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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (51960)	7/1/2009 8:07:15 PM
From: Joseph Silent	Read Replies (1) \| Respond to of 218070

An asset is a liability in disguise, it seems; and vice-versa. This is terribly stupid and sad. news.yahoo.com I continue to believe that we do not have the tools to understand risk. I'm not making wisecracks about the snakes in the banking industry or in politics (and maybe I should). The more important point is that "risk" is an incredibly complex thing to gauge, and the standard probabilistic tools try to do their best with limited information. Who has parameter-values for parameters we may not (yet) know? Despite this, there is usually a moron entrusted with the task of assessing risk involving someone oblivious to the peril, and often someone simply innocent. Common-sense, intuition, balance and old-fashioned values help where computational guarantees go up in smoke. In the case of Goldman and AIG, crooked backup plans worked when risk measures failed. By then the risk problem had changed.

To: carranza2 who wrote (51960)	7/1/2009 8:44:29 PM
From: TobagoJack	1 Recommendation Respond to of 218070

just in in-tray ritholtz.com History of US Home Values from 1890 - in a Shiller graph

To: carranza2 who wrote (51960)	7/2/2009 8:37:42 AM
From: TobagoJack	Read Replies (2) \| Respond to of 218070

just in in-tray, per GREED and fear · The best guess for now still remains one more push higher for Wall Street correlated equities before stock markets roll over later this summer. Government bonds have rallied of late but the US dollar has failed to follow. Rather the dollar continues to trade inversely to a still well bid oil price. · The PPIP is very unlikely to happen in its originally announced form. Banks are reluctant to sell loans or assets at perceived fire-sale prices while potential buyers are concerned about becoming victims of a future political witch-hunt. GREED & fear would advise investors to remain sceptical about all aspects of the PPIP unless there is more of a clear mechanism for forcing banks to sell. · The US banking cycle now has to go through the regular cycle of rising non-performing loans in an economic downturn. The real troubled area in coming quarters will be commercial real estate where many regional banks have massively concentrated loan portfolios. · Federal government policy towards the banking sector has still not succeeded in getting banks to get rid of their bad assets; though it is true that the Fed is sitting on a lot of securitised excreta as collateral. It is the constipated condition of the banking system which explains why the Japanese precedent is still relevant. · The rally in US financial stocks encourages GREED & fear to adjust the recommended hedge of being short Australian and European financial stocks to being short financial stocks in all three areas. There is less systemic risk in Australia than in America. · A zero weighting is still recommended in Australian financials in the Asia ex-Japan relative-return portfolio. Australian banks are now facing their first loan-loss cycle since 1992. Over the long term international investors will also be structural sellers of Australian banks given the seemingly inevitable rise of China and India in the benchmark indices. · One unfortunate consequence of the Madoff episode is the focus on “hedge funds” as the cause of all the recent problems. This is as misplaced as efforts to blame the financial crisis on offshore financial centres. It would be a shame if there is now regulatory overkill in the hedge fund space when the only regulation that matters should be caveat emptor. · If the regulators want to do anything they should simply ban the use of the word “guaranteed” in the promotion and marketing of any investment product. The real fundamental cause of the financial crisis is the growing abuse of government guarantees as a consequence of the growing socialisation of credit. · Thailand remains as fundamentally divided a society as ever. The results of the two by-elections in late June confirm that the pro Thaksin “red shirt” phenomenon is not yet dead and buried. The results also represent a setback for the current Democrat Prime Minister Abhisit Vejjajiva. · GREED & fear’s Asia ex-Japan thematic portfolio has risen by 390% in US dollar terms since its inception at the end of 3Q09, compared with a 124% rise in the MSCI AC Asia ex-Japan index and a 12.8% rise in the S&P500. The portfolio outperformed the regional index last quarter, rising by 38.9%, compared with a 33.7% gain in the MSCI AC Asia ex-Japan index. · The Japan thematic portfolio performed in line with the Topix last quarter, rising by 20.4% in yen terms compared with a 20.2% rise in the Topix. The portfolio is now down 11.6% in yen terms since inception on 17 March 2005, while the Topix has declined by 22% over the same period. CLSA CLEAN & GREEN: Please consider our environment before printing this email. The content of this communication is subject to CLSA Legal and Regulatory Notices These can be viewed at clsa.com or sent to you upon request.