!

I wish I had the ability to correctly analyse today's exposure of financial players. I believe I would become exceedingly rich :-)]]> Tue, 24 Jun 2008 12:12:11 -0400 You have a point regarding the short-sightedness of the agencies' evaluation game. Unfortunately being right here does not help MBIA/ABK since they have too much leverage to gain back credibility in these confusing times. As always in the short term it does not matter whether you will be able to pay and survive but only whether people believe you'll be able to. Might be a big difference!

I wish I had the ability to correctly analyse today's exposure of financial players. I believe I would become exceedingly rich :-)]]> http://seekingalpha.com/article/73060-why-wall-st-needed-credit-default-swaps?source=feed#comment-154827 154827 Tue, 22 Apr 2008 14:44:52 -0400 http://seekingalpha.com/article/72720-jp-morgan-6-billion-capital-raising-is-routine?source=feed#comment-152479 152479 Thu, 17 Apr 2008 17:06:37 -0400 http://seekingalpha.com/article/71862-mannkind-slammed-no-guarantees-in-drug-safety?source=feed#comment-148753 148753
our society is obsessed with risk. With the regulatory process one can be pretty sure of not missing any MAJOR risk. Of course, there might be minor ones that will be discovered later (and pharma is much better organised to discover these than, say, toy manufacturers) and then one can still pull a drug off the market or amend its label. Since the risks are minor, little harm is usually done. But don't try to explain that to a politician who faces TV pictures of sobbing victims and the resulting public outrage.]]> Fri, 11 Apr 2008 02:29:39 -0400
our society is obsessed with risk. With the regulatory process one can be pretty sure of not missing any MAJOR risk. Of course, there might be minor ones that will be discovered later (and pharma is much better organised to discover these than, say, toy manufacturers) and then one can still pull a drug off the market or amend its label. Since the risks are minor, little harm is usually done. But don't try to explain that to a politician who faces TV pictures of sobbing victims and the resulting public outrage.]]> http://seekingalpha.com/article/69050-mark-to-no-market?source=feed#comment-128427 128427
Since loan performance figures are routinely provided as well everyone can make up their own mind of what these assets' values are when held to maturity.

Would you buy a bundle of subprime mortgages today that have not defaulted so far (= perfect performance)?]]> Tue, 18 Mar 2008 16:53:47 -0400
Since loan performance figures are routinely provided as well everyone can make up their own mind of what these assets' values are when held to maturity.

Would you buy a bundle of subprime mortgages today that have not defaulted so far (= perfect performance)?]]> http://seekingalpha.com/article/65422-thestreet-com-on-primus-guaranty-wacky-and-uninformed?source=feed#comment-117561 117561
I like Tom and his ideas but would love for him to more directly address the central concern. While the TheStreet.com article appears somewhat unstructured it is not entirely oblivious of most of the points Tom is making in his article (no serious risk of BK or losing the AAA rating, currently only m2m losses etc).

Key sentence in the TheStreet.com article is "Given Primus' high cost structure and its book of credit protection that could be easily replicated today at much better prices, the stock will remain in trouble."

TheStreet implies that Primus has most of its available capital employed and might not have a lot of dry powder left to take advantage of the current spreads. Recapitalisation probably is difficult/too dilutive with the stock price so low. Therefore competitors who are starting in the current environment might have a much better priced portfolio in a short time. Tom's data shows that Primus is currently writing more business than it has done before which is a good thing. The remaining question then is how much dry powder there is left in case the current "mispricing" will stay with us for say the remainder of 2008.

And, of course the argument with a cost structure, that according to TheStreet is 60-100% higher than industry average, also needs to be addressed (though this might be more open to management's intervention).

I would love to hear Tom's view on these two points specifically.]]> Thu, 21 Feb 2008 08:03:05 -0500
I like Tom and his ideas but would love for him to more directly address the central concern. While the TheStreet.com article appears somewhat unstructured it is not entirely oblivious of most of the points Tom is making in his article (no serious risk of BK or losing the AAA rating, currently only m2m losses etc).

Key sentence in the TheStreet.com article is "Given Primus' high cost structure and its book of credit protection that could be easily replicated today at much better prices, the stock will remain in trouble."

TheStreet implies that Primus has most of its available capital employed and might not have a lot of dry powder left to take advantage of the current spreads. Recapitalisation probably is difficult/too dilutive with the stock price so low. Therefore competitors who are starting in the current environment might have a much better priced portfolio in a short time. Tom's data shows that Primus is currently writing more business than it has done before which is a good thing. The remaining question then is how much dry powder there is left in case the current "mispricing" will stay with us for say the remainder of 2008.

And, of course the argument with a cost structure, that according to TheStreet is 60-100% higher than industry average, also needs to be addressed (though this might be more open to management's intervention).

I would love to hear Tom's view on these two points specifically.]]>