China: Is Retail Growth a Proxy for Consumption Growth? [View article]
“The biggest problem with China’s economy is that the growth is unstable, unbalanced, uncoordinated, and unsustainable.” Premier Wen Jiabao, National People’s Congress Press Conference, March 2007.
Things haven't changed for the Premier, or for China, since he expressed these concerns. If your information is correct, Michael, they are counting INVENTORY BUILD-UP as retail sales, whether a single consumer bought anything or not.
Add to that the usual obfuscation that comes from any centrally-managed economy, and the fear the towns, districts and provinces have of reporting anything less than robust growth (there's that knock on the door at midnight) and you have a combustible combination.
With the Chinese markets right back at their 50-day M.A. even bulls in the China shop might find it prudent to take a deep breath and stand aside with at least some of their assets...
Foreclosures: They're Not Just for Breakfast Anymore [View article]
There are two body blows coming for the banking industry. One is described in this article. People with no equity in their homes, thanks to banks giving no down payment loans, have no incentive to remain in those homes unless the bank is willing to work with them. Thus far just 12% of all qualified applicants in danger of foreclosure have been granted any renegotiated terms from the banks.
If you can find worse leadership in any other industry, let me know.
Second, FASB is likely to require all off-balance sheet assets/liabilities to be reported on balance sheet beginning in January 2010. Wells Fargo, as just one example, and possibly not the most egregious, has over $1.7 TRILLION in off balance sheet assets/liabilities. If those were included in their reporting they would need to raise over $70 BILLION in additional capital to meet reserve requirements.
If you can find worse leadership in any other industry, let me know.
Wall Street Breakfast: Must-Know News [View article]
"Bank of America (BAC) said it's 'surprised and disappointed' by accusations that's it's hiding behind attorney-client privilege."
Yes, and in 'Casablanca', Louie was "shocked...SHOCKED!" to discover there was gambling in Rick's bar ( and casino) as the croupier handed him his winnings...
PIMCO High Income Fund Cannot Support Its Share Price [View article]
Your analysis may prove to be correct -- but I long ago stopped attempting to decide what price may or may not be supported by my singular read of the "facts."
Value I believe I can well determine. But price? Price is a function of hope, greed, fear, speculation, rumor, ebullience, despair and the madness of crowds.
Five Questions About Government's Role in the Mortgage Business [View article]
One of the primary stated goals of the taxpayer bailout of the big banks was to allow the banks to begin making loans or renegotiating loans to individuals in trouble. They were to make loans available again to consumers and small businesses.
How are they doing in this alleged endeavor? If you believe their PR flacks, really well. B of A just trumpeted that it “doubled the number of people it has helped under the government’s ‘Making Homes Affordable’ program to help delinquent homeowners who can afford their homes if mortgages are modified.”
Doubled. Right.
Left unsaid is that B of A has used our money to give themselves large pay raises and bonuses rather than help individuals. As of last month, B of A had modified just ** 4%** of the mortgages of qualified people who had applied for renegotiation. 4 in 100. Then Congress threatened to revive legislation that would allow bankruptcy judges to modify mortgages, if the banks didn’t do better.
So B of A, only under the duress of Congress taking away one of their favorite loopholes, “doubled” their activity. Now they are deigning to offer slight relief to 8 out of every 100 qualified applicants.
Their response is as underwhelming as their humility, gratitude and business sense…
I could agree this move "would bring stability to the overall sector" EXCEPT -- there is no way these banks will permit transparency. If these modern-day Emperors did so, we'd all see they have no clothes.
Well before the always-a-step-behind regulators can finish debate about regulating a particular product, the bankers have already created a slightly different type of product that is designed to circumvent both the letter and the spirit of the law. A WSJ article this morning said it quite well: “Major banks have regained their footing, and some of their swagger. Profits are off their lows. Large compensation packages are back, And so is risky business. Banks are back to selling exotic financial products similar to those that felled markets and the world economy last fall. And bank’s appetite for risk for themselves has grown. The nation’s top banks collectively stood to lose more than $1billion on an average day in the second quarter of 2009 should their trading bets go sour, a record level.” Bankers (and their subsidiary brokers) have learned NOTHING from the terrible events of the past two years, other than how to lay off their problems on the taxpayer and keep their bonuses rolling in. As market analyst Sy Harding, discussing the “too big to fail” problem, has observed, “…the Paulsen fix last year was to let a few [brokers and banks] go under and give the rest hundreds of $billions to make them even larger. So, as of June 30 the three largest banks, Bank of America, Wells Fargo, and JP Morgan had $2.3 trillion in deposits, or 31% of the total deposits in the entire banking industry, a 50% increase over the 20% they had two years ago.” “Too big to fail” is not a license to flail, wail and blackmail. Nor should any of these blackguards ever again be too big to curtail – or see its perps sent to jail.
Medical Tourism as a Viable Investment Theme? [View article]
I doubt anyone has yet compiled an extensive database with exit interviews followed up, say, a year and three years later, with a large enough population of "medical tourists" to know if the quality of care is comparable.
We do have anecdotal evidence and it is, thus far, quite good. Many of the physicians are US Board Certified, practice in the US for a few years, then miss their home countries and return to practice there. Their English is excellent, their skills as high as any US doctor -- certified by US medical boards.
I have one anecdotal example from this year and numerous others from among my friends and clients in the past few. A friend who is a dance instructor without medical insurance was told she could not continue dancing without a hip replacement. Total cost in the US -- somewhere around $80,000. Total cost in Malaysia including a recuperative stay in a 5-star hotel, airfare, nursing and surgery? $14,000. Today, 9 months later, she is dancing again...
BP Strikes Black Gold: A Boon for Energy ETFs? [View article]
Becoming enamored of the dynamics of natural gas, coal, oil, nuclear, solar and wind as a young stockbroker, I have been on the right side of the energy trade for 40 years. But I can tell you that running to embrace broad-based energy ETFs because of one discovery is foolhardy.
When Petrobras announced their elephant find offshore Brazil, the same excitement ensued. It will be the same with BP's elephant at Tiber. Now comes the reality. Environmental regulation costs, pioneering deep drilling costs, defining the field costs, transportation costs, hurricane protection costs, etc.
Make no mistake -- Tiber will add significantly to BP's cash flow. But, like all things in "the business" it will add incrementally. It's a slow steady slog toward success, not a sprint. Buy BP -- and any other energy ETF -- when it is cheap, not when it is in the full flush of a big discovery. Buy when it's cheap, sell when it's dear...
Cadbury Bid Indicates We're in a Stock Bull Market [View article]
We may or may not be in a bull market; only the silly certainty of hindsight will tell us which raving crowd of cheerleaders will have been correct.
But I doubt the Kraft bid for Cadbury is an indicator either way. The Kraft bid for Cadbury means that Kraft saw a chance to jump on an undervalued competitor at a time Kraft was flush with cash and Cadbury wasn't! It's easier to pursue a hostile bid when the other guy has disgruntled shareholders and little cash with which to fight back.
This bid is about corporate positioning in an attractive space, no more, no less. And I imagine if Cadbury mounts a sturdy enough defense to dissuade them, Kraft will set its sights on Hershey or some other smaller fish. This has always happened in tough times and I suspect it always will...
In a Post-Madoff World Investment Advisors Revise Their Guidance [View article]
This is fine generic advice, as far as it goes, though it seems more designed to advise the investment advisor rather than the individual investor. For more specific help geared more to an individual seeking information on a broker, brokerage firm or investment advisor, I suggest two websites:
The first is “FINRA,” The Financial Industry Regulatory Authority, located at www.finra.org/index.htm They provide investor education as well as a database of client disputes or regulatory actions against brokers and brokerage firms.
The second website is the SEC’s (and, by linkage, all state regulators’ websites) that track Investment Advisors and Investment Advisory firms. It’s located here. www.adviserinfo.sec.gov/.
Using these two sites lets you see, in advance, if others have had a history of trouble with particular brokers or advisors and constitute a good first step in doing your due diligence on the people you are considering doing business with.
Natural Gas: America's Energy Salvation [View article]
Going out to use up some clean, renewable (though regrettably not inexhaustible!) energy which requires only a little protein, fat and carbohydrates to power it. That would be muscle power to kayak on Lake Tahoe.
Before I do, let me thank all those who have already commented and answer some questions posed.
One eye, my best guess as to why hydro has declined is that it has only barely declined in absolute terms and then only for sound environmental concerns. In RELATIVE terms, however, we’ve probably tapped every major river we can and hydro’s percent of power generation will continue to slide relative to all the other sources. As for the BTU % generated by oil, I took these numbers directly from the Dept of Energy website. My GUESS – and it is only that – is that the 2% of utilities using oil slurp up a huge amount of the stuff because they are the oldest and biggest utilities near the biggest population centers. Newer plants built in the later-settled sections of the country use newer sources of fuel. If someone knows another reason, I’m all ears.
Wind4me, as stated in the text above the chart, I get my – what you in your blind obeisance to an appealing Siren song call “distorted figures” – from DOE. If I’m not mistaken, I believe the head of that organization, which currently spends $26 billion a year to maintain its vast bureaucracy of grants, subsidies and pork, is a direct report of President Obama.
John Peterson, there will always be those who hide their head in the sand and pretend that just because electricity is clean AT THE OUTLET, why, Santa’s elves must produce it at the North Pole. You are spot on. Clean-burning hybrids make the most sense economically, geopolitically and environmentally.
Grey Road, have the mighty fallen so far that the choices are “wind freak” or “Nat Gas freak”? //grins // I don’t believe espousing a sane, geopolitically, environmentally and economically feasible solution to our energy crisis is freaky at all!
And, last, AO. Thank you for your stirring words written from someone inside the business from roughneck to EVP... I tend to downplay the geopolitical side on an economic and investing forum like SA only because my many years as a world and regional geopolitical analyst in the US Intelligence Community already predisposes me to be more concerned about those issues, and I don't want to stray too far from how an investor might approach all this. They are clearly, however, the most important national strategic consideration. How can we maintain our strength as a nation if our leaders are blind to this massive drain on America’s future? “There are none so blind as those who will not see…” Thank you for taking the time to address all the issues attendant to this state of affairs. Parenthetically, when I was a wee lad just entering this business there were two companies I became very familiar with and recommended to my clients as being run by ethical, smart and aggressive energy leaders. Helmerich & Payne was one and Houston Oil & Minerals (if anyone even remembers that name so many years, national mis-steps, and OPEC-inflicted pain later.)
Finally, my comments, in the past, in this article, and in the future, are not about some food fight over whether natural gas or wind or solar are cooler to contemplate, but about advocacy for a sane national energy policy. Let the facts lead us to the most intelligent course of action, not the volume of rhetoric.
Did Chinese Government Stimulus Drive the Latest Rally? [View article]
It may have worked out anecdotally for Wu Hua and any others who speculated with borrowed money, but it was likely pure luck.
Buying equipment with a 10- or 20-year life will pay off, albeit not this year. Doing stock buybacks will reduce float, retain dividends, and provide an investment in ones own company.
But he who borrows just to speculate on an overheated market should heed the adage usually reserved for over-eager and over-leveraged short sellers: “He who sells what isn’t his’n, must buy it back or go to prison.”
How Miscommunication Caused Lehman's Collapse [View article]
I wish I could agree with your too-kind premise, Felix. It would give me far greater confidence in my government to believe that it was "miscommunication." That would allow for a benign view that someone dropped the ball or made a mistake, in which case we could all sagely conclude, as Mr. Paulson's upcoming memoir will no doubt intone, "To err is human."
As an industry insider for many years, however, I have seen the arrogance, pomposity, hubris and imperiousness that characterizes so many of our little self-proclaimed Masters of the Universe. It is well-known that Hank Paulson, head of Goldman, and Dick Fuld, head of Lehman, despised each other.
The story that may never be told is that it is quite possible that a personal feud sealed the demise of Fuld which meant the demise of Lehman which provided the trigger to cause untold hardship on millions of people, the loss of many jobs far beyond Wall Street, and the further indebtedness of an entire nation.
Petty squabbles among those granted too much power for their touchy ego's ability to responsibly control have accounted for much "collateral damage" in history.
How Much of China's Export Industry Is Owned by U.S. Corporations? [View article]
"...countries that had lost sight of the idea that ultimately, unless there is freedom and free markets, there is nothing."
You mean like our own country?
I traveled extensively during my 36 years in uniform. I travel extensively today. I often had spirited discussions with friends in democratic nations that embraced cradle-to-grave social welfare, they attacking and me responding with a spirited defense of the benefits properly-regulated free markets WITHOUT government over-intervention or favoritism of some groups, sectors, industries or blocs of voters.
It's embarrassing now to be asked to defend my government which is embracing the same mistakes China, Sweden, Hungary et al have tossed on to the garbage heap of history as unworkable. They have caught on to the truth of the old adage:
When Ivan owns one cow, and the cow is sick, it is Ivan who stays up all night to nurse it back to health. That cow is his livelihood. When Ivan and 99 of his closest friends own 100 cows, and some cows are sick, it's always "someone else's" responsibility -- maybe the government's -- to take care of the herd.
Substitute Johnny for Ivan and you create a nation that passes China on the road as they are coming the direction we are leaving behind. Enough. A nation of enlightened capitalist entrepreneurs is what gave us our strength and spirit. We need to stop complaining about China or any other nation and tend the home fires.
Wall Street Breakfast: Must-Know News [View article]
"The U.S. dollar is safe as the world's reserve currency for now, but China took the first step towards a new reserve currency by agreeing to buy $50B of the IMF's Special Drawing Rights."
Actions have consequences.
Both the previous and current administrations decided we could mismanage our economy, eschew individual participation in the markets, and continue with 'business as usual' by keeping our largest financial institutions (barely) afloat. This was compounded when they issued a call, not to do the opposite of what got us into this mess and encourage savings, personal responsibility and accountability among the perps who created this fiasco by their greed and arrogance, but to spend more!
"Here! We'll pay your down payment with $8000 if you indebt yourself further to our financial institutions by buying a house! How's $4500 sound if you buy a car and finance the rest? Need a new refrigerator? Big Brother says you should have one! Buy! Buy! Buy!"
They may have fooled some of us. They certainly have fooled themselves. But the rest of the world looks at these irresponsible actions and concludes, in consequence, they need to protect themselves from our leadership. The profligacy and ignorance of basic economics at the national level confounds other nations.
China may be the first to take this step but, unless we change our ways, they won't be the last.
China: Is Retail Growth a Proxy for Consumption Growth? [View article]
Things haven't changed for the Premier, or for China, since he expressed these concerns. If your information is correct, Michael, they are counting INVENTORY BUILD-UP as retail sales, whether a single consumer bought anything or not.
Add to that the usual obfuscation that comes from any centrally-managed economy, and the fear the towns, districts and provinces have of reporting anything less than robust growth (there's that knock on the door at midnight) and you have a combustible combination.
With the Chinese markets right back at their 50-day M.A. even bulls in the China shop might find it prudent to take a deep breath and stand aside with at least some of their assets...
Foreclosures: They're Not Just for Breakfast Anymore [View article]
If you can find worse leadership in any other industry, let me know.
Second, FASB is likely to require all off-balance sheet assets/liabilities to be reported on balance sheet beginning in January 2010. Wells Fargo, as just one example, and possibly not the most egregious, has over $1.7 TRILLION in off balance sheet assets/liabilities. If those were included in their reporting they would need to raise over $70 BILLION in additional capital to meet reserve requirements.
If you can find worse leadership in any other industry, let me know.
Wall Street Breakfast: Must-Know News [View article]
Yes, and in 'Casablanca', Louie was "shocked...SHOCKED!" to discover there was gambling in Rick's bar ( and casino) as the croupier handed him his winnings...
PIMCO High Income Fund Cannot Support Its Share Price [View article]
Value I believe I can well determine. But price? Price is a function of hope, greed, fear, speculation, rumor, ebullience, despair and the madness of crowds.
Five Questions About Government's Role in the Mortgage Business [View article]
How are they doing in this alleged endeavor? If you believe their PR flacks, really well. B of A just trumpeted that it “doubled the number of people it has helped under the government’s ‘Making Homes Affordable’ program to help delinquent homeowners who can afford their homes if mortgages are modified.”
Doubled. Right.
Left unsaid is that B of A has used our money to give themselves large pay raises and bonuses rather than help individuals. As of last month, B of A had modified just ** 4%** of the mortgages of qualified people who had applied for renegotiation. 4 in 100. Then Congress threatened to revive legislation that would allow bankruptcy judges to modify mortgages, if the banks didn’t do better.
So B of A, only under the duress of Congress taking away one of their favorite loopholes, “doubled” their activity. Now they are deigning to offer slight relief to 8 out of every 100 qualified applicants.
Their response is as underwhelming as their humility, gratitude and business sense…
Big Banks Commit to Transparency [View article]
Well before the always-a-step-behind regulators can finish debate about regulating a particular product, the bankers have already created a slightly different type of product that is designed to circumvent both the letter and the spirit of the law.
A WSJ article this morning said it quite well: “Major banks have regained their footing, and some of their swagger. Profits are off their lows. Large compensation packages are back, And so is risky business. Banks are back to selling exotic financial products similar to those that felled markets and the world economy last fall. And bank’s appetite for risk for themselves has grown. The nation’s top banks collectively stood to lose more than $1billion on an average day in the second quarter of 2009 should their trading bets go sour, a record level.”
Bankers (and their subsidiary brokers) have learned NOTHING from the terrible events of the past two years, other than how to lay off their problems on the taxpayer and keep their bonuses rolling in.
As market analyst Sy Harding, discussing the “too big to fail” problem, has observed, “…the Paulsen fix last year was to let a few [brokers and banks] go under and give the rest hundreds of $billions to make them even larger. So, as of June 30 the three largest banks, Bank of America, Wells Fargo, and JP Morgan had $2.3 trillion in deposits, or 31% of the total deposits in the entire banking industry, a 50% increase over the 20% they had two years ago.”
“Too big to fail” is not a license to flail, wail and blackmail.
Nor should any of these blackguards ever again be too big to curtail – or see its perps sent to jail.
Medical Tourism as a Viable Investment Theme? [View article]
We do have anecdotal evidence and it is, thus far, quite good. Many of the physicians are US Board Certified, practice in the US for a few years, then miss their home countries and return to practice there. Their English is excellent, their skills as high as any US doctor -- certified by US medical boards.
I have one anecdotal example from this year and numerous others from among my friends and clients in the past few. A friend who is a dance instructor without medical insurance was told she could not continue dancing without a hip replacement. Total cost in the US -- somewhere around $80,000. Total cost in Malaysia including a recuperative stay in a 5-star hotel, airfare, nursing and surgery? $14,000. Today, 9 months later, she is dancing again...
BP Strikes Black Gold: A Boon for Energy ETFs? [View article]
When Petrobras announced their elephant find offshore Brazil, the same excitement ensued. It will be the same with BP's elephant at Tiber. Now comes the reality. Environmental regulation costs, pioneering deep drilling costs, defining the field costs, transportation costs, hurricane protection costs, etc.
Make no mistake -- Tiber will add significantly to BP's cash flow. But, like all things in "the business" it will add incrementally. It's a slow steady slog toward success, not a sprint. Buy BP -- and any other energy ETF -- when it is cheap, not when it is in the full flush of a big discovery. Buy when it's cheap, sell when it's dear...
Cadbury Bid Indicates We're in a Stock Bull Market [View article]
But I doubt the Kraft bid for Cadbury is an indicator either way. The Kraft bid for Cadbury means that Kraft saw a chance to jump on an undervalued competitor at a time Kraft was flush with cash and Cadbury wasn't! It's easier to pursue a hostile bid when the other guy has disgruntled shareholders and little cash with which to fight back.
This bid is about corporate positioning in an attractive space, no more, no less. And I imagine if Cadbury mounts a sturdy enough defense to dissuade them, Kraft will set its sights on Hershey or some other smaller fish. This has always happened in tough times and I suspect it always will...
In a Post-Madoff World Investment Advisors Revise Their Guidance [View article]
The first is “FINRA,” The Financial Industry Regulatory Authority, located at www.finra.org/index.htm They provide investor education as well as a database of client disputes or regulatory actions against brokers and brokerage firms.
The second website is the SEC’s (and, by linkage, all state regulators’ websites) that track Investment Advisors and Investment Advisory firms. It’s located here. www.adviserinfo.sec.gov/.
Using these two sites lets you see, in advance, if others have had a history of trouble with particular brokers or advisors and constitute a good first step in doing your due diligence on the people you are considering doing business with.
Natural Gas: America's Energy Salvation [View article]
Before I do, let me thank all those who have already commented and answer some questions posed.
One eye, my best guess as to why hydro has declined is that it has only barely declined in absolute terms and then only for sound environmental concerns. In RELATIVE terms, however, we’ve probably tapped every major river we can and hydro’s percent of power generation will continue to slide relative to all the other sources. As for the BTU % generated by oil, I took these numbers directly from the Dept of Energy website. My GUESS – and it is only that – is that the 2% of utilities using oil slurp up a huge amount of the stuff because they are the oldest and biggest utilities near the biggest population centers. Newer plants built in the later-settled sections of the country use newer sources of fuel. If someone knows another reason, I’m all ears.
Wind4me, as stated in the text above the chart, I get my – what you in your blind obeisance to an appealing Siren song call “distorted figures” – from DOE. If I’m not mistaken, I believe the head of that organization, which currently spends $26 billion a year to maintain its vast bureaucracy of grants, subsidies and pork, is a direct report of President Obama.
John Peterson, there will always be those who hide their head in the sand and pretend that just because electricity is clean AT THE OUTLET, why, Santa’s elves must produce it at the North Pole. You are spot on. Clean-burning hybrids make the most sense economically, geopolitically and environmentally.
Grey Road, have the mighty fallen so far that the choices are “wind freak” or “Nat Gas freak”? //grins // I don’t believe espousing a sane, geopolitically, environmentally and economically feasible solution to our energy crisis is freaky at all!
And, last, AO. Thank you for your stirring words written from someone inside the business from roughneck to EVP... I tend to downplay the geopolitical side on an economic and investing forum like SA only because my many years as a world and regional geopolitical analyst in the US Intelligence Community already predisposes me to be more concerned about those issues, and I don't want to stray too far from how an investor might approach all this. They are clearly, however, the most important national strategic consideration. How can we maintain our strength as a nation if our leaders are blind to this massive drain on America’s future? “There are none so blind as those who will not see…” Thank you for taking the time to address all the issues attendant to this state of affairs.
Parenthetically, when I was a wee lad just entering this business there were two companies I became very familiar with and recommended to my clients as being run by ethical, smart and aggressive energy leaders. Helmerich & Payne was one and Houston Oil & Minerals (if anyone even remembers that name so many years, national mis-steps, and OPEC-inflicted pain later.)
Finally, my comments, in the past, in this article, and in the future, are not about some food fight over whether natural gas or wind or solar are cooler to contemplate, but about advocacy for a sane national energy policy. Let the facts lead us to the most intelligent course of action, not the volume of rhetoric.
Did Chinese Government Stimulus Drive the Latest Rally? [View article]
Buying equipment with a 10- or 20-year life will pay off, albeit not this year. Doing stock buybacks will reduce float, retain dividends, and provide an investment in ones own company.
But he who borrows just to speculate on an overheated market should heed the adage usually reserved for over-eager and over-leveraged short sellers: “He who sells what isn’t his’n, must buy it back or go to prison.”
How Miscommunication Caused Lehman's Collapse [View article]
As an industry insider for many years, however, I have seen the arrogance, pomposity, hubris and imperiousness that characterizes so many of our little self-proclaimed Masters of the Universe. It is well-known that Hank Paulson, head of Goldman, and Dick Fuld, head of Lehman, despised each other.
The story that may never be told is that it is quite possible that a personal feud sealed the demise of Fuld which meant the demise of Lehman which provided the trigger to cause untold hardship on millions of people, the loss of many jobs far beyond Wall Street, and the further indebtedness of an entire nation.
Petty squabbles among those granted too much power for their touchy ego's ability to responsibly control have accounted for much "collateral damage" in history.
How Much of China's Export Industry Is Owned by U.S. Corporations? [View article]
You mean like our own country?
I traveled extensively during my 36 years in uniform. I travel extensively today. I often had spirited discussions with friends in democratic nations that embraced cradle-to-grave social welfare, they attacking and me responding with a spirited defense of the benefits properly-regulated free markets WITHOUT government over-intervention or favoritism of some groups, sectors, industries or blocs of voters.
It's embarrassing now to be asked to defend my government which is embracing the same mistakes China, Sweden, Hungary et al have tossed on to the garbage heap of history as unworkable. They have caught on to the truth of the old adage:
When Ivan owns one cow, and the cow is sick, it is Ivan who stays up all night to nurse it back to health. That cow is his livelihood. When Ivan and 99 of his closest friends own 100 cows, and some cows are sick, it's always "someone else's" responsibility -- maybe the government's -- to take care of the herd.
Substitute Johnny for Ivan and you create a nation that passes China on the road as they are coming the direction we are leaving behind. Enough. A nation of enlightened capitalist entrepreneurs is what gave us our strength and spirit. We need to stop complaining about China or any other nation and tend the home fires.
Wall Street Breakfast: Must-Know News [View article]
"The U.S. dollar is safe as the world's reserve currency for now, but China took the first step towards a new reserve currency by agreeing to buy $50B of the IMF's Special Drawing Rights."
Actions have consequences.
Both the previous and current administrations decided we could mismanage our economy, eschew individual participation in the markets, and continue with 'business as usual' by keeping our largest financial institutions (barely) afloat. This was compounded when they issued a call, not to do the opposite of what got us into this mess and encourage savings, personal responsibility and accountability among the perps who created this fiasco by their greed and arrogance, but to spend more!
"Here! We'll pay your down payment with $8000 if you indebt yourself further to our financial institutions by buying a house! How's $4500 sound if you buy a car and finance the rest? Need a new refrigerator? Big Brother says you should have one! Buy! Buy! Buy!"
They may have fooled some of us. They certainly have fooled themselves. But the rest of the world looks at these irresponsible actions and concludes, in consequence, they need to protect themselves from our leadership. The profligacy and ignorance of basic economics at the national level confounds other nations.
China may be the first to take this step but, unless we change our ways, they won't be the last.