Posts Tagged ‘Berkshire’

Oracle Of Omaha Honors Subpoena

Oracle Of Omaha Honors Subpoena

International CEOs Attend Summit At Microsoft Campus

Courtesy of Karl Denninger at The Market Ticker 

So much for "transparency", "fair dealing" and similar.

Warren Buffett was "invited" to testify before the FCIC today.  He declined. 

Now one must understand that when a Congressionally-authorized panel "invites" you to appear, you’re not really being asked.  Right behind said invitation, should you refuse, is nearly-always a subpoena.

Buffett, believing that he has no duty to actually talk about what happened (especially with the ratings agencies of which he has, until fairly recently, held a major stake in via Moody’s), decided to say "nuts" to the invitation.

That in turn led to a subpoena, as expected. 

True to form of a snubbed "King" (remember, there’s kings and there is everyone else – the law applies only to the "everyone else") Buffett has failed to provide any sort of prepared testimony in advance to the FCIC.  That’s a snub too – it is common practice, and considered good form, to provide a written document containing your opening testimony a day or two before you appear so that the panel is prepared to respond to the gist of your comments.

Buffett, of course, deigned to schedule an interview with Tout TV just before going on, it has been announced.  So rather than provide his testimony to the Congress, he will instead give it to CNBS and allow them to spin it into whatever they’d like just before going in the dock.

That’s nice.

The oligarchs are such a sniveling pack of frauds.  If there’s nothing to be disclosed of importance, why not show up at…
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Here Come The Hypocrites! (Berkshire)

Here Come The Hypocrites! (Berkshire)

Courtesy of Karl Denninger at The Market Ticker 

That didn’t take long…

WASHINGTON—Democrats took a step toward their goal of overhauling financial regulation, reaching a tentative deal to set restrictions on trading in exotic financial instruments known as derivatives.

Among the considerations still in the balance: A big provision being sought by Warren Buffett in recent weeks. A key Senate committee had changed its proposed overhaul of derivatives regulation after lobbying by Mr. Buffett’s Berkshire Hathaway Inc., potentially helping the famed investor avoid a financial hit, congressional aides say.

I thought these were weapons of financial mass destruction Warren?

What’s the problem?  You don’t want to be forced to recognize the economic and accounting reality of your transactions?  I don’t see why that should be a problem.

Posting margin on underwater positions is a reality for everyone who trades on margin – and you do a lot of it.  There’s no reason why anyone – you included – should not have to put forward margin – in cash – just like everyone else.

Yeah, I know, Berkshire is "Strong".  So what?  That’s not material to the point at hand, which is that when you are short a "PUT", which is effectively what you are, and the position is underwater, you should be required to post margin!

Hot globe exploding

Reliance on "future economic strength" to avoid this requirement is a big part of why the system nearly blew up.  You were a part of it writing those contracts, and you now want to be exempted from safety and soundness requirements on something you identified – in public – as a dangerous practice.
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A few thoughts on the Burlington acquisition

A few thoughts on the Burlington acquisition

Courtesy of Vitaliy Katsenelson at Contrarian Edge

warren buffettI have tremendous respect for Mr. Buffett.  But every word that comes out of his mouth should not be looked upon as prophecy, or the gospel truth.  I get a feeling that Buffett has been canonized into a value investor saint  – investors and the media worship the ground he walks on and the air he breathes.  The media are unable to get any critical quotes from his investors, and nobody wants to be caught disagreeing with the Oracle of Omaha – after all he’s been right more often than wrong – and so we only get positive puff pieces.  On the rare occasion when Berkshire Hathaway stock declines more than the market, you see an article asserting that “Buffett has lost his magic touch,” but these articles are usually followed by stellar performance by Berkshire.  Though Buffett deserves admiration – he is brilliant and likable and he has achieved incredible returns for his investors over the last half-century – he should not be canonized, and not everything he does or says is the ultimate truth.  

Most investors agree with Buffett’s criticism of Kraft’s decision to buy a fairly valued (or overvalued) Cadbury at 22 times earnings (over the past 15 years, its average price-to-earnings ratio has been 21), using Kraft’s undervalued stock.  Cadbury runs a global, noncyclical confectionary business that, if properly managed, should have a very high return on capital.  Buffett, a shareholder of Kraft, was very public about his dismay – he said he felt poorer when Cadbury accepted Kraft’s increased offer.  

 But though many agree with Mr. Buffett’s assessment of the Kraft/Cadbury deal, investors and media are completely ignoring Berkshire’s own, $30-billion-plus acquisition of a very cyclical, capital-intensive, not terrifically high-return-on-capital business – Burlington Northern.  A railroad for which Mr. Buffett’s Berkshire will lay out 18 times earnings (over last 15 years its average P/E was 15); and to make it even worse, part of the deal will be financed by issuing what Buffett recently called “cheap” Berkshire stock.  Burlington stock is not cheap, it is fairly priced at best, and likely overpriced.  Also, Buffett owning Burlington Northern will not make the railroad business any more valuable.  There is little value to be unlocked in this business, and Buffett will practice his usual hands-off approach. 

Though Mr.…
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Testy Tuesday – Dow 9,650, Berkshire $60 Edition!

Wheee, this is fun!

Just two weeks ago, on October 17th, I warned in the Weekly Wrap-Up that it was "Dow 10,000 or Bust" for the next week and we failed that one and last Wednesday we were looking to hold NYSE 6,900 and THAT failed too.  Now we enter into the second phase of our limbo game where the deep-voiced guy asks the question "how low can you go?" and we’ll be setting our next bar at our long-standing 9,650 target for the Dow,  which we are already hitting in pre-market trading.  If that fails, we’ll have to look down to S&P 1,000.  As you can see from Jesse’s Chart, we took a nice bounce off serious resistance yesterday but we’re just not feeling it yet, even though the market is now as technically oversold as it was in March

Yesterday was like a roller coaster and my first Alert to Members of the morning targeted 9,775 as the on/off line for our bullish/bearish posture on our DIA covers.  We whipped past that line right about 10 am as we got good reports from ISM, Pending Home Sales and Construction Spending but by 12:45 we had broken back down so I sent out an Alert calling to refocus back to 55% bearish by adding the DIA Jan $100 ($5) and Jan $102 puts ($6.20), already covered by the Nov $99 puts ($2.50). 

The reason we mess around with our covers is we don’t want to flip in and out of our option positions, which are generally either straight bearish or well-hedged long positions, is because options carry a relatively large bid/ask spread and cost you money every time you get in and out.  So, on the whole, we’d rather let our over-riding cover plays, like our DIA spread, adjust our stance as conditions change, making a single adjustment that keeps us balanced as we ride out the market waves. 

It’s been a couple of weeks since we had a good, old-fashioned stick save but we got a mother of one yesterday (as seen in Dave Fry’s chart) which was right on schedule as Kustomz bought it up in Member Chat at 3:09 and I agreed at 3:19 that "It does feel like a pre-stick move" and we grabbed VIX $25 puts at .85 to protect ourselves from a sudden surge in complacency.

By 3:33, my next comment to Members was: "The stick lives!" but…
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More Smelly Emissions From Omaha

More Smelly Emissions From Omaha 

Warren BuffetCourtesy of Karl Denninger at The Market Ticker

One would think that Buffett would be a bit more circumspect when his holdings have benefited so wildly from the fraudfest of the last few years:

The “gusher of federal money” has rescued the financial system and the U.S. economy is now on a slow path to recovery, Buffett wrote in a New York Times commentary yesterday. While he applauds measures adopted by the Federal Reserve and officials from the Bush and Obama administrations, Buffett says the U.S. is fiscally in “uncharted territory.”

The "gusher" has done no such thing.

As I have repeatedly pointed out (including in the Tickers of the last two days) the transmission mechanism in our monetary system – the "moneyness" of debt transmission and sale – remains broken.

It remains broken because we have refused to prosecute and remove those who have committed fraud from the system, we have refused to force honest marks to be taken on these so-called "assets", and we have refused to clear the system of the bad debt.

We have instead "gushered" newly-issued Federal Debt into the system.

This is similar to someone presenting in the emergency room with a severed femoral artery.  By continually injecting huge amounts of blood you can prevent circulatory collapse and the death of the patient.

However, your ability to continue this path of "treatment" is limited by your supply of blood.  If you do not repair the severed femoral artery before you run out of blood supply the patient will die.

We have done nothing about the severed femoral artery.

The government is trying to spark business and consumer spending through a $787 billion stimulus plan spanning tax cuts and infrastructure projects, while the Treasury and the Fed have spent billions more on separate programs to rescue financial institutions and resuscitate the banking system. The U.S. budget deficit is forecast to reach a record $1.841 trillion in the year that ends Sept. 30.

There’s the draining of the blood bank.  How much longer can we continue to draw on what our policy-makers seem to think is an unending credit supply of accumulated reserves in China and Japan?

This much is certain: There is a finite supply,…
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Zero Hedge

China Appeals To "Kind Angels" Of Biden Administration, Blames Trump For "Burning Bridges"

Courtesy of ZeroHedge View original post here.

While essentially placing sole blame on Trump and his top officials, foreign ministry spokeswoman Hua Chunying said in the latest press briefing remarks that "kind angels can triumph over evil forces" in America.

"In the past years, the Trump administration, especially (former Secretary of State Mike) Pompeo, has laid too many mines that need to be removed, burned too many...



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ValueWalk

These Are The Top Ten Biggest Mutual Funds

By Aman Jain. Originally published at ValueWalk.

Mutual funds are among the most reliable asset classes. It pools money from investors and then invests it in different securities, such as stocks, bonds and more. Investors buy units of mutual funds, giving them a part ownership of the fund and in the income that it generates. Mutual funds are a good way for investors to invest in stocks that are otherwise out of their reach. If you are also planning to invest in this asset class, then detailed below are the top ten biggest mutual funds.

Q4 2020 hedge fund letters, conferences and more

Top Ten Biggest Mutual Funds

Our list of the top ten biggest mutual ...



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Kimble Charting Solutions

A Repeat Of The 2000 Dot.com Highs In Play?

Courtesy of Chris Kimble

Since the 2000 tech bubble and crash, tech stocks have regained their leadership form. Especially large-cap tech stocks.

Headlines have varied in focus from the “4 horseman” to “FANG” and “FANGE”, but one thing remains: Large-cap tech stocks have been the bull market leader.

So what about when large-cap tech lags the market? Not so good.

In today’s chart, we look at a “monthly” chart of the performance ratio of the Nasdaq 100 Index to the Nasdaq Composite. It’s basically a look at how large-cap tech stocks perform against the broader tech stocks world.

As you ca...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Saturday, 11 July 2020, 05:26:16 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: This is lack of liquidity means support is likely to break if it is tested hard!



Date Found: Saturday, 11 July 2020, 09:51:58 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: Nasdaq losing momentum.



Da...

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Politics

What is the 'boogaloo' and who are the rioters who stormed the Capitol? 5 essential reads

 

What is the 'boogaloo' and who are the rioters who stormed the Capitol? 5 essential reads

Rioters mass on the U.S. Capitol steps on Jan. 6. Samuel Corum/Getty Images

Courtesy of Jeff Inglis, The Conversation

In the wake of the insurrection on Jan. 6, the U.S. is bracing for the possibility of additional violent demonstrations and potential riots at the U.S. Capitol and state capitol buildings around the nation. W...



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Biotech/COVID-19

The simple reason West Virginia leads the nation in vaccinating nursing home residents

 

The simple reason West Virginia leads the nation in vaccinating nursing home residents

By mid-January, only about a quarter of the COVID-19 vaccines distributed for U.S. nursing homes through the federal program had reached people’s arms. Paul Bersebach/MediaNews Group/Orange County Register via Getty Images

Courtesy of Tinglong Dai, Johns Hopkins University School of Nursing

The urgency of vaccinating nursing home residents is evident in the numbers. The COVID-19 pandemic has claimed the lives of mo...



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Mapping The Market

The Countries With The Most COVID-19 Cases

 

The Countries With The Most COVID-19 Cases

By Martin Armstrong, Statista, Jan 12, 2021

This regularly updated infographic keeps track of the countries with the most confirmed Covid-19 cases. The United States is still at the top of the list, with a total now exceeding the 22 million mark, according to Johns Hopkins University figures. The total global figure is now over 85 million, while there have been more than 1.9 million deaths.

You will find more infographics at ...



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Digital Currencies

Bitcoin: why the price has exploded - and where it goes from here

 

Bitcoin: why the price has exploded – and where it goes from here

B is for blast-off (but also bubble). 3DJustincase

Courtesy of Andrew Urquhart, University of Reading

Bitcoin achieved a remarkable rise in 2020 in spite of many things that would normally make investors wary, including US-China tensions, Brexit and, of course, an international pandemic. From a year-low on the daily charts of US$4,748 (£3,490) in the middle of March as pandemic fears took hold, bitcoin rose to ju...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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