China Sells $79 Billion Bonds to Set Up Reserves Fund
``The bond market will feel the impact of the special issue gradually as the central bank will use it mainly as a tool to absorb liquidity,'' said Lu Wenlei, an analyst with Shenyin Wanguo Securities Co. in Shanghai. Lu said the central bank will reduce issuance of bills to make room for the new debt.
L.G.: What percentage of your net worth do you have in the markets, versus C.D.’s and other risk-averse investments, and how do you decide where to put your money? What stocks do you like, dislike?
M.C.: I don’t know the percentages. I stay pretty conservative and try to stick to things that pay me rather than things I just pray go up because someone else decided to buy some shares.
I have some stock investments that I have made over the years but don’t look at them very often and haven’t traded them much if at all over the past few years.L.G.: And most important, how have you done?
M.C.: I do fine. I bought things that paid dividends or interest, and they go up over time. I will take positions in strategic shorts, meaning I don’t go through and read all the S.E.C. filings. I look for companies that are out-and-out liars or are in a business that I don’t think has a future. (And no, I’m not going to name names. Companies that are shorted tend to put more effort into being litigious rather than spending time trying to actually run a profitable business.)
Source: Executives Column - The World According to ... by Lloyd Grove: Mark Cuban - Portfolio.com
The practice of bidding on a stock that is in the toilet, at a price so low that it's really just a joke if you buy it.
The biggest winners were the financials, which I said at the time were the most over-sold and bad-mouthed by Talking Heads. Of the worst examples of negativity in the market on August 15, Lehman Bros (LEH) has jumped +20.7 pct and Bear Stearns (BSC) is up +10.5 pct. Bear was so despised at the time ($106) that I set a stink bid price of $100, and the low happened to be $101.23. BSC closed Friday at $117.10
Bill Cara: Saturday’s Commentary & Chat, 08/25/2007 9:14 AM ET
As I've noted in recent weeks, the overall combination of an overvalued, overbought, and overbullish market has historically been associated with stock market returns below Treasury bill yields, on average, even when recent price action has been generally constructive. Two weeks ago, I took profits on most of our speculative call options, though the Fund does hold a small further position on the sole basis of market action. I would expect to increase that toward about 2% of assets if the market clears its overbought or overbullish status without serious deterioration in market internals.
Source: Hussman Funds - Weekly Market Comment: November 27, 2006 - Why Warren Buffett Plays Bridge
The 39-year-old, who quit Deutsche Bank AG in April to set up the fund, said in a telephone interview he amassed ``thousands of pounds'' in fines from unpaid congestion-charge fees and taxes. Authorities seized the blue Maserati Cambiocorsa in late May. Des Pallieres didn't realize it had been taken until this month.
``I was distracted by the market turmoil,'' said Des Pallieres, who doesn't use the car during the week because he can walk to his office in the St. James's district of London in 15 minutes. ``My assistant at Deutsche Bank used to take care of the road tax.''
Source: Bloomberg.com: Exclusive
What you hope to get is usually different than what you'll actually get, and the spread increases as demand decreases. Banks are finding this out the hard way.
In one way, I'm sympathetic to the institutional reluctance to face the music. I'd give a lot to mark my weight to "model" rather than to "market."
Source: Jason Kelly | Home
Deloitte Survey
A survey carried out in the US of 1,500 participants across a range of industries showed that only six percent of companies have assessed how Statement 157 will impact the valuation of their assets and liabilities, even though it takes effect in a few months.Approximately half of the participants indicated that the requirement to apply exit price vs. entry price when assessing an asset’s fair value would have some effect on their company – but, as yet, many had done little to quantify the impact.
Approximately half also believed that the provisions of Statement 157 will result in the increased use of valuation specialists at their companies.
Deloitte US comments that while Statement 157 provides clearer guidelines for the valuation process, early consideration of its provisions is key. Corporate executives signing off on company financial statements need to ensure that the new rules are adhered to, so that both they and their companies are protected.
Someone's been cooking the books perhaps? What does Level 3 Accounting really mean?
The Rub
Here's the rub: The footnotes show the vast majority of the $2.24 billion in derivative losses were Level 1 or Level 2, while the $2.01 billion in MSR gains were all Level 3.
In other words, it's a safe bet the losses were real, while the gains had all the substance of a prayer. Indeed, Wells Fargo said in its Aug. 6 quarterly report that ``the valuation of MSRs can be highly subjective and involve complex judgments by management about matters that are inherently unpredictable.''
Moreover, to get to minus $225 million for ``market-related valuation changes to MSRs, net of hedge results,'' Wells Fargo excluded the other $808 million in MSR losses, meaning these fair-value changes weren't hedged at all.
Source: Bloomberg.com: Opinion
12,600 jobs @ $40k/year is $480,000,000.
Mortgage lenders announced plans to cut more than 4,000 jobs, bringing the total of announced housing-related job losses since Thursday to more than 12,600. Many of the cuts related to subprime lending, which involves loans to people with weaker credit.
"There is no functioning subprime market," said Bose George, a Keefe, Bruyette & Woods Inc. analyst. "This is the only way to weather the storm. Cut the work force, stop making loans they can't sell, and hope things get better."
Source: Mortgage crisis widens at Accredited, HSBC, Lehman | Business | Reuters
Yuri is master... I'm not sure how many time's I've played this game, but if it was a job I would be retired by now. Perhaps the game itself turns humans into zombies - I wouldn't be surprised.
Playing C&C is sort of like Zazen meditation, but with tanks and airplanes blowing things up instead of Buddhist priests sitting around.
So why am I not surprised that Russia is fulfilling the C&C plot?
Major-general of the reserve of the Russian Federal Custodial Service Boris Ratnikov tells that Russia and other countries work on making special devices that turn humans into zombies.
Russians have psychotronic weapon to zombie people
Source: Russians have psychotronic weapon to zombie people - Pravda.Ru
After the last couple of weeks in capital markets, many people will be reading blogs like these....
And if you are looking for inspiration about what others in the blogosphere are doing to stay frugal, here are some good reads –
- What I Do to Live Frugally @ Mapgirl's Fiscal Challenge.
- 25 Things We Do To Save Money @ Money, Matter and More Musings
- Strategy - being frugal @ Savvy Saver.
- Four ways I live frugally @ Stop Buying Crap.
- 3 Ways I Live Frugally Without Feeling Deprived @ My Money Blog.
- Green Living is Good for the Pocketbook @ Suddenly Frugal.
- Things I Do to Save Money @ Cal Girl Finance.
- What can one person really do to make a difference? @ The Good Human.
On Tuesday, we told the Housing story using mostly words. Today, we'll go with an only-pictures review:
>
More Mortgage resets are coming:
Chart via At These Levels
Brother can you spare a dime? How about $130.2 billion then?
The European Central Bank, in an unprecedented response to a sudden demand for cash from banks, loaned 94.8 billion euros ($130.2 billion). Overnight lending rates banks charge each other jumped to the highest in six years. The London interbank offered rate in dollars rose to 5.86 percent today from 5.35 percent and in euros gained to 4.31 percent from 4.11 percent.
`Sign of Panic'
``Today's step by the ECB looks like a sign of panic,'' said Sergi Martin, who helps oversee $9.6 billion at Credit Andorra in Andorra. ``We might see more of this in the coming days.''
Source: Bloomberg.com: Europe
I find the UI for this site a bit cluttered and rough, but the concepts make huge sense.
Feature Richness and User Engagement (August 6)
Interaction techniques that deviate from common GUI standards can create usability catastrophes that make applications impossible to use.
Source: useit.com: Jakob Nielsen on Usability and Web Design
Me, I'm looking at GKA-GKE for some Bond ETFs. Fed's gotta make money too.
July 20 (Bloomberg) -- Federal Reserve Bank of St. Louis President William Poole said investors who lost money buying subprime mortgage-linked securities got what they deserved.
Source: Bloomberg.com: Worldwide
Apparently between $50 - $100 BILLION is a "fairly significant" number in Bernanke speak. Somehow I think he's right, since Kuwait's GDP is just a bit shy of $100B. Perhaps "fairly significant" is too strong?
Apparently 15 million people losing their homes is a "slight decline" in the housing market. I guess that's only a 5% loss in financial terms, if there's 301 million people in the US. But just like derivatives, the people that lose their homes will send repercussions onto the rest of the population. Guess this would be a good time to rent out property.
Apparently 20 million people have lost their homes in Asia over the last two months due to flooding. That's probably less than 5% of the total population. Sound like something you would bet on in the markets?
"The feeling I have today is that of watching a very slow motion train wreck," wrote Jeremy Grantham, chairman of GMO LLC, which manages about $150 billion in assets.
That doesn't really instill a whole lot of confidence in me. As my flight instructor, a French Canadian Air Force pilot, told me while we were flying last month, "If we crash, make sure you aim for ze trees and not ze water. Ze water, it is like concrete. In ze trees, we will probably jus' get knocked out and maybe break some arms. And somebodee will come looking for us, eventuallee."
Glad I'm not afraid of flying.
"Some observers have viewed the large expansion of hedge funds as a rising danger to financial stability, requiring additional regulation and Fed readiness to intervene. I myself believe the dangers of systemic problems from hedge fund failures are vastly overrated. The hedge fund industry is indeed large but it is also highly diverse and competitive. Many and perhaps most of the large positions taken by individual firms have other hedge funds on the opposite side of the transactions. I trust normal market mechanisms to handle any problems that might arise."
Bill Poole, November 16, 2006.
Sounds to me like a father telling his drowning son to "swim, idiot!" instead of tossing him a life preserver, or getting his feet wet.
In the words of the Fed, "Bear Stearns, bite me."
I wonder how this will affect program trading?
So now that the SEC has ditched the uptick rule, how does this affect the market's major players? Let's see…
- Individual Investors: Longer-term investors, especially those that only go long, will see little change in their activities. But for anyone shorting NYSE or AMEX stocks, the change could have a significant impact on the ease of getting filled in those short sales, since investors will no longer have to wait for an uptick. However, there won't be much change for Nasdaq stocks, since earlier changes allowed legal workarounds for Nasdaq traders.
- Institutions & Funds: A common practice for "big money" on Wall Street was to craftily put in a significant amount of buy orders to move a stock to an uptick before then placing their real short sale order. But now that the SEC has eliminated the uptick rule, short selling will now be more efficient for these institutions and funds.
Source: The Uptick Rule
SCORECARD: DEBT DILEMMAS
How Credit-Market Tremors Have Affected Junk Bonds, LBOs and Hedge Funds
The days of easy credit may be coming to an end. The jitters began with losses at two Bear Stearns hedge funds that invested in subprime-mortgage debt that now are worth almost nothing. And over the past few weeks, a string of companies has delayed or canceled debt offerings, a sign that investors may be less interested in debt deals that don't adequately reward them for potential risk. — Compiled by Annelena Lobb and Cassandra Vinograd
Source: WSJ.com
MARKET ALERT
from The Wall Street Journal.July 31, 2007
Bear Stearns, already forced to shut two hedge funds that bet heavily on the risky subprime-mortgage market, is now facing big losses in a third fund that has roughly $900 million in mortgage investments, according to people familiar with the matter.
The $850 million Bear Stearns Asset-Backed Securities Fund has suspended investor redemptions and expects losses in July.
Also, Japan down over 1% right now.
Posted by: onlineaces
at July 31, 2007 10:22 PM
Source: Bill Cara: Cara’s Daily Commentary, Tues., July 31, 2007, 11:09 AM
Move forward to the peak in silver prices in early 1980, and that same median home would cost one-third as much in terms of silver. Quite a move in just a few years, don't you think? This of course will bring many questions to mind, because most real estate investors are partial to the investment class that they understand and have experienced for some time. Real estate opportunities still exist, but the overall trend has shifted. In plain words, it will be far easier to make money in the precious metals over the next several years than in real estate.
Source: Jul 30, 2007 Rich Investor, Poor Investor David Morgan 321gold
The British Columbia Major Projects Inventory is a comprehensive database containing information on major development activities in British Columbia. Information on the location and status of capital projects over $15 million (Cdn.) in capital cost, or $20 million in the Lower Mainland area, for mining, oil and gas, manufacturing, transportation, utilities, hotel and residential construction projects are all available at your fingertips.
