Tag Archives: Finance

Sky’s the Limit

Sky's the Limit

Sky's the Limit

Highly Illogical

A)  American’s don’t want a public healthcare plan.

B)  A public health care plan will force out private insurers.

So we don’t want a public option but if it’s offered we’ll all select it??


A)  American’s want their big SUV’s and not fuel-efficient econoboxes.

B)  GM went out of business because it was making cars American’s didn’t want.

So American’s want big SUV’s that GM made but won’t anymore.


A)  Bank of America is Too Big to Fail

B) Bank of America is forced to buy the biggest mortgage lender, Countrywide, and the biggest retail broker, Merrill Lynch.

So stress tests now prove that new bigger Bank of America will no longer fail nor need to be disassembled.

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”  (guess the speaker)

Quote of the Day

From a Gold Commercial:

“It has never been worth zero.”

When a Penny is Overpayment?

At the request of a friend a video and some truth:

When paying is Penny is still getting Ripped off.

Picture ten houses all with $100,000, 30yr mortgages on $200,000 houses. They each pay $1000 per month into a pool of payments equaling $10,000 per month.

Now in the olden days, the bank received all these payments. If one homeowner completely defaults through bankruptcy, the bank would only receive $9,000 per month going forward and one house. Pretty Simple

Today it’s all different.

Instead of the bank owning all the future payments or the house after a default, individual investors own either a portion of the future payments or the right to a house after foreclosure.

Someone might own the right to the first two checks mailed in by homeowners each month. Another investor gets monthly payments two through five mailed in by homeowners each month.

Now who would want to own the last payment each month after just one homeowner defaults, sends jingle mail, walks away, etc.?

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Madoff

Madoff

This may be the biggest Ponzi scheme already, but the impact disclosed so far may be the tip of the iceberg.

It seems that outside of Mr. Madoff’s specific firm, a large number of other managers, much like remoras on sharks, attached both their client’s fortunes and their personal livelihood to this fraud.

Because of another aspect of so-called hedge funds that hasn’t been getting much media time, the fraud seems to be mushrooming. The practice is known as Fund of Funds, which is one hedge fund investing in another with each taking their asset based fee.  This deferring of actual investment decision making to another entity not only acts as a multiplier of commission fees but also absolves most supposed advisers of possessing any actual knowledge about investing.

I’ll lay out a simple example:

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Unemployment

High unemployment is not only bad for the newly unemployed. It also forces down salaries for those still working by increasing competition for jobs. Simple supply and demand.

So all those “demanders”, owners and consumers, will now get to pay less for the labor portion of the production equation.

It is important to remember that a large portion of the populace thought the economy leading to the Great Depression era was just great, the gap between rich and poor, like today was approaching a good monarchy. Excepting the anarchy that punctuated the end to their laissez-faire policies, we might have already completely regressed to a serf type employment arrangement. Continue reading

Financial Blog Roundup

Three Rules of Blogs

  1. Know your source – verify it with your own logic or a main stream media source
  2. Avoid Yes Men Blogging – don’t restrict yourself to those blogs you agree with or you’ll wind up with the equivalent of just “yes men” blogs
  3. Read the Comments – just do it and you’ll understand why

  1. Seeking AlphaThis is a good general purpose stock research blog that allows you to search by ticker and includes both technical and fundamental opinions on stocks. The articles are from various sources who, for the most part, provide bios that allow you to judge their opinions.
  2. The Big PictureThis self described “Macro Perspective on Capital Markets, Economy, Geopolitics, Technology and Digital Media” is from Wall Street vet Barry Ritholtz. It is somewhat of a contrarian site but the comments are choc full of mostly intelligent disagreement that lets you see both sides of a given argument.
  3. Calculated Risk – primarily a Real Estate blog but good for breaking down economic numbers/ The comment section is populated by some great opinions as well
  4. Jim Sinclair’s “Mine Set” – This is a major gold bug site that makes sense once you understand the Formula that underpins the authors claim to $1650 gold. Also a good collection point for news not in the news. Contains analysis based on both fundamentals and technical trading for gold and gold stocks
  5. Naked Capitalism – a great collection blog that pulls marco market info from around the globe. Similar to Calculated Risk in that some of the best info on the site is found in the comments.

This list is just the Top 5 sites that I use. I started the list with Seeking Alpha because it actually led me to the other five sites. All of these sites frequently contain terms or events that I am unfamiliar with so both Google and Wikipedia are indispensable.

The following example applies both to how to be a successful trade and how to use blogs:

I check the blog Trader Mike infrequently due to it brief entries and focus on technical trading. Yet just yesterday I checked it for the first time in a few weeks and found the following link: One Way to Learn to Trade . This took me to another blog, Globetrader, that has my exact philosophy for successful trading (in that there is no exact method). Here is “GlobeTraders” advice:

What do you need to do to become a profitable trader?

“There is no holy grail, there is no secret trading wisdom. It’s all very plain and simple. But you need to find it in yourself. That might sound cryptic, but trading the way I understand it is nothing mechanical, nothing I can reproduce in an automatic trading system. And that means if you want to learn it you will have to invest the time. You can shorten your way by following a path that has lead to success for others. If it is your path only the future will tell. There are a lot of successful trading methods I can’t trade, because I don’t have the money or account size, because emotionally I can’t stand the high number of losers compared to a small but very profitable number of winners.

I followed a master trader, I learned a lot from her and I got my account to new highs only to go nearly bankrupt just 6 months later. The way that true master trader traded, even if it was extremely successful, was not my way. I could not trade that way and it nearly cost me my account to finally understand that. It took another 2 years to find my way, to find a way to trade that is in sync with my understanding of the markets. You will find successful traders on your way as well. You will follow their example and try to emulate their trading. But only if you are able to make it truly your own, will you be successful. “