Eurozone Germany Signals Shift on Europe Aid http://t.co/AcnaysGz “a common fiscal policy would be irreversible and well coordinated.” $$ Jun 29, 2012Bermuda on track to comply with EU insurer rules http://t.co/TFdvIr1D If not, cos reinsured could not take full reserve credit;wud lose biz Jun 26, 2012How Germany’s euro fight has turned Orwellian http://t.co/fjwZFYvb “foreigners shouldn’t overestimate Germany’s financial capacity.” $$ Jun 26, 2012Hollande Reality...

 I have worked for a hedge fund, and I have many friends that work for hedge funds.  I understand hedge funds well.The “Little Book” people at Wiley should indeed have done this book, but with a different author.  Why?  When there are significant areas of controversy around a topic, and you write a book as if there is no controversy, it means you haven’t done your homework.There are many like Simon Lack, who wrote “The Hedge Fund Mirage,” and Dichev and Yu,...

I received the following from a reader:My primary motivation for writing to you is this post by Jeff Miller:http://oldprof.typepad.com/a_dash_of_insight/2012/06/the-quest-for-yield-part-7-what-about-bonds.htmlIn my mind, you are the foremost expert blogger when it comes to bonds so I wanted to get your take.  It’s been a long time since my bond class getting my MBA and I haven’t dealt with bond math in quite awhile.I’m wondering about this whole individual bond ladder versus...

Why should insurance companies be such a good place to invest?  That’s a great question, and I will try to outline an answer.  Before I do, let me draw a few distinctions:I’m not talking about life companies, they are far more capital encumbered then P&C companies.I am also not talking about title, mortgage, or finance insurers.  They are too risky, and that was my opinion in the early 2000s.Health insurers have a different model, much more subject to regulation.Many insurance...

So SEC Chairman Mary Shapiro wants money market funds to use mark-to-market accounting, and publish a daily NAV.  Well, why not impose mark-to-market accounting on banks, and force them to report the fair market value of their surplus every day? Large depositors over the guaranty limit and the repo market might be interested in this data.  Oh wait, that’s procyclical, so many claim, even though it reveals cash flow mismatches, which are material to the running of a banking...

A note to all of the actuaries in the audience, all three of you : an old friend from my GIC days is seeking a multi-talented actuary to work in the stable value business.  Must understand how wraps work, etc.  If interested, drop me a note, and I’ll send you the contact info.On with the tweets:=-=–=-=-=-=-=-=-=-=-=-=-=-==–=-=-==-=-=-=–==–=-=-=-==–=Eurozone May not last long $$ RT @John_Hempton: @AlephBlog Spain imposing on bank junior bonds but prefs...

This book is written by a man who wants to see the European experiment succeed, but is not confident that it will succeed.  I think this is a fair book on the topic; it does not absorb all of my biases on why I think the Eurozone is hopeless: a) Currency unions have never worked; they must either become a nation, or break up.  b) I have a saying, “Governments are smaller than Economies, and Economies are smaller than Cultures.”This saying puts things in their place.  Government...

April 2012June 2012CommentsInformation received since the Federal Open Market Committee met in March suggests that the economy has been expanding moderately.Information received since the Federal Open Market Committee met in April suggests that the economy has been expanding moderately this year.“This year” makes it more of a historical statement, and shades the GDP view down.Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated.However,...

As you might know, I reviewed Howard Marks’ excellent book The Most Important Thing, and its enhanced version, The Most Important Thing Illuminated.  Some PR flacks are more tenacious, and some less so.  Some come to me prior to publication, and some after.  Some represent an amazing author and book, others less so.Even though the PR flack came to me after publication, she was tenacious, and offered me an interview with Howard Marks, Chairman of Oaktree Capital.  How could I refuse?Now, I...

These articles appeared between February and April 2011:On the Percentage of Market Cap held by Domestic Stock ETFsImplicationsDomestic stock ETFs tend to pick more volatile stocks.Domestic stock ETFs tend to pick stocks held by major institutions.Domestic stock ETFs tend to pick stocks less held by insiders.  (They tend to be more boring.)Goes Down Double-SpeedBear markets move at 1.9x the rate of bull markets. (double speed)Consider the Boom in the Bust; Consider the Bust in the BoomWe would...