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Short Selling

The improbable success of The Big Short, a scathing and hilarious tutorial on making money during a financial crisis, probably has a lot of people thinking that now might be a good time to start betting against the current bubble(s). That’s a well-timed thought because it comes after three long years in which shorting was […]

After today’s market close there was a flurry of earnings announcements, some of which were way low. Not bad, mind you. In fact they were pretty good. But because Wall Street analysts were expecting more in order to justify current stock prices, the disappointments led to big price declines in the aftermarket: Google shares fall […]

Are Treasuries FINALLY the Short of the Decade?

by John Rubino on March 14, 2012 · 21 comments

For years now, US government bonds have looked like terrible investments, what with those trillion-dollar deficits and multiple wars and all. But Treasuries just kept rising, earning their owners nice returns and making their critics seem like financial illiterates who didn’t know a AAAA credit when they saw one. Check out the chart for TBT, […]

Junk Bond ETFs: Another Big Short

by John Rubino on August 22, 2010 · 20 comments

Sometimes the market makes it too easy. Check this out: Desire for income drives high-yield bond ETFs’ popularity BOSTON (MarketWatch) — Investors fed up with U.S. stocks’ negative returns over the past decade and paltry rates in today’s fixed-income markets are piling into exchange-traded funds that invest in high-yield corporate bonds. “Where else can you […]

This Year’s Big Short

by John Rubino on August 5, 2010 · 22 comments

For short sellers, the pickings aren’t quite as obvious as they were in 2006. But they’re still pretty good. Muni bonds, for instance, are a disaster waiting to happen. But the juiciest short — akin to the subprime lenders during the housing boom — are for-profit colleges. They came to my attention a while back […]

Preying on the Pumpers

by John Rubino on July 12, 2010 · 18 comments

When you run a website that contains Google ads you constantly have to watch out for penny stock hustlers promising ludicrous returns. They’re generally “pump and dump” operators who push up the price of thinly-traded stocks and then bail, leaving their hapless clients holding worthless paper. Dirtbags, in other words. So it was with some interest […]

Another Take on Munis as the Next Big Short

by John Rubino on July 12, 2010 · 3 comments

Here’s a piece on municipal bonds by Rich Bookstaber, an SEC adviser and author of Demon of Our Own Design, a well-received book on derivatives. The article is a few months old, but — since the muni market has yet to blow up — it’s still timely. See the last paragraph for a succinct explanation […]

Time to Get Short, Part 2

by John Rubino on April 15, 2010 · 12 comments

Signs of a top are accumulating. Here’s survey of the market’s happy mood from Wednesday’s Financial Times (love the first line): Irrational equanimity is back. Not only are developed market stocks back to pre-Lehman levels, but investors’ comfort levels are in a zone not seen since the eve of the credit crisis in early 2007. […]

Looks like the past year’s borrowing and printing are finally paying off. Junk bonds are setting records and emerging stock markets are booming. See this overview and this look at today’s action. But even in this kind of hot money environment, the collapse in spreads between emerging market bonds and U.S. Treasuries is remarkable: Emerging […]

One Decision Per Decade: Three Choices

by John Rubino on December 29, 2009 · 4 comments

A few years ago the trust department of a major bank decided that it would be good to know where its profits were coming from. So they had their accountants run the numbers and found that, notwithstanding their army of highly-paid stock pickers, more than 75% of their investment profits came from sector choices. In […]

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