Euro and European stock ETFs head south as ECB pulls plug on Greek debt
Feb 4 2015, 16:01 ET | By: Stephen Alpher, SA News Editor
The ECB pulled its waiver which previously had allowed Greek sovereign paper to be used as borrowing collateral despite its sorry credit status. GREK -10.4%, NBG -7.1% in the regular session.
...withdrew a waiver which had allowed the use of Greek government paper as collateral for borrowing despite its low credit rating.
European markets are closed, but the Stoxx 50 ETF (FEZ -2.1%) - trading in New York - takes a tumble. Others of note: Spain (EWP -2.7%), Italy (EWI -2.6%), France (EWQ -1.8%), Germany (EWG -1.6%), U.K. (EWU -0.9%)
http://seekingalpha.com/news/2272666-euro-and-european-stock-etfs-head-south-as-ecb-pulls-plug-on-greek-debt
Earlier
Turkey tumbles as government takes over Bank Asya
Feb 4 2015, 12:38 ET | By: Stephen Alpher, SA News Editor
..(it's)about preventing the lender's failure, while others hurl accusations of political meddling."This operation is very much linked to a personal grudge and it goes down very badly with investor communities
http://seekingalpha.com/symbol/TUR
@catch22 A couple of week's ago I posted a couple of reads from Foreign Policy, here is another with a more populist/Keynesian bent.
ARGUMENT
Welcome to the Backlash Era, Europe
From Greece to Spain to France, radical parties are making gains. And the Eurocrats have no one to blame but themselves.BY PHILIPPE LEGRAIN FEBRUARY 3, 2015 Philippe Legrain, who was economic advisor to the president of the European Commission from 2011 to 2014, is a visiting senior fellow at the London School of Economics’
Podemos (the party’s name means “We Can” in Spanish) filled the streets of Madrid on Jan. 31 to protest against austerity, crushing debts, and the country’s corrupt political system — and demand change. The demonstrators don’t represent a fringe group, either. Podemos is leading in the polls, ahead of both the mainstream center-left and center-right parties in elections that will be held by the end of the year.
But the likes of Podemos are also right about important things. At a time when households, companies, and banks are all trying to reduce their debts at once, austerity leads to stagnation and suffering, not “stability,” as eurozone leaders claim. Budget cuts and tax increases have often fallen on the poor and vulnerable, not the politically connected rich. The political class in many countries is corrupt and in the pockets of vested interests, not least the banks.
More broadly, it is neither feasible nor fair for debtors to bear the full costs of the financial crisis. For every reckless borrower there is a reckless lender. In the eurozone’s case, those were primarily German and French banks, which lent vast sums to southern Europe, both directly and via local banks. While the bailouts of Greece, Ireland, Portugal, and Spain are portrayed as gestures of EU solidarity, they were in fact covert bailouts of those foreign banks that would otherwise have suffered huge losses on their reckless lending. Southern Europe’s huge debt burden — primarily private in Spain, mostly public in Greece — is stifling the economy and is unpayable in full.
Outside the eurozone, many sensible people of all stripes would agree with it. The tragedy of the eurozone is that the policy establishment in Brussels and national elites are destroying political support for the European project by advancing Germany’s selfish and destructive agenda as a creditor. With luck, they will change course before it is too late. After all, while Syriza and Podemos want to make the eurozone fairer, the far right wants to destroy the EU altogether. Europe urgently needs mainstream alternatives to Merkelism — or it risks a President Le Pen.
http://foreignpolicy.com/2015/02/03/welcome-to-the-backlash-era-europe-podemos-syriza-elections/

@Ted: Thanks for the link. While there, I found this:
Foreign Small/Mid Value
#1: Pear Tree Polaris Foreign Value Small Cap Fund (QUSIX)
If you missed it, here's David's take on this fund.

the market reversed on this from ECB re Greek collateral:
http://www.bloomberg.com/news/articles/2015-02-04/ecb-shuts-off-direct-funds-to-greece-as-reform-progress-in-doubt

@Ted
Thanks. And this Wednesday morning; all was well with the Greek's on tour, visiting several Euro heads. I did see the big swings with crude oil and thought perhaps this was the market down story.
I've been working outside. After I thaw, I will have to catch the latest news.
Take care,
Catch

FYI:
Regards,
Ted
WSJ Slant:
http://www.wsj.com/articles/u-s-stock-futures-edge-lower-1423055566
Bloomberg Slant
:http://www.bloomberg.com/news/articles/2015-02-04/u-s-stock-index-futures-retreat-after-s-p-500-s-two-day-rally
Reuters Slant:
http://www.reuters.com/assets/print?aid=USKBN0L81D420150204
MarketWatch Slant:
http://www.marketwatch.com/story/us-stocks-futures-tilt-lower-as-oil-gives-back-gains-adp-data-ahead-2015-02-04/print
WSJ Markets At A Glance:
http://markets.wsj.com/us
Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-tracker
Current Futures:
http://finviz.com/futures.ashx

FYI: Some day interest rates will go up. Until then the Treasury bears are missing one of the greatest bond rallies in history.” -- Jim Bianco, Bianco Research
Since 2015 began, everyone has been fixated on the U.S. dollar and oil prices. I want to direct your attention to what may be the greatest show now playing in financial markets: The 30-year U.S. Treasury bond.
Regards,
Ted
http://www.bloombergview.com/articles/2015-02-04/the-unloved-treasury-rally
Enlarged Graphic: http://www.ritholtz.com/blog/wp-content/uploads/2015/02/total-30-year-return.jpg

Virtually all of my bond exposure (32%) is in long term munis which were inherited , all rated at least AA by S + P, first call date is June 2016. I assume they will be called, too bad, they are paying an average of 4.3%. I have a small holding in OSTIX, but glad I don't have to be be looking at bond funds right now.

@BenWP
Along the left edge of this page, under the "big blue" icon named "Start New Discussion" you should find several other areas listed below this, including one named, My Drafts. If you have a draft that did save properly, you should see a "1" to the right of My Drafts.

2-3-15
0.00 RSIVX - RiverPark Strategic Income
0.33 PONDX - PIMCO Income
Dr. Dave,
While only one day, this is a rather large percentage difference between two "Multisector Bond Funds" that you feel should be compared to each other.
Since I see by your post that you fully embraced and learned from fundalarm's, would you tell us why RSIVX was flat on the day and PONDX was up 1/3rd of a percent?
Hint: Look under the hood.

about that currency exchange rate thing .......... depends on who's exchanging what for what (and maybe that can't be determined either?). It's black market bingo time.
http://globaleconomicanalysis.blogspot.com/2015/02/black-market-in-ukrainian-currency.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+MishsGlobalEconomicTrendAnalysis+(Mish's+Global+Economic+Trend+Analysis)

FYI: Strategy: Be greedy when other muni bond investors get fearful and don't worry when Treasury yields begin to pick up.
Regards,
Ted
http://www.investmentnews.com/article/20150204/FREE/150209975?template=printart

Berkowitz has proven himself an impressive and intelligent investor overall, but I think where things ran into significant trouble was after the financial crisis. Fairholme has always run a concentrated portfolio, but it got - I think - concentrated to the point of absurdity, with nearly half the portfolio in AIG. The bet on St Joe was matched on the opposite side by a notable short position by David Einhorn, who - so far - has been proven right. I believe Einhorn was still short it recently.
The Sears story? I've been a vocal opponent of the long story, as well and have gone into reasoning countless times before. Fairholme was buying Sears above $100. Is there more value in Sears than the current stock price? Perhaps, but there's no way the stock will see $100+. There's just way too much retail real estate, with Sears and tons of other retailers looking to offload real estate into a buyer's market. The REIT spin-off? No thanks and I just don't see the demand being there.
I really am starting to think a group of managers got sucked into the Eddie Lampert story ("It's the next Berkshire!") and are now finding out it wasn't what they thought. If it was such a tremendous story, the market wouldn't seem to disagree so much and for so long. Yeah yeah, ignore the crowds - but sometimes the crowds are right.
The thing that continues to get me was a Kiplinger's article with Berkowitz in 2009 where he talked about if he doesn't understand something, he walks away in reference to things like AIG's derivatives. Then shortly after he loads up?
There's also the Fannie/Freddie bet that's gone sour although he continues to fight the government. Good luck with that.
Financials have done (at least at last glance) worse than energy this year, which hasn't helped BAC/AIG.
And yes, Biotech has beaten a lot of things (and I think it probably will continue to do well and now it's starting to pay dividends (Gilead announcing their first dividend yesterday, Amgen increasing dividend with next payout.) I certainly see more tailwinds then headwinds for healthcare in general going forward.
As for Fairholme:
"Believes current shareholders know what to expect and are in it for the long term, five years or more."
LOL. They'll run to something else if things don't get any better without a second thought.

http://www.dallasnews.com/obituary-headlines/20150122-don-hodges-80-co-founder-of-dallas-mutual-fund-firm.ece
Hodges used to have an investment minimum of $250 at FIDO, but it looks to no longer be the case. Is that something that Fido has done bc it is an NTF fund?

http://www.dallasnews.com/obituary-headlines/20150122-don-hodges-80-co-founder-of-dallas-mutual-fund-firm.ece
Hodges used to have an investment minimum of $250 at FIDO, but it looks to no longer be the case. Is that something that Fido has done bc it is an NTF fund?

@FA:
Thoughtful post appreciated. (But why do you, who label me marxist, call yourself fundalarm? Some sort of historical appointment?)
>> when a mortgage guy launches a multi-strat fixed income fund, you can bet, that it will have around 80% in mortgages in its 'neutral state' with as little as 40 when the opportunities vanish and as much as 100% when it's available
Well, exactly ... not sure whose point you are making in pointing this out, but that was my thinking from the getgo, and the reason I began at the flexible and nominal high level. Perhaps I should've phrased it more as a question. Go-anywhere bond funds, etc.
>> incomplete data.
I obvs do not intend to cite incomplete data, just wanted to hear and query how multisectors did their thing and whether there was comparability over time and changing circumstance.
>> dan ivascyn is a mortgage guy and always will be
As a longtime owner of his efforts I know this and would then pose the question (again) why is his vehicle mandate language as it is?
(OT: what has happened to PDI, do you suppose? And it is not quite the etf version of PONDX/PIMIX, is it.)
>> i actually encourage generic and flexible language where possible as not to request a board approval every time
Well, sure. In this country especially the point is not to have many review loops with legal. Can't be helped, and they ruin most explanations and not in the good way. As the contract drafter you have to also redirect (polite term; rechannel?) the foolishnesses of the marketing people and the wackiness, or sometimes timidity, or sometimes both, of the various managers.
Thanks.

Right, so here's the allure...

Basically, investing with Bruce the past 15 years means you have more than quadrupled your investment since FAIRX inception. You've earned 11.7% per year!
Who has beaten that? Suspect very few.
But you are absolutely correct about performance last 5 years and one year. But he does have strong 3 year performance, so he's not a Three Alarm Fund, if that is what you mean.
I certainly hope he's not another Hussman from a performance perspective. And, their investing styles? Really, no comparison.
c

Thanks Charles. Although wondering if anyone here has been with the fund since inception, I can see where you are coming from and not trying to stir things up. But back to that topic we have discussed many times here, who is to say his early out performance wasn't simply a byproduct of luck?
Edit: Haven't many healthcare/biotech funds bested FAIRX over that 15 year period and with a much smoother ride?

Thanks @Charles
Was there any discussion of Lands End? (I know, I'm being lazy. I'll check the transcript.)
Portfolio Weight % Shares Owned Total Ret YTD (Daily)
Lands' End, Inc. 0.66 1,641,616 -34.04
@Junkster
It's a independent focused value fund. Is it out of step with the market bc there is an opportunity or are his best ideas not very good? There are plenty of arguments against Bruce though. You could replicate the fund pretty easily as his top investments haven't changed in a long while.

Right, so here's the allure...

Basically, investing with Bruce the past 15 years means you have more than quadrupled your investment since FAIRX inception. You've earned 11.7% per year!
Who has beaten that? Suspect very few.
But you are absolutely correct about performance last 5 years and one year. But he does have strong 3 year performance, so he's not a Three Alarm Fund, if that is what you mean.
I certainly hope he's not another Hussman from a performance perspective. And, their investing styles? Really, no comparison.
c

Hi @fundalarm
I was reading through this thread again and looked again at PIMIX and its current holdings as of its last posting. This and its cousin, PONDX have a much different mix of holdings from the previous several years. The overwhelming majority of prior holdings were directed at the mortgage sector, both agency and non.
Disclosure: We hold PIMIX at this time; although it has had a rough start for this year, but rewarding for the past several years. I fully trust both managers and their skills with a multi-sector bond fund and the flexibility available to them.

Hi catch,
I am not fundalarm, but please bear with me.
As you know, PIMIX and PONDX are the "same" fund. The only difference is in the "share class" or expense ratio. PIMIX are "institutional" shares and have an expense ratio of 0.45% and PONDX are "D" shares and have an expense ratio of 0.77%. Other than that, no difference.
You are correct that PIMIX (or PONDX) has had a rough start, but rewarding in the past. You are also correct that Dan has reduced his exposure in the mortgage sector. That said, I am confident Dan Ivascyn is as bright and sharp as the past. However, where I have some reservation, is with his promotion with the departure of Bill Gross. With his increased responsibilities, will he be able to perform at the high level that we both are accustomed to? I have no idea.
This is how I am handling PIMIX. It's still positive YTD. If and until it goes negative by 1%, I am staying with it. Yes, Junkster has taught me a few things ;-)
Mona

And some folks collected glassware.
https://images.search.yahoo.com/yhs/search;_ylt=A0LEViQRntFUgwkA1GYnnIlQ;_ylu=X3oDMTB0N25ndmVnBHNlYwNzYwRjb2xvA2JmMQR2dGlkA1lIUzAwNF8x?_adv_prop=image&fr=yhs-mozilla-001&va=Depression+glass&hspart=mozilla&hsimp=yhs-001

Hi @fundalarm
I was reading through this thread again and looked again at PIMIX and its current holdings as of its last posting. This and its cousin, PONDX have a much different mix of holdings from the previous several years. The overwhelming majority of prior holdings were directed at the mortgage sector, both agency and non.
Disclosure: We hold PIMIX at this time; although it has had a rough start for this year, but rewarding for the past several years. I fully trust both managers and their skills with a multi-sector bond fund and the flexibility available to them.
And yes, high yield has been happier again these past several trading days. I can not confirm; but suspect some of the positive direction is related to more positive action in the energy sector and their junk bonds. I also feel that if crude prices remain below $60/barrel and especially around the $50 area for the next year or so, that there be both high yield defaults in this area; as well as stronger players in this area (fracking) to start to buy the companies that are on the edge, a consolidation.
Take care of you and yours,
Catch

Except for oil and gas issues, things are really looking up for junk rated companies.
http://blogs.barrons.com/incomeinvesting/2015/02/03/moodys-corporate-liquidity-rises-burned-by-energy/