The Modern Investor’s Manifesto

Submitted by Tim Price via Sovereign Man blog, “The stock market is filled with people who know the price of everything, but the value of nothing.” – Philip Fisher. A personal perspective on some of the challenges facing today’s investor: 1. The Communist experiment of the planned economy did not work. 2. Not only did it not work, it impoverished millions. 3. Western central banks, their client governments, and agents in the economics “profession” seem unaware of this fact, or wilfully disregard it. 4. People respond to incentives. Everything else is detail. 5. Adam Smith’s invisible hand does work, if left well alone by the dead arm of bureaucracy. 6. In the aftermath of the breakdown of Bretton Woods, ‘developed’ governments have amassed unpayable mountains of debts. 7. A culture of entitlement has made these debt mountains higher. 8. These debts will never be repaid, except in devalued money. […] Read More

Starting Monday, Billions In ETNs Are No Longer Marginable Collateral

When is marginable collateral not marginable collateral? When it is an ETN, or Exchange Trade Note: the cousin of the Exchange Traded Fund (ETF). The very mutated, and unabashedly evil cousin of the ETF that is. At least such is the view of US brokerage Interactive Brokers (and certainly not of the ECB where as is widely known blocks of feta cheese and olive oil are perfectly acceptable forms of collateral). First, what exactly is an ETN? Here is the IB definition: ETNs are not equity shares but rather a form of unsecured debt whereby the issuing institution promises to pay a return linked to a market index or other benchmark. As ETNs generally do not buy or hold assets like an Exchange Traded Fund (ETF), their returns are realized through holdings of derivative contracts such as options, futures and swaps. While ETNs trade on exchanges in a manner […] Read More