A very interesting clip of Peter Schiff arguing that a massive, multi-year recession is just around the corner. Art Laffer does his best to ridicule and insult Peter, offering to bet him a dollar and his honor that there can't possibly be a recession coming.
Who's your daddy now Art? Put one dollar and your honor in an envelope and send it to Peter.
Date: August, 28th 2006.
Thursday, October 30, 2008
Peter Schiff vs. Art Laffer for One Dollar and Honor
Goldigger Meets Hedgie, Hilarious
[ Hat Tip: Shallowman ]
What happens when a goldigger meets a hedgie? You're about to find out...
This was picked up by the New York Times: Acquisitive Craigslist Post Reddens Faces All Around. Original post below:
THIS APPEARED ON CRAIG'S LIST
What am I doing wrong?
Okay, I'm tired of beating around the bush. I'm a beautiful (spectacularly beautiful) 25 year old girl. I'm articulate and classy. I'm not from New York . I'm looking to get married to a guy who makes at least half a million a year. I know how that sounds, but keep in mind that a million a year is middle class in New York City, so I don't think I'm overreaching at all.
Are there any guys who make 500K or more on this board? Any wives? Could you send me some tips? I dated a business man who makes average around 200 -250. But that's where I seem to hit a roadblock. 250,000 won't get me to central park west. I know a woman in my yoga class who was married to an investment banker and lives in Tribeca, and she's not as pretty as I am, nor is she a great genius. So what is she doing right? How do I get to her level?
Here are my questions specifically:
- Where do you single rich men hang out? Give me specifics- bars, restaurants, gyms
- What are you looking for in a mate? Be honest guys, you won't hurt my feelings
- Is there an age range I should be targeting (I'm 25)?
- Why are some of the women living lavish lifestyles on the upper east side so plain? I've seen really 'plain jane' boring types who have nothing to offer married to incredibly wealthy guys. I've seen drop dead gorgeous girls in singles bars in the east village. What's the story there?
- Jobs I should look out for? Everyone knows - lawyer, investment banker, doctor. How much do those guys really make? And where do they hang out? Where do the hedge fund guys hang out?
- How you decide marriage vs. just a girlfriend? I am looking for MARRIAGE ONLY
Please hold your insults - I'm putting myself out there in an honest way. Most beautiful women are superficial; at least I'm being up front about it. I wouldn't be searching for these kind of guys if I wasn't able to match them - in looks, culture, sophistication, and keeping a nice home and hearth.
It's NOT ok to contact this poster with services or other commercial interests
PostingID: 432279810
THE ANSWER
Dear Pers-431649184:
I read your posting with great interest and have thought meaningfully about your dilemma. I offer the following analysis of your predicament. Firstly, I'm not wasting your time, I qualify as a guy who fits your bill; that is I make more than $500K per year. That said here's how I see it.
Your offer, from the prospective of a guy like me, is plain and simple a crappy business deal. Here's why. Cutting through all the B.S., what you suggest is a simple trade: you bring your looks to the party and I bring my money. Fine, simple. But here's the rub, your looks will fade and my money will likely continue into perpetuity...in fact, it is very likely that my income increases but it is an absolute certainty that you won't be getting any more beautiful!
So, in economic terms you are a depreciating asset and I am an earning asset. Not only are you a depreciating asset, your depreciation accelerates! Let me explain, you're 25 now and will likely stay pretty hot for the next 5 years, but less so each year. Then the fade begins in earnest. By 35 stick a fork in you!
So in Wall Street terms, we would call you a trading position, not a buy and hold...hence the rub...marriage. It doesn't make good business sense to "buy you" (which is what you're asking) so I'd rather lease. In case you think I'm being cruel, I would say the following. If my money were to go away, so would you, so when your beauty fades I need an out. It's as simple as that.
So a deal that makes sense is dating, not marriage. Separately, I was taught early in my career about efficient markets. So, I wonder why a girl as "articulate, classy and spectacularly beautiful" as you has been unable to find your sugar daddy. I find it hard to believe that if you are as gorgeous as you say you are that the $500K hasn't found you, if not only for a tryout.
By the way, you could always find a way to make your own money and then we wouldn't need to have this difficult conversation.
With all that said, I must say you're going about it the right way. Classic "pump and dump."
I hope this is helpful, and if you want to enter into some sort of lease, let me know.
Closer to ZIRP, Liquidity Trap, Lost Decade,
“The door is wide open for further rate cuts or anything else that might help the economy. The implication is that we'll see another half-point cut in December, if the prospects for the economy remain poor.'' -Allen Sinai, Decision Economics
Fed Signals Door `Open' for Cutting Rates to Lowest on Record: “Federal Reserve Chairman Ben S. Bernanke signaled he's ready to cut interest rates to the lowest level on record should the central bank's actions fail to stem the deepening economic slump.
Policy makers said yesterday that “downside risks to growth remain” even after their half-point reduction in the main rate to 1 percent. The Fed dropped a reference in its statement to threats from inflation, projecting “levels consistent with price stability'' in coming quarters.”
Yesterday we got one step closer. Already the market is expecting another 50 basis point cut to 0.50% in December. (See: Really Scary Fed Charts, Why Bernanke Will Furiously Cut. This post has become a monthly series.)
“Bernanke is drawing on an academic career studying the failed efforts to prevent the Great Depression, and yesterday's shift indicates he's prepared to revisit his 2003 commitment as a governor to lower rates to zero percent if necessary. Should lending fail to revive by December, the central bank will probably cut by another half point, said former Fed Governor Lyle Gramley.”
In Japan 2.0 I argued the following:
“We are heading for Japan v2.0.
Think ZERO percent interest rates and think DEFLATION. Think LOST DECADE. Think DEPRESSION. Now make all that GLOBAL.
That is what we have to look forward to.”
We are heading for a Liquidity Trap. Believe it. DEFLATION is Here, inflation is what we had.
This mess will take a long long time to sort itself out. Just like Japan had their Lost Decade, so to will America.
Related Posts:
Japan 2.0
Japan 2.0: Liquidity Trap
The Lost Decade
Stimulus Package: Does it Even Work
DEFLATION is Here
Lost Decade
The Really Scary Fed Charts Series:
1) Really Scary Fed Charts, Why Bernanke Will Furiously Cut
2) Fed CHANGES Really Scary Fed Charts
3) Really Scary Fed Charts: MARCH
4) Really Scary Fed Charts: APRIL
5) Really Scary Fed Charts: MAY, False Alarm?
6) Really Scary Fed Charts: JUNE, ‘Just’ 1% of GDP Now
7) Really Scary Fed Charts: JULY, More of the Same
8) Really Scary Fed Charts About to Get Crazy Scary
9) Really Scary Fed Charts: OCT, Now Crazy Scary
Wednesday, October 29, 2008
Tuesday, October 28, 2008
Volkswagen Short Squeeze, Hedgies Hurting
This morning Volkswagen (VOW) was worth more than Exxon Mobile (XOM) as common shares rocketed up as much as 93% on a short squeeze.
Prosche, in an attempt to take over the carmaker has engineered a shortage of common shares by gobbling up as much as 75% of the company via options. The counter parties to these options went long the actual stock to hedge their exposure, leaving the shorts scrambling for shares to buy back.
Volkswagen Overtakes Exxon as Most Valuable Company (Update1): “Volkswagen AG became the world's biggest company by market value after Porsche SE announced plans to raise its stake in the German carmaker to 75 percent, triggering demand from short-sellers.
Volkswagen rose as much as 485.01 euros, or 93 percent, to 1,005.01 euros and was up 55 percent as of 11:10 a.m. in Frankfurt trading. Wolfsburg, Germany-based Volkswagen has risen more than fivefold this year and at its intraday peak was valued at 296 billion euros ($370 billion), more than Exxon Mobil Corp.'s $343 billion market value at yesterday's closing price in New York, according to data compiled by Bloomberg.
Porsche, the maker of the 911 sports car, has accumulated Volkswagen shares since 2005 in an effort to protect ties to its largest supplier. Porsche said Oct. 26 that it aims to increase its holding from 42.6 percent. That prompted some short-sellers to buy from a shrinking pool of stock to end their bets. BaFin, Germany's financial-market regulator, said today that it's monitoring trading in Volkswagen shares following the gains.
“One of the biggest risks with the herd mentality approach to shorting is that a lot of money can be made on the outset,” said Ed Oliver, a senior business consultant at Spitalfields Advisors, a London-based firm specializing in securities lending. “But you can end up losing the whole of it when you try to close the position. There's no limit.”
Stock On Loan
Volkswagen's surge came as 23 of the 29 other stocks in the country's benchmark DAX Index fell on investor concern that a slowdown in the global economy is accelerating. About 12.9 percent of Volkswagen's common stock was on loan as of Oct. 23, mostly for short sales, the highest proportion of any company on the DAX, according to London-based Data Explorers.
Stuttgart, Germany-based Porsche added to an earlier 35 percent stake and said two days ago that it holds options for another 31.5 percent.
“Porsche heads for a domination agreement and triggers a short-squeeze,” Horst Schneider, an HSBC Holdings Plc analyst in Dusseldorf, Germany, wrote in a report yesterday, in which he upgraded Volkswagen's common shares to “neutral” from “underweight.” The stock “will be more driven by covering of short positions rather than by fundamental valuations.”
Carmakers worldwide are struggling with plunging sales as credit markets seize up and economies contract, deterring consumers from making large purchases. U.S. industry-wide auto sales fell 27 percent in September, the steepest monthly slide since 1991, while nine-month deliveries in Europe declined 4.4 percent as September sales dropped 8.2 percent.
Ratings Cut
PSA Peugeot Citroen, Europe's second-biggest carmaker, and smaller French competitor Renault SA both had their credit ratings downgraded by Moody's Investors Service because of the risk that car markets won't recover next year. Standard & Poor's said it may cut the credit rating of Fiat SpA, Italy's largest carmaker, to less than investment grade.
Until yesterday, when the stock more than doubled, Volkswagen's biggest gain in almost two decades was a 27 percent jump on Sept. 18. People familiar with securities lending said at the time that the collapse of Lehman Brothers Holdings Inc. caused the increase by triggering recalls of borrowings. The stock fell 23 percent on Oct. 20, the biggest drop also in almost two decades, as short-sellers predicted the price would decline once Porsche gains control.
Largest Shareholders
There may be little ordinary stock freely trading in Volkswagen because most of the shares are owned by Porsche, the German state of Lower Saxony and the banks that underwrote Porsche's options, Adam Jonas, a London-based analyst at Morgan Stanley, wrote in a research report yesterday. Lower Saxony is Volkswagen's second-biggest owner with a 20.1 percent stake.
Index-tracking funds also hold stakes in Volkswagen, now the DAX's most-weighted stock, and must retain the holdings as long as the carmaker remains a member.
Deutsche Boerse AG, the operator of Germany's main stock markets, said Volkswagen will remain in the DAX unless the carmaker announces the freely traded stock no longer meets requirements.
“We're applying our regulatory framework and, as long as Volkswagen's free float is above 5 percent, the index won't be changed,” said Torsten Baar, a spokesman for Frankfurt-based Deutsche Boerse.
BaFin is analyzing trading in Volkswagen stock, though it hasn't opened a formal inquiry into whether there's any manipulation and “pure cash-settled options do not require disclosure” under the country's laws, said Anja Engelland, a spokeswoman for the Bonn-based agency. Results from any analysis are unlikely this week, she added.
Porsche's Intent
Until Oct. 26, Porsche had said it was aiming only for a stake exceeding 50 percent, and Chief Executive Officer Wendelin Wiedeking said at the Paris Motor Show early this month that a stake of as much as 75 percent would be “not realistic” because of market turmoil.
Short sales have largely been undertaken by investors betting on a decline in Volkswagen's common stock, which hold voting rights, or its underperformance relative to the preferred shares, which carry no votes, according to analysts.
The common shares, which outnumber the preferred equity almost three to one, are the only gainers this year on either the DAX or the nine-member Bloomberg Europe Autos Index. In contrast, Volkswagen's preferred stock has dropped 62 percent, including a 14 percent decline yesterday, to 37.89 euros.
“Volkswagen has been one of the greatest shorts of hedge funds, and it's been an absolute, absolute disaster,” Emmanuel Roman, co-chief executive officer of GLG Partners Inc., said at a conference in London on Oct. 23. “It's been very painful.” GLG didn't participate in short-selling trading of the carmaker's common shares, he said.”
Prosche, in an attempt to take over the carmaker has engineered a shortage of common shares by gobbling up as much as 75% of the company via options. The counter parties to these options went long the actual stock to hedge their exposure, leaving the shorts scrambling for shares to buy back.
Volkswagen Overtakes Exxon as Most Valuable Company (Update1): “Volkswagen AG became the world's biggest company by market value after Porsche SE announced plans to raise its stake in the German carmaker to 75 percent, triggering demand from short-sellers.
Volkswagen rose as much as 485.01 euros, or 93 percent, to 1,005.01 euros and was up 55 percent as of 11:10 a.m. in Frankfurt trading. Wolfsburg, Germany-based Volkswagen has risen more than fivefold this year and at its intraday peak was valued at 296 billion euros ($370 billion), more than Exxon Mobil Corp.'s $343 billion market value at yesterday's closing price in New York, according to data compiled by Bloomberg.
Porsche, the maker of the 911 sports car, has accumulated Volkswagen shares since 2005 in an effort to protect ties to its largest supplier. Porsche said Oct. 26 that it aims to increase its holding from 42.6 percent. That prompted some short-sellers to buy from a shrinking pool of stock to end their bets. BaFin, Germany's financial-market regulator, said today that it's monitoring trading in Volkswagen shares following the gains.
“One of the biggest risks with the herd mentality approach to shorting is that a lot of money can be made on the outset,” said Ed Oliver, a senior business consultant at Spitalfields Advisors, a London-based firm specializing in securities lending. “But you can end up losing the whole of it when you try to close the position. There's no limit.”
Stock On Loan
Volkswagen's surge came as 23 of the 29 other stocks in the country's benchmark DAX Index fell on investor concern that a slowdown in the global economy is accelerating. About 12.9 percent of Volkswagen's common stock was on loan as of Oct. 23, mostly for short sales, the highest proportion of any company on the DAX, according to London-based Data Explorers.
Stuttgart, Germany-based Porsche added to an earlier 35 percent stake and said two days ago that it holds options for another 31.5 percent.
“Porsche heads for a domination agreement and triggers a short-squeeze,” Horst Schneider, an HSBC Holdings Plc analyst in Dusseldorf, Germany, wrote in a report yesterday, in which he upgraded Volkswagen's common shares to “neutral” from “underweight.” The stock “will be more driven by covering of short positions rather than by fundamental valuations.”
Carmakers worldwide are struggling with plunging sales as credit markets seize up and economies contract, deterring consumers from making large purchases. U.S. industry-wide auto sales fell 27 percent in September, the steepest monthly slide since 1991, while nine-month deliveries in Europe declined 4.4 percent as September sales dropped 8.2 percent.
Ratings Cut
PSA Peugeot Citroen, Europe's second-biggest carmaker, and smaller French competitor Renault SA both had their credit ratings downgraded by Moody's Investors Service because of the risk that car markets won't recover next year. Standard & Poor's said it may cut the credit rating of Fiat SpA, Italy's largest carmaker, to less than investment grade.
Until yesterday, when the stock more than doubled, Volkswagen's biggest gain in almost two decades was a 27 percent jump on Sept. 18. People familiar with securities lending said at the time that the collapse of Lehman Brothers Holdings Inc. caused the increase by triggering recalls of borrowings. The stock fell 23 percent on Oct. 20, the biggest drop also in almost two decades, as short-sellers predicted the price would decline once Porsche gains control.
Largest Shareholders
There may be little ordinary stock freely trading in Volkswagen because most of the shares are owned by Porsche, the German state of Lower Saxony and the banks that underwrote Porsche's options, Adam Jonas, a London-based analyst at Morgan Stanley, wrote in a research report yesterday. Lower Saxony is Volkswagen's second-biggest owner with a 20.1 percent stake.
Index-tracking funds also hold stakes in Volkswagen, now the DAX's most-weighted stock, and must retain the holdings as long as the carmaker remains a member.
Deutsche Boerse AG, the operator of Germany's main stock markets, said Volkswagen will remain in the DAX unless the carmaker announces the freely traded stock no longer meets requirements.
“We're applying our regulatory framework and, as long as Volkswagen's free float is above 5 percent, the index won't be changed,” said Torsten Baar, a spokesman for Frankfurt-based Deutsche Boerse.
BaFin is analyzing trading in Volkswagen stock, though it hasn't opened a formal inquiry into whether there's any manipulation and “pure cash-settled options do not require disclosure” under the country's laws, said Anja Engelland, a spokeswoman for the Bonn-based agency. Results from any analysis are unlikely this week, she added.
Porsche's Intent
Until Oct. 26, Porsche had said it was aiming only for a stake exceeding 50 percent, and Chief Executive Officer Wendelin Wiedeking said at the Paris Motor Show early this month that a stake of as much as 75 percent would be “not realistic” because of market turmoil.
Short sales have largely been undertaken by investors betting on a decline in Volkswagen's common stock, which hold voting rights, or its underperformance relative to the preferred shares, which carry no votes, according to analysts.
The common shares, which outnumber the preferred equity almost three to one, are the only gainers this year on either the DAX or the nine-member Bloomberg Europe Autos Index. In contrast, Volkswagen's preferred stock has dropped 62 percent, including a 14 percent decline yesterday, to 37.89 euros.
“Volkswagen has been one of the greatest shorts of hedge funds, and it's been an absolute, absolute disaster,” Emmanuel Roman, co-chief executive officer of GLG Partners Inc., said at a conference in London on Oct. 23. “It's been very painful.” GLG didn't participate in short-selling trading of the carmaker's common shares, he said.”
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