Using Veritas to Construct the "Per…

29-04-2017 Hits:39493 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:40262 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:39677 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:41449 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:41006 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:43572 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:28304 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:42193 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:42134 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:42375 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:44463 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:43836 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 we go. It is amazing that the investment banks have rallied, particularly considering that most of them rely heavily on MBIA and Ambac as counterparties. Here is nearly all of the MBIA holdings of Morgan Stanley (many billions of dollars worth), recently downgraded:  icon Morgan Stanley_final_040408 (1.38 MB) . A comprehensive forensic deep dive, economic analysis and update of Morgan Stanely will be following shortly. Stay tuned...

  • Fitch Ratings cut MBIA Inc.'s insurance rating to AA from AAA: bond insurer short of $3.8bn capital to warrant the top ranking. Outlook negative.
  • BIS: Monoliners have written roughly $450bn of super-senior protection on CDOs in the form of CDS contracts. About $125bn of these reference ABS CDOs. Counterparties to these trades are large banks, securities firms or off-balance sheet vehicles like ABCP conduits/SIVs.
  • Fitch: As of July 2007: Industry gross insured portfolio = $2.5trillion; industry shareholder equity = $24.5bn (=leverage ratio of 100x)
  • The industry guarantees $1.2trillion municipal bonds and around $800-900bn in structured finance products. CDS portfolio is $463bn (net seller). $287bn (or 61%) of CDS written on corporate bonds; 14% on RMBS.S&P: Banks hedge about $125bn of CDOs with monoliners (senior, super-senior tranches)
  • FT Alphaville: Fitch downgrades SCA monoline bond guarantor rating from AAA to junk--> needs around $5bn to regain AAA rating. FGIC downgraded again also by S&P--> April 3: FGIC given 30 days by regulator to raise new capital to avoid worst-case scenario.
  • Tett: Some Federal Home Loan Bank (FHLB) member banks want to offer their AAA rating to municipal infrastructure projects. However, FHLB role is already being expanded for mortgage purchases and their capital is stretched already.
  • Fahey/Scott: Exposures to financial guarantors arise from:
    - CDS counterparty exposure associated with CDO, CMBS, RMBS, other ABS and corporate bond hedges;
    - Trading inventories of equity or debt of guarantors;
    - 'Wrapped' securities held in trading or investment portfolios;
    - Muni bonds wrapped in association with Tender Option Bonds (TOB) and Variable Rate Demand Obligations (VRDO) programs [i.e. off-balance sheet entitites with liquidity backstop lines]
    - Loss protection for conduits;
    - Potential support for money funds containing enhanced securities.
  • Davies: Additional risk: unwinding of negative basis trades: difference between higher bond yield and lower cost to insure (with monoliners) that same bond (usually due to oversupply of CDS)--> buying both gives positive and risk-free return usually above Treasuries.
  • Oppenheimer: Banks may write down $70bn if major monolines lose AAA
  • Egan Jones: Bond Insurers Need $200 Billion to Retain AAA
 
For anybody who is interested, I am making available info on several other institutions with downgraded MBIA insured inventory. This is no trivial occurrence, and in my opinion it was long overdue (for those of you who don't remember, reference my Super Scary Halloween Tale of 104 Basis Points). Below are the results of my proprietary research on broker/bank direct Ambac and MBIA counterparty exposure. This is the link to Fitch's analysis of the same (requires free registration).
 
icon CFC ABS Inventory (these guys were just downgraded themselves, hat tip to Paul)