PrudentMan, CFA
Loading...
Symbols:
Loading...
Symbols:
Hedge Fund Jobs
Job Seekers: Search jobs by category, get job alerts by email or live feed, apply online See full list of jobs »
Employers: See all recruitment options, get applications online or by email Post a job »
Trading Center
- Free E-Newsletters
- About Seeking Alpha
- About Us
- Contact Us
- What's New
- Readers Feedback
- Advertise With Us
- Contributors
- Contribute an Article
- Feature Your Book
- Our Contributors
- Anonymous Contributions
- Dispute an Article?
- Legal
- Terms of Use
- Privacy
- Copyright
Latest Comments117 Comments
Oil: A Slippery Slope Ahead?
Hedge Fund Tracking: Paulson & Co. (John Paulson), Q3 2008
A Skeptic on Leveraged ETFs
Unless you have the answer you should, like any other investment that you do not understand all of the risk, avoid. Pure PRUDENCE!!
Self-Defeating Stimulus Packages: Retaining Short Bias for S&P 500
Is the risk of destruction worth the possibility of gain? We must increase credit standards for everyone. Starting the the U.S. Government would be a great start. Margin requirements for everyone must be raised as it should have been in 1999. Unfortunately, the Obama Economic Team is loaded with Wall Street shills and enablers of financial idiocy.
Seeking an Historical Precedent for the Current Crisis
As far as I am concerned, this is not as bad as the Seventies. This is a financial leverage problem but don't tell me when consumers spend seven percent MORE than last year on Black Friday this is a severe recession. You have to have money or credit in order to spend, regardless of so-called "bargains".
Now that the NBER declared the recession startd last December (actually Feb. 2007 only they wait and rely on government bureacrats for their measurements) so it is unofficially over. Fifty years of professional experience tells me the NBER's designation of recession is a mark of its end, as in 2001.
Big Difference between Price and Value
I hope that only the talking heads on CNBC, WSJ, Bloomberg, Fox, and other members of the mindless business media still believe these hoaxes in order to draw naive investors into the Wall Street financial slaughter houses.
Does anyone believe that the value of a company like Exxon-Mobile, with all their various products, assets and subsidiaries, varies every day depending upon the news or what some clueless analyst says? Such nonsense has little to do with investing and only results in the chaos such as we are seeing today.
When the smoke clears and the public learns what money managers have done to pension funds and peoples life savings a generation, hopefully, will be gone from the Wall Street predators. But, with the emotion of greed that has been present forever, the lambs will be back to be slaughtered.
The Capital Market Ceased to Be a Value Discovery Mechanism
In the fifty years I have spent as an investment professional, the turning point in the industry started to sour when the broker/dealers were allowed to be investment advisers and have their own mutual funds and other horrible products. The fee income became so great, as is the well-spent lobbying money, that a culture is now nurtured (political and private) where anything goes resulting in Glass-Steagall being removed as well as the uptick rule, a couple of obvious perversions that are just the tip of the iceberg. Conflicts of interest abound and "Chinese Walls are a joke as manifested in any Wall Street cocktail lounge after the close of business..
Are current financial debacle has been caused by Wall Street with Congress as the co-conspirators. A generation of confidence has been destroyed which hopefully will be a catharsis. Do we really need the New York Stock Exchange? My first visit in 1962 questioned its honesty and certainly with the advent of the cathode ray tube the NYSE became an anachronism and it now is more so regardless of the sophistry espoused by its self-serving supporters.
The Critical Slipping Cog in the Global Financial Machine
Fifty years ago the FRB would never have allowed itself to be characterized as a "Central Bank" as that moniker connotes political control, which at the time was , as now, is a correct appraisal. One important tenant of the Free Enterprise System is the allowance of failure. No enterprise should even be allowed too get to big to fail as, by definition, it is monopolistic or oligopolistic hence anti-Free Markets.
Keynesian economics', which has raised it ugly head again, main fallacy was that because politicians never want to take away the punch bowl, they will never stop spending what they don't have to prime a pump that doesn't need priming. As differentiated from the arrogant Galbraith when he wrote that the average individual is incapable of making sound economic decisions ( a belief of most politicians) it took statists, like him, to make those decisions for them. Keynes, on the other hand, understood this and made a fortune in the stock market, then got out.
The non-term-limited Congress loves printing money until the bubble bursts. After all, members of the House of Representatives must be re-elected every two years and they don't want any economic slow down of their watch. Political survival and expedience is more important than doing what is good for the country.
A good start on limiting these boom and busts cycles would be to distance the FRB further from the "Central Bank" designation and put term limits on Congress ridding us of the Chris Dodds and Barney Franks who have much more economic power activity than all of the reborn Clintonites in the Obama Administration, including Obama himself which he will soon realize as Bill Clinton did in 1993. Furthermore, Franks and Dodd are not held to any responsibility for their recklessness that borders on criminality.
Now Is a Better Time to Assess Earnings, Not Valuations
The NBER will probably say this recession started this year when it started in March, 2007 and that great discounting mechanism, the stock market, continued to hit new highs like they did in 2000 when the recession started in March and the NBER lists the start in 2001, when it actually ended. Idiots learning from other idiots and getting Phds for it. (See Nobel winners Krugman as well as Merton and Scholes of LTCM fame with their "fellow traveler" Arafat and Jimmy Carter.)
My friend was so good the management had to replace him with and an Ivy Leaguer (son of a friend of Alan Greenspan) as he wasn't one of "them", even though he won a Lipper (the only one the firm ever earned) and the fund, under its new "prestigious"... manager folded. My friend also stated the truism that a derivative is only as good as its underlying security but with more risk. That was in 1987.
If you haven't learned in the last ten years, that the smartest guys in the room are not on Wall Street, Boston or Washington as their P.R. people try to sell you on, you are doomed to continue to rely on the same investment statists.
I think the next Secretaries of Treasury and Commerce along with the Council of Economic Advisors should be staffed with successful farmers and small businessmen - the less "formal" education the better. They know the "real world" every day and not by Ivy League syncophants who got their positions through networking.
A Positive Outlook on the Markets with Obama's New Appointments
Deleveraging Pushes the Dollar Up
FDR didn't end the depression his policies caused. Hitler's invasion of Poland did regardless of what the history re-writers say. We who were there know the FDR, like the JFK with his politically motivated Bay of Pigs, Berlin Wall, Cuban Missile Crisis and War in Vietnam, hype is myth and is perpetuated by clueless academics who learned the myth from other clueless academics.
Fortunately some of us who were alive at the times can challenge the media-sanitized myths. Unfortunately, most won't.
Does anyone believe a Hawaiian prep school, Columbia, Harvard Law elitist (middle class not), advised by privileged statists, knows anything about Free Enterprise? Evidently the voters who thought they were voting for Prom King do.
As a lover of American Culture, who put his life on his line to protect it, I wish Obama well. I assume that he will follow the Clinton Model and sweep the major decisions under the rug and his compliant media will, like they did during the election, keep quiet. He won't have to worry about the dysfunctional Republicans but he better watch those Clintonites, who gave us Enron, WorldCom, Tyco, 50X leverage, et al.
As Bank Industry Analysts Lose Jobs, Serious Blogs Take the Forefront
Google went public alone and it looks as thought they did quite well. As a CFA who has been on both the buy and sell sides, I never found in house sell-side security analysts anything more than pimps for the Investment Banking peddlers.
What an immoral industry that adds absolutely no value to our economy. Do markets really have to revalue companies on every tick? Its can be fun (if you win) but is nothing more than an overrated casino game.
It is amazing that some believe the stock market is a discounter. Makes for silly academics but no real investor believes that. What were we discounting in 2007 when we were entering a recession in February and market took off?
U.S. Multinationals Must Brace Themselves for Strengthening Dollar
With the Frat Boys who gave us WorldCom, Enron, Tyco, etc. running the show anything can happen, and it is usually bad. But, they are good for denying any responsibility and sweeping responsibility under the rug. But, probably, the next guy will be the same guy so they can run but not hide as they did in the nineties. They still have the same old statist media sanitizing their messes.
Obama will not have any problem with the dysfunction Republicans. He has to watch his own people who are sharpening their knives for their political opportunities. Like Clinton, Obama should just spend the next four years as he did the past two: running for president. He does that well if nothing else.
Of course, this is my country and I wish Obama success. Unfortunately, I spent more time defending it and didn't have his advantages of Hawaiian prep school, Columbia, Harvard Law on the dole than he has without his arrogance. Like the new rostrum - what a sociopathic ego.
Obama's Dream Team Selection Stabilizes Markets ... For Now
What happened to Obama's "change"? He doesn't know anyone smarter and more experienced than these Ivy League Frat Boys? The "Chicago School" has sharper people than any of these Washington Insiders who have crafted our current economic problems.
If Governments could produce economic growth their would be no poor countries!
The U.S. Economy: Slow Going
Today consumer spending was announced as down one percent. Seventy-five percent of that was the reduction in gasoline expenses.
Hear me: The worst of the economic recession is over (the NBER will announce we are in a recession, their usual one year late analysis - they did recognize the March-May 2000 recession in mid-2001) and the government programs will end up doing more damage than good. While the "smartest guys in the room" are talking about deflation (the same ignorant economic elitists that gave us fifty times leverage) while inflation is the next play.