Contrarian Chronicles
The latest from Fleck...
United Airlines Pension Scandal
The plight that so many companies find themselves in has often been a consequence of shortsighted corporate management (i.e., playing beat the number). The little guy will be forced to pay for the mistakes of chieftains at the top, who have repeatedly skated away with zillions of dollars.
United's pension default is a shocking reminder that in Corporate America, nobody's word is worth very much. A person can slave away his whole life for the company and then be informed: "We're not going to give you what we told you we would."
Junk Bond Arbitrage
The amount of deleveraging that may be taking place is not quantifiable or knowable at this moment in time, but deleveraging is a decidedly bearish occurrence for financial markets. It would explain the undertow that's been at work lately. And it might also explain why the current "no-news-period rally" -- the interval between quarterly earnings reports when, in the absence of bad news, bullish fantasy often reigns supreme -- has been as lame as it's been. In short, there is a lot of smoke and, in all likelihood, some fire.
There are just too many stories about convertible-debt arbitrage problems, carry-trade angst, widening credit-default-swap spreads, etc. for some form of that not to be occurring. In addition, there are stories of brokerage firms raising margin requirements for various hedge funds.
Contrarian Chronicles
United Airlines Pension Scandal
The plight that so many companies find themselves in has often been a consequence of shortsighted corporate management (i.e., playing beat the number). The little guy will be forced to pay for the mistakes of chieftains at the top, who have repeatedly skated away with zillions of dollars.
United's pension default is a shocking reminder that in Corporate America, nobody's word is worth very much. A person can slave away his whole life for the company and then be informed: "We're not going to give you what we told you we would."
Junk Bond Arbitrage
The amount of deleveraging that may be taking place is not quantifiable or knowable at this moment in time, but deleveraging is a decidedly bearish occurrence for financial markets. It would explain the undertow that's been at work lately. And it might also explain why the current "no-news-period rally" -- the interval between quarterly earnings reports when, in the absence of bad news, bullish fantasy often reigns supreme -- has been as lame as it's been. In short, there is a lot of smoke and, in all likelihood, some fire.
There are just too many stories about convertible-debt arbitrage problems, carry-trade angst, widening credit-default-swap spreads, etc. for some form of that not to be occurring. In addition, there are stories of brokerage firms raising margin requirements for various hedge funds.
Contrarian Chronicles
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