Blogs

As the nature of markets evolve, you need to understand how collective inflows are influencing the trends in each asset class and changing the relationship between them. Rebalancing is crucial, but so is understanding what is going on in each asset class and how developments in one asset class will impact other asset classes.

Must and interesting reads for your weekend ponder. Some Evans-Pritchard goodness, cash calls, horse manure and a lot more.

All this for a measly $100 million paycheck? He only made $2 billion for Citigroup.

In investing, it's important to think unconventionally and creatively while at the same time considering risks - no matter how remote or unmanageable they are. I keep thinking: What would drive our interest rates up in the US?

Fed Governor Warsh wrote his 'Blog'on QE. He may have penned the words, but not without Bernanke's approval. This was intended to calm the concerns over QE. It did not work for me.

There is a clean energy revolution going on and it's just in its infancy. Those who can't see it are either blind or hopelessly ignorant. If pension funds are smart, they will start thinking about investing opportunistically in this sector now.

Jim Cramer calls a top in Treasury Bonds. So it must be.

Yesterday's mini sell off has brought out the dip buyers.

There probably is a lot of back slapping going around at the Fed and Treasury Department these days as the markets have risen on a flood of liquidity.

What do you have to do to make $675,000 at Freddie Mac? Not much. Why is the gigantic piece of dead wood hiring big buck talent? Big money politics, of course.

NOTE: AFTER I WROTE THIS ADDITIONAL DETAILS CAME OUT: KARI GOT A $2MM BONUS AND A GUARANTEE OF $3.75MIL!!!!

It's amazing how a year after the worst financial crisis in post-war history, when hedge funds were closing the gates of hedge hell, things have not changed on Wall Street.

The price correlation between equities and bonds of late has some argue that typically, if equities are trending higher, then bonds would head lower, and yield would be higher, due to concerns of higher inflation. So, the fact that bonds and equities in general are both firm seems to beg the question - which rally would end first - equities or bonds?

"… excess savings flowing in from Asia and the reckless lowering of interest rates by the Federal Reserve Board; the relation between executive compensation, short-term profit goals, and risky lending; the housing bubble fueled by low interest rates, aggressive mortgage marketing, and loose regulations; the low savings rate of American people; and the highly leveraged balance sheets of large financial institutions." - Richard Posner

In the environment we're heading into, I prefer liquid asset classes over illiquid ones and I certainly would pick and choose my private equity and real estate funds more carefully instead of writing big checks to every large buyout fund. I'd make sure that my private equity managers are not glorified financial engineers who came from an investment banking background, but guys and gals with solid hands on experience restructuring companies from the bottom-up.

You may recall that the crude spread gap opened just a few weeks after Lehman Brothers failed and AIG required a capital infusion. During the super contago phase of late 2008 and early 2009, the spread was so ridiculously wide that the rate of return was close to 70% at one point of time.
Those few who had a role in taking advantage of the super contango ended up boosting the spot oil price back to a more normal relationship to the outer months.