The Credit Crisis Financial Stocks Short Journal

1430 GMT [Dow Jones] Growth in the ECRI weekly leading index weakened past the -10% mark that some economists say always signals a U.S. recession. The growth rate for the week of July 16 slowed to -10.5% from -9.8% in the previous week, although the index itself was unchanged at 120.7. Growth in the June index dropped to -7.1% from 1.4% in May. (kathleen.madigan@dowjones.com)
 
Quote from Martinghoul:

Firstly, it IS about timing. The fact that you're risking a few bps is an illusion. You're paying away carry/rolldown, which is the real cost of the trade. The longer you hold the trade, the worse it gets and you get no redeeming benefits of convexity.

Peter Thiel's performance speaks for itself, doesn't it? As you may have noticed, I am not a fan of the "I can do no wrong, because I am so successful" style of macro punting. If he thinks shorting JGBs is free, he's a bigger idiot than I thought. This is not to say that selling 10y JGBs at 50bps is a bad trade. It's just not free, no matter how low the yield looks on the chart.

P.S. That's quite all right. I like having a small ego and a small pair. Healthier that way and makes walking easier, you know?
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Yes, free was just a term to save typing a few keystrokes. I'm pretty sure even folks w/o your obvious intellectual capacity know there is a small cost to shorting JGBs at 0.50%.

Thiel, Leitner, Paulson, Burry, Eisman, Lippman, Cornwall, ... I know none of these guys have nothing on your skills, but they have one thing in common - they didn't mind paying a few points of negative carry for the possibility of a lottery-sized payout. And no, its has very little to do w/timing. That's the whole point of it.

I'm afraid I'm going to have to begin to ignore you unless you're going to start posting your trades. You're excellent at pontificating, truly outstanding. I would ask that you let the rest of us take a peek inside the Temple and let us know how you are growing your already considerable fortune.
 
Quote from ralph00:

Yes, free was just a term to save typing a few keystrokes. I'm pretty sure even folks w/o your obvious intellectual capacity know there is a small cost to shorting JGBs at 0.50%.

Thiel, Leitner, Paulson, Burry, Eisman, Lippman, Cornwall, ... I know none of these guys have nothing on your skills, but they have one thing in common - they didn't mind paying a few points of negative carry for the possibility of a lottery-sized payout. And no, its has very little to do w/timing. That's the whole point of it.

I'm afraid I'm going to have to begin to ignore you unless you're going to start posting your trades. You're excellent at pontificating, truly outstanding. I would ask that you let the rest of us take a peek inside the Temple and let us know how you are growing your already considerable fortune.
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Ha-ha, you can't bait me this easily, amico, although I appreciate the sarcasm very much... To be perfectly and brutally honest, I am as indifferent as humanly possible to whether you ignore me or not. I leave the choice with you and I trust you to choose wisely.

As to all the names, to be honest, I really really really try to think for myself as much as possible. There's so many issues with the public pronouncements of these financial heroes of yours, I don't even know where to start enumerating them.

As to the issue of timing, let me ask you a stylized question. Say you have to pay $1000/month to secure an uncertain $1m payoff at time T from today. Will you be equally willing to sign up for this when T = 1yr and when T = 30yrs?

As to posting my trades, there's many reasons why I don't want to do that. You're just gonna have to take me as I am, for better or worse, til' death do us part. Or, as I said, feel free to ignore me, I don't mind. I do confess to being curious as to why you're reacting in such a hostile way. I am only disagreeing with you about a trade, it's not a big deal.
 
I tend to chew on plum pits and peach pits for hours after eating the fruit. I've been known to fall asleep w/a pit in my mouth. I've woken up a couple of times choking, but never at a point where air was completely blocked. Scary stuff.
 
Quote from ralph00:

I tend to chew on plum pits and peach pits for hours after eating the fruit. I've been known to fall asleep w/a pit in my mouth. I've woken up a couple of times choking, but never at a point where air was completely blocked. Scary stuff.
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I'm reasonably confident that I was going to die without the Heimlich maneuver because the supplement was large, it blocked my throat good, and it opened up, it was going straight to my lungs. My sis told me my face was red when she saw me. Maybe I should buy some OTM options, its my lucky day
 
Quote from Martinghoul:

Ha-ha, you can't bait me this easily, amico, although I appreciate the sarcasm very much... To be perfectly and brutally honest, I am as indifferent as humanly possible to whether you ignore me or not. I leave the choice with you and I trust you to choose wisely.

As to all the names, to be honest, I really really really try to think for myself as much as possible. There's so many issues with the public pronouncements of these financial heroes of yours, I don't even know where to start enumerating them.

As to the issue of timing, let me ask you a stylized question. Say you have to pay $1000/month to secure an uncertain $1m payoff at time T from today. Will you be equally willing to sign up for this when T = 1yr and when T = 30yrs?

As to posting my trades, there's many reasons why I don't want to do that. You're just gonna have to take me as I am, for better or worse, til' death do us part. Or, as I said, feel free to ignore me, I don't mind. I do confess to being curious as to why you're reacting in such a hostile way. I am only disagreeing with you about a trade, it's not a big deal.
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I'm hostile because you seem to dismiss something just because there is negative carry. You say you think for yourself, but you behave just like 95% of the hedge funds out there which seem to be little more than vehicles set up to borrow at low yields and invest at high ones. That can also be a way to the poorhouse.

Just because I find stories like Burry or Eisman or Cornwall inspirational doesn't mean I don't think for myself. As far as I know, these guys have made no recent public pronouncements about the fate of interest rates. Should I instead take my inspiration from John Devaney?

http://money.cnn.com/2007/07/30/news/newsmakers/yacht_sale/index.htm
 
Quote from Daal:
I'm reasonably confident that I was going to die without the Heimlich maneuver because the supplement was large, it blocked my throat good, and it opened up, it was going straight to my lungs. My sis told me my face was red when she saw me. Maybe I should buy some OTM options, its my lucky day
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I had this happen to me once. It's scary, so now I make sure to chew things VERY carefully.
 
Quote from Daal:

I'm reasonably confident that I was going to die without the Heimlich maneuver because the supplement was large, it blocked my throat good, and it opened up, it was going straight to my lungs. My sis told me my face was red when she saw me. Maybe I should buy some OTM options, its my lucky day
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........happened to my brother in '81 at thanksgiving dinner, he turned blue,he was so happy he didnt die,he went out and bought presents for all the nieces/nephews,dies a week later dec 1 in car accident,could have been an omen
 
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