Jeseppi Trade Wildfeather Finance Study Page

U.S. Policy Options in Response to Chinese Currency Practices

2010-06-05T09:38:00.000-07:00

By Philip I. Levy | House Committee on Ways and Means
(March 24, 2010)

While China’s currency undervaluation poses problems for global economic rebalancing, the most acute problems appear in China itself. It is therefore in China's own interest to move toward an appreciated currency. The United States, on the other hand, should be patient and pursue an approach that relies upon multilateral diplomacy. more:

2009-10-16T13:35:00.000-07:00

ABAT / AFFX / CENX / CNXT / COIN / CRS / CVGI / DAN / DENN / DIA / ERJ / FCN / IWM / IWN / JADE / KERX / KEY / KFN / NLS / OMN / ONTY / OWW / PCAP / QQQQ / SIFY / SPY / TELK / TLT / TSPT / UIS / VCI

Bernard Madoff, the Mafia, and Naked Short Selling

2009-02-27T07:56:00.000-08:00

Remember you are in the Naked Underground and you are looking beneath the surface. Here we will take a closer look the relationship between short selling, hedge funds, the buddy system and Bernard Madoff.

In the revealing investigative research which follows Mark Mitchell takes the study of Madoff and his world to a deeper level.

The Article:

Bernard L. Madoff was once the chairman of the NASDAQ stock exchange. He was one of the most important market makers on Wall Street. And he managed what was, by some estimates, the largest hedge fund on the planet. More

The Roots of the Crisis –How did Wall Street get into this mess?

2009-02-22T15:00:00.000-08:00

If you were wondering what paradigms occur every so often to deflate our economy and keep the masses enslaved read this post by:

Michael Flynn | October 1, 2008

The unexpected 228-205 defeat of the housing bailout in Congress Monday threw a curveball across Wall Street. It contributed to a large sell-off on Wall Street, where the bailout had already been "priced" into the market. The Dow shed just over 6 percent, the 18th largest drop in its history. But given the dire warnings about financial chaos that would result unless there were a bailout, this seems fairly modest. Read on

Now that Hedge Funds Have Collapsed! -Oil price to $20 by 2012

2008-12-19T08:52:00.000-08:00

The Naked Underground seeks to manifest what's going on beneath the surface throughout the many areas of the multi-blog. This wisdom may be expressed in prophesy or a sophisticated prediction based upon knowledge, insight and truth? Here is a good example of such wisdom in an article on June 7th by Carolyn Plaza:

"The spectacular jump in oil price today confirmed what we suspected for a long time. The oil pit in NY was filled with hedge funds and private equity funds speculation money buying oil on any weakness of dollar.
As the employment figure came in worse than expected, the dollar dropped. The commercials looked at the dollar and started holding off selling the crude futures as the hedge against the commodity in ocean from Middle East. The slower pace of selling of the futures boosted the morale of the hedge funds and private equity funds. They quickly tried to cover their shorts and go long. As prices shot up, the index funds started adding more positions.
The jump in crude oil is typical of any commodity in the final days of blow off in many-year bull market. Expect some short-lived follow through with a massive crash within a month that will take crude oil below $90 a barrel. There after the margin requirement will be increased ten folds on the futures market. That will be the end of funds driven bull market in oil.
Two factors are responsible for crude price surge. First is the China-India effect where money countries make from globalization of trade (exploiting American consumer) is put to work subsidizing the native Indians and Chinese buy $2500 cars and drive then with cheap gasoline. The second, which is primarily responsible for this year�s jump in price, is the index, hedge, private equity and ETF funds.
Oil is ready to start its many-year bear market. Both the India-China effect and the funds effect is reversing at this time. These two effects will be responsible for $20 crude oil by year 2012."

Walmart and the Dumb Money

2008-11-20T09:29:00.000-08:00

So what does the dumb money do now with whatever is left? They rush to Walmart and buy high only to lose it again later when the new kid on the block comes into Dodge with a sharper pistol and a better aim and WMT prices begins to drop to its knees.

But, smart money saw the cheap shoes coming back in the 70's just as papa said they would and they listened. Today, the wise children are rich and papa is all the wiser. If you had bought 100 Wal-Mart shares 30 years ago, for $34.5 each and you invested $3,450. Today, after nine stock splits, you'd be the proud owner of 51,200 shares worth $52 each ... over $2.5 million with hundreds of thousands more in dividends.

Ceo's, Bankruptcies and theThree Little Piggies

2008-11-20T06:04:00.000-08:00

Corporate bankruptcies are up. Executive officers out of work. Fewer jobs available. Mergers increasing. Massive pay cuts. Upscaling means downsizing. Meanwhile lifestyle, auto, home, wife and kids are running between eight and twelve thousand a month. On the low side. But all that is finished now. No more stocks. No more borrowing. No more fat vacations. No more huge expense accounts. Visions of wild weekends in Dubai have vanished. No more boasting and gloating over one's successes. Oh, it will all come back. But it will come back to the smart little piggies who built their houses in stone. Just as the story goes. Those dumb little pigs who built their lives in cheap wooden mansions and barns of hay for Samantha's quarter horses ... all up in smoke.

Bloomberg:

"U.S. corporate bankruptcies are accelerating as the economic slowdown compounds the end of easy credit.....Increased levels of distressed corporate debt signal that failures will accelerate, says Lynn LoPucki, a professor at the University of California, Los Angeles law school who studies bankruptcies.

The amount of distressed corporate bonds jumped to $206 billion April 11 from $4.4 billion in March 2007, according to a Merrill Lynch & Co. index of bonds yielding at least 10 percentage points more than Treasuries. The share of leveraged loans considered distressed was 16 percent at the end of March, the highest since 1997, says Standard & Poor's, based on loans trading below 80 percent of their face value.

``Money was so easy, companies that should have failed were kept alive,'' said Rick Cieri, a bankruptcy lawyer at Kirkland & Ellis in New York. He said bankruptcies will include businesses ``with severe operational problems'' and too much debt. ``Companies may well be sicker when they enter Chapter 11.''.....

``Subprime was just a paradigm for the credit markets overall,'' Maxwell said. ``Now in the corporate market, the shoe is just beginning to fall, and we're poised for a major correction that has been coming for at least a decade.''

Bankruptcy filings have just begun to increase. According to court records compiled by Jupiter eSources LLC, Chapter 11 business bankruptcies, including small, nonpublic companies, increased 16 percent in the first quarter of 2008. Under Chapter 11 of U.S. bankruptcy law, a company seeks court protection from creditor lawsuits while working out a reorganization.

``I think this is the beginning,'' said Brett Barragate, a bankruptcy lawyer at Jones Day in New York. ``You have rising defaults into a market where it's virtually impossible to get refinanced.''....

Martin Fridson, chief executive officer of FridsonVision LLC in New York, a high-yield research firm, predicted that a recession as deep as the eight-month contraction that started in 1990 could push defaults to 16 percent.

The highest default rate for speculative bonds and loans since 1983 was 9.98 percent in 2001, during the last U.S. recession. The average annual default rate over the same period was 4.48 percent, Moody's says.

Default rates may not rise along with a company's financial distress this time as they have in the past because some companies got so-called ``covenant lite'' loans, without restrictions that can trigger defaults, said Kenneth Emery, Moody's director of corporate default research, in an interview. The covenants are usually financial ratios that measure ability to service debts, such as a quarterly limit on total debt related to cash flow.

``Even if a company's operating performance is sub-par, the bank issuers can't force them into bankruptcy because there are no covenants,'' Emery said. As a result, if a company does eventually file for bankruptcy, it will have even more debt, and less value....

The new wave of filings may be affected by debt from the era of easy credit. Some lenders have second and even third liens on a company's assets. That puts them behind the creditor first in line to recover.

The tightening of loan standards means some companies may have difficulty obtaining so-called ``debtor-in-possession loans'' that fund operations as a company restructures. Others have had trouble getting financing needed to exit bankruptcy...

``It is apparent now that some companies may be postponing Chapter 11 filings because it's not even clear they can fund themselves in bankruptcy,'' Kirkland & Ellis's Cieri said."

CEO confidence index plunges to record low: survey

Posted 2008/11/06 at 4:34 pm EST

NEW YORK, Nov. 6, 2008 (Reuters) — U.S. chief executives have abruptly lost confidence in business and economic conditions and about jobs, according to a monthly index that posted its biggest-ever drop in October.
The CEO Confidence Index fell 42 points to 58.2 last month, a record low, Chief Executive magazine said on Thursday. The index had registered gains in confidence in August and September.

Measures of both current and future business conditions also plummeted in October, and the survey's employment confidence indexes reached record lows.

More than two-thirds of CEOs expect employment to fall over the next quarter, according to the survey, suggesting the U.S. unemployment rate could reach 8 percent in coming months, compared with 6.1 percent in the most recent reading. The government will release October jobs data on Friday.

"We have never seen confidence drop so sharply and dramatically during one polling cycle," said publisher Ed Kopko.

About 300 business executives from both private and public companies responded to the magazine's survey, which dates back to October 2002.

(Reporting by Nick Zieminski, editing by Dave Zimmerman)

Capitulation of the Dumb Money

2008-11-13T17:25:00.000-08:00

Earlier this afternoon the Dow was over 4 points under and yet it ended over five above.

After todays massive shift from red to green at eleven percent it should be obvious that the dumb money has already exited the market and the smart money appears to be at the helm. I believe that the volatility of today's trading may indicate capitulation and that from here on one may expect to see a gradual change in the trend lines. I am assuming that larger purchases by fewer magnates are responsible for the demand dynamics as noted today which would suggest that more stock is in the hands of fewer people ... I could be wrong. My feeling is that it simply takes more time to negotiate higher demand by many more little mouths when encouraged, but it takes less time for a griping fear among the same to cause a sharp plunge.

Selling Stock Short: It's a Gamble -Smart versus Dumb Money

2008-10-14T06:35:00.000-07:00

when you sell my stock short
i get paid in full plus commissions

now, had the stock risen
i would have made more profit
but, that's okay because in your wisdom
you did me a favor
by selling that lousy stock short
because the SOB was going down anyway
and i got my money and made a profit

i did this because you requested me to do it
with the intention of buying it back later
after the stock went down
as you predicted it would
-you saved my ass!
i got my money
before it was too late to sell
good thing!

what's even better
is that you have promised to buy it back
at a later date when the price goes down
and then return it to me
so i once had an overpriced stock
now it's gone
and it comes back to me later
with even greater value (p/e)
plus
you will purchase it at that time
and put it back into my account
like a little gift
whe-hell, let's see how much money i have made
i made a profit selling the stock initially
because the stock was going up when you asked me to sell it
i got full price for my shares
and now two months later
you are going to buy these very same shares
much cheaper you hope
and return them to me
sounds like a great deal
actually i feel a little guilty
to be making all this money off of you
so tell you what i can do for you
for saving my ass on that miserable stock
i will pay you the difference between what you paid for it
and what it was initially sold for
why should i make all that money
because i now have the same number of shares
that you bought for me
albeit, much cheaper
poised and ready to increase and make me a juicy profit
according to your wisdom

so, let's recap
somebody else buys my stock
i make my money
you promise to buy it back for me later when it goes down
and return it to me
and i'll pay you the difference
i mean
i would have lost that money
had i sold it myself later
had i waited to sell
but now i got my money
and i got all those shares back
because of you

sounds like a plan

but if the stock should happen to go up
after i sell it initially
i am up the creek
because i might have sold it for a higher price
and made a greater profit
you made me sell my stock
now i make you buy it back
same number of shares
at that high price
and deliver them to me as promised
sure, i got my money when the stock was first sold
and now when you buy it back for me again
i get high priced shares back again
all of them!
on you
you covered me ... us
love ya!
i really make a killing off of you
and never have to return a penny to you
although i should
i feel terrible about this
i just doubled my money
plus!
after all
business is business
sucker

it's a gamble
and as they say
the house always wins
in the end

The Rest of the Story by Jeseppi Trade Wildfeather

2008-10-12T17:18:00.000-07:00

The last meltdown in 2001 as all meltdowns are designed to meltdown the dumb money and purify and refine the smart money. Out of fear the dumb money sold too late and out of wisdom the smart money had bought earlier and taken massive profits as usual and then sat bored on their US Treasuries until the dumb money out of fear and terror drove the market down until the strongest companies were selling for bargain basement prices. The smart then bought up everything of value creating massive demand and turning the market around initiating a bullish charge to until the Tau broke the fourteen K sound barrier. It is my understanding that as the smart get richer and the dumb get poorer, the smart had to do something creative with the enormous wealth they had amassed. Reeling with options and tremendous capital they decided to create hedge funds, derivatives and anything else they could imagine that could be invested in again by the dumber money. So they invented companies that insured the insurer of the insurer of the maintenance contracts that the dumb money painfully pay for (stomach) instead of paying a little more for quality. They invented companies that insure the insurer who insures how many toilets will flush on any given day in New York City and sell futures on consumer non durables like toilet paper and room deodorizers. The dumber money, who made a killing on that last bubble bust, took the bait as always, and began to leverage out purchases because dumber money is motivated by greed, lust and fear and have no compunction about using OPM indiscriminately and unwisely reeling as they are apt to be with avaricious fool hardiness and an inordinate spirit of outlaw folly that says, "The other guy will loose his shirt ... but, I'll get out in time." The fatal call comes from the god of the ticker demanding full payment with interest, and OPM just became OPM with a vengeance. And, after both the dumber money and OPM have exchanged the most sordid case of financial STD's (Smart Trumps Dumb) they are both forced to sacrifice what is in the grip of their clingy miserable hands and deliver them to the wise like Soros and Buffet who will rightly divide the spoils with the demigods of the fiat kingdom who understand p/e and control the seasons and cycles financial affairs to suit their own sophisticated pleasures.

Those With Sense of History May Find It’s Time to Invest By Alex Berenson

2008-10-12T07:00:00.000-07:00

Published: October 11, 2008, The New York Times:

The four most dangerous words for investors are: This time is different.

Martin Whitman, manager of the Third Avenue Value fund.

Multimedia

Are Stocks a Bargain?

In 1999, technology companies with no earnings or sales were valued at billions of dollars. But this time was different, investors told themselves. The Internet could not be missed at any price.

They were wrong. In 2000 and 2001 technology stocks plunged, erasing trillions of dollars in wealth.
Now investors have again convinced themselves that this time is different, that the credit crisis will push economies worldwide into the deepest recession since the Depression. Fear runs even deeper today than greed did a decade ago.
But in their panic, investors are ignoring 60 years of history. Since the Depression, governments have become far more aggressive about intervening when credit markets seize up or economies struggle. And those interventions have generally succeeded. The recessions since World War II, while hardly easy, have been far less painful than the Depression.
Now some veteran investors, including G. Kenneth Heebner, a mutual fund manager who has one of the best long-term track records on Wall Street, say that the sell-off has gone much too far and stocks are poised to rally powerfully if the downturn is less severe than investors fear.
“The fact is, there are a lot of tremendous bargains out there,” said Mr. Heebner, who manages about $10 billion in several mutual funds. Indeed, by many measures stocks are as cheap as they have been in the last 25 years.
He pointed to Chesapeake Energy, a natural gas producer that he owns in his CGM Focus mutual fund. In July, Chesapeake traded for $63 a share. On Friday, it fell as low as $11.99.
He says that investors with a stomach for risk and a long time horizon should consider following Warren E. Buffett, who in the last three weeks has invested $8 billion in Goldman Sachs and General Electric.
Mr. Heebner expects world economies to contract over the next year. But he said the market plunge in the last week was no longer being driven by rational analysis. Stocks are probably falling because of a combination of panic and forced selling by hedge funds that must meet margin calls from their lenders, he said.
Mr. Heebner’s funds have not avoided the carnage this year. The CGM Focus fund is down about 42 percent so far in 2008. But his long-term track record is impressive. In the decade that ended Dec. 31, 2007, CGM Focus rose 26 percent a year, including reinvested dividends, making it among the best-performing mutual funds.
Mr. Heebner is not alone in his optimism.
“I think in years to come — I wouldn’t say months to come — we will perceive this as being a great value-buying opportunity,” said David P. Stowell, a finance professor at Northwestern and a former managing director at JPMorgan Chase. “Two and three years from now, it will seem very smart.”
Even before their jaw-dropping plunge of the last month, stocks were not expensive by historical standards, based on fundamentals like earnings and cash flow. Now, after falling 30 percent or more since early September, stocks in stalwart, profitable corporations like Nokia, Exxon Mobil and Boeing are trading at nine times their annual profits per share or less. Many smaller companies are even cheaper. Some of those stocks are trading at five times earnings or less.
Those ratios are historically low. Over all, the Standard & Poor’s 500-stock index is trading at about 13 times its expected profits for 2009, its lowest level in decades. In contrast, at the height of the technology bubble in early 2000, the stocks in the S.& P. traded at about 30 times earnings, the highest level ever. At the same time, the 10-year Treasury bond paid about 6 percent interest, compared with less than 4 percent today.
Investors have fled stocks in favor of government bonds, insured bank deposits and other low-risk investments because they are deeply afraid of the worldwide economic crisis, said Stephen Haber, an economic historian and senior fellow at the Hoover Institution. But he said he believed that fear might have gone too far.
“If there is good and wise policy, and government moves effectively, this need not play itself out in ways like the Great Depression, which is the image that is playing itself out in people’s mind,” Mr. Haber said. Government action typically does not work immediately, and banking crises around the world often require multiple interventions, he said.
Still, optimists remain in the minority on Wall Street. Most investors seem to believe that the credit crisis will do substantial damage to stocks and overall economic activity.
“We have never before seen for such sustained periods of time such a sustained turn away from risk taking,” said Steven Wieting, the chief United States economist for Citigroup. “This has broken out of the boundaries we’ve seen.” Economic activity appears to have slowed sharply in September, Mr. Wieting said.
The panic last week took the biggest toll on financial companies, as well as companies that are highly leveraged. But stocks fell 10 to 30 percent even for companies typically thought to be resistant to economic downturns, like the manufacturers of consumer staples.
For example, Newell Rubbermaid fell to $12.82 on Friday from $17.34 on Oct. 1, a 26 percent decline in 10 days. Newell Rubbermaid now trades at its lowest levels since 1990, and just eight times its expected earnings for next year.
Yet Newell Rubbermaid, whose brands include Calphalon, is profitable and insulated from the credit crisis, said William G. Schmitz Jr., who follows household products companies for Deutsche Bank. “There’s really no balance sheet risk,” Mr. Schmitz said. The company also pays a 6 percent dividend.
Newell Rubbermaid said in July that it would earn $1.40 to $1.60 a share for 2008, excluding restructuring charges. For 2009, stock analysts predict it will make $1.53 a share. And while a slowing economy may mean that people will be buying fewer products from Newell Rubbermaid, the recent plunge in oil prices will reduce its costs, Mr. Schmitz said.
“The way the stock’s reacted, you’d think they were going out of business,” he said.
Martin J. Whitman, a professional investor for more than 50 years, said that as long as economies worldwide could avoid an outright depression, stocks were amazingly cheap. Mr. Whitman manages the $6 billion Third Avenue Value fund, which returned 10.2 percent annually for the 15 years that ended Sept. 30, almost two percentage points a year better than the S.& P. 500 index. The fund is down 46 percent this year.
“This is the opportunity of a lifetime,” Mr. Whitman said. “The most important securities are being given away.”

The Bailout's Essential Brazenness by Jay Cochran

2008-10-03T06:12:00.001-07:00

Dr. Cochran is an Adjunct Professor of Economics at George Mason University.

Added to cato.org on October 1, 2008

This article appeared on Cato.org on October 1, 2008

One of the more galling arguments put forth in support of the Treasury’s $700 billion bailout, is the suggestion that the government might actually profit from being a hold-tomaturity investor in the illiquid mortgage instruments currently clogging the arteries of high finance. Laying aside the thorny issue of whether the Treasury Secretary and his overseers have the means to discover the correct price for securities that the market itself cannot price (hence the illiquidity), it is breathtakingly brazen that the supporters of this scheme think it somehow proper for the government to earn even one basis point of net return from a problem that is of its own making.

Congress and the executive branch, established the rules and institutions that all but guaranteed the outcome we taxpayers see unfolding and are being asked to pay for today. Government leaders had multiple opportunities to correct problems identified years before, but instead dithered and calculated. To suggest now-in malice, greed, or fear-that it is somehow proper for government to make a net return on the assets it purchases, is as unjust as allowing a referee to make money gambling on the outcome of a game he oversees. (Read on)

Bailout? The Vultures Stay Away

2008-09-28T15:43:00.000-07:00

Speaking on last year's bailout I thought Alan Greenspan has something exceptionally wise and insightful to say"

"This bailout was the target of criticism from Greenspan, who said it was geared to support a faltering asset class. He argued that the prices of these assets should be allowed to fall until speculative excesses are wrung out and bargain-hunters emerge.

"If you intervene in the system, the vultures stay away," he said. "The vultures sometimes are very useful." "

Chinese Government is Top Foreign Holder of Fannie Mae, Freddie Mac Bonds

2008-07-14T13:20:00.000-07:00

$376 Billion in Chinese Agency Bond Holdings Subject to Taxpayer Bailout Proposals According to FreedomWorks Analysts

Last update: 11:08 a.m. EDT July 11, 2008

WASHINGTON, Jul 11, 2008 (BUSINESS WIRE) -- As politicians call for taxpayer bailouts and a government takeover of troubled mortgage lenders Freddie Mac and Fannie Mae, FreedomWorks would like to point out that a bailout is a transfer of possibly hundreds of billions of U.S. tax dollars to sophisticated investors and governments overseas.

The top five foreign holders of Freddie and Fannie long-term debt are China, Japan, the Cayman Islands, Luxembourg, and Belgium. In total foreign investors hold over $1.3 trillion in these agency bonds, according to the U.S. Treasury's most recent "Report on Foreign Portfolio Holdings of U.S. Securities."

FreedomWorks President Matt Kibbe commented, "The prospectus for every GSE bond clearly states that it is not backed by the United States government. That's why investors holding agency bonds already receive a significant risk premium over Treasuries."

"A bailout at this stage would be the worst possible outcome for American taxpayers and mortgage holders, who have been paying a risk premium to these foreign investors. It would change the rules of the game retroactively and would directly subsidize the risks taken by sophisticated foreign investors."

"A bailout of GSE bondholders would be perhaps the greatest taxpayer rip-off in American history. It is bad economics and you can be sure it is terrible politics."

SOURCE: FreedomWorks

FreedomWorks
Adam Brandon, 202-942-7612
abrandon@freedomworks.org

Fannie and Freddie Doubled Today. Takes Balls!

2008-07-11T12:16:00.000-07:00

One man's poverty is another man's prosperity.

Bravo to to those who made money today. Your fearless took balls, and you deserve every penny of your reward. You have inspired many!

On the other hand, all of that money represented in the loss of market value has now returned into the economy. Inflation will follow.

But, what is really going on here?

We are being told that FRE and FNM own approximately $5 trillion in mortgages.
We see that market capitalization amounts to aprox. $15 billion.
We also know that, at say, an average of 6% interest, FRE and FNM are expected to earn $300 billion this year.

Alan Greenspan: THE AGE OF TURBULENCE - Commentary

2008-07-07T07:42:00.000-07:00

"In my study of Alan Greenspan I see that the cosmopolitan world is obsessed with growth especially growth in interest rates which in effect is usury. I see Mr. Greenspan as seeking the balance which I feel is much more important as in the human body; as in the basic household and in every higher sphere. Growth like a cancer can rapidly destroy an organism unless it is considered a healthy form of growth. After a certain point all organisms age and growth begins to decline. It is the same with all entities. That is why it becomes increasingly necessary for the nations to grow as a global unit finding the balance instead of clutching separatist and isolated realms controlled and stifled by the limitations of emotionally and traditionally driven populist agenda." —Wildfeather

My Recent Amazon Commentary:

"In view of the turbulence of the twentieth century, one may find it easy to embrace conspiracy theories of government, banking and nefarious systems of world domination. But, perhaps there are other less understood factors which may account for the events of our recent history. One hundred fifty pages into Mr. Greenspan’s classic work, “The Age of Turbulence”, I now find that I must shift my thinking. Mr. Greenspan may well be the Thucydides of this age. In reconstructing detailed summaries of scores of important events in the modern history of the United States, he gives clear instructions and definition regarding the financial behavior of our people and our markets. His explanations are an applied econometric survey of our recent past. His invaluable revelation of the thinking and beliefs of key administrators of those times will serve to enlighten the student of politics and finance for many years to come. This contribution is an honest document of the wisdom of a man who possesses the refinement of a Julliard graduate, a close friend of Ayn Rand, a successful Wall Street executive, and a brilliant and courageous Colombia University scholar whose willingness to stand in the face of strong and at times potentially lethal opposition is inspiring to say the least. His memoirs will serve mankind well and in my view is worthy of the highest praise.

In keeping with high standards of accuracy and truth, most probably attributable to his Levitical heritage, which is the origin of the tradition of Sacred Scripture, this work in my view is academically reliable and useful for teaching and correction. “The Age of Turbulence”, if understood and pondered by the wise, will render necessary questions and answers, but perhaps more importantly, will manifest tools and examples of profound leadership necessary to accomplish the goals of the oncoming years. We the people will ultimately receive what we deserve for better or for worse. It was never your job, Mr. Greenspan, to keep us from making, heal us of, or compensate for our mistakes. I believe that your wisdom served to provide stability in the face of the changing times which in my view is grounded upon one’s ability to feel, balance and know precisely when to let go. These elements it seems have always been evident in your work. It is with humbleness, awe and trepidation that I proceed further into “The Age of Turbulence.”" —Wildfeather

The Real Bear Stearns Story and the Risks of Systemic Collapse by John Mauldin

2008-06-19T17:31:00.001-07:00

Let's Get Real About Bear Stearns (by John Mauldin)

I already have a slew of emails from people upset about what they see as a bailout of a big bank, decrying the lack of "moral hazard." And I can understand the sentiment, as it appears that tax-payer money may have been used to bail out a big Wall Street bank that acted recklessly in the subprime mortgage markets. ...more

Notice P/E Ratio

Secrets of the Private Equity Trade

2008-06-11T20:08:00.000-07:00

Published: June 11, 2008 in Knowledge@Wharton

Private equity firms manage some $1 trillion of global capital, yet because they are highly secretive, much remains unknown about their internal economics. How do PE firms organize themselves, for example, and how do they capitalize on their success? ... more

2008-06-07T17:01:00.000-07:00

Bloomberg Says:

Dollar Weighs on Crude Oil Prices, OPEC's Khelil Says (Update3)

By Maher Chmaytelli and Irene Garcia

June 5 (Bloomberg) -- A decline in the price of crude oil hinges on whether the dollar will strengthen against other currencies, limiting its appeal as an inflation hedge, according to OPEC President Chakib Khelil.

``It all depends on the dollar's situation,'' Khelil, who is also the oil minister of Algeria, said in a telephone interview today with Bloomberg Television from Algiers.

``At this point, we don't think prices will get to $150; they won't fall below $100, they will stay around $120,'' he said. ``They will be going down if the dollar strengthens.'' ... more

The Split

2008-01-25T14:32:00.000-08:00

Some say the real reason for stock split is to increase trade volume. Because the more volume there is, the easier it is to sell/buy the stock and it increase speculation which in turn can increase the stock price on the short run.

2007-11-19T15:21:00.002-08:00

Excerpt:

Hedge funds and petroleum markets: a primer

Hadrian Partners, Ltd.
New York

With nearly $1 trillion under management, according to a re-cent study by JP Morgan, hedge funds have considerable influence over any market they wish to participate in.

"The impact of hedge funds
Some observers have blamed hedge fund participation in the futures markets and elsewhere for the historic run-up in crude oil and other petroleum prices. These critics include various government officials, the International Monetary Fund, and the Bank of International Settlements. Physical participants in the petroleum market, both producers and consumers, also have criticized the funds.

The Organization of Petroleum Exporting Countries has targeted hedge funds as a scapegoat to deflect criticism from the cartel itself for persisting in hawkish policies that contribute to the current damaging price increases.

In its quarterly review, the Bank of International Settlements singled out what it termed "herd-like" behavior directed at the funds and blaming them for pushing the price of oil higher. The IMF issued a stern warning accusing hedge funds of destabilizing other financial markets and of pushing up the price of oil. No less a figure than Gordon Brown, chancellor of the exchequer in the UK, made an unprecedented call for the hedge fund industry to increase disclosure. The BIS offered help to government agencies in this effort. The SEC is also looking at ways of increasing fund surveillance.

Whether the funds have really had so much influence on the price of crude and the refined products is debatable. But, according to S&P's Hedge Fund Indices, escalating energy prices have contributed to hedge fund profitability."

2007-07-10T10:26:00.001-07:00

" I combine these patterns with stocks that have unusually higher rates of growth and low number of shares that float. For the average stock I list, growth rates must be up at least 40% for both earnings and revenues growth for their most recent quarters and most stocks that I list have growth rates up 80, 90, 100 and sometimes up 200% and more. It's these high growth rates combined with stocks that have low number of shares that float that make them so explosive. "

Going In and Coming Out

2007-06-03T20:00:00.000-07:00

a person's freedom is proportional
to his ability to enter or exit
anything at will