22 July, 2013 00:21

22 Jul

I did not send this message, apologies.

On Jul 21, 2013 6:19 PM, "Stone Street Advisors" <stonestreetadvisors> wrote:


Stone Street Advisors

7/21/2013 11:19:41 PM


21 July, 2013 18:19

21 Jul


Stone Street Advisors

7/21/2013 11:19:41 PM

Accountability – Taking Stock

4 Jul

Anonymous bloggers are often discredited because they hide behind a veil of secrecy. As such, they don’t have to suffer the consequences of their actions/comments.  However, we at Stone Street Advisors have argued that anonymity is not always “bad.” Many of my followers know who I am and what I do for a “living.” I prefer to “labor in shadows” in an effort to keep my writing uncompromised from corporate edicts. I digress. This is a short note to take stock of my posts over the past two years. Continue reading

American Securitization Forum returns to Vegas, Baby!

22 Jan

Happy New Year and may 2012 not suck as much as 2011!

I’ve been on forced hiatus due to issues relating to a trip to Cuba, a woman named Carla and a small golden statue of significant religious value. I won’t bore you with the details.

Now that I’ve been released …err… returned to work, I’m on my way to the preeminent fixed income structured finance (FISF) conference; the American Securitization Forum (ASF). For those outside of the business, the FISF brought you such fine investment products as Collateralized Debt Obligations (CDOs), Subprime mortgage backed securities, Liar Loan mortgage securities, Commercial Mortgage Backed Securities (CMBS) and synthetic version of the same.

After the colossal market meltdown which lead to the bursting of the credit bubble and implosion of several small countries, the ASF held its 2010 conference in Washington DC as a sign of contrition and to let congress know we’ve learned our lesson and don’t need pesky laws regarding risk retention. In 2011, ASF ventured to Orlando because the business is family friendly and gave Rep. Garrett the forum to espouse his hatred for all things government especially the President, Fannie Mae, and Freddie Mac though he seemed to forget about FHA/VA loans. The time for slinking around is over and the ASF is back in its favorite city, Las Vegas!!

In a bit of delicious irony, the ASF chose to hold the convention in the opulent Aria Hotel. The Aria is located in the new City Center in Las Vegas. The construction of City Center was financed by a loan originated by a large investment bank with extremely loose underwriting standards (pro-forma underwritten and had interest only payments due). This large investment shop placed the loan into its own CMBS and made themselves a good deal of money.

The City Center loan failed as the construction project ran out of money. The equity owner was highly levered and had no interest in putting his own money into the work. The project stalled for months until a new partner came with a cash infusion for a significant ownership of the project. The ASF, having not learned its lesson, holds its conference in the very hotel which represented a shining example of how messed up the originate to securitize model had become.

BTW, the private residential mortgage backed securities continues to be stalled with two small deals in 2010 and the first deal of 2012 announced just before the convention.

Naked Bond Bear

12 Things You Should Know Before Buying BJRI in 2012

2 Jan

Presented without graphics. I have been watching BJ’s Restaurants for several months to see if the stock would fall from its Icarus like heights. The short story is that during that time it has yet to come back to a level that seem more “attractive” to my somewhat trained investment eye. For my first post of 2012, I present to you my top 12 reasons why you would be better served to buy one of the menu items before buying the stock.

Continue reading

Koo’s solution for the Spanish/Italian balance sheet

23 Aug

Nomura’s Richard Koo has a note out today which contains a novel idea for how the larger European peripherals might be able to assuage their two headed problem of both needing more stimulus and having borrowing rates that make it implausible.

Solution: allow only residents to buy government bonds

As I have previously proposed, one way to solve this eurozone-specific problem is to prohibit member nations from selling government bonds to investors from other countries. Allowing only residents to hold a nation’s government debt will prevent the investment of Spanish savings, for example, in German government debt. Most of the Spanish savings that have been used to buy other countries’ government debt will therefore return to Spain.

During a balance sheet recession, Spanish government bond yields will then fall just like those of the US, the UK, and Japan, providing support for the necessary fiscal stimulus.

Fiscal stimulus at a time when the private sector is not saving is reckless and irresponsible; fiscal consolidation is necessary at such times. But when private savings are increasing sharply and economic conditions are severe, allowing private savings to flow overseas prevents the government from implementing needed fiscal stimulus. This state of affairs in the eurozone is a tragedy that must be addressed.”

Site Housekeeping: If You’re Reading This, Keep Reading

16 Aug

We’ve recently switched from wordpress.com to a hosted wordpress.com solution.  If you subscribe to our posts via RSS feed, email, etc, there is a non-zero chance you’ve missed this (or thought we just gave up on posting altogether).  If you go to http://www.stonestreetadvisors.com you’ll be able to see all of our recent posts (for now).  If you subscribe to the RSS feed there, you’ll likely have to do so again as we have one more website transition which should happen in the next week or two.

We apologize for the confusion.  If you have any questions, feel free to shoot me an email.