“Government Employment Report Friday” and “fraud” are synonymous. It would be redundant to say, “the employment is a fraud.” If you just say, “employment report,” the word “fraud” is implied. As an English major in college, I find that tautologies can be intellectually oppressive in certain contexts. This is certainly one of them…
Of course, it now looks like Banco Espirito Santo is headed to the graveyard. Most of the creditors and the stockholders, including the “mighty” Seth Klarman of the famed Baupost hedge fund, will see their money and their investors’ money incinerated.
This one was as easy to spot as was Enron. But what about the derivatives?
Also easy to spot is the fraud known as homebuilder stocks. I saw a presentation yesterday by Jeffrey Gundlach here in Denver who gave a scathing assessment of the housing industry and referenced the homebuilder stocks as “insanely overvalued.”
Of course, I’ve been beating this drum since January 2013…You can see my first short-sell research report on a homebuilder with 360% more debt than book equity: Homebuilder Short-Sell Report. It’s overvalued by a factor of at least 4x and I uncovered a stunning fact about its accounting.