Latest Posts

  • End of the World Trade

    Jul 2, 2008 / 4:16am / in Americas, derivatives, International Investing

    I asked one investment banker what might cause half of North America’s top corporations to default. No ordinary economic recession or natural disaster short of an asteroid strike could do it: no hurricane, for example, and not even ‘the big one’, a catastrophic earthquake devastating California. All he could think of was ‘a revolutionary Marxist government in Washington’. That’s not a likely scenario, yet the cost of insuring against it had shot up ten-fold. Normally one can buy $10 million of end-of-the-world insurance for between two and three thousand dollars a year.

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  • Insurers to Banks: Swap Guarantees for Nothing

    Jun 24, 2008 / 6:28am / in derivatives, International Investing

    Let’s say you file a claim with the insurance company after a disaster. Instead of getting a check, the insurance company tells you that it would prefer NOT to pay the claim since that would put the insurance company in a precarious financial position. What would your reaction be? Some banks are confronting a similar question with their CDS insurance.

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  • "Should Analysts Who Don't Own Stocks Be Trusted?"

    Jun 17, 2008 / 9:40am / in Americas, Equities, International Investing

    Remove the part about "Who Don't Own Stock" and you've got a legit story. Another silly rule designed to prevent conflicts makes analyst guesses less trustworthy.

    You've almost certainly seen it: Every time an analyst on CNBC comes on to talk about a stock there is The Screen. We find out whether they own the stock, their family owns the stock, their firm owns the stock, their pet owns the stock, etc.

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  • "The Criminalization of Failure"

    Jun 16, 2008 / 11:57am / in Americas, International Investing

    Great John Carney post at The cure is worse than the problem:

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  • Protectionism for Profit – Now Doctors get in on the Racket

    Jun 13, 2008 / 8:16am / in Americas, Asia, International Investing

    How can doctors get fat off the tax payer if the tax payer has a choice? MD lobbyists are preemptively shoring up their bottom line under the guise of safety. Add this to the existing list of readymade excuses to steal from the tax payer whose greatest hits already include, “it’s for the children,” and “the war on drugs/terrorism/poverty/whatever people are riled up about this week.”

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  • "Ever wonder why fund managers can't beat the S&P 500? "

    Jun 12, 2008 / 11:14am / in Americas, International Investing

    The headline quote from Gordon Gekko from the 1987 movie Wall Street show this has been common knowledge for decades: Fund managers cannot beat the index after fees.

    According to this Bloomberg article, consumers are finally starting to catch on:

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  • Oil Up Again

    Jun 11, 2008 / 10:59am / in Americas, Oil, International Investing

    Previously a $5 move would be front page news. Now it's just to be expected:

    Crude oil for July delivery rose $5.07, or 3.9 percent, to settle at $136.38 a barrel at 2:48 p.m. on the New York Mercantile Exchange. Oil reached a record $139.12 a barrel on June 6. Futures have doubled in 12 months as investors looking to hedge against the dollar's drop helped push oil, gold and corn to records this year.

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  • China > USA

    Jun 9, 2008 / 10:47am / in Asia, Emerging Markets, International Investing

    From Whiskey & Gunpowder:

    China added more to global economic growth in 2007 than the U.S. That's the first time a country other than the U.S. has contributed more to global GDP since at least the 1930s. This little history-making milestone typifies a growing list of Chinese economic achievements… and American shortcomings. "On issue after issue," Zakaria writes, "China has become the second most important country on the planet."

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  • "House prices are falling even faster than during the Great Depression"

    May 29, 2008 / 11:10am / in General, International Investing

    The Economist puts up the sentence (headline) and the chart of the day in this article on housing prices.

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  • The Bear Collapse – WSJ’s Incredible Reporting

    May 28, 2008 / 4:11am / in Americas, International Investing

    Outside of Fortune, very few publications write good business stories. The Wall Street Journal has interesting articles and does good reporting, but rarely writes about the internal drama of Wall Street in such a readable way. It’s like something Bethany McLean or Kurt Eichenwald would have written. Part 3 will be out tomorrow. Read part 1 and part 2. Here is an excerpt:

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