Kunst

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626 Comments

    • Mon Dec 1st 02:50 AM
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      Rating: 0 0
      Commented on:
      Hedging Gas Consumption with U.S. Gasoline Fund

      Gas at 4.11 (over 4.50 in my area of California) and gas at 1.90 are both extremes. Buy UGA when gas starts to go up and you will be happy down the road.
      View article »
    • Mon Dec 1st 02:47 AM
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      Rating: 0 0
      Commented on:
      Will Baby Boomers Start Selling Their Homes for Liquidity?
      Inflation/devaluation is the only answer. The Boomers will get their money, but it won't be worth nearly what it used to be, or what they expected. Check out what happened to pensioners in Russia after the fall of the USSR. The ruble lost 90% of its value and those who counted on the equivalent of Social Security were destitute.
      View article »
    • Sun Nov 30th 19:14 PM
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      Rating: 0 0
      Commented on:
      Understanding Synthetic Bonds
      Nice explanation of one use of credit default swaps, which I am still struggling to understand.

      In your example, the CDS seller (Fred) has 100% collateral (the $100M of treasuries). As long as those are locked down (Fred can't go sell them during the CDS term -- is that true?), the CDS buyer is fully protected and we have a legitimate deal. From what I've read about CDS, this is not always the case. CDS are basically insurance, but there doesn't appear to be any requirement that the CDS seller actually be able to pay up in case the insured loss occurs. Am I understanding that correctly? Without assurance that the CDS seller can actually make good on the protection he's offering, how can anyone trust that instrument?

      You also mentioned that you could sell your interest in Fred. How would that work? What happens to your $100M of treasuries securing payment? Do they go with the sale, or does the buyer have to provide that protection, or did the collateral just go away? From what I've read, this is another big problem with CDS. If I sell you a CDS, apparently I can then sell my obligation to someone else, without your permission or even knowledge, and apparently with little or no guarantee that he can meet the obligation I undertook and am now selling to him. How do you know that you're really covered in that scenario?
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    • Sun Nov 30th 18:54 PM
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      Rating: +3 0
      Commented on:
      Here Comes a Consumer Killer
      Cards are very convenient, but they are a terrible way to borrow. The best way to borrow is NOT. Use a debit card and make sure there is money in your bank account BEFORE you buy something.
      View article »
    • Sun Nov 30th 18:50 PM
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      Rating: +1 0
      Commented on:
      In Search of the Next Reserve Currency
      Again and again, history has shown that military empires cost more than they are worth.

      By the time you add back all the hidden and deferred costs, we spend close to $1 trillion per year on "defense". We've been doing that (in today's dollars) for the last 60 years. Do you really think we have gotten $60 trillion of benefit from our various wars, incursions, and meddling in other countries' affairs?
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    • Sun Nov 30th 18:41 PM
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      Rating: 0 0
      Commented on:
      U.S. Stocks Look Like They're Still Headed Lower
      If you are going to toss in a passing mention of "a coming dollar collapse", maybe you could take a few more words to say what you expect and why.
      View article »
    • Sun Nov 30th 18:37 PM
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      Rating: 0 0
      Commented on:
      Actually, Now Is a Good Time to Enter Emerging Markets
      "Investing in Russia during the ten-year period would have produced a 22.5% return. But that number falls to -4.3% if the top 20 days are missed."

      In the six months to 11/19/08, RSX lost 82%.
      View article »
    • Sun Nov 30th 18:32 PM
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      Rating: 0 0
      Commented on:
      Actually, Now Is a Good Time to Enter Emerging Markets
      In fairness, why don't you tell us what missing the 10 or 20 worst-performing days would have done?
      View article »
    • Sun Nov 30th 17:38 PM
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      Rating: +1 0
      Commented on:
      Last Thursday Was the Bottom - It's Time to Get Back in
      "Looking at the current downturn, it makes sense that we would be at or near the bottom at this point in the cycle."

      No, that doesn't make sense.
      View article »
    • Thu Nov 27th 19:51 PM
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      Rating: +1 -1
      Commented on:
      Did Citi Suffer a Run on Deposits?
      Do any of you have real opinions, backed by some facts? Or are you just here to bash the author, who I really don't think can move C to his benefit?
      View article »
    • Thu Nov 27th 16:12 PM
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      Rating: 0 0
      Commented on:
      Oil Guesses Are Wrong Again, Contango Grows
      to reign in the market. -- rein

      The jest of what I say -- jist
      View article »
    • Thu Nov 27th 16:07 PM
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      Rating: +1 0
      Commented on:
      Stocks: Is the Tide Turning?
      About time to dust of the ultrashorts again. Another suckers' rally bites the dust.
      View article »
    • Thu Nov 27th 00:57 AM
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      Rating: 0 0
      Commented on:
      Housing Prices Will Probably Recover in Next 48 Months
      Double the money supply, double prices and incomes, double house prices, problem solved. Already underway, coming soon to an economy near you.
      View article »
    • Thu Nov 27th 00:49 AM
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      Rating: 0 0
      Commented on:
      When Will the Auto Industry Reach a "Better Place"?
      I thought "a better place" is where you go when you die.
      View article »
    • Wed Nov 26th 22:46 PM
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      Rating: 0 0
      Commented on:
      America's Economy: Leaving on a Jet Plane
      The ultimate weapon in the hands of the US government is the ability to create dollars without a corresponding liability. $300 billion for Citi, $150B for AIG, $50B for the auto makers (what the heck, why not?). Another stimulus package, $600 billion or so. This on top of a federal deficit heading up from $450 billion not counting all these specials.

      There is no way we can borrow enough dollars to cover all these bailouts. If we try, interest rates will skyrocket, pushing the lever on the toilet our economy is already in. No, it's time for "quantitative easing", AKA printing money. We'll pretty it up as a loan from us to us, but it's new money to replace at least some of the old money that got incinerated when the real estate and stock market bubbles popped.

      You have to think the eventual result of this will be inflation, but with all the asset destruction that's already occurred, maybe not. I wonder how our creditors are going to feel about it. They still hold our debt, they still get (low) interest. If inflation doesn't occur, those dollars still have the same purchasing power. Maybe we'll get away with it. After all, if they decide they don't want to buy US treasuries any more, we'll just buy them from ourselves!

      Of course, at some point, someone is going to ask why they are giving us all these goods for dollars created out of thin air. When oil stops being priced in dollars, the jig is up.
      View article »