Posts Tagged ‘The Big Short’

TWO DECADES OF GREED – THE UNRAVELING

TWO DECADES OF GREED – THE UNRAVELING 

Courtesy of Jim Quinn at The Burning Platform 

We are currently in the midst of a Fourth Turning. This twenty year Crisis began during the 2005 – 2008 timeframe with the collapse of the housing bubble and subsequent repercussions on the worldwide financial system. It is progressing as expected, with the financial crisis deepening and leading to tensions across the world. It will eventually morph into military conflict, as all prior Fourth Turnings have. The progression from High to Awakening through the Unraveling took from 1946 until 2006. The most treacherous period of the Saeculm is upon us. The intensity of a Crisis is very much dependent upon how a country and its citizens prepare for the Crisis during the final years of the Unraveling. The last Unraveling period in U.S. history from 1984 through 2005 was symbolized by Boomer greed, materialism, debt and selfishness. When Michael Lewis graduated from Princeton University in 1985 and joined Salomon Brothers, I’m sure he didn’t realize that he would end up book-ending the Unraveling period in his two best-selling books about Wall Street.

In his latest book, The Big Short: Inside the Doomsday Machine, Lewis seems bewildered by the fact that his first book Liar’s Poker, written in 1989,  didn’t dissuade college students from pursuing careers on Wall Street. If Lewis had read The Fourth Turning by Strauss & Howe when it was published in 1997, he would have understood why the people on Wall Street couldn’t change. The generations were just acting out their part in a grand never ending cycle. Lewis explains what he thought would happen:

“I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance.”

Michael…
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Betting on the Blind Side

Betting on the Blind Side

By Michael Lewis, appearing in Vanity Fair

Michael Burry always saw the world differently—due, he believed, to the childhood loss of one eye. So when the 32-year-old investor spotted the huge bubble in the subprime-mortgage bond market, in 2004, then created a way to bet against it, he wasn’t surprised that no one understood what he was doing. In an excerpt from his new book, The Big Short, the author charts Burry’s oddball maneuvers, his almost comical dealings with Goldman Sachs and other banks as the market collapsed, and the true reason for his visionary obsession.

Excerpted from The Big Short: Inside the Doomsday Machine, by Michael Lewis, to be published this month by W. W. Norton; © 2010 by the author.

In early 2004 a 32-year-old stock-market investor and hedge-fund manager, Michael Burry, immersed himself for the first time in the bond market. He learned all he could about how money got borrowed and lent in America. He didn’t talk to anyone about what became his new obsession; he just sat alone in his office, in San Jose, California, and read books and articles and financial filings. He wanted to know, especially, how subprime-mortgage bonds worked. A giant number of individual loans got piled up into a tower. The top floors got their money back first and so got the highest ratings from Moody’s and S&P, and the lowest interest rate. The low floors got their money back last, suffered the first losses, and got the lowest ratings from Moody’s and S&P. Because they were taking on more risk, the investors in the bottom floors received a higher rate of interest than investors in the top floors. Investors who bought mortgage bonds had to decide in which floor of the tower they wanted to invest, but Michael Burry wasn’t thinking about buying mortgage bonds. He was wondering how he might short, or bet against, subprime-mortgage bonds.  

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ValueWalk

The Last Gold Rush...Ever!

By Jacob Wolinsky. Originally published at ValueWalk.

Excerpt from The Last Gold Rush…Ever! courtesy of Post Hill Press

Q3 2020 hedge fund letters, conferences and more

From The Gold Dollar Standard To The Mere Dollar Standard

Few realize that today’s US dollar is the third iteration of the country’s currency in less than a hundred years. (It is no consolation that other countries have done worse. Between 1986 and 1994, Bra...



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Phil's Favorites

Rabobank: "A Dangerous Moment"

Courtesy of ZeroHedge

By Michael Every of Rabobank

The markets have started a new week of trading in risk off mode (when this note was heading to press) amid fading expectations that the US Congress will pass another fiscal package. With just 8 days left until the presidential election, both sides may not have a sufficient incentive to reach an agreement. Even if there is no deal in the coming days, a fiscal stimulus is still likely to be agreed after the election to support businesses and households as the US is struggling to contain the coronavirus pandemic. In fact, President Trump’s chief of staff openly admitted that the US is “not going to control” the pandemic and instead will focus on “proper mitigation factors”, such as vaccines and treatments. Former Vice President Biden s...



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Zero Hedge

Rabobank: "A Dangerous Moment"

Courtesy of ZeroHedge

By Michael Every of Rabobank

The markets have started a new week of trading in risk off mode (when this note was heading to press) amid fading expectations that the US Congress will pass another fiscal package. With just 8 days left until the presidential election, both sides may not have a sufficient incentive to reach an agreement. Even if there is no deal in the coming days, a fiscal stimulus is still likely to be agreed after the election to support businesses and households as the US is struggling to contain the coronavirus pandemic. In fact, President Trump’s chief of staff openly admitted that the US is “not going to control” the pandemic and instead will focus on “proper mitigation factors”, such as vaccines and treatments. Former Vice President Biden s...



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Biotech/COVID-19

An epidemiologist explains the new CDC guidance on 15 minutes of exposure and what it means for you

 

An epidemiologist explains the new CDC guidance on 15 minutes of exposure and what it means for you

A girl wearing a mask walks down a street in the Corona neighborhood of Queens on April 14, 2020 in New York City. Johannes Eisele/AFP via Getty Images

Courtesy of Ryan Malosh, University of Michigan

The Centers for Disease Control and Prevention has new guidance clarifying what exactly “close cont...



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Politics

How to track your mail-in ballot

 

How to track your mail-in ballot

Make sure you know when your ballot is arriving, and whether it’s been accepted for counting back at your election office. erhui1979/DigitalVision Vectors via Getty Images

Courtesy of Steven Mulroy, University of Memphis

Many voters who want to participate in the election by mail are concerned about when they’ll receive their ballot – and whether it will get back in time to be counted.

The pandemic has caused interest in ...



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Kimble Charting Solutions

Doc Copper/Gold Indicator Breaking Out Again?

Courtesy of Chris Kimble

The Doc Copper/Gold ratio broke above a 2-year falling channel back in 2016 at (1). Following this breakout, it rallied for the next year. During that year, Copper related assets did very well!

The ratio peaked in the summer of 2018 and created a series of lower highs over the past two years.

The strength of late has the ratio attempting to break above dual resistance at (2).

If the ratio continues to push higher and succeeds in breaking out, Copper, Basic Materials (XLB), and ...



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Chart School

Dow Gann Angle Update

Courtesy of Read the Ticker

Time to see what happens to the Dow post US elections.

The Dow Gann Angle Target 3 (from 2007 top) is on the table, and what a ride that will be. The FED went BRRRRR is all the fundamental news you need to know. Gann angles are very good tool to see how the masses are pushing price.


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The last two US elections saw Bitcoin and the DOW rally well for 6 months, due to stimulus. The most bearish 2020 US Election case for the markets is a Biden win with the Senate and Congress controlled by the Democrats, somehow this blog feels that is very unlikely. So what could go wrong!


...

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Digital Currencies

Bitcoin: the UK and US are clamping down on crypto trading - here's why it's not yet a big deal

 

Bitcoin: the UK and US are clamping down on crypto trading – here's why it's not yet a big deal

Where there’s a bit there’s a writ. Novikov Aleksey

Courtesy of Gavin Brown, University of Liverpool

The sale and promotion of derivatives of bitcoin and other cryptocurrencies to amateur investors is being banned in the UK by the financial regulator, the Financial Conduct Authority (FCA). It is a...



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Mapping The Market

COVID-19 Forces More Than Half of Asset Management Firms to Accelerate Adoption of Digital Marketing Technology

By Jacob Wolinsky. Originally published at ValueWalk.

There is no doubt that the use of technology to support client engagement initiatives brings both opportunities and threats but this has been brought into sharp focus this year with the COVID-19 pandemic.

The crisis has brought to the fore the need for firms to enable flexibility in client engagement – the expectation that providers will communicate to clients on their terms, at their speed and frequency and on their preferred channels, is now a given. This is even more critical when clients are experiencing unparalleled anxiety from both market conditions and their own personal circumstances.

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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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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

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Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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