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Jack Rice  

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  • U.S. Stocks Have Become A Deflationary Asset [View article]
    A strawman argument is when someone lies about what someone else has said and then debates the lie.

    "the remarks about a pig out at the expense of poor, poor governments around the U.S. are just laughable."

    I made no such "remarks". The pig-out was at the expense of the nation, and "governments" are world governments, not "governments around the U.S.," whatever that means.

    It's a waste of time to engage those who regard anything to the left of Attila the Hun as "socialist" and who, in the spirit of Islamists demanding a return to the Caliphate, demand a return to the Articles of Confederation.
    Nov 25, 2015. 02:56 AM | Likes Like |Link to Comment
  • U.S. Stocks Have Become A Deflationary Asset [View article]
    "the ever increasing deficits are what is the biggest driver of deflation since the governments are growing faster than their economies"

    That's rich. For years the right-wingers were ranting the same thing except plug in "inflation" instead of "deflation". And let's not forget the right-wing bogeyman of big/growing government, a self-serving myth, utterly discredited since the "free market" pig-out of the first decade. Governments -- along with government services, infrastructure maintenance, regulation and enforcement, and defense, as well as revenues to maintain themselves -- have been shrinking, not growing. For two decades privatization as panacea has run rampant around the world.

    These are indeed normal times of boom and bust, overbought and oversold. From the last decade's pig-out to the new Chinese equities market that blew a fuse from over-exuberance, to the same old same-old shambles that is Brazil.

    Behold Norway: an incredibly rich nation, owner of North Sea oil. While oil and gas were over $100 a barrel, Norway maintained an austere economy. Why? Because they are Lutherans? No, because they recognize the cyclical nature of secular economies. Did they have any specific prognosis? Other than their belief in the business cycle -- that "this boom" shall also end -- no.

    Today, the Fed knows that our fundamentally strong economy continues to emerge from the wreckage of 2008. I believe that the Fed (whose timidity I partly blame for the 2008 crash) is husbanding the recovery well. QE cannot last forever, and benchmarks set by Bernanke and Yellen have been reached for easing the easing. There is great opportunity here to do what's not been done by the Fed before, to use rates proactively instead of reactively.

    I strongly disagree with the half-empty-cuppers. For every segment that's disappointing, I can point to more that are doing well or very well. The U.S.
    economy is proving to be self-sustaining. While world trade is depressed, the U.S. will keep chugging along. But world trade will inevitably pick up as soon as the fallout from the overheated EMs subsides. China will be fine. Despite its occupation by restive and unassimilated Muslim hordes, EU is rated overweight by UBS.

    There are some caveats: the Brazilians have to get serious about whom they elect, and on India Narendra Modi is an old man whose pro-business movement needs someone to take up his baton, and though Putin seems fit, Russia will need a successor like him to keep from flying apart.

    What does this mean all this mean for the investor? Koldus gives a great précis on the current state of the U.S. vis-à-vis the global economy. The Turner chart is quite useful. Is this Stage 3, the bottom of a cycle? Well, UBS above seems to think so, in overweighting EU (but not EMs). And so, apparently, does the Fed, in beginning to end its pump priming. Where I might differ is that some of the "overbought" issues, such as the FANGs, are expanding outside the U.S. Well, if, as Koldus recommends, we should start reducing our U.S. allocations and, by implication, start increasing our non-U.S. allocations, then is it not just as well to invest in those issues, like FB and NFLX, that are expanding outward?

    To me, "commodities and inflation sensitive assets" are synonymous, and thus a falling knife. What I like are commodity consuming businesses that have built defensive positions to protect their windfalls from the contingent inflation cycle. (DAL comes to mind.) There are also American industries that make huge amounts of money, like LMT and NOC, which grow their stock while spinning off great divies. On the other hand, if you believe in overweighting EU, then SIE, TKA, DAI and NESN are as good as any.

    Once again, great article!
    Nov 23, 2015. 07:46 PM | 3 Likes Like |Link to Comment
  • Zuckerberg to take paternity leave, doesn't name replacement [View news story]
    That's right, right-wing gospel, aimed at wrecking society for the sake of individual greed, decrees that stinking workers don't need to organize to protect their stinking interests.
    Nov 23, 2015. 05:25 PM | 2 Likes Like |Link to Comment
  • Zuckerberg to take paternity leave, doesn't name replacement [View news story]
    Doesn't name replacement? OMG, what if something should happen while he's out of the office???
    Nov 23, 2015. 01:11 PM | 1 Like Like |Link to Comment
  • High-Flying Delta Will Continue To Soar [View article]
    I don't agree. The airlines use mass seating for break-even and non-discretionary/fron... for the profits. Even JetBlue recognizes this with its recent class branding. Legacy and even some LCC airlines must fill their cheap seats, but business is where the gravy is.

    The notion that flyers won't be loyal if the payback (i.e. kickback) is so low is unsupported. Cheap pax will fly an airline because it has the route and the price, not the FF program. DAL and AA understand this and so are refocusing their programs on the high-rev pax.

    In any case, the airlines, as they always have, will find a way to incentivize loyalty in their high-revenue pax.
    Nov 20, 2015. 03:31 PM | Likes Like |Link to Comment
  • High-Flying Delta Will Continue To Soar [View article]
    Beg pardon, I do know of what I speak. I've had senior captains tell me that as people pilots are arrogant jerks. And in the history of labor relations, pilots have been downright SOBs. Their intransigent demands and endless strikes wrecked Eastern Airlines and hobbled TWA, Northwest, Pan Am, BA and AF. In September, a walkout of Lufthansa pilots caused cancellation of 1000 flights. The headline read, "Lufthansa Pilots Strike AGAIN" (my caps).

    And not just the biggies. Star Air, a European cargo airline that contracts with UPS, was almost shut down, in 2013, by pilots.

    But back to Delta. Last June there was an agreement on profit sharing, using the generous 10/20 plan in the article. The leadership recommended it, but the pilots overwhelmingly rejected it. Delta pilots already had the best pay in the industry.

    As for the 1989-2008 pay rates you cite, all I know is that in the late 1990s and early 2000s, leading up to the bankruptcies of the legacy carriers, pilots enjoyed even higher pay than they do now, as well as generous pensions and other benefits. Pilots want to return to those good old days.

    By the way, mechanics are up there with pilots in the SOB category. The history of mechanics throwing wrenches in airline operations goes back a half century or more.

    Airlines are mindful that they cannot depend long-term on low fuel prices. And when the current boom cycle inevitably ends, with airfares declining in real dollars, from competition with LCCs and ULCCs, DAL will be facing far lower margins than the current windfall provides. They do not want anywhere near the conditions that drove them to Chapter 11.

    Companies must plan for the future, which, alas, means contending with pilots ever-eager to embrace the zeitgeist's infantile watchwords: "Me! Now!"
    Nov 20, 2015. 03:04 PM | Likes Like |Link to Comment
  • High-Flying Delta Will Continue To Soar [View article]
    Of course DAL does not expect pilots to leave the union. The profit sharing plan for non-union employees will serve as a benchmark for future contract negotiations. Airline pilots are, with few exceptions, arrogant jerks, who have destroyed more than one airline. Their union is about more than protecting pilot jobs, it's about extortion. The only thing the pilot union enforces is greed, and the only thing it promotes is itself, and to blazes with everybody else, including non-pilot employees.
    Nov 19, 2015. 04:59 PM | 2 Likes Like |Link to Comment
  • High-Flying Delta Will Continue To Soar [View article]
    The boilerplate description of SkyMiles evades the fact that SkyMiles is one of the stingiest programs out there. Its nickname is SkyPesos.

    But in perspective, in the old days, when there was a reliable connection between money spent and miles flown, Frequent Flyers really were frequent flyers who spent a lot of money. Those pax got the perks. DAL seems to be returning to a more authentic criterion for what's considered a frequent flyer.
    Nov 19, 2015. 04:34 PM | Likes Like |Link to Comment
  • Marc Andreesen is selling out his stake in Facebook [View news story]
    Oops -- that's "LOTS of payment services possibilities."
    Nov 18, 2015. 03:09 PM | 1 Like Like |Link to Comment
  • Marc Andreesen is selling out his stake in Facebook [View news story]
    Yep, priced as momentum stock, but substance behind the momentum.

    Right about fees. Monetization isn't only about ads. Lost of payment services possibilities. The depth and breadth and reach are there. FB is used by many in mobile as home page.

    One problem: With all these bells and whistles, FB platforms will need to streamline the interfaces to keep them user-friendly -- uncluttered, with easy and intuitive movement between sub-apps.
    Nov 18, 2015. 02:37 PM | 1 Like Like |Link to Comment
  • Is Andreessen Right To Take His Money Out Of Facebook? [View article]
    "As a longtime tech reporter Marc Andreessen remains one of my favorite people."

    A longtime tech reporter who doesn't know or care to know about FB?

    A longtime reporter who can't write an English sentence? (So, Marc Andreesen is a longtime tech reporter?)

    Not an article but an extended comment.

    Triple fail.

    But effective clickbait, which is what counts these days.
    Nov 17, 2015. 08:48 PM | 3 Likes Like |Link to Comment
  • Marc Andreesen is selling out his stake in Facebook [View news story]
    "more ads = less unhappy users"

    Fine with me.
    Nov 16, 2015. 07:46 PM | Likes Like |Link to Comment
  • The Strengthened Case For 'Risk Off': Liking Extra Cash And Some Other 'Value' Assets [View article]
    Pretty much stream-of-consciousness -- amounting largely to the tired right-wing meme of blaming the Fed for whatever ails us (1929, yeah, right) and for whatever catastrophe/bubble the old reactionaries always see just around the corner.

    "Dodgy lending practices"? Is that not describing the laissez-faire pig-out of the previous Fed-passive decade, the crash from which the world is still extricating itself? Now? If by "dodgy" is meant giving no one a loan, then I guess that's right.

    And let's not forget those bad old deficits which, according to hoary old men, are bad for the character, but which also save lives which same hoary old men don't care about.

    And finally, torturous prose ending with the bromide:

    "My perspective, though, is that the plot of this market story is that the odds favor a cautious approach."

    A "cautious approach"...what an epiphany!
    Nov 16, 2015. 07:44 PM | 2 Likes Like |Link to Comment
  • Marc Andreesen is selling out his stake in Facebook [View news story]
    Ridiculous speculation. People with big investments get to sit on boards. Now that Andreesen no longer has such a huge interest, he may leave the board. Perfectly normal.
    Nov 16, 2015. 01:10 AM | Likes Like |Link to Comment
  • Marc Andreesen is selling out his stake in Facebook [View news story]
    Rubbish. Paid large sums of money to what? Hold his stock? First, board members aren't paid "large amounts of money". Certainly not large to someone like Andreesen. Second, he's an outside director; he doesn't work for the company. Get real.
    Nov 16, 2015. 01:08 AM | 1 Like Like |Link to Comment