valueorama

Would destruction of service economy(+ to some extent industrial production) not just in US but worldwide impact inflation?

https://willmyphonework.net/ Just put in your phone and see if it will work. I would say most SE Asia, the local sim can be used.

I think, CDS market is shrinking because of liquidity issues. Even on a good day, not all HY bonds trade. With CDS, it is even less. 1. To me, the situation described sounds like insider trading. 2. or you can say, GSO basically got free money. If the scenario mentioned in the article is considered, i would say the CDS is grossly under-priced. ISDA should include language to remove these incentives. Otherwise, single name CDS market will be dead soon.

This is some disturbing turn of events that i feel will kill the CDS market or at least new versions of contracts need to be drafted. =================== from FT: https://www.ft.com/content/69194bda-f5af-11e7-88f7-5465a6ce1a00 Blackstone-led debt deal sparks outcry Traders say refinancing of a US housebuilder undermines legitimacy of $5tn CDS market Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Save to myFT Joe Rennison in New York an hour ago 34 Derivatives traders are crying foul over a Blackstone-led refinancing deal for the US housebuilder Hovnanian, saying the controversial arrangement threatens to further undermine the shrinking market for credit default swaps. Hovnanian, which is based in New Jersey and is one of America’s largest homebuilders, has agreed with Blackstone-owned hedge fund GSO to refinance up to $320m of its debt — but the deal has a catch. In order to secure the funds from GSO, Hovnanian has agreed to skip a payment on some of its existing bonds, triggering a technical default and a big payday for the hedge fund, which placed bets on a default in the CDS market. While legal, traders say the arrangement makes a mockery of a market designed to be used to hedge the risk of real defaults at companies in genuine financial distress. “We fear that the Hovnanian situation could embolden investors to pursue manufactured credit events with other corporate issuers, which would undermine the true intention and spirit of the CDS market,” said Adam Savarese, co-head of leveraged finance trading at Goldman Sachs. GSO is able to offer attractive financing terms precisely because they stand to receive a payout on its CDS contracts, and because they have structured the proposed new lending to maximise that payout. Others, including Goldman and credit hedge funds Citadel and Solus Alternative Asset Management, are on the other side of the CDS contracts and stand to lose money, according to people familiar with their positions. “You can do your credit work but you may not know what is going on behind the scenes where someone could be trying to manufacturer a credit event,” said another fund that had sold Hovnanian CDS. Solus on Thursday launched a lawsuit against GSO and Hovnanian, asking for an injunction to stop what it called “an illegal bribery scheme masquerading as a ‘refinancing transaction’”. Goldman and Solus had earlier offered Hovnanian an alternative refinancing deal. Hovnanian’s investors face a deadline of this Friday to give a green light to the GSO plan, although it also rests on the approval of a market committee of banks and credit investors, which will have to certify an event of default to trigger the CDS payout. The tactic of making refinancing conditional on triggering CDS has been used on occasion before, although the Hovnanian situation is unusual because of the size of the deal and because the company is not in financial distress, according to analysts and traders. Recommended Why does the CDS market leave so many people unhappy? The Big Read: Blackstone’s struggle to win over investors FT Series: Outlook for markets in 2018 CDS fell out of favour after the credit crisis and trading has further shrivelled as market players complain about a lack of transparency and liquidity. The value of outstanding “single-name” CDS, designed to hedge the risk of default on individual companies, has fallen from $33tn in November 2008 to $5tn in the middle of 2017, according to data from the Bank for International Settlements. GSO and Hovnanian say their deal represents the best financing that was available to the company for replacing debt coming due in 2019. “The company appropriately utilised the most attractive financing techniques available,” said a GSO spokesperson. But Peter Tchir at Academy Securities, who spearheaded the use of CDS during the early 2000s, said the controversy would have an impact on the market. “CDS was never designed for something like this,” he said. “I think this is going to create more and more pressure to create a better synthetic hedging vehicle than CDS.”

Happy New year to all!

http://abcnews.go.com/US/navy-pilot-recalls-encounter-ufo-unlike/story?id=51856514&cid=social_twitter_abcn Pilot's interview with ABC. He has done an interview with Fox also. What fascinates me is that pilot claims, that the object didnt have any propeller, Didnt look like a helicopter nor did it have wings.

It is all relative to who is observing i guess. I feel Social security number and credit score is Orwellian in nature! Almost for everything people do ask for SSN. Now China has added a new dimension to tracking.

One thing that surprised me recently was that prices vary for same product on different locations. I was told by a manager that if a Walmart or Sam's club is near a Costco, prices will be lower.

one creative way to get rid of it is to transfer it to a person on death bed. The management company then has to buy it back from the estate. Check into it.

Trump and 10yr old girl. https://www.theguardian.com/us-news/video/2016/oct/13/trump-makes-inappropriate-remarks-about-10-year-old-girl-video

Car companies have been doing research and introducing Electric cars for some time. Here is GM EV1 1996-1999 ==> https://en.wikipedia.org/wiki/General_Motors_EV1 People have short term memory. In fact as we speak GM is ahead of Tesla in introducing a EV at less than $40k. Search for Chevy BOLT. One can order it and get it this fall.

Happy birthday Sanjeev.

Here is Gunlach saying Bremain is going to happen, suggesting it seems to be a good trade. http://www.cnbc.com/2016/06/22/reuters-america-update-2-gundlach-says-considering-selling-european-equities-on-bremain-vote.html

As someone else mentioned the thresholds for this are high. $416k of income filing single and $466k filing jointly. There are 892,000 people who pay taxes at this rate. Out of the ~300 million or so citizens it doesn't seem so bad. Now granted a large percentage of that 800k might be on this board, but throwing the number out there to give some perspective. Obamacare "surcharge" is called Net Investment income tax . Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household (with qualifying person) $200,000 Qualifying widow(er) with dependent child $250,000 https://www.irs.gov/uac/Newsroom/Net-Investment-Income-Tax-FAQs

Please add New Jersey to that list. http://www.fool.com/personal-finance/taxes/2014/10/04/the-states-with-the-highest-capital-gains-tax-rate.aspx

Direct them/advise them based on Diehards.org or www.bogleheads.org(same).

MIT's real time CPI or Price index. They call it the billion price project. It tracks online prices of products. It is pretty accurate. http://bpp.mit.edu/usa/

Whenever i read about gold/silver investment, i need point this/similar story. http://blog.sfgate.com/stew/2012/09/18/7m-in-gold-bars-found-in-dead-recluses-nevada-home/ As long as you dont end up like this, i think you will be ok.

This is a surprise. Marty's Credit fund is being liquidated with no redemption allowed at this point. Very surprised. http://www.bloomberg.com/news/articles/2015-12-10/third-avenue-plans-to-liquidate-focused-credit-fund-after-losses

History of Interest rates by Sidney Homer and Richard Sylla. https://soundcloud.com/bloomberg-business/episode-5-6000-years-of-interest-rates Above link is a podcast on the book with the author. The book sounds very interesting. http://www.amazon.com/History-Interest-Rates-Fourth-Finance/dp/0471732834/ref=sr_1_1?ie=UTF8&qid=1449536764&sr=8-1&keywords=sidney+homer

So Druckenmiller is bearish, just look at his tie. It is full of polar bears.

According to Munger, USA should be last to use up its oil. It gives a strategic advantage long term.

Huh? I would think press freedom and free speech advocates would have to reevaluate their views. Its obvious that banning coverage of school shootings would enormously reduce their frequency. Next we will talk about removing some words from the dictionary as it gives ideas. Suddenly the year will reset to 1984.

I thought RMB was fully convertible with Singapore dollar. Once you go into singapore dollar, i am assuming on can convert to USD.

Thank you