Let's see, with today's raising of 1.35 billion in capital, and the existing market cap of $283 million, but existing shareholders share is only 5.5%, well, that would put Thornburg to a market cap of $5.1 billion.
And they have to pay 18% interest... Just how the heck do they manage that?
A lot of people have a mistaken belief that the stock market crash of 29 was what lead into the Great Depression, but the problem was housing, not the stock market. [more]
The headline reads "Tougher Regulations May Hurt Wall Street Profits" when it probably ought to read "Tougher Regulation to Control Misleading Reports on Profits and Gross Fudging and Deception by Wall Street."
I don't know how Canadian stats would compare to US as the systems are fairly different, but Canada has a lot of highly education immigrants that are shut out of the job market for not having their credentials recognized in Canada. [more]
Naked Captialism has a piece on hedge funds in London. Apparently London is hedge fund capital of the world, and they are having the most outlandish parties with all the money they've been paid for those short term paper profits.
There seems to be 300 point down days when these hedge funds blow up...
I've seen a couple posts on this already, the SEC changing rules. [more]
Grumble, grumble... [more]
I was just reading a comment that said most people don't have $1000 to put into a stock. I think $1000 is about the smallest amount I'd consider for any position simply because of fees. [more]
In the comments earlier when I read about the degree of fraud and how Wall Street is getting bailed out for behaviour that would get you executed in China, well, my comment was: [more]
Today there is more news about walking away from free trade by Hilary Clinton. That would probably be good for BC as free trade isn't so free. There is a requirement to sell energy even if Canadian energy needs grow to the point that we need the energy and in BC with Expo 86 population vastly out grew the rest of Canada. My understanding is that we have to sell the energy cheaper and then buy back any shortfalls in energy at a higher price. [more]
Bespoken's piece on short interest got my attention today. Apparently 5.4% of the S&P is shorted right now. Apparently the short interest is in the range of 52 week high in 9 out of 10 sectors. [more]
I was falling asleep at the keyboard, so I didn't finish looking at Goldcorp, which I still don't have much good to say about. [more]
Somehow I missed Goldcorp's earnings last month. Goldcorp is one of the overpriced pigs I follow. I started following it because of the joint ownership in the Alumbrera mine with Northern Orion and Xstrata. I looked at NO in depth and I did not understand why it was going down when it appeared undervalued to me. So I decided to contrast it's valuation to another company to help me to see if I'd missed something. At the end of contrasting the two companies it seemed to me that NO was trading at about 5-10c on the dollar relative to Goldcorp. So, I've followed copper piggy ever since. [more]
People have been rushing into financials just in time for the next series of down grades and cut earnings. Looking for bottoms in this kind of uncertainty seem highly risky. Of course, the traders will be out already... [more]
I have but one thing to say about the financial advisor who advised this guy... - and since the profanity filter won't let me say it, it rhymes with dick.
Someone else, Yves, has questioned this publicly first, however, with the way the stock market trading has been going, last week or the week before I was having a private conversation with a friend about how rigged the market had looked to me over a few days of trading. It seemed that in the very last couple minutes of trading there was a whole bunch of buying that changed the day from being an all day down day to a positive day. [more]
Big Picture has cute "Famous Last Words" poster ad being run by Fox business. [more]
I am not sure where I was just reading in the past week or so a fantasy story about why New York's real estate won't go down. [more]
Financial times has a post about the price, 5c on the dollar...
Great, we have honest and upstanding JP Morgan helping Canadians restructure $32 billion of asset backed paper.
I was just going to have a quick look around before heading off to the NTW today, and what do I find, Ambrose Evans-Pritchard's article about a derivative chernobyl being averted by the fed's actions over that little Bear incident. [more]
I am of the position that while long term China will probably have an increasing standard of living, or at least there will be a growing "middle class," short term China is going to go through a painful correction. I also find it highly unlikely that the masses will see much in the way of an increase in standard of living simply because there are too many people there and not enough of the essential resources, like water. [more]
And here's your bunny rabbit video from NC. [more]
Seeing how lquadland10 completely spammed and polluted the entire MF blogsphere with the video from my last post and other videos there not much point in continuing leaving as my last post as it is now everywhere... [more]
How do you spell volatility?
The swings in the market are a strong statement of the level of uncertainty people are feeling.
So, gold has gone from a high of just over $1030 with the Asian market on Sunday night Monday morning to $941...
Richard Daughty rights his Mogambo articles that I sometimes read with great amusement, for example, today's. [more]
Interesting, I didn't realise the root of "credit" is to trust. The credit crisis is a break down of trust...
I have little experience in projecting the non-fundamental reasons why things happen as they do, as with BSC being so far above its $2 fire sale price.
I've seen two reasons, shareholders thinking the pot might be sweetened and bond holders who want the deal to go through. Think of it as buying more insurance perhaps...
Here's an interesting read about tightwad or frugal.
I am enjoying new found spending power... Got an ipod and a laptop this week :).
When I piece together what governments, regulators, banks, business, etc., have done, I don't like the picture and I ask myself, "where do you hide?" [more]
I constantly look to end picks on caps, and one I found today to end and say good-bye to is Energy Transfer Equity, L.P. (ETE). [more]
Long term I think oil goes up, but I've been saying for a while I think it goes down in the shorter term, and so far the market is saying different. [more]
The fact that the fed has opened its discount window to non-banking institutions should have people out protesting in the streets. This is serious. [more]
OMG, JP Morgan has put in an offer to buy Bear Stearns for $2/share...
Look out below...
Here's an interesting development, a fair housing group has filed a complaint about the legality of the fed bailing out an investment brokerage, which doesn't fall under the definition of a bank. Certainly what the fed is doing with the bail is preventing the market from correcting, which is obviously in the interest of anyone wanting to get into the housing market. [more]
Reading the opening paragraph on this wsj piece and calling it the "titanic credit mess," well, the first thing that came to my mind was the Titanic sank... [more]
The "rescue" of Bear Stearn is the type of thing that I've been expecting and, as I have stated a few times, is why I choose to be out of the market. If you check out the brokerage insurance quality it might leave something (like actual capital) to be desired. [more]
On mortgages, it isn't a bad plan, imho, limits losses, but also leaves a cost for negligence.
Seems policy makers expected the financial crisis to be accounted for by now, and urge banks to quickly disclose losses. Seems to me that this will not happen because there are losses yet to be realised because of all the mortgage resets still coming and the lack of being able to predict how many will walk from mortgages and how far housing will fall. [more]
Every day it seems another form of government is reporting how much revenues are missing expectations and the need for more cuts. [more]
I am going to guess that decisions like Volkswagon to be looking to build a plant in the US is probably driven in part by shipping costs which are related to energy. Any bets that more of the bigger ticket items end up being produced closer to the markets in which they get sold? [more]
Naked Capitalism had a post about this Barney Frank guy who was threatening to intervene if the rating agencies didn't quit their discriminatory rating of the municipalities. [more]
The Big Picture has some pretty good quotes about the intention of home equity loans and outcomes with them. [more]
This story, Drake considering liquidating all hedge funds, could very well be what is playing out in a number of hedge funds right now. [more]
Naked Captialism has a post about badly written contracts which probably means that a great many of these derivative things are unenforceable.
The post says that the CDOs are so poorly written, how to handle a default isn't clear. In the past month or two there was an example of one of these things where one company paid about $100k to insure $10 million and they lost in a legal battle for essentially a technical wording reason. They paid insurance that could never be collected on the debt they thought they were insuring with the way the contract was written.
I have had past experience reading many legal documents and contrasting them for what you would think they said and what they actually say and whether they are enforceable. I got this experience when I was working to get smoking out of public places in BC. I got all the existing by-laws that I could find at the time, and there were 30-40 municipalities that had some kind of by-law at the time, usually the you-can-smoke-in-this-half-of-the-room and damn the laws of physics.
I systematically broke these by-laws down and contrasted individual points onto a grid. I had about 40 different columns. I did this exercise in the 80s and it was one of my most important learning experiences and an enormous contributor to what gives me an edge in everything I read and analyse. It was as much work as I put into a semester of university. [more]
Well, I didn't know we had one... [more]
Paul Farrell on Market Watch has a piece titled "Derivatives the new 'ticking bomb.'" The only thing "new" about derivatives is that learning about these things is new to the masses. [more]
I thought this was a priceless way of looking at things... [more]
When demographia came out with their 4th annual affordability study I couldn't help but notice Australia. I am highly of the opinion that the US is in big trouble because the average affordability index for the country got up to 3.9 in 2005, and it is currently at 3.6. [more]
Bush signed a zero down payment initiative in Feb. 2004? And Americans voted him into office again. Americans have a president that passed negligent and incompetent lending practices into law and then they voted for him again...
I am reading The Housing Bubble and I am finding a common theme, people who bought homes far ahead of the bubble, at affordable prices, are in trouble because of in increasing their borrowing. For example, there is a story of a couple who bought a condo 8 years ago for $160k and now they owe $294k. After 8 years of ownership you are supposed to owe less. [more]
One thing I have to say about the political system, and capitalism it is nonsense to believe there is a free market system. What exists is gross manipulation of the political system by wealth to protect wealth at the expense of the masses. [more]
Back in January I posted Here Comes The Margin Squeeze. In the post I was commenting on analyst's earnings expectations having changed by about 20% and how the markets had already experienced declining earnings. [more]
The Saudi Oil Minister says speculation is driving prices.
Oil couldn't possibly have speculation. It's different than housing.
What a shock, Ambac managed to raise $1.5 billion selling equity, but what a price, $6.75 per share is a mere 7% of the peak price of $96.10 earlier this year. It is 9% below today's closing price and it almost tripled the number of shares. [more]
I am not sure if I posted about this. One of the problems in the whole oil and gas issue is the refining capacity. Refineries are a huge environmental headache to build and they are expensive. I haven't followed the whole issue that closely but it has been suggested that insufficient refining capacity is helping to keep prices high.
MarketBeat on WSJ has a mention of how people are talking about a treasury bubble. The article then goes on to talk about short term treasuries. [more]
Bespoken has quite the interesting graph of S&P stocks widely held by hedge funds and those that are not. [more]
As I stated in an earlier post David Walker heading up a billion dollar foundation set on fixing American government spending is the best news for Americans in years. [more]
These executives know no limits in terms of they ought to be paying their bonuses for the past 10 years back, yet they continue to rob investors.. [more]
When the Dow first hit 13,000, on its way to pass 14,000 (not the way down) surveys started showing up asking which would show up first Dow 12,000 or 14,000. At the time I was seeing the serious problems with the economy and never dreamed the Dow would hit 14,000, so I picked 12,000. [more]
I was reading DemonDoug's latest blog with the Nikkei chart showing their market still at half of what it was in the bubble around 1990. I was also reading how Greendunk didn't see the housing or stock market bubbles. [more]
Boy, I was in a rush this morning. I intended to include this in my last post. [more]
This morning reading Naked Capitalism I notice he picks up much stronger a point from Robert Reich than I did when I first read Reich's piece yesterday, and a point strongly worth considering for economic analysis. [more]
I was reading "The Ultimate Sell Signal: Part II" and a single line got my attention for the disasterous advice it implies. [more]
The Nikkei going diving is getting to be a regular thing... Down over 500 so far. Doesn't look good for tomorrow.
I can't stand technical analysis. [more]
My reading list has had quite a bit of reflection on Buffett's latest report,(pdf) and it seems that everyone takes interest in a different part of the report to mention. [more]