Quadrocopters Can Play Ping Pong, But Will Not Deliver You Tacos (Yet)

Source: TacoCopter.com
In non-financial fraud and destruction news, you first saw how quadrotors could fly in formation through obstacles. Well, now the video below (h/t tip Good.is) shows quadrocopters, built by the Institute for Dynamic Systems and Control in Zurich, playing ping pong in flight. But, there's another quadrotor in the news that I think I'd use tomorrow if I could. According to PC Magazine, the site TacoCopter.com, which claims they will soon be able to deliver you tacos from a quadrocopter in SF, is a hoax. But, if quadrocopters can fly in formation through obstacles and play ping pong, how hard is it to deliver a taco? Use google maps and a camera? Look what the app looks like. I don't buy it, I think the hoax is a hoax. Now I'm hearing that it would be impossible to get a commercial FAA permit for this.

In other interesting robot news (h/t PC World), the Q.bo robot can map out its environment in real-time in 3D. In conclusion, if you're a food delivery associate or waiter/waitress, keep an eye on your potential competitors.

The House Memo on MF Global's $200 Million Transfer From a Segregated Customer Account

I embedded the House memo after the jump.

Renting Out Foreclosed Homes Is The New Hot Trend, Bank of America's "Mortgage to Lease" Program

Courtesy of Richard Elzey - Flickr
Bank of America released some interesting news for homeowners facing foreclosure. It said 1,000 customers will be "invited to participate" in their new "Mortgage to Lease" program, which will allow homeowners to avoid foreclosure by converting their home into a rental. Renting out foreclosed homes is the hot trend these days. From Bank of America (full press release below):

"Pilot participants will transfer title to their properties to the bank and have their outstanding mortgage debt forgiven. In exchange, they may lease their home for up to three years at or below the current market rental rate. The rental payment will be less than the existing mortgage payment, and the customer will be relieved from certain other homeowner financial obligations, including property taxes and hazard insurance.

Initially, Bank of America will retain ownership of the properties, working with property management companies to oversee the rental properties. Properties in the pilot program will be transitioned to investor ownership. If the Mortgage to Lease program proves viable, it may lead to a broader program, potentially involving selected real estate investors who would purchase properties that meet their predetermined specifications and keep the previous homeowners in place as tenants.

Insight: The Wall Street gold rush in foreclosed homes (Reuters):

"The Federal Housing Finance Agency, which regulates Fannie and Freddie Mac, expects it will receive a considerable number of bids in April for the initial round of 2,500 Fannie-owned homes in cities like Atlanta, Chicago, Los Angeles and Phoenix."

Will Graphene Touchscreens Revolutionize Mobile Technology? (Videos)

Wow, forget the iPad. Are thin, bendable, foldable, graphene sheets the future of mobile technology and telecom? In the second video, Samsung even showed an example of holograms popping out of the sheet. It looked like a game, but imagine communicating with someone or watching a basketball game. Apple products are too heavy, this would be amazing. Watch the videos after the jump.

HSBC China Flash PMI Hits 4-Month Low (48.1), AUD/USD Falls to 1.0370

Articles on the Chinese economy and HSBC Flash PMI (and some news on Japan):

HSBC Flash China Manufacturing PMI: "New order book weakness contributes to renewed decline in manufacturing output." 48.1 vs. 49.6 in February (full press release at MarketEconomics.com)

"Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said:

“Weakening domestic demand continued to weigh on growth, as indicated by a slowdown in new orders which came in at a four-month low. External demand remained in contraction territory, but the decline was at a slower pace, implying that there are no improvements in the demand outlook. More worryingly, employment recorded a new low since March 2009, suggesting slowing manufacturing production was hindering enterprises' hiring desire. The soft-patch in manufacturing was in line with the recent downside surprise in industrial production growth. Growth momentum could slow down further amid a combination of sluggish export new orders and softening domestic demand. This calls for further easing steps from the Beijing authority.”"

David Tice: S&P Falls To $1,000, Gold Rises To $2,500, Likes Silver Even More (Video)

Img: FoxBusiness.com
Here's some doom and gloom for your morning. In an interview with Fox Business on 3/20, David Tice, president of Tice Capital, and founder/former manager of the Prudent Bear Fund (acquired by Federated Investors), said the S&P will fall to $1,000 in the next 18 months, and gold will rise to $2,500 as central banks (Fed, ECB and... BoJ?) "destroy their currencies." Keep an eye on the long term chart of gold. He said he liked silver more than gold, and sees big problems ahead when interest rates rise.

"It's really irresponsible how short our duration is of our government debt. The administration is going out and borrowing at 80 basis points for paper under 2 years. And when rates do go up, and rates are going to go up, our fiscal deficit is going to explode."


Goldman's Oppenheimer Says Buy Stocks Relative To Bonds (SPX/USB Since 1993)

courtesy of stockcharts.com
Read Peter Oppenheimer's report at Zero Hedge, and watch Matt Nesto and Jeff Macke's reaction at Breakout. To take the other side, Business Insider posted that SocGen's Albert Edwards expects "new lows on bond yields by Q3 and this equity rally to turn to dust – just as it did in 2011." To build on this, I thought I'd chart out the S&P 500 (SPX), the 30-year Treasury bond price ($USB), and SPX/USB ratio since 1992.

Looking at this strictly as a ratio call, you'd essentially be taking the other side of the 30-year bull market in bonds relative to stocks trading sideways or breaking out from here. Look how SPX/USB rose in tandem with the S&P during the 1990's while the 30-year bond chopped around. You'd want to see the same trajectory in the ratio, but going forward it could be the result of bonds getting killed. It's all about timing the breakdown though.

Einhorn on Equities That Trade Like Options, "Levered Stubs" (Punch Taverns Call)

Source: Reuters Blogs
First, some background on what happened between GreenLight Capital and Punch Taverns. David Einhorn's hedge fund GreenLight Capital was recently fined £7.2 million by the U.K Financial Services Authority for trading off inside information that was disclosed during a (non-wall crossed) conference call with former Punch Taverns (PUB.LSE) CEO, its CFO, and Punch's Merrill Lynch broker Andrew Osborne in 2009, who was also fined (read the full transcript at fsa.gov.uk (pdf), and read Greenlight Capital's response to the fine).

At the time, Punch wanted to raise capital to repay £220 million of convertible bonds, and have "10% headroom" on covenant ratios attached to securitization vehicles. For more info on how pub securitization works, read this paper by Fitch Ratings (2003). Osborne mentioned in the call that Punch would need to issue £350 million, which would dilute Einhorn's 13.3% position in the company significantly. So, Einhorn dumped his shares after the call, avoided a £5.8 million loss when the stock tanked, and was fined for insider dealing. So that happened. But the whole point of this post is to show you what Einhorn said during the conference call.

Einhorn, one of the top value fund managers out there, who publicly releases extensive research at times (recently GreenLight and T2 Partners went publicly short St. Joe Co. and defeated the Fairholme Fund), gave his views on how to manage Punch Taverns' capital structure during the call, and explained how highly levered equities "trading at less than 50% of the face value of debt" are essentially "options on the debt-side of the capital structure", which was interesting. The blog Distressed Debt Investing had an interesting post on this as well. He mentioned that Einhorn made a successful investment in a "Levered Stub Basket" at the end of 2008, which ended up making 227%. I actually found GreenLight's year-end 2009 letter that mentioned this (courtesy of DealBreaker):