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Posts tagged ‘Reggie Middeleton’

“Hardware IS Dead” Thesis Has Now Torn Through All Handset Providers & Now Everyone Can Act On It

By Reggie Middeleton

called the Apple short before it became vogue! I called the Blackberry short beforethey became the industry whipping boy! I warned about Nokia and made clear that Samsung Will Be Ready To Do That Fruit Thing! How’d I know all of this? It’s quite simple, I explained it all in 2012 – Smartphone Hardware Manufacturers Are Dead. Well, now the chickens continue to come home to roost, as per CNBC:

In order to deal with such pressures, Samsung appears to be pricing the Galaxy S5 lower than its predecessor S4, according to Kang, who has collected pre-order prices for the device from around the world.

“It reflects the trend of smart phone commoditization – Samsung will have to learn to create profits at a lower price point,” Kang said.

Earlier this week, Samsung said it’s on track to post its second straight quarter of profit decline, as slowing smartphone sales growth continued to weigh on earnings.

Samsung Electronics 1Q profit view just shy of estimates

The South Korean tech giant estimated that its January-March operating profit fell by 4.3 percent to 8.4 trillion won, slightly below an average forecast of 8.5 trillion won, according to Reuters.

I’ve created an infrastructure that significantly expands these investment markets by allowing anyone, anywhere with an Internet connection (of almost any speed) to participate in almost any of the world’s public financial markets. Taking the subject matter of this article into consideration, we can short Samsung on its own home exchange of Korea for nearly any amount, from $10 million US down to $8 …….

full article at source: http://ultra-coin.com/index.php/homes/item/27-hardware-is-dead-thesis-has-now-torn-through-all-handset-providers-now-everyone-can-act-on-it

The “Anti-Economist” Calls Bitcoin the Anti-Social Network

From boombustblog.com

Paul Krugman wrote an anti-cryptocurrency Op-Ed piece in the NY Times titled the “Anti-social Network“. Now, I know the Times needs to sell ad space and subscriptions, hence technical accuracy may not be exactly what they are going for, but Mr. Krugman (the classical Keynesian economist type – I don’t particularly subscribe to such schools of thought, I guess I’m not educated enough) has spewed so many inaccurate statements, false facts and just plain old indications of his total misunderstanding of the subject matter one would think it would behoove the Times to either have him issue corrections (or, since it is Op-Ed after all) have someone such as my self (you know, maybe a little less academically involved) come after him and clean up a little.

Now, where shall I start? To quote Mr. Krugman:

So how is bitcoin different? Unlike credit card transactions, which leave a digital trail, bitcoin transactions are designed to be anonymous and untraceable. When you transfer bitcoins to someone else, it’s as if you handed over a paper bag filled with $100 bills in a dark alley.

I don’t think that’s true Mr.Krugman. Let’s refer to Wikipedia’s write-up on the Crypto……………… full article at source: http://boombustblog.com/blog/item/9178-the-anti-economist-calls-bitcoin-the-anti-social-network

Question

Is there anybody out there who can help set up a Bitcoin currency for us In Ireland????

What Happens When That Juggler Gets Clumsy?(Reggie Middleton)

 

Anybody thinking of going into the markets now should at least take a look at this blog Reggie has been spot on now for the last 4 years I’ve been following him.

 

By Reggie Middleton

 

It has been hard for true fundamental investors to reliably make money since the bear market rally of this generation (c. 2nd quarter 2009) due to the fact that global market central planners world wide (read as central bankers and their cohorts) have been distorting price discovery and realistic valuations to an unprecedented extent. Counting the money just doesn’t work when no one truly respects and valued money but you. In essence, central bankers world wide (starting here in the US, with our central bank) have disrupted and disrespected the economic circle of life. For a detailed explanation of this happenstance, see Do Black Swans Really Matter? Not As Much as the Circle of Life, The Circle Purposely Disrupted By Multiple Central Banks Worldwide!!! But….. Those very same central bankers/central planners have to juggle many, too many, balls in order to keep this charade afloat. Yes, sink this charade will – and when it does, it will probably look very ugly. Now, its a timing game. As the title inquires…

source and full article here :http://boombustblog.com/BoomBustBlog/What-Happens-When-That-Juggler-Gets-Clumsy.html

Greece May Not Complete All Asset Sales

By Reggie Middeleton

Here’s a surprise that many may not have expected, Bloomberg reports Greece May Not Complete All Asset Sales

Greece’s deputy finance minister, Pantelis Economou, said the country won’t manage to sell everything on its list of planned state-asset sales and real- estate developments. “We will sell a lot less than planned,” he told lawmakers yesterday, according to a transcript posted on the Parliament’s website.

Greece aims to raise 50 billion euros ($69 billion) through asset sales and property developments by the end of 2015, part of a package of fiscal measures demanded by the European Union and the International Monetary Fund in exchange for financial support. Parliament approved the measures in two votes at the end of last month…

“Selling state holdings to reduce Greece’s debt is a necessary condition to get what we are entitled to,” Economou told lawmakers. He added that eliminating tax evasion can “buy time” for Greece and help to meet revenue targets through 2015, according to the transcript.

The Finance Ministry announced the board of the agency that’s been set up to supervise the asset sales. The program includes plans to sell stakes in Public Power Corp SA (PPC) and gambling company Opap SA (OPAP), as well as Greece’s two biggest port operators and banks.

Now, here’s the kicker…

 Economou said there isn’t enough investor interest in the assets for sale as “credit default swaps and spreads are the kinds of thing they have their eyes on.” Concrete assets are “riskier,” he said.

Methinks Mr. Economou (what irony is there in an name???) may be missing the forest due to tree bark irritants in his corneas.There will be plenty of investor interest in hard asset sales if said hard asset sales were priced realisitically and with true price discovery enabled. The problem is that that’s just not the case. The proforma asset sales numbers proffered by the Greek government were ridiculously optimistic, and that was before said asset’s market prices tumbled off of a cliff the 2nd and 3rd times. As it stands now, CDS and are easier to price than Greek assets with cooked books. How cooked? Refrerence

  1. Once You Catch a Few EU Countries “Stretching the Truth”, Why Should You Trust the Rest?
  2. Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!

Now, let’s reference the biting piece that directly addressed and forecasted todays Greek asset sale problems over a year ago, Greece’s Circular Reasoning Challenge Moves From BoomBustBlog to the Mainstream

Full article and source :http://boombustblog.com/BoomBustBlog/Greek-Asset-Sales-Fall-Short-As-We-Virtually-Guaranteed-They-Would-In-Spring-2010.html

Big Banks Will Pay for Optimism Driven Reduction of Reserves

By Reggie Middleton

from www.Boombustblog.com

As those that follow me know, I have been bearish on US banks since 2007. That bearish outlook resulted in massive returns ensuing years, just to have nearly half of it returned due to rampant shenanigans and outright fraud. Needless to say, it pissed me off – but it did much more than that. It created a re-bubble before the bubble that was bursting had a chance to fully deflate. As a result, what we have now is one big mess that is getting messier by the minute.

On Friday, July 16th, 2010 I posted “After a Careful Review of JP Morgan’s Earnings Release, I Must Ask – “What the Hell Are Those Boys Over at JP Morgan Thinking????”. The impetus of such was that this bank that all seem to be in awe of was taking a big risk in order to pad accounting earnings for a quarter or two. Below is an excerpt of my thoughts:

Trust me, the collateral behind many more mortgages will continue to depreciate materially as government giveaways and bubble blowing for housing fade!

The delinquency and NPA levels drifted down a bit, but they are still at very high levels. Charge-offs came down but the reduction in provisions has been quite disproportionate bringing down the allowance for loan losses. In 2Q10, the gross charge- offs declined 26.6% (q-o-q) to $6.2 billion (annualized charge off rate – 3.55%) from $8.4 billion in 1Q10 (annualized charge off rate – 4.74%). But the provisions for loan losses were slashed down 51.7% (q-o-q) to $3.4 billion (annualized rate – 1.9%) against $7.0 billion (annualized rate – 3.9%) in 1Q10. Consequently, the allowance for loan losses declined 6.2% (q-o-q) from $35.8 billion from $38.2 billion in 1Q10. Non performing loans and NPAs declined 5.1% (q-o-q) and 4.5% (q-o-q) respectively. Thus, the NPLs and NPAs as % of allowance for loan losses expanded to 45.1% and 50.7%, respectively from 44.6% and 49.8% in 1Q10. Delinquency rates, although moderated a bit, are still at high levels. Credit card – 30+ day delinquency rate was 4.96% and the real estate – 30+ day delinquency rate was 6.88%. The 30+ days delinquency rate for WaMu’s credit impaired portfolio was 27.91%.

read this great article at source: http://boombustblog.com/BoomBustBlog/As-Earnings-Season-is-Here-I-Reiterate-My-Warning-That-Big-Banks-Will-Pay-for-Optimism-Driven-Reduction-of-Reserves.html

comment:

Again  a great article from Reggie!

It would be no harm if you are in the markets to take out
some insurance as I myself have done over the last month so I am not that
worried where the market goes from here as I win each way  and the news at the moment is there is likely
to be lots of volatility in the coming weeks.

Reggie Middleton on the Potential of a European Banking Crisis As Keynote Speaker at ING

Reggie’s, excellent presentation earlier this month on the European banking crises ignore this at your peril!

Step by Step Guide to the Largest String of Sovereign Defaults in Recent History

The Anatomy of a Portugal Default: A Graphical Step by Step Guide to the Beginning of the Largest String of Sovereign Defaults in Recent History

By  Reggie Middeleton

of http://boombustblog.com

There are more and more “professionals” in the mainstream media stating that they expect European defaults. What is interesting is that as there is at least a minority of pundits that are facing this inevitable event. European (and American) equity markets are still chuggling the global liquidity elixir awash in the markets and moving ever higher. From Bloomberg: Shrinking Euro Union Seen by Creditors Who Cried for Argentina

Nine months before Argentina stopped paying its obligations in 2001, Jonathan Binder sold all his holdings of the nation’s bonds, protecting clients from the biggest sovereign default. Now he’s betting Greece, Portugal and Spain will restructure debts and leave the euro.

Binder, the former Standard Asset Management banker who is chief investment officer at Consilium Investment Management in Fort Lauderdale, Florida, has been buying credit-default swaps the past year to protect against default by those three nations as well as Italy and Belgium. He’s also shorting, or betting against, subordinated bonds of banks in the European Union.

“You will probably see at least one restructuring before the end of the next year,” said Binder, whose Emerging Market Absolute Return Fund gained 17.6 percent this year, compared with an average return of 10 percent for those investing in developing nations, according to Barclay Hedge, a Fairfield, Iowa-based firm that tracks hedge funds.

He’s got plenty of company. Mohamed El-Erian, whose emerging-market fund at Pacific Investment Management Co. beat its peers in 2001 by avoiding Argentina, expects countries to exit the 16-nation euro zone. Gramercy, a $2.2 billion investment firm in Greenwich, Connecticut, is buying swaps in Europe to hedge holdings of emerging-market bonds, said Chief Investment Officer Robert Koenigsberger, who dumped Argentine notes more than a year before its default.

No disrespect intended to these fine gentlemen and distinguished investors, but the default of several of these states is simple math. You cannot take 8 from 10 10 from 8 and come up with a positive number. It really does boil down to being just that simple in the grand scheme of things. I actually released a complete road map of Portugal’s default yesterday (see ), and today I will walk those who are not adept in the area through it with simple graphs and plain vanilla explanations.This is done as a preview for our subscription only Ireland, Spain and Greece default scenarios. These scenarios, while still denied by most, are actually just the tip of the iceberg, for they will do much more damage together than they could ever do separately. As a group, they will make the Argentina event look like a bull rally. That is where the contagion models come into play (see Introducing The BoomBustBlog Sovereign Contagion Model: Thus far, it has been right on the money for 5 months straight!). Any institutions or professional investors who are interested in accessing our research should subscribe here. To my knowledge, I believe BoomBustBlog is the only source on the publicly available web for such information.

This is what the Argentinian referenced in the article above did to investors…

image001

Price of the bond that went under restructuring and was exchanged for the Discount bond

image003

That’s right! Ouch! Imagine this times 10! That is what we are looking forward to. Let’s jump straight into Portugal’s situation, and remember that many of these countries have deliberately mislead and misrepresented their fiscal situations for years (see Once You Catch a Few EU Countries “Stretching the Truth”, Why Should You Trust the Rest? and Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!).

This is the carnage that would occur if the same restructuring were to be applied to Portugal today.

Yes, it will be nasty. That 35% decline in cash flows will be levered at least 10x, for that is how much of the investors in these bonds purchased them. A 35% drop is nasty enough, 35% x 10 starts to hurt the piggy bank! As a matter of fact, no matter which way you look at it, Portugal is destined to default/restructure. Its just a matter of time, and that time will probably not extend past 2013. Here are a plethora of scenarios to choose from…

This is Portugal’s path as of today.

Even if we add in EU/IMF emergency funding, the inevitability of restructuring is not altered. As a matter of fact, the scenario gets worse because the debt is piled on.

Let it be known that there are larger sovereign states that are worse off. There are other states that are not in as bad a shape but are poised to do much more damage,  and then there are a plethora of states that will get dragged down through contagion. Yet, the natural manner of pricing risk in the equity markets does not transmit these facts because of the unprecedented amount of liquidity stemming from central bankers around the world doing the Bernanke/Japanse QE thing.

Anyone interested in seeing the entire scenario analysis for Portugal should look here, you will find it nowhere else:

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