Michael Covel: News & Info.

Alpha goes to Beta.

This excerpt from the wires today is interesting:

A stock bounce was hardly unexpected, though, after the Dow lost nearly 240 points Monday on worries about the sagging financial sector. Wall Street is torn: Energy prices, if they continue on their downward path, could provide big relief to consumers and in turn help the economy, but credit losses keep mounting at the nation’s major banks. The result is big swings in the market but little consistent direction. “We’re living from one piece of news to the next,” said Alan Gayle, senior investment strategist for RidgeWorth Capital Management. The market’s volatility is likely to continue unless it gets further evidence that oil prices are, indeed, on their way down, and that banks have already seen the bulk of their losses.

That poor reporter. He has to write something. He has to try and paint word pictures to explain volatility, but it is clearly a struggle for him. I am not sure how a reporter can wake up excited each day to go to a job that requires him to literally make stuff up to justify random price movements.

Amazing.

Even if you did not know this about Indymac their chart told you all you needed to know. Same deal as with Enron the chart was ahead of the “oh we were so shocked at the fraud after the fact revelations” curve. You can only trust the price. I know that is an un-sexy message, sorry.

From a Reuters story the other day comes this opening line excerpt from reporter Svea Herbst-Bayliss:

Hedge funds are posting their worst returns in about two decades…

Interesting statement. Trend followers (many of which are hedge funds) are up big over the first 7 months of 2008 - very big. So does this statement just apply to the wildly leveraged long only equity only hedge funds? If so, why not say that? The term and concept hedge fund is confusing enough for most people, but to classify all hedge funds as essentially the same strategy is brain dead (and lazy).

From FT.com comes this excerpt:

Oil prices continued their correction this week as the debate about the influence of speculators in energy markets reached a new pitch. The US Senate yesterday failed to agree on proposals to limit excessive speculation in energy markets and, with oil prices becoming a huge political issue in a presidential election year, attention turns to the House of Representatives, which will debate the issue next week

How does one define “excessive”? Do tell. Where does this nonsense end? With this type of logic isn’t the wealth of Buffett, Gates, Soros, etc. excessive?

Not knowing exactly what to expect, I ventured to Comic Con today in San Diego to experience 125,000 “geeks” (I say that affectionately) crammed into one place to worship comics and science fiction. While waiting to hear a presentation from directors Kevin Smith, Judd Apatow, Frank Miller and Zack Snyder, I was standing in the line at the bathroom and was immediately in front of comedian Dennis Miller. Given the crowd, and given that he was dressed down, I doubt many recognized him. I told him that I liked the “libertarian” bent he takes in his pubic appearances (Bill O’Reilly show for example) and I said that it really seems to be where most people are these days even if neither political party gets it. His answer was simple? He just said, “time to be pragmatic.”

The SEC has gone mad with power. Remember when Americans could point to China and Russia and mock their forms of government controlled “capitalism”? By the time Christopher Cox is done with his remaking of the SEC over in Karl Marx’s vision, America will most likely have a financial system of contradictions that not even the top socialists could have dreamed up. Apparently this is all to “save” us. Here is a tip to all the desk jockies at the SEC in Washington DC: if the market wants to go down no amount of engineering by you will stop it. In fact, these types of actions could very well accelerate a push down.

Some of the best one liners around.

Agreed.