Legislation, Law & the Government, Investment Banks, Financial Shenanigans	26 Oct 2008 12:00 AM
Golden Boys guilty of a conflict of interest, nahhh!! by Reggie Middleton	Comment (5)

The Guys From ‘Government Sachs’

A most interesting article in the NY Times . Here's an excerpt...

Photo illustration by The New York Times

Treasury faces, from left: Steve Shafran (formerly of Goldman), Kendrick Wilson III (ditto), Henry Paulson Jr. (you guessed it), Edward Forst (yep) and Neel Kashkari (see a trend?).

THIS summer, when the Treasury secretary, Henry M. Paulson Jr., sought help navigating the Wall Street meltdown, he turned to his old firm, Goldman Sachs, snagging a handful of former bankers and other experts in corporate restructurings.

In September, after the government bailed out the American International Group, the faltering insurance giant, for $85 billion, Mr. Paulson helped select a director from Goldman’s own board to lead A.I.G.

And earlier this month, when Mr. Paulson needed someone to oversee the government’s proposed $700 billion bailout fund, he again recruited someone with a Goldman pedigree, giving the post to a 35-year-old former investment banker who, before coming to the Treasury Department, had little background in housing finance.

I recommend reading the whole thing.

Research, Investment Banks, Heard on the Street, Blogonomics	24 Oct 2008 12:00 AM
Blog vs. Broker, whom do you trust! by Reggie Middleton	Comment (8)

The Name Brand - that bastion of marketing that the finance and investment industries have come to rely on to convince those who should no better to do things that they shouldn't -has come under attack. "Attack by who?", you may ask. Attack by me, Reggie. "Who the hell is Reggie?" you ask. Well, a quick bio , and a list of writings that have brought use here so we can move on...

In the past week or two I attempted to debunk the "'Name Brand' is the best" mentality of so many individual and INSTITUTIONAL investors enamored by the marketing machine that is the Wall Street banks, brokers and Greenwich/mid-town hedge funds. In attmepting to do so I have released this blog's research model results, provided a glimpse into my proprietary trading, a backgrounder on my investing style, and a comprehensive comparison of both the blog and my results as compared to all major (and minor) hedge fund indices.

Now that we know:

that a man can beat market averages,
we know hedge funds don't necessarily deliver that much absolute alpha,
we know the difference between relative and absolute return,
we know the difference between return and risk adjusted return,
and know who the hell Reggie is...

It's time to move on to what is the actual essence of Wall Street, the big money center banks and brokerages (or at least what's left of them). As representative of Wall Street, I am using the four largest and most representative banks and brokerages - Goldman Sachs, Citibank, JP Morgan, and Morgan Stanley.

Strategy, Investment Banks, Blogonomics	23 Oct 2008 12:00 AM
Blog vs. Brokers, preview by Reggie Middleton	Comment (2)

In the past week or two I attempted to debunk the "'Name Brand' is the best" mentality of so many individual and INSTITUTIONAL investors enamored by the marketing machine that is the Wall Street banks, brokers and Greenwich hedge funds. In attmepting to do so I have released this blog's research model results, a glimpse into my proprietary trading, a backgrounder on my investing style, and a comprehensive comparison of both the blog and my results as compared to all major (and minor) hedge fund indices.

Now, I will be moving on to the big money center banks and brokerages (or at least what's left of them). Some time tomorrow, I will release a comprehensive comparison of my blog's statc research model against the timed buy/sell recommendations from all of the big bank/brokerages.No excuses made for disparities in budget, resources, political conflicts of interest, etc. Be aware that I refrained from giving explicit buy and sell advice (except in the case of Bear Stearns where I inadvertantly shared my opinion), which has handicapped the blog's results in cases where stocks have dropped and then risen again, ex. PNC. If you click the "proprietary trading" link above you can get an illustration of the results possible when this blog's research is used to actively manage positions.

Holding period return
	GGP	LEN	MS	PNC *	Average
Citi	49%	-16%	-71%	5%	-8%
Goldman Sachs	-89%	59%	-70%	7%	-23%
JPM	-87%	-76%	-71%		-78%
Morgan Stanley				-10%	-10%

Reggie's return	162%	125%	117%	1%	101%
* The brokerage recommendations benefit from timing, where the blog is pure fundamental research timing made a big difference in the PNC call, where my proprietary results are significantly higher. PNC had fallen nearly 50%. Of course, I expect PNC to fall much further .

Research, Investment Banks, Industrial Manufacturing, Global Macro, Current Affairs, Commercial Banks, Capital Markets	21 Oct 2008 12:00 AM
The Butterfly is released! by Reggie Middleton	Comment (3)

I am releasing the balance of the Butterfly Effect (see The Asset Securitization Crisis Part 27: The Butterfly Effect) to the public in anticipation of the next two installments of the Asset Securitization Crisis to be published to subscribers, probably sometime this week. Before we go on, I would like to thank the loyal supports of my blog. I think this as I sit up at 3 am (my standard blogging time) typing this post into the blog’s text editor, slightly pissed off at some guy giving me a hard time because I won’t give him what he wants for free. I was enthusiastically supported by readers who truly appreciate the value of actionable intelligence. I would like to put a few excerpts here, starting with an explanation from me (edited to take some of the passion out of the debate):