Saturday, December 29, 2012

Kyle Bass: 5 Reasons Why The Japanese Bond Market Will Collapse

1. Japan simply cannot repay its existing debt
(240% Debt to GDP, 25 times tax revenue; total on-balance-sheet debt is one quadrillion yen; Bass expects a bond crisis in 2-3 yrs)

2. Japan's Interest Expense is Unsustainable
(Japan spends a quarter of their tax revenue on interest even at near-zero rates; "this is what the non-linearity looks like"; the "most obvious thing" he's seen in his career, "only a question of when")

3. Japan is not self funding. Current Account deficit will grow. BOJ will need to print more
(Current Account Surplus at under 1% is much lower than Fiscal Deficit of 10.5%, so not self funding; Current Account will be negative by Q3/4 next year; Balance of trade is deteriorating fast)

4. Japan's population crisis is here. Taxable Income will decline, savings rate will decline, Social Security Payments will rise
(Population peaked at 129M people and now at 125M, one of the most homogeneous and xenophobic developed nations in the world; Life Insurance companies are paying out more than they're bringing in)

5. Japan's govt has no idea what to do
(Elected 10th finance minister in the last 6yrs; Privately saying can't implement consumption tax hike; Posted budget on xmas eve last year and showed social security expenditure decreasing 8% even though it was increasing by 9.5% a year for the last 5 years; They would finance this by issuing "compensation bonds" that will be paid for by future radical reform of the tax system; Ministry of Finance said they didn't want to issue more JGBs so as to not upset the "delicate balance" of the JGB market)

Tuesday, December 25, 2012

Felix Baumgartner's incredible space jump

Felix Baumgartner has completed a jump from a balloon 128,000 feet above New Mexico. He reached a top speed of 833.9 miles per hour. He deployed his parachute after falling for four minutes and landed just under ten minutes after jumping.

Stein: Static Rates Would Be `Highly Unusual'

Gabriel Stein, founder of Stein Brothers, discusses interest rates and fiscal policy.

Streible: Silver is #1 Commodity Pick of 2013

RJ O'Brien & Associates Senior Commodity Broker Phil Streible explains why he thinks silver will be the number one commodity pick for 2013

Morganlander: Global Growth Dead in the Water

Stifel Nicolaus Portfolio Manager Chad Morganlander sees a choppy first half in 2013, but second half growth could surprise to the upside and even reach "escape velocity."

Barron's: Europe Stocks on Sale

Ralph Silva, VP of Banking Strategy, HfS Research discusses Barron's cover story which forecasts Europe stocks could rally as much as 20% in 2013.

Jason Trennert's 'Nifty Fifty'

Jason Trennert of Strategas Research Partners, explains why he thinks some US stocks (Google, Microsoft, McKesson) are headed towards a "nifty fifty" trend because of financial repression. There are 25 companies whose CDS are trading below US Sovereign CDS.

James Montier at the European Investing Summit

Michael Mauboussin on luck vs. skill

Michael Mauboussin of Legg Mason is the author of The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing. He was recently interviewed by Miguel Barbosa.
Michael Mauboussin: The Success Equation Untangling Skill and Luck in Business, Sports, and Investing from Miguel Barbosa on Vimeo.
Interview with Michael Mauboussin: The Success Equation Untangling Skill and Luck in Business, Sports, and ...

Howard Marks on Value Investing,

Jim Grant: Honey, I Shrunk the Yield Curve!!

Jim Rickards: Fed is Racing to Create Inflation

Ryan Morris: 28-Year-Old Activist Investor

Ryan Morris launched Meson Capital Partners in Feb 2009 with $50K. He invested 40% of the fund in 3 companies and was up 753% gross for the year. In 2010, Whitney Tilson and Zeke Ashton of Centaur Capital Partners became seed investors, but Morris struggled and evolved into an activist investor knowing that he couldn't count on 2009-type market opportunities, and needed a more durable advantage.

Morris currently has 33 investors and $15M AUM.

Activist situations he has been involved in include HearUSA, InfuSystem, Pinnacle Airlines, and Lucas Energy.

See full article in Businessweek: Ryan Morris, 28-Year-Old Activist Investor

Howard Davidowitz on Holiday Sales, Economy

Retail sales are a "train wreck." Autos and homes are doing well, but are vulnerable.