| Tavakoli Structured Finance, Inc.
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| | A Speculator: "Beneath his frontal sinuses, amid the convolutions of his brain, a silent, invisible struggle is going on, which if put into bodily shape, would startle the beholder. There the vulture passions are at work, led on by their generals, ambition and avarice."
— William Worthington Fowler
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| | Ooops! The USA is wrong again!
My British friends are having a good laugh. They have been following the news about how the "transparent" Obama administration will not say the words: "radical Islamic terrorism." Next the administration would not release the Orlando terrorist's tapes, mostly in Arabic. Now the Justice Department's Ministry of Truth has changed course and released the transcript, but it substituted the word "God" for "Allah."
That is a mistake, since "Allah" is not "God" in the Judeo-Christian sense of the word. Yes, I believe our government knows better. This is simply part of the continuing con job that starts with the false claim that Islam means "peace." In reality, Islam means submission. Submission to the will of Allah.
If you read my brief biography, "Unveiled Threat a Personal Experience of Fundamentalist Islam and the Roots of Terrorism,"
you already know that Mohammad, the prophet of Allah, was a murderer,
warlord, sex-slaver, slave trader, plunderer, and a pedophile. He is Islam's
"perfect man." Unlike, say, Catholicism, Islam was not founded in peace, by a peaceful man who preached peace. Islam was founded by a warlord who waged war to found it.
The Terrorist did it in the name of Allah, not God, or Jesus or Jehovah
So who is Allah? Allah is one of the ancient pagan gods of Mecca, a diety people invoked in time of danger. Mohammad deliberately rejected Jewish and Christian words and chose "Allah" to be the one god for Islam. Allah is no more God as we think of God in the west than Ahura Mazda, the ancient Zoroastrian god, although Ahura Mazda may be closer in the idea. By the way, Catholics believe Jesus is God (one of the manifestations of the Holy Trinity), and Jesus and Allah are not the same at all. Jews do not believe Jesus is Jehovah or God. The USA is wrong.
So yes. Once again the USA got it wrong. Moreover, our House of Representatives passed House Resolution 569. What is that? In Islam there are anti-blasphemy laws, part of sharia law. House Resolution 569 is a de facto blasphemy law, not for any of the major religions practiced in the USA, rather it is for Islam only. Every Congressman (or woman) who voted for this Resolution deserves to be voted out of office.
CIA Narrative
Speaking
of narratives, CIA Director John Brennan just testified on Capital Hill
that there was no direct link between the Orlando shooter and Islamic
terrorist groups (Never mind the shooter's expensive multi-week (training?) trips to Saudi Arabia. Never mind the shooter's ISIS pledge and his FB posts.
Never mind his mosque that produced another terrorist with whom he
prayed side-by-side. Never mind his wife's apparent complicity, and the
hate speech of his father. Never mind his selling his house to his
sister for a song just before the attack. The narrative is that he was a
"lone wolf"). That's a relief! Did you see the 2015 movie MI-5?
Near the end of the movie, The Director General of MI-5 sneers at the
head terrorist during an attack on MI-5, telling him that he’ll soon be
just another dead terrorist, and he’ll never look like a hero,
especially not to his people:
“You
don’t understand. No one’s going to see you as a hero. By the time
we’ve finished, you’ll be a drunken, wife beating, impotent kafir.
We’ll be allowed a couple of Marrakesh rent boys, give them a couple of
free tickets to Disneyland, in return for saying you begged them to
pi$$ on you. Can’t have you being remembered well.”
But that's just a movie, about MI-5. It's not as if it is real life or the CIA. That's a relief!
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| | The Queen Backs Brexit
The Sun took fire for its "The Queen Backs Brexit" headline, but the editor stood behind it. I lived in the UK for five years, and to a man (women, too) my circle affirms the headline. Two of them are the Queen's blood relatives. It is hardly a surprise, since Brexit is ultimately about self-determination as a country.
As for those who claim Britain will suffer horrible trade consequences, I do not agree, if history is any guide. On balance, it is likely to be good for Britain. It is disruptive in the short term, but not as disruptive as one might think, and it sorts itself out extremely fast. Moreover, there are huge benefits that the "let's stay" crowd seems to completely dismiss, or perhaps they are simply unschooled. Even though Britain has to import raw materials, keeping production of products it can make itself in house gives the local economy and employment a huge boost.
I'll have more to say on this another time, but with respect to the USA and our own trade debate. We tried the protectionism in the USA"s history. It was enormously and swiftly successful. There are differences, yes, but as I say, there are huge positives for Britain that are not being mentioned at all.
The Financial Times is so biased as to be misleading. Shame on the FT. I am tempted to cancel my subscription, but it is useful to read all points of view, and they do occasionally print facts, even if the paper can no longer seem to competently interpret them.
Speaking of shameful narratives, the Obama administration has publicly admitted it will scrub all references to the Orlando terrorist and "Islamic terrorism." O's administration has not admitted to anything else it may be scrubbing. Profiling in the USA as a result of this incident is limited to citizens' Constitutionally recognized right to bear arms. (That should be a separate debate.) The people in Obama's administration are a clown comedy team.
Why is the Obama Administration Massively Buying Military Weapons for its Own Appointees?
There was a shocking story in today's Wall Street Journal. It is under subscription, but if you paste the title into your google search, you may be able to read it: "Why Does the IRS Need Guns?" Here's an excerpt:
"Special agents at the IRS equipped with AR-15 military-style rifles? Health and Human Services “Special Office of Inspector General Agents” being trained by the Army’s Special Forces contractors? The Department of Veterans Affairs arming 3,700 employees?"
"The number of non-Defense Department federal officers authorized to make arrests and carry firearms (200,000) now exceeds the number of U.S. Marines (182,000). In its escalating arms and ammo stockpiling, this federal arms race is unlike anything in history. Over the last 20 years, the number of these federal officers with arrest-and-firearm authority has nearly tripled to over 200,000 today, from 74,500 in 1996."
"What exactly is the Obama administration up to?"
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| | Narratives
A reader asked me what I read every day. The WSJ, the FT, Handelsblatt, 10Ks and other SEC filings, and I-Bank research (I get a waterfall of research). I look in on the web: SIFMA, Stockman, ZeroHedge. Oh...and Bloomberg and Reuters!
I believe it is important to subscribe to our trade rags, The Wall Street Journal and the Financial Times, because financial institutions usually speak to them first to control their narratives. It is always interesting to compare that with official financial filings. The emphasis may be different than what one would reasonably expect.
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| | Germany's Negative Rates
The Bundesbank reports that for the first time teh average rate across all if its bonds hit a new low of minus 0.02 percent.
Central Bankers have lost their minds.
The beat down of investors will continue until morale improves.
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| | Dimon Says Auto Loan Market Stressed, Sees Pain for Banks
But not Dimon's bank, according to him. U.S. Bancorp’s Richard Davis also sees problems. Read more from Hugh Son at Bloomberg.
Of course, if you read Risk, or this newsletter, you already know this and much more. |
| | Conspiracies and Corners, Greenbacks and Gold, War and Peace, Bubbles and Bear Raids, Riches and Ruin, Margin Calls and Crashes, the Great Panic and the Great Depression
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This is the annotated Kindle edition of William Worthington Fowler's, Twenty Years of Inside Life in Wall Street or Revelations of the Personal Experience of a Speculator, his classic chronicle of the New York traded markets from 1860-1880, a period that spanned the Civil War, the post war bubble, worthless paper money, the Black Friday Gold Panic of 1869, the Great Panic of 1873, and the consequent first and worst seven year Great Depression. Fowler witnessed how U.S. government paper money replaced specie leading to bubbles, panics, and crashes.
Print edition is now available.
He met the most influential financiers of the day including Jay Gould, James "Diamond Jim" Fisk, Jr., Cornelius Vanderbilt, Jacob Little, Daniel Drew, Leonard Jerome, Addison Jerome, David Groesbeck, and Henry Keep. Their fortunes rose and fell on margin, carry, and derivatives including puts, calls, and futures.
They risked everything speculating in equities and a wide range of commodities including gold, silver, cotton, and more. Fowler’s tale entertains as he exposes the great corners, trading rings, conspiracies, bear twists, manipulations, and frauds.
Wall Street ran red with the blood of suicides and murder. A lucky few survived and thrived, and of those, a tiny fraction had lasting influence.
About the annotated edition
The foreword by Janet M. Tavakoli draws parallels between the Panic of 1873 and Great Depression of 1873-1880 with the financial crisis of 2008 and the ongoing Great Recession. Edited to correct errors and inconsistencies in the original edition. Includes annotations with additional biographical and background material.
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| | | RISK
Just Released!
Risk is the first book in finance expert Janet Tavakoli’s Qualitative Finance series. Her reader-friendly commentaries on complex financial topics break new ground in global finance.
Tavakoli’s Unique Insights on Risk and Reward
"Higher math produces the wrong answer to nine decimal places, and computers spit out the wrong answer faster. Technology churns out numbers that are astonishingly precise even when they are terrifyingly inaccurate."
- Identify a bank's biggest risks
- Manage the risk of short positions
- A new big short
- How to find the next big short
- The most important analysis to reduce portfolio risk
- Red flags for Fraud
- The paramount concept omitted from texts on risk
- The major myth propagated by Modern Portfolio Theory
- A “fixed income” analysis that is as important for stocks as it is for bonds
- The leverage paradox
- How to fix the global banking system
EBook release date: March 1, 2016
Print edition: March 15, 2016
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Deutsche Bank - You were out or short if you read Decisions
My friend A.T. shorted Deutsche Bank stock after reading Decisions in early April 2015. It was $35 and is now just under $18. What did you do? If it was in your portfolio, you no doubt got out.
Deutsche Bank is owning up to its problems. It posted a full-year 2015 net loss of over $7 billion (Euro 6.8 billion).
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Michael Burry told Congress he read the first edition of this book along with Tavakoli’s Credit Derivatives, before he put on “the big short” mentioned in Michael Lewis’ post-crisis book about the trade.
Tavakoli’s second edition explains those trades and the financial meltdown caused by derivatives combined with phony securitizations and fake ratings.
State-of-the-art look at the CDO and structured credit products market.(Wiley, 2008)
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Straight talk about documentation risk and information arbitrage.
Tavakoli covers total return swaps, advanced balance sheet management, credit default swaps, exotic structures, first-to-default options, credit linked notes, synthetic structures, sovereign risk, convertibility options, collateralized loan obligations, BISTROs, principal protected notes, leveraged exposure to credit spreads, conditional probability of default, callable step-ups, secured loan trusts, securitizing first loss risk, basis risk and delivery options, credit arbitrage funds, credit event definitions, notice of credit events, first to default options, firm-wide credit risk management and strengths and weaknesses of models. |
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