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Posts Made By: Brian Sledz

July 23, 2009 01:45 PM Forum: Investment Discussions

What happened to the toxic paper?

Posted By Brian Sledz

I have seen many of the "toxic" assets climb in price in the last six months. Some MBS or ABS paper was trading in the 30-40 range, it is now back in the 60-80 range. Even at today's prices they represent huge historical spreads to treasuries.
When the world seemed like it was ending in Oct and Nov it was very hard to buy this paper even though it was yielding around 20%.

August 1, 2009 06:38 PM Forum: Investment Discussions

Divergence in Fossil Fuels

Posted By Brian Sledz

Buy NatGas Sell Crude in equal dollar amounts. Use 5% of your portfolio assets as a stop loss point, and call me when its over, I can't stand to watch!!

November 5, 2010 03:07 AM Forum: Investment Discussions

Paul, can you help me

Posted By Brian Sledz

If I may.

Central banks are responsible (bad word here) for maintaining a low inflation rate and a high employment rate, and to be the borrower of a last resort to another (hopefully) financial institution. The Fed has held interest rates low since the financial mess, in order to help banks recapitalize their balance sheets, this is probably better than just giving them complete bailouts. Although some of that did go on. The banks borrow from the Fed at near zero and lend to others at higher rates (or they speculate and trade with our tax dollars and pay themselves billions of bonuses and pat themselves on the back for a job well done, donate monies to the politicians who will bring legislation to help them make more money and so the cycle goes. cynical off)

It can be debated and rightly so that a government should not interfer with markets, however, from time to time when the government does something really stupid, like allow banks to become too big to fail, force the GSEs to make silly loans to increase home ownership or other tomfoolery, the govenrment must and should act to temper job loss and or financial crises. Over a year ago the Fed decided to start to buy large blocks of treasuries because they knew they could not get rates much lower AND because the White House and the congress went nuts spending on their 'stimulus' bill (read election payback) that created no jobs, and then increased spending on many government programs which created no jobs. As the fed statement said yesterday, because of the lack of fiscal policy by the current administration and congress, the Fed will underatke the purchase of 600b of longer maturity bonds and notes. (paraphrased).

The Fed feels like it must act in order to keep the economy from really struggling and to try to boost aggregate demand enough to stave off the really dreaded defaltion. The buying program will probably lower rates by half to 3/4 of a point AND make holding assets less costly. Look at it this way, in the 60s and 70s we as a country spent tr(b) illions on social programs, housing projects the Dept of Energy, the Dept of Education and still have more homeless, and lesser educated people than many countries on the planet. BTW the housing projects are torn down, and we still have an energy crisis etc. At least by buying treasury securities there is an asset that pays 2-4%.

In the 90s the RTC bailout cost roughly 2.5% of GDP. So far this mess has cost less. The Fed is very smart a lot smarter than the bloggers and self proclaimed gurus on TV (the head economics reporter for CNBC is a Journalism major from Columbia, be careful to whom you listen, though he is pretty good, I was merely making a point). IF and WHEN the fed undertakes the sale of the treasuries, guaranteed it will be slow and orderly. In fact it will act as a way to slow down the economy and stave off inflation, because they will be removing $ from the system.

One other thing the gurus leave out of there arguments, in order for us to have inflation we need velocity of the money. Bank one lends it to customer a who buys a piece of equipment from company c who deposits the profits from sale in bank one who relends it to company d and so on. There is no velocity now, banks are not lending on anything. And there is a lack of demand due to so much uncertainty in govermental policy. Cap n Trade, health care, taxes, more financial regulation, etc.


hope this helps.

September 5, 2011 02:08 AM Forum: Investment Discussions

Any ideas on investing in this era?

Posted By Brian Sledz

IF the knuckleheads in DC could ever make a large scale structural change in the tax code (like a national sales tax so as to broaden the tax base) then we could see pretty good returns in the next few years. If they enacted large parts of the Simpson Boles studies, we could see good growth.
The country needs something to radically increase aggregate demand. Wars do this, only the last 2 we had were unfunded which is a big cause of the latest debt issue.
Brian

September 30, 2011 08:15 PM Forum: Investment Discussions

Be encouraged. Be VERY encouraged!

Posted By Brian Sledz

I, for one, am jealous. That must have been wonderful. He is one of the beest if not best Fed chairs. Lots of knuckle heads on the web poke at the Fed without knowing about the people involved. They are more than brilliant. We can't go back to gold, we must live in this global world with these challenges. Things may look bad, but they always do at the bottom. ;-]]
Brian

December 12, 2012 12:27 AM Forum: Investment Discussions

Man vs. Machine, the HFT markets

Posted By Brian Sledz

If you are an investor then the bots are good. If you are a day trader then you must learn to think like a bot. Remember the bots are programmed by humans. They look for inefficiencies and ways to make very small profits on a lot of transactions.
The bit heads have programmed a lot of methods and models, but they still must be right more than they are wrong. Also keep in mind when you hear that the Wall St firms made $10B trading this month, they don't mean trading like taking risk trading. They (those thieves like GS and JPM) are allowed to shop the customer orders for a split seconds (I think 3) to find a buyer or seller at advantageous prices to the firm, of course, skimming a small amount from the customer order. This should be outlawed, but it is also not a large share of the 70% figure.
The machines of which you speak do things like, take the Fed statements off the Fed web site at release and have a word search program which looks for words that are either hawkish or dovish to monetary policy, then take actions on that, which is why the markets get really volatile, all are trying to do the same thing. I was a floor trader for 10 years and this is no different, when news came out and it was bad all the floor traders sold, you are not obligated to buy at a higher price to help out the outside inestor/speculator.


March 6, 2009 08:43 PM Forum: Polls

The new administration ....

Posted By Brian Sledz

Herb you are so pessimistic, 95% of Americans now have $13 extra per week to spend at Walmart.

Under normal circumstances a budget and spending like the proposed would send the markets down. Add in all of the money being spent to help the autos, banks and AIG and we got a disaster.

http://www.nypost.com/seven/03052009/postopinion/opedcolumnists/brain_trust_bust_158067.htm?page=0

Charlie Gasparino, a reporter on CNBC wrote an oped in the NY Post about the brain trust bust in BHO's administration. (I am not sure if the link made it through.) Search the Post. Charlie is a respected reporter with some inside info, great read. It explains why we are heading toward SP500 of 100.

And of course they will blame it on Bush, when in fact the Glass Stengall Act Clinton passed is the real cause. Nobody mentions GWB tried to rein in Fannie and Freddie but Barney Frank and Chris Dodd would have nothing of it.

Last I checked the Dow was about 9000 on election day. And about 8200 on Inauguration Day, 6633 now. Blame that on GWB? C'mon now.



March 7, 2009 10:23 PM Forum: Polls

The new administration ....

Posted By Brian Sledz

How soon people forget..GWB was in office 30 seconds and the media and the left blamed him for a recession started by the then Fed Chief Greenspook.
Mr Obama has talked down the economy since the election day, each day he came on the TV or spoke he talk of an economy that was "the worst since the great depression", "rivaling the great depression".
I own businesses that employ 15-20 people, since the leader tells me things are horrible, I need to layoff at least half of my staff.
See, that is how he is to blame. Oh add the most destructible budget and tax policy since Hoover and I am running for cover.
My two cents,
Brian