Using Veritas to Construct the "Per…

29-04-2017 Hits:93375 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:84601 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:84519 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:89075 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:87555 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:87367 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:58530 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:86900 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:86516 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:86859 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:93174 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:90500 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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I will start posting more news topics of interest and welcome readers to forward research and investment ideas at will. Here is the crop from last week. I will post topics from the weekend later on today, and as usual will randomly comment on daily news events.

From Alliance Bernstein:

  • Core Intermediate Producer Prices have taken 6 months to rise 5.2% annualized, recession of 2002 took 2 years to reach same level
  • Operating Rate hit low of 65.4% last year and has only risen to 69.4%, still short of historical threshold causing rise in raw material prices (74%)
  • Increases in foreign operating rates have started to indicate US may now be a price follower instead of price leader
  • The Fed cited lack of resource utilization as reasoning for maintaining record low rates, as these concerns begin to wane Alliance Bernstein sees easing of emergency Fed policy

  • Christina Romer, Peter Orszag, and Tim Geithner have predicted unemployment will settle in 2010 at around 9.7%, citing poor job conditions
  • Federal deficit projections for 2011 & 2015 are $1.5 trillion & $751 billion respectively, White House officials cite Bush's medicare and income tax cuts for allowing deficit insanity

  • Moody's has stated US, UK, Germany, & France, are at risk of credit downgrades from AAA (dollar rose on this news)
  • All 4 countries estimate debt costs of 80% of annual GDP

  • Most financial historians look at the SPDRs as first ETF, introduced in 1993 to track S&P 500
  • ETFs nearly doubled in AUM over the past year to $1 trillion, Mutual Funds have total of $18.7 trillion, but some mutual funds have started to structure ETFs
  • ETFs cross various asset classes (FX, Commodities, Bonds), leverage (1x, 2x, inverse) and offer better fees than traditional mutual funds
  • ETFs have developed into an incredibly large and important asset class for the retail investor
  • Of course, there is the risk of slippage and tracking error in ETFs, particularly the leveraged ones which seem to suffer from time decay. This is Reggie's comment, and not necessarily that of the author of the article.

  • The $787American Recovery and Reinvestment Act has propped up temporary jobs to generate a "pseudo-recovery" [Tell me about it]
  • Obama has talked down risky loans, while back handedly pushing banks to take "third and forth looks" at potential debtors, meanwhile, FHA will take 3.5% down payments
  • FHA loans continue to increase in default rate, as do readjusted HAMP (Home Affordable Modification Program) loans
  • Prime loans have had terrible default rates due to the way prime is accessed, primes can include adjustable rate mortgages, low down payments, and "debt disguise mechanisms"

  • Under new chapter 11 plan, "LAMCO" would manage all of Lehman's assets outside of its core operations that were liquidated in bankruptcy court
  • Secured, administrative and priority creditors would be paid in full under the proposed plan, while general unsecured claims, direct intercompany claims and guarantee claims would in part be satisfied by some "pro rata" cash distributions

  • Organization for Economic Co-operation and Development estimates that more than 30 percent of Greece's GDP is untaxed [yet Greece believes they can fix this in one year, see "Greek Crisis Is Over, Region Safe", Prodi Says - I say Liar, Liar, Pants on Fire! ]
  • US Manufacturing produced $1.4 trillion in 2007, even after losing 1/3 of workforce since 1998 (Greece's economy is based on tourism & agriculture)
  • Flight from USD for debt reason does not make sense to author since Euro nation debt loads are similar or worse, and Japanese debt is much greater than the US

IMF Working Paper @

  • Current US fiscal policy is becoming a long term liability, forecasting is very hard with large deviations between projections and outcomes (projections are too optimistic) [This is not just a US problem. The Eurozone members are champions at this, see Once You Catch a Few EU Countries "Stretching the Truth", Why Should You Trust the Rest?]
  • While bad real GDP forecasts have contributed to error in fiscal forecasts, regression analysis of GDP, CPI, and fiscal policy finds only a 12% correlation
  • Near-Medium term economic outlook is neutral/skeptical, potentially downplaying the importance of reducing deficit for that same term
  • The primary balance surplus exceeded expectations throughout most of the 1990's, however fell short throughout most of the following decade
  • According to IMF models, fiscal prudence would stabilize debt/GDP at 68%, if policy reaction is slow, reaching 80% is more realistic (IMF models are much less optimistic than OMB models)
  • There is a wide range of uncertainty about US fiscal policy, but it is clear that without adjusting the primary balance the US will see debt levels north of the 77% projection by 2020
  • Incredible/Impossible balancing act of steady stimulus vs. debt reduction is almost underway, but a intermediate term fiscal course correction is necessary

Imes Discussion Paper @

  • Textbook economic theory regarding sticky prices and low nominal inflation may not hold when multiple nations are fighting a liquidity trap
  • In a global liquidity trap, the country with the biggest gov't expenditures will weaken its currency and worsen its terms of trade
  • Under normalized conditions (normal central bank policies), fiscal multipliers are kept under 1.0, but when interest rates push the zero boundary, fiscal spillover and government spending increases, terms of trade weaken and global trade breaks down [Think US-China trade beef, Germany & practically the rest of Europe. See Mainland Chinese Express Regret, Anger at Google Move]
  • Fiscal multipliers >1 usually result in gov't expenditures achieving employment growth, but negative results if elasticity of consumption is <1

Albert Edwards/ZH Report @

  • Private sectors continue to deleverage, governments continue to lever up at all levels (perhaps the only reason financials appear to be deleveraging is because gov'ts continue to soak up their bad debts?)
  • Bank lending continues to decline, deleveraging is not nearly finished, contradicts mainstream idea of debt based, leveraged recovery
  • Possibility for global debt-deflation crisis continues to grow, Edwards & Grice predict the printing presses will heat up (hyperdeflationary default followed by hyperinflationary printing to pay debts due)

ECB Article @

  • ECB forecasts minimal growth (0.4%-1.2% GDP) this year & moderate growth (<2.5%) next year, inflation expectations remain low
  • Unsure what the post-crisis "normal" will be, or conditions when ECB ends non-standard monetary policy operations
  • ECB recognizes individual fiscal prolificacy and calls for tighter fiscal policy to avoid sovereign debt crisis (a little late for this isn't it???)
  • Stark concludes with typical calls for transparency, when the Fed calls for transparency it comes off as a back handed joke and I'm going to assume this is not much different. See Smoking Swap Guns Are Beginning to Litter EuroLand, Sovereign Debt Buyer Beware!

 ING Forecast@

  • With weak consumption/confidence, and stagnating labor demand, GDP growth forecasts continue to look sluggish
  • Changes in the discount rate are barely a measure of tightening, as only $112 billion was borrowed on average per week at the height (fall of Lehman) and now is at a mere $14 billion/avg per week
  • Greece continues to haunt markets by keeping safe haven fixed income at lower yields
  • Similar consumption/confidence issues are "plaguing" the Eurozone, growth outlook still weak, UK is slightly more optimistic but fiscal concerns are starting to hold weight
  • Employment conditions in Japan appear to be easing, but deflation continues to dominate
  • PBoC continues to have issues with balancing inflation and stimulus led asset prices
  • Funds and banks are waiting out potential RMB appreciation
  • Dollar continues to benefit from negative sovereign credit outlook in the Eurozone, particularly UK & Greece, no mention of heavy hitters Spain & Italy

Flash Economics: Spain@

  • Spain is currently seeing -3.7% GDP growth, 19% unemployment, annual deficits of ~11% debt/GDP
  • Spanish "growth" was credit driven, bursting of construction bubble was incredibly deflationary for income and resulted in defaults
  • Hypothetically, a government default would bankrupt the banks because the banks are absorbing most of the fiscal financing as private lending has sunk
  • Government estimates to reduce deficit to 3% annual GDP by 2012 are IMPOSSIBLE without economic growth
  • Subscribers, see Spanish Banking Macro Discussion Note

Flash Economics: Greece v. Germany@

BBVA Weekly Article @

  • EU industrial output grew 1.7% MoM due to Germany, France, and Italy
  • German exports continued to increase, thanks to a weaker Euro, even as French confidence fell and Italian GDP was revised negative
  • Lighter trade continues to hold back the UK, private demand in Spain continues to be incredibly weak
  • Trichet continues to highlight potential sovereign debt crisis while maintaining very low rates to support stimulus measures

State Sreet G7 Weekly @

  • US retail sales for February were upbeat thanks to substantial downward adjustments from December and January
  • US current account deficit continues to grow while trade deficit also widens on "recovery" signs
  • Canadian exports, employment, capacity utilization, and housing data continue to look optimistic, chance for rate increases looks good at first glance, but the BoC rarely acts before the Fed
  • In the UK, industrial output continues to disappoint, but retail sales numbers continue to improve
  • German, French, and Italian output continue to rise slightly, but are still unimpressive, graphs are generating an "L shaped recession"
  • Japanese data continues to act erratically as the BoJ attempts to fight deflation for the seemingly 1,000th time, but manufacturers are seeing orders rise in potential signs of export growth
  • Japanese corporate prices are rising due to oil prices, deflation still reigns supreme
  • Australian home loan approvals have fallen by 7.9%, this is the 4th consecutive decline and could be a leading indicator for a decline in construction activity
  • Chinese M2 grew 25% YoY, Indian production is up 16% YoY (India raised rates, also something to follow), and Brazil posted its first annual GDP gain (4.3%) in a year
  • US household wealth is up $5 trillion over the past 3 quarters, but $12 trillion remains in losses

FT Alphaville Article @

  • Santander hemorrhaged cash (and equivalents) at a loss of €10.892 billion over the past year, meanwhile, competitor BBVA posted cash gains of €1.69 billion and operating cash flow of positive €2.567
  • Boosts in operating cash flows at both BBVA and Santander potentially line up with alleged assistance from the ECB, which a Santander spokesperson took the time to go after the blog post, stating if Santander wanted more cash it could get it from the market, not resort to the ECB
  • To follow up on the previous bullet, does Santander really want to try and raise funds from the market? A terrible bond auction for Santander would raise its risk profile as well as Spanish sovereigns, which would help unwind the "extend and pretend" policies currently used
  • See The Spanish Inquisition is About to Begin... and subscriber download Spanish Banking Macro Discussion Note