Tuesday, September 1, 2009

Hogs on a Diet

The hogs at the trough in the finance industry seem to be on or going on a forced diet. For decades these hogs slurped down huge pay in bonuses and "profit" shares while eventually running their firms into bankruptcy or huge losses that wiped out all the "profits" their prior pay purportedly compensated them for generating. Lehmann, Bears Stearns and quintessentially, Merrill Lynch, are public examples. Large numbers of private hedge funds and buyout funds are other private examples.

Their bosses were supposed to be promoting the firms' long term value, but they had their snouts in the trough bigtime, too.

As a proponent of populist libertarianism, readers know I favor regulating the ruling classes while letting the common man have maximal freedom. And somehow regulating the hogs of finance is part of that. Europe is imposing government rules on bonuses in the finance industry.

From FT: "[UK Prime Minister] Gordon Brown has pledged tough action to clamp down on excessive remuneration for bankers as part of an international effort to rectify the systemic weakness that led to the global financial crisis. The prime minister said in an interview with the Financial Times that pay and bonuses should be based on long-term success not short-term speculative gains; banks should “claw back” bankers’ rewards if their performance suffered in subsequent years; and regulators should be able to impose higher capital requirements on financial institutions."

And: "Banks will be barred from lucrative French government mandates if they fail to abide by new international guidelines on pay, President Nicolas Sarkozy warned on Tuesday as he unveiled tough domestic rules on rewards for traders. “We will not work with banks that do not apply the rules,” the French president said after a meeting with the country’s top bankers, who were summoned to the presidential Elysée Palace."

How can this be done in the US, with our tradition of individual freedom inherited from the pioneer days ?

Shareholders and investors need enhanced powers. For decades the SEC has emasculated shareholders, letting boards of directors become pawns of the CEO hogs. Large investors now know the costs of letting the hogs eat too much. I suspect given powers they will act now. There is evidence of this.

FT: "Private equity groups are facing mounting opposition from investors over their attempts to raise annex funds, which buy-out firms hope will provide fresh cash to bail out many of the companies they bought during the debt bubble. Apollo Management had been forced to drop plans to raise an annex fund, after opposition from some of the US private equity group’s biggest backers, according to people familiar with the situation. Apollo declined to comment."

These annex funds are a particularly sleazy way for the hedge funds and buyout fund to grab more fees. The managers are supposed to work hard to get the funds back to the "high water" marks before getting more fees. But what do they really do ? Create a "sister" or "annex" funds and divert all the good ideas and deal there, so they can grab for fees. Their greed and sleaze knows no bounds of propriety.

Investors now know how this is crucial to their long term profits. They'll act, if given the powers.

SEC, Congress, Fed and Treasury: get on the ball and follow Europe's lead in working out how to give shareholders and investors real powers to limit these and align them truly with the long term investors.

Memory

Today is the 70th anniversary of the beginning of World War II in Europe, as Nazi Germany invaded Poland on September 1, 1939. In Asia, World War II began in 1931 when Japan invaded Manchuria. Let's remember the dangers of totalitarian or militarist regimes. They are true enemies of humanity and deserve no quarter.

Actions

Doing nothing. Je ne fais rien. The sell-off is orderly so far. No significant bad news has appeared. More tidbits of evidence than economic growth is returning continue to appear. This is likely a minor pullback in a bull market. Buyers are taking a breathers and perma-bears are getting a bit bolder. I'll continue to buy dips and sell rips. This week I'll prepare a list of ten or so exporters to buy in Obama Fund or Fido Fund.

Word of the Day

"Crepuscular" - noun [$10] from reading of Conrad's "The Tale"
Crepuscular means 1.a. of twilight; 1.b. dim; 2. (zoology) appearing or active in twilight.
Sentence: During crepuscular light mosquitoes become especially active as they can target one's body better.

[btw, "twilight" is the period of partial light just after sunset. Dusk is the darker period of twilight.]

[Soon I'll recommence "Word of the Day" for the other langauges I am learning.]

71 comments:

Spin-em said...

Knight

"So here we have the SEC suspending the use of leveraged and any inverse ETFs at major brokerages. It's starting with the 401-ks, but how long do you think it'll be before more "help" is on the way?


You've also created a situation where people will be helpless to sustain the value in their accounts, because their choices will be (a) cash; or (b) bullish equity positions.
Jerks'

Bunkerman said...

all the Street wants is the vig on those frauds. Holding a leveraged ETF in a 401K is a one way street to total loss of retirement money, as data on their performance over a year proves.

Those are for day traders.

Buying LT Treasuries in early 2008 would have made a 401K a huge gain without any shorting.

Bunkerman said...

btw, the quote was self-contradictory: cash DOES sustain the value in the account.

Bunkerman said...

polemical nonsense.

Bunkerman said...

btw, I see nothing wronge with a simple inverse ETF that actually shorts SPY or QQQQ or real stocks.

No derivative bs.

Bunkerman said...

August ISM Manufacturing 52.9 vs 50.5 consensus, prior 48.9

Sayonnara recession.

mfl59 said...

Obama has really saved us....what a great job he has done....

Bunkerman said...

No, so far he's done nothing. The recession should have ended in Q2 as in Europe & Asia, but his stimulus package was mostly wasted or is late.

Ben has done all the work.

US should have come out of this first, but due to Obama, it's last.

Spin-em said...

'mern the quitters' hero Maher says LBJ last true dem prez....

Bunkerman said...

jeez, that's saying a lot.

LBJ was the worst US President in the 20th century.

mfl59 said...

Bunk if I can get you to swing at that garbage you must be a little rusty...

Bunkerman said...

uhhhh, yes, I am a bit starved for political action.

Frosty said...

please post all panic sales...thanks in advance.

Bunkerman said...

hmmm I see that recent rising short interest data was a sign the beefers were going to try a push lower.

Interesting ... it's not a contrary indicator any more & hasn't been for a couple of years.

Bunkerman said...

panic sales lolol I did my selling on the rips during the summer.

Bunkerman said...

maybe I'll get my exporter buuys at far lower prices.

No buck fever here, either.

Bunkerman said...

after the wilderness trip, I am very mellow.

mfl59 said...

Can you give a few examples of exporters you are looking at Bunkerman? thanks...

Spin-em said...

Bunk did you buy LT treasuries in early 08?

Bud said...

what ?? no f'ng tommyhawk action..........all that talk .......and nuthin but some .......fishin


sat by the fire.......and looked at stars......and talked

what a bunch of fags

Bud said...

speakin of fags


hey frosty.............i am sure you loaded the QID yesterday.........you're the f'ng best...........you're also a f'ng douchebag



PS.....still wanna be friends ??

Bud said...

speakin of fags


andy pettitte 3rd winningest pitcher in yankee history.......a cheater......a juicer.....and a cocksucker.......and a jizz swallower


typical yankee scum

Bud said...

hey Bman...........doug kass extremely bearish on the stock market


is Kass also serving his beefer masters ??

mfl59 said...

There he is fellas!!!!

Get that handicap validated son...Feb 2010 coming quicker than a Hal fkk job.....

Bud said...

oh no..............trader tax gaining momentum again

http://www.thehill.com/homenews/house/56789-afl-cio-dems-push-new-wall-street-tax


thoughts Bman ???

Bud said...

Bman are managed futures an assett class ???

Bunkerman said...

Maybe "exporter" was the wrong word; I want US companies that have a large proportion of revenues from non-US sources. I don't care if they make it here or not.

example: ITW

Bud said...

'stocks like NVAX disgust me'


yeah ...........stox that go from 2 to 7 in a few weeks sure are disgusting


great job mern............stick with the stock market kid............F lookin for a job

Bunkerman said...

no re LT Treasuries, I was wrong about the panic occuring - I didn't think the Street was so stupid.

But IF I had thought it would happen, yes I would have bought them. That was a lesson from 1987 that I knew well.

mfl59 said...

ahhhhhaaaaaaa...so you concede there really is no such thing as a US exporter...

touch em all baby!!!!

Bud said...

speakin of fags


shut the F up ace..............traitor.....deserter........judas............benedict arnold...............go to hell !!!!

Bunkerman said...

hey Bud, there are films and photos of me with my tomahawk in action. Impressive, indeed.

Bunkerman said...

I could even hit a turban at 25 yards with it ;)

Bunkerman said...

let alone split an empty skull.

;)

Bunkerman said...

Kass IS a beefer master, sheesh, you dope.

Bud said...

'hit a turban'

Bman!!!!!

LMAOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO

Bunkerman said...

well, US corn and soybean farmers are exporters, but not public companies.

Bunkerman said...

Big Al has a movie of me in action with the tomahawk.

Spin-em said...

BEANTOWN HOMOS A LIL BITTER???..I THINK SO......thank you for your attention

Bud said...

omg !!!!!!


just read Bman's post from this morning........nonsense.....garbage........what a bunch of thumping tosh


Bman are you a bloshevick ???

Spin-em said...

andy pettitte 3rd winningest pitcher in yankee history.......a cheater......a juicer.....and a cocksucker.......and a jizz swallower

they say the same about ur granny mom and sister,boyfriend but Im too mucha gentleman.....

Bunkerman said...

I know a lot about Bolshviks - more than 99.9999% of people in the US - and no, I'm not even close nor in the same dimension.

Why is it "socialism" to give shareholders REAL power to monitor their companies ?

Actually, it's a bit of fascism to prevent them.

Bunkerman said...

"Shareholders and investors need enhanced powers. For decades the SEC has emasculated shareholders, letting boards of directors become pawns of the CEO hogs. Large investors now know the costs of letting the hogs eat too much. I suspect given powers they will act now. There is evidence of this."

Doesn't sound like "socialism" to me.

Of course the hogs will screech whatever lies can confuse the issue.

Spin-em said...

aahead only shows up after jim wrecks his p&l.....to weak to man up to jim...blows off in bunker......ROFLLLL...what a douche

mfl59 said...

Bunkerman dont you know that "jim" says there is no such thing as overpaid....

Now if that dude isnt overpaid, then nooone is....

Bunkerman said...

hmmm if no person can be "overpaid", then by analogy that would mean that no price is too high to pay for a stock.

What a fool / knave !!!

Frosty said...

Spin LMAOOO...u know if I can get sharkfolio updates on my crackberry 89000000000000000000000000000000000000

Bud said...

Bman no thoughts on the trader tax article ??


pretty scary ..............afl-cio and the liberals in the house............a deadly combination for us


well......at least for me........since i'm a ping-pong player only...............a long-term investor like you prolly supports it



bolshevick indeed

Spin-em said...

back to the Bmen questions....that more like it bitch..you Fl azzheads quit so easy...lil slap and the punks run away....soft indeed..ROFLLLLLLL

Frosty said...

easy big Spin...."this one time, in jr high............."

Bunkerman said...

I saw no recent "trader tax" article in WSJ or FT.

Bud said...

http://www.thehill.com/homenews/house/56789-afl-cio-dems-push-new-wall-street-tax


there it is B

Bud said...

Bman does nouriel roubini also 'serve his beefer masters ' ??


he on fast money tonite.............he been predicting a double dip recession

mfl59 said...

dont forget that "guy" who is now eating out of a straw.....be very careful spin....

Frosty said...

Bunky...check the Pakistan Times, think there is an online version...search headline: trader tax jihad.

Spin-em said...

ROFLLLLLLLLLLLLLLLLLLLLLLLLLLL

Spin-em said...

good times..good times.....PakiBraus on me

Bunkerman said...

Roubini wants to sell books and get paid to bloviate in speeches.

Will he ever admit error when no "double dip" occurs ?

Pundits never do.

Did Molotova admit error in saying to sell JPM at 20?

Bunkerman said...

Just boob bait for the bubbas ... and Buds.

Money soon to flow to lobbyists .. on schedule.

mfl59 said...

Bunkerman how can the market go down whe the economic backdrop is so bullish?

Bunkerman said...

beefers can make Ms. Market dance to any tune they desire ... for awhile.

Bunkerman said...

and ... "real buyers do it on dips"

hence they would pull bids and let beefer shorts bring it down awhile.

Frosty said...

Regulatory Notice 09-53

Increased Margin Requirements for Leveraged Exchange-Traded Funds and Associated Uncovered Options; Effective Date: December 1, 2009

Executive Summary

Effective December 1, 2009, FINRA is implementing increased customer margin requirements for leveraged ETFs and uncovered options overlying leveraged ETFs, in accordance with NASD Rule 2520 and Incorporated NYSE Rule 431.


Bunky...nonono top shelf booze...shrimps nonono robster size...skim delayed...your heros at the SEC not getting what they want.

Bunkerman said...

one wonders why any margin debt is allowed for a leveaged ETF.

Sheesh ... double leverage.

mfl59 said...

boy Ive got you swinging at pitches bouncing 10 feet in front of the plate sir....

"bullish backdrop"...

lmaooooooooooooooooo

Bunkerman said...

SEC, FINRA are completely in the Street's pocket.

Bud said...

APT

nailed it !!!!!


stock of the week............stock of the decade..........up 50% in a day


DANKE VIELMALS JIM !!!!!!!!!!!!!!!!!!!!!

Bud said...

" hey sal............why you gotta be so tedious?"


cuz i'm a tedious motherfucker !!!!

mfl59 said...

that line gets ignored for a month straight and yet you keep going to it...pffftttt....

"el bastardo amarillo" indeed

Spin-em said...

"el bastardo amarillo" indeed

rofllllllllllllllllllll

Spin-em said...

nobody.....and I mean nobody.....comes into our house and pushes us around....LOOOOL