I Can Tell You Who is Holding the Bag

By: Reggie Middleton | Thu, Oct 16, 2008
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As a continuation of the recent posts on credit default swap risks, I am releasing my proprietary study of Lehman's counterparties. Please read "Interesting Lehman email" and "Do you who's going to screw who next week?" to get a clear background on the chain of posts (and the ample comments beneath the posts) that generated this one. It would appear that I am on the right track, with extreme resources being dedicated by already bankrupt companies to unwind trades that were supposedly "netted out" already (Lehman Plans to Hire 200, Unwind Derivatives Trades: WSJ Link), monolines seeking government bailouts (Ambac, Bond Insurers Will Present Plan to Tap Treasury Funds, Callen Says), and hedge funds raising substantial amounts of cash in a hostile market:

I was very, very specific in my assertions that the hedge fund bubble has burst, and I was even at risk of sticking my toe in the bubble since I had my own vehicle primed and ready to go. The fund formation process combined with my proprietary trading clued me in on the maelstrom well before the media started running the stories. I urge all who have done so, to please read " In the Great Global Macro Experiment, the next bubble to burst is...". It is quite tell tale and also reveals a lot about your author. Now, back to the topic at hand.

This CDS exposure report was a quick and dirty overnight project and thus not perfect, for I didn't want to distract my teams from their other projects. I will offer most of it here for free, but the actionable items are for paying subscribers (all levels) only. I stripped out the companies that I felt were actionable in the near term to present it to the general blog. This the process that was used to devlop a list of companies with exposure towards Lehman's debt and equity.

We extracted data for individual companies (approx 100). Some of the companies (in addition to the stated exposure herein) have also disclosed expected losses or write-down on the corresponding Lehman exposure. In cases where this information was not available we have computed expected loss based on the recovery rate of 15 cents (US) on a dollar.

We then used the following process to come up with a shortlist of 9 companies which may find it difficult to sustain the pressure from expected losses as a result of Lehman's failure and inability to repay. Stage 1:

• After computing expected loss on Lehman exposure we have computed expected loss-to-shareholders' equity to determine the relative magnitude of loss each company could undertake.. Stage 2:

• In addition to expected loss-to-shareholders' equity we have also looked into factors like absolute share price, relative decline in share price over various periods and price-to-book value to indentify potential companies that are prone to trouble.

• Based on the factors above we have indentified a list of 9 companies (for subscribers) which meet each of the following criteria

1. Expected loss-to-share holder's equity =>1.0%
2. Absolute share price >$15
3. Share price decline is less than 30% in last 3 months and less than 60% decline in the last 12 months
4. Price to book value more than 1.0x

Subscribers may download the actual spreadsheet here: Lehman Brothers CDS exposure_impact (153.5 kB 2008-10-16 19:12:02), all others can see the sanitized list below in HTML.

Company name Lehman
exposure
(US$ mn)
Expected
loss
Price
(Local
currency)
Price
US$
Exposure
/ Equity
Expected
loss/
equity
GLG Partners Inc $95 $81 3.8 $3.79 82.60% 70.20%
Ambac Financial Group Inc $1,437 $1,221 1.8 $1.80 63.00% 53.60%
Friedman Billings Ramsey Group $250 $213 0.6 $0.57 39.30% 33.40%
BlueBay Asset Management PLC $50 $43 174.5 $3.17 35.20% 30.00%
Raiffeisen Bank Aval $185 $158 0.3 $0.05 20.00% 17.00%
Swedbank AB $1,378 $1,171 71.3 $10.07 14.60% 12.40%
Eaton Vance Corp $18 $15 21.4 $21.37 7.60% 6.50%
Freddie Mac $1,600 $1,360 1.1 $1.14 5.90% 5.10%
Petroleum Development Corp $22 $18 21.9 $21.88 5.50% 4.60%
Straumur-Burdaras Investment Bank $74 $63 7.1   4.70% 4.00%
American Equity Investment Life Holding $28 $24 4.8 $4.83 4.60% 3.90%
Metropolitan Bank & Trust $70 $14 26 $0.58 4.20% 0.80%
American Safety Insurance Holdings $8 $8 10.7 $10.73 3.90% 3.90%
Shinsei Bank Ltd $375 $246 206 $2.28 3.50% 2.30%
Breitburn Energy Partners LP $50 $43 13.1 $13.13 3.50% 3.00%
Aetna Inc $295 $251 30.6 $30.61 2.90% 2.50%
CNB Financial Corp $2 $1 10.6 $10.62 2.90% 1.90%
PartnerRE Ltd $110 $94 51.8 $51.82 2.50% 2.20%
Mizuho Trust & Banking Co $108 $92 115 $1.17 2.30% 1.90%
StanCorp Financial Group Inc $29 $25 36.2 $36.20 2.00% 1.70%
Hartford Financial Services Group Inc $332 $282 32.8 $32.75 1.70% 1.50%
Bank of New York Mellon Corp $477 $425 29.3 $29.25 1.60% 1.40%
First Mercury Financial Corp $3 $3 10 $10.00 1.40% 1.20%
United Bankshares Inc $10 $10 29.5 $29.49 1.30% 1.30%
Bank of East Asia Ltd $54 $46 20.8 $2.85 1.30% 1.10%
Chuo Mitsui Trust Holdings Inc $148 $49 397 $4.47 1.30% 0.40%
Montpelier Re Holdings Ltd $19 $16 12.7 $12.66 1.10% 0.90%
Hanmi Financial Corp $4 $4 4 $3.97 1.10% 1.10%
United Fire & Casualty Co $8 $4 22.5 $22.48 1.00% 0.50%
Ace Ltd $167 $150 44.4 $44.43 1.00% 0.90%
Aegon NV $195 $166 3.9 $5.39 0.90% 0.80%
Prudential Financial Inc $215 $183 46 $46.03 0.90% 0.80%
New York Community Bancorp Inc $37 $31 14.5 $14.53 0.90% 0.80%
Grupo Financiero Banorte $24 $20 22.9 $1.82 0.90% 0.70%
Harleysville Group $6 $6 28.8 $28.78 0.80% 0.80%
Chiba Bank $49 $42 450 $4.97 0.80% 0.70%
Great-West Lifeco Inc $87 $74 27.8 $23.57 0.80% 0.70%
Australia & New Zealand Banking Group Ltd $120 $102 17.3 $12.44 0.80% 0.60%
Phoenix Cos $16 $14 6 $6.02 0.70% 0.60%
China Citic Bank Corp $76 $65 2.7 $0.39 0.70% 0.60%
Allstate Corp $139 $118 29.5 $29.51 0.60% 0.50%
Wachovia Corp $494 $420 6.1 $6.06 0.60% 0.50%
Commonwealth Bank of Australia $104 $69 42.4 $29.90 0.60% 0.40%
BOC Hong Kong $69 $59 11.7 $1.60 0.50% 0.50%
Scor SE $26 $22 13 $17.44 0.50% 0.50%
Wells Fargo & Co $249 $212 33.4 $33.35 0.50% 0.40%
Unitrin Inc $12 $10 18.1 $18.10 0.50% 0.40%
ICICI Bank Ltd $42 $36 416.2 $8.53 0.40% 0.40%
Allianz SE $294 $250 73.1 $102.90 0.40% 0.40%
Hua Nan Financial Holding Co $11 $39 16.9 $0.54 0.40% 1.30%
BNP Paribas S.A $294 $250 55.9 $80.10 0.30% 0.30%
China Construction Bank Corp $191 $163 3.8 $0.52 0.30% 0.30%
Aozora Bank Ltd $25 $21 105 $1.12 0.30% 0.30%
BNP Paribas $250 $213 55.9 $80.10 0.30% 0.30%
Intesa Sanpaolo SpA $191 $163 3 $4.43 0.20% 0.20%
Integrys Energy Group Inc $8 $7 42.4 $42.39 0.20% 0.20%
Royal Bancshares of Pennsylvania Inc $6 $10 4.9 $22.29 0.20% 0.30%
Cigna Corp $10 $9 26.5 $26.50 0.20% 0.20%
Industrial & Commercial Bank of China Ltd $151 $128 4 $0.60 0.20% 0.20%
PSB Holdings Inc $2 $5 7.1 $22.29 0.20% 0.40%
Swiss Reinsurance Co $44 $37 43.7 $38.63 0.20% 0.10%
Paris Re Holdings $5 $4 11.7 $15.90 0.20% 0.10%
Banca Popolare di Milano S.C.A.R.L. $7 $6 4.5 $6.23 0.10% 0.10%
Societe Generale SA $58 $294 45 $65.95 0.10% 0.60%
Bank of China Ltd $76 $64 2.6 $0.36 0.10% 0.10%
UniCredit SpA $88 $75 2.4 $3.36 0.10% 0.10%
Industrial Bank Co $34 $29 3.8 $0.54 0.00% 0.00%
State Bank of India $5 $3 1540.6 $30.91 0.00% 0.00%
Credit Agricole S.A. $15 $184 10.4 $14.89 0.00% 0.30%
Ameren Corp $1 $1 30 $30.00 0.00% 0.00%
Swissquote Holding AG   $8 30.1 $27.23 0.00% 6.70%
Banco de Oro Unibank Inc   $79 32 $0.71 0.00% 5.80%
Rizal Commercial Banking Corp   $20 12.3 $0.27 0.00% 3.10%
Erie Indemnity Co   $19 34.7 $34.65 0.00% 1.80%
Tower Group Inc   $2 19.7 $19.70 0.00% 0.70%
Wichford PLC   $3 58 $1.00 0.00% 0.70%
FBL Financial Group   $5 16 $16.00 0.00% 0.60%
Bangkok Bank PCL     74 $2.29 0.00% 0.00%
MetLife Inc     34.2 $34.17 0.00% 0.00%
Maui Land & Pineapple     17.8 $17.80 0.00% 0.00%
Morningstar Inc     47.3 $47.31 0.00% 0.00%
Primus Guaranty Ltd. $136 $116 0.8 $0.82 -145.50% -123.70%
HCC Insurance Holdings Inc None $32 19 $19.03   1.30%
Citigroup Minimal   16.2 $16.23   0.00%
Calamos Asset Management Minimal   10 $10.00   0.00%
State Street Corp no unsecured ex   46.8 $46.83   0.00%
Mega Financial Holding Co $29 $59 10.9 $0.34    
Shin Kong Financial Holding $77 $5 7.7 $0.24    
Chinatrust Financial Holding Co $548 $465 12.5 $0.40    
AXA SA $221 $188 23.5 $23.48    
Bank Hapoalim B.M. $124 $105 2.3 $2.25    
Dexia SA $368 $258 4.8 $6.83    
Friends Provident $31 $27 13.9 $13.90    
ING NV   $74 15.2 $15.18    
Kingsway Financial Services Inc $17 $14 5.8 $5.84    
Matrix European Real Estate Investment Trust $102 $86 158 $2.93    
Manulife Financial Corp $395 $336 24.2 $24.21    
Mitsubishi UFJ Financial Group Inc $312 $265 7.2 $7.20    
Mitsubishi UFJ Financial Group $235 $246 7.2 $7.20    
Nicor Inc $3 $2 28.2 $40.45    
Reinsurance Group of America Inc $32 $27 49.8 $49.75    
Sun Life Financial Inc $299 $254 26.3 $26.28    
Sumitomo Mitsui Financial Group Inc $980 $99 5.5 $5.48    
UBS AG   $300 16.7 $16.66    
Swiss Life Holding AG $18 $15        
PMA Capital Corp $9 $8        
Munich Re AG $258 $219        
Banca Popolare dell'Emilia Romagna $17 $15        
Commerzbank AG Minimal          
Lincoln National Corp $121 $103        
Danske Bank A/S   $100        

Additional notes and comments:

Company name Expected
loss/
equity
Other information
GLG Partners Inc 70.20% Lehman holds 13.7% stake in firm. GLG said its Lehman exposure was less than 1% of assets managed.
Ambac Financial Group Inc 53.60% Direct exposure to 6 interest-rate currency swaps with Lehman as counterparty: "insignificant" net payable balance to Lehman; up to $137 million in reinsured surety at several brokerages; about $1.3 billion in outstanding GICs backing credit-linked notes with Lehman as counterparty
Friedman Billings Ramsey Group 33.40% Fannie mortgage-backed security sold to Lehman under repurchase agreement
BlueBay Asset Management PLC 30.00% Counterparty to $50 million in trades
Raiffeisen Bank Aval 17.00%  
Swedbank AB 12.40% Swedbank decided it won't make any provision after conducting an investigation. Swedbank is Lehman's third-largest creditor, according to a Lehman filing.
Eaton Vance Corp 6.50% $15.9 million debt and stock holdings through funds at Sept. 12; $2.2 million derivatives deals with non-broker-dealer lehman affiliate
Freddie Mac 5.10% $400 million servicing-related exposure on single-family loans; $1.2 billion unsecured Lehman payment due Sept. 15 wasn't made. Freddie Mac is still evaluating the extent of exposure to Lehman and said actual losses could exceed current estimates.
Petroleum Development Corp 4.60%  
Straumur-Burdaras Investment Bank 4.00% Lehman Brothers International Europe is a prime broker and principal. Straumur sold credit protection referencing Lehman Brothers Holding with a EUR29 million notional value.
American Equity Investment Life Holding 3.90% 1.3 million preferred stock at amortized cost; $27 million unsecured counterparty exposure. American Equity will book an other-than-temporary charge on its Lehman holdings.
Metropolitan Bank & Trust 0.80% Extended PHP2.4 billion loan to Lehman's Philippine Investment One Inc. and Philippine Investment Two Inc; $20.4 million in bonds. Metrobank asked a local court to place the units under corporate rehabilitation to stop all claims against them. Metrobank said the loan is current. Metrobank set aside a $14 million provision.
American Safety Insurance Holdings 3.90% $7.7 million book value in Lehman, Fannie and Freddie investments at Sept. 30. American Safety will record a third-quarter pretax charge for the full book value and will book a net loss because of those and other securities-related impairments.
Shinsei Bank Ltd 2.30% Shinsei also cut its full-year forecast to Y12 billion from Y62 billion.
Breitburn Energy Partners LP 3.00% Counterparty to $50 million interest rate swap
Aetna Inc 2.50% 132 n in debt securities and $163 mn reinsurance recoverable from Lehman affiliate at Aug. 31. Aetna is pursuing its claims regarding the recoverable through liquidation proceedings. Aetna took possession of the assets supporting the recoverable on Sept. 19.
CNB Financial Corp 1.90% Subordinated corporate bond. Will have $1.3 million other-than-temporary noncash impairment charge.
PartnerRE Ltd 2.20%  
Mizuho Trust & Banking Co 1.90%  
StanCorp Financial Group Inc 1.70% Debt securities
Hartford Financial Services Group Inc 1.50% $91 million senior debt, $127 million subordinated debt, $34 million preferred stock, about $50 million unsecured counterparty exposure in connection with derivatives deals, $30 million senior debt through credit default swaps
Bank of New York Mellon Corp 1.40% BNY Mellon expects to book a $425 mn third-quarter charge. Maximum $235 mn in funds; maximum $242 mn in other capital support arrangements
First Mercury Financial Corp 1.20% $3.18 million par value securities from Lehman, AIG and Freddie (book value $2.95 million at June 30)
United Bankshares Inc 1.30% Senior corporate bond. Expects to record a noncash other-than-temporary impairment charge in the third quarter.
Bank of East Asia Ltd 1.10%  
Chuo Mitsui Trust Holdings Inc 0.40%  
Montpelier Re Holdings Ltd 0.90% Senior debt
Hanmi Financial Corp 1.10% Unsecured senior debt with $2.8 million carrying value at June 30; derivative contract with $1.2 million carrying value at June 30
United Fire & Casualty Co 0.50%  
Ace Ltd 0.90% $167 million aggregate par value debt in Lehman and related companies, including $75 million senior debt and $92 million subordinated debt. More than 90% of the securities are classified as "available for sale" and are marked to market.
Aegon NV 0.80%  
Prudential Financial Inc 0.80% Securities worth $117 million amortized (fair value Sept.16 about one third that price); debt wit fair value $8 million (down about $16 million since June 30); $90 million in unsecured counterparty derivatives exposure
New York Community Bancorp Inc 0.80%  
Grupo Financiero Banorte 0.70% $22 million senior notes, counterparty to $2 million in interest rate swaps. The exposure represents 0.07% of Banorte's total assets and 0.6% of its capital
Harleysville Group 0.80% Unsecured notes
Chiba Bank 0.70%  
Great-West Lifeco Inc 0.70% C$101 million par value of fixed income securities
Australia & New Zealand Banking Group Ltd 0.60%  
Phoenix Cos 0.60%  
China Citic Bank Corp 0.60%  
Allstate Corp 0.50% $65 million estimated fair value fixed income securities at Sept. 19 (down from $185 million at June 30); $74 million net payables in counterparty exposure under master netting pacts; Lehman contributes $80 million under $1 billion credit pact
Wachovia Corp 0.50% Evergreen Investments' Evergreen Institutional Money Market Fund had $309 million (1.9% of assets), Money Market Fund had $110 million (1.66% of assets), Prime Cash Management had $75 million (0.97% of assets) invested in Lehman credit at Sept. 12
Commonwealth Bank of Australia 0.40% Unlikely to recover its exposure, which could hurt earnings by about A$100 mn
BOC Hong Kong 0.50%  
Scor SE 0.50% Senior notes. Scor expects "significant recoveries" on the notes.
Wells Fargo & Co 0.40% $199 million, including $109 million in notes and $90 million in preferred stock; $50 million in unsecured counterparty exposure; no direct lending exposure
Unitrin Inc 0.40% Combined Lehman, AIG securities less than $12 million at June 30, 2008
ICICI Bank Ltd 0.40%  
Allianz SE 0.40%  
Hua Nan Financial Holding Co 1.30% NT$370 million in bonds and bills. Hua Nan Commercial Bank booked a NT$152 million loss for its Lehman investments.
BNP Paribas S.A 0.30%  
China Construction Bank Corp 0.30% Lehman paper accounts for 0.019% of Construction Bank's assets at June 30, 2008. Exposure - $141.4 million senior
bonds and $50 million in subordinated bonds
Aozora Bank Ltd 0.30%  
BNP Paribas 0.30% According to Lehman's bankruptcy filing, BNP is owed $250 million and is one of Lehman's largest creditors.
Intesa Sanpaolo SpA 0.20%  
Integrys Energy Group Inc 0.20%  
Royal Bancshares of Pennsylvania Inc 0.30% Royal Bancshares will record a $9.6 million charge related to its investments in Lehman, WaMu and two collateralized mortgage obligations $3.9 million of which relates to Lehman investments.
Cigna Corp 0.20% Debt with book value $10 million
Industrial & Commercial Bank of China Ltd 0.20% Lehman holdings make up 0.01% of its assets at June 30, 2008
PSB Holdings Inc 0.40% $5.4 million pretax impairment from its Lehman and Freddie holdings, including $1.8 million from its Lehman debt.
Swiss Reinsurance Co 0.10%  
Paris Re Holdings 0.10% Paris Re's Lehman exposure represents 0.09% of its total investment portfolio.
Banca Popolare di Milano S.C.A.R.L. 0.10%  
Societe Generale SA 0.60% EUR76 million in senior debt: granted EUR3 million in loans to Lehman. SG estimates the replacement risk for the activities in which Lehman group companies were counterparties is around EUR400 in current market conditions.
Bank of China Ltd 0.10% Bonds
UniCredit SpA 0.10%  
Industrial Bank Co 0.00% Industrial Bank hasn't made any provision yet for the exposure
State Bank of India 0.00% Expects to recover 60%-70% of its total exposure. The company has made a full provision on the securities.
Credit Agricole S.A. 0.30% Credit Agricole expects the costs to replace Lehman collateralized market transactions to be less than EUR250 million.
Ameren Corp 0.00%  
Swissquote Holding AG 6.70%  
Banco de Oro Unibank Inc 5.80%  
Rizal Commercial Banking Corp 3.10%  
Erie Indemnity Co 1.80% Preferred stock, bonds. Erie Indemnity expects to book a third-quarter $2.4 million charge from its Lehman exposure, Erie Insurance Exchange anticipates a $12.2 million charge from its Lehman securities and Erie Family Life Insurance sees booking a $4.8 million charge on its Lehman holdings.
Tower Group Inc 0.70% Bonds. Expects to book a $2.1 mn other-than-temporary non-cash charge in 3Q
Wichford PLC 0.70% Lehman lent GBP 344 mn. The company said it won't have to repay more than GBP300 mn in loans. The company cut its dividend to between 7 and 8 pence from 10.2 pence.
FBL Financial Group 0.60% senior subordinated bonds with $6 million amortized cost; fixed-for-floating interest rate swap with Lehman Brothers Specialty Financing, with estimated mark-to-market value $2.1 million payable to Lehman, currently being terminated
Bangkok Bank PCL 0.00% short-term bonds
MetLife Inc 0.00% Owed $878.4 mn
Maui Land & Pineapple 0.00% Lehman failed to fund $35.6 million in a syndication construction loan to Kapalua Bay Holdings LLC. Maui Land has a 51% ownership stake in Kapalua Bay. Affiliates of Marriott International Inc. (MAR) and Exclusive Resorts LLC and other holding members agreed to advance funds to the venture.
Morningstar Inc 0.00% Revenues from Lehman, Merrill and AIG was 3% of company-wide revenue in 2007.
Primus Guaranty Ltd. -123.70% $80 million in credit default swaps; also has CDS exposure in bespoke tranche portfolios; has sold CDS protection to Lehman Brothers Special Financing Inc. with mark-to-market value $56 million at Sept. 12
HCC Insurance Holdings Inc 1.30% HCC sold all of its positions in the preferred stock of Fannie, Freddie, and Wachovia and in the securities of AIG and Lehman during the third quarter. The company will realize a $19.4 million pretax loss as a result of the sales and a net realized investment loss of $12.1 million before taxes from all securities sales
Citigroup 0.00%  
Calamos Asset Management 0.00%  
State Street Corp 0.00% Owed $1 billion
Mega Financial Holding Co   Mega International recognized a NT$1.9 billion asset impairment loss on investments in Lehman's commercial papers. Redemptions have cut the fund's size to NT$5 billion from more than NT$35 billion
Shin Kong Financial Holding   Booked a NT$517 million loss for its Lehman investment.
Chinatrust Financial Holding Co    
AXA SA    
Bank Hapoalim B.M.    
Dexia SA   Senior bonds
Friends Provident    
ING NV    
Kingsway Financial Services Inc   fixed income
Matrix European Real Estate Investment Trust    
Manulife Financial Corp    
Mitsubishi UFJ Financial Group Inc    
Mitsubishi UFJ Financial Group    
Nicor Inc    
Reinsurance Group of America Inc    
Sun Life Financial Inc    
Sumitomo Mitsui Financial Group Inc   SMFG expects Y10 billion in losses from credits to Lehman
UBS AG    
Swiss Life Holding AG   Bonds
PMA Capital Corp   senior debt securities
Munich Re AG    
Banca Popolare dell'Emilia Romagna    
Commerzbank AG   Dismissed a television report that the company had EUR300 million in Lehman exposure but didn't provide specific figures for its actual exposure.
Lincoln National Corp    
Danske Bank A/S   Secured deals including interest rate swaps, foreign currency and bond deals, extended facilities to Lehman units including $800 million repo transaction with 50% nominal excess cover; Lehman guaranteed $300 million repo transaction secured by prime mortgages with 30% excess cover

 


 

Reggie Middleton

Author: Reggie Middleton

Reggie Middleton
Reggie Middleton, LLC
Perpetual Interests, LLCTM
http://boombustblog.com/

Reggie Middleton

Who am I?

Well, I fancy myself the personification of the free thinking maverick, the ultimate non-conformist as it applies to investment and analysis. I am definitively outside the box - not your typical or stereotypical Wall Street investor. I work out of my home, not a Manhattan office. I build my own technology and perform my own research - in lieu of buying it or following the crowd. I create and follow my own macro strategies and am by definition, a contrarian to the nth degree.

Since I use my research as a tool for my own investing to actually put food on my table, I can stand behind it as doing what it is supposed too - educate, illustrate and elucidate. I do not sell advice, I am not a reporter hence do not sell stories, and I do not sell research. I am an entrepreneur who exists just outside of mainstream corporate America and Wall Street. This allows me freedom to do things that many can not. For instance, I pride myself on developing some of the highest quality research available, regardless of price. No conflicts of interest, no corporate politics, no special favors. Just the hard truth as I have found it - and believe me, my team and I do find it! I welcome any and all to peruse my blog, use my custom hacked collaborative social tools, read the articles, download the files, and make a critical comparison of the opinion referencing the situation at hand and the time stamp on the blog post to the reality both at the time of the post and the present. Hopefully, you will be as impressed with the Boom Bust as I am and our constituency.

I pay for significant information and data, and am well aware of the value of quality research. I find most currently available research lacking, in both quality and quantity. The reason why I had to create my own research staff was due to my dissatisfaction with what was currently available - to both individuals and institutions.

So here I am, creating my own research for my own investment activity. What really sets my actions apart is that I offer much of what I produce to the public without charge - free to distribute and redistribute, as long as it is left unaltered and full attribution is given to the author and owner. Why would I do such a thing when others easily charge 5 and 6 digits annually for what some may consider a lesser product? It is akin to open source analysis! My ideas and implementations are actually improved and fine tuned when bounced off of the collective intellect of the many, in lieu of that of the few - no matter how smart those few may believe themselves to be.

Very recently, I have started charging for the forensics portion of my work, which has freed up the resources to develop the site to deliver even more research for free, particularly on the global macro and opinion front. This move has allowed me to serve an more diverse constituency, which now includes the institutional consumer (ie., investment turned consumer banks, hedge funds, pensions, etc,) as well as the newbie individual investor who is just getting started - basically the two polar opposites of the investing spectrum. I am proud to announce major banks as paying clients, and brand new investors who take my book recommendations and opinions on true wealth and success to heart.

So, this is how I use my background and knowledge in new media, distributed computing, risk management, insurance, financial engineering, real estate, corporate valuation and financial analysis to pursue, analyze and capitalize on global macroeconomic opportunities. I have included a more in depth bio at the bottom of the page for those who really, really need to know more about me.

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