BerkeleyBob

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    • Mon Dec 1st 14:00 PM
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      Commercial Real Estate Not Immune to Economic Woes
      The commercial REIT I am long in, PLD, seemed largely immune to the credit meltdown for much of this year, but fell off a cliff in October and November and now trades in single digits, below $5.00. A plausible explanation for the drastic decrease is forced selling by hedge funds and mutuals; so far as I can tell, PLD was heavily owned by institutional investors. Not much comfort for individuals. Like any commercial REIT, PLD needed to borrow periodically, but gave every appearance of running a tight ship fiscally.
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    • Sun Nov 30th 18:00 PM
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      It's Time for the Fed to Get Serious - Barron's
      We will not see an end to the economic disaster until both varieties of bank (are there any investment banks left?) accurately assess and realistically value loan portfolios. The problem with the Fed and Treasury is they backed off of taking a preferred equity position in faltering lenders. You don't like FAS 157, come up with a better way to accomplish the result. We can not print enough money to shore up housing prices and the long term pain is going to exceed the short term gain, if any. I'd recommend reading Michael Lewis' article in the current Portfolio, Niall Ferguson's article in the current Vanity Fair. Both are lucid, unlike some posters here.
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    • Wed Nov 26th 13:22 PM
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      Commercials on Sirius XM: Benefit vs. Backlash
      I am a long time Sirius subscriber, listen mostly in the car. At home, I listen to the local (non-commercial) college station or the local NPR outlet. As to the latter, I donate but resent the non-commercial commercials and periodic fund raisers. I am willing to pay on a subscription basis for the music I like without commercials. Apparently Sirius XM, which attracts more comment, some of it rabid, than almost any other topic on this site is having a hard time integrating its programming and getting a universal receiver out. As for the stock, I bailed on it long ago. I always understood it was speculative and that both Sirius and XM would burn through a lot of cash until the startup infrastructure was paid off. Over the long run, their competition may be from internet radio, not terrestial. Terrestial radio is doomed and deserves its eventual collapse.
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    • Wed Nov 26th 13:08 PM
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      Is Starbucks a Bargain? It Almost Goes Without Saying
      Peet's (PEET) reported a pretty good quarter and has grown with little reliance on outside debt. It has not been a "hot" performer, but its shareholders probably sleep better at night... PS: Their coffee is better.
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    • Wed Nov 26th 13:03 PM
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      Bernanke Admits to Misjudging the Mortgage Crisis
      If Bernanke is the smartest guy in the room and he describes the secondary market as complex, why does all this remind me of the fanciful names the Enron scammers gave their trading? There was a great deal of intentional obfuscation and a great deal of regulatory blindness in both cases.
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    • Wed Nov 26th 12:50 PM
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      What Obama Needs to Know about Tim Geithner, the AIG Fiasco and Citigroup
      Complex issues here, some of the comments are informative, some not. Two central points emerge: 1) The damage to US reputation in the world financial market is incalculable and grave; 2) AIG appears to have been at the fulcrum of making book on leveraged CDO's and credit default swaps which were purchased by entities having no insurable or legitimate hedge interest in the underlying assets. It was not insurance, not regulated, and required apparently no reserve. Pure profit for AIG until the Ponzi scheme unraveled. Hank Greenberg is as unrepentant as Dennis Kowzlowski or any of the Enron gang.
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    • Tue Nov 25th 12:24 PM
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      Common Stock: A Thing of the Past?
      Perhaps the problems with the modern corporation is the issue of control and "ownership". Given the number and volume of shares held by institutional investors (mutuals, pension plans, etc.) and their traditional "hands off" policy as to corporate governance, the modern corporation is run by and for the benefit of management, not the shareholders. That is why excessive executive compensation, a long-overdue reform, never gets off the ground. I think an economist named Berle wrote on this long ago, after the '29 crash. There is some transparency and required disclosure, SEC filings, quarterly earnings reports and outside analysis (from the likes of the people who blessed bad loans with high ratings?) but there will be no shareholder "control rights" (undefined term) under the present system.
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    • Mon Nov 24th 11:34 AM
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      Fed and Citi Reach Deal, Bar Set for Troubled Banks
      Lenders hate mark to market accounting rule, but until and unless we get an accurate handle on the value of an institution's loan portfolio, it is all guess work and funny money. Too big to fail does not excuse some level of accountability for those responsible. Personally, I bailed on Citi and Freddie Mac long ago because I did not like what I was seeing. The closest thing I am long on that could be characterized as a financial is GE. Events seem to be moving too fast for Bernanke and Paulson--the latter looked a little ragged at his last press conference.
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    • Fri Nov 21st 13:47 PM
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      The Smoking Gun of the Credit Crisis: FICO
      Very interesting analysis. I get elevated blood pressure when I read WS Journal editorial garbage or (mostly) Republican jeremiads against the CRA and Fannie and Freddie. I have long suspected that the issues with Fannie and Freddie were not poor underwriting or appraisal practices but they did practice "creative" accounting and did respond to political pressure because of the inherent conflict between their quasi-public status and obligation to maximize shareholder return. California's quasi-public work. comp insurer, State Compensation Insurance Fund has had strikingly similar issues, investigations, resignations, etc.
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    • Fri Nov 21st 13:23 PM
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      Why This Isn't Financial Armageddon
      I wonder if there has not been sufficient recognition of international interdependence and if it is not time to review from the ground up the flow of capital. I suspect that much of the malaise in foreign economies (and I wouldn't take the poster's version of the high life as typical) comes from the export of toxic debt, whether characterized as CDO's or whatever other euphamism dreamed up by investment banks. If our commercial paper is loaded with fraud (phony ratings) and our corporations concealing non-performing "assets", why should a foreign national bank or institutional investor put full credence in, say, government debt? This may mean a painful re-examination and standardization of accounting standards globally. Some countries have their own, possibly malign, agenda, but the reality is that the world has grown too small not to try to bring everyone in under the same tent. Just my thoughts, no conclusion.
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    • Thu Nov 20th 12:14 PM
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      Music Moves to New Phase as CDs Fade
      A topic of considerable interest. I still buy CD and vinyl but am increasing downloads. MP3 is not satisfactory, but the ITunes higher quality releases are fairly close to CD quality. There are increasing numbers of high-resolution releases, some on small labels. I also purchase when an artist makes available CD's at a live performance, some of which are not otherwise available. This model of direct distribution is not common, but the record labels have a long dismal history of ripping off artists and what ever business model we end up with, I want to see fair compensation for the artists.
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    • Wed Nov 19th 13:14 PM
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      Cramer's Stop Trading! It's a Horrible Market (11/18/08)
      Retirees who get monthly annuity checks should be concerned--ask the beneficiaries of Executive Life structured settlements.
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    • Wed Nov 19th 13:12 PM
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      My Reconsideration: Why Share Buybacks Are Pointless
      Article confirms my gradual realization that buy backs are not a net benefit to the shareholder and that they are often announced when shares are trending up, not down. Executive over-compensation is a pet peeve, and dillettantedude (spelling?) has a point that incentive payments can be tied to eps or share price. As we have seen, management likes a big payday whether times are good or bad. I am gradually taking my lumps on some losers who don't pay dividends and getting more defensive in my stock picking.
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    • Tue Nov 18th 12:42 PM
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      Oh Mamma.com: SEC Charges Mark Cuban With Insider Trading
      I agree the SEC has been inept at the minimum and more likely as myopic as Inspector Cleuseau. Most of the significant enforcement activity came from the former NY AG, E. Spitzer. We don't know what the evidence will establish but we do know that 3/4 of a million is not pocket change but a small fraction of Mr. Cuban's net worth. Misplaced priorities? Probably. Was Martha Stewart guilty? Yes. Is Mark Cuban? We don't know yet but we do know that Hank Greenberg, the former CEO of AIG is still loudly bellowing about his innocence. The failure of the SEC to police the hedge funds, toxic CDO's and fraudulent credit ratings has done much more to impair investor confidence in a transparent an orderly market than anything Mr. Cuban did or allegedly did.
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    • Sat Nov 15th 13:46 PM
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      Why AIG Was in the CDS Business
      Hank Greenberg is certainly unrepentant and apparently thinks he has enough remaining assets to buy selected pieces of AIG. Recall he was dumped as CEO because of reinsurance sham transactions. Reinsurance is not regulated. AIG and others involved in derivative risk management used a variety of euphamistic (spell check doesn't like but I think it's correct) and opaque terms to disguise the essential nature of their transactions, in a manner quite reminiscent of the Enron energy bandits. These financial transactions were fairly far removed from conventional liability insurance, even if on an international scale...
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