Posts Tagged ‘financiers’

Vintage Wine Turns Sour for Financiers

Vintage Wine Turns Sour for Financiers

By Alex Daley and Doug Hornig, Casey Research

Shopping basket red wine bottles

When the folks at a private equity firm gather at the holiday party refreshment table to talk about “vintage,” they aren’t commenting on the Château Pétrus.

The world of private equity financing doesn’t have high visibility, but it is big business behind the scenes. Unlike venture capital outfits – which provide startup money to very early-stage companies – those who play this game grab existing private companies, often through leveraged buyouts (LBOs). Each year’s investments are referred to as vintages, with some being more highly drinkable than others.

Now, some of the recent vintages look like they’ll turn out to be little more than vinegar.

Private equity investing has never been for the faint of heart. But investors continue to engage in it, because the payoff can be substantial. And for the first few years of the new millennium, it was a go-go place to be. With so much easy money sloshing around, the number of PE deals exploded, totaling over half a trillion dollars at the manic peak in ’07.

Then came the crash:

                                                                                                

It’s important to remember that credit was not a single bubble. It was a bubble machine. It created the housing bubble, which fueled the personal debt bubble (which in turn popped the housing bubble, but that’s another story). The mortgage market gave birth to a whole new range of derivatives, things like collateralized debt obligations (CDOs), mortgage-backed securities (MBSs), and the rest of the acronyms we’ve all become familiar with, even if we don’t quite understand what they do. (Don’t be embarrassed, neither did the financial geniuses who swapped them like baseball cards.)

Frantic trading in these newly printed scraps of paper created its own bubble, manufacturing an incredible amount of seeming liquidity in a very compressed time frame. We know the ultimate consequences to the balance sheets of our banks, and our government, by now. But there was more to it than that. The capital these transactions threw off had to go somewhere, and suddenly well-capitalized investors were pouring their
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About The Jobless Recovery ….

About The Jobless Recovery ….

Courtesy of Jesse’s Café Américain

For the first time we had a ‘jobless recovery’ after the tech bubble bust thanks to the wonders of Greenspan’s monetary expansion and the willingness (gullibility?) of the average American to assume enormous amounts of debt, largely based on home mortgages, the house as ATM phenomenon. Not to mention the large, unfunded expenditures of the government thanks to tax cuts and multiple wars.

household cash less liabilities

national debt
 

Now the pundits are talking about the hopes for another jobless recovery.

Who is going to go deeply into debt this time? It looks like its the government’s turn. And the expectation is that foreigners will continue to suck up the debt.

growth in public debt

Federal Debt (Percentage of GDP)
 

If you think this explosion of Federal debt will facilitate a stronger US dollar you might be suffering from ideological myopia or some other delusion.

Some years ago we forecast that the financiers and their elites would take the world down this road of leveraged debt and malinvestment, and then make you an offer that they think you cannot refuse. They will seek to frighten you with a collapse of the existing financial order, because that is what they fear the most themselves, for their own unique positions of power.

The offer will be a one world currency, which is a giant step towards a one world government, managed by them of course. Once you control the money, local fiscal and social preferences start to matter less and less.

This theory seems more plausible today than it did then.


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A year of Trump: how his incendiary style took the place of substance

 

A year of Trump: how his incendiary style took the place of substance

Courtesy of Clodagh Harrington, De Montfort University

Anyone looking for a visual representation of Donald Trump’s first year in office need only behold Time magazine’s cover marking the anniversary. Composed by artist Edel Rodriguez, it depicts Trump as a furious, bellowing mouth, his notorious hair rendered in livid flames.

For a year of poisonous rhetoric backed up with few substantial achievements, it could scarcely be more apt. Without even a glance at a policy checklist, the most casual observer knows that Trump has torn up the presidential rule book and set the shreds on fire.

Year One. My new cover for TIME magazine, on newsstands today....



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ValueWalk

Creating Bloomberg

By Akhlaqahmed9941. Originally published at ValueWalk.

An interview with billionaire founder of Bloomberg and previous Mayor of New York, Michael Bloomberg. In this interview, Michael discusses creating Bloomberg and how he made it successful. Michael also talks about New York more generally and surviving economic downturns.

]]> Get The Full Warren Buffett Series in PDF

Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

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Zero Hedge

Measuring The Equity Bubble - "You Are Here"

 

Measuring The Equity Bubble - "You Are Here"

Courtesy of Zero Hedge

Submitted by Francesco Filia via Fasanara Capital,

On best revisions for GDP and earnings in 2018 after Tax reform, the S&P is now less expensive than before, at just 57% above historical average...

...



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Insider Scoop

Wall Street Previews Netflix's Q4 Earnings: Rising Subscriber Numbers Drive Bullish Projections

Courtesy of Benzinga.

Related NFLX Needham's Laura Martin: Amazon Prime Price Increase Won't Affect Netflix, Roku Upcoming Netflix Earnings:...

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Digital Currencies

Bitcoin and cryptocurrencies are just the Beanie Babies of the moment

 

Bitcoin and cryptocurrencies are just the Beanie Babies of the moment

Courtesy of Vitaliy Katsenelson, Contrarian Edge

If you invested in the markets circa 1999, it is hard to observe the Bitcoin mania and not experience the feeling that you’ve seen this movie before and know how it will end – in losses and tears. The internet was a great idea that convinced a lot of great minds to invest capital and energy into businesses that have transformed the world – Amazon, eBay, Cisco, PayPal … the list is very long (though in fairness the list of non-survivors is even longer – but they are not here to remind us of their nonexistence).

R...



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Chart School

Short Covering Driving Gains in Semiconductors and Nasdaq 100

Courtesy of Declan.

The Nasdaq 100 breakout cleared channel resistance, the fifth significant breakout in four months. All technicals are posting new near-term highs which also meant the short generated on the tag of the rising channel is negated.


The Semiconductor Index also enjoyed a substantial breakout as short covering drove traders out of their positions. Technicals see an improvement with a relative gain against the Nasdaq 100.

...

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Biotech

How Alzheimer's disease spreads throughout the brain - new study

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

How Alzheimer's disease spreads throughout the brain – new study

Courtesy of Thomas E CopeUniversity of Cambridge

Harmful tau protein spreads through networks. Author provided

Alzheimer’s disease is a devastating brain illness that affects an estimated 47m people worldwide. It is the most common cause of dementia in the Western world. Despite this, there are currently no treatments that are effective in curing Alzheimer’s disease or preventing its relentless progressio...



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Mapping The Market

Trump Admin Bans CDC From Using Words Like 'Science-Based,' 'Diversity'

By Jean-Luc

These are the policies of a theocracy, not a modern democracy:

Trump Admin Bans CDC From Using Words Like ‘Science-Based,’ ‘Diversity’

The Trump administration has prohibited the Centers for Disease Control and Prevention (CDC) from using words like “science-based,” “diversity,” and “transgender” in their official documents for next year’s budget, according to the Washington Post.

Senior CDC budget leader Alison Kelly met with the agency’s policy analysts on Thursday to announce ...



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Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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