Indy Telecom & Industrial Media

What do folks think the next big market bubble to burst?

Here are some choices that I’ve heard floating around –

1. Debt bubble (bonds) — A friend recently commented that at a recent investor meeting, this was raised as the next bubble that could burst. On one hand, some folks think that the fed could do negative interest rates, and on the other, a lot of European investors are supposedly preparing to to short the U.S. government bond market in anticipation of much higher interest rates in the coming months. If you want to see signs that bonds have jumped the shark, look no further than State Street’s new offering, first convertible bond ETF of its kind.
2. Gold — This has been a long time coming. The sooner the better, I feel. It is a commodity that has been overvalued beyond measure, and the current market isn’t helping. And just have a look at the number of gold ETFs out there.
3. Sovereign default –To quote PD, while it is unlikely that the Fed, ECB and the BOE will let this happen, we are on the precipitous edge.
4. Fall of a big bull – Another friend who’s a hedge fund manager quoted that bear market will not end until one of the big bulls of this era gets run over, and until a new bull takes the place. He thinks it could be Warren Buffet.

Personally, I’m more concerned about 1 and 2 (2 is a great shorting opportunity and 1 is a scary thought).  3 is unlikely, and 4 — well, let’s say I’m holding back on 4.

Disturbing charts that show the comparison of the four bad bear markets — Dow crash of 1929, Oil crisis of 1973, Tech crash of 2000 and the current sub-prime/credit crunch crisis.

The inflation/CPI adjusted ones are particularly scary in that they show just how closely we are mirroring the Great Depression.

(Via Paul Kedrosky)

Some more handmade cuff links made by Lana.

I really can’t say I have a favorite because they are all equally gorgeous.

Dealbreaker recently talked about a rather fascinating yet disturbing article on a woman who was stuck in Dubai because her husband was arrested for losing his job and facing bankruptcy.

“Before I came here, I didn’t know anything about Dubai law. I assumed if all these big companies come here, it must be pretty like Canada’s or any other liberal democracy’s,” she says. Nobody told her there is no concept of bankruptcy. If you get into debt and you can’t pay, you go to prison.

“When we realised that, I sat Daniel down and told him: listen, we need to get out of here. He knew he was guaranteed a pay-off when he resigned, so we said – right, let’s take the pay-off, clear the debt, and go.” So Daniel resigned – but he was given a lower pay-off than his contract suggested. The debt remained. As soon as you quit your job in Dubai, your employer has to inform your bank. If you have any outstanding debts that aren’t covered by your savings, then all your accounts are frozen, and you are forbidden to leave the country.

While a landrover may certainly be bigger than an apartment in Manhattan, and while the story certainly has some open questions, I must add that there is a very good reason why folks in western societies trying to live in Islamic societies is a bad idea.

I mean, seriously. Sharia law mandates cutting your hands off for theft, and stoning people to death for sex outside marriage or for even giving up your religion.

Yes, they could have done several things differently — but the most important of them all?  Not having left western civilization in the first place.

I’m planning on attending (if time permits). Would love to meet some friends/readers there, if anyone else is planning to go.

I recently discovered CNBC’s Berkshire Hathaway Portfolio Tracker, which keeps track of the publicly traded stocks held by BRK or its subsidiaries.

I recently stumbled upon a really good introduction to technical analysis by Recognia.

Good material that would be quite useful for someone who is new to technical analysis.

And in the interest of full disclosure, while I’m certainly not associated with them in any way, my broker does provide me access to their technical analysis tools which are rather awesome.

Some interesting trading desk setups.

This one belongs to the famed Hedge Fund manager Adam Sender.

This one, no idea — it’s from Forex Chronicles.

And this last one is from Greg Simmons‘ Scope Labs, LLC.

Interesting technical analysis patterns from the past week:

If you’ve been paying attention to stock performances, you would have heard about General Growth Properties, and its unusual trading volume and price-jump these past few days.

The company says that it isn’t aware of any corporate developments that could be responsible for this.

Of course, one interesting hypothesis that’s been floating around is the breakout of the bullish ascending triangle pattern.

The NYT has a rather excellent piece on Lawrence Summers’ time spent in the hedge fund industry (and D.E. Shaw, at that).

As part of Shaw’s rigorous screening process — the firm accepts perhaps one out of every 500 applicants — Mr. Summers was asked to solve math puzzles. He passed, and the job was his.

In a rare interview, David E. Shaw, who founded the firm in 1988 above a communist book shop in Greenwich Village, put it simply: Mr. Summers is “a brilliant, brilliant guy.” That is from a former computer science professor at Columbia who now spends his time researching areas like treatments for cancer, while others run his hedge fund day-to-day.
…

Even so, Mr. Summers, who, before the crisis broke out, spoke and wrote about the need for greater financial regulation, has not resisted the efforts to tighten up on hedge funds like Shaw. The administration, for instance, is moving toward closing a tax loophole that these funds have long enjoyed. A White House spokeswoman says his actions supporting hedge fund regulation prove he is not biased.
Some people in the financial world say they have more confidence in the White House’s plans because of Mr. Summers’ time at D. E. Shaw.
…

Mr. Summers’s experience in hedge funds might leave some wondering if he will return to private investing when his latest White House assignment ends, perhaps even to run his own lucrative fund.

Asked about that, Mr. Shaw laughed. “Oh, boy, I have no idea,” he said. “Thankfully he’s doing what he’s doing. I’m really glad he’s running this. It’s a scary time, and I can’t think of anybody I’d rather see there.”

I’ve always been a firm believer that almost all our problems can be solved quantitatively, or through technology. And I’ve always admired (tinged with a little green, if I might add) places like DE Shaw, Rentech etc.

The fact that this administration chose someone like Lawrence Summers (an intellectual, as opposed to those that merely politic) gives me confidence in our ability to recover.

No, seriously.

In my case, I was rather oblivious to investing until the end of grad school, and something kicked in. I must have made my parents proud, both of whom monitor and manage their investments rather intently.

The question, of course, is where the penchant for risk comes from (since most Asians/Indians tend to be more than a little risk-averse).

Rather interesting chart in the WSJ on older people staying unemployed for long.  Now what would have been even more interesting if this data had also accompanied the demographic distribution of each of these age-groups.

Hey, you can call it dress-down Wednesday, but some of the big boys won’t give in. Cause they can punch you and stuff.