US, China, Eurozone & Rest of the World Covered In Weekly Tweets

US, China, Eurozone & Rest of the World Covered In Weekly Tweets

US, China, Eurozone & Rest of the World Covered In Weekly Tweets

Market Dynamics

  • On Paradigm Shifts Hunter takes us through mental exercises 2 make us intelligently contrarian. “Invert, Always Invert” May 02, 2012
  • Hedgers’ net short position vanishes in US oil Commercial interests do not fear lower prices, could be bullish 4 crude May 02, 2012
  • There’s Plenty of Money for Junk Presently the credit cycle is virtuous; vicious part is coming, but no appt set $$ May 02, 2012
  • Bad Models Mistook Housing Bust for Dot-Com Bubble Busts of assets that are heavily levered harder than unlevered $$ May 02, 2012
  • Best U.S. Real Estate With Self-Storage Self storage a winner in the past, may not do so well in the future; hi vals May 02, 2012
  • Marginal oil production costs are heading towards $100/barrel Same as my reasoning on high crude prices $$ May 02, 2012
  • Four-percent rule a relic, advisers say Better rule: 10y Tsy yield plus 0% if bearish, 1% if neutral, 2% if bullish $$ May 01, 2012
  • The remarkable resurgence in synthetic credit tranches Increases in the notional amounts of several corp bond swaps May 01, 2012
  • Contra: Black Scholes & the formula of doom Debt levels & Asset-Liab mismatch largest causes of crisis not BS model Apr 30, 2012
  • Energy’s Pain is Consumer Discretionary’s Gain I have been on the wrong side of this trade. Sigh. $$ Apr 30, 2012
  • Notes from the DoubleLine Lunch with Jeffrey Gundlach, Spring 2012 Gives a good overview, w/a large topping of snark $$ Apr 30, 2012


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  • China’s Auditing Train Wreck Any Chinese firm listed in the US, the auditors should be subject to SEC scrutiny. $$ May 05, 2012
  • China bear Pettis says world coming around to his view Pettis isn’t a bear but a realist; invt-led growth overplayd $$ May 04, 2012
  • The Family and Corruption Family ties & group affiliation dominate economic/political power among Chinese Communists $$ May 04, 2012
  • Who is Fu? Chinese exile is ‘God’s double agent’ Story of a Chinese Pastor in US & escape of Chen Guangcheng $$ May 02, 2012
  • Microblogs Survive Real-Name Rules–So Far Even the CCP would have a hard time shutting down their Twitter-apps $$ May 02, 2012
  • Beijing’s secret: It’s not really loosening There is not enough demand in China 2 pay all of the high prices. $$ May 02, 2012
  • China’s Left Behind Children Economic growth that separates parents from children imposes significant costs on China $$ May 02, 2012
  • China Closes Unirule Website Founder receives award from Cato Institute; China government shuts down his website $$ May 02, 2012
  • China’s property boom has peaked, forever Amount of deadweight in China property is so large that prices have peaked $$ Apr 29, 2012

Financial Services

  • Caution: Contents May Be Hot I worry about ETF slippage from bad creation/redemption unit design & bad trading by users May 04, 2012
  • Well, That Was Awkward… Bank Chiefs’ Regulatory Concerns Met With Official Silence; maybe regulators getting fed up May 04, 2012
  • A talent shortage looms as the industry booms Financial planners getting old/retiring faster than the Baby Boomers $$ May 04, 2012
  • 2nd attempt2 automate bond trading 1st failed RT @BloombergNews: Goldman preps trading system for corporate bonds | May 04, 2012
  • Mortgage Rates in US for 30-Year Loans Fall to Record Low Mtge rates b nimble, MR b quick, MR go under limbo stick $$ May 04, 2012
  • Spending A Year On An M&A Bidding War Is Apparently Overrated It’s well-known that scale acquirers underperform $$ May 04, 2012
  • Every liability has an asset, but not every asset has a liability. Some are owned outright. May 03, 2012
  • Canadians Dominate World’s 10 Strongest Banks Ask again after their housing bubble pops, same 4 other fringe nations May 03, 2012
  • Pimco’s latest ETF shields against price spikes I wonder if active ETFs will have more performance slippage. $$ May 02, 2012
  • Hedge Funds Hurt by Volatility Hedge funds r vehicles that do better when credit spreads r tightening $$ May 01, 2012
  • Bond Market Is Creating A New Galaxy for Trading Dealer inventories thin; trading costs rise; electronic mkts start May 01, 2012
  • US banks still cutting commercial real estate exposure Banks still rotating out @ an almost constant rate since 2009 $$ Apr 30, 2012
  • Largest U.S. Banks Resist Federal Reserve’s Credit Limits Big banks need 2b broken up or shrunk; they don’t accept it Apr 29, 2012

US Fiscal/Regulatory Policy

  • CEOs rank Texas tops for business, California worst 8th year in a row for this survey; high taxes/regs annoy CEOs $$ May 04, 2012
  • Exposing the Medicare Double Count Same $$ being spent twice, must borrow the difference. May 02, 2012
  • Coburn: `We Ought to Totally Revamp Our Tax Code’ Very similar to my proposals; simplify code eliminate deductions $$ May 02, 2012
  • U.S. Considers Notes That Float Intermediate-dated Tsy floaters would trade above par, neg yields like TIPS $$ May 01, 2012
  • Trying to Shed Student Debt Lawmakers Rethink Bankruptcy-Law Ban on Walking Away From Education Loans $$ #slavery Apr 30, 2012
  • Can the US Economy Recover Without a Housing Recovery? It will probably have to try w/o housing’s assistance $$ Apr 30, 2012
  • Central Bank paper suggests house prices have ‘over-corrected’ Have Irish housing prices overshot? Tough 2 say. $$ Apr 30, 2012
  • Treasury floaters could b issued @ premium 2 par 2 inflation speculators allowing the Tsy 2 finance @ negative rates Apr 30, 2012
  • U.S. Perfecting Formula for Budget Failure, Says Bowles It’s nice 2b a part of a nation that is a global leader ;) $$ Apr 30, 2012
  • Will TARP Make a Profit? That’s the Wrong Question Conflicting govt goals make policy hard 2 implement & interpret $$ Apr 30, 2012
  • You will buy more Govvies, or else Financial Repression, Quantitative Easing, Debt Monetization, Hyperinflation $$ Apr 30, 2012
  • On Student Loans, Accounting Gimmicks, Electric Cars, FX and a note on SS Hodgepodge of insight from @brucekrasting $$ Apr 30, 2012
  • “The Treasury should be issuing 100 year or perpetual bonds until the market can’t stand it anymore to lock in these … Apr 30, 2012
  • The floating YTMs will probably be negative, as interest rate speculators will pay more than par for the floating rat… Apr 30, 2012


  • The euro crisis just got a whole lot worse Election of Hollande may lead2 Euozone policy paralysis; growth v austerity May 04, 2012
  • Making eurozonians, or not The Eurozone was never a natural place to set up a shared currency. $$ May 04, 2012
  • Madness in Spain Lingers as Ireland Chases Recovery Ireland may b rebounding, as Spain’s slump deepens #austerity $$ May 02, 2012
  • Why the New York Times’s Paul Krugman is clueless about the European economic crisis Aside frm Ireland no austerity yet May 02, 2012
  • Core infection and eurozone PMIs Core of the EZone sluggish @ a time when it can least afford it $$ #depressionary May 02, 2012
  • ECB Measures Pushing Domestic Bonds Into Domestic Banks, Planting Seeds for Euro Disintegration Yeh, this da future $$ May 02, 2012
  • The rise in the Eurozone money supply has not improved credit conditions Euro M3 diverges from bank loans $$ May 01, 2012
  • The ECB lending to periphery governments via “backdoor SMP” How to stuff the ECB full of Eurofringe debt, c/o LTRO $$ May 01, 2012

Rest of the World

  • Brazil: cutting at any cost? Pushes up asset & price inflation, as currency held down 2aid exporters; unsustainable $$ May 04, 2012
  • Turkey Credit Rating Outlook Cut by S&P on Worsening Trade Wide current account def & hi external financing needs $$ May 02, 2012
  • Once poster child of crisis, Iceland recovers Letting banks fail & stiffing foreign creditors -> winning solution $$ May 02, 2012
  • Which emerging economies are at greatest risk of overheating? A gauge from the Economist on which Em Mkts r2 hot $$ Apr 29, 2012

Company News

  • Buffett’s CTB Adds Chicken Eviscerators in Dutch Purchase Buffett’s firm is no chicken; it has a lot of guts! ;) $$ May 04, 2012
  • Sorry, really sorry… May 04, 2012
  • Ackman Rejects Canadian Pacific Deal Ruling Out CEO Pick Pick is former CEO of $CP rival $CNI – Bad blood; good CEO May 02, 2012
  • Impressive work Mr. Einhorn. The analyst that wrote up the question deserves praise; if you did that… May 01, 2012
  • Phillips 66 aims to run more shale oil LD: + $COP $PSX First day of trading for the new $PSX. Combo up 2%+ so far $$ May 01, 2012
  • Value investing does not mean cheap. It means margin of safety. Cemex does not have that. Look at the debt. $CX $$ May 01, 2012
  • Falcone Agrees To Step Aside “a final agreement may not be reached, and a bankruptcy filing was still possible” $$ Apr 30, 2012
  • Delta to buy US refinery for $150 million If zero is dumb & 100 is very dumb, this one scores in the 90s. $$ Apr 30, 2012
  • Discuss “At $1.7 billion, Nook is worth more than Barnes Spin off Nook 2 create value $$ $BKS $AMZN #interneteatsbooks Apr 30, 2012
  • @ampressman Would it have been value-enhancing to $BKS 2 sell the whole Nook unit 2 $MSFT, in your opinion? $$ Apr 30, 2012

Statistical Analysis

  • trading-and-the-null-hypothesis Problem:No academic journal wants2 publish studies with ‘no result’ as their conclusion May 04, 2012
  • . @thenumb47 Allows for too much of a specification search; would be good to require disclosure of everything tried but not published $$ May 03, 2012
  • Have to allow for accidents! RT @incakolanews: just scrub the word “validate” and I think you have a great idea May 03, 2012
  • Thus my proposal for economists: come up w/research idea: goes 2a database. Randomly assigned economist will analyze & trash/validate it $$ May 03, 2012
  • Unlike double-blind studies, raw statistical research allows health analysts to inject their own bias into the analysis, as economists do $$ May 03, 2012
  • Analytical Trend Troubles Scientists Health researchers using statistics like economists find ambiguous results $$ May 03, 2012


  • 14 Lessons From Benjamin Franklin About Getting What You Want In Life Advice from 1 of the wealthiest men of America $$ May 04, 2012
  • Is Wall Street Meeting God’s Expectations? Many Christians misuse the Bible; almost all non-Christians misuse it $$ May 03, 2012
  • What would Jesus trade? Many Christians misuse the Bible; almost all non-Christians misuse it; another example $$ May 03, 2012
  • And in a more honest way than Google RT @SconsetCapital: Long good, short evil. May 03, 2012
  • Apparel-Swapping Millennials Eschew Stores and Malls “Is that a new outfit?” “Well, it’s new to me!” An odd trend $$ May 03, 2012
  • @TheStalwart Kasriel was different enough that he will be missed, kind of like the sound of one hand clapping $$ #littledoghasbuddhanature May 01, 2012
  • The record 4 tallest bldg s/b based on weighted average height; weighting based on cross-sectional area @ height $$ Apr 30, 2012
  • So if you have something thin at the top, it wouldn’t count 4 much. A rectangular parallpiped would get full credit 4 height $$ #usingmath Apr 30, 2012
  • That would work, simpler than mine $$ RT @Pollack7: @AlephBlog Meh.Highest continuous occupancy floor. Apr 30, 2012
  • As the smartest boss I ever had said “Make bets, but never bet the franchise.” Apr 30, 2012

Monetary Policy

  • Bernanke Charts New Mission For Fed: Financial Stability Fed has a hard enuf time w/a double mandate, triple will b wrs May 02, 2012
  • Then again, if focusing on financial stability forces the Fed to be more restrained in its monetary policy, that would be good. $$ May 02, 2012
  • Bernanke: Be Humble! The picture says it: Humility in BB’s view: leaving monetary policy loose $$ May 01, 2012
  • My Speech Delivered at the New York Federal Reserve Bank An Austrian let loose amid the marble palace in NYC?! Wow. $$ Apr 29, 2012

US Politics

  • Renewed Hope that Jon Corzine, President Obama’s Top Tier Campaign Bundler, Will Face Criminal Charges J. Tavakoli $$ May 01, 2012
  • Occupy Wall Street Plans Global Protests in Resurgence #OWS won’t b effective until they organize as a 3rd party $$ + May 01, 2012
  • Or, organize to influence the Democrats the way the t-party does the Republicans. #OWS is irrelevant until then, b/c it doesn’t do anything May 01, 2012
  • Is that a bailout in your pocket? Boyazny, panel’s populist, replied that the credit markets had become “undemocratic” May 01, 2012

By David Merkel Of The Aleph Blog

David J. Merkel, CFA, FSA — 2010-present, I am working on setting up my own equity asset management shop, tentatively called Aleph Investments. It is possible that I might do a joint venture with someone else if we can do more together than separately. From 2008-2010, I was the Chief Economist and Director of Research of Finacorp Securities. I did a many things for Finacorp, mainly research and analysis on a wide variety of fixed income and equity securities, and trading strategies. Until 2007, I was a senior investment analyst at Hovde Capital, responsible for analysis and valuation of investment opportunities for the FIP funds, particularly of companies in the insurance industry. I also managed the internal profit sharing and charitable endowment monies of the firm. From 2003-2007, I was a leading commentator at the investment website Back in 2003, after several years of correspondence, James Cramer invited me to write for the site, and I wrote for RealMoney on equity and bond portfolio management, macroeconomics, derivatives, quantitative strategies, insurance issues, corporate governance, etc. My specialty is looking at the interlinkages in the markets in order to understand individual markets better. I no longer contribute to RealMoney; I scaled it back because my work duties have gotten larger, and I began this blog to develop a distinct voice with a wider distribution. After three-plus year of operation, I believe I have achieved that. Prior to joining Hovde in 2003, I managed corporate bonds for Dwight Asset Management. In 1998, I joined the Mount Washington Investment Group as the Mortgage Bond and Asset Liability manager after working with Provident Mutual, AIG and Pacific Standard Life. My background as a life actuary has given me a different perspective on investing. How do you earn money without taking undue risk? How do you convey ideas about investing while showing a proper level of uncertainty on the likelihood of success? How do the various markets fit together, telling us us a broader story than any single piece? These are the themes that I will deal with in this blog. I hold bachelor’s and master’s degrees from Johns Hopkins University. In my spare time, I take care of our eight children with my wonderful wife Ruth.
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