The issue of allowing less requirements for smaller companies already took its toll. It was clear that this was going to become a problem. It was better to allow private companies to sell shares than to eliminate requirements based on size. Networking and the elevator pitch have replaced decision making in the last ten years.
For first time there was a compassionate calling to allow smaller companies to do less paperwork. This decision undermined the purpose of the practices without providing a way to meet the requirement.
The main purpose of the paperwork is not for the company to do; it is for the investors to have. They eliminated procedures without satisfying the need that created them.
A successful small company crashed in less than a year of going public without any transparency.
The market is becoming secondary when automated traders have priority, insider lockout periods are flexible, and public companies don't need to report as much leaving investors on their own. Again, it seems the system is forgetting why it was built.
This makes Gross's overreaching statement that equities are dead a lot more credible.
Hologram IPO Holds Lesson for Investors http://on.wsj.com/OjERIQ
Thursday, September 13, 2012
Sunday, September 2, 2012
The imprint of TheFacebook.com
In the history books of positivism, American mysticism, and their consequences in actual implementation, there is a new great solemn event: the 2012 California budget.
In their forecasted budget, California accounted for the taxes that a successful Facebook IPO would have brought to the state.
The forecast accounted for an extra 2.5 billion over five years. The interesting fact about this type of decision making is that the consequences tend to double the effects in the negative direction. It is one of those interesting proportion rules in nature.
They just didn't loose the 2.5 billion tax revenue they predicted leaving them at zero. Now they are probably an extra 2.5 billion in the red.
The ramifications of simple decisions like the Facebook IPO ripple throughout society just to amaze us. It makes it so easy to visualize the collapse of a system. Probably only another mystic positive outlook forecast could fix the situation this time.
In their forecasted budget, California accounted for the taxes that a successful Facebook IPO would have brought to the state.
The forecast accounted for an extra 2.5 billion over five years. The interesting fact about this type of decision making is that the consequences tend to double the effects in the negative direction. It is one of those interesting proportion rules in nature.
They just didn't loose the 2.5 billion tax revenue they predicted leaving them at zero. Now they are probably an extra 2.5 billion in the red.
The ramifications of simple decisions like the Facebook IPO ripple throughout society just to amaze us. It makes it so easy to visualize the collapse of a system. Probably only another mystic positive outlook forecast could fix the situation this time.
Wednesday, August 22, 2012
The Americas
Still holds the shores where fleeing capital runs to. The Hong Kongian Vix jumped 40%.
It seems that the US economy might not have any other way to go but up. Direct investment is declining across the globe. And here is the US economy once more, standing again at the shore watching capital swim its way looking for dry land.
It seems that the US economy might not have any other way to go but up. Direct investment is declining across the globe. And here is the US economy once more, standing again at the shore watching capital swim its way looking for dry land.
Monday, August 20, 2012
Muni Money Mani Mo
More than a handful of analyses have been ditched out like out of a toaster about how Muni defaults are really not a risk.
The Meredith got it all wrong.
Meanwhile, Buffet just recalled all his defaults swaps on all muni debt. This is usually an expensive move having to recall the insurance at a premium. If someone can afford it, he can, and he did.
If he had the capital to recall it early; then he doesn't need the capital to invest it somewhere else. So why do it.
I think the FED calls this move Quantitative Ease. They also act like this with very old bills and with counterfeit. They just take them all out and disappear them.
It is a pretty terminal decision for The Long Term Value Investor.
The Meredith got it all wrong.
Meanwhile, Buffet just recalled all his defaults swaps on all muni debt. This is usually an expensive move having to recall the insurance at a premium. If someone can afford it, he can, and he did.
If he had the capital to recall it early; then he doesn't need the capital to invest it somewhere else. So why do it.
I think the FED calls this move Quantitative Ease. They also act like this with very old bills and with counterfeit. They just take them all out and disappear them.
It is a pretty terminal decision for The Long Term Value Investor.
Sunday, August 19, 2012
The July Yield
It seems naive to read warnings to the buyers of corporate bonds that they will loose money. The basic assumption is that both sides of the transaction are aware of the basics, they should just have different expectations.
The explanation given is that buyers are looking for quality investment. Under what calculation, a sure drop in price becomes a positive return?
There could be a sharp pencil expecting still lower yields in contrast to an uncertain world where US Corporations might continue making a deeper dent.
In the other hand, in a global market, the expected depreciation of other currencies might easily cover the devaluation of the principal. Then, it comes the reinvestment at higher yields if the warnings are correct. But this already makes it an unsafe strategy compared to what the original assumption was when trying to explain why so many buyers are snatching very expensive bonds.
Follow the money and the end of the month data, and answers might reveal themselves.
------/////
The numbers show that a lot of the flight to bonds are 401k owners.
The explanation given is that buyers are looking for quality investment. Under what calculation, a sure drop in price becomes a positive return?
There could be a sharp pencil expecting still lower yields in contrast to an uncertain world where US Corporations might continue making a deeper dent.
In the other hand, in a global market, the expected depreciation of other currencies might easily cover the devaluation of the principal. Then, it comes the reinvestment at higher yields if the warnings are correct. But this already makes it an unsafe strategy compared to what the original assumption was when trying to explain why so many buyers are snatching very expensive bonds.
Follow the money and the end of the month data, and answers might reveal themselves.
------/////
The numbers show that a lot of the flight to bonds are 401k owners.
Wednesday, August 8, 2012
Hayek
I am not sure. It could have been his idiosyncrasies. When Paulson went on Charlie Rose after he had left office, it seemed his relation with Goldman Had become a soft spot.
With no doubt, at the moment of crisis, his closeness became the only venue he could see for a solution.
There have been interesting questions raised about what could have been done when it all happened.
Way before they even acknowledged the crisis, the wise men spread the rumor of allowing Hayek run free. It was a clear solution before the too big to fail was pitched the same way Chrysler became one of three.
It would have been painful, but the proponents showed the vision. The business lost should have been satisfied by competitors. Instead, it dragged not only loosing the business but also loosing the demand.
With no doubt, at the moment of crisis, his closeness became the only venue he could see for a solution.
There have been interesting questions raised about what could have been done when it all happened.
Way before they even acknowledged the crisis, the wise men spread the rumor of allowing Hayek run free. It was a clear solution before the too big to fail was pitched the same way Chrysler became one of three.
It would have been painful, but the proponents showed the vision. The business lost should have been satisfied by competitors. Instead, it dragged not only loosing the business but also loosing the demand.
Wednesday, August 1, 2012
The New Rising Global NFL league
The NFL is a league of stats. It seems the purity of the game is born from its unmatched transparency.
After all the turnmoil, there is the possibility that everything was just the prolog of what is to come.
If the Libor investigation bears undeniable proof, all the major banks have just become a target of compensatory lawsuits from the rest of the world that feels they have suffered from a strict and placist system with a rigged rule book.
After all the turnmoil, there is the possibility that everything was just the prolog of what is to come.
If the Libor investigation bears undeniable proof, all the major banks have just become a target of compensatory lawsuits from the rest of the world that feels they have suffered from a strict and placist system with a rigged rule book.
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