Hitman
Tuesday, September 6, 2011
Tuesday, December 23, 2008
The Mansion
One of my favorite authors in the world of Finance ever since my days involved with trading.Article taken from Portfolio.com
The Mansion: A Subprime Parable
by Michael Lewis October 2008 Issue
When Michael Lewis and his family move into a house they can't afford, he gets a taste of the new American nightmare.
I was looking to return to New Orleans, where I’d grown up, to write a book. The move would uproot my wife and three children from California, and I felt a little bad about that. They needed a place to live, but places to live in New Orleans are hard to find. Ever since Hurricane Katrina, the real estate market there has been in turmoil. Owners want to sell, buyers want to rent, and the result is a forest of for sale signs and an army of workers commuting from great distances.
At the bottom of every real estate ad I saw was the name of the same agent. One woman ruled the market, it seemed, and her name was Eleanor Farnsworth. I called her and threw myself on her mercy. She thought my problem over and then said, “I only know of one place that would work for you.” She’d suggested it to Brad Pitt and Angelina Jolie, she said, before selling them their more modest place in the French Quarter.
That shouldn’t have been a selling point; it should have been a warning. I should have asked the price. Instead, I asked the address.
As soon as I saw it, I knew it—the mansion. The most conspicuously grand house in New Orleans. As a child, I’d ridden my bike past it 2,000 times and always felt a tiny bit unnerved. It wasn’t just a mansion; it seemed like the biggest mansion on the street with all the mansions, St. Charles Avenue, an object of fascination for the tourists on the clanging streetcars. But it was hard to imagine a human being standing beside it, much less living inside it, and as far as I could tell, none ever did. There was never any sign of life around it; it was just this awesome, silent pile of pale stone. The Frick Museum, but closed.
Thirst for big homes
Inside, it was even more awesome than outside. It was as if the architect had set out to show just how much space he could persuade a rich man to waste. The entryway was a kind of ballroom, which gave way to a curved staircase, a replica of one in the Palace of Versailles. The living room wasn’t a kind of ballroom; it was a ballroom, with $80,000 worth of gold on the ceiling. The bedrooms were the size of giant living rooms. The changing rooms and closets and bathrooms were the size of bedrooms. There were two of everything that the rest of the world has one of: two dining rooms, two full kitchens, two half kitchens. Ten bathrooms and seven bedrooms.
I didn’t ask the price—I was renting—so I didn’t know that the last time it changed hands it had sold for close to $7 million, and was now valued at $10 million. I imagined how it would feel to live in such a place. What it wouldn’t feel like, clearly, was anything close to being in the other houses in which I’d lived.
Upper middle class: That’s how I’ve always thought of myself. Upper middle class is the class into which I was born, the class to which I was always told I belonged, and the class with which, until this moment, I’d never had a problem. Upper middle class is a sneaky designation, however. It’s a way of saying “I’m well-off” without having to say “I’m rich,” even if, by most standards, you are. Upper-middle-classness has allowed me to feel like I’m not only competing in the same financial league as most Americans—I’m winning! Playing in the middle class, I have enjoyed huge success.
Saturday, November 29, 2008
Why Euro will fall further
Why the Euro Is Set to Fall Further ...
by Jack Crooks
Is anyone less thankful this year than last year? It's probably safe to bet on YES.
I don't have to run through it all — we've been bludgeoned by all that's bad in the global economy and financial system all year long. And I'm sure there are plenty of individuals out there who aren't quite in the mood to be thankful — turkey on the table or not.
Last week I discussed the effect of tight coupling on financial markets. I said when the mechanics of some market or some asset of immense complexity becomes loose, it's liable to create a downward spiral for all the moving parts tightly coupled with it.
That's exactly what's happening. And it means ...
Assets Collapse, Markets Crumble and Capital Flow Shifts as We Enter an Ice Age
Governments are taking all kinds of efforts to bailout key institutions and contagious markets.
They understand the severity of the cleansing cycle that's begun; and are very afraid of what they see.
Eventually though, they're going to have to take their economies, and the financial system, off life-support. If not, after too long, they may be left with a system incapable of organic growth.
In the meantime, Mr. Consumer is starting to get very worried. His wealth has been hammered by lower housing and stocks, and now his job is either already gone or in jeopardy.
This fear is leading to a major uptick in savings. That means spending takes a back seat. And in the end, global consumption takes a hit.
A very smart guy named Stephen Roach, Chairman of Morgan Stanley Asia, recently commented on the economies of Asia and how they're faring in this environment. He said:
"[There is] no country in Asia that is either not declining, or in recession, or slowing sharply. No one is spared. [They're the] most linked region of the world for the rest of the global economy."
Bingo!
He went on to say China is "slowing very, very sharply."
You see, China has come to represent a very important middle-man between developed and emerging market economies — in Asia and across the globe. Their low-cost, cheap-labor production model entails gobbling up input products and raw materials from emerging economies in order to satiate the demand from developed economies.
Signs that China is in trouble stem from, among other items, collapsing demand for the stuff they produce. And the ramifications of China slowing down will spread far and wide.
by Jack Crooks
Is anyone less thankful this year than last year? It's probably safe to bet on YES.
I don't have to run through it all — we've been bludgeoned by all that's bad in the global economy and financial system all year long. And I'm sure there are plenty of individuals out there who aren't quite in the mood to be thankful — turkey on the table or not.
Last week I discussed the effect of tight coupling on financial markets. I said when the mechanics of some market or some asset of immense complexity becomes loose, it's liable to create a downward spiral for all the moving parts tightly coupled with it.
That's exactly what's happening. And it means ...
Assets Collapse, Markets Crumble and Capital Flow Shifts as We Enter an Ice Age
Governments are taking all kinds of efforts to bailout key institutions and contagious markets.
They understand the severity of the cleansing cycle that's begun; and are very afraid of what they see.
Eventually though, they're going to have to take their economies, and the financial system, off life-support. If not, after too long, they may be left with a system incapable of organic growth.
In the meantime, Mr. Consumer is starting to get very worried. His wealth has been hammered by lower housing and stocks, and now his job is either already gone or in jeopardy.
This fear is leading to a major uptick in savings. That means spending takes a back seat. And in the end, global consumption takes a hit.
A very smart guy named Stephen Roach, Chairman of Morgan Stanley Asia, recently commented on the economies of Asia and how they're faring in this environment. He said:
"[There is] no country in Asia that is either not declining, or in recession, or slowing sharply. No one is spared. [They're the] most linked region of the world for the rest of the global economy."
Bingo!
He went on to say China is "slowing very, very sharply."
You see, China has come to represent a very important middle-man between developed and emerging market economies — in Asia and across the globe. Their low-cost, cheap-labor production model entails gobbling up input products and raw materials from emerging economies in order to satiate the demand from developed economies.
Signs that China is in trouble stem from, among other items, collapsing demand for the stuff they produce. And the ramifications of China slowing down will spread far and wide.
Which side are you on?
Are You Optimistic Or Pessimistic About The Economic/Corporate Earnings Outlook?
By The Money Gardener on November 29, 2008
One of the reasons why stocks change hands a million times over everyday is because no matter how great or dire the economic/corporate earnings outlook is, there is always two sides to the story. Optimists and pessimists will always disagree, and each side can usually make a compelling case to either leverage yourself to the hilt and buy stocks with all your resources, or to sell everything stash most of your cash underneath your mattress and use the rest to build a bomb shelter. I think most would agree that it feels like we are on a very bad footing right now economically, but yet stocks are still finding bids, and the sun continues to rise every morning. Here are some reasons to be optimistic or pessimistic about the near-mid term economic/corporate earnings outlook:
Pessimists
* Consumers and businesses are buckling down for a number of reasons which include economic uncertainty, rising unemployment, recessions, falling home prices, and trouble obtaining credit.
* The U.S. government is building a massive debt load, and recent actions that they’ve taken shake the very foundations of capitalism and promise more risk aversion, and government regulation, of industries and markets in the future.
* The former ‘BIG 3′ automakers are in trouble, putting millions of more jobs at risk.
* The growth within emerging markets like China and India is slowing and recent terrorist acts add to the fear and uncertainty in these markets.
* Deflation is now taking over from inflation as a worry because the price of goods are declining quickly.
Optimists
* Fuel and other commodities are much more affordable than they were just months ago. This allows consumers and businesses to cut costs and leave room for consumption and investment.
* The S&P 500 index has fallen over 40% since the start of 2008. Shares of many companies can be bought for significantly less now versus in 2007. Severe declines in forward earnings have been priced into many stocks making them less risky investments.
* Interest rates around the world are coming down making credit and mortgages cheaper for many.
* Emerging markets like China and India are still growing at very high rates and demographic, and lifestyle trends indicate that they will require the rest of the world’s goods and services in a big way for years to come.
* In a Darwinian type of way, plenty of the inefficiencies, mismanagement, redundancy, greed, and waste is being washed from the system. Most of the issues which have been dealt with and are being dealt with right now will come out the other side cleaner, leaner, and more stable. (ie Big 3, Financial sector, credit markets, consumer debt)
By The Money Gardener on November 29, 2008
One of the reasons why stocks change hands a million times over everyday is because no matter how great or dire the economic/corporate earnings outlook is, there is always two sides to the story. Optimists and pessimists will always disagree, and each side can usually make a compelling case to either leverage yourself to the hilt and buy stocks with all your resources, or to sell everything stash most of your cash underneath your mattress and use the rest to build a bomb shelter. I think most would agree that it feels like we are on a very bad footing right now economically, but yet stocks are still finding bids, and the sun continues to rise every morning. Here are some reasons to be optimistic or pessimistic about the near-mid term economic/corporate earnings outlook:
Pessimists
* Consumers and businesses are buckling down for a number of reasons which include economic uncertainty, rising unemployment, recessions, falling home prices, and trouble obtaining credit.
* The U.S. government is building a massive debt load, and recent actions that they’ve taken shake the very foundations of capitalism and promise more risk aversion, and government regulation, of industries and markets in the future.
* The former ‘BIG 3′ automakers are in trouble, putting millions of more jobs at risk.
* The growth within emerging markets like China and India is slowing and recent terrorist acts add to the fear and uncertainty in these markets.
* Deflation is now taking over from inflation as a worry because the price of goods are declining quickly.
Optimists
* Fuel and other commodities are much more affordable than they were just months ago. This allows consumers and businesses to cut costs and leave room for consumption and investment.
* The S&P 500 index has fallen over 40% since the start of 2008. Shares of many companies can be bought for significantly less now versus in 2007. Severe declines in forward earnings have been priced into many stocks making them less risky investments.
* Interest rates around the world are coming down making credit and mortgages cheaper for many.
* Emerging markets like China and India are still growing at very high rates and demographic, and lifestyle trends indicate that they will require the rest of the world’s goods and services in a big way for years to come.
* In a Darwinian type of way, plenty of the inefficiencies, mismanagement, redundancy, greed, and waste is being washed from the system. Most of the issues which have been dealt with and are being dealt with right now will come out the other side cleaner, leaner, and more stable. (ie Big 3, Financial sector, credit markets, consumer debt)
BAD SELECTION
The 8:00 AM Thanksgiving train from New York to Boston was full of self satisfied New Yorkers including myself, smug in their knowledge that they they were able to circumvent the maddening crowds at the airports and the bumper to bumper traffic on the highways during the busiest travel day of the year in US. Indeed, as the train sailed smoothly towards Boston's Route 128 station, the majority of the passengers began to gather by the exit smiling at the fact that the whole journey took a scant three hours to complete. Suddenly, however, the train lurched to screeching halt and a sickening smell of burnt rubber enveloped the car.
We were no more than four minutes away from the train station but now found ourselves dead still in the middle of suburban Massachusetts wilderness surrounded only ominous looking trees and and a track full of twigs. A grim faced conductor rushed by and said, "Go back to your seats. We are not going anywhere for a while."
What happened? After a few minutes of frantic cell phone calling to friends and relatives at the train station we pieced together the basic facts of the story. A man had apparently wandered on to the track and was unfortunately struck by our train. Although injured, he was not dead and by now the whole rescue apparatus of the state of Massachusetts was involved in the incident.
The moment the outline of the story became known, a hundred Iphones and as many Blackberries lit up in frantic attempt to find out how soon the whole mess would be resolved. As i watched my fellow passengers armed with the latest gadgets of the information age struggle vainly with getting an answer I smiled ruefully knowing how pointless it was.
By now, the accident triggered a long and complicated bureaucratic protocol and no matter how many times my fellow travelers refreshed the tiny screens of their web-enabled cellphones they weren't going to expedite the process. So as ten minutes turned into a half an hour and half hour turned into an hour and an hour turned into two, we watched the Amtrak local train which left New York an hour after us and was supposed to arrive two hours later pass us by as we remained trapped less than a mile away from our final destination.
Sitting in a cafe car nursing a cold cup of coffee, I realized how this little unexpected and unfortunate adventure was similar to trading. I saw clearly how even the best laid plans, accompanied by the latest information technology can still fall victim to fate. All of our clever travel planning, all of gadgets could not help us on this Thanksgiving day. We were simply subject to forces outside our control.
As traders of course we see this phenomena all the time. No matter the trade plan, no matter the analytics, no matter the money management, sometimes we simply make a Bad Selection. The good news for the passengers is that we finally arrived to Boston safe and sound and enjoyed a great Thanksgiving with our families . A point to keep in mind next time a trade blows up in your face. Bad Selection is part of life as it is part of trading we should take it all in stride.
We were no more than four minutes away from the train station but now found ourselves dead still in the middle of suburban Massachusetts wilderness surrounded only ominous looking trees and and a track full of twigs. A grim faced conductor rushed by and said, "Go back to your seats. We are not going anywhere for a while."
What happened? After a few minutes of frantic cell phone calling to friends and relatives at the train station we pieced together the basic facts of the story. A man had apparently wandered on to the track and was unfortunately struck by our train. Although injured, he was not dead and by now the whole rescue apparatus of the state of Massachusetts was involved in the incident.
The moment the outline of the story became known, a hundred Iphones and as many Blackberries lit up in frantic attempt to find out how soon the whole mess would be resolved. As i watched my fellow passengers armed with the latest gadgets of the information age struggle vainly with getting an answer I smiled ruefully knowing how pointless it was.
By now, the accident triggered a long and complicated bureaucratic protocol and no matter how many times my fellow travelers refreshed the tiny screens of their web-enabled cellphones they weren't going to expedite the process. So as ten minutes turned into a half an hour and half hour turned into an hour and an hour turned into two, we watched the Amtrak local train which left New York an hour after us and was supposed to arrive two hours later pass us by as we remained trapped less than a mile away from our final destination.
Sitting in a cafe car nursing a cold cup of coffee, I realized how this little unexpected and unfortunate adventure was similar to trading. I saw clearly how even the best laid plans, accompanied by the latest information technology can still fall victim to fate. All of our clever travel planning, all of gadgets could not help us on this Thanksgiving day. We were simply subject to forces outside our control.
As traders of course we see this phenomena all the time. No matter the trade plan, no matter the analytics, no matter the money management, sometimes we simply make a Bad Selection. The good news for the passengers is that we finally arrived to Boston safe and sound and enjoyed a great Thanksgiving with our families . A point to keep in mind next time a trade blows up in your face. Bad Selection is part of life as it is part of trading we should take it all in stride.
Monday, November 10, 2008
China to Spend on Airports and Highways
China to spend 1 trln yuan a year on airports, highways in next 2 yrs - state TV
2008-11-11 05:38 UTC (GMT)
BEIJING (XFN-ASIA) - China's fixed asset investment in the transport sector, excluding railways, will be around 1 trln yuan annually in the next two years, China Central Television (CCTV) reported.
Citing Ministry of Transport spokesman He Jianzhong, the report said that there are 12,000 kilometers of express highways currently under construction in the country, which are expected to consume 12 mln tons of steel products and 100 mln tons of cement in total.
The report quoted He as saying that according to the ministry's estimate, China's 2008 fixed asset investment in the transport sector will be 800 bln yuan, of which 300 bln will be completed in the fourth quarter.
The transport ministry is now in charge of the air, river/sea shipping and land transport, with the rail sector managed separately by the Ministry of Railways.
China's State Council announced on Sunday night a four trln yuan stimulus plan for the economy to counter the impact of the global economic slowdown.
The government formally adopted 10 measures to boost domestic demand, including lifting credit controls as well as speeding up investment in rural development, railways, highways, airports and other infrastructure projects.
(1usd = 6.83 yuan)
2008-11-11 05:38 UTC (GMT)
BEIJING (XFN-ASIA) - China's fixed asset investment in the transport sector, excluding railways, will be around 1 trln yuan annually in the next two years, China Central Television (CCTV) reported.
Citing Ministry of Transport spokesman He Jianzhong, the report said that there are 12,000 kilometers of express highways currently under construction in the country, which are expected to consume 12 mln tons of steel products and 100 mln tons of cement in total.
The report quoted He as saying that according to the ministry's estimate, China's 2008 fixed asset investment in the transport sector will be 800 bln yuan, of which 300 bln will be completed in the fourth quarter.
The transport ministry is now in charge of the air, river/sea shipping and land transport, with the rail sector managed separately by the Ministry of Railways.
China's State Council announced on Sunday night a four trln yuan stimulus plan for the economy to counter the impact of the global economic slowdown.
The government formally adopted 10 measures to boost domestic demand, including lifting credit controls as well as speeding up investment in rural development, railways, highways, airports and other infrastructure projects.
(1usd = 6.83 yuan)
Sunday, November 2, 2008
The Hidden Hand
The free markets scream the capitalist, but is it so an efficient market as claimed?
Some research has been done here and using extracts from some links and a time line with the chart embedded in the graph.
So you decide on it.
Just follow the time line and enjoy reading!
1)JANUARY 30, 2005: U.S. loses track of nearly $9 billion in Iraqi funds
The CPA provided less than adequate controls for approximately $8.8 billion of Development Fund for Iraq (DFI) funds provided to Iraqi ministries through the national budget process. [CPA Report, 1/30/05]
2)MAY 11, 2005: Bush signs supplemental spending bill, providing nearly $76 billion for military operations in Iraq and Afghanistan [State Department, 5/12/05]
3)FEBRUARY 3, 2006: Bush requests additional $70 billion for Iraq and Afghanistan, $120 billion total for 2006 [Washington Post, 2/3/06]
4)JULY 12, 2006: White House budget document reveals that administration will ask for another $110 billion to fund the wars in Iraq and Afghanistan [White House Office of Management and Budget, 7/12/06]
5)JANUARY 19, 2007: $8.4 billion: The cost of the Iraq war per month. “It rose from a monthly ‘burn rate’ of about $4.4 billion during the first year of fighting in fiscal 2003.” [LA Times, 1/19/2007]
6)FEBRUARY 2, 2007: Bush requests another $100 billion for Iraq
"President George W. Bush will ask Congress for $99.7 billion for the Iraq and Afghanistan wars for rest of fiscal year 2007 and more than $145 billion for fiscal year 2008. … That money comes on top of $70 billion that Congress approved for the current fiscal year, adding up to a total of $170 billion and making it the most expensive year yet for the war.” [Reuters, 2/2/07]
7)MAY 12, 2007: Billions in oil missing in Iraq.
“Between 100,000 and 300,000 barrels a day of Iraq’s declared oil production over the past four years is unaccounted for and could have been siphoned off through corruption or smuggling, according to a draft American government report. Using an average of $50 a barrel, the report said the discrepancy was valued at $5 million to $15 million daily.” [New York Times, 5/12/2007]
8)JULY 19, 2007: Report: Iraq war to cost $550 billion by October. [Bloomberg, 7/19/07]
9)OCTOBER 8, 2007: Brown announces phased withdrawal from Iraq, says troop reductions have made Basra ‘calmer’. [BBC, 10/8/07]
10)NOVEMBER 9, 2007: Iraq veteran healthcare may be $650 billion claims a group of noted physicians. [Boston Globe, 11/9/07]
11)NOVEMBER 13, 2007: The economic costs to the United States of the wars in Iraq and Afghanistan so far total approximately $1.5 trillion, according to a new study by congressional Democrats that estimates the conflicts’ “hidden costs”– including higher oil prices, the expense of treating wounded veterans and interest payments on the money borrowed to pay for the wars. [Washington Post, 11/13/07]
12)FEBRUARY 6, 2008: Bush administration abandons long-term “security guarantee” with Iraq, CQ reports. As one administration official said, “We say, look, if you want a security guarantee, that will be a treaty, and a treaty will have to go to our Senate,” endangering the whole agreement. [CQ, 2/6/08]
13)Oil trading manipulation probe by CFTC.http://money.cnn.com/2008/05/30/news/economy/oil_cftc/index.htm
14) The last entry is history now!
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