dowfin1

This working paper supports your view that productivity gains will come. The final paper is behind a pay wall however. http://www.nber.org/chapters/c14007.pdf

Financial losses suffered by investors from losing all the cases would be dwarfed by the immeasurable loss to the rule of law in the US.

My guess is that this team was hired to kill the SHLD thesis, and cannot do it but is still trying.

Try this planner which allows for variable returns, inflation, expenses, income etc. Its' versatile and lets you stress test your results. http://www.flexibleretirementplanner.com/wp/planner-launch-page/

Truly deserved Sanj. Congrats.

Zach, theres a good chart in note 14 of the FNMA 10-k

Agreed. Quicken can track everything including investment returns by stock, account, time period, asset class etc. Have all my data input since 1993 and available in 1 file.

Post-C capital is more problematic than I thought which means that a substantial new capital raise with long transition rules will likely be necessary for the GSEs to emerge with substantial value for the common. It's a political calculus not a legal issue. IMO the jr. preferred is the smarter bet but a blend ala BB is not a bad idea either just in case.

I thought capital requirements for the GSEs were set by statute in 12 USC 4612: "For purposes of this subchapter, the minimum capital level for each enterprise shall be the sum of— (1) 2.50 percent of the aggregate on-balance sheet assets of the enterprise, as determined in accordance with generally accepted accounting principles..." As of 6-31-14, FNMA had total assets of $3,218 B and equity of $6.1 B or less than .2%. But with the remaining credit line from Treasury under the SPSA ( about $83 B), one could argue under sec. 4502 (23) that FNMA has total capital of $89 B available under conservatorship or 2.76% which meets the statutory minimum. Note that FNMA had cap ratios of 4.66%, 4.92%, and 4.98% before the crisis for YE 2005-07. While I agree plaintiffs are likely to prevail in court, you are correct that the consequences of a victory are uncertain -- and that's what gives me pause from increasing my position. Bad case scenario: 1. plaintiffs win 2. Treasury ordered to return $80 B. 3. Treasury terminates the SPSA under sec 6.7 and/or 6.12, and demands full repayment 4. FHFA deems the GSEs critically undercapitalized and converts them to a receivership. Obviously there are other possible scenarios, but it's obvious that we need Treasury cooperation/support even if the cases are won.

Attached is a copy of the discovery order. We'll see document demands, frivolous objections, multiple motions to compel/sanctions, and ultimately depositions of DeMarco, Geithner, Lockhart, and Paulson even before any hearing on the dismissal motion. Promises to be a great sideshow. discovery_order_2-26-2014.pdf

Great job over the years, Sanjeev. I'm in.

Here are more excerpts from Sequoia letters that provide contemporaneous explanations. Sequoia_1973-74_letters_excerpts_WSJ_5-7-01.pdf

A very good presentation by a criminal law expert on talking to police.

valuecfa, Shrinking mortgage assets to $250B over time will reduce earnings for capital build, even if some of the illegal sweep is applied to principal on the senior preferred upon successful litigation. With a prolonged litigation, I worry that a liquidation at the end is insufficient to pay the preferreds at par or even close. How do you think about this? Thanks.

The environmental intelligentsia may be changing their minds about nuclear.

Some scientists see discernible and predicable patterns to war and terror. http://www.psmag.com/culture/the-physics-of-terror-25955/ http://www.ft.com/cms/s/2/b70eb990-ad40-11e2-b27f-00144feabdc0.html

May be. See page 18 in the proposal: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2014/assets/strengthening.pdf "The Budget would limit an individual’s total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per year in retirement, or about $3 million for someone retiring in 2013." But then compare the budget analysis language: Limit the total accrual of tax-favored retirement benefits.—the Administration proposes to limit the de- duction or exclusion for contributions to defined contribu- tion plans, defined benefit plans, or IrAs for an individual who has total balances or accrued benefits under those plans that are sufficient to provide an annuity equal to the maximum allowable defined benefit plan benefit. this maximum, currently an annual benefit of $205,000 pay- able in the form of a joint and survivor benefit commenc- ing at age 62, is indexed for inflation, and the maximum accumulation that would apply for an individual at age 62 is approximately $3.4 million. the proposal would be effective for taxable years beginning after december 31, 2013. page 200. http://www.whitehouse.gov/sites/default/files/omb/budget/fy2014/assets/appendix.pdf This language is ambiguous as to whether only the deduction/exclusion for new contributions will be eliminated (and the full account will continue to be tax sheltered), or whether the accounts will be capped and the surplus automatically taxed. I have been looking for the last hour and cannot find any specific legislative language. Has anybody?

Differences in results of the Fed-run stress tests against those conducted by the banks are likely to raise questions among regulators when deciding how much excess capital they will allow the banks to return to shareholders. In November, the Fed said it was judging the adequacy of banks’ capital plans partly based on whether the banks had “effective” processes for estimating potential revenues, losses and capital needs. Large variations between bank-run tests and those at the Fed may call into question banks’ abilities to manage risk. http://www.ft.com/intl/cms/s/0/d3ba26ae-8754-11e2-9dd7-00144feabdc0.html#axzz2MmITy7Gx Comparing the FED and BAC's results, the major difference is pre-provision revenue: FED - $24.1b vs. BAC - $38.5b I suspect there is a fundamental difference in assumptions between the FED model and BAC's to account for this, and that it could be viewed by the FED as an internal risk management problem. Personally, I hope there is another opportunity to buy at lower prices if capital return to shareholders is stingy.

On July 17 2008, Mr Martoma allegedly obtained the final disappointing results of the drug trial from Mr Gilman and three days later, according to the complaint allegedly “spoke to the owner” of the hedge fund where he worked and recommended selling Elan and Wyeth before the drug trial results were made public. The next day, according to the complaint, Mr Martoma and the hedge fund owner instructed a trader to sell its entire 10.5m share position in Elan and 7m shares of Wyeth. The hedge fund also placed a bet that the two stocks would drop. http://www.ft.com/intl/cms/s/0/8b17542a-3327-11e2-8e44-00144feabdc0.html#axzz2CjzrZcem

Despite California Prop. 38 failing, I bet Charlie is very proud of his daughter who apparently learned very good lessons from her father: "Proposition 38 would have brought $120 billion over 12 years to our public schools. Was it worth $45 million for a change to get $120 billion for our kids? Absolutely, even if the odds were long. Learn by doing, when there's something you want to do, start doing it, pursue it, try to make it happen. You can't just sit there and say well its too hard, the hills too high I can't. You have to say, look, the voters show in polls that they want to support the schools. The schools desperately need it as a matter of policy. When you have its the right thing to do and the voters know it, somehow there's got to be a way to unlock the formula to bring those two things together and get it done and we will get it done if we keep working on it. http://www.scpr.org/programs/take-two/2012/11/07/29208/molly-munger-on-the-failure-of-proposition-38/

For someone driven by a quest to find things that are undervalued, as Mr. Buffett is, knowing the price of cash as a call option is the key. The “call premium” on the cash option is essentially the opportunity cost. It is the difference between what he can earn somewhere else and the nil return on holding cash, said Ms. Schroeder, addressing the crowd at the annual Investment Industry Association of Canada conference, after which she sat down for a Canadian exclusive interview. “There are times when he feels like that option premium is really cheap, compared to the intrinsic value of the option itself,” she says. One thing I was confused about is: how is the intrinsic value of the option calculated for cash when the future for investment opportunities is uncertain? How do you handicap this? What is a reasonable time horizon?

or this one http://www.amazon.com/50-Things-Liberals-Love-Hate/dp/1451679254/ref=sr_1_1?s=books&ie=UTF8&qid=1348154065&sr=1-1&keywords=liberals+love+to+hate

David Rosenberg has changed sentiment because voters may be acting like adults. Mr. Rosenberg says his newfound optimism was crystallized by the votes last week in Wisconsin and California. He sees those representing a sea change in the way state and local governments are addressing their fiscal problems, and expects that attitude will sweep across statehouses and eventually filter up to the national level. He said that those political events were an eye-opener, but the thoughts have been coalescing for some time. A few weeks ago, he published a note listing 10 “silver-linings” amid the dark clouds. All of this leads him to believe the next 15 years or so won’t be like the past 12 or so. Anybody who tries to project the future based on the immediate past is making a mistake of “gargantuan” proportions, he says. “I think we may look back at the events of last week as a real inflection point,” he says. http://blogs.wsj.com/marketbeat/2012/06/14/a-noted-market-bear-gets-a-little-bullish/

It's good to see WEB with his usual vitality. Speculation of his near phase out seem wholly unfounded.

This could be recipocation for the Office cast appearance in the ASM movie this year.