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Watsa conundrum


shalab
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For all the macro folks on the board and the ones that attended the dinner events.

 

- Prem is bearish on Europe but thinks the Euro will be intact

- Looking at the Greek situation, it is still possible for Euro to be intact but unlikely Greece will continue to use the Euro

- He has invested in bank of ireland which will be affected if Euro disintegrates

- I am sure Prem has a thesis but it seems contradictory to me

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If one believes the Euro will survive in some fashion it makes sense.  Why else is the Euro at $1.27 or there abouts and not 90¢?  The world thinks that the Euro will be around but with less members and subsequently stronger members.  Mostly Ireland has taken there hit, with maybe a little more to go.

 

Cheers

JEast

 

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If one believes the Euro will survive in some fashion it makes sense.  Why else is the Euro at $1.27 or there abouts and not 90¢?  The world thinks that the Euro will be around but with less members and subsequently stronger members.  Mostly Ireland has taken there hit, with maybe a little more to go.

 

Cheers

JEast

 

Also, listen to the CEO of Fortress Paper discuss the Euro from the standpoint of a currency paper printer (Swiss Franc). It physically cannot be done overnight. He estimated years.

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As Moore has discussed many times here, and was made abundantly clear with the ECB LTRO program, central banks always and forever will resort to printing money. Germany has what only 2 votes out of 27 (can't remember off the top of my head)? They're all talk. They know they benefit the most out of everyone from the Euro staying together. Printing is going to happen.

 

Moore, what are your thoughts?

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Over the past few years I have travelled across Spain and France.  The Inter-country free trade is enormous.  On the Atlantic Coast Highway in France and the Interstate across central France, you see the EU plates with virtually every country designation, on large transports.  It is the same as the Us where you see state plates from everywhere on the major highways.

 

The Euro is going no where and I suspect, neither is Greece, and definitely not Spain, Italy, or Portugal.  Curiously, alot of Spains building boom was driven by buyers from the UK and Germany looking for a nice warm second home.  I was in Spain exactly nine years ago, and the locals could no longer afford to buy property.  I would suggest that trend is likely reversing right now.

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As you mentioned since the first discount facility announced in the face of 2008, whereby the Central bank resorted to creating new fiat money and lending it out in exchange for illiquid trash securities, I believe we are in the face of a new normal whereby central banks will not allow banks to fail in the classic sense or governments to default, again in the classic sense.

 

What that means is that shareholders of banks will be allowed to lose their investments but you will never ever see a scenario where depositors lose money. Same with Sovereign defaults, you may see an orderly exit of a country from the Euro Zone IE: Greece/or Spain, in which case gov bonds may be devalued but in such a case central banks will step in, create new money, and inject it as new capital to the remaining banks that had to take a hit on the depreciation of the bonds from the kicked out nations.

 

What all this means is that you won't see a scenario where the system breaks down or that there is any actual contagion of liabilities, really the only contagion is in the mood of the investor deploying and harvesting their capital more quickly trying to time the market.

 

Investors in this environment need to understand that the biggest risks remain loss of purchasing power due to inflation. We live in a new world that is no longer subject to the classic rules of free market capitalism in the sense of to the victor go the spoils.

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As you mentioned since the first discount facility announced in the face of 2008, whereby the Central bank resorted to creating new fiat money and lending it out in exchange for illiquid trash securities, I believe we are in the face of a new normal whereby central banks will not allow banks to fail in the classic sense or governments to default, again in the classic sense.

 

You are correct here, as far as the United States is concerned.

 

What that means is that shareholders of banks will be allowed to lose their investments but you will never ever see a scenario where depositors lose money. Same with Sovereign defaults, you may see an orderly exit of a country from the Euro Zone IE: Greece/or Spain, in which case gov bonds may be devalued but in such a case central banks will step in, create new money, and inject it as new capital to the remaining banks that had to take a hit on the depreciation of the bonds from the kicked out nations.

 

You may be very wrong here...I would say it is 50/50 at this moment.  Please see the slide attached from our AGM in April.  If you can find a way for the ECB to fund the losses with the amount of leverage involved in Europe, then you are a better man than me. 

 

The problem will solve itself over time, but not without considerable pain.  That will affect the U.S. to a degree, but they will be better off than anyone else, as they have dealt with alot of their problems in the last three years.  Like I said, I'm long on certain U.S. banks, because they will be better off than all of the banks in Europe and probably China & Japan.  But Europe is going to pay a price for their excess.  The ECB will survive, but almost certainly not in its present form.  Cheers! 

 

MPIC_Funds_Presentation_-_2012_AGM_-_Slide_34.pdf

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Looks like an interesting presentation, Parsad. Are you going to make the full set available?

 

The problem with trying to read the minds of the EZ leaders is that there is no way in hell any of these bureaucrats are going to throw themselves on a sword and promote monetary expansion without reaching consensus on consolidated fiscal expansion as well. If it "works", then your political enemies say that you unnecessarily put your country at hyperinflation risk. A political animal will wait until its constituents express desperation. If the German elite, for example, secretly supported the logic of Keynesian policies, then they would probably look very similar to austerians until the last minute.

 

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As you mentioned since the first discount facility announced in the face of 2008, whereby the Central bank resorted to creating new fiat money and lending it out in exchange for illiquid trash securities, I believe we are in the face of a new normal whereby central banks will not allow banks to fail in the classic sense or governments to default, again in the classic sense.

 

You are correct here, as far as the United States is concerned.

 

What that means is that shareholders of banks will be allowed to lose their investments but you will never ever see a scenario where depositors lose money. Same with Sovereign defaults, you may see an orderly exit of a country from the Euro Zone IE: Greece/or Spain, in which case gov bonds may be devalued but in such a case central banks will step in, create new money, and inject it as new capital to the remaining banks that had to take a hit on the depreciation of the bonds from the kicked out nations.

 

You may be very wrong here...I would say it is 50/50 at this moment.  Please see the slide attached from our AGM in April.  If you can find a way for the ECB to fund the losses with the amount of leverage involved in Europe, then you are a better man than me. 

 

The problem will solve itself over time, but not without considerable pain.  That will affect the U.S. to a degree, but they will be better off than anyone else, as they have dealt with alot of their problems in the last three years.  Like I said, I'm long on certain U.S. banks, because they will be better off than all of the banks in Europe and probably China & Japan.  But Europe is going to pay a price for their excess.  The ECB will survive, but almost certainly not in its present form.  Cheers!

 

Parsad, with respect, a calculation of bank assets to GDP is a novel one at best. All that matters is bank leverage ratios (Assets to equity) and then you need to simply add up the value of all the "non surviving member" sovereign debt  held by the members of the "surviving eurozone". In every scenario you can assume say Spain exits, or even France, well then just look at the surviving members ie: Germany, Netherlands, Belgium, analyse those banks and on those balance sheets add up the value of the sovereign debt they hold.

 

In the scenario I propose the ECB will simply create new money and either inject it in the form of a TARP or if there is enough equity cushion provide it against illiquid assets. Its fairly easy to ring-fence the banks belonging to the surviving euro zone with fiat money as has been proven by the americans.

 

So, if Greece exits, and surviving nation banks have to take further write downs (which they don't currently based on my calculations) ECB would step in and create that magic number, inject it as either a discount window loan (against anything) or a TARP, if Spain or Italy left, the same would happen.

 

Meanwhile the exiting nations would simply supplement their former currency the Euro with a new fiat currency which could be created at will to meet the nominal disequilibrium between their tax revenues and debt service... This would cause inflation of course (as I previously mentioned as the number one risk)

 

So you see in all scenarios the Euro as we currently know it is actually worth quite more than is currently being reflected. Imagine a Euro anchored by just the top nations...

 

The only way you lose in Europe under the scenarios I propose is if you are invested in the securities of the nations which you feel may exit the Euro, the PIIGS or what not...

 

This is the reality we all live in now, a reality where money means nothing and where debts will be papered over to keep the system from gravitating towards its natural path of correction.

 

Tomorrow we will all continue to contribute to the economy and engage in commerce, and both the kicked out nations and surviving nations will still consume the same amount of goods and services. If their currency does not afford them the same amount then you will see domestic companies pop up and correct the imbalance. A Parmalat for example has an advantage over a Nestle and Danone in Italy if it returns to the Lira...

 

Bottom line: How this all affects BAC or BP or the rest of the companies in my portfolio? It doesn't.. its just providing a window of opportunity for me to buy more of these fantastic businesses at incredible valuations.

 

 

 

 

 

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As you mentioned since the first discount facility announced in the face of 2008, whereby the Central bank resorted to creating new fiat money and lending it out in exchange for illiquid trash securities, I believe we are in the face of a new normal whereby central banks will not allow banks to fail in the classic sense or governments to default, again in the classic sense.

 

You are correct here, as far as the United States is concerned.

 

What that means is that shareholders of banks will be allowed to lose their investments but you will never ever see a scenario where depositors lose money. Same with Sovereign defaults, you may see an orderly exit of a country from the Euro Zone IE: Greece/or Spain, in which case gov bonds may be devalued but in such a case central banks will step in, create new money, and inject it as new capital to the remaining banks that had to take a hit on the depreciation of the bonds from the kicked out nations.

 

You may be very wrong here...I would say it is 50/50 at this moment.  Please see the slide attached from our AGM in April.  If you can find a way for the ECB to fund the losses with the amount of leverage involved in Europe, then you are a better man than me. 

 

The problem will solve itself over time, but not without considerable pain.  That will affect the U.S. to a degree, but they will be better off than anyone else, as they have dealt with alot of their problems in the last three years.  Like I said, I'm long on certain U.S. banks, because they will be better off than all of the banks in Europe and probably China & Japan.  But Europe is going to pay a price for their excess.  The ECB will survive, but almost certainly not in its present form.  Cheers!

 

Parsad, with respect, a calculation of bank assets to GDP is a novel one at best. All that matters is bank leverage ratios (Assets to equity) and then you need to simply add up the value of all the "non surviving member" sovereign debt  held by the members of the "surviving eurozone". In every scenario you can assume say Spain exits, or even France, well then just look at the surviving members ie: Germany, Netherlands, Belgium, analyse those banks and on those balance sheets add up the value of the sovereign debt they hold.

 

In the scenario I propose the ECB will simply create new money and either inject it in the form of a TARP or if there is enough equity cushion provide it against illiquid assets. Its fairly easy to ring-fence the banks belonging to the surviving euro zone with fiat money as has been proven by the americans.

 

So, if Greece exits, and surviving nation banks have to take further write downs (which they don't currently based on my calculations) ECB would step in and create that magic number, inject it as either a discount window loan (against anything) or a TARP, if Spain or Italy left, the same would happen.

 

Meanwhile the exiting nations would simply supplement their former currency the Euro with a new fiat currency which could be created at will to meet the nominal disequilibrium between their tax revenues and debt service... This would cause inflation of course (as I previously mentioned as the number one risk)

 

So you see in all scenarios the Euro as we currently know it is actually worth quite more than is currently being reflected. Imagine a Euro anchored by just the top nations...

 

The only way you lose in Europe under the scenarios I propose is if you are invested in the securities of the nations which you feel may exit the Euro, the PIIGS or what not...

 

This is the reality we all live in now, a reality where money means nothing and where debts will be papered over to keep the system from gravitating towards its natural path of correction.

 

Tomorrow we will all continue to contribute to the economy and engage in commerce, and both the kicked out nations and surviving nations will still consume the same amount of goods and services. If their currency does not afford them the same amount then you will see domestic companies pop up and correct the imbalance. A Parmalat for example has an advantage over a Nestle and Danone in Italy if it returns to the Lira...

 

Bottom line: How this all affects BAC or BP or the rest of the companies in my portfolio? It doesn't.. its just providing a window of opportunity for me to buy more of these fantastic businesses at incredible valuations.

 

Hi Moore, I don't think we disagree.  You're saying that you aren't concerned about volatility because they don't affect your underlying holdings.  I'm saying that I do worry about volatility, not because I'm concerned about my underlying holdings, but how that volatility may shape the decisions of my partners.  We'll both be buying if markets drop. 

 

Incidentally, I think TARP is what will have to happen in Europe, but it will be complicated by the existing leverage and the exodus of possibly a couple of EU nations.  Cheers!

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Under the scenario Moore outlined, which has been proven to be more than a possibility by the LTRO program, why would that be anything less than at least a floor under risk assets if a "disorderly breakup" is taken off the table?

 

Perhaps Sanjeev you are right that we get a decline not quite as bad as 2008/2009 before Moore's scenario comes to fruition....

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Ray Dalio has an interview in Barron's which is terrific and very detailed. (sees 30% chance Europe will stumble badly). Search for ( "Dalio's world in Barrons ). I don't think there is a better analyst of macro than Ray - even Paul Volcker said Ray's analysis is better than the feds.

 

As much as I admire Prem, I am unable to comprehend his bets:

 

- CPI derivative bets => Bets on deflation; trigger Europe and Asia. I still feel Buffett will turn to be right here - it is easier for governments to print money than face angry electorate. Everyone including the U.S wants Europe to focus on growth rather than austerity.

- CPI bet is hinged on Euro collapsing; but Bank of Ireland bet is hinged on Euro surviving. I dont see both happening. If Euro survives and Ireland is in it, CPI bets won't work. However, if Euro collapses and Ireland leaves the Euro; bank of Ireland bet won't work.

- RIMM => I see this as a bet on a fellow Canadian company( may be because of social pressure, not certain ), not a great investment value yet.

 

 

What I see in FRFHF's bets is "If x happens, I will be ok" and "If y happens I will be ok" but I don't see x and y happening. This is not a game Buffett is playing - he is focused on buying businesses ( a minority holding via stocks or a majority position based on valuation, earning power ) and I think this will come out ahead.

 

 

 

Shalab, Prem is not purely betting on anything to happen. He just sees a reasonable chance that something very bad happens and he is hedged for a worst case scenario through this CPI bet. He probably calculated the price of the CPI derivates was low and had a margin of safety when he compared it against the chance of severe deflation. Although the possibility of this might be low (for ex. 10%), the bet could still be worth taking if the price represents a much lower expected possibility (for exp. 2-5%). This is especially true for a leveraged insurer like FFH.

 

If x and y don't happen then those derivates will turn out to be worthless in 5+ years. But that doesn't mean that he won't do ok. Fairfax is positioned to do good enough over the long haul no matter what happens. He didn't bet $2b on those CPI contracts or something in that line, it's really more insurance. Berkshire is a totally different beast. That is also why both men can be correct from their POV and given their situation. Just like two value investors can have very different levels of cash in their portfolio atm!  ;)

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Sanjeev,

 

With all due respect, I don't understand. Early last Fall yourself and others were buying BAC at pretty much its current price and at one point when these macro discussions were going on you said that you didn't care and were buying anyway. While I understand your need to minimize volatility and possibly meet redemptions isn't 50% cash very heavy considering the amount of bargains out there and the fact that none of us here knows for sure how this will get solved? I own some stocks at 2 times, 6 times earnings and below net cash. How much cheaper should I ask before jumping in with both feet?

 

What about something like SPY Sept puts to offset the panic that you seem to foresee and protect your portfolio? Personnally I am very afraid of the sovereign debt issue, but simply don't know what to do about it.

 

Cardboard

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Sanjeev,

 

With all due respect, I don't understand. Early last Fall yourself and others were buying BAC at pretty much its current price and at one point when these macro discussions were going on you said that you didn't care and were buying anyway. While I understand your need to minimize volatility and possibly meet redemptions isn't 50% cash very heavy considering the amount of bargains out there and the fact that none of us here knows for sure how this will get solved? I own some stocks at 2 times, 6 times earnings and below net cash. How much cheaper should I ask before jumping in with both feet?

 

What about something like SPY Sept puts to offset the panic that you seem to foresee and protect your portfolio? Personnally I am very afraid of the sovereign debt issue, but simply don't know what to do about it.

 

Cardboard

 

Very good question Cardboard!  To answer your question, ask yourself why my opinion would change?  ;D 

 

The answer:  I saw the problems with the PIIGS, and expected Portugal, Ireland & Greece.  I didn't think Spain would get to the point it has...and I'm far more worried about Spain than Italy...but that could change if things degrade there with the speed they did in Spain.  As soon as I recognized how big the problem was in Spain, and the scope of helping them, we started buying out of the money SPY puts...we then added the BAC puts.  Not because we saw any issues with BAC or the United States, but that this was going to be a problem and we were going to see volatility probably worse than in 2011.  The BAC puts are up well over 130% and the SPY puts are up about 25%...they were well out of the money.  We've sold 35% of the BAC puts and none of the SPY puts. 

 

We don't work in a vacuum.  I'm constantly reading and trying to put together information that I pick up.  If the scenario changes where the risk/reward ratio degrades, I have to accept the new analysis and apply it to the fund...otherwise, it would be like floating in a boat that develops a hole in the hull, determined to reach your destination, and not patching the hole because you choose to ignore the new information...you may make it or you may not, but the decision to ignore could be very costly.  Cheers! 

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The problem of QE in EU is German doesn't like or need it. And EU without German is like a man without 2 arms.  It will take a lot but German can't afford EU to go down tho. The new French president may help.

 

I dont see where they have a choice. If they dont proceed with it they wont have any customers.

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Sanjeev,

 

With all due respect, I don't understand. Early last Fall yourself and others were buying BAC at pretty much its current price and at one point when these macro discussions were going on you said that you didn't care and were buying anyway. While I understand your need to minimize volatility and possibly meet redemptions isn't 50% cash very heavy considering the amount of bargains out there and the fact that none of us here knows for sure how this will get solved? I own some stocks at 2 times, 6 times earnings and below net cash. How much cheaper should I ask before jumping in with both feet?

 

What about something like SPY Sept puts to offset the panic that you seem to foresee and protect your portfolio? Personnally I am very afraid of the sovereign debt issue, but simply don't know what to do about it.

 

Cardboard

 

Very good question Cardboard!  To answer your question, ask yourself why my opinion would change?  ;D 

 

The answer:  I saw the problems with the PIIGS, and expected Portugal, Ireland & Greece.  I didn't think Spain would get to the point it has...and I'm far more worried about Spain than Italy...but that could change if things degrade there with the speed they did in Spain.  As soon as I recognized how big the problem was in Spain, and the scope of helping them, we started buying out of the money SPY puts...we then added the BAC puts.  Not because we saw any issues with BAC or the United States, but that this was going to be a problem and we were going to see volatility probably worse than in 2011.  The BAC puts are up well over 130% and the SPY puts are up about 25%...they were well out of the money.  We've sold 35% of the BAC puts and none of the SPY puts. 

 

We don't work in a vacuum.  I'm constantly reading and trying to put together information that I pick up.  If the scenario changes where the risk/reward ratio degrades, I have to accept the new analysis and apply it to the fund...otherwise, it would be like floating in a boat that develops a hole in the hull, determined to reach your destination, and not patching the hole because you choose to ignore the new information...you may make it or you may not, but the decision to ignore could be very costly.  Cheers!

 

I seriously do not follow this logic. The only thing that changed with Spain between then and now is that bond yields have risen due to the vigilantes shorting them, the same goes for France and Italy, the Debt to GDP ratios have not changed at all.. Just because bonds rise and fall reflecting a higher or lower YTM does not mean the underlying fundamentals have changed. Ask Icahn who bought Lightsquared debt that.. he made 50% in a month...

 

 

 

 

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The problem will solve itself over time, but not without considerable pain.  That will affect the U.S. to a degree, but they will be better off than anyone else, as they have dealt with alot of their problems in the last three years.  Like I said, I'm long on certain U.S. banks, because they will be better off than all of the banks in Europe and probably China & Japan.  But Europe is going to pay a price for their excess.  The ECB will survive, but almost certainly not in its present form.  Cheers!

 

While reading this I couldn't help but remember all of those news items from 2008-2009-2010 where European leaders talked about how the U.S. model didn't work and how Europe was so superior financially, more careful and conservative, and so on.. Funny how things changed (or rather, reality just caught up with them at a different speed).

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The nightmare is Greece doing an Iceland, & the precedent spreading to the rest of the PIIGS.

 

A unilateral declaration that Greece is leaving the Eurozone, & suspending all Euro denominated sovereign debt & debt service payments for X years. It is not a default (no CDS payout), existing debt suddenly values at cents as zero coupon debt, Greek banks are nationalized overnight, recapitalized in Drachma, & open up next day with wide open Drachma denominated credit taps. Deliberate inflation & devaluation to drive tourism/exports, & put the country back to work.

 

You have to think this is repeatable in Spain & Portugal, the lands of 50%+ youth unemployment. It also has to be looking attractive to southern Italy (Palermo) with 85%+ youth unemployment. The obvious solution is a new Plaza Accord, & two euro’s within Euroland. A hard currency (Germany, France, Switzerland, etc), a soft currency (PIIGS), a fixed hard/soft euro exchange rate, & all existing trade agreements remaining as is. At best, a minimum 3-5 years to implement.

 

A minimum 3-5 yrs of extreme volatility ..... that N America cannot hope to escape.

 

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Deliberate inflation & devaluation to drive tourism/exports, & put the country back to work.

 

You have to think this is repeatable in Spain & Portugal, the lands of 50%+ youth unemployment. It also has to be looking attractive to southern Italy (Palermo) with 85%+ youth unemployment. The obvious solution is a new Plaza Accord, & two euro’s within Euroland. A hard currency (Germany, France, Switzerland, etc), a soft currency (PIIGS), a fixed hard/soft euro exchange rate, & all existing trade agreements remaining as is. At best, a minimum 3-5 years to implement.

 

How likely is it that Germany would institute a hard currency regime given the current account rebalancing that would occur in a two euro scenario?

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Sanjeev,

 

With all due respect, I don't understand. Early last Fall yourself and others were buying BAC at pretty much its current price and at one point when these macro discussions were going on you said that you didn't care and were buying anyway. While I understand your need to minimize volatility and possibly meet redemptions isn't 50% cash very heavy considering the amount of bargains out there and the fact that none of us here knows for sure how this will get solved? I own some stocks at 2 times, 6 times earnings and below net cash. How much cheaper should I ask before jumping in with both feet?

 

What about something like SPY Sept puts to offset the panic that you seem to foresee and protect your portfolio? Personnally I am very afraid of the sovereign debt issue, but simply don't know what to do about it.

 

Cardboard

 

Very good question Cardboard!  To answer your question, ask yourself why my opinion would change?  ;D 

 

The answer:  I saw the problems with the PIIGS, and expected Portugal, Ireland & Greece.  I didn't think Spain would get to the point it has...and I'm far more worried about Spain than Italy...but that could change if things degrade there with the speed they did in Spain.  As soon as I recognized how big the problem was in Spain, and the scope of helping them, we started buying out of the money SPY puts...we then added the BAC puts.  Not because we saw any issues with BAC or the United States, but that this was going to be a problem and we were going to see volatility probably worse than in 2011.  The BAC puts are up well over 130% and the SPY puts are up about 25%...they were well out of the money.  We've sold 35% of the BAC puts and none of the SPY puts. 

 

We don't work in a vacuum.  I'm constantly reading and trying to put together information that I pick up.  If the scenario changes where the risk/reward ratio degrades, I have to accept the new analysis and apply it to the fund...otherwise, it would be like floating in a boat that develops a hole in the hull, determined to reach your destination, and not patching the hole because you choose to ignore the new information...you may make it or you may not, but the decision to ignore could be very costly.  Cheers!

 

Puts hedge on top of 50% cash. I see you trying to swing big with some macro view and market timing. So far so good...

 

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Something strikes me as odd this time around the EZ merry-go-'round....

 

There is a huge "jog" on the banks currently underway, projected deficits are rising, the LTRO effect is exhausted, China is slowing down, the US is slowing down and Greece is as close as ever to a "disorderly exit", yet....EZ bond yields are really not that close to where they were back at the lows of last year. If Spain is in such trouble and we're about to face Lehman 2.0, why are yields not blowing out? (I'm not looking at spreads here, which are garbage - absolute yields are what matters...)

 

Perhaps the general "risk-on" market is pricing in an ECB backstop and will subsequently be surprised if it comes later rather than sooner if at all.

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Something strikes me as odd this time around the EZ merry-go-'round....

 

There is a huge "jog" on the banks currently underway, projected deficits are rising, the LTRO effect is exhausted, China is slowing down, the US is slowing down and Greece is as close as ever to a "disorderly exit", yet....EZ bond yields are really not that close to where they were back at the lows of last year. If Spain is in such trouble and we're about to face Lehman 2.0, why are yields not blowing out? (I'm not looking at spreads here, which are garbage - absolute yields are what matters...)

 

Perhaps the general "risk-on" market is pricing in an ECB backstop and will subsequently be surprised if it comes later rather than sooner if at all.

 

Remember, China can print too. They employ a fiat standard as well. People forget that.

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moore_capital54,

 

The companies you mentioned are not headquartered in any of the troubled PIIG countries. In your opinion what would happen to the valuations of companies located in the PIIG countries that exit the EURO, like Total in France???  It seems like Total's valuation is unduly depressed. Could it be France's possible exit from the Euro??

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