JEast

An interesting feature with some of the TARP warrants, unsure if all as I have not looked at all of them, but some of the earlier issued warrants are cashless. Meaning that when you exercise you do not actually put up cash, but receive the equivalent in shares of the difference between strike price and current price upon conversion. I have not heard of anyone actually talking about this unique feature outside the also unique feature of the decreasing strike price for increased dividends on the common. I think some select TARP positions are some of the cheapest investments around. Cheers JEast

It is my understanding the price and demand are inter-related to supply. If the demand was high, would one argue much over price? One can debate if supply creates its own supply, which is if you have a place to store the supply. If not, the product sits in the warehouse, or on a ship in the ocean. Cheers JEast

Glad to see some of our long-term bond money going into 60 cent dollars. Cheers JEast

Is China Slowing? Add in the natural gas effect on US coal, and not so good for domestic railroads. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Coal/6353964 Cheers JEast

Austerity? Reducing Debt? How does this play out for the end is near for the yen 'Bass Play?' Or is it just more deflation? Questions, and more Questions. http://www.nytimes.com/2012/06/16/business/global/japan-reaches-tax-deal-that-could-help-shrink-debt.html Also with the agreement, they have decided to start-up some of their nuclear plants as summer is approaching. Cheers JEast

The Washington Post closes their 49% ownership share of the Mersey newsprint mill in Nova Scotia. http://finance.yahoo.com/news/resolute-indefinitely-idle-mersey-mill-123000677.html Cheers JEast

Yes the new 15" MacBook Pro with Retina display is very nice, but $2,200?? I still say the rest of the mac line announcements were a yawn though, which is hard for a diehard mac guy to say. Cheers JEast

After being a 100% Mac guy since 1990 (23 years), I bought my first ever pc today. After waiting for nearly a year on Apple's new upgrades/products, yesterday was a big yawn with some disappointment tossed in. Take into account the price point on the mackbooks, I broke down and bought a Dell instead. Oh well, we all most move on at some point :( Cheers JEast

Off subject, but interesting. The world's oldest animal marriage looks set to have ended after an incredible 115 years when the two Giant Turtles at an Austrian zoo refused to share their cage anymore. Zoo boss Helga Happ said: "We get the feeling they can't stand the sight of each other anymore." http://austriantimes.at/image/30308/news/General_News/2012-06-08/42193/Shelling_Out_for_a_Divorce Cheers JEast

Reaching out to the board community that may have any comments on the consumer credit companies in Japan. If any have followed the industry, you are aware of the issues over the last several years. Of course we had the financial crisis and then the Great East Japan Earthquake effecting these financial companies. But on top of and before these events, the companies had essentially draconian regulatory change. Among other miscellaneous issues, mainly three (3) big changes as I have understand them are/were — 1) Return of interest that consumers could request because of 2) Lowering of the maximum lending rate allowed, and 3) loan receivables are limited to 33% of annual income. The potential (emphasis on potential) is that some of these companies are down 95% from their peak and some are actually still making money. Any companies the board knows about and would like to comment on? Cheers JEast

Just a little more anecdotal evidence of the lower rate environment the we will be in for a few more years as China lowers rates 25bp. http://www.bloomberg.com/news/2012-06-07/china-cuts-interest-rates-for-first-time-since-2008.html Cheers JEast

Yes. The most interesting comment by Nick Snyder on Chesapeake was that he indicated that today, Chesapeake reminds him of Fairfax back in 2006. Highly misunderstood, people think the CEO is a crook, they are going bankrupt, etc... but the assets are on the balance sheet. Cheers JEast

Yes, received my copy yesterday as well and I too was surprised. Pounding the table again on Chesapeake. Cheers JEast

Finding plenty of 30¢ and 40¢ dollars in Japan these days. Of course they may stay that way for a very long time. On the other hand, I have noticed that some companies have actually followed thru on their share buybacks. http://www.cnbc.com/id/47668274 Cheers JEast

A nice Thermostat. Not so much to save money, though nice, but more so for the comfort and the ability of the thermostat to learn your habits. http://www.nest.com/ Price tag runs you $249US, and maybe more as you might want to buy a second one as they will communicate with each other. It also has wireless communications to know the local weather based on zip code and you can update changes via a phone app. Cheers JEast

As a follow-up for negative returns, Germany's two-year note has been negative for two days. http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/06/01/bloomberg_articlesM4XDB36JIJUY01-M4XIO.DTL Cheers JEast

What happens? Presumably with the fallout, they go up in price!! Cheers JEast

I thought the payroll data was worrisome, but did not expect the 30-year to move 20bp over the fact. Is this just headline noise or is the market telling us something? Maybe our deflation derivatives via Fairfax have moved a little closer back to par now :) Cheers JEast

Since the lose is conceivably limited as long-term rates will not go below zero. I say this knowing that recent rates on short-term notes have on occasion turned negative. Why not short the ProShares Ultra 20+Year (UBT) as you may have the value erosion working for you? Cheers JEast

US payrolls for the month of May came in around 130k. The rule of thumb is payrolls need to expand around 200k per month or the economy is going nowhere. Businesses are making money, but it does not appear that the economy is going to rebound this year. I would assume that this is the reason the bond market is making lows. http://www.marketwatch.com/story/hiring-trend-for-private-payrolls-slows-down-adp-2012-05-31?dist=beforebell Cheers JEast

Maybe inflammatory, but just thought that a once considered very large law firm collapsed as you do not see such stuff make the headlines very often. As for more pain to come, I was referring to the potential second down leg that some have predicted. Anecdotal evidence? Absolutely, but just peaked my interest. And as Uccmal indicated, they are already suing each other which caused a chuckle. Cheers JEast

The second wave of the '08-'09 financial fallout may be approaching. Noticed that the once largest law firm in the US just filed due to cash flow issues (i.e. too high compensation and too much debt). If lawyers are starting to fall, maybe the next leg is coming. Oh wait, I just said lawyers are getting laid off -- is this a bad turn of events? http://www.reuters.com/article/2012/05/29/us-deweyandlebouef-bankruptcy-idUSBRE84S01R20120529 Cheers JEast

A nice article by Frank Martin of Martin Capital Management. Click on the link in the lower left for the article. http://www.mcmadvisors.com/ A plug for Frank Martin's two published books. A Decade of Delusions http://www.amazon.com/Decade-Delusions-Speculative-Contagion-Recession/dp/1118004566/ref=sr_1_1?s=books&ie=UTF8&qid=1338304555&sr=1-1 Speculative Contagion http://www.amazon.com/Speculative-Contagion-An-Antidote-Epidemics/dp/1425900755/ref=sr_1_3?s=books&ie=UTF8&qid=1338304711&sr=1-3 Cheers JEast

In another tribute to we really don't know anything, the U.S. oil output is at a decade high even though it is discounted to brent. I very good article on oil output and gasoline consumption of which some are surely aware of, but most of us are probably not as it does not fit the narrative. http://www.bloomberg.com/news/2012-05-28/seaway-oil-torrent-boosts-gas-cargoes-as-scorpio-rises-freight.html Cheers JEast

Christine Lagarde of the IMF, said she has more sympathy for children deprived of decent schooling in sub-Saharan Africa than for many of those facing poverty in Athens. Is the IMF finally stepping up as a serious institution?? http://www.guardian.co.uk/world/2012/may/25/payback-time-lagarde-greeks Cheers JEat