Tuesday, January 29, 2008
The Ligne Maginot
Monday, January 28, 2008
l'anti christ et la rethorique mensongere
Thursday, January 24, 2008
tschernobyl et le trader fou expliquées apr els mass medias
fraude ou echec de la gestion de risque chez societe generale ?
Wednesday, January 23, 2008
blogs on bernanke
From panic to penicillin - Bernanke, blogged
While the FTSE 100 finished a giddy 165 points up, the US didn’t manage quite such a feat of euphoria. The Dow see-sawed, dropping more than 450 points before regaining more than 300 points of its losses.
Cut through the noise though, and it was another down day, tacked onto the previous week’s losses, says David Gaffen at MarketBeat. And what noise it was. Rich material for the live market bloggers, like Greg Newton at Naked Shorts. At lunchtime he noted, “the usual suspects are still talking about a liquidity problem, which is curious considering the cash tossed so willingly at financial services basket cases.”
MarketBeat summarises the analysts’ views of the latest Fed cash dump.
Without a doubt, what could have been a horrific trading session was headed off before the opening bell due to the Federal Reserve’s action. But the concerns about the handling of the current economic downturn have only multiplied. Analyst views of the Fed fall broadly into three camps — those that think the Fed is way behind the curve; those that think the Fed has become beholden to the markets, and those who believe the Fed is doing a masterful job. (This third group is more of a cult at this point, though.)
Felix Salmon at Market Movers is among those unimpressed by the Fed’s decision to take the slash and burn option just a week before a scheduled meeting.
the Fed is charged with keeping employment high and inflation low; it’s not charged with protecting the capital of investors in the stock market. So this action smells a bit like panic to me, and it might also have prevented the kind of stomach-lurching selling which could conceivably have marked a market bottom.
Barry Ritholtz, at the Big Picture, has a similar concern, describing the move as a “shot of penicillin to a cancer patient.” The Fed may merely have delayed the inevitable, he argues. “This market saving cut prevented a thorough, 5% wash out. In other words, all the Fed did was prevent a healthy capitulation.”
Naked Capitalism’s Yves Smith offers a “less than respectful commentary” on the Fed’s market-saving move. What the hell is the Fed doing meddling with the stock market, he wants to know?
What bothers me is the de facto declaration that stock markets are to be a low (or contained) risk zone. I started out in the securities industry in 1980, when most sensible people thought equities were speculative (this was two years before the infamous Business Week “Equities are Dead” cover).
Over at Econbrowser, James Hamilton takes a charitable tack and is prepared to accept that there may be more to the Fed’s 75bp move than a panicked attempt to avert a stock market plunge:
I suspect that the Fed is using equity prices just as I and many other economic analysts do, namely, as a useful aggregator of private and public information about near-term prospects for economic growth. All the recent indicators have suggested a significant deterioration of real economic activity over the last two months. I take the global stock market sell-off as one more confirmation of that assessment, and new information about the global scope of the problems we face.
The trouble is, he adds, 75bp won’t prevent a recession, any more than 50bp did in April 2001. But it might mitigate the damage: “I believe the FOMC cast its vote….with those who declare that a recession has already begun.”
Paul Krugman in his NYT blog points out that Bernanke spent a lot of time worrying about Japan’s 1990s experience, and in particular the way in which monetary policy became ineffective. The best way to avoid that “liquidity trap”, as argued in a paper co-authored by Bernanke in 2004, is by “maintaining a sufficient inflation buffer and easing preemptively as necessary.”
The Interfluidity blog reads between the lines of the lone FOMC dissenter, William Poole’s comments on the notion of a Fed put.
Poole is at pains, throughout his talk (whose theme is moral hazard) to claim that stabilization policy uses the stock market as a instrument of policy, but that this does not imply that the stock market can use the FRB as a backstop or guarantee. In the question of who’s using who, Poole wants to make it clear that the FRB is the boss. But, if the Fed must intervene to prevent “panics”, it has placed itself in the role of a parent habitually blackmailed by a self-destructive adolescent….
…It’s not a particular policy action that’s bad, it’s the macroeconomic game that we’ve settled into that has to be changed if we want markets that aggregate external information and make wise allocation decisions rather than focusing on intrafinancial Kremlinology.
le torquemada de la finance
the repeat of gbp crisis at the time of dem strength ?
Saturday, January 19, 2008
pal samuelson on subprime and compassionate conservatism
Monday, January 14, 2008
news jan 08
credit losses continue, citigroup , hyporeal estate point to an incipient recession
chf smallmidcaps, a buying opportunity
Gold shares positive times ahead?
the next crisis , credit cards , first signs of rising payment defaults
telecom in shaky times
Impact of a recession on metal prices
in the middle of the storm ubs official explanation on capital dilution and dividend payment
us real estate valuation, uk( barratt , balfour beatty/expensive, taylor wimpey), spain ( colonial, astroc)
Retail down: Tesco, Metro, Inditex, drop sahrply. buy opportunity? see eastern europe consumption
medical techno: molecular biology, cardio tech/ ( see medtronic)
swiss cyclicals, gf,abb, rieter, burckhardt , sika
SEZ , ANOTHER EX OF LOOTING THE SHAREHOLDERS
UBS financing discussed at the next general assembly
SIKA amd construction shares cheaply valued( Holcim, Geberit)?
EFG, cheap
US Biotech, cheap valuations, interesting article on the cost/ profit structure of the sector compared to pharma and its valuation / earnings outlook
US real estate ; centex, lenner a, d r horton, shares plunge , problem with valuation of inventory( see land price) which may be too high in the book value . trend negative, difficult to stop it ? SOME RECOMENDATIONS in Australia : centro(au), westfield, goodman ( see gs , t 45%),Maquarie(ubs)
Wednesday, January 02, 2008
Unrepented / Greater Fool Theory
what about fooling in history ? looks like in the 1920s sub prime collateral and siv were the backbone of one of the most colossal frauds in financial history. Mr Kreuger gains the coverage of the Economist, a Swedish finance buccaneer depicted by Galbraith ,a hypochondriac economic historian, as a man of genius unbounded by integrity.
http://economist.com/finance/displaystory.cfm?story_id=10278667
what's up for 2008?
http://economist.com/daily/columns/marketview/displaystory.cfm?story_id=10415523
"In retrospect, it seems clear that banks were playing a sophisticated game but they ended up being “too clever by three quarters”, as was once said of Harold Wilson, a former British prime minister. They earned fees for managing and distributing complex securities, and took them off their balance sheets, freeing up precious capital. But the buyers of these securities were often dependent on finance from the banks. And as those buyers have struggled, then the banks (HSBC and Citigroup among them) have been forced to take the securities back"
American elections ; stock amrkets perform well but are we at the juncture of an epochal change ? This is creating a bull market in pessimism. The likes of Bill O'Reilly and Lou Dobbs have transformed themselves into cable stars by ranting about cultural decay and “broken borders”. Patrick Buchanan's latest book is called “Day of Reckoning: How Hubris, Ideology and Greed are Tearing America Apart”. “We are on a path to national suicide,” he says. America is not just “coming apart”, but also “decomposing”.....In fact, Americans have always had a vigorous tradition of pessimism, in counterpoint to the optimistic one....but ... Much of today's pessimism may prove as unfounded
and what about forecasters? The venerable Abby Joseph Cohen of Goldman Sachs asserts, with remarkable precision, that profits will grow by 5.6% and that the S&P 500 index will end the year, not at 1,670 or 1,680, but at 1,675. The one forecast Buttonwood can safely make for 2008 is that the consensus will prove to be wrong. In one of the defining phrases of 2007, the author and investor Nassim Taleb has called these occurrences “black swans”—unexpected events that have enormous consequences. These are, by definition, very hard to forecast. One approach is to make several wild guesses in the hope that one will prove right;the writer goes on explaining that the major risk lies in a real estate crisis in the uk, ireland , spain and eastern europe.
against this background why not considering an investment in africa and the middle east ?
Up to $1bn is set to flow into North African and Middle Eastern stock markets in the coming months as several heavyweight firms launch funds focusing on the region, confirming its status as the next investing hot spot.
BlackRock, the US-based investment manager, on December 1 launched a Middle East North Africa Opportunities hedge fund....It is believed that it began trading with about $12m, and hopes to raise $250m by the second quarter of 2008......
Permal, the hedge fund of funds group, will shortly begin marketing a new one, called Silk Road, which will invest in North Africa, the Middle East and the neighbouring countries leading to Asia........T Rowe Price, the US-based mutual fund group, three months ago launched an Africa & Middle East fund, which has attracted more than $140m in investors' money. The strong start for the fund, which has had little marketing, indicates that US retail investors have an appetite for the region. It is believed to be the only such fund available to US investors, although there are some – New Star launched one last month – available to European investors.The T Rowe Price fund will have a relatively concentrated portfolio of 40 stocks and initially invest in 11 of the more developed markets in the region - such as Nigeria and Egpyt - and then expand to others, such as Botswana and Tunisia.Several other money managers around the world have similar plans. Mizuho Bank in Japan has launched a North Africa/Middle East mutual fund. Emerging markets mutual funds have historically had little or no investments in Africa and the Middle East, but have begun to lift their holdings there. Some of the African stock markets have been among the best performing in recent years.