hello 2mar$, last night's report
(i) had drinks and dinner w/ small group of comrades who spoke at the clsa conference here in hk
(ii) folks disagreed about what they fear most
(iii) folks unanimously likes gold, only differing in allocation %
(iv) i sold all my annaly (nly) shares that had been accumulated and cloud-atm put/call extracted over the 17 months, and the final tally is a net net ^%$#@52cking net of 13.8% return including all premium and dividend flows, and if not counting premium flows, then 5.6% return
conclusion: cloud-atm extraction makes a material difference in returns
(v) just cleared from e-mail tray
From: H
Sent: Saturday, September 15, 2012 3:13 AM
Subject: Re: Comments - Week of September 10
Indeed, the 'collateral transformation' business sets the stage for the next huge blow-up cum scandal.
On Fri, Sep 14, 2012 at 10:44 AM, C wrote:
Perhaps worryingly for Jim...
...I agree. Though you should all know I have continually been expecting a nasty bump in the night.
Big problems simply papered over with bank notes. There are too many of Rumsfeld's
"knowns and unknowns" out there waiting to jump out and bite the overgeared risk-on, risk-off merchants.
For example I was reading the other day how a couple of trillion in derivatives are soon due to move to clearing houses.
This was intended to reduce risk and increase transparency. But the clearing houses are in the habit of demanding proper collateral. A lot of the traders currently have unacceptable collateral which, for a price, some of the banks will switch on a repo basis against good quality bonds acceptable to the clearing house. Thus the dealers will not have to reduce their obscenely high leverage and can carry on trading on fractions of a percent of margin.
The problem is that most of the high quality bonds that will thus be lent to the dealers will not belong to the banks.
They will be their customers' bonds. So when the dealers go broke on a bad trade and the clearing house keeps "their" collateral, the banks will lose their customers' bonds that have been borrowed from custodial and prime brokerage accounts and there will be another scandal a la Man Group, Peregrine and Lehman all over again...
There is no way of knowing when this might go wrong up but if this regulatory arbitrage really is allowed to happen then I guarantee it will eventually blow up and take a load of innocent players with it.
Grumpy
On 9/14/2012 2:44 PM, Jim wrote:
Totally spot on. Perfect exit rally.
On 14 Sep, 2012, at 3:14 AM, TH wrote:
The Bernanke conference was the usual nonsense. The questions were a bit better, but he didn't really answer any questions that were not to script. I think the Fed has made a huge error with open ended QE. The, "threat" of QE3 has been out there for the better part of a year and that threat is what drove markets. Now it is defined and perhaps the market has already baked in more on greater expectations.
At least twice Bernanke mentioned the tools the Fed is using, or has in reserve (?) are, "not strong".
It is possible we are near a top in equities.
On 9/13/2012 2:39 PM, r wrote:
heil hail the the Ben Bernacht?!
Just finished watching the Dalio interview http://www.cfr.org/business-and-foreign-policy/conversation-ray-dalio-video/p28984
and would like to make an observation which may apply here: most fat cats have a calmer perspective, fat cats being people who really are not going to be affected. To them, it is a matter of making more money that they do not need, or making less money which is nothing more than an entry on their financial statement.
I think it would be different if he worries about losing his job or is carrying an underwater mortgage, or just realized he does not have enough money for retirement.
On Thu, Sep 13, 2012 at 8:38 AM, M wrote:
I note that velocity has declined in the past 3 years, and it was an interesting observation when I went to Walmart at midnight this summer to see the woman in front of me cash a check for $872 and simply wanted the money.....the Washington Post with an interesting story......the poor cannot afford the monthly fees, so they simply opt out all together. Good news? The US will remain a cash society, limiting the Government's ability to intrude if one chooses to opt out.
M
washingtonpost.com
SNIP:
Released Wednesday, the study found that 821,000 households opted out of the banking system from 2009 to 2011 and that the so-called unbanked population grew to 8.2 percent of U.S. households.
That means that roughly 17 million adults are without a checking or savings account. Another 51 million adults have a bank account, but use pawnshops, payday lenders or rent-to-own services, the FDIC said. This underbanked population has grown from 18.2 percent to 20.1 percent of households nationwide.
The study also found that one in four households, or 28.3 percent, either had one or no bank account. A third of these households said they do not have enough money to open and fund an account. Minorities, the unemployed, young people and lower-income households are least likely to have accounts. |
