January 25, 2021

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  • I've had this research on MBIA sitting on my desktop for some time now, too busy to convert it into a post for the blog. The macro situation stemming from the real estate bust is unfolding just as I have surmised, albeit a bit quicker and more far reaching than I originally thought. It is scary, for nobody wants to see bad things happen to other people, and I don't want to get caught in a financial downturn regardless of how well prepared I try to make myself. On the other hand, these situations create significant opportunity for gain, primarily from those who refuse to acknowledge the fact that the wave is not only coming, but has reached us quite a while back. I have learned unequivocally what many probably new for some time now. What is that you ask? You really just can't trust government data. Now, I don't want to get into politics and conspiracy theories, but the data as of late ha

A Super Scary Halloween Tale of 104 Basis Points Pt I & II, by Reggie Middleton

November 17, 2020

Ambac Financial Group Inc.

Ambac Financial Group Inc. (Ambac or the Company) was a financial services holding company whose principal subsidiaries, Ambac Assurance Corporation and Ambac Assurance UK Limited, were financial guarantee insurance companies. Ambac Financial Group Inc, headquartered in New York, was founded in 1971.

Realizing the impending crisis in housing and consumer finance in the US, BoomBustBlog (the financial blog primarily authored by Reggie Middleton) pointed out the trouble Ambac Financial Group Inc. had and its potential impact on stock prices in an article (Ambac is Effectively Insolvent & Will See More than $8 Billion of Losses with Just a $2.26 Billion Market Cap), in 2007. According to the article, the possibility of insolvency for Ambac Financial Group Inc. was rising as it was insuring more than it could cov

BoomBustBlog As the Most Predictive Media Property In the World? Comparisons to Mainstream, Financial and Business Publications, Pt. 2 - Bankruptcy of Ambac

November 12, 2020

The Asset Securitization Crisis of the US and much of the developed and emerging markets (2007-2009) apparently ended for many relatively quickly, despite being the worst economic downturn the country (and most likely the world) has seen since the Great Depression. How did the US pull out so fast, or more importantly, did the US actually pull out of it at all? Well, it was never my belief that the problem was over, simply papered over with some accounting changes and force fed massive amounts of liquidity coupled with a drive to privatize profits while socializing losses. Of course, the natural result of such actions was the gorging of the public sector on debt and bad assets. This sleight of hand was able to create a positive GDP print in many countries while rescuing sub par private companies that would have toppled under less generate corporate welfare, but more importantly, it succeeded in poisoning several governments whose finances could not handle the extra burden of unrestrained spending during economic boom times combined with the assumption of massive private sector loss

With the Euro Disintegrating, You Can Calculate Your Haircuts Here

November 10, 2020

Bloomberg has as a headline: Greek Quarantine Tested as Spain Vows to Combat Euro Contagion `Madness':

Investors are already testing the euro region’s efforts to contain the Greek crisis.

Greek bond yields rose yesterday above their level before the government agreed on a European Union-led bailout on May 2 as escalating protests cast doubt on its ability to drive through austerity measures. Spanish and Portuguese bonds also renewed last week’s slide as investors question their ability to cut budget deficits that are among the highest in the euro area.

The equity destroying capability of this occurrence should not be underestimated. Referencing " How Greece Killed Its Own Banks!", you can see that at just 10x leverage (about 1/3rd what most European banks are currently sporting), any holder of Greek bonds are underwater (if not insolvent) on those particular purchases at offer - and that is using last weeks numbers, which look much better than the reality today!

European governments are hoping that Greece’s 110 billion- euro bailout will stop

With Europe's First Real Test of Contagion Quarrantine Failing, BoomBustBloggers Should Doubt the Existence of a Vaccination

May 05, 2010

Zerohedge reports: Time To Go All-In The "Big Short 3.0"? 80% Of New York Hotels On Verge Of Default. To wit:

Now that hedge funds have finally started piling into the "Big Short 3.0" trade, which as we first explained back in June is basically shifting the CMBS short from malls to hotels (via the overexposed CMBX Series 9 index whose BBB- tranche is the fulcrum), every incremental development in the sector is closely scrutinized.

With Every Hedge Fund and Their Mother Crowding Into the Big Short 3.0, Remember Who Warned You 1st, in 2007 and 2020

November 14, 2020

Whether you have seen him featured on CNBC, The Keiser Report or are interested in the world of “smart contracts,” Reggie Middleton, the “Disruptor-In-Chief” of Veritaseum, is an expert you should know.

Based in the New York area, Middleton has gone from a successful real estate investor, capitalizing on the market’s economic downturn in 2008, to predicting the fall of Bear Sterns, Lehman Brothers, and others in the years to come. Reggie Middleton has always been a step ahead of the curve, so Bitcoin.com sat down with him on where the banking industry is going with blockchain technology.

As a former banker myself, I’ve seen many parallels with the Internet’s global propagation back in the 1990’s, and how the “banksters” are struggling with the Bitcoin concept, just like they did the Internet way back when. The rhetoric and blind attacks of today show history repeating itself if memory serves me correctly. How does Reggie see this financial industry-wide plan of blockchain integration playing out? Read on.

Bitcoin

To Laud the Blockchain While Deriding Bitcoin...It's Ignorance' - Reggie Middleton, Veritaseum

December 15, 2015

Bloomberg reports America’s $20 Trillion Debt Pile Is Getting Cheaper as It Grows

The U.S. government is paying less as it borrows more, one reason investors appear more comfortable than

Congress about funding another leg of stimulus. Interest payments in the federal budget declined about 10% in the first 11 months of this fiscal year, when America was running up its biggest deficit since World War II. Over the next few years, servicing the national debt will be cheaper than any time in the pa

America’s $20 Trillion Debt Pile Is Getting Cheaper as It Grows - This is Why Rates Won't Rise Anytime Soon

September 11, 2020

It has been called to my attention that among the many typos in my earlier post, an important one was the reference to the funding costs of DHI. The company in question was actually DHOM - Dominion Homes, not DR Horton - DHI. The general theme still stands, though, these guys as an industry who hold significantly depreciating real assets or options on said assets, financed by debt (all of them) or those who have significant mortgage banking operations without internal financing (ex. deposit accounts, etc.) (the vast majority of them), and who are running consistent operating losses for the last quarter and foreseeable next half (all of them) are in trouble, to say the least.

TOLL will exhibit a lag in some of the effects since they deal in a slightly upscale market, but are far from immune. They say that they do not warehouse mortgages without a buyer committed for the paper. If true, that is good management, but

the problem still remains... Who will be the buyer for the non-conforming stuff in this market. If Countrywide can't

Correction, and further thoughts on the topic

October 21, 2020

The Creatively Destructive Pace of Technology Innovation and the Paradigm Shift known as the Mobile Computing Wars!

  1. There Is Another Paradigm Shift Coming in Technology and Media: Apple, Microsoft and Google Know its Winner Takes All
  2. The Mobile Computing and Content Wars: Part 2, the Google Response to the Paradigm Shift
  3. An Introduction to How Apple Apple Will Compete With the Google/Android Onslaught
  4. Don’t Count Microsoft Out of the Ultra-Mobile Computing Wars Just Yet
  5. This article should drive the point home: An iPhone 4 Recall Will Hurt Apple More By Opening Additional Opportunity for Android Devices Than Increased Expenses
  6. A First in the Mainstream Media: Apple’s Flagship Product Loses In a Comparison Review to HTC’s Google-Powered Phone
  7. After Getting a Glimpse of the New Windows Phone 7 Functionality, RIMM is Looking More Like a Short Play
  8. RIM Smart Phone Market Share, RIP?
  9. Android is gaining preference as the long-term choice of

The mobile computing

October 21, 2020

The Asset Securitization Crisis of 2007, 2008 and 2009 led to the demise of several global banks and institutions. Central bank induced risky asset bubbles gave rise to, what was popularly considered and reported as through the popular media, a rapid recovery. The reality was that the insolvencies that marked the crisis were passed on, in part, to the sovereign nations that sponsored the Crisis, and as the chickens came home to roost the Asset Securitization Crisis has now blown into a full Sovereign debt crisis.

The Pan-European Sovereign Debt Crisis, to date (free):
  1. The Coming Pan-European Sovereign Debt Crisis – introduces the crisis and identified it as a pan-European problem

The Latest Pan-European Sovereign Risk Subscription Research – The Goo

The Pan-European

October 21, 2020
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