Insomniac Hedge Fund Guy

10 reasons why stocks should go up

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          The news is pretty depressing.   The economy is slowing, the country is bitterly partisan, and the market has been down several days in a row.  The VIX reflects that and is in overbought territory where it could sell off.  VIX goes down stocks generally go up. The first of the month usually brings in new money.  If it did this month, they were slapped hard. S&P 500 is at 200 day moving average and in oversold territory.  I’d be nervous if I was short Debt ceiling conclusion will lift some of the cloud hanging over … Read more

‘Magic Trip’ Reconstructs Footage From Ken Kesey’s Bus Trip – NYTimes.com

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Maybe I’ve drunk the Kool-Aid but I found a lot of things to buy today.  We went from about 10% invested to 100% invested today and short gold.   Our  historic average hold time is about 7 days but we are prepared to be long term investors when we do buy. Film Hitches a Weird Ride on Kesey’s Bus By CHARLES McGRATH Published: July 31, 2011 “Magic Trip: Ken Kesey’s Search for a Kool Place,” a film by Alex Gibney and Alison Ellwood that opens on Friday, is an exercise in what they call “archival vérité.” It’s a documentary that … Read more

Does anyone have one of these laying around?

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1923 Leica 0-series becomes world’s most expensive camera, fetches $1.89 million at auction from Engadget by Sean Hollister Just when we thought ancient wooden boxes were all the rage among camera collectors, a compact beauty has shattered our theories — this 1923 Leica 0-series just sold at auction for €1,320,000, or about 1.89 million in US money. Curiously enough, the exact same auction house reportedly sold the exact same camera four years ago: No. 107, the first Leica to be exported, allegedly for a patent application inspection in New York. In 2007, it fetched a relatively paltry €336,000, which was … Read more

Time to Buy USD

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The big bets have been against the USD in July, but this maybe an opportunity to buy some, cheap. Ninety-four percent of the 17 money managers overseeing a total of $1.26 trillion surveyed by Ried Thunberg ICAP Inc. expect the dollar to be stronger or steady relative to the euro in next three months, while 59 percent expect it to be stronger or steady against the yen. The New Jersey-based firm is a unit of the world’s largest interdealer broker. The dollar weakened 2.2 percent in July, according to Bloomberg Correlation-Weighted Currency Indexes, which track the performance of a basket … Read more

Sea Change in Map of Global Risk

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With Crises Shaking Confidence in U.S. and Europe, Investors Turn to Debt of Emerging Lands The black-and-white borders of the bond market are graying. As the pristine credit rating of the U.S. remains under threat, and the debt crisis in Europe rolls on, investors, traders and policy makers are grappling with fundamental changes in the global bond markets. Many so-called emerging countries, which have typically been charged higher interest rates because of their perceived risk, are now paying as little to borrow as developed nations, if not less. Full article provided by Wall Street Journal @: http://online.wsj.com/article/SB10001424053111904292504576480142807295216.html?mod=rss_whats_news_us&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7011+%28WSJ.com%3A+What%27s+News+US%29

Lawmakers to vote on last-minute debt deal

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(Reuters) – Congressional leaders rushed to line up Republican and Democratic votes on Monday for a White House-backed dealto raise the U.S. borrowing limit and avert an unprecedented debt default. With scars still fresh from the months-long debate over increasing the $14.3 trillion debt ceiling, a new battle was shaping over the incendiary topic of taxes. Votes were expected later in the day in the House of Representatives and Senate on a plan to cut at least $2.4 trillion over 10 years, form a new congressional committee to recommend a deficit-reduction package by late November, and raise the borrowing limit … Read more

The President Surrenders on Debt Ceiling – NYTimes.com

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The President Surrenders By PAUL KRUGMAN Published: July 31, 2011 A deal to raise the federal debt ceiling is in the works. If it goes through, many commentators will declare that disaster was avoided. But they will be wrong. For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the … Read more

‘t Help

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Economy Looking Weak, Data Revisions Don’t Help The economy is certainly weak. The latest report on GDP showed sub-par growth in the second quarter. Revisions to past data, which occur every summer, showed that the first quarter was even worse than we previously thought. Here’s a comparison of GDP growth rates, with “old” indicating the official data as released prior to today, and “revised” indicating the new view. I’ve highlighted the significant differences. Looking at past history, the recession was worse than we previously thought–not a surprise, really, when you think about the sharp decline in employment at the time. … Read more

Fed Readies Guidance for Banks in Event Aug. 2 Deadline Missed

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July 29 (Bloomberg) — The Federal Reserve is preparing guidance for banks in the event the U.S. debt limit isn’t raised and the Treasury Department runs out of money to pay all of its bills, a government official said. The guidance would cover issues including how payments are made, collateral pledged for loans as well as other supervisory and regulatory matters, said the official, who asked not to be identified because congressional negotiations on the debt limit are still under way. A credit-rating downgrade of U.S. Treasury securities caused by a failure to lift the $14.3 trillion debt ceiling would … Read more

A Crisis of Faith in America

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While the media has focused on the short term debt issue matters and to a lesser extent the long term implications what they have not addressed is the way this Circus has impacted the credibility of the USA Capital Markets. The political rhetoric and the refusal to deal with the issue at hand will have a lasting impact on the way the world looks at investing in America. Since 2008 the Government and those elected to represent the American people have made reactionary, over bearing legislation based on there popularity on the given day. Dodd-Frank, Capping Financial Institutions Wages, Over … Read more

‘s Failure to Panic

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I just got off the phone with a source on Capitol Hill who has spent the past few days trying to convince Republicans to vote for a debt ceiling hike. He told me that the biggest obstacle he faces has been “market complacency.” “Frankly, a bit of panic would be very helpful right now,” he said. As he explained it, lots of people in Washington, D.C., expected that this would be a week marked by panic in the markets. Stocks would tank. Bonds would get clobbered. The dollar would do something dramatic. And all of this would help convince reluctant … Read more

Support & Resistance

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Support and Resistance are two of the most closely watched and utilized technical indicators. Although difficult at times, identification of these key indicators is an essential ingredient to succesful technical analysis and even being aware of their existence and location can greatly improve your forecasting and analyzing abilities. Both are price levels at which either supply or demand for a security is often perceived greater than the other and this in turn can affect the movement of that security. Support: is the price level at which demand is thought to be great enough to prevent the price from declining any further because as … Read more

Poll: 65% of Americans Support Balanced Budget Amendment – Hit & Run : Reason Magazine

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A Sachs/Mason Dixon poll released today [PDF] has found that “65 percent of the public supports” a balanced budget amendment, “with 27 percent opposed, [and] 8 percent undecided.” By party affiliation, that breaks down as “81 percent of Republicans, 68 percent of independents and 45 percent of Democrats.” This jibes with the first-ever Reason-Rupe Poll, which found that 74 percent of Americans think that the federal government needs some kind of spending cap to keep expenditures in line with revenues. Percentage breakdown there among R/I/D: 85/76/64. Here, visualize it: via Poll: 65% of Americans Support Balanced Budget Amendment – Hit … Read more

Has the world turned short seller?

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It seems that the smart money is going short this market. Probably the most destructive internal conflict since the Civil War is threatening the U.S.  It’s finally become clear to me that this is all about the balance budged amendment.  What’s the big deal?  Go for it.  We need that discussion.  We wouldn’t have had the disastrous Bush and now Obama wars if we had to pay for it today.  We wouldn’t have allowed pharmaceutical companies to charge us exorbitant fees on a government paid for prescription plan.  At some point the market may move over to the Tea Party … Read more

Banks Finding Few Signs of Distress in Repo, Credit Markets

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July 28 (Bloomberg) — U.S. banks searching for hints of credit-market distress ahead of next week’s deadline to raise the debt ceiling are finding few signs of panic so far. Commercial banks and securities firms are tracking how money-market funds adjust holdings and whether participants in repo markets, where financial firms obtain short-term financing, change terms for collateral including Treasuries, according to executives in charge of finance operations at five of the largest U.S. banks. They are also looking for disruptions in commercial paper and swaps markets, said one of the people, who declined to be identified because the deliberations … Read more

Debt Ceiling Debacle Sets up Well for a Strangle

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A strangle is an options strategy where the investor holds a position in both a call and put with different strike prices but with the same maturity and underlying asset. This option strategy is profitable only if there are large movements in the price of the underlying asset. This is a good strategy if you think there will be a large price movement in the near future but are unsure of which way that price movement will be. There will probably be no deal tonight or Friday on the debt ceiling negotiations.  If we don’t see a bill to extend the … Read more

Managing Investments in a Crisis

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Mobility and a long term outlook are essential when managing your portfolio in a crisis. The ability to select the best quality long term investments from the traditional and emerging markets. For hedging mobility is key, the ability to access Foreign Exchange, Commodities and Futures to balance your risk is a new fundamental asset for investors. Cash is no longer king and the value of the USD is being eroded which means everyone must rethink their investment strategy and adjust their portfolio holdings. While many think that if they live in the USA and earn in USD nothing will change, … Read more

Hedge Fund Regulation Is Backfiring: SAC Capital Edition

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Is SAC Capital going to escape hedge fund regulation? On Tuesday we learned that George Soros was returning all of the capital of outside investors to his fund, following a path laid down by legendary investors like Stanley Druckenmiller and Carl Icahn. By closing their funds to outside investors, these managers will be able to escape attempts to regulate them. They won’t be classified as hedge funds anymore. Despite their billions of dollars under management, they’ll simply be private investors or family funds. Today we learn that Steve Cohen, the founder of SAC Capital, is closing his flagship fund to … Read more

S&P Sees Greek Default on Debt After EU Plan Takes Effect

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July 27 (Bloomberg) — Greece will partially default on its debt once European officials push through a plan that will see bondholders foot part of the bill of a second bailout agreed to last week in Brussels, Standard & Poor’s said. The rating company also cut its ranking for Greece to CC, two steps above default, from CCC, according to a statement published in London today. The outlook on the debt is negative. “The proposed restructuring of Greek government debt would amount to a selective default under our rating methodology,” S&P said. “We view the proposed restructuring as a ‘distressed … Read more

Debt fears lead to US downgrade – BUT DOES IT MATTER?

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Debt fears lead to US downgrade By Michael Mackenzie in New York Egan-Jones has become the first US rating agency to downgrade the country’s sovereign credit rating from triple A to double A plus as it focuses on the rapid rise in outstanding debt over the past five years.Egan-Jones was officially recognised in 2008 by the Securities and Exchange Commission and, unlike its larger rivals, generates revenue from institutional investors and not from issuers of debt. During the past decade it downgraded US carmakers and structured credit products before similar decisions by the big rating agencies. via Debt fears lead to … Read more

‘ hedge fund money

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  (Reuters) – Billionaire investor George Soros, whose stock-picking career has spanned nearly four decades, said he will manage money only for himself and his family as new regulations threaten to crimp the hedge fund industry he made famous. The octogenarian fund manager, known as much for earning $1 billion on a nervy currency bet as for giving away millions to support liberal causes, will return roughly $1 billion to outside investors most likely by the end of the year and turn Soros Fund Management into a family office. The sum represents only a small portion of the $25 billion … Read more

Time For More Fed Action?

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With the economy still weak and the politicians unable to agree on a plan to lift the debt ceiling, it might be time for the Federal Reserve to embark on QE3. Before you think I have lost my mind, please examine the three facts listed below. First and most important, the economy — supposedly out of recession for two years — is not in good shape. After rising at a paltry rate of 1.9% in the first quarter, the gross domestic product likely crept ahead at an even slower pace in the second, according to the MarketWatch consensus. This is … Read more

US Property Prices Fall

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Real Estate prices in major US cities rose for the second straight month in May, propped up by a flurry of spring buyers. But after adjusting for such seasonal factors, prices fell in a majority of markets. The Standard & Poor’s/Case-Shiller home-price index released on Tuesday showed that prices rose in 16 of the 20 cities tracked. Boston posted the biggest monthly increase, followed closely by Minneapolis and Washington. Prices in three metro areas hit the hardest by the housing crisis – Detroit, Las Vegas and Tampa (Florida) – fell to their lowest points since the recession began. Prices in … Read more

The Joy of Cash

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By Chris Farrell You’ve probably heard of a “black swan,” the catchphrase coined from the 2007 book by author and investor Nassim Nicholas Taleb. A black swan for investors is essentially an outlier event that dramatically affects the economy and markets. For example, the 1998 Russian debt default that unexpectedly took down the Long Term Capital Management hedge fund and the 2008 global financial free fall when Lehman Brothers imploded. It doesn’t take much imagination to see black swans lurking throughout the global economy. Europe’s crisis with the sovereign debt of the euro zone’s periphery nations threatens the health of … Read more

Obama crashed the Senate and House Web Servers

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You have to assume that the markets expect some kind of debt deal to happen.  The mild reaction to the dysfunctional government can only be interpreted as frustration about the timing and method of a debt ceiling deal, not the actual certainty of one being reached.  We will find a way not to default although it may take an enormous drop in the market to wake up the public against the dug-in intransigence of the Tea Party.  After all it wasn’t the Democrats that voted down the TARP precipitating the biggest one day slide in the Dow’s history but rather the … Read more

USA Regulators Punish Banks

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US regulators are straining to keep pace as they write more than 200 rules to rein in risk-taking throughout the financial system. A year after the enactment of the Dodd-Frank financial oversight law, regulatory agencies have finalized only a handful of reforms (50) but are expected to pick up the pace during 2-H of the year. Lobbyists and Wall Street executives, as part of their efforts to delay and scale back reforms, are raising pointed questions about whether Dodd-Frank will hamstring the economic recovery. A broad rollback of reforms is not expected, at least in the near-term. Here is a … Read more

Using Logic To Examine Risk

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This article is very interesting and should be read. You can find it at:http://finance.yahoo.com/news/Using-Logic-To-Examine-investopedia-437029966.html?x=0 Brian Bloch, On Friday July 22, 2011, 11:52 am EDT In 1660, Blaise Pascal did some pioneering work on risk. He was dealing with theology, but the implications for the capital market are unmistakable. His original concern was the expected value of believing in god.. He attempted to convert nebulous uncertainties into calculable probabilities – what we now call risk. His “expected values” are the basis of modern risk theory. Pascal demonstrated that uncertainty is about people, their beliefs and their courage, while calculated risk is … Read more

6 Likely Social Security Changes

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6 Likely Social Security Changes Philip Moeller, On Monday July 25, 2011, 12:53 pm EDT Washington’s current soap opera, As the Debt Ceiling Turns, is winding down to its season finale. Grand plans for a “big deal,” including changes to Social Security and Medicare, have given way to face-saving efforts to permit the country to issue new debt and still allow the political parties to claim the high ground as they gear up for 2012 election campaigns. So, for the time being, retirees can breathe a bit easier about changes to their key benefits. Even though nearly every “reform” plan … Read more

New Emerging Markets a Buy

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Last week the World’s smallest stock exchange opened in Cambodia joining a growing group of small exchanges in the developing World. In places like Laos, Mozambique, and Cameroon, only a few companies are listed, but these exchanges hold the biggest potential for trading in and bidding on the future. The markets these exchanges serve effect the lives and the livelihoods of thousands of people in many ways including; health care, education, and other social values will be lifted as the developing economies grow. China and India are the countries most people think of in terms of economic growth and power. … Read more

‘s Banks causes lots of pain for short sellers

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Time and again, Sean Egan and his team at Philadelphia-based Egan-Jones Ratings have made important calls months ahead of their better-known rivals. The firm has won grudging respect for its work on Ambac, CIT, Countrywide, General Motors, IndyMac, Lehman Brothers, MBIA and New Century, all of which encountered big problems after getting poor credit grades from Egan-Jones.  Read the rest of the report by clicking on the link below. A very scary interview with Sean Egan from Barron’s This is a very convincing report and may prove to be true but the short covering on the banks mentioned in this … Read more