Fannie and Freddie Reform Is Necessary, but Not at Expense of Private-Sector Investment

Private investors and the government don’t always make easy bedfellows and nothing exemplifies this more than the case of Fannie Mae and Freddie Mac. After verging on collapse in 2008, the government-backed mortgage groups are now turning significant profits, but investors are not happy. Since their inception, the structure of Fannie and Freddie has been […]

No, the Hedge Fund Industry Is Not Doubling or Tripling

Every now and again, an article or piece of research crosses my desk that is so wrong-headed, it demands a riposte. Today’s deserving article is in the WSJ based on a survey from Citi: Hedges’ Assets: $5 Trillion; with the sub hed Funds May Triple Over Five Years, Survey Says; New Offerings to Stoke Growth: […]

2011: Disastrous Year For Mutual, Hedge Fund Managers

“Hedge funds have made massive mistakes. We are less and less willing to invest with these people because at the point when you need them the most, they’re worth the least.” -George Feiger, chief executive officer of Contango Capital Advisors, wealth management arm of Zions Bancorporation. Feiger manages $3.3 billion at Contango and Western National […]

Denial in the Mortgage Industrial Complex

I just came back from the AmeriCatalyst conference in Austin, which was a packed two days focused on the state of the housing and securitization market. The panels were very informative, and it was also good to see some of the people I’ve read or heard about, in particular the leading analyst, Laurie Goodman of […]

FED Outgunned, EMU Outflanked

As I read the latest round-up of comments by Fed officials that they are certainly not ruling out another round of asset purchases I am wondering whether this signals another round of actual quantitative easing by the Fed or whether investors should change their mindset back to before the crisis where it wasn’t the USD […]

The Double-Edged Sword of ‘Investing’ in Volatility

A new research paper casts some doubt on using volatility as an asset class. The warning isn’t unexpected, given that the broad themes of the paper’s findings have been discussed for years. Nonetheless, “The Hazards of Volatility Diversification Volatility” (by Carol Alexander and Dimitris Korovilas at the University of Reading) is a timely reminder that owning (or shorting) volatility directly can be a complicated affair.

Pyramid Builders

It is a little surreal that stocks were poised for substantial further gains after September.  All the risk factors are there, and the warning signs getting louder.  However, thanks to people like John Paulson, who are “naïve optimists” as phrased by The Wall Street Journal (see Paulson and the Bulls Bounce Back), and David Tepper, who is opportunistic in taking the Bernanke put, the market got back to life in September.

The Greatest Show on Earth

Welcome back my friends to the show that never ends

We’re so glad you could attend

Come inside! Come inside!

Come inside, the show’s about to start

guaranteed to blow your head apart

Rest assured you’ll get your money’s worth

The greatest show in Heaven, Hell or Earth

Karn Evil 9 Emerson, Lake and Palmer Brain Salad Surgery

  

For the past few decades, the greatest show on earth has been the global stock markets. The gyrations of markets make for a compelling narrative: From boom to bust and back again to boom and bust.

Welcome back my friends to the show that never ends