Using Veritas to Construct the "Per…

29-04-2017 Hits:53739 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:53801 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:53043 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:55067 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:54316 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:56840 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:35857 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:55366 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:55243 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:55591 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:58213 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:57045 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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This is an email I got from one of the individual investors of who frequent the blog before Lehman announced its record writedown. It appears as if he was onto something!

"I think Lehman may be an interesting bank to look into (even though I believe Bear Stearns is in the absolute worst position, Lehman is not much better off I think, while at the same time being perceived as having dodged excessive write-downs a-la Goldman Sachs). It starts with FAS 159 which you may be aware of. You can read how this has helped out the investment banks in the link below.
http://blogs.wsj.com/marketbeat/2007/09/21/great-moments-in-accounting/

Lehman has benefited the most on a relative and absolute basis thus far from FAS 159 accounting. Since they've filed their 10K recently we can update the total benefit they've booked as a result of a decline in their own credit worthiness for the liabilities they've elected to measure at fair value (FAS 159 allows companies to apply fair value to both their assets and LIABILITIES). From the 10K, on page 109 it states that "The estimated changes in the fair value of these liabilities were gains of approximately $1.3 billion, attributable to the widening of our credit spreads during fiscal year 2007." Lehman appears to have used $900 million of this gain to decrease the impact of write-downs (see table on page 49 of the LEH 10K, under "Valuation of debt liabilities"). For the year, Lehman booked write-downs of $1.9 billion total, however backing out FAS 159 gains would have substantially increased this amount. Again, looking at the write-down table on page 49 Lehman describes their gross and net write-down totals. From this we can back into how hedged Lehman is in each category of investment. The two primary categories to look at are there Residential mortgage-related and Commercial mortgage related positions. Looking at Residential, they booked a $4.7 billion gross write-down but only a $1.3 billion net write-down, implying that they are 72% hedged on their exposure to Residential Mortgage positions. Their commercial positions saw a $1.2 billion gross write-down, and a $900 million net write-down, suggesting they are only 25% hedged to their commercial positions.

I believe that the commercial mortgage/real-estate market still has a ways to go on the downside, and is much earlier in its trajectory than the residential market (as I'm sure you'll agree judging by some of your posts on the subject). Lehman's residential and commercial mortgage exposures are roughly equivalent ($37.3 vs $38.9 billion as of 11/30/07).

I also believe that even on a gross basis, Lehman has not taken large enough write-down in comparison to other companies. I believe they have accomplished this by moving mortgage assets to Level 3. I've loved reading your blog and truly appreciate the unique and in-depth analysis performed on target companies thus far."