Ah, now the runup in Amazon's stock makes sense. They're pricing in online music market share!
Oh, and they've got a better product than Apple! DRM free?! Sign me up. I think Itunes is just good for podcasts at this point.
Article
Tuesday, September 25, 2007
Fox versus the NYTimes
You have to hand it to Rupert Murdoch. He took the NY Times in his crosshairs, and he is taking them down. Business at the NYTimes is going downhill.
And, I believe it has to do directly with the Fox News Network. They never miss an opportunity to smear the 'liberal, far left leaning' Times -- especially O'Reilly. They've polarized their audience so far in one direction that no self-respecting Republican would read the Times. Amazing work.
If Mark Cuban uses ShareSleuth to trade off of, I can see Murdoch using his own new financial news channel to further his economic agenda -- say, talk up oil shortages if he wanted to move up the price of oil. Talk down whole countries if he wanted to move in and get assets on the cheap. I don't think he's above it. Scary shit.
And, I believe it has to do directly with the Fox News Network. They never miss an opportunity to smear the 'liberal, far left leaning' Times -- especially O'Reilly. They've polarized their audience so far in one direction that no self-respecting Republican would read the Times. Amazing work.
If Mark Cuban uses ShareSleuth to trade off of, I can see Murdoch using his own new financial news channel to further his economic agenda -- say, talk up oil shortages if he wanted to move up the price of oil. Talk down whole countries if he wanted to move in and get assets on the cheap. I don't think he's above it. Scary shit.
Jim Speaks
From Singapore, Jim is interpreting the fed cut as a big positive for commodities.
video <-have to search for the flash on the front page
video <-have to search for the flash on the front page
Wednesday, September 19, 2007
The Demise of the Dollar
I think the Fed's latest cut showed his hand. Ben is more concerned with Wall Street than with our currency.
Other countries seem to get it -- including Saudi Arabia (article).
Other countries seem to get it -- including Saudi Arabia (article).
Thursday, September 13, 2007
Hot Central Bank Action
From somewhere in the UK: Bank of England to bail out British lender (by way of CalculatedRisk)
So the BoE Governor Mervyn King speaks loudly but carries a big check! Just yesterday, readers of vitually every news source except the WSJ, perused some tough talk from the British Bernanke about central banks providing liquidity. (His Dear John letter is here ).
Now the news is all over the British press that King more or less reversed course. Maybe he is using his "penalty rate" clause as an escape - the full details of the deal are not available yet. The FTSE open tomorrow could be fun...& the Dow after hours is already stressed.
While on the subject of central bank liquidity infusions, I'd like to update a previous report of mine noting US banks' reluctance to use the Discount Window. The Fed reported today that US banks are in fact availing themselves of the Discount Window in larger numbers & larger sums:
I stand corrected...but I'm going to sit down now...
So the BoE Governor Mervyn King speaks loudly but carries a big check! Just yesterday, readers of vitually every news source except the WSJ, perused some tough talk from the British Bernanke about central banks providing liquidity. (His Dear John letter is here ).
Now the news is all over the British press that King more or less reversed course. Maybe he is using his "penalty rate" clause as an escape - the full details of the deal are not available yet. The FTSE open tomorrow could be fun...& the Dow after hours is already stressed.
While on the subject of central bank liquidity infusions, I'd like to update a previous report of mine noting US banks' reluctance to use the Discount Window. The Fed reported today that US banks are in fact availing themselves of the Discount Window in larger numbers & larger sums:
Banks more than doubled their requests for cash at the Federal Reserve's discount window in the latest week, according to central bank data published on Thursday.
Financial institutions borrowed an average $3.16 billion per day in the week ending Sept. 12, compared with a $1.34 billion daily average for the prior week.
Primary credit borrowings on the day of Wednesday Sept. 12 were $7.152 billion, the biggest for any single day since the aftermath of the Sept. 11 2001 attacks on New York and Washington.
I stand corrected...but I'm going to sit down now...
Buried in the Headlines
Article here.
Orleans Homebuilders Inc., suffering from a cooling housing market and mortgage turmoil, swung to a loss for fiscal 2007 and had a 34 percent drop in revenues.The Bensalem, Pa., homebuilder is predicting a continued "unfavorable" market that will impact new orders.
Credit Lines Lift Countrywide
The article is here.
The shorts are running for the hills, but basically this is a press statement that says:
"Business is really bad, but we've found some more people (40 banks!) to help us fund operations."
It's interesting that they released so much bad news (cockroaches) with the financing deal.
I don't anticipate them having much more good news for the rest of the year or next year, but they have bought themselves some time.
What should they be valued at?
The shorts are running for the hills, but basically this is a press statement that says:
"Business is really bad, but we've found some more people (40 banks!) to help us fund operations."
It's interesting that they released so much bad news (cockroaches) with the financing deal.
I don't anticipate them having much more good news for the rest of the year or next year, but they have bought themselves some time.
What should they be valued at?
Wednesday, September 12, 2007
Tuesday, September 11, 2007
Using Their IRAs to Make Home Loans
From the Walleye: Using Their IRAs to Make Home Loans
The rise of hard-money lending has begun. This is the first MSM hit on the issue I've seen, but I've come across people touting these type of schemes in more grassroots ways starting a few months ago. I expect to see more.
The pitch goes like this: Got some spare cash? Sick of settling for a measly 4% and change guaranteed return? Why not try your hand at lending money to people who need it & get 10% returns - guaranteed by that most solid of assets: real estate!
How can you lose?
(btw - I guess what makes it newsworthy to the WSJ is that these innovative folks are tapping their IRAs. I find it strange how blithe everyone - WSJ & the investors they interview - is about the foreclosure process. Sounds pretty easy: 1. borrower doesn't pay. 2. foreclose 3. own property 4. sell property. Okay - who can spot a step there where the average truck-stop manager might run into some trouble?)
In the midst of the mortgage meltdown, some lenders are actually rooting for foreclosures: investors who make mortgage loans with their IRAs.
Through a little-known tool known as a self-directed individual retirement account, individuals can pursue a wide variety of investments, from real estate to businesses. Now, at least several thousand people are trying to goose their retirement savings by using self-directed IRAs to invest in mortgages, according to companies that promote the strategy.
The rise of hard-money lending has begun. This is the first MSM hit on the issue I've seen, but I've come across people touting these type of schemes in more grassroots ways starting a few months ago. I expect to see more.
The pitch goes like this: Got some spare cash? Sick of settling for a measly 4% and change guaranteed return? Why not try your hand at lending money to people who need it & get 10% returns - guaranteed by that most solid of assets: real estate!
How can you lose?
(btw - I guess what makes it newsworthy to the WSJ is that these innovative folks are tapping their IRAs. I find it strange how blithe everyone - WSJ & the investors they interview - is about the foreclosure process. Sounds pretty easy: 1. borrower doesn't pay. 2. foreclose 3. own property 4. sell property. Okay - who can spot a step there where the average truck-stop manager might run into some trouble?)
Monday, September 10, 2007
In nuce
Here's my current market status outside of its Latin nutshell:
Currently short real-estate (residential & commercial) & financial (since 3Q 2006).
- these have some way to go yet, I believe. Eg., commercial RE lags residential by 5-8 qtrs.
- rate cuts won't be a silver bullet for financial institutions carrying lots of bad debt.
Recently went short consumer goods & consumer services (as of June-July 2007).
- Mortgage equity withdrawal is drying up & savings-less US consumers will start to rein in spending.
- As our consumer-based economy cuts service workers, the service providers will suffer from loss of customers; vicious cycle ensues.
Long commodities since 2002/3, but reducing those positions.
- $USD decline should continue to boost apparent prices, but I worry that a US recession will be a strong headwind to materials for some time. I don't know that China will decouple from its largest customer (us) & thus the Chinese boom may slow.
- I could be exiting early here...but I think a US recession is tough to buck & may offer a better entry point later.
Long CHF, JPY & RMB.
- unwind of carry trades will boost CHF & JPY directly
- holding these as hedge against USD (& hence USD asset) declines
Long US bills & notes.
- in lieu of cash, these short -term issues will benefit ( are already benefitting) from the flight to safety
General methodology:
I recently decided to stop chasing individual equities (or gave up, depending on how you look at it). My realization: I don't have the necessary time to devote to researching & keeping tabs on a myriad of stocks...but I do have time to aggregate lots of info into broader, macro positions. I develop these ideas over time as evidence builds/ebbs, slowly shift positions & worry less about noisy day-to-day news items except as they affect the macro view.
I'm hoping discussions here will help me refine these macro ideas & provide alternate methods of capitalizing on them.
Currently short real-estate (residential & commercial) & financial (since 3Q 2006).
- these have some way to go yet, I believe. Eg., commercial RE lags residential by 5-8 qtrs.
- rate cuts won't be a silver bullet for financial institutions carrying lots of bad debt.
Recently went short consumer goods & consumer services (as of June-July 2007).
- Mortgage equity withdrawal is drying up & savings-less US consumers will start to rein in spending.
- As our consumer-based economy cuts service workers, the service providers will suffer from loss of customers; vicious cycle ensues.
Long commodities since 2002/3, but reducing those positions.
- $USD decline should continue to boost apparent prices, but I worry that a US recession will be a strong headwind to materials for some time. I don't know that China will decouple from its largest customer (us) & thus the Chinese boom may slow.
- I could be exiting early here...but I think a US recession is tough to buck & may offer a better entry point later.
Long CHF, JPY & RMB.
- unwind of carry trades will boost CHF & JPY directly
- holding these as hedge against USD (& hence USD asset) declines
Long US bills & notes.
- in lieu of cash, these short -term issues will benefit ( are already benefitting) from the flight to safety
General methodology:
I recently decided to stop chasing individual equities (or gave up, depending on how you look at it). My realization: I don't have the necessary time to devote to researching & keeping tabs on a myriad of stocks...but I do have time to aggregate lots of info into broader, macro positions. I develop these ideas over time as evidence builds/ebbs, slowly shift positions & worry less about noisy day-to-day news items except as they affect the macro view.
I'm hoping discussions here will help me refine these macro ideas & provide alternate methods of capitalizing on them.
The Fed & the Dollar
For next week's Fed meeting, according to this story
According the article, Helicopter Ben is going to speak on Tuesday and then act on the 18th. It also alludes to the fact that many within the Fed feel things aren't too bad and are adopting a wait and see attitude.
My feeling is that the bad payroll numbers will only get worse when Beazer, Countrywide, and all these crashing companies hit the panic button.
We could be in for a series of cuts -- none of which are able to fix the predicament of the homebuilders or the mortgage lenders; and, I believe that is the point. The Fed wants these companies with poor practices out of the system so that they can get a better view of how distorted things are.
And, the credit market crunch is a testament to the same notion. Interestingly, this is affecting European companies as much as U.S. companies from some of the data I've seen.
If the Fed does engage in a series of slow, small cuts to revive the job market, the dollar should come under additional pressure as the treasury yields decline.
The counter argument to this is that if there is a global equities meltdown, there may be a rush to the dollar (through the treasuries) for "quality". But, would that be a short term bump? Most likely.
I think the only thing to bank on right now is that a lot of these companies like Standard Pacific, NVR, and Toll Brothers are in a homebuilding bear market that hasn't run its course. As much as people want to try to quantify the move downwards, it won't end until the supply/demand pendulum swings wildly the other way. In the meantime, with sales at 16 year low and no one wanting to lend them money on a short term basis, a lot of these companies have dismal prospects.
the futures markets expected the Federal Open Market Committee to lower the federal funds rate to 4.75% by the end of the month, down from 5.25% currently.
According the article, Helicopter Ben is going to speak on Tuesday and then act on the 18th. It also alludes to the fact that many within the Fed feel things aren't too bad and are adopting a wait and see attitude.
My feeling is that the bad payroll numbers will only get worse when Beazer, Countrywide, and all these crashing companies hit the panic button.
We could be in for a series of cuts -- none of which are able to fix the predicament of the homebuilders or the mortgage lenders; and, I believe that is the point. The Fed wants these companies with poor practices out of the system so that they can get a better view of how distorted things are.
And, the credit market crunch is a testament to the same notion. Interestingly, this is affecting European companies as much as U.S. companies from some of the data I've seen.
If the Fed does engage in a series of slow, small cuts to revive the job market, the dollar should come under additional pressure as the treasury yields decline.
The counter argument to this is that if there is a global equities meltdown, there may be a rush to the dollar (through the treasuries) for "quality". But, would that be a short term bump? Most likely.
I think the only thing to bank on right now is that a lot of these companies like Standard Pacific, NVR, and Toll Brothers are in a homebuilding bear market that hasn't run its course. As much as people want to try to quantify the move downwards, it won't end until the supply/demand pendulum swings wildly the other way. In the meantime, with sales at 16 year low and no one wanting to lend them money on a short term basis, a lot of these companies have dismal prospects.
Staying in the Big Picture
From
http://quieroelmundoahora.blogspot.com/2007/09/how-can-i-be-better-investor.html
http://quieroelmundoahora.blogspot.com/2007/09/how-can-i-be-better-investor.html
Whether it is tulips, bonds, stocks, real estate, etc. They always look the same. Study bubbles because this is where the real money is won or lost. If you understand bubbles, you have to potential to make incredible returns.
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