kiwing100

thank you

Here is the link to internet TV broadcast if you don't get if on your local cable channel http://www.bloomberg.com/tv/

fyi, Buffett on Bloomberg TV with Betty Liu on for 2 hours beginning now from Sun Valley ... 8.00am to 10.am EDT

Howard Marks latest memo dated 20 June, titled "It's all a big mistake" http://www.oaktreecapital.com/memo.aspx?AspxAutoDetectCookieSupport=1

http://www.marketwatch.com/story/irish-central-banker-outlines-bank-capital-needs-2012-05-30?dist=beforebell

If this occurred, this would likely have an adverse impact on an investment in Bank of Ireland ... http://www.bloomberg.com/news/2012-05-25/dallara-says-greek-euro-exit-may-exceeed-1-trillion-euros.html

Not sure if Bank of Ireland needs any new capital. If so, who will provide it, what form will it be and at what price? http://www.telegraph.co.uk/finance/financialcrisis/9274830/Euro-austerity-example-Ireland-may-need-second-bailout.html

BRK tried to buy ResCap before bankruptcy: report http://www.reuters.com/article/2012/05/18/us-berkshire-ally-rescap-idUSBRE84H03L20120518?feedType=RSS&feedName=innovationNews&rpc=43

BRK buys newspaper titles from Media General, gives Media General a loan and gets penny warrants on Media General: http://finance.yahoo.com/news/warren-buffett-makes-another-major-120600098.html;_ylt=A2KJjakY7bRP6QoAlMDQtDMD Press release from Media General http://www.mediageneral.com/press/2012/may17_12.html

thank you

For those of you unable to attend the BRK AGM in Omaha, here are some live blog links for you ... Live blog from Morningstar - http://news.morningstar.com/articlenet/article.aspx?id=549818 Blog from Andrew Sorkin - http://dealbook.nytimes.com/2012/05/05/live-blog-berkshires-2012-annual-meeting/ Blog from Wall Street Journal - http://blogs.wsj.com/deals/2012/05/05/live-blogging-buffettpalooza/

here is the link to the full programme: http://www.bloomberg.com/video/92027217/

thank you very much

Some of you may trade these exchange products to hedge or to make outright directional calls. Here's a lesson on how the performance of an exchange traded product varied significantly from the performance of the underlying index it was trying to replicate.. Caveat emptor ... From my perspective - always look at the underlying assets owned by the exchange traded product and the nature of the security which you are buying would be the lesson to take away here. http://www.bloomberg.com/news/2012-03-30/credit-suisse-opened-volatility-bets-to-small-investors.html

An adverse vote outcome here may have an adverse impact on the value of the Bank of Ireland stake held by Fairfax (assuming that Fairfax has not hedged this investment in any way or that Bank of Ireland has not hedged its Irish govt bond exposure) http://www.google.com/hostednews/ap/article/ALeqM5hd3D9t-25nzddH5AHmHmApxzmEag?docId=45bbd9b5352c4a53ae098adfbf686795

http://www.oaktreecapital.com/memo.aspx

dcollon, thank you very much.

FYI, he also put out a note on his opinion on how the economic machine works - a template for understanding - which was updated in March. The link is below http://www.bwater.com/Uploads/FileManager/research/how-the-economic-machine-works/a-template-for-understanding--ray-dalio-bridgewater.pdf

As per Bloomberg story - Net notional credit default swaps on Greek government bonds total $3.2 billion while the gross notional amount of CDS is more than $69 billion, according to Bloomberg data based on the DTCC. I'm not an expert here but shouldn't you be focusing on the gross notional CDS exposure, not the net notional exposure? The $3.2bn is the net notional exposure - the GROSS notional exposure is $69bn. I'm not sure if there is $69bn gross notional long CDS exposure or $69bn gross notional of short CDS exposure outstanding. If there is $69bn of gross notional short CDS exposure, then there is long CDS notional exposure of $66bn. Note that some of the long CDS exposure could be hedging long bond positions, so the actual unhedged short CDS exposure on Greece (excluding the long CDS used to hedge long bonds) is likely to be larger in that case. If there is $69bn of gross long notional CDS exposure, then there is short $66bn of gross notional CDS exposure. Some of this gross long notional CDS exposure could be due to actual hedging of long bond positions being held so the net notional exposure could actually be nil if you take the hedging of bond positions into account. (if more than $3.2bn notional CDS exposure is used for hedging long bond positions, then net notional unhedged exposure would actually be negative (i.e short)) Either way, those who are short CDS are likely to see additional cash collateral calls on the short CDS positions or cash settlement on their short CDS positions - I read somewhere in a Bloomberg article that CDS pricing was about 7mn per 10mn of exposure, (not sure how accurate this is since I don't get the updated market prices) so there is another 3mn of cash to pay up (which is another 42% [3mn on 7mn mark to market]). Of course those that close out their short CDS positions by paying the additional 3mn per 10mn of exposure get delivery of the "defaulted" bond which they can in turn exchange for the newly issued Greek bond(s) (and other securities - I understand that there are warrants to be issued). But they have to come up with the cash before they take delivery of the "defaulted" bond. Where will they get the additional cash from? - their existing cash resources (if they have sufficient cash available), or by fund raising from selling some of their securities in their portfolios to raise cash (which could possibly cause some market dislocation). They can then sell the newly issued Greek bond (securities) in the market when it is delivered and when it starts trading. Who knows what the market value of the securities will be ... If there is counterparty default anywhere along the chain, then if you netted off your short CDS exposure, by closing out in the market you could be caught on one side. Interesting to watch from the sidelines is all I can say ....

eclecticvalue - Thank you for sharing

I had trouble with the above links. Here is the interview I found on youtube

http://www.scribd.com/fullscreen/75516666

for those of you who are interested, a view of the European macro situation http://www.scribd.com/doc/74335711/Hayman-Nov2011

BRK reportedly invested 23.9bn in 3Q http://www.bloomberg.com/news/2011-11-07/buffett-broadens-portfolio-by-spending-23-9-billion-in-quarter.html

it seems that the CDS may not be offering a a hedge to Greek bond investors. They have yet to determine whether there is a credit event on Greek bonds with the voluntary restructuring. Holders may be facing a 50% haircut on the bond and no payout on the CDS. http://online.wsj.com/article/SB10001424052970203554104577002131748108506.html?KEYWORDS=DAVID+REILLY In that case, the arbitrage trade by banks of being long a bond and long CDS where you capture the income differential may result in substantial losses if the underlying are Greek bonds. Use of leverage in this position would magnify this significantly. So what seems like a riskless trade may not be ... Also I am wondering which financials have naked short CDS on Greek bonds, they are likely to face more margin calls (like AIG did in 2008). Also which financials are short CDS on Italian, and Spanish govt debt, and bank debt ... Margin calls caused the downfall on MF Global and Dexia putting pressure on their liquidity ...