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MegaBlog
MegaBlog- – this is an amalgamation of posts from popular trading blogs . This section will allow you to track interesting topics and track popular trends in trading., understand what traders live.
stock market and real estate investments
Recently we talked with my friend from Russia about the relationship between the real estate market and the stock market.. The impetus for such reasoning was an article from the analytical department of the company “Kalita-Finance”. I think everyone will be very interested in reading it., especially those, who also deals with real estate.
Widely known, that stock indices are leading indicators of the country's economic health. Stable […]
Banking has been an "industry on steroids," as front-loaded benefits and back-ended costs caused banks’ achievements to be artificially inflated, said Michael Mayo, managing director and financial services analyst at Calyon Securities.
RELATED LINKS US Banking Like ‘Japan-Light’: MayoExecs Defend Pay, Concede Change NeededObama to Unveil Bank Fee In prepared statements for Wednesday’s Financial Crisis Inquiry Commission, Mayo — the only banking analyst invited to speak before the congressional panel — said the U.S. is now paying the price for the industry’s mistakes, which he outlined in his testimony.
Mayo cited 10 reasons that he believes the industry has been artificially boosted:
Enhanced Performance With Excessive Loan Growth: The financial industry grew loans twice as fast as the natural rate, because banks pushed for loans that never should have been made. Pumped-Up Profits With Higher Yielding Assets: With higher yields come higher interest rates, which means more profits for banks. The problem, however, is that higher yields also come with added risk, which gets paid later. Side Effects Ignored With Concentration of Assets: Of the 11 loan categories listed by the FDIC, all five of the fastest-growing loan categories were related to real estate. This is as simple as the old banking adage, "Don’t put all your eggs in one basket." Higher Dosage With Higher Balance Sheet Leverage at Banks and Brokers: By 2006, before the crisis, US banks had the highest level of leverage in a quarter century. Investment Banks Originated More Exotic Dosages: Instruments such as collateralized debt obligations (CDOs) amplified leverage in new and untested forms. These tools were so complex that not even CEOs, directors or auditors fully understood their risks. Consumers Went Along for the Ride: Consumer debt to GDP has reached a record level of 100 percent, versus only 50 percent 25 years ago. This created a false illusion of prosperity that allowed for the purchase of homes, cars and other items that should have never been financed or purchased. Accountants Assisted With Performance Enhancement: In 1998, the SEC required banks move closer to a pay-as-you-go approach when accounting for losses on their loans. This caused banks to make more risky loans with better profits, but set aside less reserves for future problems. Regulators Facilitated Performance Enhancement: Despite paying the FDIC insurance premiums for the coverage that they give on deposits, banks paid zero deposit insurance for the decade ending 2006 because the insurance fund was deemed fine. This was a ridiculous insurance model that is analogous to an auto insurance company not charging premiums until somebody has an accident. The Government Doled Out Some of These Steroids: Government-sponsored enterprises helped to accelerate growth in housing related to securities via subsidies to banks and consumers, whose absence would have meant less of a housing bubble. Incentives Encouraged the Behavior: The system lashed out against those whose job it is to report on the financial health of companies and the industry, in lieu of those with more positive outlooks. The solution for the financial industry involves a three-part mix of accounting rules, bankruptcy and capital, Mayo said.
The analyst said bank regulators should take charge again and allow banks to fully reserve for their problem loans. A baseline level of reserves would be helpful, Mayo said, adding that in general regulators should stop giving so much latitude to bank accounting.
See Mayo’s Full Testimony See Mayo’s Powerpoint Presentation Mayo emphasized that bankruptcy is part of the U.S. financial system, for banks as well as for borrowers and others. But he added that some banks are in fact too big to fail.
Finally, Mayo said, there should never be a question of whether banks have enough capital, not even on the worst day in business history.
Cool service, the truth is, by default, everything is in bucks, anyway.
I will add a weekly schedule in the title post for easy monitoring:
New Year began with parks in the real sector. Everyone needed me urgently. Three days on my feet, virtually no food or sleep. On Tuesday, in no condition, on Finam's account, minimum lot (0.05) entered three times with the result $-4. On Wednesday, having reached the house and having sharpened a salad, he passed out. Woke up at one in the morning — silence, rest, grace! (:
Opened the terminal, noticed the signaller breakout test, shorted with the minimum lot (0,1). Planned like this:
But the target has worked tick to tick, did not close due to spread, closed manually:
Outcome +14,32%. Did everything qualitatively, satisfied with the trade.
That's it for today.
PS. Decided, I will post more pictures «big dots». Sometimes it's scary to look at them, but for history, I think, will not be superfluous.
Thought IQfeed was a reliable quote provider. Opinion changed today after they misled their March corn schedule — placed a sell order on the chart yesterday, which is not true. After the order has worked, suspicion arose — compared with the charts of other suppliers and accurately, it turned out, that the system should have placed an order for almost 5% above. It will be necessary to demand from them compensation for damage. Here is IQfeed's March corn chart:
“Many firms were too highly leveraged, took on too much risk and did not have sufficient resources to manage those risks effectively in a rapidly changing environment,” Morgan Stanley Chairman John Mack, 65, will tell the panel. “The financial crisis has also made it clear that regulators simply didn’t have the visibility, tools or authority to protect the stability of the financial system as a whole.”
For those, who is not familiar with English. Free translation,смысл ,spoken by first person Morgan Stanley, is that, which is well known to everyone. A lot of risk with high debt burdens( as well as shoulders) in a rapidly changing market leads to disaster. As well as, if the regulators do not have the understanding and ability to control what is happening, then, in general, such a financial system cannot be stable.
P.S. Ignoring rules isn't just among traders, it is rather a property of people
Extremely interesting. Today the Financial Crisis Inquiry Commission invited the best analyst in the banking sector to its meeting( in my mind) Michael May. I've been following Michael since the mid 90s. What's interesting about him, this is what, that one of the first in the USA, who began at one time to reveal the problems of the banking sector and assign sell to many large banks. For this he lost his job at Prudential. For a long time he was not even heard. And only recently his name has become a household name. He is a very intelligent analyst, I rarely have such an opinion of anyone, who worked in large houses. Think, that it was not in vain that he was invited to the federal level today.
