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Anthracite Capital, Inc. Message Board

  • bond_dadddy bond_dadddy Jan 15, 2003 8:57 AM Flag

    lousy earnings news at FNM today ....

    big writedown on their derivatives holdings ...

    probably hurts the whole MREIT sector even though the only one that was remotely similar to them was AXM in terms of strategy ......
    (and we can see what happpened to them !)

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    • working_on_my_first_million working_on_my_first_million Jan 18, 2003 1:30 AM Flag

      Papa, I agree with you. I have read much of buffets stuff, and it is VERY good. The best thing is his attitude toward investing. He invests like the market could close for 5 years. He has a focus portfolio and suggests that for joe investor that he have only 5-10 stocks that are well researched. Case in point, if you owned some Vanguard index 500, a year ago, you had some eneron stock. They held onto eneron until it was delisted. Now any idiot could see probably when eneron was around 10 or so that they were having some major problems. But the fund didn't sell because it was still part of the index. Even when it was at like 50 cents a share, it was still listed. Buffet is the man!

      still working...

    • Hey, Bond Daddy - Let's find out....


      Hey Li... Confucious says - "Gaia-Cochan"

      I've never read more facachta in my life then the dribble you post. Lets see, AHR has made me far more money then Templeton's Dragon Fund. China's got some big-time economic issues as well.

    • << He is the only Jewish kid that has never been circomcised, because there is no end to that schmuck. >>

      my Jewish partner here at work has read much of Harvey's posts here and has decided he must have been switched at birth because nobody that dumb is really Jewish :)

    • As Dow Jones reports, this week more than 17000 workers at GE�s two key unions staged a two day walk off. How bad is it for the employer and its profits? GE said health care cost rose 45% to $1.4 billion in 2002 from 1999. And as we said about health care costs GE validates, the company expects costs to rise an additional 15% this year and anticipates similar hikes in the near future. Another figure, overall spending on health care hit $1.4 trillion in 2001, and health care spending now accounts for 14.1% of the nation�s gross domestic product. Things are so bad, small and medium size companies may have to drop their coverage. And employers will pass some cost to the employee and reduce real wages. Dupont raised premiums 13% in 2003 and 135% for retirees over the age of 65. EDS anticipates a 15% rise in health care costs in 2003. As a result, workers will pay 22% of their premiums, compared to 19% last year. (The figures came from Dow Jones Newswire)

      Still not convinced the Fundamentals stink?
      From CNN Money, �In 2002, the average annual cost of homeowners insurance rose 8% to $553, according to Insurance Information Institute, and in 2003 that number is expected to rise 9 percent to $603.

      More on China:
      From Bloomberg, �Many US companies have transferred production to China, helping to explain the jump in Chinese exports. P+G has invested more than $300 million in China to date. The company has 6 production plants in China to make Head n Shoulders shampoo, Tide laundry, and Oil of Olay skin care products. Unilever has invested $1 billion dollars.

      So we believe the US is at a structural labor disadvantage to China and India. The profits squeeze is on and the Federal Reserve easy money only makes matters worse. So if the fundamentals stink, why NOW are the bears in control?

      Why the bears are in control?
      Today all three major equity indices experienced a key reversal. Technically, that it happened is bearish but that it happened in a seasonally strong period is even more bearish and convincing. The VIX is also below 30 and consider it happening under geo-political concerns, accounting concerns, and a long bear market and one can surmise just how complacent the bulls and bears really are. The market is ripe to re-test the lows. Even as other bears, we are told, are scared of shorting this market, we don�t think the bears should be scared, the market is ready to head lower. The fundamentals stink and the technical picture darkened on January 15- a day we think will mark a major turning point.

      From the floor level, my great friend and terrific source Morgan Paisley had an opinion on today�s market action. He said his opinion was the pension funds and the funds receiving cash inflows are buying stock and the traders are taking the other side of the trade. Traders think valuations are too high while pension funds are making up for a deficit in their long-term commitments. For the best broker in the business contact Morgan Paisley at 1(800) 216-1487�tell him Mario sent ya**

      My opinion is that the traders are right and the market is overvalued and ripe for a pullback. The Intel news helped the bear cause as capital spending remains week, but the bears knew that and the bulls were delusional�what�s new?

      So in a nutshell, the big traders are selling this market to under-funded pensions, when the money dries up this market will hit an air pocket, the fundamentals and technicals are screaming sell�but of course that is only our opinion.

      L. W. Chi

    • Ricchio Report
      January 15 Mario Ricchio
      The Bears are Back in Business

      If you haven�t bailed on stocks, now is the time. There are a host of fundamental reasons to avoid stocks. The S+P is trading at 30 times earnings, dividend yields are at historic lows, companies have no pricing power, and corporate expenses are rising. As we said before, a profit squeeze is upon us.

      Is America�s competitive disadvantage structural or cyclical?
      The United States has a dynamic economy that allows it too shift resources faster and more efficiently than any other economy. But our monetary system is destroying our ability to compete. In essence, monetary inflation has raised the domestic cost of living to the point that wages need to reflect a real estate bubble on fire. If real estate were cheaper, so would wages. If one lives in California, wages are higher. In Kansas, nominal wagers are lower as real estate prices stagnate. What I�m saying is our fiat monetary system causes the cost of living to rise in dollar terms to the point that wages accelerate to the upside. OK Ricchio, draw a conclusion. I will. If the Central Bank debases a national currency within a global economy, the debased economy prices its labor out of the global market. My theory is best illustrated from information in the latest King Report:

      �China said on Friday exports rose 30.2% y/y in December to $31.89 Billion. Hewlett Packard will move more consulting and integration work to countries where costs are lower, including India and China. Our friend Al told us that he got a telemarketing call from India for a household name US company. Service jobs are fleeing now. When the public becomes aware of this, the outcry will be deafening. His friend Lacy noted that with wage and benefit costs, Japanese labor is $20/hour, Germany and France $18, US $12 and China $ .35, where should jobs flow. Finally Wolfe at JPM said- all the jobs that have been lost in the US in manufacturing have essentially been recreated in China. This means they ain�t coming back no matter how low the FED pushes rates or if Bush�s plan is implemented in total.�

      As we can see, China�s cost of living in dollar terms is below that of the US. They aren�t experiencing an asset bubble in Real Estate. As such, property in the mainland affords lower wages. As for Japan, there labor cost structure is highly inefficient and anti-competitive. China looks to eat there lunch. Europe must reform there labor market and shift away from Unions. But the grand point is the three largest economies, US, Japan and Germany is at a labor cost disadvantage. More problematic, easy money will only serve to heighten the labor cost differential in favor of China. The more money the US prints the more expensive labor costs relative to China. Now if you were the CEO of a multinational based in the US, and you saw the labor costs for manufacturing in China and the labor costs for service in India relative to US wages, why keep employment in the US? You can hire a computer programmer in India to do the same job an American can for a fraction of the cost. While the US recession forces US managers to streamline costs, the shift will prove to be structural in nature until the US adopts an honest monetary unit.

      Do we need more fundamental reasons to bet against this bear market rally? How about rising health care costs?

    • keep your day job harvey ...... a poet you are not :)

      oh , and you conveniently forgot to add in the 3 dividends totaling $1.05 you have bled since late June and you forget that AHR never traded during market hours at 13.25 .......... (that was an after hours dividend trade).......

      and if you managed to short in the $12's , your profit is < $1 and will bleed to red in 2003 ........and you are out over $1 in HARD cash vs a paper profit that could go poof in a minute .

      is this how you present your performance to your investors ?...... no wonder so many hedge funds are closing down with pathological liars like you :)

    • << In seriousness let me ask, isn't the economy at large a concern for MReits?
      If the economy gets worse, wouldn't defaults increase? >>

      yes and yes ......

      but keep in mind that most equity REITs are still paying out their highest dividends ever and these are the same people who are all the borrowers in the bonds owned by AHR ......

      thus given debt payments are not negotiable but equity dividends are freely changeable , we have the perfect built in 'canary in the coal mine' which is equity dividends .... until you see them get to zero , the risk of defaults on debt remains very low ...

      Sam Zell and his company EQR at all time record dividend of 43.25 cents quarterly .... he can cut that dividend to zero if need be and nobody but shareholders howl ....... if he misses a single bond payment , his whole 6bln company goes into default .........

      thus while concern about defaults is always there , the fact that virtually all equity REITs are paying their highest dividends ever gives plenty of room for them to start cutting those back before they would ever miss a bond payment ......

      the best trade out there is to short equity REITs like EQR with 7% dividends and get long AHR at 13% ..........

    • I feel you pain and your life is something I hold dear.
      You cannot hide your sorrow from me.
      And just for the moment let me take it from you.
      For I want to give you some warmth and love,
      And just for the moment let my hands and heart
      give your warmth.
      As the tears roll down my cheeks
      I know your heart aches.
      Let me give you love and security.
      I can feel the void.
      It is a silent cry.
      Life has been cruel to you at times.
      I know the emptyness, ah too well.
      I know that your heart aches from deep inside.
      I am here, let me soothe and comfort you.
      Don't shut me out from the world.
      I will cry with you,
      hold you and share your sorrow.
      I have no magic to heal your sorrow,
      but I am here and I care.
      And some day when I am gone I hope you have
      fond memories of me
      Knowing that I truly loved you
      and cared for you.
      Oh yes, I feel your pain and it is part of me.
      For I truly love you and you are part of me.
      by Mary

      L. W. Chi

    • papaol, cute I got a good laugh on that one.
      In seriousness let me ask, isn't the economy at large a concern for MReits?
      If the economy gets worse, wouldn't defaults increase? And that would be a threat to AHR, and all mreits, of course the threat is bigger to equity reits. But at some point it will hurt mreits also.
      I know on the cmm board that seems to be the only concern of the posters.

    • papaowl >Please tell the AHR readers how the King Report will effect there holdings. Would you yell fire in the movie theater when somebody turned on a flashlight? What is the purpose of your message?

      Lower dollar means higher interest rates. Higher rates means lower AHR and REITs

      L. W. Chi

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