Friday, February 01, 2008

Features of the week

Microsoft makes an unsolicited offer for Yahoo!, dealing with recession, and a few words with famous investors Jim Rogers and Julian Robertson. Coming up in our, "Features of the week".

1. Microsoft makes an unsolicited $44.6 billion offer for Yahoo! in an attempt to challenge Google's search dominance.

2. Jim Rogers speaks with Bloomberg about commodities and the reckless Fed, who are "debasing the currency" and making the same mistakes that the Japanese have made.

3. Ahh...politics. After bickering back and forth for weeks, Obama and Clinton say, "let's be friends". The Democratic candidates have plotted a change in strategy and now wish to highlight the incessant bickering between Republican frontrunners.

4. Tiger's Julian Robertson roars again. Fortune profiles the retired hedge fund star and his recent success out of the limelight.

5. Two billionaires describe our outlook. Lamont Trading Advisors match up with George Soros and Julian Robertson on bonds, interest rate views.

6. Real investment tax rate is 256% higher than stated, says Daniel Amerman.

7. Last year's model: stricken US homeowners confound predictions.

8. Financial Sense Newshour interviews Dick Davis, author or The Dick Davis Dividend.

9. Vulture investors circle. Warren Buffett, Wilbur Ross, and Ron Perelman seek bargains in the financial industry's fallout.

10. China is the world's second largest gold producer, just behind South Africa.

11. Hedge fund manager Bill Ackman has been betting against MBIA and Ambac for some time.

12. Dealing with Recession. An Austrian's view, by Clifford F. Thies.

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Thanks for reading Finance Trends Matter, and enjoy your weekend.


Maria said...

RE: point 7:

US homeowners confound prediction models because it appears that they can do math after all--sure, they took on ridiculous ARMS looking as though they couldn't understand the math--but when it came to paying the interest vs selling vs walking away, the choice was easy. Let's see. I own no part of this house because I put no money down. If I stay, I will be paying more than the house is worth. If I sell, I would have to come up with money to cover the mortgage. Hm. Seems like the bank can have it.

It isn't that Americans changed, --it's that the lending rules did. And no one in their right mind wants to be left holding an overpriced, impossible-to-pay-for, impossible-to-sell bag of house.

Hint to those creating the models: If the lending rules change, you should change your models.

David said...

I agree, and I think it's telling to note how a reliance on models and a diminished capacity for plain judgement seem to have played a role in so many of the recent financial market blowups.

Regarding the trend of people walking away from their homes, I have seen a lot about this in the past two weeks and it is really surprising to see it all play out.

When you see those ads for the "You Walk Away" service, you know that it's gotten kind of surreal.

I recall Richard Russell writing about the inevitable housing bust some time ago in his newsletter and saying that when it's all done, you'll be surprised how many people will just walk away from their homes and turn the keys in to the bank. It's all coming true.