December 2009
34 posts
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S&P 500: Total and Inflation-Adjusted Historical... →
Inflation-adjusted S&P returns, via Freakonomics Blog
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Economy Poised for Surge as Most Accurate... →
Some optimistic forecast for 2010 GDP Growth.
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Sprott Calls The Fed "A Ponzi Scheme" As Half A... →
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US Gov't Debt in 2010: $1 Trillion New Issuance +...
In 2010 the US government will need to sell $1.14 trillion in bonds to finance the federal budget deficit.
In addition, $2.0 trillion of short-term debt come due in 2010.
That makes a cool $3 trillion in supply of US government debt, in line with 2009 figures: €2.6 trillion in new issuance and €0.5 trillion of roll-over.
See my Google spreadsheet on US Government Debt by maturity date for...
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“How do you make a contribution to reduce the debt?
Make your check payable to...”
– Hilarious quotes from Government - Frequently Asked Questions about the Public Debt
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“Q. Why does the debt sometimes decrease?
A. The Public Debt Outstanding...”
– Government - Frequently Asked Questions about the Public Debt
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We Just Had A Lost Decade
People wondering if the US will enter a “lost decade” should just look back … they just had one!
On employment, there were 130,532,000 payroll jobs in December 1999, and 130,996,000 payroll jobs in November 2009; an increase of 464 thousand jobs. However the preliminary estimate of the annual benchmark revision “indicates a downward adjustment to March 2009 total nonfarm...
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Tepper's Appaloosa Is The Paulson Of 2009
Hedge fund Appaloosa made a $7 billion profit in 2009 and its managing director stands to personally profit $2.5 billion.
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Ranking Of Private Equity Firms Might Be Different...
Looking at hard numbers, the best private equity firms are not the ones you expect: peHUB » Top-Performing Private Equity Firm? Try Leonard Green
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Not One, But Two Good Private Equity News
First, Marlin Equity Partners closed its fund raising in less than 4 months with an oversubscribed $650 million fund. This is its third fund, after a solid performance on its previous two funds of 260% IRR on a small $60 million 2005 fund, and a 30% IRR (based on valuations, no exits) on a $300 million 2007 fund.
Second, Stanford University endowment canceled its secondary sale of private equity...
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Demographics Spreadsheet
Inspired by a few reports linking savings rate and demographics I uploaded the following google demographics spreadsheet with some assumptions on fertility rate, mortality rate, income, spending and employment rate, all parameters by age.
It is interesting to see how a population evolves over time (from left to right) for different age cohorts (on the vertical axis).
Enjoy!
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Errors And Omissions - Take 2
As I previously said, Central Bank of Italy keeps publishing balance of payment reports with error and omissions as large as Italy’s financial account at €26 billion (vs €1 billion last year). Weird-o!
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Borrow From Government, Lend To Government
The monster arbitrage opportunity for banks that borrow from the government (or central banks, if you really believe that they are independent) at quasi-0% and lend to the government pocketing a risk-free (beside sovereign default risk …) 3-5% spread is going on in Europe as well.
European banks, which have lost or written down $561 billion in the credit freeze, are awash with cash after...
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How To Make The World's Easiest $1 Billion →
“Entrepreneurial idea” and follow-up on my previous posts on the carry trade and carry trade spreadsheet.
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Should I Pay Or Should I Go?
As peer pressure pushed people to buy homes that they could not afford reassured by rising prices, we are now about to witness an opposite social effect: people that are underwater deciding to purposely default on their mortgage, also because their friends start doing so.
That works in the US were mortgages are non-recurse debt. In most European countries the bank would come after all your and...
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Big Buyout Firms Reinventing Themselves
Big buyout firms need to reinvent themselves because their investors are not going to pour billions into their next funds after the bust of the LBO boom and related losses.
So Kravis of KKR says:
The days are long gone when you just buy a company and hope that financial engineering will work. Our job today is to create value. Private equity, to me, is acting and thinking like an...
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“I am often asked whether the ongoing decline of the dollar implies that it can...”
– FT.com / Comment / Opinion - The dollar’s fall reflects a new role for reserves
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Half an Hour: What Not To Build →
Excellent overview of a range of ideas to avoid and to pursue.
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New York Times Goes Self-Service
New York Times launched a self-service adversing platform à la Google Adsense at Self-Service Online Advertising - New York Times.
Something is moving in old media land.
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Harvesting The Truth
Bank of America / Merrill Lynch issued this equity research document busting a few myths regarding US and China economies, leverage, exports, manufacturing.
Bianco Harvesting the Truth
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Guess Which EU-15 Country Last Defaulted?
Germany did, in 1948.
“They’ll probably go to the IMF, have a credible standby program and then aid from Brussels and bilateral aid from selected sovereign governments in Europe and the U.S. will be available,” Buiter said in a Bloomberg Television interview. “We could see the first all EU-15 sovereign default since Germany had it in 1948.”
Source: Almunia Says EU Ready to Assist Greece in...
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Gold Bull Run Is Still In Its Early Days
or so says John Hathaway of Tocqueville.
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PIMCO - Viewpoints Scott Mather December 2009 Fear... →
A case for an orderly devaluation of the US dollar
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“Candover has agreed with investors to terminate the €3bn ($4.5bn) buy-out fund...”
– FT.com / UK - Candover closes €3bn fund
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Private Equity Is Dead. Long Live Private Equity.
The old leveraged buy-out, flip it quick model won’t come back for some years as the world works through a long balance sheet recession. Private Equity, with fewer, smaller, nimbler funds, will have to go back to its origins. Some other interesting thoughts are at: Reimagining, reengineering the private equity business - Pensions & Investments