Alm 2010

Good and Bad appears in balance sheets with a will attached. Where do I find Greedwill. There has been a huge arbitrages in the mortgage and LBO markets. Finaly we see that it was not without risk. Its a healthy sign. Actually its very strange that so many people without any special kind of skill could make so much money during such a long period of time.

Mortgage market: I think it is rather obvious that it will become more individually priced again. Probably at rather unchanged levels for house owners that doesnt need the loan, at higher rates for people that need them and if you badly need it, it will not exist.

The market for LBO financing: You have to look at it as you do in all business. A deal has to be ok for everybody involved in it. Otherwise there is no deal. We have to rename it to BO or maybe lBO (small L). I think we will see new forms of financing for Buy Outs. One interesting modell could be through options where existing shareholders finance the deal. If you are interested to know how that could work then you can always ask me kindly in an email.

The market in general: Actually rather unchanged US markets since last friday. When you read and listen to media and your neighbours you get another feeling. I think the markets show a lot of strength and maybe the huge increase in implied volatility will keep the markets around these levels. You can find good value but no bargains. If you like risk there could be a good timing for a covered call strategy.

Market data: (change compared to last week) 10 year treasury 4.78 (+0.04) Swedish OMX (-4%) FTSE DOW (+0.5%) NASDAQ (+1.5%). The CBOE volatility Index (VIX) is up from 20 to 29 in two trading days. That is a showing of the anticipated risk in the market. My experience tells me that when its expensive to take insurance you dont need one.