Using Veritas to Construct the "Per…

29-04-2017 Hits:85773 BoomBustBlog Reggie Middleton

Using Veritas to Construct the "Perfect" Digital Investment Portfolio" & How to Value "Hard to Value" tokens, Pt 1

The golden grail of investing is to find that investable asset that provides the greatest reward with the least risk. Alas, despite how commonsensical that precept seems to be, many...

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The Veritas 2017 Token Offering Summary …

15-04-2017 Hits:80003 BoomBustBlog Reggie Middleton

The Veritas 2017 Token Offering Summary Available For Download and Sharing

The Veritas Offering Summary is now available for download, which packs all the information about Veritas in a single page. A step by step guide to purchasing Veritas can be downloaded here.

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What Happens When the Fund Fee Fight Hit…

10-04-2017 Hits:79864 BoomBustBlog Reggie Middleton

What Happens When the Fund Fee Fight Hits the Blockchain

A hedge fund recently made news by securitizing its LP units as Ethereum-based tokens and selling them as tradeable (thereby liquid) assets. This brings technology to the VC industry that...

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Veritaseum: The ICO That's Ushering in t…

07-04-2017 Hits:84342 BoomBustBlog Reggie Middleton

Veritaseum: The ICO That's Ushering in the Era of P2P Capital Markets

Veritaseum is in the process of building peer-to-peer capital markets that enable financial and value market participants to deal directly with each other on a counterparty risk-free basis in lieu...

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This Is Ground Zero for the 2017 Veritas…

03-04-2017 Hits:80884 BoomBustBlog Reggie Middleton

This Is Ground Zero for the 2017 Veritas Offering. Are You Ready to Get Your Key to the P2P Capital Markets?

This is the link to the Veritas Crowdsale landing page. Here is where you will be able to buy the Veritas ICO when it is launched in mid-April. Below, please...

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What is the Value Proposition For Verita…

01-04-2017 Hits:83130 BoomBustBlog Reggie Middleton

What is the Value Proposition For Veritas, Veritaseum's Software Token?

 A YouTube commenter asked a very good question that we will like to take some time to answer. The question was, verbatim: I've watched your video and gone through the slides. The exchange...

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This Real Estate Bubble, Like Some Relat…

28-03-2017 Hits:54140 BoomBustBlog Reggie Middleton

This Real Estate Bubble, Like Some Relationships, Is Complicated...

CNBC reports US home prices rise 5.9 percent to 31-month high in January according to S&P CoreLogic Case-Shiller. This puts the 20 city index close to an all time high, including...

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Bloomberg Chimes In With My Warnings As …

28-03-2017 Hits:82264 BoomBustBlog Reggie Middleton

Bloomberg Chimes In With My Warnings As Landlords Offer First Time Ever Concessions to Retail Renters

Over the last quarter I've been warning about the significant weakness in retailers and the retail real estate that most occupy (links supplied below). Now, Bloomberg reports: Manhattan Landlords Are Offering...

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Our Apple Analysis This Week - This Comp…

27-03-2017 Hits:82117 BoomBustBlog Reggie Middleton

Our Apple Analysis This Week - This Company Is Not What Most Think It IS

We will releasing our Apple forensic analysis and valuation this week for subscribers (click here to subscribe - lowest tier is the same as a Netflix subscription). As can be...

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The Country's First Newly Elected Lame D…

27-03-2017 Hits:81985 BoomBustBlog Reggie Middleton

The Country's First Newly Elected Lame Duck President Will Cause Massive Reversal Of Speculative Gains

Note: Subscribers should reference  the paywall material here for stocks that should give a good risk/reward scenario for bearish trades. The Trump administration's legislative outlook is effectively a political desert, with...

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Sears Finally Throws In The Towel Exactl…

22-03-2017 Hits:88010 BoomBustBlog Reggie Middleton

Sears Finally Throws In The Towel Exactly When I Predicted "has ‘substantial doubt’ about its future"

My prediction of Sears collapsing once interest rates started ticking upwards was absolutely on point.

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The Transformation of Television in Amer…

21-03-2017 Hits:85884 BoomBustBlog Reggie Middleton

The Transformation of Television in America and Worldwide

TV has changed more in the past 10 years than it has since it's inception nearly 100 years ago This change is profound, and the primary benefactors look and act...

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Governments world over have issued guarantees and commitments to assure the world that they would not let any major counterparty to fail. This has created the desired impact in short term credit and lending markets, as well as the longer term corporate bond markets. It has also produced the effect that I anticipated, moral hazard (ex. the continued extreme risk taking at Goldman Sachs despite being backstopped by the US government - see The Goldman conspiracy theory is now no longer a theory) as well as the carry of corporate risk by central banks and governments in lieu of private investors.

 

As of July 29, 2009, total outstanding (seasonally adjusted) short term commercial paper (the primary method of both financial and non-Marginal companies with marginal business models are going to crackshort term funding) was down from US$2.2 trillion in August 2007 to US$1.06 trillion. With the collapse of the shadow banking system (the network of "non-bank" lending facilities), asset backed commercial paper (ABCP) has stabilized  at US$437 billion--a third of its peak volume in 2007. The Fed's commercial paper lending facility declined to US$124 billion as of June 24, 2009.

Reuters:

 The steady contraction of the key U.S. commercial paper market for short-term corporate borrowing suggests the much heralded economic recovery may still be a distant dream.

The IOUs that companies write for periods of three months or less, known as commercial paper, enable funds to be raised for running businesses on a day to day basis to pay workers and stock shelves with fresh goods.

The decline in borrowing by corporations in this market in the past year reflects weak demand in the economy as a whole, meaning there is little need for companies to borrow to build up stocks or take on extra staff.

The labor market is still languishing, even if the pace of job losses is slowing slightly. Consumer confidence surveys are recovering from the depths of despair seen last year, but U.S. consumers have yet to put their money where their mouth is.

Companies usually borrow in the commercial paper market to rebuild inventories in anticipation of rising sales, but sales have fallen even faster.

"That shows there is a long way to go," said Robert C. King an economist at the Jerome Levy Forecasting Center in Mount Kisco, New York. "Although eventually inventories will get down to some point where they will have to be rebuilt, we are not there yet."

"That could be some explanation for the commercial paper market (trends) because it is used to finance inventories," King said.

The latest weekly Federal Reserve data released on Thursday showed the commercial paper market's dramatic contraction which began when the global credit crunch erupted in mid-2007 has continued unabated.

Total U.S. commercial paper outstanding has shrunk to $1.23 trillion, the lowest level in more than eight years and close to half its $2.2 trillion peak nearly two years ago.

The contraction in the commercial paper market suggests inventories may not have bottomed.

U.S. business inventories have been declining since the autumn of 2008 and fell again in the latest data for April this year.

 The Business Insider on Krugman vs. Ferguson:

We've broken the credit markets. Where once we could learn a lot about investor sentiment and expectations from the credit markets-including the markets for treasuries-the signaling function now is by and large useless. That's because there are now way too many debt instruments that are the functional equivalent of treasuries. We have a lot of bank debt floating around that is backed by the FDIC explicitly, for example. And even the new debt that banks are issuing without explicit government guarantees is backed by a semi-explicit guarantee voiced by politicians who have promised "no more Lehmans." In other words, every large, complex systemically important financial institution is a government sponsored entity these days. Why buy treasuries when you get a better return from bank debt that is just as safe? In short, the short term fluctuations in treasury yields now result from way more factors than they once did, and the signals about market expectations they through off are far less transparent.

Pimco's Mohamed El Erian, Beware the "business as usual" mindset shares similar concerns.

See also: Marginal companies with marginal business models are going to crack and Credit shrinkage will continue throughout the recession and into the recovery.