The Fintag Newsletter

Helium © fintag

News comments:
There are reports the world's helium is going to run out (dailymail). My models tell me there is an inverse correlation between helium and the markets. But this is not the only reason why I can feel in my bones we are entering the next and biggest ever yet economic boom since, well the last one. Can't you feel it? Here is why:

NUMBER 1
Governments will not be able to control inflation through putting up interest rates. Inflation = price hikes = asset bubbles all fueled by negative real interest rates. Come on down Bernanke ... (bloomberg)

NUMBER 2
The post dot com boom slump was picked up when the Icelandic banks and some money laundered eastern European money flooded into Europe. They undercut all the old banks and turned retail banking into the new investment banking. Well this time its the Chinese turn. The Chinese banks are flush and their imperialistic owners want to own the people of the West. Like the US government, best way is to own their debt. So what are they doing? Building up their banking businesses. I have never seen so many jobs on offer in London ... (HR China)

NUMBER 3
We are all bored of the gloom. We want shiny new toys like iPlods and Fairtrade Organic jeans that cost more than the factory they were made in. Online retail sales hit three year high ...(zdnet)

NUMBER 4
Pay as you go. That's right. Cell phones, SKY, cars, Boris Bikes, nobody wants to own, we all want to rent. Hire purchase. No more capital purchases; lots more short term consumption. Bring it on Rupert Murdoch ...(pressgazette)

Shorting is dead. Long live shorting (sometime in 2013 when we are at the top of the curve ...)

Passes only © fintag

News comments:
Today, the UK's next generation of leaders and team players were handed out A'Levels (telegraph). In post socialist coalition cooperation Britain, failure is for those who refuse to be spoon fed. Well done and good luck on their career paths and a life of never failing.

Man by pub © fintag

News comments:
Today I take a break for a few days. Sitting on cash, this time its EUR, means I can fish in peace. See you next week sometime.

Today's shorts:
Ireland Given Another Beating (blooomberg)
Bank Of Merrill Flogs Its Adminstration Business (wow, I didn't know it had one) (icfa)
Ocado - The World's Crappiest IPO To Launch (independent)
SkyBridge: Is This A Joke? (finalternatives)

Today's longs:
Hedgies: Extinct At Last (nymag)
Hedgies: Rent-a-friend (telegraph)
Hedgies: About As Useful As A Dart Board (yahoo)
FTAlphaville To Close Down (ftalphaville)

Gossip:

Connaught Cocktails © fintag

Barely Measures Risk © fintag

So my bartender just won an award. He is the world class bartender of the year and beat 9000 people from 23 countries. The Connaught (see pic) is a favourite haunt and I am pleased Erik won. He is a winner (advfn).

Unlike those poor punters being force fed Ocado stock by Goldman who need the IPO to succeed. The founders shares are owned in tax havens, the company will never produce dividends, the business model is repeatable (fedex anyone?) and needs more funds to survive. Goldman are winners (dailymail).

MSCI. It bought riskmetrics and now its bought Bear Stearns barely measures risk (see pic). The winner is JP Morgan (marketwatch). But not the UK (telegraph).

But sometimes there are no winners. Take the Americans. Having bashed the Spanish and Greeks it turns out they are in a much worse position. Double Dip USA - Welcome to the the Great Depression 2.0 (telegraph).

Thought the internet was killing off journalism? 12 Hacks produced this simple powerpointesq chart. Financial Times. Via Google.

Prediction:
USA to give up the greenback for the Euro.

Mistresses for sale © fintag

News comments:
Subprime. The cause of the world's ills. Or an effect of cheap lending? The upshot? Goldman are made a scape goat. Shocking. Peanuts. AIG, Bear Stearns, Bank of America, Lehman, all suffered fates worse than a few dollars but hey ho that is capitalism. RBS (that is the UK tax payer) gets USD100m.

Oil. Obama. > 10 dead. Dead pelicans. Stopped. Yahoo.

Apple. Liars. iPhone works with Duct tape. Recall. Worse than a Toyota Prius.

Dodd-Frank
So the lawyers delight has born fruit. The Dodd-Frank Act ("DFA") has come to pass, although most of it is unenforceable:

1. What is a derivative?
2. What is prop trading?
3. What is a hedge fund?
4. The SEC were useless during the crash. Why are they being give more powers?
5. The CRAs have been beaten up. So now we get state controlled rating agencies?
6. Will Goldman turn itself private? For sure.
7. Will JP Morgan get a another good quarter? Not if it has to sell off its prized derivatives business.
8. Market liquidity. The next few years it will dry up?
9. The DFA conflicts with EU law. So if Goldman sets its holding co in the UK and continues to prop trade, what will the DFA say to that?
10. There are OTCs and OTCs. Bi-lateral OTCs need never be put on an exchange. Surely?
11. How can DFA control banks too big to fail? Seems vague.
12. Hedgies managing >USD150m need SEC registration. Big deal. Come over the the UK and all managers have to be regulated by the FSA.
13. What is a venture fund? Is my hedge fund a venture fund because its illiquid?
14. The cost of this legislation being implemented will be horrendous. Interpretation, loop holes and ignorance will turn the banks into retail only shops. Nice for the consumer? Not really as the DFA costs will be passed to them.
15. Fannie and Freddie. Where so they feature? They were a main cause of the crash?
16. And much more ....

Of course the DFA will be repealed and in 10 years time we will be back to square one. Asia and Europe could win big time. Imagine that. Prop trading (like gambling) banned in the USA.

Today's shorts:
BP Saves Itself (bbc)
Fund Of Funds Are Dead. RIP (ft)

Today's longs:
Goldman Pay Some Pennies To Make The SEC Go Away (bloomberg)

Gossip:
Goldman to raise its fee when placing Obama's T-Bills.