Outside the Box, November 2007


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The Next Dominos: Junk Bond And Counterparty Risk

November 26, 2007

The subprime problem, we were told, would not spread to other markets. It would be "contained." And it has, according to Jim Grant. He quipped last week that it has been contained on planet Earth. The risks coming from rising defaults in the US (now above 600,000 and rising from just 200,000 a few years ago) are clearly spreading to markets far beyond the subprime world.

This week's Outside the Box talks about the next two dominoes that could fall: junk bonds and counterparty risk in the...

Quant Funds & The August Market Turmoil

November 19, 2007

What really happened last August? There was blood in the street for many hedge funds, while others did ok. But in this week's Outside the Box, Jon Sundt from Altegris Investments (and my US partner) dives you the behind the scenes details of what was going on inside the trading rooms of various quantitative hedge funds. It makes for interesting, if not sobering, reading.

I think you will find this analysis helpful in your own efforts to analyze your investment managers. How much real risk are...

The U.S. Credit Crunch Of 2007

November 12, 2007

This week in Outside the Box I strive to address an issue that I have been meditating on for quite some time. Precisely, how have we arrived at the current credit crisis that now threatens the domestic and global economy. I believe one of the underlying reasons is what is termed the "Minsky Moment," the topic of this weeks Outside the Box. If we understand how we have arrived at this crisis, we may get some clues as to how it will unfold. I am going to take up other thoughts on this topic...

The Credit Markets - Tragedy or Farce?

November 5, 2007

This week in Outside the Box we bring you the text of a powerhouse speech by Michael E. Lewitt, made at the The Bank Credit Analyst Conference last week. We have been discussing the current market turmoil in our weekly letters for quite some time, addressing the adverse effects of CLOs, (collaterized loan obligations), CDOs, (collaterized debt obligations), SIVs, (Structured investment vehicles), what have you, outlining the how these products among others have been instrumental to the market...

War Plans: United States and Iran

November 1, 2007

This week in our Special Outside the Box, George Friedman of Stratfor addresses what many believe to be the looming war with Iran, the potential wars' strategic futility, the underlying geopolitical implications, and the inherent threats that abound on account of Iran's defensive measures and offensive capabilities; the latter consisting of terrorist organizations that can harm US interests, be they domestic or foreign.

Stratfor continues to provide insightful and pertinent research on...