Trade Naked » Macro

10 Lessons Already Forgotten

Thu, 05 Nov 2009 19:03:44 +0000

Great slides and from a great short seller, Chanos, from a talk he gave at the University of Virginia. Pessimists are more realistic than optimists, though they don’t do as well usually, the psychologists tell us. Need to stay a little paranoid when all is going well.

Click on the big blue writing to see the slides.

Excerpts From Art of Successful Investing Conference

Mon, 02 Nov 2009 17:00:09 +0000

Felix Zulauf, a Swiss money manager, sees the market peak in early 2010 if the US GDP numbers remain strong, and in the fall of 2010 if they weaken. Here’s why:

Ron Baron runs several equity mutual funds focusing on bottom up stock picking. He believes that stocks are cheap. He also discusses real estate.

Marc Faber, a Hong Kong based Swiss analyst, editor of the Gloom, Boom, and Doom report, discusses emerging markets in detail, and the US dollar.

Gloom Boom and Doom

Fri, 25 Sep 2009 14:40:09 +0000

Marc Faber, a Swiss analyst based in Honk Kong, editor and publisher of the Gloom, Boom & Doom Report manages to discuss boom and doom right here and spread a little gloom as he discusses the future effects of the government stimulus.

Here he talks about inflation in the system and how it shows up.

What Does Freight Tell Us?

Thu, 17 Sep 2009 15:32:57 +0000

In yesterday’s video clips Warren Buffett said that he would look at freight tonnage if he could only look at one thing. Here Lee Klaskow discusses rail and truck freight flows. This really tells you what is going on with the economy. It is like counting cardboard boxes used by a manufacturer when you want to verify his production numbers.

US Dollar Main Funding Currency

Wed, 16 Sep 2009 16:30:50 +0000

What that means is that investors world wide are happy to sell dollars to buy other assets. That has been a large driver of the rally in emerging market stocks, oil, gold, and other commodities. Nick Parsons of National Australia Bank is very interesting to listen to.

Warren Buffett on the Economy and Lehman

Wed, 16 Sep 2009 15:24:31 +0000

Here Buffett discusses the economy, flat, no bounce yet and what numbers he looks at to evaluate the economy.

Warren Buffett talks about the busy weekend of phone calls when Barclay’s was trying to buy Lehman Brothers. He also talks about looking at the property and casualty business of AIG.

More Bank Losses?

Tue, 15 Sep 2009 18:36:02 +0000

Chinese importers buy commodities through the over the counter futures market. Their counterparties are large Western banks. If the Chinese government lets them walk away from the contracts, the banks will have another source of large losses.

A ‘Bog – like Recession’

Thu, 03 Sep 2009 16:20:46 +0000

Marshall Gittler from Deutche Bank spent 19 years in Japan. His perspective is, I believe, the right one since we were in a liquidity trap like Japan was for ten years. He comments on a wide range of issues. His main point is reassuring, that we are in a normal recession now, not the unprecedented freeze up of last fall.

Commenting on Plosser’s comment that interest rates will have to rise as sharply as they fell, he says that may be in a year or two. The Fed doesn’t raise interest rates until six months after unemployment peaks. Since unemployment is still rising and may stay high for quite some time, interest rates probably won’t rise for a time.

Why Loan Loss Reserves Is So Interesting

Tue, 01 Sep 2009 15:51:00 +0000

Eugene Ludwig has been one of the saner voices in the financial world. He was comptroller of the currency for five years under Clinton. Now he advises banks through his vehicle, Promontory Financial Group.

Some points of the discussion:

Five percent of the banks are on the FDIC watch list.
Letting Lehman Bros fail was a big mistake.
Through the cycle provisioning for loan losses is a good idea.
Does the market punish banks that reserve too much?
Large capital cushions and fortress balance sheets are rewarded.
Should we let bankers have more judgment?

For example, SEC told SunTrust to reduce reserves so that they couldn’t manage earnings by managing their reserves. The idea here is not to allow banks to put too much money in reserve for loan losses when times are good. Banks want to do that so that they can smooth out their earnings. In good times they withdraw income into their loan loss reserves so that in bad times they can release those reserves and show more income.

On the other hand, through the cycle provisioning, which they briefly discuss, would allow just that kind of smoothing so that banks would have the money they need in reserves when they get hit with large losses on the loans that they have made.

The real problem was that banks were able to syndicate many of their loans and get them off their books. They should have to keep skin in the game.

Not Reappoint Bernanke?

Fri, 21 Aug 2009 13:34:09 +0000

Just when I’ve learned to spell his name and pronounce it. The meeting at Jackson Hole is the focus of this twelve minute video with Robert McTeer the former head of the Dallas Fed.