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The news from JP Morgan gets worse by the day, and it is becoming eerily similar to what happened with Bear Stearns in 2007. The question is, will there be the same outcome? Before you laugh off the question, ponder the implications. There is still an untold nominal value of trades sitting out there that JPM is responsible for, in an illiquid CDS market, with hundreds of specialty hedge fund vultures circling around the wounded JPM. The $2 Billion loss is likely to increase to $4 Billion or even more, and then when you look at the impact on JPMs corporate bonds and their stock price, things can begin to spiral out of control. We call on Jaime Dimon to step down immediately so JPM will not become the next Bear Stearns and drag the rest of the market into oblivion.
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The Hedgeable Company Blog explores many of the crucial economic, investing, and financial issues of today, and also provides Hedgeable clients with updates on important company news and milestones.
- Crowdfunding Platform Coming Soon
- Spain the Bigger Concern
- Will JPM Be the Next Bear Stearns?
- Betterment Strikes a Nerve
- 10 Things to Hate About Tax Day
- Keynes Would Be Pleased
- U.S. Debt Clock
- Chinese Copycat Society = No Innovation
- Dividend Taxes Set for 43.4% Next Year
- We Call B.S. on Inflation
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May 17, 2012
April 18, 2012
Betterment Strikes a Nerve
Betterment Made Some Angry With Their Blog Post
Betterment, our fellow disruptors of all things evil that goes on in the financial services space, and fellow New Yorkers, seem to have hit a nerve in the investment advisor community and made a few people throw quite a fit. It all stems from a recent post in their blog- Financial Advisors are Bad for Your Wealth
Their post sparked backlash to financial advisor and investment advisors bloggers- see the post from I Heart Wall Street and The Reformed Broker, to see their response.
Once you read everybody’s opinion, we will let you decide who is right and who is wrong.
10 Things to Hate About Tax Day
Tax Day!
Tax Day has come and gone and if you are in the mood for a breezy, yet interesting article, we point you to Smartmoney’s 10 Things I Hate About Tax Day:
1. Paperwork
2. Dishonesty
3. How they treat investment income
4. The mortgage interest deduction
5. Stupid retirement rules
6. Subsidizing half the country
7. Taxing overseas Americans
8. Taxophobia
9. It’s regressive
10. Alternative Minimum Tax
February 5, 2012
Kapitall Launches Brokerage
Kapitall Launches Brokerage
Congrats to our friends on the Kapitall team for their successful launch of their new brokerage platform. Kapitall brings a video game like interface to the discount brokerage world, making it less intimidating for younger and tech savvy investors. Clearing is being offered through Pershing, and at a very competitive rate of $5 per trade up front. We encourage all to check it out!
January 18, 2012
More Fizzle than Sizzle, IPO Market Making Bankers Rich
Bankers Set to take $200 Million from Facebook IPO
Facebook is close to filing papers that would announce their intent for an IPO this spring. It would be one of the largest and most anticipated IPOs of the last decade, with speculation that $10 Billion in capital could be raised. To put that in perspective, Groupon raised about $700 Million last year, and Zynga about $1 Billion. Back in 2004 Google only raised about $1.2 Billion in their IPO. So $10 Billion in new capital is a very large number. The problem with the current IPO market is that it is making founders and bankers very wealthy, but for average investors they are more fizzle than sizzle.
If Facebook were to raise $10 Billion, it would mean over $200 Million in fees paid to whichever Wall Street Bank represents them. Not a bad haul for a few months of work. In the Groupon IPO, the founders and early stage investors were able to cash out on billions in stock. When Facebook goes public, Mark Zuckerberg will surely be one of the top 5 richest men in America. But, the long-term value for shareholders is incongruent with the wealth created for the bankers and founders, making it a an IPO market that should send red flags to the average investor.
