Craig Brown

Eight Reasons the Market Is Going Down

Okay, I went out on a limb that the government sawed it off. I wrote my prediction yesterday at my blog and it was only posted by Seeking Alpha today. I have no control over when it appears - or if it appears - on Seeking Alpha.


On Oct 29 10:02 AM thiazole wrote:

> Funny that the GDP data had already been released before you posted
> this (3.5%). No guesswork needed - it was good.

Why Is Paul Volcker Being Ignored?

No pain no gain. We need to take our pain today and get it over with. I am not saying all at once as that would be way too much, but we need to over the next 5 years or so take down some soured banks, allow (encourage) consumers and commercial entities to reduce debt and hope to get on with it on a much lower but economically sustainable level. I say endure the pain now.


On Sep 21 08:24 PM CES wrote:

> People who had money back in Volcker's day loved the high, 15 or
> 18%-I forget which, interest rate on savings and they thought he
> was fine. He put untold number of businesses out of business, the
> unemployment rate skyrocketed and it was a hard time. He broke inflation
> and nearly broke the economy doing so.

Don't Follow the Bears

I apologize, but if you invest based upon investor surveys you are a bit of a fool. Look at the fundamentals to guide your investments and make sure you are looking at the right fundamentals. In time you will come to reality, which right now says you are are wrong on the market, in my opinion. Of course I only made 138% in my brokerage account last year and am only up around 23% this year, but what the heck do I know.

AIG Talks, The Market Walks Away

Unfortunately I fear I doth protest too little. Time will tell.


On Aug 21 12:38 PM User 474862 wrote:

> Mr Brown doth protest too much, methinks.

Bloomberg Reports Extreme Recession: I'm Shocked

I agree that the program, which touted its prime objective as gas mileage/environmental, needed a much wider differential between the clunker gas mileage and the new car mileage. I am thinking at least 7 miles per gallon and perhaps as many as 10. Seriously, if you have a clunker at 17 miles per gallon, you can have good impact moving up to 27 or so, combined. And so goes most compromises between Democrats and Republicans. Two competing objectives, when compromised to achieve resolution, achieve no well defined result. Sad but true - though sometimes we like it that way.


On Aug 04 01:45 PM delta 777 wrote:

> Cash for clunkers is hardly a fair or equitable use of taxpayer dollars-people
> usually own clunkers for two reasons: either they are too poor to
> buy a better car (and therefore are too poor to buy an new car),
> or-if they are wealthy- they have kept the clunker as a secondary
> back-up car because it was worthless to sell or trade it in. Cash
> for clunkers selectively rewards the second group, while providing
> no benefit for those owners who were either prudent or sufficiently
> conscientious to dispose of a clunker as soon as possible. A possible
> third group: those who are wealthy enough to have given/sold their
> clunker to their kids, and now are wealthy enough to arrange an upgrade.
>
> In all cases, despite the immediate gratification boon this gives
> to auto makers, this program will quickly reflect in future lower
> auto purchases.
> It is also obvious from actual sales information that, in general,
> the new vehicles purchased under this program are far from being
> true economy cars.
> Cash for Clunkers constitutes investment of taxpayer dollars to a
> select few individuals for consumable items; as opposed to using
> this taxpayer money to create infrastructure that will be of lasting
> benefit to the taxpayer that pays for it. (in addition to the obvious
> immediate creation of broad-based jobs)

Keeping My Investments on Sidelines as Market Lacks Clear Direction

Old Trader and Larry, Thanks for your comments. One place I am beginning to look at is Costa Rica. I have not been there but I hear it is beautiful and unexpensive. Obviously there are a ton of issues you need to work out, but it may be worth it. If not for two little ones I would be exploring these options a bit more seriously at the moment, but I have a two and five year old and hope to educate them here before leaving. That attitude might change, but for now I am here.

On the place to park some money, I cannot and will not give specific advice but some people smarter than me are saying some municipal bonds, insured by Berkshire, are paying decent returns - especially in these times of low inflation/deflation. The tide could turn quickly on inflation so be ready for that, but relatively high paying municipal debt with a Berkshire guarantee is not a bad place in my mind to park some money while the market sorts things out. Not advice, just telling you what I am looking at presently.


On Jul 07 06:53 PM Old Trader wrote:

> Craig,
>
> Regretfully, I'm compelled to agree with you, in regards to relocation.
> I'm close enough to retirement age to start thinking about it seriously
> (i.e. trying to decide where might be the best bet).
>
> Larry; agreed that high quality debt is not a bad place to park some
> money, at least in the short/intermediate term.

Chinese Banks Are on the Edge

We visited the new financial district in Beijing too and I was stunned at the amount of new construction and even more at how nearly all of it seemed virtually vacant. I counted at least a dozen condo buildings that looked empty. The office buildings did not seem to be faring much better. Impressive area in terms of the buildings and architecture but it seems to be built on the "build it and they will come" philosophy.

And I would not read too much into the real estate prices. The land is owned by the government and it does not seem willing to discount. You are paying for the building on it and then it is just - I believe - for a 99 year lease of the land it is built on. I cannot imagine values going up when you do not own the land and the leasehold is gradually disappearing, though over an extended period of time. In short, China is not a place for real estate investments.


On Jun 30 03:48 PM fleeing omega wrote:

>
> i was just in beijing too. still lots of construction cranes in the
> greater vicinty of the financial district (east beijing) together
> with a LOT of new apartment buildings and a new power plant. yet
> from what i hear, housing prices are being propped up and much of
> this capacity is basically adding to a severe preexisting housing
> bubble. sure, the buildings are there, but are there buyers?
>
> interestingly, flying in over the port of tianjin, i saw an armada
> of freighters, all of them obviously at anchor in a grid pattern,
> consistent with stories of commodities coming in and stockpiled at
> sea. there were only 2 container ships on the move, and they were
> inbound. the harbor itself looked more active than the port of los
> angeles, but that isn't really saying much. i wouldnt call it business
> as usual.
>
> in beijing, we were among the only customers in a major electronics
> store and were outnumbered by staff approx 5:1.
>
> plenty of evidence for stimulus, but not exactly a rosey picture
> for an export economy.
>
> yet people were relatively upbeat compared to japan, where things
> appear fine on the surface, but optimism is hard to come by.

Mixed Messages from the Markets

Keep reading and you will learn something disturbingly different. Focus on sites that focus on facts and data. Find reliable blogs and follow them. I cannot give you better advice. I agree it will eventually recover, but I do not think we are to that point yet. And when we get there, expect us to take a decade or two to get back to where we were. Just my take. so read more to see if I am right.


On Jun 18 03:27 AM Sovestor wrote:

> Economy is recovering slowly. Focus on the long-term and keep it
> simple.

Mixed Messages from the Markets

Despite our two party system, people can vote however in the world they want. I believe Vermont recently had a Socaialist governor. If enough people vote for it, ironically, we can decide to turn our Democracy into a Communist state. Those that want to fulfill the requirements to get on the ballot, which are not that difficult, can get their for a vote. Go for it. Yet if you want a state exempt from federal regulaion - move out of the country

Debt, Debt, and More Debt in Store for the U.S.

Sorry the first link is not working. Something must have gotten lost in translation between my blog and Seeking Alpha. Try this link:

english.caijing.com.cn...

If that still does not work, the link is working on my blog, which is linked above below the picture.

Expect an 'L-Shaped' Recovery

Sorry, but I am not here to give specific investment advice. I have put options all down rather significantly as this bounce has gone on longer than I expected. If you are risk adverse, as the pilot said "I would rather be on the ground wishing I were in the sky than in the sky wishing I were on the ground."


On May 14 01:53 PM BigJake wrote:

> Question to the author. If we are going to experience an L shape
> recovery, would it make sense to sit on both sides of the short and
> long fence in say FAZ and BGU at the same time, selling into gains
> whenever they occur? Or am I out of my mind?

Even Warren Buffett Isn't Perfect

I agree. I pray every night to only have Warren Buffet's fiscal problems. Then again, my prayers are said with a wife and daughter that make my life what it is and it is wonderful, so in many respects I still prefer my life to his. The uncontrollable laughter out of my daughter during play today (on multiple occassions) cannot be bought with Warren' money. Today, folks, was a very good day! I played with my daughter, hugged my daughter, wife and several friends, and had loads of fun. Nothiing better than family and friends. Not even money. Go figure.



On May 10 11:02 AM notsosmart wrote:

> @ 78 yrs buffett is not worried.some of these folks have little to
> write about

Financial Institutions Step Away from Government Debt

Yes, that is what I meant to say. I caught the error last night on my blog and fixed it there, but apparently the Seeking Alpha editor had already grabbed the post for here.


On Apr 13 10:25 PM Joyful Alternative wrote:

> Did you mean the example's house is now worth $225,000? Otherwise,
> the illustration doesn't work. (Oh, and good luck to him trying to
> sell a house for what it's "worth.")

Buffett Down, But Not for the Count

I think BRK.A will do very well in the long term. And it is presently surging with the market. If you believe the market is going to continue this course, I have a bridge you might like to buy.


On Apr 09 06:49 PM Cetin Hakimoglu wrote:

> But BRK.a is surging along with the market so this downgrade is a
> lagging indicator. As the economy recovers, this downgrade will be
> a non issue.

More Correction on the Way in This Bear Market

The economic growth has now been wiped out and then some. The markets are back to where they were in the 1990s and housing prices are back to where they were before the Goldilocks economy you note. Talk about a lost decade.


On Apr 08 05:22 AM Cetin Hakimoglu wrote:

> True some people were living beyond their means and the deficit ballooned,
> but inflation was tame and economic growth was steady, which meets
> the criteria of a Goldilocks economy.