Category: investment
Housing: The Downfall Is Just Beginning
January 3rd, 2007There is some big, bad news in housing and housing-connected sectors today (of course, you wouldn't know it looking at the stock market, but I believe there's a relevant Keynes quote about that).
First up is that homebuilder Lennar shocked observers b… more »
Illegalize Investing!
October 28th, 2006A recent The Infinite Mind on "Money and the Mind" had a harrowing tale of Jim Cramer's stock market addiction:
Mr. Cramer then describes his extreme obsession with money and the stock market. With markets open around the clock, he would trade at… more »
Bad loans draw bad blood
October 15th, 2006So what has become of all those subprime mortgages, sold to over-consuming SUV-driving Joe Soccer mom, Jose` day laborer, and Susie Q. welfare queen -- re-packaged, securitized, and sold to (other) banks through the mortgage market? What happens when th… more »
The Fallout of Amaranth
September 20th, 2006The damage from the Amaranth hedge fund's apparent collapse appears to be shallow but far-reaching. At least $6.5 billion was lost, as the fund kept doubling-down on a bet that natural gas would go up, and ran out of credit.
So far the following pe… more »
USA Today: Hedge Funds Sputtering
September 19th, 2006Hedge funds haven't been doing so hot in the past few months:
Lately, returns have tailed off. The Hennessee Hedge Fund Index is down three straight months. Even funds that track hedge fund indexes are trailing the indexes they track. Critics blame… more »
A Broken Risk-Management Paradigm
September 18th, 2006Lately in these pages I've been doing a lot of attacking of hedge funds and other areas of the financial economy where I see sources of systemic weakness. Most of these criticisms have had to do with reduced "cash" capitalization and increased leverage.… more »
Going Public: The Next Rabbit in the Hedge Fund Hat?
September 15th, 2006The NYTimes Business section had an interesting story today on the prospect of hedge funds--otherwise surreptitious creatures--going public (!):
The Man Group, a London-based hedge fund first went public as a commodities broker with hedge fund op… more »
All Hail The Mighty Mogambo
September 14th, 2006I got mogambofied recently. (If you dont read Richard Daughty aka "The Mogambo Guru's" regular economic commentary, even if you disagree with the standpoint, you are missing some good laughs). more »
Does A Capitalist Economy Require Central Liquidity Engineering?
September 13th, 2006It is conventionally argued that neutral monetary policies can represent a drag on business innovation and ultimately progress: if there isn't "enough money" available for new ventures, they will stall, and businesses will fail (or never get off the grou… more »
The Unsoundness Of the Housing Bubble: Home Builders and Off-Balance-Sheet Financing
September 3rd, 2006Is the swan dive of home builders finished? I have long suspected not, after seeing the following segment from Barron's "The Trader" column back on June 5 ($$$ required, excerpts posted below):
While much bad news is certainly priced into home bu… more »
Give That Scoundrel An Award!
August 30th, 2006What happens to one of the principals of the most notorious hedge fund in history (as of yet), eight years later?
Nope, not jail time.
Nope, not damages.
Nope, not being banned from the finance industry.
Try getting a lifetime achievement awa… more »
Defaults in the Commodities and Futures Exchanges
August 30th, 2006James Turk writes in his recent regular commentary:
Less than one year ago REFCO, a New York based financial services company, collapsed. Last week the London Metals Exchange took the extraordinary step to postpone what looks like the inevitable def… more »
Banks to Hedge Funds: What, Us Worry?
August 29th, 2006From a seemingly-mundane piece from this week's Barron's, "End of the Line for Brokers", an article arguing that brokerage/investment banks have peaked ("brokers" below are the investment banks):
Firms are more inclined today to lend the same amount… more »
Another Interesting "What Happened in 1995" Chart: Home Builders
August 28th, 2006Posted at Random Roger (hat tip Raja Ziady):
My specific explanation for the above is, besides an increasing prevalence of leveraged bets by market players (e.g. hedge funds), an increasing use of leverage by the home builders themselves (appar… more »
Signs of Dwindling Interest in US Securities
August 27th, 2006From the Aug. 19 "Inflation News Aids Bonds and the Fed" in Barrons, by Randall W. Forsyth, comes this set of revelations (emphasis mine):
Numbers for June, the most recent month for which data are available, show that overseas investors sharpl… more »
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