This post is not about the Ruling Classes (CEOs, government bureaucrats and politicians) who loot the public to get richer & more powerful while failing to deliver anything to the common man and woman. This post is about the beefers, aka big, evil funds, mostly private investment partnerships also known as hedge funds, who led the hoard of financial vikings who looted the nation before and during the Panic of 2008 and its aftermath. A new book shows that nearly the entire industry is a scam. The hedge fund managers make plenty of money, but the investors get nothing cumulatively. Remember that old book and adage about the financial industry during the Great Depression - "Where are the Customers' Yachts?". The hedge fund industry is a reprise writ large.
A review of "The Hedge Fund Mirage: The Illusion of Big Money and Why It's Too Good to be True" [Simon Lack, Wiley] in the weekend Financial Times contains all you need to know. "If all the money that's ever been invested in hedge funds had been put in Treasury bills instead, the results would have been twice as good."
More: "Never in the field of human finance has so much been charged for so little."
And: "The prime purpose of the sector is to provide jobs and wealth creation for the industry professionals: managers, consultants, allocators, prime brokers, and other service providers."
The total amount of money lost by hedge funds in the Panic of 2008 - "some $450bn-odd vaporised in a single year ... destroyed all the value that hedge funds ever created."
The managers made big money. "From 1998 to 2010, the cumulative split was just $9bn to investors versus $440bn to managers." That is a breathtaking vision of pure greed and fraud.
The author has the numbers and data to back up every conclusion ... and every smirk of disgust at the hogs at the trough. In the end, though, he blames the investors. They are the stupid cows being milked and leeched by the parasites in the hedge fund industry. They want to get ... more. And they get what they deserve - less.
Your author, the Bunkerman, has been saying and writing this for years, to the smirks and jibes of various pontificating (and well paid) pundits and some hedge fund managers themselves. It's nice to see Bunkerman proven right ... again.
Showing posts with label beefers. Show all posts
Showing posts with label beefers. Show all posts
Monday, February 20, 2012
Thursday, September 2, 2010
On for the Ride
My favorite market metaphor is the herd of elephants. Those are the "beefers". A "beefer" is a Big, Evil Fund. A Big, Evil Fund is an actively managed fund (hedge fund or mutual fund or the proprietary trading desks on the Street) with more than $100 million (likely leveraged a lot) which mostly tries to make money trading. Nowadays, many are run by computers.
The "market" is a herd of them - like a herd of elephants. There are few brains: very, little fundamental thinking. Elephants are smart, so maybe dinosaurs are a better choice for the animal. They had small brains. The Steagsaurus had a brain the size of a walnut and a multi-ton body. Or maybe a Brontosaurus.
Beefer behavior is like a heard of brontosaurs: they mill around the water hole, stomping on everything that moves on the ground, and eating everthing edible. Their computers try to extract "vig" from the real investors and the dumb money. After awhile, the water hole is all mud and the food is gone. Then the herd will head out looking for the another water hole. It might be a "bullish" or a "bearish" water hole. Some sectors might be favored, or they'll just play the indexes.
That's what happened yesterday. The herd started moving out.
How does a small, agile mammal - like the common man investor - survive & make some money ?
When the herd is milling around, stay in the trees. If you get involved, you'll get stomped. Pick off some trades on the edges of the herd when asset values get out of whack. Mostly wait. Sit.
BUT keep looking for signs and portents that might signal the herd is getting ready to move out. When it does, don't be afraid to hop onto the back of a Brontosaur & ride along. That's how you make the big money. Ride a trend to the next water hole. Then get into the trees again.
Krypto knows this and has hopped onto the back of a Brontosaur for the ride. Yesterday I bought much $ in US index funds, mostly VTI. If the move is a feint or fades, I'll get back into the trees, but until that seems obvious, I'll enjoy the ride.
By the way, Krypto is a Kelpie from Australian and those dogs are bread and trained to climb onto the backs of a herd of sheep to move them through the gate. Riding a big Brontosaurus is no problem :)
Word of the Day
"Flagitious" - adjective [$10]
Flagitious means criminal, utterly villainous.
Sentence: So much flagitious behavior of politicians and would be politicians has been exposed and is occurring that finding honest candidates seems to be a mission like finding a few righteous men in Sodom.
The "market" is a herd of them - like a herd of elephants. There are few brains: very, little fundamental thinking. Elephants are smart, so maybe dinosaurs are a better choice for the animal. They had small brains. The Steagsaurus had a brain the size of a walnut and a multi-ton body. Or maybe a Brontosaurus.
Beefer behavior is like a heard of brontosaurs: they mill around the water hole, stomping on everything that moves on the ground, and eating everthing edible. Their computers try to extract "vig" from the real investors and the dumb money. After awhile, the water hole is all mud and the food is gone. Then the herd will head out looking for the another water hole. It might be a "bullish" or a "bearish" water hole. Some sectors might be favored, or they'll just play the indexes.
That's what happened yesterday. The herd started moving out.
How does a small, agile mammal - like the common man investor - survive & make some money ?
When the herd is milling around, stay in the trees. If you get involved, you'll get stomped. Pick off some trades on the edges of the herd when asset values get out of whack. Mostly wait. Sit.
BUT keep looking for signs and portents that might signal the herd is getting ready to move out. When it does, don't be afraid to hop onto the back of a Brontosaur & ride along. That's how you make the big money. Ride a trend to the next water hole. Then get into the trees again.
Krypto knows this and has hopped onto the back of a Brontosaur for the ride. Yesterday I bought much $ in US index funds, mostly VTI. If the move is a feint or fades, I'll get back into the trees, but until that seems obvious, I'll enjoy the ride.
By the way, Krypto is a Kelpie from Australian and those dogs are bread and trained to climb onto the backs of a herd of sheep to move them through the gate. Riding a big Brontosaurus is no problem :)
Word of the Day
"Flagitious" - adjective [$10]
Flagitious means criminal, utterly villainous.
Sentence: So much flagitious behavior of politicians and would be politicians has been exposed and is occurring that finding honest candidates seems to be a mission like finding a few righteous men in Sodom.
Tuesday, May 25, 2010
Heavy Shelling ...
The Euro-beefers are bailing out, hence the severe weakness in the AM futures markets. I think yesterday's very late, massive sell-off was the precursor to the today's AM drop off. I'd guess the Street had the orders in already or knew that Euro-beefers were being liquidated, so used the firmness yesterday to front-run the moves at the close.
Of course, since all participants [except the common man investor] have learned to recognize signs of computer order floods, and to climb the trees to safety at first sight, the swings are much larger and faster than an orderly market would normally have. For all the blather about "liquidity" provided by computer trading, is it not NOW obvious to all that such "liquidity" is a phantom, and is NOT there when needed ?!
Get rid of ALL computer trading EXCEPT within very narrow market windows of time and price.
The knaves at the SEC won't do that, though. They care NOTHING for the common man investors. All they want to to line up a job with fat pay at the Street or the Street's law firms after leaving government.
Actions
Waiting. Krypto has plenty of cash to redeploy. She did a LOT of selling as the market approached the recent highs - I posted them all. Notice that UNLESS one does selling on the way up, one will not have cash to buy on big plunges. You really do have to buy low, sell high AND sell high to buy low. It will take a good bit more drop to trigger Krypto's buy programs again. Just sitting & waiting.
Mrs. B has a bit more more cash to redeploy, too. No ideas in mind for now, though. Lolol, I think she is the only buyer at her local broker's office lately.
Word of the Day
"Apophasis" - noun [$100] Rhetorical
Apophasis means denial of one's intention to speak of a subject that is at the same time named or insinuated, as "I shall not mention Caesar's avarice, nor his cunning, nor his morality."
Sentence: In modern political dialog, one often hears examples of apophasis as a way to smear an opponent with negative or even false accusations, while seeming or purporting to be clean.
[From Greek, ap'opha(nai) - to say no, deny]
Of course, since all participants [except the common man investor] have learned to recognize signs of computer order floods, and to climb the trees to safety at first sight, the swings are much larger and faster than an orderly market would normally have. For all the blather about "liquidity" provided by computer trading, is it not NOW obvious to all that such "liquidity" is a phantom, and is NOT there when needed ?!
Get rid of ALL computer trading EXCEPT within very narrow market windows of time and price.
The knaves at the SEC won't do that, though. They care NOTHING for the common man investors. All they want to to line up a job with fat pay at the Street or the Street's law firms after leaving government.
Actions
Waiting. Krypto has plenty of cash to redeploy. She did a LOT of selling as the market approached the recent highs - I posted them all. Notice that UNLESS one does selling on the way up, one will not have cash to buy on big plunges. You really do have to buy low, sell high AND sell high to buy low. It will take a good bit more drop to trigger Krypto's buy programs again. Just sitting & waiting.
Mrs. B has a bit more more cash to redeploy, too. No ideas in mind for now, though. Lolol, I think she is the only buyer at her local broker's office lately.
Word of the Day
"Apophasis" - noun [$100] Rhetorical
Apophasis means denial of one's intention to speak of a subject that is at the same time named or insinuated, as "I shall not mention Caesar's avarice, nor his cunning, nor his morality."
Sentence: In modern political dialog, one often hears examples of apophasis as a way to smear an opponent with negative or even false accusations, while seeming or purporting to be clean.
[From Greek, ap'opha(nai) - to say no, deny]
Monday, April 19, 2010
Financial Vikings
Friday began what I hope is an historical example of "The Truth Shall Set You Free" [John 8:32]. Finally some group in the regulatory swamp in DC finally did their job and investigated some of the failed transactions that helped create the Panic of 2008. The SEC charged Goldman, Sachs - a leading Financial Viking - of misleading investors, and hiding the true nature of a transaction it created.
What is a Financial Viking ? The analogy to the Vikings of old fits rather well. The Vikings who invaded Europe after 800AD and continued for about 200 years were ruthless plunderers who took whatever they could, burned monasteries and towns, and killed anyone in their way. Then later they settled in conquered lands and set up aristocratic feudal states. William the Bastard - Duke of Normandy - later William the Conqueror and then William I, first King of England, was a descendent of the leader of a Viking band.
A financial viking is a firm (Wall Street or beefer) who trashes, loots and plunders anyone it or he can in financial trades in any manner possible. They use their great wealth and power to ... get more. They lure sleepy institutions into dumb trades: heck, internally they call them the "dumb money". They don't care if that leads to job losses or the bankruptcies of innocent people. They hide behind phalanxes of well-paid lawyers and boilerplate risk language.
Financial Vikings shorted huge amounts of stocks while buying credit default swaps on those firms. They were trying to cause defaults by spreading fear and panic. And like the Vikings of old, they operate in loose bands. One would blow the horn to attack (likely using unrecorded instant message systems), and the others would start to hammer the stock and swaps.
And they created artful lures to get more from the "dumb money". The transaction created by Goldman Sach at the heart of the SEC charges is well described in this link -> http://www.reuters.com/article/idUSTRE63F5CZ20100416
I have seen the Goldman Sachs "pitchbook" for the Abacus 2007-AC1 offering. This "document" is grossly misleading. The pitch goes to great lengths creating a sham that ACA was the creator of the offering, managing it, and structuring it. GS is portrayed as simply the initial buyer of the securities. The core role of Paulson is not mentioned. The entire transaction was a lure - a trap - for "dumb money" to enter the lair of Paulson & Co. Dracula had to lure his victims to his clutches: "Enter freely and of your own free will" [Dracula, by Bram Stoker, Chapter 2, page 2. And the Financial Vikings had to do that to continue to drink the blood of the dumb money.
I hope that the Department of Justice and the New York State authorities investigate this as conspiracy to defraud investors, and include Paulson & Co. in that. That firm is a quintessential Financial Viking. Sure, he saw a problem - a fire starting in residential mortgages. He proceeded to throw gasoline on and spread the fire everywhere to burn as much of the forest as possible .. for his own gain.
More
Friday's Wall Street Journal describes the new headquarters of Goldman Sachs. That building is so representative of that firm. The aristocracy of the "partners" have palatial offices. The rest of the vassals and serfs get demeaning and uncomfortable desks and cubicles. Sure, they might be well paid. But they have to kiss the books of their Lords, the "partners", every day before being sent out to loot the public and "dumb money". Goldman Sachs is a band of Financial Vikings trying to create an aristocracy of the rich & powerful in the US and the World. Until recently their "partners" were part of what seemed like an exchange program for the ruling classes, going on to high offices in the US government. That all has to change.
Financial regulatory reform must put all Financial Vikings and their weapons (derivatives, etc.) under chains and locks.
And More
Goldman, Sachs hid the fact of the SEC investigation [ the "Wells Notice"] from the public. Amazingly brazen !
Word of the Day
"Misprision" - noun [$10] [pronounced mis 'prizh un] from Shakespeares's "As You Like It".
Misprision means (I) (Law) 1. the deliberate concealment of one's knowledge of a crime, treason [misprision of a felony, treason]; 2. a wrong act or omission; 3. neglect in preventing or reporting a crime; 4. maladministration of public office. (II) 1. a misreading, misunderstanding, etc.; 2. (usu. foll. by 'of') a failure to appreciate the value of a thing; 3. (archaic) contempt (see related verb 'misprize')
Sentence: How many people in the financial community - lawyers, compliance, management, on and on - are guilty of misprision ? The numbers are likely countless: well-paid enablers of the looting.
What is a Financial Viking ? The analogy to the Vikings of old fits rather well. The Vikings who invaded Europe after 800AD and continued for about 200 years were ruthless plunderers who took whatever they could, burned monasteries and towns, and killed anyone in their way. Then later they settled in conquered lands and set up aristocratic feudal states. William the Bastard - Duke of Normandy - later William the Conqueror and then William I, first King of England, was a descendent of the leader of a Viking band.
A financial viking is a firm (Wall Street or beefer) who trashes, loots and plunders anyone it or he can in financial trades in any manner possible. They use their great wealth and power to ... get more. They lure sleepy institutions into dumb trades: heck, internally they call them the "dumb money". They don't care if that leads to job losses or the bankruptcies of innocent people. They hide behind phalanxes of well-paid lawyers and boilerplate risk language.
Financial Vikings shorted huge amounts of stocks while buying credit default swaps on those firms. They were trying to cause defaults by spreading fear and panic. And like the Vikings of old, they operate in loose bands. One would blow the horn to attack (likely using unrecorded instant message systems), and the others would start to hammer the stock and swaps.
And they created artful lures to get more from the "dumb money". The transaction created by Goldman Sach at the heart of the SEC charges is well described in this link -> http://www.reuters.com/article/idUSTRE63F5CZ20100416
I have seen the Goldman Sachs "pitchbook" for the Abacus 2007-AC1 offering. This "document" is grossly misleading. The pitch goes to great lengths creating a sham that ACA was the creator of the offering, managing it, and structuring it. GS is portrayed as simply the initial buyer of the securities. The core role of Paulson is not mentioned. The entire transaction was a lure - a trap - for "dumb money" to enter the lair of Paulson & Co. Dracula had to lure his victims to his clutches: "Enter freely and of your own free will" [Dracula, by Bram Stoker, Chapter 2, page 2. And the Financial Vikings had to do that to continue to drink the blood of the dumb money.
I hope that the Department of Justice and the New York State authorities investigate this as conspiracy to defraud investors, and include Paulson & Co. in that. That firm is a quintessential Financial Viking. Sure, he saw a problem - a fire starting in residential mortgages. He proceeded to throw gasoline on and spread the fire everywhere to burn as much of the forest as possible .. for his own gain.
More
Friday's Wall Street Journal describes the new headquarters of Goldman Sachs. That building is so representative of that firm. The aristocracy of the "partners" have palatial offices. The rest of the vassals and serfs get demeaning and uncomfortable desks and cubicles. Sure, they might be well paid. But they have to kiss the books of their Lords, the "partners", every day before being sent out to loot the public and "dumb money". Goldman Sachs is a band of Financial Vikings trying to create an aristocracy of the rich & powerful in the US and the World. Until recently their "partners" were part of what seemed like an exchange program for the ruling classes, going on to high offices in the US government. That all has to change.
Financial regulatory reform must put all Financial Vikings and their weapons (derivatives, etc.) under chains and locks.
And More
Goldman, Sachs hid the fact of the SEC investigation [ the "Wells Notice"] from the public. Amazingly brazen !
Word of the Day
"Misprision" - noun [$10] [pronounced mis 'prizh un] from Shakespeares's "As You Like It".
Misprision means (I) (Law) 1. the deliberate concealment of one's knowledge of a crime, treason [misprision of a felony, treason]; 2. a wrong act or omission; 3. neglect in preventing or reporting a crime; 4. maladministration of public office. (II) 1. a misreading, misunderstanding, etc.; 2. (usu. foll. by 'of') a failure to appreciate the value of a thing; 3. (archaic) contempt (see related verb 'misprize')
Sentence: How many people in the financial community - lawyers, compliance, management, on and on - are guilty of misprision ? The numbers are likely countless: well-paid enablers of the looting.
Friday, April 16, 2010
TGIF ... and a some thoughts
Yup, and I'm tired. It's been a long week.
Below is a slight modification of an old post from mid 2008 when the Panic of 2008 was getting really bad. I updated it by changing "populist libertarian" to Fraternal Libertarian. For reference, at the time written, the price of oil was about $140 per barrel and the financial market panic was getting much worse - soon to implode completely.
***Old post begins***
Tuesday, June 24, 2008
Speculation is not a Dirty Word
For all my rants against beefers (aka big, evil funds) and oil market speculators, I want to make it explicit that speculation is neither a dirty word nor a dirty business. Everyone should be free to speculate to the extent of his or her desire. That's what freedom means and clearly, being a fraternal libertarian, you expect that from me.
But ...But that means as a person ... not a giant pool of big money. Human freedom is to be exalted, but not groups of big money pools. Those need to be regulated and / or prohibited from trashing crucial financial markets, and overwhelming natural hedgers by their sheer size and thus manipulating prices higher in the same manner as the old "corners" on markets.
And the rich pour money into these pools in the search for "excess returns" and "stable returns". Do they invest in a new oil field ? Or a new mine ? Or in new discoveries ? No. They pour money into financial products and beefers who act as their Vikings to loot more plunder in trading pools. The rich should just find a good broker to pick some stocks and private investments in new mines, oil, or ventures. This layer of beefers needs to be heavily regulated.
Fraternal Libertarianism is a two word concept. The "fraternal" part means that the big pools of money, the ruling classes, must be limited in their ability to raid the common man.
***Old post ends***
Back to now
Later in the fall of 2008, the financial Vikings did destroy the markets. They cause a worldwide panic much like the original Vikings did just after 800 AD. Then everyone had to hide in castles and towers or in the woods to avoid their depredations. Later in 2008, many persons and institutions moved all their money to T-bills and hid, shriveled up and terrified of the raids.
Now the markets have recovered just to pre-October 2008 panic levels. The economy is back to a sort of normalcy, with a huge loss in economic wealth and human capital in the millions of unemployed and underemployed. And it truly did not have to get that bad. The beefer Vikings caused the Panic. If the financial reform bill does not address them, then it will be a failure.
Regulate hedge funds, Wall Street trading operations, credit default swaps. Banks should be banks, not securities trading operations. Any "bank" not making loans should be forced to cease being a bank and lose the right to take deposits.
Money has to circulate in the small towns and cities across ALL of America. Big banks should not suck it all out to play in securities trading in NYC, etc. Regulate all the big money pools much more: make them serve the common man more, and not be used to fund speculation.
Word of the Day
"Genuflect" - verb, intransitive [$10]
Genuflect means to bend the knee.
Sentence: It's time to make the money masters genuflect to the common man; for too long they have acted like lords over all people. Make them submit to stronger regulations that benefit the common man.
Below is a slight modification of an old post from mid 2008 when the Panic of 2008 was getting really bad. I updated it by changing "populist libertarian" to Fraternal Libertarian. For reference, at the time written, the price of oil was about $140 per barrel and the financial market panic was getting much worse - soon to implode completely.
***Old post begins***
Tuesday, June 24, 2008
Speculation is not a Dirty Word
For all my rants against beefers (aka big, evil funds) and oil market speculators, I want to make it explicit that speculation is neither a dirty word nor a dirty business. Everyone should be free to speculate to the extent of his or her desire. That's what freedom means and clearly, being a fraternal libertarian, you expect that from me.
But ...But that means as a person ... not a giant pool of big money. Human freedom is to be exalted, but not groups of big money pools. Those need to be regulated and / or prohibited from trashing crucial financial markets, and overwhelming natural hedgers by their sheer size and thus manipulating prices higher in the same manner as the old "corners" on markets.
And the rich pour money into these pools in the search for "excess returns" and "stable returns". Do they invest in a new oil field ? Or a new mine ? Or in new discoveries ? No. They pour money into financial products and beefers who act as their Vikings to loot more plunder in trading pools. The rich should just find a good broker to pick some stocks and private investments in new mines, oil, or ventures. This layer of beefers needs to be heavily regulated.
Fraternal Libertarianism is a two word concept. The "fraternal" part means that the big pools of money, the ruling classes, must be limited in their ability to raid the common man.
***Old post ends***
Back to now
Later in the fall of 2008, the financial Vikings did destroy the markets. They cause a worldwide panic much like the original Vikings did just after 800 AD. Then everyone had to hide in castles and towers or in the woods to avoid their depredations. Later in 2008, many persons and institutions moved all their money to T-bills and hid, shriveled up and terrified of the raids.
Now the markets have recovered just to pre-October 2008 panic levels. The economy is back to a sort of normalcy, with a huge loss in economic wealth and human capital in the millions of unemployed and underemployed. And it truly did not have to get that bad. The beefer Vikings caused the Panic. If the financial reform bill does not address them, then it will be a failure.
Regulate hedge funds, Wall Street trading operations, credit default swaps. Banks should be banks, not securities trading operations. Any "bank" not making loans should be forced to cease being a bank and lose the right to take deposits.
Money has to circulate in the small towns and cities across ALL of America. Big banks should not suck it all out to play in securities trading in NYC, etc. Regulate all the big money pools much more: make them serve the common man more, and not be used to fund speculation.
Word of the Day
"Genuflect" - verb, intransitive [$10]
Genuflect means to bend the knee.
Sentence: It's time to make the money masters genuflect to the common man; for too long they have acted like lords over all people. Make them submit to stronger regulations that benefit the common man.
Wednesday, March 3, 2010
A Typical Wednesday
That means nothing is happening. Sighhhh.
Spring is arriving here on time. Meteorological winter ended on Sunday and the daffodils are perking up, poking their heads up in places with southern exposure.
I'll still reading Empires of the Steppes: A History of Central Asia. The book has 500+ packed pages. I just started on the times of Genghis Khan. He's a fascinating figure and leader who made a remarkable comeback. Reading about how people lived then is a dividend: in the steppes and hunting and fishing in the forests north of the steppes. Their epic tales sound a whole lot like those of the American Indians, being laced with animal metaphors. Perhaps that's no accident, as the ancestors of the American Indians came from that area of Asia.
Obama is still playing Captain Ahab, seeking to take the whole Democratic party down in his lust for his Great White Whale, viz. ObamaCare.
Regulators are looking at beefer attacks on the Euro and at naked credit default swaps. Gosh, such diligence ! It's only 18 months after the Panic of 2008. Does anyone else notice the regulators seem to care only when their own financial status is at stake ? It's obvious they care nothing about the common man.
Markets
I put on the last slug of my put position. When fully in the money, that will make my 1-2-3 Fund 300% short effectively. That's enough, IF I'm right. This might not work ...
Word of the Day
"Longanimity" - noun [$100]
Longanimity means patience, forebearing, long suffering; patient endurance of hardship, injuries or offense; forebearance.
Sentence: (A) Genghis Khan's longanimty as a vassal of Wang-khan let him survive until his forces were strong enough to survive the final betrayal that Wang-khan perpetrated against him. (B) The common American man's longanimity as Racketeer Central continues to feed on his product must soon end in a taxpayer revolt.
Spring is arriving here on time. Meteorological winter ended on Sunday and the daffodils are perking up, poking their heads up in places with southern exposure.
I'll still reading Empires of the Steppes: A History of Central Asia. The book has 500+ packed pages. I just started on the times of Genghis Khan. He's a fascinating figure and leader who made a remarkable comeback. Reading about how people lived then is a dividend: in the steppes and hunting and fishing in the forests north of the steppes. Their epic tales sound a whole lot like those of the American Indians, being laced with animal metaphors. Perhaps that's no accident, as the ancestors of the American Indians came from that area of Asia.
Obama is still playing Captain Ahab, seeking to take the whole Democratic party down in his lust for his Great White Whale, viz. ObamaCare.
Regulators are looking at beefer attacks on the Euro and at naked credit default swaps. Gosh, such diligence ! It's only 18 months after the Panic of 2008. Does anyone else notice the regulators seem to care only when their own financial status is at stake ? It's obvious they care nothing about the common man.
Markets
I put on the last slug of my put position. When fully in the money, that will make my 1-2-3 Fund 300% short effectively. That's enough, IF I'm right. This might not work ...
Word of the Day
"Longanimity" - noun [$100]
Longanimity means patience, forebearing, long suffering; patient endurance of hardship, injuries or offense; forebearance.
Sentence: (A) Genghis Khan's longanimty as a vassal of Wang-khan let him survive until his forces were strong enough to survive the final betrayal that Wang-khan perpetrated against him. (B) The common American man's longanimity as Racketeer Central continues to feed on his product must soon end in a taxpayer revolt.
Thursday, February 25, 2010
Big Evil Funds - a reprise.
A "Best of Bunkerman" Post - the FIRST ONE !
Originally posted Sunday, January 14, 2007, this post explained the concept of the market actions explained by a bunch of animals nicknamed "beefers". My modification since then would be to include the piranhas, too - those beefers and beefer-like Wall Street financial institutions that feed on others in the markets, particularly their own customers. Goldman, Sachs is the Prince of Piranhas.
***Reprise begins***
Big Evil Funds
To understand stock and commodity markets, you need to know who are the important participants. Today the principal ones are index funds, hedge funds, Street proprietary trading funds, mutual funds, the active public, and the inactive public.
For fun and because the classification works in explaining market activity, I group hedge funds, active trading mutual funds and the Street proprietary trading operations together as the Big Evil Funds. Long Term Capital Management was one, as was Amaranth until they blew up; Janus of the 1990s was one, too. I'll going into the "evil" appellation later.
For now, imagine a large group of wild elephants at a water hole. They drink & drink & drain it, then they stop around in the mud for awhile to decide what direction to go to find another water hole. At some point they decide which way to go, and they are off in a stampede to another water hole. If they get there and it's small or dry, they stomp around more & then go off in another direction. You can see the metaphor at work.
The action in the stock & commodity markets since the first of the year is a fine example of the big evil funds at work. I call them "beefers" - derived from "Big Evil Funds" shortened to BEFunds, hence "beefer" - since "beefer" has humorous secondary meanings. Besides being a country term for cattle - hence the herd stampeding, etc. - see the Urban Dictionary for more.
Early in the year they rolled into tech stocks & out of energy. then after a few days - as they realize tech water hole was too small - they all barge out of tech & mill around. Some barge into retail, some back to energy. Always they are searching for more water. The press daily comes up with nonsense about the "market" thinking one thing and then another. Trying to put reasons on this action is silly - it's just beefers searching for a trend, milling around, stomping in the dust. Don't get confused by trying to rationalize this kind of action.
***reprise ends***
Markets
A bounce. I did nothing. The Green-Red rule came close to being triggered, but not. It's not a bright line rule. The the markets slightly trigger it, but look sluggish at the time, I let it ride a bit.
Obama
More bloviating and lying. Or not ? Here's a quote from FT: "he planned to press ahead with his plans to overhaul the healthcare and financial regulatory systems and introduce a cap for carbon emissions, all policies that business has criticised to varying degrees. ... 'We need businesses to support these efforts,” he said, adding that it was “not about being anti-business or pro-government; it’s about being pro-growth and pro-jobs.' ”
That part is true. he wants to draft (or recruit ?) big business into a crypto-fascist state to rule over the common man. In Nazi Germany, industrialists had a major role in both bring the Nazis to power and in running the state. Part of fascism is its satanic marriage of big business with totalitarianism government.
PS:
I have to thank a reader and oft astute commentor known a Sun Boy for this idea. He thought it mocking when made yesterday, but I recognized the value of reprising good, old posts from a few years ago for the thousands [ ;) ] of new readers of this blog. And some days I have nothing original to say after three years of daily posts. [Daily here means business days, plus a few weekends.]
Word of the Day
"Irrefragable" - adjective [$10]
Irrefragable means 1. (of a statement, argument or person) unanswerable, indisputable.
Sentence: The statement by Bunkerman that, 'credit defaults swaps and beefers were the core of the Panic of 2008', is an irrefragable truth by virtue of the facts of the AIG debacle.
OOOOOOOOOOOPS
Sorry, I used that one last week. I forgot to put its card into the "used recently" pile :((
Originally posted Sunday, January 14, 2007, this post explained the concept of the market actions explained by a bunch of animals nicknamed "beefers". My modification since then would be to include the piranhas, too - those beefers and beefer-like Wall Street financial institutions that feed on others in the markets, particularly their own customers. Goldman, Sachs is the Prince of Piranhas.
***Reprise begins***
Big Evil Funds
To understand stock and commodity markets, you need to know who are the important participants. Today the principal ones are index funds, hedge funds, Street proprietary trading funds, mutual funds, the active public, and the inactive public.
For fun and because the classification works in explaining market activity, I group hedge funds, active trading mutual funds and the Street proprietary trading operations together as the Big Evil Funds. Long Term Capital Management was one, as was Amaranth until they blew up; Janus of the 1990s was one, too. I'll going into the "evil" appellation later.
For now, imagine a large group of wild elephants at a water hole. They drink & drink & drain it, then they stop around in the mud for awhile to decide what direction to go to find another water hole. At some point they decide which way to go, and they are off in a stampede to another water hole. If they get there and it's small or dry, they stomp around more & then go off in another direction. You can see the metaphor at work.
The action in the stock & commodity markets since the first of the year is a fine example of the big evil funds at work. I call them "beefers" - derived from "Big Evil Funds" shortened to BEFunds, hence "beefer" - since "beefer" has humorous secondary meanings. Besides being a country term for cattle - hence the herd stampeding, etc. - see the Urban Dictionary for more.
Early in the year they rolled into tech stocks & out of energy. then after a few days - as they realize tech water hole was too small - they all barge out of tech & mill around. Some barge into retail, some back to energy. Always they are searching for more water. The press daily comes up with nonsense about the "market" thinking one thing and then another. Trying to put reasons on this action is silly - it's just beefers searching for a trend, milling around, stomping in the dust. Don't get confused by trying to rationalize this kind of action.
***reprise ends***
Markets
A bounce. I did nothing. The Green-Red rule came close to being triggered, but not. It's not a bright line rule. The the markets slightly trigger it, but look sluggish at the time, I let it ride a bit.
Obama
More bloviating and lying. Or not ? Here's a quote from FT: "he planned to press ahead with his plans to overhaul the healthcare and financial regulatory systems and introduce a cap for carbon emissions, all policies that business has criticised to varying degrees. ... 'We need businesses to support these efforts,” he said, adding that it was “not about being anti-business or pro-government; it’s about being pro-growth and pro-jobs.' ”
That part is true. he wants to draft (or recruit ?) big business into a crypto-fascist state to rule over the common man. In Nazi Germany, industrialists had a major role in both bring the Nazis to power and in running the state. Part of fascism is its satanic marriage of big business with totalitarianism government.
PS:
I have to thank a reader and oft astute commentor known a Sun Boy for this idea. He thought it mocking when made yesterday, but I recognized the value of reprising good, old posts from a few years ago for the thousands [ ;) ] of new readers of this blog. And some days I have nothing original to say after three years of daily posts. [Daily here means business days, plus a few weekends.]
Word of the Day
"Irrefragable" - adjective [$10]
Irrefragable means 1. (of a statement, argument or person) unanswerable, indisputable.
Sentence: The statement by Bunkerman that, 'credit defaults swaps and beefers were the core of the Panic of 2008', is an irrefragable truth by virtue of the facts of the AIG debacle.
OOOOOOOOOOOPS
Sorry, I used that one last week. I forgot to put its card into the "used recently" pile :((
Monday, January 4, 2010
A New Year Begins ...
Krypto Fund returned 21.56%, beating most hedge funds according to FT. Krypto Fund uses a simple asset allocation model on Excel to invest the long term money among asset classes: cash, TIPs, bonds, US stocks, Foreign stocks, real estate and precious metals. The fees are dog biscuits, paid to the manager, Krypto, my dog, who pushes a button on the computer to re-allocate. Who needs beefers ?
What do we know now that we did not know one year ago ?
First
The big banks all repaid TARP in 2009. Losses, while large, were not the industry-wide monumental tidal wave that the bomb throwers proclaims so stridently in 2008. That means that "most" of the collapse in the financial markets in 2008 truly was a simple panic, not the incurable end of the world proclaimed.
How did the panic get so bad ?
Simple: huge money pools of hedge funds sloshing around worldwide making huge "bets" on collapse through short selling (often naked) and credit defaults swaps. The simple answer is, "The beefers did it."
Don't overstate or understate this. There was more than smoke. There was a modest fire that the Fed was controlling. But then the beefers threw on the gasoline.
The TARP investments in the big banks helped stop the panic, which was truly out of control as a run on the bank in money market funds was incredibly dangerous. Note: only one major money fund broke the buck, due to excessive investment in Lehman paper.
Second
This means that the Republicans in Congress were completely wrong in causing the initial defeat of TARP. After that defeat, the stock market fell 20% and the retirement assets of a generation were gutted. The market has "almost" recovered that, but not quite. The pure libertarian philosophy, while so attractive in theory, proved again to be inadequate in a dynamical world.
Third
The public was NOT right, either in its opposition to the TARP or in its belief that housing was a retirement asset that could not go down. That belief led millions upon millions of them to commit to pay too much of their income for housing, thinking it would go up in value to let them repay that huge debt burden. This was a "greater fool" bubble by the PUBLIC. The group thinking of the people was WRONG.
Book of the Week
"Public Opinion" by Walter Lippmann. This excellent book was written in 1922 by the man who became the first nationally syndicated columnist and wrote a hugely influential column for forty years. The main point of the book is that the public and most governmental leaders have insufficient information to make truly informed decisions about modern, complex issues. I state part of his thesis thus: "polls based on ignorance are meaningless". They are useless for making informed, correct decisions.
It's remarkable to me that this book and its arguments seem foreign to modern journalists. They blather endlessly about what the people think about some issue yet Lippmann almost 90 years ago knew, and showed, that the people mostly are ignorant of even the simplest facts or theory to base a truly informed opinion. Lippmann had personal experience in the World War I propaganda machine and knew both its power and the difficulty informing the people.
He also was one of the rich and powerful and recognized the power of his class. He recognized how they often used their power to gather more power and wealth.
I haven't yet finished the book, but so far, it's a jewel.
PS: The new edition with the introduction by Lippmann's biographer, Ronald Steel, is best.
Word of the Day
"Scry" - verb, intransitive [$10]
Scry means to divine by crystal gazing.
Sentence: Bunkerman did not scry to learn the conclusions in today's blog; they came from the application of simple principles and ruthless logic to events in the public press.
What do we know now that we did not know one year ago ?
First
The big banks all repaid TARP in 2009. Losses, while large, were not the industry-wide monumental tidal wave that the bomb throwers proclaims so stridently in 2008. That means that "most" of the collapse in the financial markets in 2008 truly was a simple panic, not the incurable end of the world proclaimed.
How did the panic get so bad ?
Simple: huge money pools of hedge funds sloshing around worldwide making huge "bets" on collapse through short selling (often naked) and credit defaults swaps. The simple answer is, "The beefers did it."
Don't overstate or understate this. There was more than smoke. There was a modest fire that the Fed was controlling. But then the beefers threw on the gasoline.
The TARP investments in the big banks helped stop the panic, which was truly out of control as a run on the bank in money market funds was incredibly dangerous. Note: only one major money fund broke the buck, due to excessive investment in Lehman paper.
Second
This means that the Republicans in Congress were completely wrong in causing the initial defeat of TARP. After that defeat, the stock market fell 20% and the retirement assets of a generation were gutted. The market has "almost" recovered that, but not quite. The pure libertarian philosophy, while so attractive in theory, proved again to be inadequate in a dynamical world.
Third
The public was NOT right, either in its opposition to the TARP or in its belief that housing was a retirement asset that could not go down. That belief led millions upon millions of them to commit to pay too much of their income for housing, thinking it would go up in value to let them repay that huge debt burden. This was a "greater fool" bubble by the PUBLIC. The group thinking of the people was WRONG.
Book of the Week
"Public Opinion" by Walter Lippmann. This excellent book was written in 1922 by the man who became the first nationally syndicated columnist and wrote a hugely influential column for forty years. The main point of the book is that the public and most governmental leaders have insufficient information to make truly informed decisions about modern, complex issues. I state part of his thesis thus: "polls based on ignorance are meaningless". They are useless for making informed, correct decisions.
It's remarkable to me that this book and its arguments seem foreign to modern journalists. They blather endlessly about what the people think about some issue yet Lippmann almost 90 years ago knew, and showed, that the people mostly are ignorant of even the simplest facts or theory to base a truly informed opinion. Lippmann had personal experience in the World War I propaganda machine and knew both its power and the difficulty informing the people.
He also was one of the rich and powerful and recognized the power of his class. He recognized how they often used their power to gather more power and wealth.
I haven't yet finished the book, but so far, it's a jewel.
PS: The new edition with the introduction by Lippmann's biographer, Ronald Steel, is best.
Word of the Day
"Scry" - verb, intransitive [$10]
Scry means to divine by crystal gazing.
Sentence: Bunkerman did not scry to learn the conclusions in today's blog; they came from the application of simple principles and ruthless logic to events in the public press.
Wednesday, November 18, 2009
What is Wrong with Wednesdays ?
Sheesh, another Wednesday and as usual nothing is happening. Maybe there is something to that idea I tossed out a few weeks ago regarding a ruling class conspiracy to put all news either at the beginning of the week or near its end. [That's a joke !]
FT says the big beefer and private equity firm, Apollo, plans a listing. Anyone buying that stock should expect to be shorn of one's money. Apollo is planning to capitalize on the aphorism that "There's a sucker born every minute."
The markets held onto all of Monday's gains yesterday, despite early weakness, thus consolidating over the old recovery highs.
DRYS to sell a convertible bond. That firm's management runs a stock share printing machine that Daniel Drew or Jay Gould would envy.
Fido Fund has a few stocks that are approaching the range of prior, pre-Panic highs. As they get to the lower end of that range, I'll take the sugar. Fido Fund capital goes to stocks I think can strongly outperform. Once a stock price gets to its upper range, further outperformance is both less likely and also less in potential magnitude. That double-barreled blow means sell to me.
I continue to seek "screaming" buys or sells. "Have Cash, Will Speculate" is going onto my new business cards.
Word of the Day
"Ascesis" - noun [$10]
Ascesis means the practice of self-discipline.
Sentence: Ascesis is a dirty word to the DC ruling classes; they practice hog feeding bouts seriatim.
FT says the big beefer and private equity firm, Apollo, plans a listing. Anyone buying that stock should expect to be shorn of one's money. Apollo is planning to capitalize on the aphorism that "There's a sucker born every minute."
The markets held onto all of Monday's gains yesterday, despite early weakness, thus consolidating over the old recovery highs.
DRYS to sell a convertible bond. That firm's management runs a stock share printing machine that Daniel Drew or Jay Gould would envy.
Fido Fund has a few stocks that are approaching the range of prior, pre-Panic highs. As they get to the lower end of that range, I'll take the sugar. Fido Fund capital goes to stocks I think can strongly outperform. Once a stock price gets to its upper range, further outperformance is both less likely and also less in potential magnitude. That double-barreled blow means sell to me.
I continue to seek "screaming" buys or sells. "Have Cash, Will Speculate" is going onto my new business cards.
Word of the Day
"Ascesis" - noun [$10]
Ascesis means the practice of self-discipline.
Sentence: Ascesis is a dirty word to the DC ruling classes; they practice hog feeding bouts seriatim.
Thursday, October 22, 2009
More Beefer Antics
Yesterday the market cratered around 100 pts. in 45 minutes at the close. To whom can we ascribe such inane selling ? Beefers*, of course. [*Beefer = "big, evil fund defined as a hedge fund or mutual fund that trades very actively and has over $100 million in assets.] My guess is that the selloff was from liquidation of Galleon. The owner / leader of that group of hedge funds was arrested a couple days ago for insider trading. Hence, its investors all wanted to redeem their money. I suppose sell lists were sent out to the Street. The Street's principal traders probably shorted the stocks to front run the sales. And all that had to be done by the close. Wonderful.
These antics just cause the public to be a bit more disheartened by the market. Too much of this volatility occurred last year. The average Joe wanting to make an adjustment in his mutual fund gets flung hither and thither. Some days he's lucky, others unlucky. All for nothing. Beefer antics add zero value to the markets. All that vaunted talk of liquidity is sheer nonsense. The Street's proprietary traders suck that out in milliseconds and the beefers themselves cause bids to disappear and shorting raiders to emerge from the hiding places.
As for Galleon, there was some discussion a few days ago whether the government was proper in using wiretaps. Today's news reports make it clear that several informants gave the government plenty of probable cause for getting wiretap warrants. End of controversy.
The FT shows another example of the dumb rich in the "There's a sucker born every minute" Club. "John Meriwether, the hedge fund manager and arbitrageur behind Long-Term Capital Management, is in the process of setting up a new hedge fund – his third. The move comes barely three months after Mr Meriwether decided to close his second fund manager, JWM Partners, which was wound down after clients saw the value of their investments fall by more than 44 per cent over the course of the financial crisis. JWM Partners was set up soon after the collapse in 1998 of Mr Meriwether’s first – and most infamous – fund, LTCM, which triggered a wave of panic across the world’s markets ..."
Who in their right mind would invest money in that nonsense ? Two funds blown up and now a third try ? Sheesh ...
And think a bit ... every proprietary trading desk on the Street does the same thing with billions. And are they better than Meriwether ? Nope. All this is simply a scam - hucksterism at its worst. Get other people's money; speculate, get fees and bonuses and then blow up. The Street is littered with the carcasses of those for that past three decades.
But now the the web of swaps and derivatives, the big firms are linked. So blow ups will necessarily bring in the taxpayer again. Ban all this nonsense or require 100% cash or physical collateral for any net short positions in derivatives.
Actions
My Tuesday sales to take "sugar" on some call options were timely. Earnings are good, but this market needs some news to move higher, such as a big drop in unemployment claims or some better job numbers. I still think that will occur by year end (as I said a few months ago). If it does, S&P 1200 should be hit. I'll wait for now, but might re-buy some calls if prices get cheap on some interesting names.
Word of the Day
"Onomastic" - adjective [$10] a Mencken word;
"Onomastics" - noun, plural (treated as singular) [$10]
Onomastic means relating to names or nomenclature.
Onomastics means the study of the origin and formation of (especially personal) proper names.
Sentence (from Mencken, The American Language, page 553 bot. referring to the origin of "Podunk" as a colorful synonym for a very small town.
"Here Dr. ____ seems to have been in error, for an onomastic explorer, _______, reported in the Boston Herald for February 8, 1933, that he had discovered a veritable Podunk in Massachusetts, not far from Worcester."
These antics just cause the public to be a bit more disheartened by the market. Too much of this volatility occurred last year. The average Joe wanting to make an adjustment in his mutual fund gets flung hither and thither. Some days he's lucky, others unlucky. All for nothing. Beefer antics add zero value to the markets. All that vaunted talk of liquidity is sheer nonsense. The Street's proprietary traders suck that out in milliseconds and the beefers themselves cause bids to disappear and shorting raiders to emerge from the hiding places.
As for Galleon, there was some discussion a few days ago whether the government was proper in using wiretaps. Today's news reports make it clear that several informants gave the government plenty of probable cause for getting wiretap warrants. End of controversy.
The FT shows another example of the dumb rich in the "There's a sucker born every minute" Club. "John Meriwether, the hedge fund manager and arbitrageur behind Long-Term Capital Management, is in the process of setting up a new hedge fund – his third. The move comes barely three months after Mr Meriwether decided to close his second fund manager, JWM Partners, which was wound down after clients saw the value of their investments fall by more than 44 per cent over the course of the financial crisis. JWM Partners was set up soon after the collapse in 1998 of Mr Meriwether’s first – and most infamous – fund, LTCM, which triggered a wave of panic across the world’s markets ..."
Who in their right mind would invest money in that nonsense ? Two funds blown up and now a third try ? Sheesh ...
And think a bit ... every proprietary trading desk on the Street does the same thing with billions. And are they better than Meriwether ? Nope. All this is simply a scam - hucksterism at its worst. Get other people's money; speculate, get fees and bonuses and then blow up. The Street is littered with the carcasses of those for that past three decades.
But now the the web of swaps and derivatives, the big firms are linked. So blow ups will necessarily bring in the taxpayer again. Ban all this nonsense or require 100% cash or physical collateral for any net short positions in derivatives.
Actions
My Tuesday sales to take "sugar" on some call options were timely. Earnings are good, but this market needs some news to move higher, such as a big drop in unemployment claims or some better job numbers. I still think that will occur by year end (as I said a few months ago). If it does, S&P 1200 should be hit. I'll wait for now, but might re-buy some calls if prices get cheap on some interesting names.
Word of the Day
"Onomastic" - adjective [$10] a Mencken word;
"Onomastics" - noun, plural (treated as singular) [$10]
Onomastic means relating to names or nomenclature.
Onomastics means the study of the origin and formation of (especially personal) proper names.
Sentence (from Mencken, The American Language, page 553 bot. referring to the origin of "Podunk" as a colorful synonym for a very small town.
"Here Dr. ____ seems to have been in error, for an onomastic explorer, _______, reported in the Boston Herald for February 8, 1933, that he had discovered a veritable Podunk in Massachusetts, not far from Worcester."
Monday, August 17, 2009
Climbing out the Windows
Eliot Ness must have bashed down the doors of the market's speakeasies last evening, as the beefers are climbing out the windows this morning, having all hit the sell buttons at the same time. I wrote about this behavior a few days as a reason that I don't like being leveraged long when the markets are making intermediate term highs.
And they are acting according to the book on their behavior.
Chinese markets were down over 5% last night, Europe is down about 2% this morning early and US futures are down about 2%. Commodities are down, too.
Any news ? Nope.
FT: "Japan has climbed out of recession after the economy returned to growth in the second quarter, raising hopes that the worst of the financial crisis is over in the world’s second-largest economy. Data released on Monday showed that gross domestic product expanded 0.9 per cent quarter on quarter on a seasonally adjusted basis, following four quarters of contraction. On an annualised basis, the economy grew 3.7 per cent.
The Street is reverting to its foolish overpayment culture as Barclays is offering some commodity traders in London huge pay packages to lure them from JPMorgan.
I was thinking this morning of the proper names for this economic slowdown and conclude that the Panic of '08 fits best. The world economies were going into a plain mid-cycle slowdown until the beefers and shorts started the raiding in the summer of 2008, culminating in the full bore financial panic of September and October. The second wave of that panic occurred in February and early March of 2009 over fears that Obama was failing to lead.
Hmmm in French, that name is a rhyming La Panique d'Zéro Huit.
Actions
I am doing nothing. Je ne fais rien. Often these selloffs take a few days to run their courses unless some fundamental change is being recognized. Thus, for now, I wait. Fido Fund has plenty of cash as does Obama Fund. If nothing fundamental seems changed, I'll target some names and groups that I've been noodling over.
Word of the Day
"Zeitgeist" - noun [$10]; a German word now used in American writing.
Zeitgeist means the spirit and outlook characteristic of a period or generation.
Sentence: If a phrase reflects the zeitgeist of the Great Depression, it was "buddy, can you spare a dime". I wonder what phrase will reflect the zeitgeist of the Panic of '08?
Verbum Diei
"Fortuna" - noun, first declension, feminine; its genitive is fortunae.
Fortuna means fortune, luck.
Sententia: Fortes fortuna iuvat. [from Terence]
Sentence: Fortune helps the brave. [alternate: Fortune favors the bold.]
And they are acting according to the book on their behavior.
Chinese markets were down over 5% last night, Europe is down about 2% this morning early and US futures are down about 2%. Commodities are down, too.
Any news ? Nope.
FT: "Japan has climbed out of recession after the economy returned to growth in the second quarter, raising hopes that the worst of the financial crisis is over in the world’s second-largest economy. Data released on Monday showed that gross domestic product expanded 0.9 per cent quarter on quarter on a seasonally adjusted basis, following four quarters of contraction. On an annualised basis, the economy grew 3.7 per cent.
The Street is reverting to its foolish overpayment culture as Barclays is offering some commodity traders in London huge pay packages to lure them from JPMorgan.
I was thinking this morning of the proper names for this economic slowdown and conclude that the Panic of '08 fits best. The world economies were going into a plain mid-cycle slowdown until the beefers and shorts started the raiding in the summer of 2008, culminating in the full bore financial panic of September and October. The second wave of that panic occurred in February and early March of 2009 over fears that Obama was failing to lead.
Hmmm in French, that name is a rhyming La Panique d'Zéro Huit.
Actions
I am doing nothing. Je ne fais rien. Often these selloffs take a few days to run their courses unless some fundamental change is being recognized. Thus, for now, I wait. Fido Fund has plenty of cash as does Obama Fund. If nothing fundamental seems changed, I'll target some names and groups that I've been noodling over.
Word of the Day
"Zeitgeist" - noun [$10]; a German word now used in American writing.
Zeitgeist means the spirit and outlook characteristic of a period or generation.
Sentence: If a phrase reflects the zeitgeist of the Great Depression, it was "buddy, can you spare a dime". I wonder what phrase will reflect the zeitgeist of the Panic of '08?
Verbum Diei
"Fortuna" - noun, first declension, feminine; its genitive is fortunae.
Fortuna means fortune, luck.
Sententia: Fortes fortuna iuvat. [from Terence]
Sentence: Fortune helps the brave. [alternate: Fortune favors the bold.]
Tuesday, December 2, 2008
More Liquidations ...
Many more hedge funds are liquidating and most of the rest are restricting redemptions.
From FT: "The combination of the worst year on record for hedge fund returns and the biggest withdrawals on record mean the industry’s assets will shrink 35-45 per cent from June to the end of December, according to analysis by Morgan Stanley."
One famous hedge fund is restructuring in a manner similar to banks: "Paul Tudor Jones, who shot to fame and made a fortune when he predicted the 1987 stock market crash, plans to split toxic assets out of his $10bn flagship hedge fund and has suspended redemptions until the restructuring is complete. "
Hedge funds were NEVER a separate "asset class" as promoted to the rich and the pension funds. They were just a speculative, risky way to manage money and overpaid their managers by colossal sums.
Commodity funds were NEVER a separate "asset class" as they did NOT invest is true assets - namely the underlying oil in the ground, or the actual cows. They were just speculating in futures and derivatives. To repeat, they were just a speculative, risky way to manage money and overpaid their managers by colossal sums.
Yesterday's drop was probably a combination of these redemptions plus the public doing some selling after the recent rally plus more tax loss selling.
And the bear beefer mouthpieces and marionettes keep saying it's different this time, and nothing will ever change and an endless current of bad events will occur forever. To me, they sound like the rah rah crowd of late 1999 and early 2000 in reverse. They just don't recognize how fast the America and Americans react. change and adapt.
Let the bears and doomsters has their fun. When the liquidations are done - an unpredictable point in time - like Don Juan in that great opera, Don Giovanni, the unrepentant bears will be sucked into "l'enfer" as a great new bull market begins.
PS: Today I read the EU is interfering with an injection of capital into a German bank. How can the EU survive this ? with both the French and Germans screaming at its bureaucrats, I think the EU will have to be restructured.
Actions
My tax loss selling is done, saving me big $$$. Later this week I can re-allocate some funds in Krypto Fund. Otherwise, I'm doing research to compile a list of stocks to buy that perhaps can provide big profits on the coming bull market. And I means multiples, not mere percentages.
Word of the Day
From FT: "The combination of the worst year on record for hedge fund returns and the biggest withdrawals on record mean the industry’s assets will shrink 35-45 per cent from June to the end of December, according to analysis by Morgan Stanley."
One famous hedge fund is restructuring in a manner similar to banks: "Paul Tudor Jones, who shot to fame and made a fortune when he predicted the 1987 stock market crash, plans to split toxic assets out of his $10bn flagship hedge fund and has suspended redemptions until the restructuring is complete. "
Hedge funds were NEVER a separate "asset class" as promoted to the rich and the pension funds. They were just a speculative, risky way to manage money and overpaid their managers by colossal sums.
Commodity funds were NEVER a separate "asset class" as they did NOT invest is true assets - namely the underlying oil in the ground, or the actual cows. They were just speculating in futures and derivatives. To repeat, they were just a speculative, risky way to manage money and overpaid their managers by colossal sums.
Yesterday's drop was probably a combination of these redemptions plus the public doing some selling after the recent rally plus more tax loss selling.
And the bear beefer mouthpieces and marionettes keep saying it's different this time, and nothing will ever change and an endless current of bad events will occur forever. To me, they sound like the rah rah crowd of late 1999 and early 2000 in reverse. They just don't recognize how fast the America and Americans react. change and adapt.
Let the bears and doomsters has their fun. When the liquidations are done - an unpredictable point in time - like Don Juan in that great opera, Don Giovanni, the unrepentant bears will be sucked into "l'enfer" as a great new bull market begins.
PS: Today I read the EU is interfering with an injection of capital into a German bank. How can the EU survive this ? with both the French and Germans screaming at its bureaucrats, I think the EU will have to be restructured.
Actions
My tax loss selling is done, saving me big $$$. Later this week I can re-allocate some funds in Krypto Fund. Otherwise, I'm doing research to compile a list of stocks to buy that perhaps can provide big profits on the coming bull market. And I means multiples, not mere percentages.
Word of the Day
"l'enfer" - noun [$ ?] French
"l'enfer" means hell, the infernal regions. the underworld. An erudite reader and poster mentioned it as I asked how to tell someone to go to hell in French: Allez à l'enfer ! Doesn't it sound more polite in French ? And more sophisticated ? By the way, this is pronounced, "Allay a longfehr", roughly.
Sentence: This is not armageddon or l'enfer; World War II was that. Stop the whining. Adapt, improvise and more ahead into the unknown like a true pioneer.
Monday, November 10, 2008
Waiting ...
The hot air in DC and the dens of the press is oven-like. But what is the point or use in speculating or even discussing what Obama might do, or whom he might appoint ? Why not just wait and see what he actually does ?
Here's some real news: China announces $586 billion stimulus plan. That's real money. Stock futures are up on the news worldwide.
WSJ has a story that jobs in many parts of China are hard to find. That means trouble for that authoritarian / communist government. So they had to act.
I read that five large beefer managers are called before Congress on Thursday. Good. I hope they are skewered. Hedge funds are a fundamental, root cause of much of the problems the world faces. Trillions of $ speculating in trading schemes instead of making real investments caused massive stress and dislocations.
AIG bailout is being re-written. From the looks of it, the troubles in the credit default swap "market" are quite intense. Obviously, that entire casino needs eviscerated. Writers of credit default swaps should be required to put % collateral in Treasuries in isolated subsidiaries and regulated as insurance companies. Anything less is fraud and or mere gambling.
Barron's had an article about the recent rush to "alternative" investments by college endowments and pension funds. We now see most of those "investments" were just speculation in commodity futures - not real assets at all - and hedge funds. Buying timber, farmland and venture capital are real investments. Hedge funds, commodity funds, private equity and that ilk are just leveraged speculations.
Everyone now agrees the LEH bankruptcy was a huge mistake. Some world leaders blame the US for letting it happen. Hindsight is so clear. But at the time, the "moral hazard" police were quite strident. Politically, I don't see how the US could have done anything else. The fallout from BSC was quite bad.
The LEH failure did bring to light hitherto unknown or unappreciated financial interconnections and leverage, such as from "rehypothecation".
Actions
Doing nothing. I will buy more of my stocks IFF they drop to buy points. By the way, IFF means "if and only if".
I've deferred re-balancing Krypto Fund as I am contemplating some transfers and exchanges that will let me take a valuable tax loss on some ETFs held in a taxable account. This will save me real money and not affect my overall asset allocations.
Tax loss selling for the rest of this year will be heavy. But I wonder if the money will just be shifted around. I plan to just shift the money around.
Word of the Day
"Conceit" - noun [$10]
Conceit means 1. personal vanity, pride; 2. (literary) a. a far fetched comparison, especially as a stylistic affectation; a convoluted or unlikely metaphor; b. a fanciful notion.
Sentence: All the information conveyed by one person speaking directly to another is subsumed in the Anglophone world under their conceit, "personal chemistry". [adapted from a thought in "Travels with Herodotus" a very fine book by R. Kapuscinsky, cf. page 185 top.
Here's some real news: China announces $586 billion stimulus plan. That's real money. Stock futures are up on the news worldwide.
WSJ has a story that jobs in many parts of China are hard to find. That means trouble for that authoritarian / communist government. So they had to act.
I read that five large beefer managers are called before Congress on Thursday. Good. I hope they are skewered. Hedge funds are a fundamental, root cause of much of the problems the world faces. Trillions of $ speculating in trading schemes instead of making real investments caused massive stress and dislocations.
AIG bailout is being re-written. From the looks of it, the troubles in the credit default swap "market" are quite intense. Obviously, that entire casino needs eviscerated. Writers of credit default swaps should be required to put % collateral in Treasuries in isolated subsidiaries and regulated as insurance companies. Anything less is fraud and or mere gambling.
Barron's had an article about the recent rush to "alternative" investments by college endowments and pension funds. We now see most of those "investments" were just speculation in commodity futures - not real assets at all - and hedge funds. Buying timber, farmland and venture capital are real investments. Hedge funds, commodity funds, private equity and that ilk are just leveraged speculations.
Everyone now agrees the LEH bankruptcy was a huge mistake. Some world leaders blame the US for letting it happen. Hindsight is so clear. But at the time, the "moral hazard" police were quite strident. Politically, I don't see how the US could have done anything else. The fallout from BSC was quite bad.
The LEH failure did bring to light hitherto unknown or unappreciated financial interconnections and leverage, such as from "rehypothecation".
Actions
Doing nothing. I will buy more of my stocks IFF they drop to buy points. By the way, IFF means "if and only if".
I've deferred re-balancing Krypto Fund as I am contemplating some transfers and exchanges that will let me take a valuable tax loss on some ETFs held in a taxable account. This will save me real money and not affect my overall asset allocations.
Tax loss selling for the rest of this year will be heavy. But I wonder if the money will just be shifted around. I plan to just shift the money around.
Word of the Day
"Conceit" - noun [$10]
Conceit means 1. personal vanity, pride; 2. (literary) a. a far fetched comparison, especially as a stylistic affectation; a convoluted or unlikely metaphor; b. a fanciful notion.
Sentence: All the information conveyed by one person speaking directly to another is subsumed in the Anglophone world under their conceit, "personal chemistry". [adapted from a thought in "Travels with Herodotus" a very fine book by R. Kapuscinsky, cf. page 185 top.
Friday, November 7, 2008
TGIF and more
Hmmm I guess yesterday's French sentence can be mostly re-used.
Hier, les Bourses replongent.
Translation - "yesterday, the markets plunged again." That French verb, "replonger" might be the label for this market, as it means "to plunge again."
WSJ has a story about more and more liquidations of hedge funds and redemptions. Perhaps more of this is coming. Beefers are the "root" cause of all the problems of this economy and market. Colossal sums invested by the greedy and dumb rich in speculative funds instead of new growth businesses led to the housing bubble, commodity bubble and all this insane volatility as they are liquidated.
You ask, how did hedge funds cause the housing bubble ? Who do you think bought the subordinated classes of all those subprime CDOs ? Without those buyers, the junk mortgages could not have been securitized and hence never created.
Sarkozy of France has suggested some regulations or restrictions on hedge funds. I hope other world leaders listen.
The jobs number will likely be quite bad.
Actions
Doing nothing. The DRYS secondary has crushed my shipping stocks. Ugh... I guess the lenders are pushing these companies to raise equity as a cushion. To me, they are risky, but quite valuable companies IFF they survive. Time will tell.
Word of the Day
"Viand" - noun [$10] formal
Viand means 1. an article of food; 2. (in plural) provisions, victuals.
Sentence: Will the future look back on today's financial turmoil to see the caricature of a former hedge fund manager in a tuxedo seeking viands on the streets of New York ?
Hier, les Bourses replongent.
Translation - "yesterday, the markets plunged again." That French verb, "replonger" might be the label for this market, as it means "to plunge again."
WSJ has a story about more and more liquidations of hedge funds and redemptions. Perhaps more of this is coming. Beefers are the "root" cause of all the problems of this economy and market. Colossal sums invested by the greedy and dumb rich in speculative funds instead of new growth businesses led to the housing bubble, commodity bubble and all this insane volatility as they are liquidated.
You ask, how did hedge funds cause the housing bubble ? Who do you think bought the subordinated classes of all those subprime CDOs ? Without those buyers, the junk mortgages could not have been securitized and hence never created.
Sarkozy of France has suggested some regulations or restrictions on hedge funds. I hope other world leaders listen.
The jobs number will likely be quite bad.
Actions
Doing nothing. The DRYS secondary has crushed my shipping stocks. Ugh... I guess the lenders are pushing these companies to raise equity as a cushion. To me, they are risky, but quite valuable companies IFF they survive. Time will tell.
Word of the Day
"Viand" - noun [$10] formal
Viand means 1. an article of food; 2. (in plural) provisions, victuals.
Sentence: Will the future look back on today's financial turmoil to see the caricature of a former hedge fund manager in a tuxedo seeking viands on the streets of New York ?
Friday, August 1, 2008
TGIF
After a volatile week, I'm thinking about the weekend. Hmmmm ... perhaps a trip to the range, a barbeque, some beer and relaxation is needed. I think the weekend will start early here in the bunker.
Markets
Yesterday the beefers performed their usual antics with one of their puppets. They pushed Elmer [aka Alan Greenspan] onto the TV in the afternoon to speak some doom and foreboding. Elmer was, of course, a principal architect of the housing bubble with his excessively long period of very low interest rates and his foolish pumping of adjustable rate loans at the same time. Since retirement, he's been doing the bidding of his beefer masters for very high pay. What a knave !
[Note for new readers: "beefer" is short for big, evil funds, the ones who bounce the market around like a ping pong ball, conduct bear raids and bull pumps while trying to shake you out of your investments.]
So "they" proceeded to knock the market down late in the day. BA was hit hard, probably by an unannounced downgrade by a major firm. The Dow Jones Industrial Avergae seems unusually volatle lately compared to the S&P 500. I wonder if the beefers have decided to use it an a tool of their manipulations, being a bit easier to bounce around as it's only 30 stocks ?
Recent data indicating a slowdown in Europe might soon give the ECB some reason to ponder its silly policy of trying to control the price of oil via interest rates.
I don't expect a good employment number today. This is seasonal layoff season. But companies are hiring if they can find people willing to work. The most important work skills are these three: 1) show up on time, 2) sober and 3) do what one is told. Unfortunately, some people don't seem to have that nowadays. A plant nearby is still trying to hire full time, unskilled labor at a reasonable entry level pay (double the minimum wage) - they have a large banner visible from a major highway advertising their desire.
PS: Added to CVX, DVN, FCX, BA, IR and ITW. At 167% long ... that's it, all full loads. NB: BA+IR+ITW is one position.
Word of the Day
"Mountebank" - noun [$10]
Mountebank means 1. (historical) a person who sells quack medicine from a platform; 2. a boastful, unscruplous pretender. Alternative definition: 1. a swindler, a charlatan; 2. a clown.
Sentence: Where is the gravitas of Obama ? So far he's shown himself to be a mountebank surrounded by his shills in the DC press, mouthing platitudes and empty slogans. "Change!" ... What Change ? He's a mere speech ... an empty head with a sales pitch for homo booboise to buy.
Markets
Yesterday the beefers performed their usual antics with one of their puppets. They pushed Elmer [aka Alan Greenspan] onto the TV in the afternoon to speak some doom and foreboding. Elmer was, of course, a principal architect of the housing bubble with his excessively long period of very low interest rates and his foolish pumping of adjustable rate loans at the same time. Since retirement, he's been doing the bidding of his beefer masters for very high pay. What a knave !
[Note for new readers: "beefer" is short for big, evil funds, the ones who bounce the market around like a ping pong ball, conduct bear raids and bull pumps while trying to shake you out of your investments.]
So "they" proceeded to knock the market down late in the day. BA was hit hard, probably by an unannounced downgrade by a major firm. The Dow Jones Industrial Avergae seems unusually volatle lately compared to the S&P 500. I wonder if the beefers have decided to use it an a tool of their manipulations, being a bit easier to bounce around as it's only 30 stocks ?
Recent data indicating a slowdown in Europe might soon give the ECB some reason to ponder its silly policy of trying to control the price of oil via interest rates.
I don't expect a good employment number today. This is seasonal layoff season. But companies are hiring if they can find people willing to work. The most important work skills are these three: 1) show up on time, 2) sober and 3) do what one is told. Unfortunately, some people don't seem to have that nowadays. A plant nearby is still trying to hire full time, unskilled labor at a reasonable entry level pay (double the minimum wage) - they have a large banner visible from a major highway advertising their desire.
PS: Added to CVX, DVN, FCX, BA, IR and ITW. At 167% long ... that's it, all full loads. NB: BA+IR+ITW is one position.
Word of the Day
"Mountebank" - noun [$10]
Mountebank means 1. (historical) a person who sells quack medicine from a platform; 2. a boastful, unscruplous pretender. Alternative definition: 1. a swindler, a charlatan; 2. a clown.
Sentence: Where is the gravitas of Obama ? So far he's shown himself to be a mountebank surrounded by his shills in the DC press, mouthing platitudes and empty slogans. "Change!" ... What Change ? He's a mere speech ... an empty head with a sales pitch for homo booboise to buy.
Tuesday, June 24, 2008
Speculation is not a Dirty Word
For all my rants against beefers (aka big, evil funds) and oil market speculators, I want to make it explicit that speculation is neither a dirty word nor a dirty business. Everyone should be free to speculate to the extent of his or her desire. That's what freedom means and clearly, being a populist libertarism, you expect that from me. But ...
But that means as a person ... not a giant pool of big money. Human freedom is to be exalted, but not groups of big money pools. Those need to be regulated and / or prohibited from trashing markets necessary for price discovery, and overwhelming natural hedgers by their sheer size and thus manipulating prices higher in the same manner as the old "corners" on markets.
And the rich pour money into these pools in the search for "excess returns" and "stable returns". Do they invest in a new oil field ? Or a new mine ? Or in new discoveries ? No. They pour money into financial products and beefers who act as their vikings to loot more plunder in trading pools. The rich should just find a good broker to pick some stocks and private investments in new mines, oil, or ventures. This layer of beefers needs to be heavily regulated.
Populist libertarianism is a two word concept. The "populist" part means that the big pools of money, the ruling classes, must be limited in their ability to raid the common man.
But that means as a person ... not a giant pool of big money. Human freedom is to be exalted, but not groups of big money pools. Those need to be regulated and / or prohibited from trashing markets necessary for price discovery, and overwhelming natural hedgers by their sheer size and thus manipulating prices higher in the same manner as the old "corners" on markets.
And the rich pour money into these pools in the search for "excess returns" and "stable returns". Do they invest in a new oil field ? Or a new mine ? Or in new discoveries ? No. They pour money into financial products and beefers who act as their vikings to loot more plunder in trading pools. The rich should just find a good broker to pick some stocks and private investments in new mines, oil, or ventures. This layer of beefers needs to be heavily regulated.
Populist libertarianism is a two word concept. The "populist" part means that the big pools of money, the ruling classes, must be limited in their ability to raid the common man.
Thursday, May 22, 2008
Snafu
For some reason, the site to create new posts did not work until now. So I didn't get to write a blog in my usual time, viz. about 5AM ET.
I was going to hit the beefers for creating this energy/oil bubble and hurting many industries and the common man. So they are creating another mess, as they did for the credit crisis, which is mostly over. All hedge funds really need to be regulated and made to file as investment companies.
They are joined by the big pension funds pouring money into the commodity funds. Pension funds should not be permitted to "invest" in commodity futures, as those derivative markets just are not designed for that huge flood on money. If they want to invest in oil, let them invest in it physically, like timber. They should be taxed on futures profits as unrelated business income.
I'll write more later.
No word of the day today as I have some things to do.
PS: Covering the TLT short, applying my "green-red" rule, viz., if a "trade" is green and turns red, I close it out. The short is flat, but likely go red at the open, so it's sayonnara for now. Might re-enter later. This rule applies to "trades", not LT positions.
I was going to hit the beefers for creating this energy/oil bubble and hurting many industries and the common man. So they are creating another mess, as they did for the credit crisis, which is mostly over. All hedge funds really need to be regulated and made to file as investment companies.
They are joined by the big pension funds pouring money into the commodity funds. Pension funds should not be permitted to "invest" in commodity futures, as those derivative markets just are not designed for that huge flood on money. If they want to invest in oil, let them invest in it physically, like timber. They should be taxed on futures profits as unrelated business income.
I'll write more later.
No word of the day today as I have some things to do.
PS: Covering the TLT short, applying my "green-red" rule, viz., if a "trade" is green and turns red, I close it out. The short is flat, but likely go red at the open, so it's sayonnara for now. Might re-enter later. This rule applies to "trades", not LT positions.
Saturday, March 22, 2008
Belated Thursday AM post
True title: "Those Darn Beefers"
This post is truly what I was thinking late Wednesday afternoon and Thursday morning after the beefers all decided to bail out of commodities and energy stocks at the same time. This incessant herd behavior of so much "managed" money is really dangerous for the "common man" investor unless he understands it. That's why I am always reitierating that one must understand their actions and behavior in picking long term investing points.
My first blog post of January 14, 2007 defined "beefer" and amazingly, that description of their behavior fits recent actions rather well. Mirabile dictu !
For a few weeks all we heard about were commodities and energy going to the moon ... parabolic ... hyperbolic ... asymptotic. Your writer posted sales of all his miners (RIO, BHP, FCX, PHU and RTP) and also numerous large sales in gold & silver culminating in Tuesday's last big "quintuple" load at 11:00 AM just before the Fed meeting.
Was I a great technician ? No. I just had a fundamental outlook that oil and the mineral prices had peaked for awhile and would fall, then base. But the beefers ... do they think ? No. They just barge into stocks+commodities and play the "momentum" game. So as the dollar kept going down, I figured the Fed might toss a fig leaf towards supporting the dollar adn start a beefer stampede out of commodities and commoditiy stocks. Hence, I wanted all my sales done before the Tuesday FOMC meeting. They did. And all the beefers bailed at once. Mirabile dictu !
All I had was good knowledge of behavior of the beefers. I've seen them do these idiotic stampedes before.
Here's a ditty I composed and posted on August 8, 2007:
***reprise from August 8, 2007 post***
Song of the times follows (based on the song, "The Grand Old Duke of York") ->
The beefer Duke of Funds
He had ten thousand stocks
He marched them up to the market top
And marched them down again.
Lolol, that ditty gave into my head yesterday afternoon. I sang it in my turret.
***End of reprise***
So that ditty came into my head driving to my hometown on Wednesday afternoon. I wanted to post this Thursday morning, but my Internet connection in Ohio had equipment problems, so I was cut off from the "modern" world.
What to do ?
Wait a few weeks or months ... oil must base for a long while around $100 and other minerals, too, at these prices as clearly price-demand rationing is taking hold. So wait. The oils & miners will be great long term buys again as the beefers liquidate. I plan to add to DVN, CVX and rebuy some of BHP, RTP, RIO and/or PCU later this year, but am in no hurry.
The big banks seem to have bottomed. I have plenty and will wait for the beefers to barge into them in the next few weeks/months then I will lighten up to amounts I can hold for a few years.
This post is truly what I was thinking late Wednesday afternoon and Thursday morning after the beefers all decided to bail out of commodities and energy stocks at the same time. This incessant herd behavior of so much "managed" money is really dangerous for the "common man" investor unless he understands it. That's why I am always reitierating that one must understand their actions and behavior in picking long term investing points.
My first blog post of January 14, 2007 defined "beefer" and amazingly, that description of their behavior fits recent actions rather well. Mirabile dictu !
For a few weeks all we heard about were commodities and energy going to the moon ... parabolic ... hyperbolic ... asymptotic. Your writer posted sales of all his miners (RIO, BHP, FCX, PHU and RTP) and also numerous large sales in gold & silver culminating in Tuesday's last big "quintuple" load at 11:00 AM just before the Fed meeting.
Was I a great technician ? No. I just had a fundamental outlook that oil and the mineral prices had peaked for awhile and would fall, then base. But the beefers ... do they think ? No. They just barge into stocks+commodities and play the "momentum" game. So as the dollar kept going down, I figured the Fed might toss a fig leaf towards supporting the dollar adn start a beefer stampede out of commodities and commoditiy stocks. Hence, I wanted all my sales done before the Tuesday FOMC meeting. They did. And all the beefers bailed at once. Mirabile dictu !
All I had was good knowledge of behavior of the beefers. I've seen them do these idiotic stampedes before.
Here's a ditty I composed and posted on August 8, 2007:
***reprise from August 8, 2007 post***
Song of the times follows (based on the song, "The Grand Old Duke of York") ->
The beefer Duke of Funds
He had ten thousand stocks
He marched them up to the market top
And marched them down again.
Lolol, that ditty gave into my head yesterday afternoon. I sang it in my turret.
***End of reprise***
So that ditty came into my head driving to my hometown on Wednesday afternoon. I wanted to post this Thursday morning, but my Internet connection in Ohio had equipment problems, so I was cut off from the "modern" world.
What to do ?
Wait a few weeks or months ... oil must base for a long while around $100 and other minerals, too, at these prices as clearly price-demand rationing is taking hold. So wait. The oils & miners will be great long term buys again as the beefers liquidate. I plan to add to DVN, CVX and rebuy some of BHP, RTP, RIO and/or PCU later this year, but am in no hurry.
The big banks seem to have bottomed. I have plenty and will wait for the beefers to barge into them in the next few weeks/months then I will lighten up to amounts I can hold for a few years.
Saturday, March 15, 2008
A Few Bits of Information
No Inflation II
I just bought a chicken to roast for dinner and paid $1.49 / lb. for a whole broiler chicken. That compares to the $1.99 / lb. that I paid last week for an organic, all-natural chicken, which were not available today at the butcher shop near my bunker. So my point on the lack of all-encompassing "inflation" is more supported than ever with this data. The BLS data is correct and yesterday's fall in the year-over-year core inflation is very bullish IF reality ruled perception ... or WHEN it does.
Beefers = Big, Evil Funds.
I realize I haven't defined this term lately, so for new readers, see my first blog post of January 14, 2007 for a more complete description and some humorous metaphors for their behavior.
Bear Stearns
No matter what one thinks about the markets and economy, the problems at Bear Stearns are quite sad. Lots of fine people working hard are at risk of their jobs and might be hurt badly. I have friends working there, some very old friends from years past. So I certainly hope a favorable acquiror can be found to maintain the firm's current level of operations.
Is this an example of the Street tossing a virgin into the volcano to appease the gods ? Aka a "fall guy" ?
No, not in my opinion. The better metaphor is Don Juan going to hell after seducing and destroying the lives of large numbers of women - see the fine 17th century play by Moliere.
This is another example of how ruthless, greedy and/or dishonest people can rise high and ruin a firm. That firm's actions over the past 20 years or more created animosity and a cult of greed and cutthroat behavior, earning no friends or support when they needed it. The behavior of the former CEO, Jimmy Cayne, during the LTCM collpase is one example. Another is their destruction of some mortgage REITs and hedge funds in those turbulent markets of 1998 with unfair margin calls - much later they lost court cases and had to pay damages. The collapse of their leveraged hedge funds in early 2007 started this mess. And who knows what they were doing in this crisis ? I also have personal knowledge of despicable behavior by some senior persons (no longer there) from past experience many years ago. But the culture never changed in my opinion, so the amount of toxicity built up by that crowd eventually killed the firm.
Bear Stearns is no virgin being sacrificed ... it's Don Juan going to hell for past evils.
The sad part is the harm that might occur for so many honest, fair men and women.
Actions
This morning I scraped every last bit of money market, marketable bond fund and TIPs in my Krypto Fund and moved it into US stocks for close of trading Monday. I can't exchange the 10% chunk that is in nonliquid, retirement long term fixed income, such as Mrs. B's TIAA, to stocks. My asset allocation program also directed me to shift some money from the real estate class [Vanguard REIT index fund] to US stocks, too, and I obeyed.
I just bought a chicken to roast for dinner and paid $1.49 / lb. for a whole broiler chicken. That compares to the $1.99 / lb. that I paid last week for an organic, all-natural chicken, which were not available today at the butcher shop near my bunker. So my point on the lack of all-encompassing "inflation" is more supported than ever with this data. The BLS data is correct and yesterday's fall in the year-over-year core inflation is very bullish IF reality ruled perception ... or WHEN it does.
Beefers = Big, Evil Funds.
I realize I haven't defined this term lately, so for new readers, see my first blog post of January 14, 2007 for a more complete description and some humorous metaphors for their behavior.
Bear Stearns
No matter what one thinks about the markets and economy, the problems at Bear Stearns are quite sad. Lots of fine people working hard are at risk of their jobs and might be hurt badly. I have friends working there, some very old friends from years past. So I certainly hope a favorable acquiror can be found to maintain the firm's current level of operations.
Is this an example of the Street tossing a virgin into the volcano to appease the gods ? Aka a "fall guy" ?
No, not in my opinion. The better metaphor is Don Juan going to hell after seducing and destroying the lives of large numbers of women - see the fine 17th century play by Moliere.
This is another example of how ruthless, greedy and/or dishonest people can rise high and ruin a firm. That firm's actions over the past 20 years or more created animosity and a cult of greed and cutthroat behavior, earning no friends or support when they needed it. The behavior of the former CEO, Jimmy Cayne, during the LTCM collpase is one example. Another is their destruction of some mortgage REITs and hedge funds in those turbulent markets of 1998 with unfair margin calls - much later they lost court cases and had to pay damages. The collapse of their leveraged hedge funds in early 2007 started this mess. And who knows what they were doing in this crisis ? I also have personal knowledge of despicable behavior by some senior persons (no longer there) from past experience many years ago. But the culture never changed in my opinion, so the amount of toxicity built up by that crowd eventually killed the firm.
Bear Stearns is no virgin being sacrificed ... it's Don Juan going to hell for past evils.
The sad part is the harm that might occur for so many honest, fair men and women.
Actions
This morning I scraped every last bit of money market, marketable bond fund and TIPs in my Krypto Fund and moved it into US stocks for close of trading Monday. I can't exchange the 10% chunk that is in nonliquid, retirement long term fixed income, such as Mrs. B's TIAA, to stocks. My asset allocation program also directed me to shift some money from the real estate class [Vanguard REIT index fund] to US stocks, too, and I obeyed.
Wednesday, February 20, 2008
Mud Wrestling
That's another name for my metaphor of market action as a herd of elephants stomping in the mud, looking for a trend to head out to a new waterhole. The world is awash in metaphors and similes nowadays, and the typical babblevision pundit sounds like a modern day "Sancho Panza" spewing out mountains of metaphors instead of Sancho's proverbs which infuriated Don Quixote but delighted noble listeners.
Here is the legend for my metaphor of today:
Elephants = Beefers = Big, Evil Funds.
Mud = trendless, choppy market action
Stomping = trading
Waterhole = profits
I like animal metaphors. They capture the actions and psychology behind some individual and collective human activities. As well they should, since humans are a mentally advanced animal. Humans still have much primitive animal brain components and human behavior is not so different from animals. I guess paleo-antropologists say humans are about ten million years in evolutionary time from gorillas and spent most of the last two million years as hunter-gatherers in the wilderness. So we differ little from animals in our deepest mental functions.
Short term, perception rules the markets.
Long term, reality rules.
For months, the rich have been panicked as they think another 2001-2003 market collapse is imminent. You see, that's the "lesson" they learned and now they think preservation of capital is the most important goal now. In old days, that meant bonds. But they don't just buy some bonds now. The trendy thing to do which they have "learned" at the country or city club is to use hedge funds - an alternative "investment" to provide "stable" returns. Now they "invest" in hedge funds which are just trading pools. Notice the false precedent: how do you "invest" in a "trading" fund ? You are just hiring a manager to trade on your behalf, not investing. So as all marginal funds are just piled into trading funds, how can a new trend develop ?
Why the chop/yo-yo/ping-pong/mud stomping ? A trend in some groups starts, but after a bit a group of "smart" traders "decide" to short it, and the group stops going up, possibly generating selling from some longs and then the group declines as the stocks go down under that pressure as more longs liquidate. So it's back to the beginning and the cycle conintues. No net gains, just yo-yo/ping-pong/mud stomping action.
If all the world's a trade, how can a trend develop ?
Over time, reality will rule. the steady pressure of corporate profits, stock buybacks, and real buyers on the dips eventually will drive up prices, creating a series of higher lows. These higher lows over time will permit the herd of trading beefers to see a new water hole in the distance, and a good bullish trend will start.
Until then, all we can do is wait, watch the real data and corporate earnings and economic news and wait. But there is evidence this process is happening. Long term, big money investors like Warren Buffet are making huge purchases of good stocks they like.
Take advantage of the inane dips caused buy beefer liquidation to buy good stocks at low prices. For example, oils and miners were knocked way down a few weks ago. And in the great wisdom of the beefers, recently they have roared back. A patient dip buyer got good stocks at low prices and now has a fine gain.
Keep doing asset allocations as needed. I have more gold to sell to get asset group under 10% in the Krypto Fund. If silver goes over $18, I will sell some of it, too.
Reality will eventually rule.
Reality:
HP reported good earnings up 38% and revenues up 13% and raised its outlook for the year.
GM building in NYC to sell for a record price over $3 billion.
ING reports good earnings, small writedown.
PS: The Street is sure eating their rich customers ... like piranhas ;-) The latest is the auction rate preferred stocks sold to the rich as a liquid, higher yield short term investment [lolol]. I guess the rich learn that there's no such thing as a free lunch. I hope the rich start seeing their hedge fund investments as similar garbage "investments".
Words of the Day:
"Execration" - noun [$10]; also "Execrable" - adj. and "Execrate" - verb, transitive
"Execration" means 1. act of cursing; 2. a curse; 3. something that is cursed or loathed.
"Execrable" means 1. deserving of execration; 2. extremely inferior, very bad.
"Execrate" means 1. to declare to be hateful or abhorent; to denounce; 2. to feel loating for; abhor; 3. to invoke a curse upon.
Sentences: Bunkerman execrates beefers, as they perform little useful function but collect high fees from the stupid rich. Their execrable activities cause needless pain for the common man trying to invest his savings. Today's blog post tried to explain why beefer activities deserve execration from all thinking people.
Here is the legend for my metaphor of today:
Elephants = Beefers = Big, Evil Funds.
Mud = trendless, choppy market action
Stomping = trading
Waterhole = profits
I like animal metaphors. They capture the actions and psychology behind some individual and collective human activities. As well they should, since humans are a mentally advanced animal. Humans still have much primitive animal brain components and human behavior is not so different from animals. I guess paleo-antropologists say humans are about ten million years in evolutionary time from gorillas and spent most of the last two million years as hunter-gatherers in the wilderness. So we differ little from animals in our deepest mental functions.
Short term, perception rules the markets.
Long term, reality rules.
For months, the rich have been panicked as they think another 2001-2003 market collapse is imminent. You see, that's the "lesson" they learned and now they think preservation of capital is the most important goal now. In old days, that meant bonds. But they don't just buy some bonds now. The trendy thing to do which they have "learned" at the country or city club is to use hedge funds - an alternative "investment" to provide "stable" returns. Now they "invest" in hedge funds which are just trading pools. Notice the false precedent: how do you "invest" in a "trading" fund ? You are just hiring a manager to trade on your behalf, not investing. So as all marginal funds are just piled into trading funds, how can a new trend develop ?
Why the chop/yo-yo/ping-pong/mud stomping ? A trend in some groups starts, but after a bit a group of "smart" traders "decide" to short it, and the group stops going up, possibly generating selling from some longs and then the group declines as the stocks go down under that pressure as more longs liquidate. So it's back to the beginning and the cycle conintues. No net gains, just yo-yo/ping-pong/mud stomping action.
If all the world's a trade, how can a trend develop ?
Over time, reality will rule. the steady pressure of corporate profits, stock buybacks, and real buyers on the dips eventually will drive up prices, creating a series of higher lows. These higher lows over time will permit the herd of trading beefers to see a new water hole in the distance, and a good bullish trend will start.
Until then, all we can do is wait, watch the real data and corporate earnings and economic news and wait. But there is evidence this process is happening. Long term, big money investors like Warren Buffet are making huge purchases of good stocks they like.
Take advantage of the inane dips caused buy beefer liquidation to buy good stocks at low prices. For example, oils and miners were knocked way down a few weks ago. And in the great wisdom of the beefers, recently they have roared back. A patient dip buyer got good stocks at low prices and now has a fine gain.
Keep doing asset allocations as needed. I have more gold to sell to get asset group under 10% in the Krypto Fund. If silver goes over $18, I will sell some of it, too.
Reality will eventually rule.
Reality:
HP reported good earnings up 38% and revenues up 13% and raised its outlook for the year.
GM building in NYC to sell for a record price over $3 billion.
ING reports good earnings, small writedown.
PS: The Street is sure eating their rich customers ... like piranhas ;-) The latest is the auction rate preferred stocks sold to the rich as a liquid, higher yield short term investment [lolol]. I guess the rich learn that there's no such thing as a free lunch. I hope the rich start seeing their hedge fund investments as similar garbage "investments".
Words of the Day:
"Execration" - noun [$10]; also "Execrable" - adj. and "Execrate" - verb, transitive
"Execration" means 1. act of cursing; 2. a curse; 3. something that is cursed or loathed.
"Execrable" means 1. deserving of execration; 2. extremely inferior, very bad.
"Execrate" means 1. to declare to be hateful or abhorent; to denounce; 2. to feel loating for; abhor; 3. to invoke a curse upon.
Sentences: Bunkerman execrates beefers, as they perform little useful function but collect high fees from the stupid rich. Their execrable activities cause needless pain for the common man trying to invest his savings. Today's blog post tried to explain why beefer activities deserve execration from all thinking people.
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