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George Acs

 
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  • Beating A Dead Horse To Life [View article]
    I think the editors may have deleted the reference to the Pan Communist Post-Apocalyptic Ultra ETF that was suggested as a hedge against that scenario
    Jun 29 09:25 AM | 2 Likes Like |Link to Comment
  • Why Raising The Retirement Age Is A Bad Idea [View article]
    Wally, I have no idea, but I may want your life.

    Too bad about your social security check, though. If only they didn't have the income limits on withholdings, maybe your check would have rivaled that of your mother.

    Come to think of it, I will be in the same boat, as I retired at 55 and expect to start drawing at 62, so my benefit will be fairly small, despite the same inequitable situation of having made more than 10X what my father made in a year. Although I consider it inequitable only because he worked far harder than I ever did, while more effectively sowing his earnings back into the economy.
    Jun 29 09:22 AM | 1 Like Like |Link to Comment
  • Why Raising The Retirement Age Is A Bad Idea [View article]
    There is considerable opinion among noted economists that a minimum wage does precisely the opposite of what the critics chant. As with many social issues there is an emotional and guttural component that exaggerates outcomes and projects events that have no precedence in historical fact.

    Just go to your physician's office and pick up a yellowed issue of TIME magazine or Business Week and see just how right predictions on the economy (or anything else for that matter) have been.

    Increasing the minimum wage results in a phenomenon that no one disagrees with. Virtually penny for penny gets returned to the economy and engenders less reliance on government programs. That's quite different from what happens to corporations who, may to some degree, have increased profits due to its pay structure and then hordes those profits adding nothing to the economy or occasionally paying a dividend that, at best, inefficiently adds too the economy.

    The greatest benefit of maintaining a low minimum wage goes to some of the largest corporations in the nation, who in addition to getting labor at ridiculously low costs receive considerable benefit from various tax programs and incentives and further pass off their responsibility to government agencies for such niceties as health insurance, while paying lower tax rates than a considerable portion of Americans.

    So are they being forced? Well, maybe that's one way to put it. Perhaps instead we should remove their government derived benefits and instead place those funds into more entitlement programs?

    No. Corporations should not get a free pass at the expense of their lowest rung employees.

    It's not an issue of giving people an income that I think they deserve, it's an issue of balancing the needs of employees with profits and allowing a job to meet the basic needs of economic survival.

    Your suggestion that increased life expectancy is at the core of the need to make changes to the retirement age neglects other solutions. But those solutions are much more politically risky, rather than rolling out new age thresholds that don't effect the people most likely to go into the voting booth.

    Remember, this is not an entitlement, as you suggest when you ask if "society" should be coughing up the money. This represents money that you may or may not get returned to you in annuity form if you survive long enough.

    The solution that you suggest is already in place. There is indexing to life expectancy and that has been the case ever since the inception of the program nearly 80 years ago.

    The solutions may include increasing the rates of withholding, the earning thresholds, better systems to protect against fraud, etc..

    Taking away current benefits? Did I say that?

    If you are referring to means testing, that is something that is done on a prospective, not retroactive basis.
    Jun 29 09:15 AM | 1 Like Like |Link to Comment
  • Beating A Dead Horse To Life [View article]
    There has to be a mix of those with cynicism and those with a basic belief in the goodness of people and the systems they create.

    You certainly aren't suggesting or expecting monolithic thought has to arise among those that may have had similar life experiences, are you? Isn't that just one of those expectations that characterized the former Soviet Union and its satellites?

    Your earlier question was simply whether you could identify a system where the number of productive workers is decreasing while those dependent on the government is increasing.

    You didn't qualify your question by stating and that system must be like the United States. I further went on to say that the situation is Japan represented am "awful" combination of events, whether in Japan or the US. The "laboratory" that I referred to was not to serve as an example, but rather as a means of answering the question of what occurs when those two conditions are concurrent. The outcome can't be desirable.

    I do have a fairly good sense of world history, with a fascination for the evolution of nation -states and the movement of peoples from medieval periods, including that of Hungary, my birthplace.

    Despite my generally positive outlook, there's no doubt that the history of the world has been characterized by anything other than humane systems of government. However, despite glaringly horrible experiments in systems of government, I think that the natural evolution is toward democracy and an increasing recognition of the basic rights of mankind.

    Unfortunately, there will always be those that consider such systems to be reflective of weakness and will seek to subvert and conquer. For those threats there needs to be some limit to absolute freedoms for the overall benefit of society, just as most people would agree that taking off their shoes prior to being allowed in the boarding area of an airport is a small price to pay for (the perception) of increased safety.

    Worst case scenario? I love my retirement in the hammock. It's just difficult typing a response while it is swinging. The hammock is certainly far, far better than the bunk bed and barbed wires that my parents faced in Auschwitz and slave labor camps, where their essential optimism and humor, in part, aided their survival. Ultimately, that same sense of hope aided in their escape from Hungary, across a land mined border to freedom, during the revolution.
    Jun 29 08:47 AM | Likes Like |Link to Comment
  • Beating A Dead Horse To Life [View article]
    Thanks.

    I recently wrote a couple of articles on Pfizer, with regard to the tender offer to exchange its shares for that of Zoetis.

    While I don't think the Viagra glory days are coming back, I think the Pfizer has the best pipeline of all of the major pharmaceutical companies. Additionally, the tender offer basically amounted to a buyback of over 400 million shares and then on top of that they announced another buyback for $10 billion today.

    I think Pfizer is a great 401k stock.

    If you are a "buy and hold" kind of investor, I think Pfizer offers some good opportunity to squeeze some additional income by selling longer term call contracts, particularly since there may not be much stimulus for significant price increases in the short term

    However, even if selling a January 2014 call with a $33 strike price you would get an additional $0.35/share in option premium. That's like getting an extra dividend payment over the next 6 months and still leaving enough room for respectable capital gains if shares are assigned, not to mention two dividends (August and November)
    Jun 28 10:23 PM | 3 Likes Like |Link to Comment
  • Beating A Dead Horse To Life [View article]
    Thanks.

    The comments are usually my favorite part of these articles.

    Of course, when I say that. I mean my comments.
    Jun 28 10:08 PM | 6 Likes Like |Link to Comment
  • Beating A Dead Horse To Life [View article]
    You're correct that in the long term that combination of a growing deficit and money supply cannot be sustained.

    However, that's in the long term. There is certainly precedence to demonstrate that combination to be an effective means of stimulating economic growth, but there also has to be appropriate policy and political will to use money appropriately.

    I think that is where we have fallen far short since 2007/8. I think there has been relatively little to show for the efforts, besides the high profile rescues of GM, Chrysler, AIG, etc..

    We had a perfect opportunity to begin needed infrastructure projects that would have pumped that extra money into the hands of people who needed it and who would have then re-circulated it through the economy for goods and services.

    I think most people would be very hard pressed to identify how trillions have been put to use. I know I am.

    On a positive note there is finally some decrease in the deficit and tax revenues are increasing. That formula worked in the 90s, albeit the deficit was far smaller.

    I too was born (but thankfully not raised) in one of those countries that took economic incentives (and everything else) from its citizens. Coming to the United States was a dream come true and continues to be a realization of that dream nearly 60 years later.

    As far as a good economic theory in a situation where the number of productive workers is decreasing while those dependent on the government is increasing, we can look to Japan to serve as that laboratory. That is an awful combination of events, but is secondary to an extraordinarily low birth rate and shifting of the age demographic. Regardless of the reason, the jeopardy is the same.

    No, I do agree with you on those final sentiments. Having left a Communist country where people were afraid to speak with their windows left open, it is nice to not have those kinds of concerns. However, like so much in life, there is the need to balance and understand that sometimes policies that are very distasteful, if implemented and overseen, may be necessary to be able to keep that window open for all.

    I have enough optimism to believe that if any nation can find a balance to preserve freedoms and provide safety for those who would not do harm, it is the United States.

    Otherwise, you could just come to rest in the hammock.
    Jun 28 09:23 PM | 1 Like Like |Link to Comment
  • Why Raising The Retirement Age Is A Bad Idea [View article]
    I have to agree with the cheer for capitalism. It is by far the best system, but as you point out human nature and the thirst for more than can ever be needed in a lifetime can give it a black eye.

    I don't know what will ultimately be our society's Achilles heel, but truly great societies wax and wane and then evolve into their new place.

    Chasms in society can be dismissed until they reach that inflection point that the imfrastructure buckles. We certainly are seeing that in the Arab world.

    In our case I agree with you that economic chasms are a threat. Nothing gives greater serenity than prosperity. I've long believed that even the Middle East could also be at peace if there was general prosperity instead of incredible concentration of riches and then abject poverty.

    For most, prosperity may be as simple as a living wage.

    That's not a bad place to start as an objective. We've given trickle down and supply side plenty of time to demonstrate whether they can live up to the hype.

    It's probably time to try trickle across and up and allow more to share in the bounty that we as a nation have.
    Jun 28 08:56 PM | 3 Likes Like |Link to Comment
  • Beating A Dead Horse To Life [View article]
    Ah, a discussion of freshman Ethics 101

    I believe that what you are suggesting is a case of "situational ethics." However, if that is indeed what you are suggesting the dynamics of open market stock trades do not support that contention.

    Well, if you would like me to explain, it does require a knowledge of how stocks transactions actually work.

    Are you ready?

    When you buy or sell shares you are generally not buying them from the company. Did you know that? In fact, unless it is through an IPO or a secondary offering, there is no direct benefit accrued to the company itself.

    In the event that the company is engaged in a stock buyback that very process deprives them of capital for further expansion of their offensive mission. I would happily accept them as a buyer of my shares.

    Can you make a case for indirect benefit? Yes, of course you can, such as the increased value of retained shares allowing the company the ability to enter the credit markets more readily and at more favorable rates.

    However, such indirect benefit may just as easily come from voting for a municipal bond offering that creates a water purification system that local farmers may be able to use in irrigating their crops. Their tobacco crops, wouldn't you know?

    Is there an ethical dilemma with that consequence of greater good?

    Anyway, you are generally transacting with an individual or an investment firm. The benefit or detriment accrues to the individual or firm. The offensive company has already received its money at the time of the IPO or secondary offering.

    While I have no problem transacting in the stock market, I would not be part of an infusion of cash into a company through an IPO nor secondary, unless the entire proceeds were going to principals (in which case it would likely be a bad investment).

    So no, it's not about convenience or situational ethics. It's about a reasoned approach to investing. If I wanted to display my displeasure with the company I would simply boycott their products and perhaps use any vehicle available to me to spread news of that displeasure.

    In that regard, I don't use or purchase tobacco products, don't allow their use in my home and have mentioned my distaste for those products several times in Seeking Alpha and other venues.

    So yes, I can still be of the belief that I have principles and apply them in a thoughtful fashion.
    Jun 28 08:02 PM | 5 Likes Like |Link to Comment
  • Why Raising The Retirement Age Is A Bad Idea [View article]
    You were doing so well in your first paragraph. Objective and accurate assessment of some of the contributing factors to the difficulties faced by the social security fund to meet its objectives.

    But after that you lost it. Good try though. Start with a credible and sensible statement and lull the audience into a false sense of trust.

    Your statement regarding a "proven fact" is patently ridiculous.

    The minimum wage is not designed to raise the wages of individuals to make them less cost effective choices when compared to more qualified individuals in the same position. It does not foist such individuals into a competitive marketplace where more skilled or qualified people, nor does it require that they be hired instead of a more qualified individual.

    In fact despite cries of how raising the minimum wage would lead to unemployment that has never been the case and the belief was widely debunked in the 90s.

    While your example of a Burger King manager starting on the serving line is a nice one to show how individuals may advance, I would suggest that there are far fewer such managerial positions than there are server positions. Despite your contention, I think you would have a hard time demonstrating that the opportunities are available to everyone and only through their own lack of initiative stays unrealized. Advancement is not quite that simple unless you believe in creating a hierarchy heavy with middle managers, where everyone is a supervisor, as often is the case in government.

    That seems so unlike you to suggest so.

    Still, you finish with a flourish and saved your best for the end - passing judgment on the place in history of a Nobel Prize winner, while in the same breath holding Arthur Laffer in esteem.

    That's what made me realize that you had to be kidding the whole time.

    Well done.
    Jun 28 07:33 PM | 2 Likes Like |Link to Comment
  • Beating A Dead Horse To Life [View article]
    Suggesting that we live in the era of big everything is in itself a political statement when you include government in that list. Further, you offer observations that are aligned with specific political views rather than with objectivity.

    I don't know the age of some of those business parks that you are referring to, but their razing may have every bit as much to do with the incredible overbuilding of such business parks as limited partnerships in the 80s and early 90s.

    Business parks, strip centers, fast food limited partnerships were being pushed by every major brokerage and investing consortium as a tax advantaged route to high returns.

    In that case, blame only the greed of investors for building what was never needed and for flooding the market with square footage and depressing commercial real estate for nearly a decade. The fact that such structures may sit unused or are razed may not necessarily be reflective of a local economy and may also reflect that they have outlived their usefulness, especially in a technology corridor.

    As far as where to hide, right now only you and I know about the spot underneath my deck, so at least the two of us are OK.
    Jun 28 07:13 PM | 3 Likes Like |Link to Comment
  • Beating A Dead Horse To Life [View article]
    Although I may not agree with you political position, I do agree with the conclusion, but I especially liked your final observation.
    Jun 28 05:08 PM | Likes Like |Link to Comment
  • Why Raising The Retirement Age Is A Bad Idea [View article]
    There are certainly many approaches to modifying the approach toward funding retirement, just as you suggest there are many ways to deal with the prospect of increased wages.

    While businesses can individually decide what approach is best suited to their needs, the government is faced with a very different situation.

    It must apply the concepts of funded retirement equally and it should not change the endpoints. However, as circumstances warrant it should change the inputs, such as witholding, income thresholds, etc..
    Jun 28 01:59 PM | Likes Like |Link to Comment
  • Why Raising The Retirement Age Is A Bad Idea [View article]
    The role of machines or computers in replacing segments of the workforce has been with us for generations, before any minimum wage act was ever in place.

    A simple sewing machine obviated the need for many seamstresses in the 19th century.

    But the decision to offshore jobs or production is far more complex than simply wages.

    The example that you cite in support of your position is completely unrelated to the issue of minimum wage. They just reflect some personal baggage or poor decision processes in higher potential workers.

    There is no suggestion that there be an obligation to hire someone who doesn't fulfill the basic requirements of the job. Perhaps you are unable to find such qualified candidates because of the wage structure that's offered.
    Jun 28 01:54 PM | 1 Like Like |Link to Comment
  • Why Raising The Retirement Age Is A Bad Idea [View article]
    You do raise a good point about how Congress further finds a way to avoid substantive assessment of programs and policies.

    While I would be opposed to mandating a retirement age, there is certainly a case to be made in certain industries or professions where the ability to propel the profession forward may be impacted by advancing age.

    Certainly in a nation where the population growth exceeds jib creation there needs to be a the removal of barriers that discourage retirement. On the other hand, if jobs are going unfilled, a mechanism to encourage people to delay retirement would be helpful.

    Ultimately, the greater the number of new workers entering the workforce the greater is the inflow of new funds into the trust that are less likely to be needed for benefits in the short term. Of course, that's also without regard to the trickle down benefits of greater discretionary spending by younger workers and greater circulation of earnings back into the economy.
    Jun 28 01:46 PM | Likes Like |Link to Comment
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