Archive - Nov 2009 - Blog entry

Recently, the Pragmatic Capitalist questioned who the mysterious large buyer of eMini S&P 500 futures (ES) was, when there has not been a corresponding large buyer of SPY ETF shares over the same short periods. We decided this warranted a further investigation to assess whether it is SPY or the ES that has historically had the greatest impact on the S&P 500 cash index. The results were surprising.

In developing my REIT short thesis, I am being forced to spend more time than anticipated quantifying the effect of explicit sell side manipulation combined with purposeful opacity in the CRE mortgage holdings as endorsed by our dear government. I am actually entertaining a direct head to head analysis competition with an entity such as Goldman Sachs that ends up explicitly detailing which properties of which REITs are underwater and by how much, which may end up in a "run on the REITs", by the banks (at least those with common sense), who don't want to be left with the least edible scraps at the table.

"Military Keynesianism" - the idea that war is the best economic stimulus - is false.

What's truly mediocre in Quebec is the media's pathetic coverage of the Caisse under Michael Sabia. If he isn't having second thoughts, it means he's ready to deliver on his promise and deal with his critics, which includes Quebec's media mafia.

There was a report by the Guardian this Monday that a “whistleblower” from the International Energy Agency (IEA) claims that IEA has been, for years, over-reporting the estimates of oil reserves around the world under pressure from the U.S. government. This would certaily be a cause for celebration by many peak oil theorists such as Matt Simmons, since on the surface, the story is quite plausible.

Give us real, SIMPLE reform, not thousands of pages of loopholes ...

Contrary to what you might have heard, higher military spending leads to HIGHER unemployment and lower GDP...

In the letter to the IASB, Jörgen Holmquist, director general of Internal Markets at the European Commission, said more assets might be marked to market under the new system than even under existing rules. He urged the IASB “urgently” to consider further changes.

Dodd's bill - while sounding good - is really an all-out attempt to save the current, broken system...

In this piece, we compare the relative performance of the 6 primary domestic equity markets, highlight extraordinary Fibonacci cycles on the VIX, illustrate possible dueling Head & Shoulders patterns between the S&P 500 and the VIX and address the current technical profile of the US Dollar

Saudi Aramco, national oil company of the world’s largest oil producer and exporter, decided earlier this month it will drop West Texas Intermediate (WTI) as the benchmark for pricing its oil for sale in the US market. The news instantly sparked speculation that other major producers would follow. Chavez (not surprisingly), reportedly already indicated Venezuela would follow Saudi’s lead adopting the new index.

Is this bill good or bad? What's it missing?

This from the FHFA. The private sector financial institutions nearly killed us. The public sector lenders might just finish the job.

For clues on inflation expectations in this carry-trade-crazed market, Tuesday’s auction of some $25 billion in 10-year treasury notes is something to pay attention to.

Disclaimer: The following set of links and associated cynical commentary touches on mature subjects and may not be suitable for some investors. Topics covered include: hyperinflation, sovereign default and yes, even investing in Zimbabwe.