Trying to Explain
March 30, 2010 at 1:19 pm | Posted in wall street | 5 CommentsA good friend from the UK follows our markets and even our politics pretty closely, so when he recently asked why we spend 2.5 times as much (purchasing power adjusted) on health care as the OECD average, I had to stop and think about it.
After all, we don’t even cover (unless you count emergency rooms) roughly 10% of our citizens. We don’t live as long, and we have a higher infant death rate.
Plainly a lot of our problem is our diet. Some might say being the center of the video game world and having 200 channels of TV adds to the problem.
The Beat(ing) Goes On
March 30, 2010 at 12:42 pm | Posted in wall street | 1 CommentSome traders that I respect have exited the amREIT group, and I know they’re sleeping better as a result. The expected widening of spreads from the Fed ending quantitative easing seems to have been offset by Fannie and Freddie accelerating paydowns through loan buyouts, and by the fact that their regulator has permitted them to resume buying for portfolio.
In short, there are cross-currents and rip tides, and only the strongest and smartest swimmers should be in the water.
Having said that, even a strong job creation number this Friday is unlikely to move the Fed to tighten short rates any time soon.
Strangling IOC Again
March 29, 2010 at 10:12 am | Posted in wall street | 3 CommentsJust a quick note to say that I’ve put on the May 60/70 put/call strangle, netting around $12. It can be done at the bid prices simultaneously for $11 net proceeds.
If you don’t understand the first sentence, then you probably shouldn’t follow this strategy.
What it means, by the way, is that I sold $60 puts and $70 calls for $12 proceeds. If the stock closes third week in May between $60 and $70, I keep all the money. To lose money, it has to close below $48 or above $82.
Such a Deal!
March 28, 2010 at 1:10 pm | Posted in wall street | 5 CommentsImagine that you ran a big company and that you wanted to hold down payroll costs.
One way you would do that is to offer nice benefits. AT&T, John Deere and Caterpillar did exactly that decades ago when they offered to pay for retiree prescription drugs.
Since none of those companies was ever a charitable organization, I have to assume they got wage concessions in exchange for the benefit, and that they were satisfied with the contracts they entered.
In 2003, along came Medicare Part D.
Value Trap Snaps Shut
March 26, 2010 at 4:33 pm | Posted in wall street | 2 CommentsI know how those flies feel now. You know, the ones that smell the honey scent from Venus flytrap plants.
I’m not just full on amREITs, I’m stuffed.
Having already gone overweight, imagine my distress (or maybe you just have to check your own emotional state) as the group took a pounding,, with the cheapest ones getting pounded the most.
Color Me Stunned
March 24, 2010 at 7:46 pm | Posted in wall street | 3 CommentsI was an interested observer of the short selling wars that went on from about 2003 until the meltdown in 2008.
When the appetite of the short sellers was no longer satisfied by destroying small financial companies and hi-tech or pharmaceutical startups, they turned on Wall Street itself. At that point, even legal short selling was halted.
There have to be limits after all.
Help, I’ve Fallen
March 23, 2010 at 9:38 am | Posted in wall street | 1 CommentI know, the personal alarm company crew has registered those words (can you really own exclusive rights to a normal English phrase?)….
I’ve fallen into a value trap and I can’t help buying more.
Several stocks were called away through covered calls again last Saturday, an event I hope continues to happen every month. It left me starting this week with more than 15% cash in the IRA’s.
They Still Don’t Get It
March 22, 2010 at 3:28 pm | Posted in wall street | 7 CommentsIn spite of facts like Tenet Healthcare rising 9.5%, making it the biggest riser among the S&P 500, or headlines like US Stocks halt global drop, the analysts and TV-approved fund managers continue to pretend that the weekend vote to give entrepreneurs and small businesses a break has nothing to do with our economic future.
While I still believe our health care payment system and its built-in incentives cost us roughly twice as much as they should, this legislation does put individuals and small businesses into a much larger actuarial pool. That will keep those health insurance customers from being screwed by premiums two and three times as high as paid for the very same people when they are part of large corporate groups.
That’s huge. It will finally free people at the peak of their professional lives to create new jobs, new companies, and even whole new industries.
Hedging the Hedge
March 17, 2010 at 9:42 am | Posted in wall street | Leave a commentNatural caution drove me to hedge last week, as I mentioned in a comment.
I bought the 2x real estate inverse ETF that trades under symbol SRS and the 3x financial inverse FAZ, following the logic that financials and real estate had gone too far, too fast in this year-long rally.
Silly me.
Escrow Scam Redux
March 15, 2010 at 12:36 pm | Posted in wall street | 2 CommentsIn the early 80′s, mortgage lenders had a very sweet deal when it came to servicing the loans.
They would require that (most) borrowers pay enough in the monthly payment to cover the mortgage, and to cover real estate taxes and fire insurance.
Fair enough. After all, they were protecting the value of the mortgage loan, which was roughly 80% of the purchase price. So why call it a “scam?”
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Having your say
Conscience of a cons… on JPM Proves My Point Taymere on JPM Proves My Point hhill51 on JPM Proves My Point Conscience of a cons… on JPM Proves My Point George on ARNA Gets Positive FDA Panel…
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