Insomniac Hedge Fund Guy

Echoes of 2008 Here we go again The Europeans are pushing the global banking system to the edge Oct 8th 2011 | from the print edition YOU know something bad is going to happen in a horror film when someone decides to take a late-night stroll in a forest. The equivalent in finance is a bank boss insisting that his institution is completely solid.European bankers have been saying things are fine for weeks now, even as their exposure to indebted euro-zone countries strangles their access to funding. The amount of money parked at the European Central Bank ECB has risen … Read more

Why should you hedge?. The answer is simple, you can secure profits long term if you limit your risk. To understand hedging you must first understand a basic but ignored concept that all investors and traders should know. Equity Beta, which is a calculation of how volatile a stock is when the market itself is moving. Beta shows the sensitivity to overall market movements of an individual equity in your portfolio. Hedging can protect you from Black Swan Events and other sudden market shifts, it can also allow you to manage your currency exposure. The best way to understand hedging … Read more

World facing worst financial crisis in HISTORY IF NOT EVER, Bank of England Governor says October 6, 2011By Jacob Wolinsky The world is facing the worst financial crisis since at least the 1930s “if not ever”, the Governor of the Bank of England said last night. Sir Mervyn King was speaking after the decision by the Bank’s Monetary Policy Committee to put £75billion of newly created money into the economy in a desperate effort to stave off a new credit crisis and a UK recession. Economists said the Bank’s decision to resume its quantitative easing [QE], or asset purchase programme, … Read more

Goldman Sachs Group, Inc., NYSE:GS Still a Strong BuyGoldman Sachs Group, Inc., NYSE:GS Still a Strong Buy according to Shayne Heffernan.U.S. banks have reason to think that regulators will put out a moderate proposal restricting proprietary trading, analysts said after a draft of the Volcker rule was leaked.The ridiculous Volcker Rule as it stands has been the reason for billions being wiped of the market cap of Goldman Sachs Group, Inc., NYSE:GS. As it appears more likely the communistic overtones of the rule will be rejected, Goldman Sachs may see a strong rally. via Goldman Sachs Group, Inc., NYSE:GS Still … Read more

Corning Announces Increased Dividend and $1.5 Billion Stock Buyback CORNING, N.Y., October 05, 2011 – Corning Incorporated’s NYSE:GLW Board of Directors today declared a 50% increase in the company’s quarterly common stock dividend. Corning’s quarterly dividend will rise to $0.075 per share of common stock held, versus $0.05 per share previously. The fourth-quarter dividend will be payable on Dec. 16, 2011 to holders of record Nov. 16, 2011. The board also authorized a stock repurchase program for purchasing up to $1.5 billion of the company’s common stock from time to time through open market or private transactions. The stock repurchase … Read more

Investors Sing a New Tune—Wont Get Fooled By SIMON CONSTABLE Now is not the time to let yourself be suckered into getting back into stocks.Sure, the markets had a couple of spectacular days last week, but dont let that fool you into thinking all is well again with the world. The stock markets volatility and concerns about Europes deepening financial crisis signals investors should remain cautious. Simon Constable explains to WSJDNs Kelsey Hubbard.Its not. Theres still plenty of uncertainty out there. Yes, the Dow Jones Industrial Average finished Friday up 1.3% for the week, one of the Dows better showings … Read more

How North Dakota Became Saudi Arabia By STEPHEN MOORE Harold Hamm, the Oklahoma-based founder and CEO of Continental Resources, the 14th-largest oil company in America, is a man who thinks big. He came to Washington last month to spread a needed message of economic optimism: With the right set of national energy policies, the United States could be “completely energy independent by the end of the decade. We can be the Saudi Arabia of oil and natural gas in the 21st century.” “President Obama is riding the wrong horse on energy,” he adds. We can’t come anywhere near the scale … Read more

Buffett Doesn’t See `Double Dip’ Recession in U.S.   Sept. 30 (Bloomberg) — Warren Buffett , chief executive officer of Berkshire Hathaway Inc., talks about the U.S. economy. Buffett, spoke with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg) via Buffett Doesn’t See `Double Dip’ Recession in U.S. – Video – Bloomberg.

Notes from the DoubleLine Lunch with Jeffrey Gundlach Joshua M Brown September 29th, 2011 Yesterday Barry and I had the pleasure to meet Jeffrey Gundlach and attend the DoubleLine Luncheon at the New York Yacht Club.  If you’ve never been, the club is on 44th Street (a block from my office) and you can tell it by the second floor windows which are shaped like the bow stern of a ship.  The dining room has a three-stories high stained-glass ceiling and is laden with ornately carved wooden accents, maritime artifacts and models of all the yachts that have defended the … Read more

By BEN LEVISOHN With the gut-churning volatility of the past few years showing no sign of letting up, some investors are swearing off stocks and piling into safe havens like cash and Treasurys. But what if there were a way to beat the stock market’s returns over the long haul with significantly less short-term instability? In this age of Ponzi-scheme blowups and complex financial instruments that self-destruct in times of crisis, such a notion sounds too good to be true. Yet academic research has shown that a relatively simple strategy of buying the least-volatile stocks and holding them for the … Read more

It has happened time and again in recent months as Europe’s debt crisis has played out. Stocks stage a strong comeback on expectations that a solution has been found. Then they quickly resume their decline as hopes dissipate, leaving investors puzzled and frazzled. What is going on? via In European Crisis, Little Hope for a Quick Fix – NYTimes.com.

China readies its own space station module for launch By Mat Smith posted Sep 27th 2011 8:24AM Presumably feeling a little left out after being turned down from the global love-in that is the International Space Station, China’s decided to go it alone. The ever-expanding nation will be ready to launch the first module of it’s very own space station, the Tiangong (Heavenly Palace), by the end of this month. The initial launch will be unmanned, delivering an 8.5-ton module ready for docking practise and other interactions with three more spacecraft that are planned to join it later this year. … Read more

EFSF Plan in Europe is no Free RideSeptember 26, 2011By Russ WinterThe debt ratios of the key players illustrates well first chart that virtually everyone is courting fiscal crisis. The easy way out of turning to bigger, more solvent governments for bailouts has run its course.  The chamber is empty. Government debt to GDP is running high everywhere. When a country such as the U.S. runs near 100% gross government debt to GDP combined with huge future deficits, it’s already dead  on arrival.Looking at the next dead-on-arrival candidates leads us to Germany and France. Although superficially it appears as if … Read more

I think its time to flush out the conversation about whether we are going into a bear market, double dip recession, or whatever awful unknown awaits us.  According to Investopedia, “A bear market is a general decline in the stock market over a period of time. It is a transition from high investor optimism to widespread investor fear and pessimism. According to The Vanguard Group, “While there’s no agreed-upon definition of a bear market, one generally accepted measure is a price decline of 20% or more over at least a two-month period. On that measure the S&P 500 topped out at 1356 on … Read more

September 26, 2011, 10:21 AM ETWarren Buffett Scorns Stock Buybacks (Except Now)Article Comments (11) Deal Journal HOME PAGE »EmailPrintTwitter Digg + More close StumbleUponMySpacedel.icio.usRedditLinkedInFarkViadeoOrkut Text By Shira OvideReutersThere are a bundle of remarkable things about Berkshire Hathaway’s announcement today that it plans to buy back an unspecified amount of its own stock.One, the conglomerate has never under Warren Buffett’s watch repurchased its own shares. That’s 40-plus years of never.Two, this announcement is an implicit admission that Buffett can’t grow returns as he has in the past. Buffett has been warning for years that he won’t be able to keep pace … Read more

The weakening Euro is actually very good for the European economies as it will make their exports cheaper, and tourism more affordable.  You won’t see Germany protesting too much. A collapsing Euro would not be good of course but an orderly descent is long overdue. It’s not good for U.S. multinationals that have had currency gains at their back.  They’ll now have a headwind. Since oil is denominated in U.S. dollars, a strengthening dollar should take some pressure off of oil prices and that will be a welcome relief to consumers if they can get the prices passed down to the … Read more

The great debt scare SEP 23, 2011 11:17 EDT   By Robert J. Shiller The opinions expressed are his own. It might not seem that Europe’s sovereign-debt crisis and growing concern about the United States’ debt position should shake basic economic confidence. But it apparently has. And loss of confidence, by discouraging consumption and investment, can be a self-fulfilling prophecy, causing the economic weakness that is feared. Significant drops in consumer-confidence indices in Europe and North America already reflect this perverse dynamic. We now have a daily index for the US, the Gallup Economic Confidence Index, so we can pinpoint … Read more