Category Archive: Bonds

Jan 14

My new ergonomic workstation

Yay Ergonomics! If you sit down all day (not good for your back or legs), use a mouse and keyboard all day (not good for your wrists, at least for the more susceptible to repetitive strain injury), and need lots of monitor space, here is the setup for you. I bought a new WorkRite Egonomics …

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Jun 27

Are your deposits insured? How to avoid losing money in the coming bank Armageddon

I am not one to use the term Armageddon lightly. But when major banks like National City (NCC) and Washington Mutual (WM) are trading under 30% of book and Wachovia (WB) is trading at under 50% of book value, what othe term is appropriate? The market is pricing in a fair probability of a number …

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May 08

The Coming Mortgage Crisis Part III: Low Interest Rates Do Not Make Housing More Affordable

Many people have argued that the current high house price to income ratio is not reason for house prices to decline, considering that interest rates are very low now. These people argue that what is important is not the actual price of the house, but the mortgage payment required to carry the house (for an …

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May 05

The dumb way to steal from your investors

If a manager who runs a $30 million hedge fund decides to embezzle money, it usually makes sense to actually embezzle it and then run away, rather than just transferring it to a shell-company brokerage account and then losing half of it selling short Treasuries. Evidently someone forgot to give that sage advice to Matthew …

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Apr 30

The Coming Mortgage Crisis: Part II

Things are different this time. That is what I argued in my previous post on the coming mortgage crisis. Exploding option ARMs will lead to record foreclosures, which will cause house prices to further decline, which will cause many households to have negative equity. Rather than pay mortgages that are larger than house values, people …

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Apr 22

The coming mortgage crisis

If you read the papers and watch the news, you may believe that we are in and have been in a subprime mortgage crisis for the last year or so. That is true. Many pundits are also saying that the subprime crisis is nearing its end. That is also true, to a point. Subprime mortgage …

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Mar 10

Interim Performance Review

Your humble blogger is not averse to eating crow. So it is time to admit that I have been wrong so far about Frederick’s of Hollywood [[foh]] (Movie Star Inc prior to a recent reverse merger). It is difficult to invest without knowing all the information, and I appear to have been over-optimistic about the …

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Feb 20

The Subprime Primer

A slidshow on Google Docs. Enjoy. Disclosure: I did not create the comic and I do not know who did.

Feb 19

Paye Tes Dettes!

The title of this post comes from the Charles Trenet song about the importance of paying off one’s debts (full lyrics). In the search of good value we must be willing to take necessary risks. We must be willing to bet on struggling companies, sometimes with bad management, sometimes in struggling industries. We must never …

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Feb 11

Financial Armageddon 2008: Part II

Well, it looks like my thoughts on a big financial catastrophe this year were not simply the inane ravings of a lunatic. Nouriel Roubini thinks very similarly to me. While neither he nor I am sure that this will happen, it is a distinct possibility, and it is worth preparing for it.

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