Ending the week we have David Einhorn’s quarterly letter, talking about Yahoo (YHOO), Warren Buffett on Bloomberg alluding to Berkshire Hathaway’s (BRK.B, BRK.A) Mastercard (MA) position, a note about the terrible jobs report, and the bubble in online couponing.
One of my favorite gurus, David Einhorn, released his Q2 letter today. Not surprisingly, he dropped Yahoo (YHOO), which he had bought into in the first quarter believing the sum of the parts were worth significantly more than the stock price. As we now know, you can't trust the sum when one or more of the parts are Chinese. Einhorn also made comments on the Greek crisis, detailing how the game is rigged among rating agencies, the government, and European banks. Credit default swaps were like gasoline thrown on fire for the 2008 crisis. He is intimating that swaps on Greek and other struggling European countries have the potential to create another crisis. I've long thought credit default swaps should simply be banned, at least in the U.S. What's the economic benefit to them other than a distortion to the markets? While we're on common sense policies that will never be implemented, I also think we should implement an 80% capital gains tax rate on securities held less than a day. Call it the really short term capital gains rate. Continue Reading »