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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (91349)	12/9/2008 2:32:14 AM
From: Proud Deplorable	5 Recommendations Respond to of 116555

Greece torn apart by bank riots which are spreading world wide Monday, December 08, 2008 What are the Greek riots really about? TOPICS: Europe, The Banks - Sceilg @ 11:31 PM theirishbulletin.blogspot.com We've been told that the ongoing riots in Greece were prosecuted by anarchists as a reaction to the Greek police's shooting of a 15 year old boy on Saturday. But is this really what lies behind such an outpouring of civil unrest? Is the official reason for the rioting just a cover to paper over some real problems facing the Greek government? Take a look at the common thread in all of these reports: Associated Press: Burning barricades stretched across streets in the capital Athens. And as night fell, gangs again torched stores and smashed bank branches in the city center, and clashes broke out in the streets near Parliament.... Violence often breaks out between riot police and anarchists during demonstrations in Greece. Anarchist groups are also blamed for late-night firebombings of targets such as banks and diplomatic vehicles. Xinhua: Fires were burnt in the center of Athens and hundreds of people were wandering through the streets, some attacking banks, businesses and vehicles. Reuters: Protesters angry at the boy's shooting late on Saturday clashed with police and rampaged through Athens, destroying banks, shops and torching cars. There was no official estimate of the damage, expected to come to millions of euros. Torching banks? Clashes near Parliament? Attacking diplomatic vehicles? Yesterday, I heard that ten banks had been attacked, and it seems strange that all of this is happening solely over last Saturday's shooting. Indeed, it is a perfect pretext for the Greek authorities and the media - not to mention their counterparts over here - who fear that their cosy relationship with the international clique of banking criminals may result in them hanging from shiny lamp-posts from Washington to Dublin to Sydney. The funny thing is that the recent headlines in Greece are similar to those in Ireland: All of Greece's major Greek lenders will participate in the government's bank support plan aimed at ensuring the continued flow of credit to the economy, the country's finance minister said on Thursday. "It was confirmed that all large banks will participate in the plan fully," Finance Minister George Alogoskoufis told reporters after a meeting with major bank CEOs and the central banker.

To: mishedlo who wrote (91349)	12/9/2008 9:31:23 AM
From: forceOfHabit	Read Replies (1) \| Respond to of 116555

mish, Since you don't even mention borrow fees in your reply, I assume you are in fact ignorant of what they are. I'll give you a hint. They are not bid/ask spreads, nor management fees (like those charged by an etf), nor interest paid on short proceeds, nor dividends. Do a little research and I'm sure you can figure them out. But that's not the main issue. The main issue is rebalancing (is this another new word for you?). Mish says (post 91272) re the apparent underperformance of inverse etf's: The problem is slippage. [blah blah blah] Hedged Growth, our long short strategy has no such problems. During the [blah blah blah] part of the above post you point out that a double inverse etf with a strategy of attaining -2X the daily returns of a stock or index must rebalance daily to achieve this target. Good point. You remain silent (blissfully unaware perhaps?) on how volatility affects the expected cost of rebalancing. Then you claim that "Hedged Growth, our long short strategy has no such problems." That could be true only if they never rebalance. Which would not conform to the published mandate of the fund. So either a) your "Hedged Growth" portfolio ignores its own mandate or b) it has the exact same type of slippage (due to rebalancing) as an inverse etf and you are ignorant of its return characteristics and its volatility exposure. Which is it? Inquiring minds want to know. Wait! Another possibility has occurred to me. c) you are unwilling or unable to present a complete picture of the risk/reward profile of various investment strategies to your readers. Well, never mind. I expect they can find other more thorough analysis elsewhere. (This link, courtesy of Webster Groves, is one such source: proshares.com ) habit