CorpRaider

Alternative scenario: U.S. sells arms to Sunnis; russia, china, whomever sells arms to the shia. Keep it roughly equal; sell US stuff from the 80's, whatever it takes to keep it "sporting". All deficits from past 30 years erased in 5 years.

Yeah, I'll take a crack at a somewhat meaningful contribution. These bonds appear to be basically securitized asset-backed term debt, secured by A/R and inventory. The non-guarantor business looks like "good sears" but all of this seems like much ado about not a lot to me. I mean it does highlight how great the "non-retailer sears" would look, but I think that is pretty intuitive. Of course one has to wonder if it would look as great in arms-length transactions. The guarantor and non-guarantor designations are only with respect to this one asset based bond issuance of about $1 bil, right? They've got plenty of coverage of A/R and inventory to cover that issuance, so they shouldn't pose a problem for anyone other than the entities holding the inventory and A/R no matter which sub is a guarantor, also other asset based lines of credit would likely be superior to these bonds. The non-guarantor subs would still be "on the hook" for general obligations of the parent (such as implosion of pension and PBGC coming in to take everyone's cookies), as far as I can tell.

This is 3 year data, hardly statistically valid. In fact given the tumult, I would expect something like this during this period. That said, to me MF is a beginning, it gives companies to analyze. Whenever I hear this response I wonder how long is needed for something to be statistically significant? I've heard people claim 120 years of market data isn't enough to show stocks outperform bonds at a statistically significant level. At the minimum, you need to go a whole market cycle. Also, I would guess, that the Chinese fraud problem really screwed up results. No experienced investor should have bought into that crap, though. Again, I look at MF as a starting point. If you scrub for the Chinese frauds, and the results were good, one could still argue that that was cherry picking. You would expect value stocks not to do as well on a big leg up in the market. I think that's certainly a form of cherry picking. Magic formula is supposed to be great because it's buying ugly and cheap companies that humans wouldn't buy because "no experienced investor should have bought into that crap". If it would have bought a few real Chinese companies that went op 1000% no-one would have complained about the bad picks, in that case it would all be part of the strategy. I must be missing something, it looks to me like my FNSAX is pantsing S&P and Midcaps. http://quotes.morningstar.com/fund/fnsax/f?t=FNSAX

I like C management better and its not even close. Of course, I doubt I'm alone in that view.

I dunno, the Australians always clean up on that "funniest commercials" show or at least they did back in the 90's when I watched it. "Your handsome-ass grandfather only had one blade....and polio!" "Flush her out to sea boys!" HAHA! I saw this guy on CNBC I think.

Yeah, Eric that's just stupid on WFC's part. Sometimes you can find an actual banker at some of the smaller community and regional banks. Sometimes I think it may not be worth it to stop off at a money center bank for anything that can't be underwritten by a high school graduate and a standard program.

Thanks. I enjoyed it. While I agreed with much of it, I also found myself thinking, "this sounds like a man who is getting 'pantsed' by the S&P and does not like it one bit."

I personally have only bought put options. Shorts theoretically have infinite loss potential. That doesn't work well if you plug it into the kelly equation. hah!

Putting on my tin hat: Summers will be the next chairman of the fed. Between his foot-in-mouth disease and the congressional mess which will flare up in about a month we're looking at trouble: muy selling. Now, if I'm right, I shall remind you all; if I am not....I was just joking around.

It looks great!

I want some MKL, but I'm hoping for some integration/merger earnings chop to afford a buying opportunity. Alternatively, one can always hope for a debt ceiling/budget panic or a Larry Summers induced crash if he's named chairman of the fed.

Tisch says CNA is buying munis: http://www.bloomberg.com/news/2013-07-29/tisch-bets-on-munis-as-yields-rebound-from-ugly-contest-.html?cmpid=yhoo

Yep, I suppose we will see. So far she's years early and off by orders of magnitude. One could argue that the producers of the classic film "Robocop" have an equally impressive record of predicting the financial future of the city of Detroit. ;D

Thanks for this post. I'm not brave/sophisticated enough to be looking at Detroit obligations; but I am interested in participating in a conversation about munis and the fear that seems to be taking hold in this market. The continuing blood letting in munis and munifunds appears to be in part because of fear of how the Detroit GO bonds might be treated in the bankruptcy (I initially thought it was just a retail reaction to the taper terror). Blackrock's muni chief wrote an op-ed cautioning that it could be the end of civilization as we know it. Then again, Meredith Whitney has continued to call for a collapse in the muni market, so maybe she was just a decade or so early.

Ackman put it out there, "I had sullcrom look at it." Icahn was like, "I could buy you six times over. I could break you mate. I could tender for the company just to burn your ass."

sounding a little like a gold bug there...

wow. I caught the caroline's clips. Thanks! I would pay Jerry Seinfeld show rates to get a whole set of that stuff.

So...I should stop buying the muni closed end funds? 10% tax equivalent yield is hard to pass up.

I would buy that. I would buy the deluxe cheesy man-love edition.

I caught it. He's the best.

OK, if we give away citizenship to 11MM illegal immigrants, then who would pay $500k for an investor's visa? Simply come across the Southern border and stay here and then get your citizenship virtually for free? What kind of precedent is this setting? I am all for immigration, LEGAL immigration. If we want to allow 1, 10, 100, 1,000 or 1,000,000 Mexican nationals (or any other group) than that is fine, have the discussion and do it in orderly fashion. Screen who is coming in and set some rules. If law abiding Mexicans, Colombians, Canadians, Indians, Chinese, Vietnamese, Australians, English etc. wish to come here that is fine. Follow the rules and come legally. How are people going to feel that follow the rules? They are suckers, they have a distinct disadvantage playing by the rules. As to people who think this is a terrible idea, maybe we should just have totally open borders? Anybody who can get here is granted citizenship? Why even have border checkpoints? Why should some people have to take a civics test to become a citizen and others don't? Why have laws on the books and not follow them? Nothing possibly could go wrong! Seems like a lot of money, but probably alot less than is being spent on bases in Korea and Japan, when Taiwan purportedly has plenty of firepower to defeat anyone in the region in a conventional war. What is the Kia or Hyundai SUVs to M1 abrams exchange rate?

I don't know what you guys are talking about. As long as America has Canadian comedians, British TV shows, Belgian assault rifles, and German tank parts, we will remain the dominant force in the universe! Heh.

Anyone starting to sniff around the (copper) miners? I'm in no rush but am starting to gently tap the tires on RIO and SCCO. Can't touch FCX anymore because I believe CEO used it as his personal piggy bank to bail out distressed E&P co's..

Will do. Thanks. If they could just stop the bleeding in nook segment the thing is trading at about a 2x EV/E ratio. I would feel a higher level of conviction with an activist leader who is ousting the management with extreme prejudice. Even if paper book consumption slowly declines over the next 30 years, that's a ton of cash between now and then and they also sell other yuppie/intelligentsia focused goods, such as lattes.

Soon it might get cheap enough to be interesting and management might be rational enough to let someone else handle the nook...