Using Veritas to Construct the "Per…

29-04-2017 Hits:87246 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:81160 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:81006 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:85476 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:81976 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:84158 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:55222 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:83424 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:83162 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:83053 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:89312 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:87025 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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Here is a quip from an email that I recieved earlier that prompted me to explain how I fell about the I banking industry now:

 

Longer term, politically the Fed may be forced to cut them off --- but we are obviously quite a ways away from that happening just yet. (referring to the I banks that just got access to the Fed window)

Great call on Bear. If these guys can now submit almost anything to the fed window --- munis, mortgages, etc. and fund at FF+25, doesn't that take funding off the table and then really it becomes an issue of the credit quality of the collateral. In past banking cycles --- low Fed funding almost always reliquified the banks, and I assume it will work again this cycle.

Is it time to move on to the next stage --- companies that are going to experience credit issues on assets but can not fall into the arms of the central bank?

 

Well, to begin with the I banks are holding a lot of stuff they can’t submit to the Fed. They were also starving for liquidity despite what they said (ex. Bear Stearn’s Schwartz on CNBC, who is bound to get sued for those statements). This is why they all hit the window the day after it was opened. The industry in general is heading for a downturn. Many can’t be patient, but a macro bet against the investment banking business is not a bad bet at all, particularly if you catch it after a euphoric rally like we just had. Look at GS and LEH stock already, less than 24 hours after “beating the Street”. MS is moving lower too.

I am having my analysts look into exactly where the Fed assistance will or will not help the banks and I will probably post my findings some time late next week. The fed has mitigated the Bear Stearns style run on the bank, but all is still not well. There is a lot of counterparty credit risk abound, and the I banks shoulder most of it. They are the ones exposed to the parties that cannot run to the Fed!

If I were a Bear Stearns employee or shareholder I would opt to force the firm into bankruptcy protection over selling for 1.25% of last year’s share price. At $2, the sales price is analogous to an under priced put option for the shareholders to hold the threat of bankruptcy over the Fed’s head. Once in bankruptcy protection, the prime brokerage clients and CDS counterparties will try to run for cover and all hell will break loose with the other banks. I think you realize there are a lot of under capitalized CDS counterparties abound that in no way could pay off on these things. These are the guys that use one CDS to hedge against another. Once the domino effect gets going…

With all of that being said, you are right about looking for the other weak credit companies. I need to find the TMAs and Carlyle Capitals. Theoretically, the I banks should extend their new found credit to these companies, but I doubt it would happen.

In addition, I listen to the talking heads on CNBC who say that we need to stabilize housing prices in order to move forward, blah, blah, blah.... I consider this to be total nonsense and indicative of extreme ignorance in regards to what the problems are in the macro sector and how we got here in the first place.

These many issues that we see around us will not go away until housing prices go back to historical norms. If you stabilize prices before prices go back down to where they should be, you will simply have another bust - on top of the one that we just had.

It is as simple as this. People are not going to buy houses until they can afford to buy houses. Housing prices have outstripped real incomes by multiples. This relationship is what must be stabilized and reversed.