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bkpark

bkpark
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  • Long-term Treasury yields that continue near all-time lows even as the economic numbers improve and risk goes full-on in 2012? Look no further than Operation Twist, under which the Fed has purchased 91% of the government's 20-30 year debt issuance. What happens when the Fed stops? What happens to the Fed's balance sheet if rates rise?  [View news story]
    Well, FWIW, he wanted lower long term interest rates, and he is getting lower long term interest rates. Looks like the Fed policy is working so far as intended (never mind that we are historically unprecedented area for at least half a century).
    Feb 2 05:24 PM | Likes Like |Link to Comment
  • Mitt Rommey might rail against U.S. debt, but in doing so, says ProPublica's Jesse Eisinger, Romney is "running away from his entire career in business." That's because under his watch, Bain would use the classic P-E technique of leveraging debt to amplify its returns.  [View news story]
    Of course debt is used as leverage to get better return on equity---speaking of equity, can anyone even reliably calculate the "equity" backing the U.S. treasuries?

    Whatever it is, if we take reported "earnings" (revenues minus expenditures) seriously, it's been decreasing for many decades.
    Jan 19 05:30 PM | Likes Like |Link to Comment
  • More from S&P: The agency faults the EU for focusing too much on cutting budgets and not recognizing the issues "are as much a consequence of rising external imbalances and divergences in competitiveness between the (core and the periphery)," i.e. Italian, Spanish, and Greek labor can't compete with Germany.  [View news story]
    So ... they fault EU for not breaking up the eurozone? Is there any way to address the "imbalances" while keeping the one currency?
    Jan 13 04:53 PM | Likes Like |Link to Comment
  • Sources tell DigiTimes that Apple (AAPL +0.6%) will introduce an iPad 3 in March and an iPad 4 in October. The iPad 3 would offer a higher-resolution display but otherwise similar hardware specs to the current model, whose entry-level price would be cut to $399, echoing Street views suggesting a dual-pricing strategy. The iPad 4 is expected to have "much upgraded hardware."  [View news story]
    So, the message to current Apple customers is, "don't bother buying iPad 3; iPad 4 will come out very soon and will be ways ahead that junk"?

    Does this mean bad Q2 and Q3 for Apple this year?
    Jan 6 12:31 PM | 1 Like Like |Link to Comment
  • Investing legend George Soros believes that gold is on the verge of a bear market. The billionaire investor, who two years ago called the yellow metal the “ultimate asset bubble,” cut 99% of his holdings in the first quarter, according to SEC filings. (video)  [View news story]
    *If* Soros proves to be right here, is it just me or does Soros make his big money by essentially going long on USD (as with his bet against GBP)?
    Dec 30 02:40 PM | Likes Like |Link to Comment
  • With trading desks barely staffed, someone has decided to run some stops in the currency market. The greenback takes a plunge over the past couple of hours against nearly every major currency, but particularly vs. the yen, the aussie, and the kiwi. The yen has now regained nearly all the ground lost when Japan intervened in late October to weaken it.  [View news story]
    And yet, barely any movement in EUR/USD pair. Interesting ...
    Dec 30 12:43 PM | Likes Like |Link to Comment
  • No sooner than Verizon (VZ) says it had fixed the latest outage of its high-speed data network, it irks customers further with news it will start charging a $2 "convenience fee" for every payment made over the phone or online with their credit cards. The company says the move is necessary to help pay for "single-bill payment options." Perhaps it should have consulted Brian Moynihan first.  [View news story]
    BTW, *some* gas stations do (or at least used to). Some gas stations advertise what they call "cash price" and the pump is somehow programmed to handle it (i.e. the price goes up by about a percent or two when I pay with plastic rather than cash).

    I wasn't sure how that didn't run afoul of VISA and Mastercard rules (self-serving rules that dictated to merchants that they couldn't charge a fee for accepting credit card), but even at many of those places, the cashback reward often more than offset the price increase.
    Dec 30 10:02 AM | Likes Like |Link to Comment
  • No sooner than Verizon (VZ) says it had fixed the latest outage of its high-speed data network, it irks customers further with news it will start charging a $2 "convenience fee" for every payment made over the phone or online with their credit cards. The company says the move is necessary to help pay for "single-bill payment options." Perhaps it should have consulted Brian Moynihan first.  [View news story]
    It's transfer from people who have no cashback rewards to people who have cashback reward; if a vendor accepts credit card, his price increase (yes, to pay for transaction fees which must be more than 1--2% on average, if the credit card company is going to make money) is for everyone, but not everyone has cashback reward cards---and I prefer to be one of those people on the receiving end of wealth transfers.

    (Also, for certain types of business, I prefer the cash-only places for precisely this reason; their prices tend to be lower. But if a business already accepts credit card, I'm not going to save anything by not paying with a credit card.)
    Dec 30 09:31 AM | Likes Like |Link to Comment
  • The ECB's got the formula all wrong, says Art Cashin. Despite a marginally decent bid-to-cover today in Italy's bond auction that staved off immediate disaster, they can't go through the year expanding their balance sheet and financing at these levels without concerns of inflation breaking out. ( video )  [View news story]
    Hence the fear about deflation (with Japan as the cautionary tale). But then, well, "Helicopter Ben" *is* the chairman of the Fed, so if lack of inflation becomes a real problem, there are probably extraordinary measures (short of throwing newly printed fiat money out of a helicopter) they can take for reflation.
    Dec 29 11:58 PM | Likes Like |Link to Comment
  • The ECB's got the formula all wrong, says Art Cashin. Despite a marginally decent bid-to-cover today in Italy's bond auction that staved off immediate disaster, they can't go through the year expanding their balance sheet and financing at these levels without concerns of inflation breaking out. ( video )  [View news story]
    I don't exactly see how inflation is necessarily regressive (it *is* a hidden tax).

    Inflation is, fundamentally, a tax on savers (especially those who get locked into a low long-term rate in the early phase of inflation when the inflation rate wasn't already baked into the interest rate). I don't see a tax on savers being regressive, seeing how savers are disproportionately wealthy.

    If the argument is that inflation is a consumption tax and therefore regressive, it doesn't really bear out---as there can be no high inflation without corresponding wage increase, for the working class (i.e. those who live from paycheck to paycheck), effects of inflation gets cancelled out over a moderate term.

    On the other hand, inflation is a boon to debtors---especially those with fixed long term rates---and those tend to be in the middle class.
    Dec 29 11:46 PM | 1 Like Like |Link to Comment
  • No sooner than Verizon (VZ) says it had fixed the latest outage of its high-speed data network, it irks customers further with news it will start charging a $2 "convenience fee" for every payment made over the phone or online with their credit cards. The company says the move is necessary to help pay for "single-bill payment options." Perhaps it should have consulted Brian Moynihan first.  [View news story]
    Er, unless you insist on paying everything by cash only (no check, no ATM debit card), credit card is the *safest* way to pay for anything.

    If a vendor charges your account fraudulently, in most cases all you have to do is dispute the charge with your credit card company (you may have to somehow prove that charge was fraudulent if the vendor fights the disputed charge rather than taking the charge off and paying the fine to the credit card company) and they will do most of the work for you (and most credit card companies will let you block additional charges from a given vendor). And so long as you communicate well with the credit card company (i.e. dispute the charge by phone and/or writing, don't simply not pay it), these disputes won't show up on your credit report (how could it, since your account would be in good standing with no late payments?) and cannot possibly have an impact on your credit score (at least not as far as your credit card company is concerned; if the vendor is someone large like a utility company, they may be able to put something on your credit record ... which you will then have to dispute with credit agencies).

    On the other hand, if you pay by check, you have given a third party all the information they need (routing number and account number) to make a fraudulent withdrawal from your bank account, and if you pay by ATM debit card, when fraudulent charges are made you are pretty much on your own since the bank has nothing at stake (the cash in *your account*, not their own funds, have been withdrawn, legitimately or illegitimately).

    P.S. One possible exception regarding safety: your bank's bill pay might be somewhat safer; from what I understand, even when they send out a paper check from these bill pay services, they don't include confidential information like account number. But then, I guess here is where people weigh cashback rewards from their credit card against relative safety.
    Dec 29 10:22 PM | 1 Like Like |Link to Comment
  • Silver Hits Head And Shoulders Target [View article]
    Did you notice how the author claims that the market is "thinly-traded" but doesn't offer a single evidence of that claim?

    The only data I have at hand is the volume data on GLD and SLV ETFs, but if they mirror futures contract data, the declines were on anything but light volumes. Silver's breakdown in April proceeded with a huge volume spike (on SLV ETF, anyway) that hasn't since been equaled. Gold's decline couple weeks ago was on a nearly equal volume as in August and September (and its decline yesterday and today also marks highest volume since mid-December; we will see whether it goes down further or bounces back quickly, with a subsequent fall-off in volume).

    Perhaps these breakdowns are "engineered", as some gold/silver bulls claim, but I'm not seeing how anyone (at least anyone outside central banks, whose motives are different from other market participants) is making money from these engineering, especially when declines happen on larger volumes than subsequent retracement rallies.
    Dec 29 07:18 PM | 2 Likes Like |Link to Comment
  • No sooner than Verizon (VZ) says it had fixed the latest outage of its high-speed data network, it irks customers further with news it will start charging a $2 "convenience fee" for every payment made over the phone or online with their credit cards. The company says the move is necessary to help pay for "single-bill payment options." Perhaps it should have consulted Brian Moynihan first.  [View news story]
    But the market can't be trusted. Surely the government must do something. Maybe they should block Verizon's next merger preemptively. There's no evil in the world that can't be fixed by more government intervention---not even prior government interventions.
    Dec 29 06:01 PM | 2 Likes Like |Link to Comment
  • Stock Market Outlook: Silver Signaling Danger Ahead [View article]
    ... which is a consolation only to the diehardest silver bugs who must've been long the metal before QE2, when it was barely in a stable trading range.

    Any trend-/momentum-following trader would've gotten out of silver positions a long time ago. In a year that hasn't been kind to the equity market, silver *underperformed* the equity market.
    Dec 29 10:24 AM | Likes Like |Link to Comment
  • Turns out the New York Times (NYT) actually did send out the message it told everyone to ignore. The Times thought it was sending an email to a few hundred people who had recently canceled subscriptions, offering them a 50% discount to lure them back, but instead the offer went to 8.6M addresses. An easy mistake, or "bad digital strategy" run amok?  [View news story]
    'doubt it. I often find marketing emails from semi-legitimate sources (such as WSJ or various political campaigns who have my email address with my consent) in Gmail spam folder.

    The fact is, marketing email (such as this one from NYT was, trying to entice former customers back) is doomed to resemble spam (because it is one) and have 50% chance or so of getting caught by spam filter, even when it's not from a fly-by-night operation.

    BTW, I think there's often slight lag between email arriving in your inbox and Gmail filter working; I also often find various pieces of email in my regular inbox first, and a few minutes later they are promoted to "Important & Starred" box.
    Dec 29 09:41 AM | Likes Like |Link to Comment
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