icandoitdon

Total Rating:
+3 / -5

363 Comments

    • Fri Nov 21st 19:36 PM | Rating: +1 -1
      Commented on:
      Buffett's Gamble: $40 Billion Bet on Volatility
      dlaw has it right.

      i chuckle at the notion that there is little risk in these trades.

      we're in a liquidity squeeze.

      capital raising is all but impossible unless you have gilt-edged credit.

      the economy is contracting at the most rapid pace in modern history.

      financial markets have tanked

      volatility is the highest in history.

      junk bond yields are approaching historical levels. spreads have never been wider.

      treasury yields are the lowest in recorded history as a consequence of the lack of confidence in our very financial system.

      bank stocks are crumbling...and not just the Cs of the world. or haven't you noticed what's happened to share prices of the "leaders" (i use the term lightly) over he last 2 months...BAC WFC, GS, USB

      insurance stocks with heavy investment portfolios have lost half or more of their market value in recent weeks...not months...weeks. BRK itself has been the latest victim of intense selling.

      maybe BRK overcomes all this and their sale of puts works out as intended. but i'd be willing to bet that buffet would not make the same trade today. the world has changed since he put that position on.
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    • Mon Nov 17th 19:15 PM | Rating: 0 0
      Commented on:
      John Hussman: The Market Is Not in Uncharted Territory
      if "this sucker's going down" everyone is toast. you included, my friend.
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    • Sat Nov 15th 16:49 PM | Rating: 0 -3
      Commented on:
      Jim Rogers on China
      for all the "poor me because i'm a white man" types, get over it. if there is any race and gender that's earned it's criticism it's the white male. get a thicker skin.

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    • Fri Nov 14th 11:47 AM | Rating: 0 -1
      Commented on:
      What Does Bank of America's Decline Mean for the Global Banking System?
      you're exactly right.

      BAC had to be utterly out of their minds to take on merrill lynch and countrywide when they did and under the terms they did. they were utterly amatuerish in their approach...like a novice investor buying too soon. these deals could well push them over the edge.

      these stocks are great shorts to hedge a long portfolio. if they go south from these levels, expect the market to go south in a big way.

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    • Wed Nov 12th 01:17 AM | Rating: +1 0
      Commented on:
      American Express Is Now a Bank
      i think barakobama is secretely either bernake or paulson. they both believe in free lunches and half-truths.

      here's a little remedial education on why charge off's do matter :

      In a growing economy, charge offs grow but so does income. everyone is happy, including the idiots who played the credit card company. but in a severely contracting economy, charge offs grow as income shrinks. and if income shrinks deeply enough and charge offs grow disproportionaly, that can be a big problem. income wouldn't just shrink...it would collapse. throw a credit crunch into the mix, resulting from years of credit abuse by consumers and businesses alike, and it's a prescription for failure of any institution that depends heavily on credit as both a borrower and lender...particularly the cheap and plentiful kind that we've had for the last 6 years.

      AMEX relies on a growing economy to cover its growing charge off's, due in no small part to declining credit standards, which have accelerated in recent years. that prop has been kicked out from under them. it also relys on cheap and plentiful credit to fund its day to day operations. that prop is gone too. without it, their profitability goes into the toilet. if profitability goes into the toilet so does their credit rating. without an investment grade credit rating they might as well shut their doors.

      AMEX has looked into the future and doesn't like what it sees...a severly contracting economy, tapped out consumers, increasingly high charge offs, reduced profitability and limited access to credit at much higher prices than they've historically paid. that's why they became a bank...so they could assure themselves of an endless supply of funds at government rates rather than market rates.

      AMEX would never have made this move if not for fear that their traditional franchise is impaired.
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    • Sun Nov 9th 20:43 PM | Rating: +1 0
      Commented on:
      Ben Stein Watch: November 8, 2008
      if you want to argue that the survival of the american car manufacturers is important to national security you must also argue that free trade agreements, which have led to the flight of american manufacturing for years, are generally contrary to our national security interests.

      if the u.s. had sound underlying economic policies that include a strong dollar, reduced reliance on foreign oil, balanced budgets and adequate pricing of risk, our economic growth would be real and sustainable and our national security would not depend on the failure of one company or another. o

      to "save" an industry as mismanaged as the american automobile industry in the name of national security somehow doesn't make me feel too secure....financially or militarily.

      if we let national security issues shape economic policy in this country we can kiss the economic frreedom that underlies capitalism goodbye.
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    • Mon Oct 27th 22:46 PM | Rating: 0 0
      Commented on:
      Down to Three Positions, I'm Ready for End of Bear Market
      16% loss tolerance might work fine in a bull market but not in a bear market as vicious as this. you can get stopped out before the day is over.

      my approach has been selling deep out of the money put options on well capitalized, low debt level, dividend paying players, #1 or 2 in their niche. i've often hedged certain of these positions by buying puts. the past two months i've had to repeatedly roll my positions into lower-strike puts because of this relentless grinding down of all equity prices. needless to say i've lost money but my losses have been far less than being long stock.

      the lack of a bounce is very bothersome and speaks volumes about the health of financial assets and the extreme levels of fear that exist. i was never a believer of "dow 6,000" but now i'm not so sure. we've traded at 7 times earnings before (early/mid 70s) and it could happen again. many strong players are already there, e.g. DE, ITW, DD, we also have brand name, well capitalized players at 3 or 4 x earnings, e.g. GCI, FCX.
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    • Mon Oct 27th 20:49 PM | Rating: 0 0
      Commented on:
      Cheapest Valuations in Decades Will Trump Panic Selling
      got that, everybody?
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    • Sun Oct 26th 12:19 PM | Rating: 0 0
      Commented on:
      Don't Buy Into Share Buybacks
      this article is spot on. the financial graveyards are full of companies that have squandered capital in this manner. it is the market's job to price securities...not the job of management. well managed companies that perform will have their shares bid up based on that performance. those who base their investment decisions on buybacks do not understand the critical role that capital plays in long terrm performance.
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    • Sat Oct 25th 19:45 PM | Rating: 0 0
      Commented on:
      Bernanke's Fall from Grace
      "The real fact is, that we can no longer allow the Liberals to destroy the very Constitution that we were created by, to destroy the Christian values, of holy matrimony, family, and honest morals in our dealings with each other. "

      ahhh, now i understand. it must have been a bunch of liberals in charge of all those commercial and investment banks, hedge funds and mortgage companies not to mention the liberals at the federal reserve, the SEC, the FHA, the FDIC, et al. that screwed the pooch. not a conservative to be found among them because they have "good christian values."

      i take it you're one of the right wingers with "good christian values" too. are they as good as jimmy "i have sinned" swaggert? remember him? or how about the good reverend jim baker? he loved both nookie and money....maybe even as much as he claimed to love god.

      i always thought that greed has no political or religious affiliation. thanks for informing us otherwise.
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    • Sat Oct 25th 10:31 AM | Rating: 0 0
      Commented on:
      Bernanke's Fall from Grace
      dr. jackpot has it exactly right.

      while the reds talk about confiscation by taxation one of the greatest transfers of wealth of all time occurred through the federal reserve by pushing real interest rates negative and holding them there. as far as i'm concerned it was a criminal act. it continues to this day.

      greenspan is a pathetic old fool and it showed in his appearance before congress. bernake is an utterly unsuited academic who belongs in the insulated world of academia. neither of these geniuses were able to recognizer the single biggest risk factor facing the economy during their tenure...the underpricing of risk and the unchecked expansion of credit. both continue to this day.

      as far as i'm concerned the federal reserve should be absolished. it is more responsible than any single regulatory agency for the collapse of our financial system. far more responsible than the congress, from which one can expect incompetence and pandering. the fed was supposed to be a regulatory body whose primary function is to safeguard the financial system and they ignored that mandate. they utterly and completely failed in that task.

      absolish the federal reserve.
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    • Wed Oct 22nd 10:51 AM | Rating: 0 0
      Commented on:
      Bigger is Not Better in Banking
      great piece.

      as for breaking up the large mega banks, its clearly a superior alternative but it ain't gonna happen of course. the good ole boys are all members of the same club whether they're treasury secretaries, CEOs, federal reserve chairmen or members of congress.

      when the dust settles on this fiasco a couple of years from now look for more affordable/subsidized housing programs....
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    • Sun Oct 19th 01:20 AM | Rating: 0 0
      Commented on:
      Dividends Protect You - Cramer's Lightning Round (10/17/08)
      stop paying taxes...i like the idea. if we all did it together it would take 100 years to build the jails to hold us all even if they had the money to build them, which they wouldn't. as "crap game" of kelly's hero's said "its the perfect caper."

      as for mel gibson, has anyone noticed that it's the moralists among us who are often the most morally repugnant?

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    • Sun Oct 19th 01:14 AM | Rating: 0 0
      Commented on:
      Winter Heating Costs: How Hard a Hit?
      i agree with past tense.

      as for the effect of lower gasoline prices, it still costs me twice as much to fill up my car as it did 3 years ago. i take no pleasure in the fact that it might have cost me 4x as much had the credit system not crashed.
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    • Sun Oct 19th 01:01 AM | Rating: 0 0
      Commented on:
      Fundamental Valuation: How Low Could We Go?


      invictus rose writes:

      "There is, however, a simple and overlooked solution to this "credit crisis." That is to make the interest on all savings tax-free.

      It's my opinion that the reason the government has never taken this most obvious step, considering that they are constantly complaining about how little Americans save, is because it would remove money from asset classes favored by those that benefit from other asset classes--those in power and those with lots of wealth."
      ____________

      to expand on this thought, the government is not only looking out for the captains of industry in its dysfunctional economic policies, it is looking out for itself as well. savings would reduce consumption, which would hurt tax revenues. less tax revenue means less money to finance wars, weapons programs, social programs, foreign aid, etc. etc. that would upset our applecart as "leader of the free world." can't have that can we, never mind the fact that it's long lost its meaning as well as its relevance.

      the so-called "pro growth agenda" of the u.s. government is mislabeled. it is not pro-growth, it is pro-consumption. a true pro growth agenda would recognize that consumption financed by excessive levels of debt is not a lasting formula to prosperity.

      many hedge funds and ETFs use leverage to goose returns, i.e. borrowing cheaply to invest in assets that grow at a rate greater than their cost of debt. the united states consumer, with the encouragement of its own government, does the same thing...achieving the standard of living he can't afford on his own with cheaply borrowed money made available to anyone who wants it. the u.s. isn't the richest country on earth...its just the most overlevered.

      when was the last time you ever heard a government economist, treasury secretary, federal reserve chairman or President tell the american consumer to quit spending and stop borrowing? not only has it never happened, it won't happen. indeed, in the midst of the current collapse of our financial system, today's badly overleveraged consumer is being exhorted to borrow and spend more on his way to the poorhouse. the very financial institutions who were, and still are, so overleveraged they are functionally insolvent are being told they should lend the $700 billion of capital injected by the feds, capital ratios be damned.

      wall street cheers these government efforts to keep the ponzi scheme going and asks for more. the underpricing of risk that led to intolerable levels of leverage is the disease that brought our country to its knees but that doesn't faze them. it wants rate cuts on top of bailout money and there is no doubt in my mind they will get everything they want.

      as for the article, i agree with the substance of the author's comments. the modern generation of investors, professional or otherwise, have no idea what constitutes undervaluation. we're not even close. yardsticks of valuation like treasury yields and earnings yields are utterly irrelevant in this environment. earnings are declining and treasuries are the beneficiary of a public afraid to even have funds in a money market account.

      the rules of the game are changing and i suspect the market hasn't fully discounted the lasting effects this will have.






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