Baltbear on Finance markets are like marshmallows

those following fnm as a proxy for the economy (and who followed my suggdstions on it)
re-acuired a chunk of fnm when it broke back below $1.
one dollar is a magic marker for fnm. currently it is trading  just under 1 3/16. (new readers are asked to note that i still run charts by the normative trasing currency, the “bit”: 1/8 of $1.)
currently the so-called press is caught up in looking at bernanke’s lack of interest on accepting responsibility for the failure of regulators to regulate. that is in fact a critical problem. fixing that problem is its own issue.
“fixing housing” is yet another problem. with 30% decline in pricing in some critical markets, with bottom only beginning to be in sight, let alone formed, there’s lots of need for right-offs, re-papering, and generic games that will leave fnm common as wall paper.
the difference here is that the mkt will eventuallly sort thru housing. it may take 5-20 years.
at some point, the us treasury will be acquiring fnm stock @ 1. and bleeding it into the mkt…or it will be forgiving the debt. if the mkt requires that forgiveness, things suck.
the treasury bet is that it will profit from the wts (unlike some other tickers, where warrants are used to game the mkt) and will be bleeding some stock into the mkt in slow intervals.
so..if fnm a buy @ 1 3/16??
or is it time to cash out on the recent buys @ 31/32?
those who bought at 31/32 have 40% apr for the year locked in now for that part of their risk capital sectiojned to real estate.

Posted under business

In a recent discussion about some newly issued warrants I had to explain “time value” to  somebody about to be worked over by the bucket shop punks who specialise in pumping the “next big thing.” This year it is tem cells. Next year…who knows? Prudent speculators take risks. They do not however take risks on the promises of ceos, board members, or bulletin board touts. They take their risks on the assets. The assets may be nothing but intellectual property, or a clear road on howe to get some. That’s what makes “story stocks” such an interesting arena. But sooner or later, risk management and reality collide with story-telling. At the point, the road to cash flow, appreciable assets and management style become critical.

As the economy picks up (as i predicted in February, a soft bottom is beginning to form in September) at the same time that credit card defaults are also again on the rise, as banks continue to keep credit tight, i anticipate that “real estate” is going to begin the process of recovering as a speculative sport. It will only be profitable for the bottom feeders. The heroic bottom feeders have been at work for 6 months. Those are the folks who had cash on hand in February and March, and bravely bought those residential properties that looked like they were going to be part of urban war zones. I salute them.

Remember Warren Buffet? Somebody told me there was nothing to learn from him. I laughed, since i recall BOA, and Tino de Angeles. Buffet understand being a prudent speculator, exceopt when he is overly prident, as he admitted a few years ago about selling MCD, because he thought the underlying real estate was being overpriced.

But it;’s a lot better to be wrong about something like that than to be wrong about overvaluing an unexecuted biz plan that depends on leased patents and paint on the tape for success.

Posted under Videos From Youtube

According to biotime sec filings (btim.ob)

:”Current loans under the Credit Agreement bear interest at the rate of 12% per annum and will mature on April 15, 2009, at which time the outstanding principal balance of the loans plus accrued interest will be due and payable. Our ability to continue in operation depends on our obtaining a renewal of the Credit Agreement that will extend the maturity date of the loan and increase the amount of credit available to us.”

so, it is now april 16th. yesterday, the market reacted intelligently to the known facts (thew ones that deny the nonsense of obama= stem cells = west = btim biotime = $$$).

let’s compare this puppy to the largest commercial real estate fir in the usa:
:”"When we did not achieve the necessary amount of agreement on the bond solicitation, at that point we recognized that it was conceivable that we would not get the time outside of bankruptcy that we had hoped for to work on a restructuring,” General Growth President Thomas Nolan told Reuters.”

has biotime bothered to tell the 4500 or so shareholder anything about , generically, “how it’s going” ?
well. no.
that woiuld be silly.
they got the shareholders money. well, no..they didn’t.
the insiders got the shareholders $$$ by being able to short an open box; thereby regaining their risk capital and absorbing, steadily, all of the financioal advantage.
wo else benefits?
let’s go back to the mall bankruptcy:
:”"We will see a significant rise in delinquent and defaulted mortgages in commercial real estate above and beyond what we already experienced,” said Sam Chandan, president and chief economist at research firm Real Estate Economics”
this is something that might be less true in the swams near san francisco where biotime shareholders have spent a largish amount of money in a locked lease that contrbutes to real estate profits, not bodily health.

a fast look at an overly simple 5 day chart gives some clues:
http://finance.yahoo.com/q/bc?s=BTIM.OB&t=5d&l=on&z=m&q=l&c=

imho the fact that btiome could not successfully publish to the sec and the public the reults of the negotiations which it stated must be completed by april 15
says that biotime is playing a losuing hand and willfully misrepresenting itself to the “investor” who will fall for the pitch.
the prudent speculator will require some transparency, and stay away until that transparency is present.

Posted under business

This is a general piece for the prudent speculator. It is about a tool for measuring, at an amotional level some cold hard facts ypou are going to need.
A little history:
once upon a time when the people who said this liquidity crisis couldn’t happn hadn’t been born yet, every 3 months publicly traded corporations wrote up dozens to hundreds of pages of impenetrable beancounter language and sent it to the sec as “proof” of something.
Then, eventuallly, the sec said it would no longer accept “the dog ate my homework”, “10k? the mailmain must have lost it”.
(if an adult reader doesn’t think this kind of excuse is till being made, i offr the 10q of biotime, btim:obb which contains the statement that becuse creditors of the self-styled stem cell research company are in different parts of the country, it took an extra time period to give an honest statement of the debt. some weeks later biotime filed, and the debt had been restructured in a d/e swap showing a clearing price of $1. )
the sec said that a transparent and liquid market is the goal of regulation, and thus mandated electronic filing of text files with readable data.
in just a few years the sec got around to noting that the .txt files could be made almost unreadable by human beings, and that the goal of regulation is a transparent and liquid market. thus, filins in .html became required. (this gives a file that opens from the sec website through your browser window, and then “reads” like a piece of paper.)
as an example:
compare the effort of reading
http://sec.gov/Archives/edgar/data/876343/000091957409002146/d964196_13d-a.htm
with
http://sec.gov/Archives/edgar/data/876343/000095000502000064/p14825_s3a.txt

A while ago, the securities and exchange commission got serious about the idea that actually, since relational databases and accessing data from them has been around for 50 years, they might have value for thw actual owners of a corporation–the people that hire management that then thinks it is the ownership–and potential owners have a right to not read, but actually understand what the filings say, as internally consistent documents.
since lotus notes, excel spread seets etc had been around for about 25 years, average people could find the relationships that had meaning to them.
since in about 1998 there had been serious work done, in part by tim berners lee, to find algorithms which would describe relationship between relationships seen by others, there could be an extensible markup language….xml..
CAn you see a thought emerging in the pea in the brontosauric sec’s head yet?
can you begin to imagine that since adobe acrobat has been capable of making a .pdf that contains pictures, movies, music–a complete little “website” all in one document, secure and shippable and readable, for >>>4 years<<< that corporations wishing te trust and money of the american people could be obliged to make the critical elements inside their filings “clickable” so that people could jump through them making sure there was honesty in them?
thus, there came, after lots of “pick me” “can i buy your congressman a nice plane ride” ? etc… a defined “extensible business relational language.”
xbrl.
an sec filing in xbrl is as searchable as this blog.
and any prudent speculator deserves one.
looking at some new ticker? wanting to get a feel for what your dd can get you?
call investor relations and ask them abot xbrl. if the answer is “we’ll do it as soon as we wil be kicked off the exchanges if we don’t” no matter how that is phrased, walk.
away.
the phrasing can be tricky. recently i was told by one posssible whore to dance with that management was far too involved in creating new products to hace paid much attention to another burdensome government regulation. i’ll never get near that puppy, becuase i never short.
i was told by another that they are looking forward to providing xbrl docs to the sec, because it will reduce calls to i/r to only those that point the company to ever more transparent means of presentation.
in reality, most tickers that speculators can work from are not your friends. they see you as fruit to be smashed to give them the juice to party on.
with this knowledge in hand, you can rob them of the secrets of their failures, double speaks, waste, hype, etc, by taking an x-barreled shotgun to their filings.
if they don;t want you to have that weapon, they are not your friends.

Posted under business