June 2015


Snoopy-Typing-Away-1-CVV14J0D95-1024x768

Greece. I have no idea what will finally eventuate, but you have to think that the country continues to exist in some form and that its productive businesses continue. So you buy Greece now, while the blood is in the street.

Screen Shot 2015-07-01 at 7.30.57 AM

Advertisements

Snoopy-Typing-Away-1-CVV14J0D95-1024x768

In the midst of the Greek thing some stocks will likely get [much] cheaper. This stock is worth a look with a 5% dividend and boring line of business, nice solid addition to a portfolio.

Screen Shot 2015-06-30 at 6.43.23 AM

Snoopy-Typing-Away-1-CVV14J0D95-1024x768

However, counterfeit is also a medium of exchange. Therefore, a more precise definition of both money and counterfeit are required. Money mediates the exchange of full value for full value. Counterfeit represents the exchange of fractional value (or no value at all) for the exchange of full value. Money, therefore, represents productive work and counterfeit represents theft from productive work.

Aristotle NICHOMACHEAN ETHICS

Snoopy-Typing-Away-1-CVV14J0D95-1024x768

Greece lost a full 25 per cent of its GDP since 2009. No other European country ever faced such a manmade catastrophe in peacetime. Six years after adjustment policies came into place, the unemployment rate in Greece is 26 per cent and poverty has taken grip of large parts of the population. Unemployment has recently started to decrease somewhat, but not because growth prospects improve, but because many give up on the search for employment. At this moment of time there is no perspective for a recovery in the near future. Adjustment policies are necessarily painful, opined the German Finance minister in Davos. But what is their plan? Do they want Greece to go through another great depressions in the name of competitiveness? In view of what we heard after the election in the German media and from German politicians, it is not clear what the worst attribute of German politics at the moment might be, sheer stupidity or cold callousness …

Snoopy-Typing-Away-1-CVV14J0D95-1024x768

What has changed though is the increased dollars managed by these funds [now > $3.5T] and the concentration, of these dollars, at the twenty largest funds [top heavy for sure]. What has also considerably changed is the cost of money…aka leverage. It is just so much cheaper…and, of course, is still being liberally applied but, to reiterate, in fewer hands.

Are these “hands” any steadier than they were ten years ago? I suppose that is debate-able but my bet is that they are not. They are still relying on regression-ed and stress tested data from the past [albeit with faster computers & more data]. They may even argue that their models are stronger due to the high volatility markets of ’08/’09 that they were able to survive and subsequently measure, test and integrate into their current “Black Boxes”…further strengthening their convictions…which is the most dangerous aspect of all.

Because…Strong Conviction + Low Volatility + High Levels/Low Costs of Leverage [irrespective of Dodd-Frank] + More Absolute Capital at Risk + Increased Concentration of “At Risk” Capital + “Doing the Same Thing”…adds up to a combustible market cocktail.

Snoopy-Typing-Away-1-CVV14J0D95-1024x768

Looks like the beginning of a bank run in Greece.

Snoopy-Typing-Away-1-CVV14J0D95-1024x768

image

Next Page »