Generated by All in One SEO v4.8.9, this is an llms.txt file, used by LLMs to index the site.

# Paranoid Bull

Observations on the markets and the world with realistic optimism

## Sitemaps

- [XML Sitemap](https://paranoidbull.com/sitemap.xml): Contains all public & indexable URLs for this website.

## Posts

- [Cycles Matter](https://paranoidbull.com/2016/05/cycles-matter/) - It has been awhile since I started this blog...actually almost a decade which is hard to believe. I'm now building Odin River, after being CIO at Artivest and working for John Paulson at Paulson & Co. before that. Alas, it feels like the Credit Cycle is turning again. It isn't as clearly contracting as when
- [On Identity and The Internet](https://paranoidbull.com/2009/03/on-identity-and-the-internet/) - This post was spurred by a discussion with @humbertomoreira and another non-twitter friend that overlapped this afternoon. One of the things we are currently experiencing as a result of the explosion of Internet usage is at once both a deconstruction and an expansion of our conception of personal identity. And this is radically shifting our
- [Never enough.](https://paranoidbull.com/2013/07/never-enough/) - By David A. Levine If nothing else, these protests show things are not all rosy in America today. There is real pain and anger and people have had enough of what they see as a system that isn’t working in their favor. We see the frustration of feeling like a system works for some and
- [Enough is Enough](https://paranoidbull.com/2007/06/enough-is-enough/) - I have been watching the unfolding of the suprime industry from the sidelines (kind of) for too long, and at this point, I need to start venting in a forum where at least I have a reason to believe someone might listen. One of the shocking things to me about the system is how the
- [Onward.](https://paranoidbull.com/2013/03/onward/) - Yesterday was my last day at Paulson & Co. Working at the company since 2009 was an absolutely incredible experience. It is now time for me to move on to the next adventure. After an appropriately placed jaunt to Austin for SXSW Interactive, I am joining a start-up here in NYC named Artivest as Director of
- [Today is a Gift](https://paranoidbull.com/2012/08/today-is-a-gift/) - 11 years ago, I sat near the Hudson in the shadows of the World Trade Center with a great friend. We chatted about life and debated the purpose of all of it. We were analysts in investment banking - working across the street from the towers in groups called M&A and Media & Telecom. We
- [Running for Kids.](https://paranoidbull.com/2012/08/please-help/) - I am lucky – and if you have found your way to this corner of the Internet chances are you are also lucky. We weren't born sick. We got to live our young lives in carefree ways. In elementary school, I was running races, participating in sports – having the kind of happy healthy childhood that so many
- [How to Fix "Education"](https://paranoidbull.com/2011/02/how-to-fix-education/) - I don't know how to fix our educational system... But I know we can do better. I just finished watching Waiting for Superman (a movie you should watch if you haven't). The punchline of the movie is something we all know well: schools in America aren't doing a good enough job at educating our kids.
- [The Future of Text](https://paranoidbull.com/2010/10/the-future-of-text/) - It seems to me like the nature of text and reading is changing... The other day, a friend of mine at work remarked about the fact that we no longer "read" that much. The comment came up in the context of discussing a recent book that none of us had read. I disagreed with her.
- [On the Need for Optimism](https://paranoidbull.com/2010/08/on-the-need-for-optimism/) - It has been a long time since I have written here, but recently I have felt compelled to rejoin the discussion "out here" in the Internets. The primary reason why I feel like I need to start writing again is because I am frankly starting to get annoyed and tired with all the pessimism that
- [Digital Idealism](https://paranoidbull.com/2009/04/digital-idealism/) - In the past, when we looked back on historical events, we were able to decipher correlation from causation after the fact…but those with military, political, or social power controlled the interpretation that became widely known. This power to determine history, in the short or even longer term, was made weaker by the invention of the
- [Political Trade-offs](https://paranoidbull.com/2009/03/political-trade-offs/) - If we gathered the smartest financial and economic minds together and locked them in a room for a week I think we could solve the current economic conundrum... But instead, our system of representative democracy forces compromise between brilliant ideals and half-baked social plans motivated by re-election cycles. Perhaps this is what the founders wanted
- [Nature Rules Even The Economy](https://paranoidbull.com/2009/02/nature-rules-even-the-economy/) - The Storm Is Back You may have noticed that we are out of the eye of the storm. As I mentioned in my last post on the economy (Rules of Nature), the current process of economic unwinding is going to be long and painful, and we are still in the early stages of the process.
- [Why I Like Twitter](https://paranoidbull.com/2009/02/why-i-like-twitter/) - As Twitter grows in popularity, a number of my friends who have heard me talking about it have started asking me why I like Twitter so much. Although I enjoy chatting about the topic and am glad to do so anytime, I thought writing a post on it might be helpful. Here are a few
- [China, Capitalism, and Character](https://paranoidbull.com/2009/01/china-capitalism-and-character/) - (I wrote this a few weeks back in the cab on the way to the airport leaving Shanghai…) I am wrapping up what has been a phenomenal trip to Shanghai and Beijing. I finally made the trip I have been wanting to make for a decade, and I’m so glad that I did. A Nation
- [Meeting Twitter Friends IRL](https://paranoidbull.com/2008/12/meeting-twitter-friends-irl/) - Social Networking in My Life I have recently had the rewarding experience of meeting a few people IRL (in-real-life) that I had only previously “known” through Twitter and the Interwebs. This experience caused me to think back to how social-networking has changed the way I meet people. Upon reflection, I realized that I have been
- [Rules of Nature](https://paranoidbull.com/2008/12/rules-of-nature/) - The Eye of The Storm Have you ever been in a hurricane? I have, and one of the strangest things about it is the phenomenon that happens right in the middle of the worst of the storm – the eye. You can walk outside and literally see the stars and the branches lying askew all
- [In The Air](https://paranoidbull.com/2008/12/in-the-air/) - Flying Is Inspiring For whatever reason when I find myself on a plane far above nowhere, I feel like the creative impulses become more uninhibited. It might simply be the fact that sitting in one place for so long allows the kind of self-reflection necessary for creativity, but I think instead it has something to
- [Creating The Future. Not Predicting It.](https://paranoidbull.com/2008/10/creating-the-future-not-predicting-it/) - I have often said that I like to try to predict the future. This materializes most concretely in the area of investing - I think the core being an investor is literally attempting to predict how the world will look in the future. If your view is different from other people, and you are correct,
- [How To Be Happy](https://paranoidbull.com/2008/11/how-to-be-happy/) - Here are my notes on a talk that I attended this weekend at Harvard Law. The talk, entitled Positive Psychology: The Science of Positive Potential, was given by Shawn Achor, an expert on "Happiness"...sounds like a pretty sweet job to me. The basic idea is that we can impact our own happiness with a few
- [Giving Thanks](https://paranoidbull.com/2008/11/giving-thanks/) - America is a beautiful nation that gives you the freedom to sit on your chair, hold the device in your hand, and listen to your yuppie-like and defiantly-critical music. But lately it has become far too popular to throw stones, and to point to others for blame. Last week it was President Bush and The
- [On The Internet](https://paranoidbull.com/2008/11/on-the-internet/) - Content Over Context I am writing this message on a machine in a place and at a time, and that has little relevance. What matters is that you are reading this message, and what would matter even more would be if this message somehow made you think something interesting or new. We share and connect
- [Walking The Walk](https://paranoidbull.com/2008/11/walking-the-walk/) - That one can accomplish entrepreneurial pursuits appears before us on an almost daily basis, but it is always cool when those materializations happen close to home. This morning, my eye was caught by a TechCrunch article about an innovative company, EyeView, that just so happens to have been launched by a buddy of mine from
- [Bull Prodded](https://paranoidbull.com/2008/11/bull-prodded/) - A friend forwarded me this article (worth the read) highlighting some of the people and psychology behind the financial crisis in order to prod a response. The End The era that defined Wall Street is finally, officially over. Michael Lewis, who chronicled its excess in Liar’s Poker, returns to his old haunt to figure out
- [Taleb On Uncertainty](https://paranoidbull.com/2008/11/taleb-on-uncertainty/) - This video I found on the excellent blog on the current crisis, In Paulson We Trust, is worth watching. It features Nassim Taleb, one of the few who anticipated the current conundrum we find ourselves in primarily be recognizing we don't know much. More on Taleb is in an earlier post on the causes of
- [What Is A 'Bank'? Amex Is Now.](https://paranoidbull.com/2008/11/what-is-a-bank-amex-is-now/) - I just saw this article, and I realized that like many of our ordinary conceptions, the idea of a 'bank' has morphed significantly over the last few months: American Express to Become Bank Holding Company The Fed’s approval for American Express was similar to the decision it made in September to transform the country’s two
- [Jim Rogers On The Markets](https://paranoidbull.com/2008/11/jim-rogers-on-the-markets/) - I've been meeting with some very smart investors lately, but few sound as clear-headed and direct as Jim Rogers. Here is a video on his views on where we are headed: 1) More downside 2) Inflation in the long-term 3) Bullishness on commodities It is worth a watch:
- [On Uncertainty And Creativity](https://paranoidbull.com/2008/11/on-uncertainty-and-creativity/) - Perhaps this will now sound redundant, I will repeat: binary thinking is dangerous and more importantly it is inaccurate. What I mean by this is not ground-breaking, although lots of wicked-smart dudes like Godel and Sartre have pointed it out in revolutionary sounding ways. Perhaps best conceptualized in the garb of quantum-mechanics, my point is simply
- [Hope Is A Long-Term Investment](https://paranoidbull.com/2008/11/hope-is-a-long-term-investment/) - The Short-term Outlook is Dark. The unfortunate reality is that we are going to face tough economic times in the short term. Furthermore, certain "structural" factors in the credit markets have led me to believe that the market prices of assets (including most stocks) have more downside risk than upside potential in the short term.
- [On Language And Decision Making](https://paranoidbull.com/2008/11/on-language-and-decision-making/) - Decision Making After a week of meeting new people in short spurts of mutual analysis (read: interviews), I am starting to realize that we suffer from an intractable problem: our decision making is only as good as our data and our data is necessarily limited. Whether this be in the context of making decisions about
- [On Humility, Creativity, and The Importance of Others. ](https://paranoidbull.com/2008/10/on-humility-creativity-and-the-importance-of-others/) - Humility. I just had one of the most profound conversations that I can remember with a guy who has taken an entirely different path through the same twenty-nine years we have been on the planet to arrive at the same place where I arrived tonight at an event with a bunch of "Internet" people down
- [Consciously Navigating Da Nile](https://paranoidbull.com/2008/10/consciously-navigating-da-nile/) - As this article on Naked Capitalism points out, some of the smartest pessimists out there are starting to get significantly more bearish lately. I have hesitated to to publish some of this content, but I think it is worthwhile to consider positions like the ones discussed here: Roubini Foresees Possible Market Shutdown After the Fed,
- [Another $Trillion Lesson](https://paranoidbull.com/2008/10/another-trillion-lesson/) - According to Bloomberg, projected losses in the corporate CDO market may approach $1T. CDO Cuts Show $1 Trillion Corporate-Debt Bets Toxic Investors are taking losses of up to 90 percent in the $1.2 trillion market for collateralized debt obligations tied to corporate credit as the failures of Lehman Brothers Holdings Inc. and Icelandic banks send
- [On Leadership (Video)](https://paranoidbull.com/2008/10/video-content-on-leadership/) - I ordinarily do not like to post simple links here on my blog (I prefer My Twitter page for this). However, I wanted to share this with those of you who don't use Twitter, as I think you should really check out this content if you have some time. Or rather, you should try to
- [Emotional Analysis Paralysis](https://paranoidbull.com/2008/10/emotional-analysis-paralysis/) - "I want you to want to clean the dishes." Brooke Myers to Gary Grobowski in the 2006 movie The Breakup. Today in a philosophy course on free will and morality, we discussed the distinction between first-order and second-order desires. In the above mentioned scene, Jennifer Aniston's second-order want was frustrated by Vince Vaughn's lack of
- [HBS Centennial: Social Entrepreneurship In Education](https://paranoidbull.com/2008/10/hbs-centennial-social-entrepreneurship-in-education/) - Below are my notes from a panel during this week's HBS Centennial Celebration. The Panel, hosted by HBS Professor Stacey Childress, featured 4 of the leading entrepreneurs making changes in education nationwide. Steve Barr - Founder of Green Dot; Kevin Johnson - Founder of St. Hope and Sacramental Mayoral candidate; Michelle Rhee - Washington D.C. Schools superintendent, and Wendy
- [Perspective Matters. Especially In Tough Times.](https://paranoidbull.com/2008/10/perspective-matters-especially-in-tough-times/) - The Reality: We are facing real challenges. I really hate to admit it, but I think there is more bad news on the horizon. The news coming out of the hedge fund industry is really troubling, and the issue with this industry’s challenges (like that of the banking industry) is that as these firms are forced
- [Who Won The Debate? America. (Video)](https://paranoidbull.com/2008/10/who-won-the-debate-video/) - America won the debate tonight. The candidates agreed on 1 thing - education. Regardless of our politics this issue is the most important for our future. Now let's hold them to their promises.
- [How Investing Is Like Relationships](https://paranoidbull.com/2008/10/how-investing-is-like-relationships/) - There is always a large amount of uncertainty. It is much harder to stomach when there is volatility. When things are good, it feels great. When things fall, it hurts like hell. There is always room for improvement. Not all ideas are good ideas. Everyone has their own strategy. While there are lots of guidebooks,
- [Yes. This Is A Bailout](https://paranoidbull.com/2008/10/yes-this-is-a-bailout/) - Any question as to whether the government was going to use its powers to directly prop up failing financial institutions will soon be eliminated. According to Bloomberg: U.S. Treasury Said to Invest $125 Billion in Major U.S. Banks The Bush administration will invest about $125 billion in nine of the biggest U.S. banks, including Citigroup
- [Dealing With Bad News](https://paranoidbull.com/2008/10/dealing-with-bad-news/) - Although the news around the financial crisis continues to worsen, an equally important and self-perpetuating component of this crisis is people's reaction to the news. Where We Are In The Crisis To re-iterate: It has been obvious for two years that a recession was inevitable, and it is likely we will see more losses for
- [Unforeseen Side-Effects of Lehman Bankruptcy](https://paranoidbull.com/2008/10/unforeseen-side-effects-of-lehman-bankruptcy/) - Apparently there may be up to $360B dollars in losses tomorrow as the auction for the Lehman CDS contracts are settled according to this Reuters article: Lehman CDS sellers face massive losses in auction Banks, hedge funds and other sellers of protection on Lehman Brothers' debt are facing losses in the area of 90 percent
- [Be Optimistic (video)](https://paranoidbull.com/2008/10/be-optimistic-video/) - There is a lot of bad news out there. But keep in mind, this isn't new news - just a change of focus. A video blog-post tonight about why we should stay optimistic even in these tough times:
- [Warren Buffett On The Crisis By Charlie Rose (video)](https://paranoidbull.com/2008/10/warren-buffett-on-the-crisis-by-charlie-rose-video/) - A long, but worthwhile explanation on where we are...and why the bailout was necessary. Thx to ADK. Some highlight Buffett-isms from the video: I would rather be approximately right than precisely wrong This is truly an economic Pearl Harbor. The patient on the floor in cardiac arrest is not Wall Street, it is the American
- [The Bailout Proposal - The Regulatory Process Is Working](https://paranoidbull.com/2008/09/the-bailout-proposal-the-regulatory-process-is-working/) - Congress has released a draft of the proposed bailout Bill, the full text of which is embedded below (information on download is here: Bailout Bill) In summary, it seems like 3 major positives have emerged from the negotiations. On the whole, I think people are making reasonable compromises and that as a result something will
- [On Laughter And The Importance Of Leadership](https://paranoidbull.com/2008/10/on-laughter-and-the-importance-of-leadership/) - Have you ever noticed that when you are sitting in around a table in a meeting, when the “alpha” laughs everyone else typically follows suit? Often this is the boss, and I remember reading somewhere this is explained by some social-psychological theory about pecking order or something like that. I think of it as another
- [The Problem With Binary Thinking (And The 2 Party System)](https://paranoidbull.com/2008/10/the-problem-with-binary-thinking-and-the-2-party-system/) - What caused the credit crisis? People have been speculating about this for months, and until recently most of the conversation on the topic was relegated to our corner of the blogosphere and academia. During the lead up to the current headline events, this debate has been enriching, and although people disagree about the fundamental causes,
- [Fatigue = Complacency](https://paranoidbull.com/2008/10/fatigue-complacency/) - So the Senate passed the bill...kind of. They passed a bailout plan, but they also included a load of pork along with the bill. Although arguably not a bad development, the fact that a website called "Treehugger.com" is blogging about the fact that this bill has a tax credit for plug-in vehicles shows you how business really gets
- [Stop The Blame Game. Pass The Bill.](https://paranoidbull.com/2008/09/stop-the-blame-game-pass-the-bill/) - Stop pointing fingers. A friend of mine asked me tonight: didn't you tell me you were against a bailout a few weeks ago? The reality is: Yes, I was against a bailout of any kind until Congress proved they were capable of coming up with a reasonable compromise in the context of a very dire
- [Just One Of Those Days (Video)](https://paranoidbull.com/2008/09/just-one-of-those-days-video/) - As all of you are now aware, the proposed bailout Bill did not pass. Here are some thoughts on what was a difficult day in many ways...even on a day like today, though, there were good moments for all of us. I hope we can focus on these moments rather than on the negative. I
- [An Explanation Of The Crisis: Why Do We Need The Bailout? (Video)](https://paranoidbull.com/2008/09/an-explanation-of-the-crisis-why-do-we-need-the-bailout-video/) - Following President Bush's excellent speech last night, I thought it might be worthwhile to review the various issues contributing to this crisis with a focus on the institutional side of the problem and why these companies need to be bailed out. Having spent the last year and half focused on this problem, I thought my
- [Is Mr. Bernanke A Good Artist?](https://paranoidbull.com/2008/09/is-mr-bernanke-a-good-artist/) - Mr. Bernanke says he wants to hold the securities purchased in the bail out until maturity, but how much will they be worth at that point? Via Bloomberg: Paulson, Bernanke Put Bank Aid Ahead of Best Deal ``I am not advocating that the government intentionally overpay,'' Bernanke told the Joint Economic Committee today, in response
- [Let's Own The Banks - Not Regulate Their Pay](https://paranoidbull.com/2008/09/lets-own-the-banks-not-regulate-their-pay/) - As I have discussed the bail-out with friends and professors over the last few days, one question keeps emerging: If we are at the point where we need to infuse this capital into the system to break-up the logjam, Why not participate in the upside? This is a question that I can't seem to answer
- [Trying To Find Clarity](https://paranoidbull.com/2008/09/trying-to-find-clarity/) - Searching for clarity in a world as cluttered as the one we live in today could possibly be the hardest task we face in the twenty-first century. In trading parlance, it is known as deciphering the “signal” from the “noise.” In everyday language it is called making good decisions. The government is currently facing a
- [The Bailout Is A "Good" Idea: The Lesser of Two Evils](https://paranoidbull.com/2008/09/the-bailout-is-a-good-idea-the-lesser-of-two-evils/) - It is worthwhile to read this accurate, though somewhat pessimistic, take on the proposed bail out, and why it is a bad idea: Why You Should Hate the Treasury Bailout Proposal I am starting to come to a more moderate conclusion: Given how bad the economy is going to inevitably get, anything we can do to
- [Stop Blaming the Hedge Funds](https://paranoidbull.com/2008/09/stop-blaming-the-hedge-funds/) - As Alan Greenspan stated this week, banning the short selling of financial stocks is a “bad idea.” Although Mr. Greenspan likely has economic theories to back up his reasoning, my rationale is somewhat simpler. It is a bad idea, because it is part of a series of actions, which seek to point the finger at
- [The Crisis: Where Are We Today?](https://paranoidbull.com/2008/09/the-crisis-where-are-we-today/) - Rather than trying to fit all of my thoughts into a blog post, I took a shot at creating a video blog post explaining where we are in the crisis, reiterating what I see as the causes and where we should go from here.
- [Flood Insurance: Needed In Galveston But Not On Wall Street](https://paranoidbull.com/2008/09/flood-insurance-needed-in-galveston-but-not-on-wall-street/) - Imagine watching the water rise in your home…first just a trickle through the bottom of the door, then to your ankles, then to your waist… People in New Orleans and now Galveston have experienced the feeling of literally watching their homes flood before their eyes. Thankfully, many people in Galveston evacuated before Hurricane Ike hammered
- [Why Are We Here?](https://paranoidbull.com/2008/09/why-are-we-here/) - A number of you have asked me to sum up my thoughts on the causes of the current crisis. One way to surmise this is to read some of my some of my posts over the last year, but I will also try to write an extensive post about this at some point soon. Â
- [Lehman Brothers - Where Vision Gets Built](https://paranoidbull.com/2008/09/so-much-for-optimism-2/) - As I write this, according to the Financial Times (here), some of my former colleagues are shuffling out of their offices at Lehman Brothers' Headquarters on 7th Avenue in New York. The Internet is swarming with news suggesting that Lehman Brothers may be filing for bankruptcy tonight, marking the end of an era for a
- [Transition Years](https://paranoidbull.com/2008/09/transition-years/) - Transitions in life seem to come up more often when one is in graduate school…or at least I have convinced myself that I am at yet another transition point as I head into the final year of my four year JD-MBA program. On the one hand, this next year will be just like any other
- [The Glass Is Half Full](https://paranoidbull.com/2008/08/the-glass-is-half-full/) - I have decided that I am going to try to stop with all of the dark talk here and elsewhere. The bells have been sounded, the destructive trend was anticipated, and for those close to me who actually listened, hopefully I saved your retirement account a few dollars or something like that. But as I
- [The Other Shoe](https://paranoidbull.com/2008/08/the-other-shoe/) - Whoever came up with the saying about the other shoe dropping must have lived in a simpler time. They didn't live in a world where the currency policy of China interacts with the supply of oil in Iraq to impact the availability of financing in Iowa. It is likely the complexity of the modern-day financial
- [Creative Destruction: The Old GDP and the New SEC](https://paranoidbull.com/2008/07/creative-destruction-the-old-gdp-and-the-new-sec/) - The schism between the old and the new in the economy was highlighted today as those who have been resisting the concept of an inevitable U.S. recession were forced into capitulation by the revision of 4th Quarter 2007 GDP, which showed a decline rather than a gain. Although the 2nd Quarter of ‘08 showed a
- [On the Markets, Twitter, and Leading a Public Life](https://paranoidbull.com/2008/07/on-the-markets-twitter-and-leading-a-public-life/) - The markets are up today…and a few companies that I was concerned about beat earnings. This ordinarily should be good news, and in a lot of ways it is. I am very glad that oil is starting to show some signs of cracking. Whether this is sustainable will surely take some time to decipher, and
- [Notes from Social Media Club LA, #smcla](https://paranoidbull.com/2008/07/notes-from-social-media-club-la-smcla/) - Here are the notes from the Social Media Club LA meeting at Mahalo. @BrianSolis, @NicoleJordan, @JackiePeters, @Richman17 and @Chiropractic were the panel. Define "Social Media": Anything that facilitates conversations online. 3rd wave of communications - 1 direct, 2 interaction with site, 3rd - interaction with each other. Shift away from email. Analogy to business is
- [Keep Learning - Admit Failure](https://paranoidbull.com/2008/07/keep-learning-admit-failure/) - One thing I admire about older people is when they continue to stretch their minds and learn new subjects into their later years. I hope that no matter what happens to me physically or otherwise that I can retain the curiosity that makes life interesting and inspires me to keep digging into new subjects.One of
- [Save Our Neighbors' Homes](https://paranoidbull.com/2008/07/save-our-neighbors-homes/) - One area that has yet to "bottom" in any sense, and one that unfortunately does not appear to be improving anytime soon is the housing market. This news today from Bloomberg is unsurprising, but nevertheless sad to hear:Foreclosures Rose 53% in June, Bank Seizures TripleU.S. foreclosure filings rose 53 percent in June from a year
- [Positive Signs?](https://paranoidbull.com/2008/07/positive-signs-2/) - Although it is hard to think we are nearing a bottom in the credit crisis when Bridgewater comes out with estimates that losses will reach $1.6T (topping Mr. John Paulson's estimates of $1.2T this Spring), there are emerging signs that the "crisis" has become consensus and that perhaps we are nearing some kind of bottom
- [Aspen Ideas Festival - President Clinton](https://paranoidbull.com/2008/07/aspen-ideas-festival-president-clinton/) - Here are my notes from President Clinton's excellent speech at the Aspen Ideas Festival. Also, if you are interested here is a video of the speech: A Conversation with President William J. Clinton. I should also note (due to a comment below) that these notes, while extensive, are obviously incomplete.Intelligence and effort are evenly distributed.
- [Aspen Ideas Festival - Web 2.0 and the Future of the Internet](https://paranoidbull.com/2008/07/aspen-ideas-festival-web-20-and-the-future-of-the-internet/) - I just left a panel discussion on the challenges of the future of the Internet and how the government might be able to address it. The most promising data point from the talk came after it was over. Clay Shirky told me that the Navy Seals are using a mashup of Twitter, Google Maps and
- [Black Gold](https://paranoidbull.com/2008/06/black-gold/) - With the price of oil hovering around $140 per barrel, the commodity boom can no longer be ignored. The price of oil is one area where I have been consistently mistaken and dumbfounded over the years. When it first peaked to $60 back in 2005, I openly told friends that I thought it would fall
- [The Turmoil Continues](https://paranoidbull.com/2008/06/the-turmoil-continues/) - As if a surprise, The WSJ reported yesterday that those who were worried about CDO ratings at Moody's (and likely the other agencies) turned out to be correct, and if those with decision making authority had listened to their warnings some of the ongoing market turmoil could have been averted.This is surely correct in hindsight,
- [Transient](https://paranoidbull.com/2008/06/transient/) - As I stood in line this afternoon, waiting to pick up a prescription at Walgreens, the person in front of me joked: "which address, I have so many" as the pharmacist sought to verify the nurse's identity.When it was my turn, I scanned the memory to guess which of my various "addresses" Walgreens would have
- [Leveraged Cubed](https://paranoidbull.com/2008/05/leveraged-cubed/) - This is just plain shady if true: leveraged, leveraged buyouts? From the sounds of this article Guy Hands Rejects Bank LBO Debt Offers, Sees Subprime Parallels it seems that banks are participating in a ridiculously sketchy-sounding practice: they appear to be bridging sales of bridge-loans that they can no longer sell to the same private
- [Signs of the Apocalypse](https://paranoidbull.com/2008/05/signs-of-the-apocalypse/) - I am willing to bet that there is a group of radicals huddled up in a cave somewhere with half-eaten cans of beans muttering to one another "see...we were right!".According to them, the horrible earthquake in China today, the tragic storm in Burma, and the financial calamities on Wall Street are all part of the
- [Mark To...Nothing](https://paranoidbull.com/2008/05/mark-tonothing/) - I guess another way to stop the bleeding is just to stop valuing assets.Merrill Says Level 3 Assets Jump 70% in First QuarterMerrill Lynch & Co. said so-called Level 3 assets climbed 70 percent in the first quarter, as the largest U.S. brokerage reclassified commercial mortgages and other assets as hard to value.Merrill's Level 3
- [May Rain](https://paranoidbull.com/2008/05/may-rain/) - One might wonder how a rainy May afternoon in the midst of finals produces optimism, but somehow this afternoon, as I trudged through an overly-gloomy Cambridge afternoon, I felt another twinge of optimism start to bite.It was surely not hindered when I turned down to my "device" a few moments later to see yet another
- [The Invisible Hand](https://paranoidbull.com/2008/04/the-invisible-hand/) - Today's announcement by Bank of America is the second in a series of recent rational decisions by private entities seeking to address some of the concerns that exist in the markets.Bank of America to Modify Mortgages, Help HomeownersBank of America Corp., seeking approval of its Countrywide Financial Corp. takeover, said it will modify at least
- [Bad Housing But Good E-Coli](https://paranoidbull.com/2008/04/bad-housing-but-good-e-coli/) - Although this is unsurprising, it is now official that the housing slump is entering into record territory nation wide. New-Home Sales Fall to Low Last Seen in 1990sThe NYTimes today said: Buyers vanished from the housing market in March, as sales of new homes plummeted to the lowest level since the housing recession of the
- [Intelligent CDS Reform](https://paranoidbull.com/2008/04/intelligent-cds-reform/) - The WSJ has a great article today suggesting the benefits of a central clearinghouse for derivatives contracts that are currently traded over the counter.Here is the article: Street Seeks Credit-Default Safety Net: Banks, Exchanges Speed Effort to Launch Clearinghouse to Back Derivatives SwapsFor those of you who have been reading this blog for awhile or
- [Former Telecom CEO And Mobile Internet](https://paranoidbull.com/2008/04/former-telecom-ceo-and-mobile-internet/) - Today I had the great privilege of having lunch (along with a group of fellow students) with the former CEO of Chunghwa Telecom, Dr. C.K. Mao. He genuinely was one of the most impressive people I have met in a long time, and I don't think I will be able to do it justice in
- [Peter Lynch Visits Harvard](https://paranoidbull.com/2008/04/peter-lynch-visits-harvard/) - The Harvard Investment Club hosted Peter Lynch today to offer some basic advice on investing in public equities. Mr. Lynch is one of the most well known and likely one of the most successful investors in history judging from the track record of his Magellen Fund at Fidelity, which returned 29% compounded over the 23
- [Jeff Bussgang of Flybridge Capital Visits HLS](https://paranoidbull.com/2008/04/jeff-bussgang-of-flybridge-capital-visits-hls/) - My VC seminar at HLS had a real treat Monday evening, when serial entrepreneur and venture capitalist, Jeff Bussgang (of Flybridge Capital, formerly IDG Ventures) took time out of his busy schedule to share some of his experiences and lessons learned from his time working on start ups and in the Venture Capital Industry. Mr.
- [Struggling to Stay Optimistic](https://paranoidbull.com/2008/04/struggling-to-stay-optimistic/) - I went to a talk tonight on a talk entitled "The Subprime Crisis, Gold, Commodities and Where the Stock Market Goes From Here" given by a few investors with a collective 70 years of investing experience, and lets just say that it makes this blog sound like a cheery story. The punch line: we narrowly
- [Hyperbole Or Not](https://paranoidbull.com/2008/04/hyperbole-or-not/) - I was having a discussion with a friend today about a paper I am writing on the credit crisis, and he suggested that I remove some of the "hyperbole" from my analysis. He was referring to recent statements by Soros and Krugman, who have both stated that the current crisis is the "worst since the
- [John Doerr of KPCB Visits HBS](https://paranoidbull.com/2008/04/john-doerr-of-kpcb-visits-hbs/) - In contrast to much of the negative news in the financial markets, there still remains a vibrant and exciting world of innovation in this country, primarily driven by the most extensive network of Venture Capitalists in the world.One of those VC's, Mr. John Doerr of Kleiner Perkins Caufield & Byers (KPCB) visited us at HBS
- [Spring Is Finally Here](https://paranoidbull.com/2008/04/spring-is-finally-here/) - It is hard not to be optimistic on a day like today. 60 degrees and sunny just sets a nice tone. May help to explain the creativity and entrepreneurship of Californians.Well, it looks like the optimism (or muted optimism) is spreading toWall Street with Goldman's head honcho today staying we are in the "third quarter"
- [Ratings Schmatings](https://paranoidbull.com/2008/04/ratings-schmatings/) - This headline from Bloomberg says enough to explain the content of the article.Moody's Is Least Accurate Subprime-Bond Rating Firm Moody's assigns Caa2 or lower ratings to just 12 percent of the 292 bonds underlying benchmark Markit ABX indexes that UBS analysts expect to default. Both Fitch and Standard & Poor's tag 57 percent of the
- [Avoiding Moral Hazard](https://paranoidbull.com/2008/04/avoiding-moral-hazard/) - Let's hope this article from the Brits is more than speculation:Fed eyes Nordic-style nationalisation of US banksApparently Fed officials have been consulting with their Scandanavian central banking counterparts to learn how the Nordics were able to save their own economies through seizing some of their domestic banks in the early 1990s.Unlike Bear's bailout, which looks
- [More Paulson Common Sense](https://paranoidbull.com/2008/03/more-paulson-common-sense/) - In another move indicating that Mr. Paulson has experience outside of Washington he appears to be poised to suggest a new set of regulators and consolidated roles among Washington beaurocrats. The moves are discussed here: Paulson to Propose New Regulators, SEC-CFTC Merger and here: Treasury’s Plan Would Give Fed Wide New PowerAcknowledging that part of
- [Finding A Bottom](https://paranoidbull.com/2008/03/finding-a-bottom/) - A number of you have asked me when I think housing prices will bottom. The short answer is: I have no idea, but most smart people I have asked think it will be 2010 before housing prices stop falling.Here is a realistic view from Irvine Housing Blog that suggests that in least in the Los
- [No More Room](https://paranoidbull.com/2008/03/no-more-room/) - Courtesy of Paul Krugman's commentary on Weird Interest RatesAlways, that is, until now. Treasury rates have plunged close to zero, even though Fed funds is still 2.25%. Since open-market operations take place in Treasuries, I take this to mean that the Fed may not actually be able to reduce short-term rates much from current levels
- [Desparate For Good News](https://paranoidbull.com/2008/03/desparate-for-good-news/) - Goldman, Lehman Reduce Loan Backlog With DiscountsU.S. banks from Goldman Sachs Group Inc. to Lehman Brothers Holdings Inc. have whittled their holdings of leveraged buyout loans to $129 billion from $163 billion at the beginning of the year by offering the debt at discounts, according to analysts at Bank of America Corp.The decline is a
- [Greenspan On Uncertainty](https://paranoidbull.com/2008/03/greenspan-on-uncertainty/) - Alan Greenspan recognizes in clear terms one of the fundamental problems with our current financial system, as enunciated in the title of his oped: We will never have a perfect model of riskThe essential problem is that our models – both risk models and econometric models – as complex as they have become, are still
- [Fear And Distrust](https://paranoidbull.com/2008/03/fear-and-distrust/) - After Friday's Bailout of Bear Stearns, less than 2 days later, it turns out that the Fed has encouraged a deal in which JP Morgan has agreed to completely bail out the company for $2/share.J.P. Morgan Rescues Bear StearnsBear Stearns Cos. reached an agreement to sell itself to J.P. Morgan Chase & Co., as worries
- [Reason May Prevail](https://paranoidbull.com/2008/03/reason-may-prevail/) - Paulson, Bernanke Plan Tougher Scrutiny of U.S. BanksThis is a reassuring companion to the bail out announced yesterday. An honest and clear assessment of the excesses of the CDO market (among other financial innovations) will lead one to conclude that banks, originators, credit rating agencies, mortgage brokers, and borrowers (yes borrowers too) were far to
- [The Put Is Here To Stay](https://paranoidbull.com/2008/03/the-put-is-here-to-stay/) - In case you were on another planet today, the stock market popped the most it has since 2002 after the Fed announced that it is going to bail out bad banking decisions at the expense of the American Taxpayer.The details are discussed here: Fed's Loan Rescue Sparks Big Stock Rally: Fed Offers $200 Billion to
- [Don't Trust Your Model](https://paranoidbull.com/2008/03/dont-trust-your-model/) - This article makes me laugh inside: Credit Swaps Thwart Fed's Ease as Debt Costs SurgeThe punch line of the article, similar to the signs we have seen at quant hedge funds is that we are not as smart as we thought we were.In other words, the same over-confidence that led people to believe that they
- [Saving The Bank](https://paranoidbull.com/2008/03/saving-the-bank/) - It looks like my intuitions about regulatory capital and bank failures are starting to materialize in a major way at Citi. This paints a dark picture for those hoping that the fed interest rate cuts would stem a decline in the housing market Citigroup to Pare Mortgage Holdings by $45 BillionCitigroup Inc., the fourth-largest U.S.
- [Bankruptcy Filings Surge](https://paranoidbull.com/2008/03/bankruptcy-filings-surge/) - More unsurprising but worsening dataBankruptcy Filings Surge Among US ConsumersAmerican consumers' bankruptcy filings jumped 15 percent in February from the previous month and a steeper rise is looming because of the subprime mortgage crisis, the American Bankruptcy Institute said.Consumer bankruptcy filings in February totaled 76,120, up from 66,050 recorded in January, the non-partisan bankruptcy research
- [Home Foreclosures Keep Growing](https://paranoidbull.com/2008/03/home-foreclosures-keep-growing/) - This is unsurprising for those of us paying attention, although it is troubling nonetheless. Via NYTimes: In Parts of U.S., Foreclosures Top SalesDuring January, it was reported this week by RealtyTrac, there were 153,745 initial foreclosure notices sent out in the United States. That dwarfed the 43,000 total sales of newly built single-family homes and
- [Buffett Is Brilliant](https://paranoidbull.com/2008/02/buffett-is-brilliant/) - Just spent some time reading this interview with Warren Buffett, and I remembered some of the best financial advice in the world is available in his newsletters for free: Berkshire Hathaway Annual Shareholder LettersMy favorites from the post:“Success is getting what you want, happiness is wanting what you get.” I won the ovarian lottery the
- [Hearing The Music](https://paranoidbull.com/2008/02/hearing-the-music/) - Have you ever heard Twelve Tone classical music? In undergrad I overly ambitiously signed up for an advanced "set theory" class which met once a week at a famous professor's house, where he served us giant bowls of ice cream and we played "guess this song" with this 12 tone classical music. I guess partly
- [Bad Mortgage Reform - Implemented Of Course](https://paranoidbull.com/2008/02/bad-mortgage-reform-implemented-of-course/) - The government has finally acted to address the increasingly bloody residential real estate markets. In a plan that includes a refund check to taxpayers, the government also agreed to lift the loan limit that Freddie Mac and Fannie Mae can purchase, which basically has the effect of lowering interest rates for loans above the previous
- [More Quant Carnage](https://paranoidbull.com/2008/02/more-quant-carnage/) - According to Bloomberg, the mega quant fund AQR is down huge already this year:AQR Hedge Fund Fell Almost 15% Through Mid-FebruaryWhy do these guys who have hired the most brilliant PHD's and built the biggest model continue to fail?The past is not indicative of the future...especially when you never had credit markets or personal balance
- [Open Source Credit Risk](https://paranoidbull.com/2008/02/open-source-credit-risk/) - This site has some ridiculously arcane sounding stuff on CD*'s. It seems like it is promoting open-source collaboration on what is obviously an important topic in risk management generally, but also for the future stability of the financial markets.This site description is what got me...cool...now if only he would have developed this a few years
- [More Gagging](https://paranoidbull.com/2008/02/more-gagging/) - For some reason the news is rife with people trying to shut down open dialogue lately.I have never heard of this site, but the very idea that a Federal Judge ordered them to shut down because of their whistleblower status just strikes me as unAmerican.Of course the Internet is the friend of liberty and apparently
- [Personal Creativity? Not At CNN](https://paranoidbull.com/2008/02/personal-creativity-not-at-cnn/) - This story, which hit the front pages of SlashDot is absolutely staggering to me. As I discussed with my father last night, the lack of ethics in politics and society in general never ceases to amaze me, no matter how often I hear of stories like this:Mike Bloomberg Claims Vote Fraud.However, the idea that a
- [Another Sign of General Fear](https://paranoidbull.com/2008/02/another-sign-of-general-fear/) - The next shoe to drop has to be bigger than the last...right?At least that seems to be the sentiment lurking in the shadows around the financial markets...perhaps it is just my contrarian nature, but this irrational paranoia (yes, I am saying others may be becoming too paranoid) just seems to create the potential for a
- [A Dark 12-Step Program](https://paranoidbull.com/2008/02/a-dark-12-step-program/) - The ominous clouds that have been lurking on the horizon have yet to materialize in the darkest forecasts imaginable, and the repeated commitment of the government to bail out the financial institutions at the crux of these issues makes me start to wonder if maybe we will be able to avert disaster through psychology, inflation,
- [More On The Consumer](https://paranoidbull.com/2008/02/more-on-the-consumer/) - This article: Credit-Card Pinch Leads Consumers To Rein In Spending in the Journal Friday was spurred by a fall-off in consumer borrowing, which seems more reasonable in the current environment that what we saw last month and I discussed a few week ago.A few friends and I had a healthy debate about what this means.
- [When The Music Stops](https://paranoidbull.com/2008/02/when-the-music-stops/) - CDO Market Is Almost Frozen, JPMorgan, Merrill SayFor some reason this headline made me think of a brutal game of musical chairs where the music stops and the players are left with the option of jumping on a bed of nails or being kicked teeth first into the curb on the Street.The never-ending slew of
- [Hedge Funds And Open Source](https://paranoidbull.com/2008/02/hedge-funds-and-open-source/) - The world is really moving in an exciting direction notwithstanding of all of the recent madness in the markets. We are in the midst of what some are calling a "loss of privacy" on the one hand, while on the other hand we might instead call it "an improvement in information and transparency". Case in
- [Its The Consumer?](https://paranoidbull.com/2008/01/its-the-consumer/) - This data from the fed makes me wonder what is going on with all the headlines suggesting that the economic slowdown is coming from hurting consumers.January 10th Consumer Credit dataSure, I get the logic: I am levered, I can't afford my ARM, I can't afford higher CC rates, so I can't spend more.But what does
- [Birds And Glass Doors](https://paranoidbull.com/2008/01/birds-and-glass-doors/) - Have you ever seen a bird flying into its own reflection? For whatever reason, the impact of skull on glass does not seem to teach these otherwise brilliant (read: they can fly!) creatures not to keep doing the same thing over and over again.Although Alan Greenspan has reluctantly admitted that perhaps he should have seen
- [The Fan](https://paranoidbull.com/2008/01/the-fan/) - As the world markets plummet on MLK day here in the States, the worst-case scenario that I have worried about for a few years now seems like it may be starting to unfold.For those who haven't spoken to me on the topic, the basic idea goes like this: When people enter CDS contracts, most of
- [Who Needs A Put, We Get Bail Outs!](https://paranoidbull.com/2008/01/who-needs-a-put-we-get-bail-outs/) - It seems like the twilight zone when stepping back and surmising the last year from 50,000 feet.Last spring was one of the strongest bull markets in recent history, and the economy (and real estate market) was humming along with seemingly unbreakable speed.Although the writing was on the wall for many of us, bringing profits in
- [Happy 2008!!!](https://paranoidbull.com/2008/01/happy-2008/) - Been awhile since my last post as I have been out of the country in Australia after a brief stop in Texas for the holidays. Of course you all have noticed that the carnage has continued unabated and even those idiots who didn't want to admit that the problems in the credit market would spread
- [A Picture Is Worth (-)Trillons](https://paranoidbull.com/2007/12/a-picture-is-worth-trillons/) - Thanks to ML for this photo that shows graphically what is obvious to anyone paying attention - we have had a "slight" bubble in the real estate markets over the last coupla years.The font is too small to read so let me translate: greatest bubble in the past - scaled to 125%. Today - scaled
- [Let The Backlash Begin](https://paranoidbull.com/2007/12/let-the-backlash-begin/) - To be honest, I was kinda bummed to see my former employer's name mentioned in the first major headline on this topic, but I can be certain that they will not be the last. I will be absolutely shocked if we don't see certain rating agencies among all of the largest creaters of these instruments
- [Why Is the Bad So Bad](https://paranoidbull.com/2007/12/why-is-the-bad-so-bad/) - Thanks to SK for forwarding this article from the Fool walking through the nuts and bolts of why the Bush "bail out" is so bad. If you have a few minutes and are interested in a quick summary of some of the implications of the current attempt at putting a band-aid on a compound fracture
- ["Put" Is An Understatement](https://paranoidbull.com/2007/12/put-is-an-understatement/) - Things have surely turned dark quickly. It was just three months ago that the concept of a "put" to the government was somewhat in question as I discussed in September. With three consecutive rate cuts not sufficing to convince the market that the put is strong enough (the market fell 250 points in less than
- [Yale Continues The Progressive Strategy](https://paranoidbull.com/2007/12/yale-continues-the-progressive-strategy/) - This is a great sign. It looks like Yale already followed Harvard's lead in dropping tuitions. Hopefully the tide will swell...Yale to Join Harvard in Easing Student Cost, Schools May FollowYale University next month plans to announce a student aid plan that could rival Harvard's initiative to ease costs for ``middle-income'' families. Again what impresses
- [Harvard Leading the Way](https://paranoidbull.com/2007/12/harvard-leading-the-way/) - This is a really cool article about Harvard's new policy regarding financial aid. It not only shows how progressive leading universities are now getting with regard to making a real commitment to socially-mobile education policy, it also shows that private sector reform can lead the way to education reform with the right leadership. I hope
- [CDS = Crazy Derivatives Stuff](https://paranoidbull.com/2007/11/cds-crazy-derivatives-stuff/) - Although this blog post is somewhat sensational (even more than me):CDS Phantom MenaceIt did have some pretty sweet pictures of how big the CDS market is getting.For those who don't know, basically a Credit Default Swap (CDS) is like an insurance contract. In principle, it lets someone who wants to own a company's bonds but
- [Larry Summers Says: Wake Up](https://paranoidbull.com/2007/11/larry-summers-says-wake-up/) - Lawrence Summers, former Chief Economist of the World Bank Secretary of the Treasury and President of Harvard, wrote an OpEd this weekend in the Financial Times that echos much of what you have read on this blog. The full article is linked here: Wake Up to the Dangers of a Deepening CrisisSeveral streams of data
- [Thankful To Avoid Landmines](https://paranoidbull.com/2007/11/thankful-to-avoid-landmines/) - I am glad to be in school right now so that I don't have to face the pragmatic consequences of the largest train wreck in history that we have been watching since June. Another land mine was revealed recently when it Citi and others acknowledged that they basically wrote put options on CDO liquidity. For
- [Gphone = G reat](https://paranoidbull.com/2007/11/gphone-g-reat/) - Google rox. As the blogosphere has been buzzing about they are pushing - not a phone - but an open source type alliance for building the next generation of cell-phone operating systems and software. Here is a video that will make you smile from the Official Google scoop on the matter:
- [A New Website For Predatory Lenders](https://paranoidbull.com/2007/11/a-new-website-for-predatory-lenders/) - This site is really funny:Predatory Lending Association A nice source for all the know-how you need to be an awesome predatory lender.
- [A Gem From 2005](https://paranoidbull.com/2007/11/a-gem-from-2005/) - I just stumbled on this gem of a press release from S&P in April 2005:S&P Comments On Risk In Newer Mortgage Products, As Discussed At Industry EventThere are really a lot of good quotes in here for a one page article, but here is a good one from a research analyst discussing Zero Amortization Subprime
- [Brutality Continued](https://paranoidbull.com/2007/11/brutality-continued/) - Well it is official for anyone who ever had any doubt - the biggest distressed cycle in history is underway.Remember the ABX charts I first posted in June? Take a look at them now. From high to low, these are BBB, A, AA and AAA (yes, TRIPLE A) Asset-backed security indices. This is really insane
- [Psychology Of Great Investors](https://paranoidbull.com/2007/10/psychology-of-great-investors/) - I saw a speech last week by a guy named Mark Sellers, the principal and founder of a small hedge fund called Sellers Capital. While the guy may not be a "household name" he was an impressive speaker and really stood out among the many great speakers I have seen in my time here at
- [The Best Headline Ever](https://paranoidbull.com/2007/10/the-best-headline-ever/) - This is really the coolest headline I have seen in awhile...Nintendo to sell Wii in ChinaIt represents the future: growth in China + growth in wicked-cool content distribution channels. I went to a talk last week with the new manager of Fidelity's famous Magellan fund. He said he is not worried about global growth even
- [The Schism Continues](https://paranoidbull.com/2007/10/the-schism-continues/) - I didn't realize when I posted Calling Another Top that we would shortly head into a few consecutive bloody weeks. But I guess I continue to underestimate how much people really have faced the fact that we are entering a prolonged period of a credit cycle. Thankfully...I believe the technology side of the economy is
- [Its Raining Outside](https://paranoidbull.com/2007/10/its-raining-outside/) - The fall is officially here in Cambridge and the darkness outside is mirroring the hammering that the stock market is taking today. The financials are getting pummelled in the wake of continuing write-offs and the recognition that people like me are not just doomsdayers for no good reason. In addition, if the stock price is
- [Bailout Murmurs](https://paranoidbull.com/2007/10/bailout-murmurs/) - As expected the banks announced yesterday that they are banding together to execute the bailout of their structured credit vehicle holding cells (referred to as SIV's).This article does a good job walking through the implications step by step (thanks to WLH):Enron, Subprime and the Derivative DiseaseLed by names like Citigroup (NYSE:C) and JPMorgan (NYSE:JPM), the
- [Another Big Bailout](https://paranoidbull.com/2007/10/another-big-bailout/) - The poor underwriting standards of lending institutions look like they are about to get another bailout...and this time it isn't in the form of a Fed rate cut. It now looks like the banks who have been scrambling to figure out a way to refinance special interest vehicles that have suffered substantial losses and still
- [We Are Not Out Of The Woods](https://paranoidbull.com/2007/10/we-are-not-out-of-the-woods/) - True, the equity markets have rebounded in reaction to the Fed's cutTrue, banks have priced and sold a few chunks of High Yield bondsTrue, the headlines of the economy sound merrier than they did in AugustNevertheless, all of these facts do not imply that the massive glut of over-liquidity has finished its impact on the
- [Politics As Usual](https://paranoidbull.com/2007/10/politics-as-usual/) - I normally refrain from political discussion both out of my disdain for the two-party system and out of acknowledgement of the fact that most people are more rabid with their political views than a dog with a porterhouse...But after seeing all of the ridiculous dialogue in the press about how the GOP's recent predictions that
- [The Worst Is Yet To Come](https://paranoidbull.com/2007/10/the-worst-is-yet-to-come/) - Although they are laggards, the credit rating agencies, as a following indicator, give us a peak into what we can expect to materialize over the coming six months to a year. When the rating agencies first started to downgrade CDO's and other asset backed securities this summer, it portended the beginning of a volatile and
- [Pessimism](https://paranoidbull.com/2007/10/pessimism/) - Credit Suisse's Dougan Says Mortgage Turmoil May LastCredit Suisse Group Chief Executive Officer Brady Dougan said the market for mortgage credit will be ``problematic'' for as long as 18 months. Bernanke Spoke With Rubin as Credit Crisis WorsenedThe Federal Reserve's Aug. 7 decision to keep interest rates unchanged set off a chain of high-level discussions
- [Optimism](https://paranoidbull.com/2007/10/optimism/) - Credit crunches and buildings fall. The world turns upside down and things we used to count on become the dreams we wish we still had. The sounds of happiness and laughter drift into sounds of yelling and despair and all that we used to hope for gets trapped in dissonance and angst. Call it a
- [Message From Someone In Need](https://paranoidbull.com/2007/10/message-from-someone-in-need/) - I got this message today from a friend here at school. Please read this note. Hello, My name is Avi Kremer. Three years ago I was a normal, healthy 29-year old. Then I was diagnosed with ALS, also known as Lou Gehrig’s disease. Now I am confined to a wheelchair, and I can barely use
- [The Understatement of The Year](https://paranoidbull.com/2007/10/the-understatement-of-the-year/) - Greenspan Sees `Rethinking' on CDOs After LossesAlthough the equity markets regained their footing and have now surpassed the peak set this summer, the credit markets continue to be in difficult shape, highlighted by Citigroup's announcement yesterday that they will take a huge loss based on writing down some of their credit assets.I try not to
- [Calling Another Top](https://paranoidbull.com/2007/09/calling-another-top/) - This article sounds interesting and kinda true. The point is basically that once the masses have caught on - the jig is up. This one speaks specifically about Hollywood's latest - an obsession with hedge funds - and the implication that now hedge funds are doomed. Hedge Funds in Hollywood: TV and movies have rediscovered
- [Digesting The Cut](https://paranoidbull.com/2007/09/digesting-the-cut/) - I guess it has taken awhile for me to respond to the news about the Fed's 50 bps cut partially because it is hard to know what the implications of the cut will be beyond the short term pop everyone witnessed over the last week and partially because I was surprised enough to take a
- [Next Up: Commercial Paper, Earnings and Buyouts](https://paranoidbull.com/2007/09/next-up-commercial-paper-earnings-and-buyouts/) - The Commercial Paper market is set to roll over a ton of debt over the next couple of weeks. According to this blog quoting newsweek:The shaky U.S. credit markets will face a critical test over the next few weeks, as companies try to find buyers for hundreds of billions of dollars in short-term debt that
- [The Power of Numbers](https://paranoidbull.com/2007/09/the-power-of-numbers/) - To tip my hand and show, contrary to what the previous post may indicate, that I believe numbers have power - if nothing more they add content to our intuitions and reason.This is truly one of the coolest displays of statistical data I have ever seen. It also reveals some unintuitive but right-sounding observations about
- [Statistically Speaking](https://paranoidbull.com/2007/09/statistically-speaking/) - It may be the fault of my Econometrics professor in undergrad who talked about how he enjoyed single malts and parties in his undergraduate days while laughing about "statistical significance." He introduced me to EconoMagic.com, and the glint in his eye as he emphasized the latter half of the site's name coupled with the ease
- [America The Beautiful](https://paranoidbull.com/2007/09/america-the-beautiful/) - I have always been patriotic. And I am from Texas.Those two facts are probably correlative and maybe even indicative of causation, but like so many things it is hard to know whether causation exists.The reason I bring it up is that sometimes I think my pessimism about the markets can get muddled with the rest
- [CP Market Vol Uncovered](https://paranoidbull.com/2007/09/cp-market-vol-uncovered/) - I wonder if this helps to explain some of the ridiculous Vol/illiquidity/drying up in the CP markets over the last few weeks:Citigroup reportedly has $100 billion in SIVsApparantly Citi (and I would be shocked if they were the only dudes who utilized this type of trade) used off-balance sheet structured vehicles to create a kind
- [More Greenspan Banter](https://paranoidbull.com/2007/09/more-greenspan-banter/) - This article is awesome. Basically now that Greenspan is out of office, he can hop into the mainstream and be honest.In his own words from the article: Greenspan Says Turmoil Fits Pattern"The behavior in what we are observing in the last seven weeks is identical in many respects to what we saw in 1998, what
- [What's Wrong With A Greenspan/Bernanke Put](https://paranoidbull.com/2007/09/whats-wrong-with-a-greenspanbernanke-put/) - I am sitting in the bathroom of a hotel room that I paid way too much for at 3 am, because the air conditioning sounds like a garbage disposal and the walls are thinner than vietnemese rice paper rendering the neighbor's conversation a just audible accompaniment to the clang of the window unit.And for this
- [Creating Alpha - On The Short Side](https://paranoidbull.com/2007/08/creating-alpha-on-the-short-side/) - For some reason the market doesn't seem to want to admit that the housing market is on a continually downward trajectory and this will continue to impact the broader economy. I guess it is hard to admit that things got way out of hand and now the economy and those benefiting from the ride will
- [What "Efficient" Markets](https://paranoidbull.com/2007/08/what-efficient-markets/) - Yesterday afternoon I experienced the irrationality of the markets first hand both as an onlooker and an emotional participant.As most of you have probably seen, Bank of America injected $2b of capital into Countrywide, ending a week of speculation about a possible takeover of the company only a week following Countrywide's tapping of its $12b
- [Finally The Fed Admits: Contained = Contagion](https://paranoidbull.com/2007/08/finally-the-fed-admits-contained-contagion/) - On Friday, the Fed finally did an about face and openly admitted what the entire world had already figured and priced into the global securities markets by suggesting that the "subprime" crisis was not simply relegated to one basket of securities, but rather - it is part of a larger problem growing out of the
- [Putting The Pieces Together](https://paranoidbull.com/2007/08/putting-the-pieces-together/) - This report does an excellent job walking through the economic indicators that show that the housing market has been both the weight driving the pendulum of the markets up and now down again over the last few years.Anyone with 20 minutes on their hands who wants some insight into where we are and where we
- [Revisiting The Indicators](https://paranoidbull.com/2007/08/revisiting-the-indicators/) - It has been awhile since I posted the beautiful (read: scary) charts of the ABX indices that were the start of all of this trouble:ABX Indices by MarkitThese reflect the reality that has been driving the crisis in the credit markets.This article does a great job walking through a summary of what has been going
- [What Tomorrow Brings](https://paranoidbull.com/2007/08/what-tomorrow-brings/) - The weather analogies continue as the first storm to hit land dissipated much like the huge drop in the market mid-day today. Now another storm, this time a hurricane, looms on the horizon, and I can't help but press the weather metaphor to the breaking point.Just as forecasters struggled with fear anticipating the worst hurricane
- [Like Rain in Texas](https://paranoidbull.com/2007/08/like-rain-in-texas/) - Irony can be ironic: the same day that the first tropical storm of the season made landfall in Texas, the markets have been pouring down on investors across the board.One of the greatest challenges when trying to understand the financial markets is recognizing that the "price" or "value" of a security is driven by what
- [Sobriety Can Be Hard](https://paranoidbull.com/2007/08/sobriety-can-be-hard/) - I just returned from a trip to Cabo San Lucas, and I have to say after not a drop - the City looks different when not seen through tequila-laden eyes...And so do the rating agencies when seen through the reality of the underlying credit rather than the "mark-to-model" numbers that seemed all-so-convincing as recently as
- [The Limits of Expectations](https://paranoidbull.com/2007/08/the-limits-of-expectations/) - When I first read this doomsday article yesterday, I thought the guy was frankly a bit extreme to say the least:MBS Monetization and US Dollar It wasn't only that the graphics atop the page made me hesitate, but I thought that the idea underlying his argument - that "Fannie Mae will eventually become a funnel
- [Correlation, Causation, and Change](https://paranoidbull.com/2007/08/correlation-causation-and-change/) - Reality reared its ugly head overnight last night as the Europeans realized that they have some trouble on their hands in the form of U.S. denominated mortgage backed securities. The equity markets took a pummelling as the beneficiaries of global liquidity (i.e. broker-dealers) faced tougher prospects for an easy out: U.S. Stocks Tumble on Credit
- [Web 3.0 is Real](https://paranoidbull.com/2007/08/web-30-is-real/) - Whether it will evolve as some combination of a Wii and Secondlife, with Nuance voice recognition technology allowing us to get past the interface hurdle...or simply through next-generation I-phone like devices tapping into social networks like Pownce or Facebook - the next "big" thing seems to be unfolding on the horizon in the internet space.
- [Bouncing With Beta](https://paranoidbull.com/2007/08/bouncing-with-beta/) - Since everyone else is enjoying the ride over the last few days, I figured maybe there is some space for good news. On globalization front, it looks like DFJ is continuing to expand its global VC horizons by entering into another partnership: DFJ’s Global OffensiveThis is a great for the idea that collaboration between entrepreneurs
- [Positive Signs?](https://paranoidbull.com/2007/08/positive-signs/) - Maybe Cramer's cage-rattling was like BX's IPO, in that it indicated the "top" of a market. Hopefully in this case it marked the peak of the hysteria and angst which has driven up the VIX index dramatically over the last couple of weeks as people grappled with the credit markets' unwind.As a friend mentioned in
- [I Hate to Quote Cramer But...](https://paranoidbull.com/2007/08/i-hate-to-quote-cramer-but/) - This is just an example of the angst that people feel when reality smacks them in the face. It is almost funny to see someone who as little as two weeks ago was "bullish" freaking out like this...but a little scary:At least he recognizes that the engine driving this train is the pain being felt
- [Transparency is Sometimes Scary](https://paranoidbull.com/2007/08/transparency-is-sometimes-scary/) - IndyMac (IMB) prides itself on providing transparency to its investors, a beacon in the complex and sometimes confusing financial services sector. (For a primer on the mortgage securities industry visit their webpage's investor relations section and read their investor presentations.)Following this tradition and a disappointing earnings release yesterday (was anyone surprised?), their CEO went so
- [Cue the Orchestra](https://paranoidbull.com/2007/08/cue-the-orchestra/) - As if on cue, an article hit the screen today foretelling the bubble bursting...and as if responding to my post from yesterday, the author called for a pop of the Web 2.0 bubble.Bubble 2.0 Coming SoonI am sticking by my optimistic guns and hoping that he is just a hater and that the frenzy going
- [Metaphors Mix Vision](https://paranoidbull.com/2007/07/metaphors-mix-vision/) - I am not sure what to think about the fact that a money manager and I have been having the same feeling of "watching a train wreck in slow motion" as the current credit cycle unwinds. Although I can safely say that he is more bearish than I am, I do agree with the overall
- [Like Dominoes](https://paranoidbull.com/2007/07/like-dominoes/) - This article updates the spread of contagion to blue chip fund Sowood Capital Management LP. According to Bloomberg, the NY Times article I referenced below mentioning a drop of 10% is vastly understated, and instead the firm's "two hedge funds plunged more than 50 percent amid the rout in credit markets."Citadel Takes Over Most Sowood
- [CCRM = Be Careful](https://paranoidbull.com/2007/07/ccrm-be-careful/) - The below article discusses a recent report by the Fed which focuses on Counterparty Credit Risk Management (CCRM) as a crucial component to reducing the risk of a system wide implosionFed Report: Risk Management Best Defense Against HF-Caused Market FailureIn English, this means that you should be careful who you are dealing with, especially when
- [Naive Optimism](https://paranoidbull.com/2007/07/naive-optimism/) - One of the things most unsettling about the current situation in the credit markets is that it makes me question the integrity of the financing system behind the boom in the mortgage securitization market and the financing markets in general.While this headline may be motivated by an investor's misplaced frustrations, when I see the rapid
- [Housing's House of Cards](https://paranoidbull.com/2007/07/housings-house-of-cards/) - This article provides a good assessment of the current situation with a focus on the dynamics underlying the house of cards - the housing market. The author focuses on the brutal reality that we are in for a long cycle of downward pressure on housing prices and this will have broad implications for the rest
- [Repricing Scorecard](https://paranoidbull.com/2007/07/repricing-scorecard/) - Bernanke says not to worry, that this is nothing but a repricing of risk... Paulson Says Subprime Rout Doesn't Threaten EconomyBut this repricing is having some tangible effects in the financing markets. Not to mention that the rest of the economy can not help but notice that people are not buying new homes. The Wall
- [Today Is Visual](https://paranoidbull.com/2007/07/today-is-visual/) - While I am not one for believing scary headlines in general, today's reaction in the equity markets to the news discussed here yesterday in the credit markets may be the beginning of an ugly period for long-only investors across asset classes. If Bank of Japan or the Fed raises rates, this could be the nail
- [What Is Wrong With This Picture?](https://paranoidbull.com/2007/07/what-is-wrong-with-this-picture/) - The picture may not do the point service, but on Friday, the headline read "A Low-Risk Investment in a High-Risk Lender" and today the stock is down more than 10% as the reality of lending to high risk individuals started to hit home for this pay-day lender.This "reality" is starting to sink in across the
- [Big Busted Bridges](https://paranoidbull.com/2007/07/big-busted-bridges/) - For some reason these headlines make me think that we will see more pain in the banking sector as more mammoth buyout deals come to market (discussed here):Banks Postpone Chrysler Funding Plan & KKR's Banks Fail to Sell $10 Billion of Boots LoansBut maybe I am just too pessimistic and instead Moody's is right to
- [Bond King vs. Fed](https://paranoidbull.com/2007/07/bond-king-vs-fed/) - This is truly one of the most brilliant things I have read in awhile...and not just because I agree with most of it. If you doubt my pessimism expressed over the last 8 months or so, maybe hearing it echoed by the greatest bond investor in the world will give it more legs.Read this...and be
- [The Princess is In Another Castle](https://paranoidbull.com/2007/07/the-princess-is-in-another-castle/) - Nintendo continues to destroy everyone. Sony and MSFT should have known better than to take on the creators of Super Tecmo Bowl, Zelda and Mario Brothers. I mean seriously did they think they could compete? That would be like someone challenging MJ to a game of one on one. Even Lebron would have to bow.Nintendo's
- [So Much For Optimism](https://paranoidbull.com/2007/07/so-much-for-optimism/) - This is the second morning I have awaken to a nice pop in the equity markets. Yesterday was long NVT - today was short CFC.Countrywide - the largest subprime mortgage lender in the nation - has to date been able to avoid the implosion faced by many of its smaller rivals, primarily by focusing on
- [Who is the Evil Empire?](https://paranoidbull.com/2007/07/who-is-the-evil-empire/) - As the I-Phone drives users back to AT&T, as discussed below, Google has also emerged as a possible player in the mobile space.It appears that they are taking their approach straight to congress and taking on Mobile-MaBell head on in the process.Not surprisingly, as discussed here (in a good piece), the tech crew is rooting
- [A Nice Primer on Pessimism](https://paranoidbull.com/2007/07/a-nice-primer-on-pessimism/) - This opinion piece on Bloomberg gives a nice overview of the situation in the credit markets and the various moving pieces I have been discussing with many of you over the last six months:AAA Grades on Subprime CDOs May Give Cold Comfort: Mark GilbertIt is hard to be gloomy when NVT pops like it did
- [Convergence is Cool](https://paranoidbull.com/2007/07/convergence-is-cool/) - So Google is now openly competing for wireless spectrum, adding cred to the rumor I helped spread a couple of weeks ago: Google open to wireless bidI for one am glad to see new-tech co's building new empires, as Facebook is clearly accomplishing as Ebay announded an app today: eBay Launches Facebook AppAlmost lets me
- [TGIA](https://paranoidbull.com/2007/07/tgia/) - Last night I saw a performance by the LA Philharmonic and it made me realize that the oil doomsdayers are wrong. I refuse to believe the spew of The Long Emergency, regardless of its allure.As I told my friend last night: the fact that human ingenuity can create music that lasts for hundreds of years
- [Dark Clouds Grow Darker](https://paranoidbull.com/2007/07/dark-clouds-grow-darker/) - As the headlines yesterday echoed, even the Fed has started to backtrack from its previous "well contained" dialogue to acknowledge that the credit crunch in the mortgage market is spreading. The Fed chief says subprime losses could hit $100bn, but if history is any judge the estimates they make are likely conservativeThe place where the
- [Nature is Better Than the Internet (Maybe)](https://paranoidbull.com/2007/07/nature-is-better-than-the-internet-maybe/) - I just had to post these pictures of a Pride even though many of you will see it on Drudge . Photo's like these make me wonder why I spend so much of my time staring at a screen and playing with new toys and websites with bad names.But then I see what a fellow
- [Rocky Waters Spur Change](https://paranoidbull.com/2007/07/rocky-waters-spur-change/) - Spending five minutes on this blog or talking to me will give you the clear impression that I am skeptical about the credit markets, and that I think this risk might spread further. The following highlights a similar concern amongst fund managers in a recent survey, though they remain optimistic about the equity markets.Credit risk
- [Customized Content is King](https://paranoidbull.com/2007/07/customized-content-is-king/) - Sometimes "bad news" is not so bad. The authors of Wired and surely the Pew Research Center for People & the Press probably thought this headline was a sign of the negative impact that the Internet is having on the masses:Infoporn: Despite the Web, Americans Remain Woefully Ill-Informed But as I read the article, I
- [First Sub, Now Alt-A, Tomorrow?](https://paranoidbull.com/2007/07/first-sub-now-alt-a-tomorrow/) - As the non-spreading containment of the credit markets continues to be isolated to the subprime sector, somehow the Alt-A sector is starting to show visible signs of deterioration.The fact that Moody's is already reacting speaks more to the magnitude of the likely issues here than to the risk if the mollasses pace of the agencies
- [Dashing My Patriotism](https://paranoidbull.com/2007/07/dashing-my-patriotism/) - Just as I get through a momentary binge of optimism, I am reminded of one of the doomsday speculative scenarios I have speculated with an extensive discussion of the topic on Bloomberg:Goldman, JPMorgan Saddled With Debt They Can't SellI can't help but hear the Juvenile inspired, "I heard you takin' spodie wodie..."And for some reason,
- [The Next Big Thing](https://paranoidbull.com/2007/07/the-next-big-thing/) - With all of the doomsday-like gloom chat here, you might think I would be like D.E. Shaw and look for future opportunies in Gurgaon or Mumbai.But although I contemplated moving to Pune last summer, I am glad I stuck to southern cali where I could become more intimate with the developments in new media and
- [Filtering a New Kind of Filter](https://paranoidbull.com/2007/07/filtering-a-new-kind-of-filter/) - The more I think about it, the more I realize the power of Web 2.0 partially resides in the ability it gives us to self-select into groups of like-minded people who can share and collaborate. One of the best functions in this process is the filtering of the massive amount of information that is floating
- [Looming Leverage](https://paranoidbull.com/2007/07/looming-leverage/) - This is the first time I have heard anyone in the mainstream media mention the risk of collapse that is inherent in the CDS markets - this market is predicated upon a risk transfer mechanism which implies that there is someone on the other side of the trade willing to write the insurance that you
- [Inflation Schminflation](https://paranoidbull.com/2007/07/inflation-schminflation/) - For those who think that inflation is well-contained please see my earlier post on the linguistic challenges surrounding such words. You may also want to check out the latest from the UN, which suggests that schminflation is causing food to become so expensive that it can't afford to feed the World any more:UN warns it
- [Another Deal Bites the Dust](https://paranoidbull.com/2007/07/another-deal-bites-the-dust/) - This is becoming regular fodder for skeptical headline junkies like myself who have been watching the slow but ever-present deterioration of the credit markets as reality sets in:KKR Cancels $1.4 Billion Loan to Refinance Maxeda LBO...But what shocks me is that the equity markets remain as bouyant as a Barbie in a bathtub: U.S. Stocks
- [Digg-ing Digg-like Sites](https://paranoidbull.com/2007/07/digg-ing-digg-like-sites/) - Although I disagree with the mentioned criticism's of Pownce which I thoroughly enjoy, this article also names some other cool sites that are worth checking out if you like Digg . The concept of a personalized filter does sound like an awesome concept, and as I discussed with some friends on Saturday night, it seems
- [The Future of the Future](https://paranoidbull.com/2007/07/the-future-of-the-future/) - Speculating about and attempting to predict the future are two of my favorite hobbies, so I enjoy it when I find others who are similarly inclined. The below article walks through some of the most exciting developments that are on the horizon (like in-home IMax's and nationwide WiMax's), and some that hopeful dreamers envision for
- [It's Friday the 13th: Dream of Virtual Worlds](https://paranoidbull.com/2007/07/its-friday-the-13th-dream-of-virtual-worlds/) - This article highlights the creative lead that Nintendo has taken in the evolution of gaming, but one thing that struck me about the story was that the fact that Sony is launching a virtual world of the likes of Second Life:"Called 'Home,' the service will let users create their own digital likeness, called an avatar,
- [A Quick Tax Lesson](https://paranoidbull.com/2007/07/a-quick-tax-lesson/) - Not that this will benefit any of us directly, but it is always interesting to check out the creativity that emerges when extremely well paid people pay smart well payed people to find a way around a problem...Tax Loopholes Sweeten a Deal for Blackstone The fact that congress has been spending the month debating income
- [Please...Somebody Buy Our Paper](https://paranoidbull.com/2007/07/pleasesomebody-buy-our-paper/) - This is hilarious...the first line of the story even quotes Lehman as "the biggest underwriter of mortgage bonds" before sourcing them for the info. on the health of the credit markets.Lehman, Bank of America, Barclays Say Rout Is OverThat is like quoting Chiquita for the statement "bananas are healthy, you should eat one for every
- [Good Conquers Old](https://paranoidbull.com/2007/07/good-conquers-old/) - New media seems to have defeated old media in the fight over online radio. Rumors have it that the proposed royalty rates that would have made online radio inpracticable have been defeated by public uproar. The blogosphere and KCRW had been blasting the message to their constituents and it seems to have worked.Online Radio Is
- [Vote of Confidence](https://paranoidbull.com/2007/07/vote-of-confidence/) - It feels good when smart people tell you they like your ideas...it inspires confidence.Well, some of the smartest people out there today may be the dudes managing the piles of capital better known as hedge funds. And these guys vote not with the ballot or in the press but with their wallets.So, I gotta wonder,
- [Nothing Like Optimistic Jargon](https://paranoidbull.com/2007/07/nothing-like-optimistic-jargon/) - I remember it was less than two years ago when the term web 2.0 first got people buzzing. Well, it is time for people to move on...to Web 3.0 and hereof course.But if you aren't ready for that you at least need to be aware of the fact that the Wii is really the future.
- [Rehashing the Preliminary Mayhem](https://paranoidbull.com/2007/07/rehashing-the-preliminary-mayhem/) - In case you haven't been keeping score, these two articles do a nice job summarizing the action over the last month or so:Debt Market Woes: ARMs Are The Next Shoe To Drop Subprime Losses Drub Debt Securities as Ratings Drop The crescendo is just on the horizon...let's hope the climax is a nice long ridable
- [Don't Worry it is Contained](https://paranoidbull.com/2007/07/dont-worry-it-is-contained/) - According to some Fed officials, the $B's at risk of losses as the subprime debacle unfolds will not create "systemic risk". Wow, these guys should retire from the Fed and kick Steve Cohen out of his digs in Connecticut. I wish I could predict the direction of Beta and proclaim it from the hills:Warsh, Steel
- [Scarier Than Googleplex](https://paranoidbull.com/2007/07/scarier-than-googleplex/) - Bigger numbers aren't all that scare something like Google. The future of facebook's grip on social networking has it shaking in its boots according to the below:23-Year-Old Mark Zuckerberg Has Google SweatingMore likely Google is keeping licking its acquisitive chops and keeping a watchful eye on the evolution of networking on sites like Stumbleupon, Pownce,
- [Death Metal to My Ears](https://paranoidbull.com/2007/07/death-metal-to-my-ears/) - As a follow up to the headline on S&P's downgrades:"S&P chief economist David Wyss predicted subprime mortgage losses to peak in late 2008 and early 2009 on a conference call this morning.The economist anticipates an 8% average national drop in home prices between 2006 and early 2008. So far, the US has experienced a 2.1%
- [Hacking a Hack of a Hacker](https://paranoidbull.com/2007/07/hacking-a-hack-of-a-hacker/) - Shocked that the Lefties at CNN would hack a fellow Lefty like Moore, but then he hacked right back. Mudslinging on real issues is a helluva lot better than what people usually get up in arms about. I wonder if he will file suit.'SiCKO' Truth Squad Sets CNN Straight
- [Pessimistic Forecasting](https://paranoidbull.com/2007/07/pessimistic-forecasting/) - IEA Forecast Underlines Oil, Gas Supply WorriesBy 2012, Production Is Expected to Fall Short Of Global DemandThe report behind this seems long and lots of smart people seem to agree. This one doesn't sound good. I just hope the tech dudes can find away around it.Medium Term Oil Market Report
- [Efficiency of Human Capital](https://paranoidbull.com/2007/07/efficiency-of-human-capital/) - Taleb says that it is all random and these guys are just lucky; but somehow the fact that this guy left in time to hit a DOUBLE in the last six months on $B's of capital doesn't seem lucky to me:Paulson Hedge Fund Gained 40% in June as Bear, Braddock Sank I think it was
- [Technology is Better Than](https://paranoidbull.com/2007/07/technology-is-better-than/) - Point and click and order. Soon I will be able to do all my Amazon shopping through my Wii or Tivo.TiVo Users Can Get Amazon Movies From TVA two-tiered economy...old burns. New blazes.
- [Maybe Now it Starts?](https://paranoidbull.com/2007/07/maybe-now-it-starts/) - Finally the rating agencies are starting to wake up and smell the rotting carcassesS&P May Cut $12 Billion of Subprime Mortgage BondsThe market reacted with a knee jerk, and the abx-indices still don't look that pretty:ABX Historical Prices for the On-the-run IndexBut the S&P announcement only relates to 2% of the outstanding and is of
- [Movies are Better than Math](https://paranoidbull.com/2007/07/movies-are-better-than-math/) - I saw a great performance by the Decemberists and the LA Philharmonic on Saturday night...the combination of lyrics and the orchestra created an almost film-like vibe as the words and sounds transformed into images.And then the next night I saw this concept perfected in the absolutely beautiful film Once. The film broke my heart and
- [Inconceivable!](https://paranoidbull.com/2007/07/inconceivable/) - The following has some scary statistics regarding the amount of outstanding ARM's (Adjustable Rate Mortgages) that are already below the equity value of the assets they underwrote (estimated at ~$500B today):Underwater ARMs ?Main reason I needed to post this was the following quote from the article:"Every time I hear the phrase "Well Contained," I am
- [The Future is Now](https://paranoidbull.com/2007/07/the-future-is-now/) - I can point my Wii remote at my television screen and watch you-tube videos. I can go into a virtual world in second life and have a second existence...and now Google is planning to transform telecomunications somehow...Technology is much cooler than securitized lending:Google: You ain't seen nothin' yet Forget iPhone, BlackBerry, Bell and Telus. Google
- [Goethe is to Derrida](https://paranoidbull.com/2007/07/goethe-is-to-derrida/) - Just as the botanist Goethe laid the groundwork for the Hegelian conception of the Aufhebung which analogizes well to Derrida's "differance", so this article nicely analogizes the environmental dissipation of toxicity to the inability of the finanicial markets to digest mortgage risk:The Ecology of Toxic MortgagesIt is a nice english language translation of some of
- [Don't Be Greedy](https://paranoidbull.com/2007/07/dont-be-greedy/) - As you head into the 4th of July holiday, remember to minimize your sun intake...you don't want to be too greedy:Human greed takes lion's share of solar energy
- [Collateral is Collateral](https://paranoidbull.com/2007/07/collateral-is-collateral/) - Poor Bear continues to take a beating for the rest of the industry in the headlines as the following article discusses the reality on the ground as Bear and others have started seizing properties through foreclosure at historical rates.Bear Stearns Meets Possums in Georgia as Foreclosures Increase The fact that some of these sales are
- [Delay in Downgrades](https://paranoidbull.com/2007/06/delay-in-downgrades/) - This article starts to shed more light on why the rating agencies may be taking so long to downgrade the $000's of B's in CDO's downstream from the subprime explosions. Because their original ratings are based on expectations of reality, it takes a change in reality (i.e. a home actually being sold through foreclosure for
- [An LOL Moment](https://paranoidbull.com/2007/06/an-lol-moment/) - Sometimes mindless humor is the best kind...An Actual Complaint to an Airline
- [Bullishness Abroad](https://paranoidbull.com/2007/06/bullishness-abroad/) - The Chinese Economy has been the topic of conversation of probably way too many cocktail stock talks...however, the upcoming Olympics suggest that if the government has anything to say about it, the boom won't stop just yet.The growth and low cost-structure present margins across industries unseen domestically. Here is an overview of a few:Profitability Ranking
- [Bridge to ???](https://paranoidbull.com/2007/06/bridge-to/) - The recent peak in the buyout boom has been funded not only with equity from the historically massive funds raised in the last few years by the behemoths at the large private equity shops but also by the credit market's willingness to absorb the high yield bonds funding up to 80% of these acquisitions.If this
- [Some Things Speak for Themselves](https://paranoidbull.com/2007/06/some-things-speak-for-themselves/) - CDOs in `Hooker Heels' Fool Moody's, S&P, Gross SaysFrom Gross's Letter (below): "To death and taxes you can add this to your list of inevitabilities: the subprime crisis is not an isolated event and it won’t be contained by a few days of headlines in The New York Times."Looking for Contagion in All the Wrong
- [Optimism About the Weather](https://paranoidbull.com/2007/06/optimism-about-the-weather/) - Being a contrarian can sometimes have positive results...like believing we will have a second consecutive slower than expected hurricane season:Where are All the Hurricanes?Or that maybe we will have global cooling before global warming melts all our ice-caps:Global cooling effectMaybe I am just an optimist about the weather...or maybe I have spent too much time
- [Downgrades Downstream](https://paranoidbull.com/2007/06/downgrades-downstream/) - The agencies have acted at the mortage-backed level, suggesting more action at the CDO level is only a matter of time.http://biz.yahoo.com/rb/070625/goldmansachs_subprime_downgrades.html?.v=2That this many have been downgraded this quickly by the reactionary agencies suggests momentum may be pushing things up the credit stream faster than some anticipate...time will tell.A like-minded scenario is further explored here, where
- [Some Like Clarity](https://paranoidbull.com/2007/06/some-like-clarity/) - One of my professors reacted in the same way to a study originally uncovered by a colleague, which only further supports the darker themes underlying the cracks in the system. For those who like clear explanations you might enjoy this read:Multiplying Mortgage Trouble
- [And the Trend is...](https://paranoidbull.com/2007/06/and-the-trend-is/) - Another week and another set of data on the underlying weakness in the housing market:Home Sales Hit Slowest Pace in 4 YearsHousing sales are falling, prices are falling, and inventories are rising. This does not bode well for the holders of the CDX's and relatives down the chain from these fundamentals. Although Bear's bail-out may
- [Rollercoaster](https://paranoidbull.com/2007/06/rollercoaster/) - It is hard to know sometimes what is the cause and what is the effect. This is similar to the problem of mistaking correlation with causation, especially when the causation seems plausible. Such is an issue that I have faced of late with respect to my overall mindset, my outlook on the markets, and my
- [On the Sunny Side of the Street](https://paranoidbull.com/2007/06/on-the-sunny-side-of-the-street/) - There is still plenty of opportunity globally, and as my friend has so dutifully pointed out, China has not only started to do the smart thing in diversifying away from US Treasuries, they have also kept their word in letting their currency appreciate:http://finance.yahoo.com/q/bc?s=USDCNY=X&t=1ySo, if you believe currency appreciation will not spell doomsday to their cheap-input
- [Signs of Spreading](https://paranoidbull.com/2007/06/signs-of-spreading/) - I could probably spend all day pointing out signs of the negative side of the market, but this one was too good to pass up:http://www.latimes.com/business/la-fi-brookstreet22jun22,1,3414975.story?coll=la-headlines-business&ctrack=1&cset=trueI wonder how many small-to-mid size trading shops have been riding the wave over the last five years...

## Pages

- [About Me](https://paranoidbull.com/about/) - I started this blog at in the summer of 2007 as the credit crisis loomed on the horizon, primarily as a vehicle for expressing my view that this crisis would be deep and that it would have a pronounced and prolonged impact on our markets and the economy. Although this became a reality, I am

## Categories

- [Uncategorized](https://paranoidbull.com/category/uncategorized/)

## Tags

- [Financial Crisis](https://paranoidbull.com/tag/financial-crisis/)
- [Lehman](https://paranoidbull.com/tag/lehman/)
- [AIG](https://paranoidbull.com/tag/aig/)
- [Causes](https://paranoidbull.com/tag/causes/)
- [Solutions](https://paranoidbull.com/tag/solutions/)
- [Bailout](https://paranoidbull.com/tag/bailout/)
- [Paulson](https://paranoidbull.com/tag/paulson/)
- [Bail out](https://paranoidbull.com/tag/bail-out/)
- [risk](https://paranoidbull.com/tag/risk/)
- [abs](https://paranoidbull.com/tag/abs/)
- [markets](https://paranoidbull.com/tag/markets/)
- [art](https://paranoidbull.com/tag/art/)
- [Video](https://paranoidbull.com/tag/video/)
- [Politics](https://paranoidbull.com/tag/politics/)
- [Blame](https://paranoidbull.com/tag/blame/)
- [Economics](https://paranoidbull.com/tag/economics/)
- [manipulation](https://paranoidbull.com/tag/manipulation/)
- [regulation](https://paranoidbull.com/tag/regulation/)
- [SEC](https://paranoidbull.com/tag/sec/)
- [Congress](https://paranoidbull.com/tag/congress/)
- [Warren Buffett](https://paranoidbull.com/tag/warren-buffett/)
- [economy](https://paranoidbull.com/tag/economy/)
- [Bankruptcy](https://paranoidbull.com/tag/bankruptcy/)
- [CDS](https://paranoidbull.com/tag/cds/)
- [The crisis](https://paranoidbull.com/tag/the-crisis/)
- [psychology](https://paranoidbull.com/tag/psychology/)
- [education](https://paranoidbull.com/tag/education/)
- [optimism](https://paranoidbull.com/tag/optimism/)
- [Investing](https://paranoidbull.com/tag/investing/)
- [challenges](https://paranoidbull.com/tag/challenges/)
- [HBS](https://paranoidbull.com/tag/hbs/)
- [entrepreneurship](https://paranoidbull.com/tag/entrepreneurship/)
- [Leadership](https://paranoidbull.com/tag/leadership/)
- [lessons](https://paranoidbull.com/tag/lessons/)
- [losses](https://paranoidbull.com/tag/losses/)
- [hubris](https://paranoidbull.com/tag/hubris/)
- [doom](https://paranoidbull.com/tag/doom/)
- [pessimism](https://paranoidbull.com/tag/pessimism/)
- [Philsophy](https://paranoidbull.com/tag/philsophy/)
- [greenspan](https://paranoidbull.com/tag/greenspan/)
- [life](https://paranoidbull.com/tag/life/)
- [love](https://paranoidbull.com/tag/love/)
- [language](https://paranoidbull.com/tag/language/)
- [decision-making](https://paranoidbull.com/tag/decision-making/)
- [philosophy](https://paranoidbull.com/tag/philosophy/)
- [hope](https://paranoidbull.com/tag/hope/)
- [Uncertainty](https://paranoidbull.com/tag/uncertainty/)
- [creativity](https://paranoidbull.com/tag/creativity/)
- [Rogers](https://paranoidbull.com/tag/rogers/)
- [outlook](https://paranoidbull.com/tag/outlook/)
- [inflation](https://paranoidbull.com/tag/inflation/)
- [Banks](https://paranoidbull.com/tag/banks/)
- [innovation](https://paranoidbull.com/tag/innovation/)
- [technology](https://paranoidbull.com/tag/technology/)
- [the internet](https://paranoidbull.com/tag/the-internet/)
- [family](https://paranoidbull.com/tag/family/)
- [happiness](https://paranoidbull.com/tag/happiness/)
- [Housing](https://paranoidbull.com/tag/housing/)
- [identity](https://paranoidbull.com/tag/identity/)
- [internet](https://paranoidbull.com/tag/internet/)
- [twitter](https://paranoidbull.com/tag/twitter/)
- [facebook](https://paranoidbull.com/tag/facebook/)