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Mark Bern, CFA  

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  • I am a Death Panelist [View instapost]
    OG - I agree that incompetence leads to the huge awards, but I don't believe that the really huge awards can be justified. I think that the huge awards lead to excessive testing and added, unnecessary costs. It seems like a chicken and the egg conundrum at first blush. But I think that if reasonable tort reform were implemented, we could see a reduction in unnecessary testing as a result. But when I say reasonable tort reform I don't mean anything like letting the medical professionals, hospitals, and insurance companies off the hook. In my mind reasonable still hurts when incompetence is in play, it just doesn't get ridiculous. I mean, awarding anyone hundreds of millions in damages sets off my ridiculous meter. What could possibly justify giving someone $200,000,000? While I agree that placing a value on a life is impossible, I still feel that making people incredibly rich over a mistake is ludicrous. It has created a litigious society where we no longer invite friends over to use the pool because of the potential liability if their son does something really stupid! It makes us all a little less friendly and much more leery in situations throughout our everyday lives. And, of course, the lawyers will all disagree with me when I say we need fewer laws and we need to hold ourselves more responsible for our own actions. But the lawyers are the people we tend to elect as lawmakers and they just can't help creating more business for their profession. After all, what will they do if they don't get reelected?
    Dec 29, 2009. 01:16 PM | 2 Likes Like |Link to Comment
  • October Case-Shiller Housing Numbers [View article]
    And the pundits say there is no seasonality! Even with the government's extension and expansion of the home purchase credit prices are getting soft again in the fall. If the pundits still believe their own propaganda, I suppose they are calling for housing prices to rebound in January and February of 2010. If there is any rebound during the dead of winter, it will be because some people are rushing to buy before the credit runs out, IMHO. But I don't think that even the credit can change the course of this ship because unemployment is still with us like unwelcome relatives and it intends to stay well beyond the holidays.

    Housing and the economy will recovery when the fundamental problems have been addressed. They may even perk up some (but not a lot) between now and the next meltdown if the administration can convince enough of the population that the banks' assets really are just fine. But the cure is for the banks to change their operating policies by taking on less risk and writing down or otherwise disposing of their toxic assets (not necessarily in that order). I am not looking for more blood in the streets. I hope the banks and the administration can pull off a miracle. I'm just not a believer in the intermediate term.

    Short term, the Treasury says it will do whatever is necessary and I believe them. I don't necessarily agree that it is in the best interests of our nation's future, but I believe them. But at some point we will have to pay the piper. Higher taxes, another financial crisis, lingering high unemployment, bigger government and more costly regulations all appear to be lining up in our future. The economy cannot grow robustly while dragging such heavy burdens along with it. More employers will find the high taxes and heavy-handed regulatory environment too costly to stay in America. More will more offshore to find a better-educated workforce. Yes, America does need change. But the change we are getting isn't the change that will make us stronger and more competitive in the global economy.
    Dec 29, 2009. 12:56 PM | 8 Likes Like |Link to Comment
  • Can Consumers Make Rational Healthcare Choices? [View article]
    My guess on this issue would be that both are right, depending upon how one looks at the problem. The question, "Are people able to make good decision about their own health care?," could elicit different answers depending upon whether one is asking this about an individual or the population in aggregate. If one considers it to be a question for an individual, the answer will vary greatly based upon a number of factors, not the least of which would probably include education and experience.

    Granted, there are individuals with very little formal education who are very capable of making sound decisions and operate better within society than some people with advanced degrees. But, on the whole, less education may create barriers caused by lack of understanding or reasoning and lead to less than optimum decisions in complex health care situations. But that is why we have doctors to guide us to the best options by making us aware of them and explaining them in understandable terms. It is also why we place so much trust in the medical profession. They went to school for medicine; we didn't. That is the process that evens out the decision-making process for the masses. But left to their own devices, many people could not make good decisions. It is the medical profession assistance and intervention that makes the system work.

    If there is not cost involved to the patient, then they will almost always take the path that costs more because they assume it will provide better results. If they have to pay for the care themselves, they will more information in their decision-making.

    I suspect that it is the government's (and Mr. Ginsberg's view) that the poor, uneducated cannot make good decisions for themselves and need the government to assist them lest they be taken advantage of by the rich professionals. That reasoning assumes that the majority of Americans need government assistance in making personal decisions which, IMHO, is not true. I believe that the vast majority of our people are quite capable of making good decisions about not only health care, but just about everything that affects our personal lives. It's called freedom. It works.

    What doesn't work is when that freedom is undermined for the many to enable the few. I am not saying that we should ignore the needs of the few. What I am saying is that the best answer is not in lowing all decision-making to lowest common denominator. As a nation, we are much stronger than our weakest link. But that will only be true as long as our creativity and drive are not repressed by government.
    Dec 29, 2009. 12:35 PM | 2 Likes Like |Link to Comment
  • Geithner: There Will Be No Double-Dip [View article]
    Never say "Never!"

    Conceptwizzard - "Why is the Feds mandate for low unemployment not followed?" I believe they are doing all they know how in this area, but are unwilling to admit that they have lost control.
    Dec 23, 2009. 06:11 PM | 4 Likes Like |Link to Comment
  • The Santa Claus Rally Continues [View article]
    And so what will investors do when they realize that Santa didn't do as much shopping as expected this year? Retail stocks have acted like this year holiday sales would rise significantly from last year's very depressed levels. So far, sales are flat to slightly below last year's levels. What am I missing? I suspect that expectations are way ahead of reality in the retail sector and could see a correction after the first of the year when results get reported and reality sinks in. However, that may not pull the whole market with it, if there are other positive catalysts. Then we could see some sector rotation going on with, perhaps, tech leading the market again. But I wouldn't go long in the retail area until the holiday dust settles.
    Dec 22, 2009. 07:42 PM | 4 Likes Like |Link to Comment
  • Bank Failures Reach 140 in 2009 [View article]
    It appears that the FDIC is hoping that the economy will improve enough over the next 12-18 months that some of the banks on its problem bank list wil actually recover. That would probably require improvements in real estate, retail, and employment. It also needs more small business creation and expansion to fuel a sustainable recovery.

    Retail seems flat from a year ago (which was abysmal), real estate is still sending mixed signals, and employment has slow its decent from earlier in the year. That doesn't sound like healthy growth to me. It is a good sign that things don't seem to be getting much worse, at least for the time being. But the banks need an improving environment to heal. They especially need real estate value to rise significantly. I don't expect that to happen any time soon. At least not soon enough to save the banks.
    Dec 21, 2009. 10:48 PM | 2 Likes Like |Link to Comment
  • Christmas Economic Cheer [View instapost]

    Have you seen anything about how the storm affected retail sales? I have been out most of the day and haven't seen anything.
    Dec 21, 2009. 07:30 PM | 1 Like Like |Link to Comment
  • Humor for Yuletide Week [View instapost]
    Maya - Another term we need to hear more of is "debt-free."

    Climate Change - that's one that is coming into vogue now that temperatures around the globe are cooling.

    Messiah - I don't think people are using this one the way it was originally intended either.

    Obamination - This one has had it's definition do a 180 degree shift in less than a year. Who know why?

    DD - Maya, I know what you're thinking but I'm not going there. How many people who speak of due diligence actual know what it means? I hear the term tossed around a lot more today than ever before, but for the life of me, I suspect that for some it means no more than checking the rsi.
    Dec 21, 2009. 07:14 PM | 3 Likes Like |Link to Comment
  • Should AIG Be Investigated? [View article]
    You'd better believe I'll sign it. I'll click through as soon as I say to all that read this article and the ensuing comments: Instead of complaining about what might be or shouldn't have happened without knowing all the facts, sign the petition and get the facts. We may have to opportunity to open up an experimental case precedent that could, by its implied threat of spreading to all others in question, bring eventual transparency and fairness to the financial system in the future. It may be a long shot, but if any shot were worth firing it would be this one, IMHO.
    Dec 21, 2009. 06:47 PM | 3 Likes Like |Link to Comment
  • Christmas Economic Cheer [View instapost]
    I don't know about you, John, but we got 27 inches of snow (starting Friday evening and ending) Saturday afternoon. I realize that the retailers were counting on me and millions of others to make Saturday the biggest retail day of the year, but I just couldn't finish shoveling my driveway (it's 120 feet in length and mostly uphill). The Mid-Atlantic got hit pretty hard and I assume the Northeast got hit, as well, since the storm moved on up the coast.

    So, I wonder how many people went out in that mess and shopped 'til they dropped? With state and local government budgets strained, I wonder how long it will take to get everybody plowed out. We rarely get snow like this in Virginia. And our road is usually plowed first right after they finish with the Interstate, but our road still hasn't been plowed as of 11:50 a.m. That is very unusual. It's the first time it's happened since we moved here. I'm not complaining, just voicing my concern for funding of the road crews and how it could affect retail sales. I know it affected mine, so far.
    Dec 20, 2009. 11:51 AM | 3 Likes Like |Link to Comment
  • Is the Dollar Too Big to Fail? [View article]
    I must concur with those who believe that nothing, not even the US$, is too big to fail. In the comments above, every possible point used to support the idea that it is not has been summarily dismissed with factual evidence to the contrary. I have yet to find anything in the article or comments that supports the idea that the dollar cannot fail that is anything more than opinion or based upon an unwillingness to open-minded debate. Facts are facts and they tend to support arguments better mere speculations.
    Dec 19, 2009. 01:29 PM | 5 Likes Like |Link to Comment
  • 4.22 Citi Shares for Each Person in the World [View article]
    The point of the article, as is often the case on SA, is in the comments. Monumental dilution, with even more monumental dilution coming soon, and most likely still more monumental dilution to come at some not-to-distant future date(s). Have you ever owned a stock that got diluted badly? Nothing of this magnitude has ever happened before. It's sort of like a one stock dilution bubble. How long can this go on? Not very, IMHO.
    Dec 19, 2009. 12:34 PM | 7 Likes Like |Link to Comment
  • New Accounting Rule Delayed [View article]
    The banks have convinced our leaders that if they were to go down, the whole country would fall into a lengthy depression with no way out. I suspect that without letting bad bank fail and letting their toxic assets be wiped clean out of the system, we will need to withstand something very close to a depression from possibly much longer.

    But it is only "depressing" for those who are affected. It is not depressing for politicians unless they don't get reelected to the next term. It is not depressing to the bank executives unless their banks are allowed to fail and they can't find another job. But even then it is not so depressing. After being awarded a hundred million dollars or more in bonuses over the last decade for the crappy job they've done, they'll be able to ride this little economic dip out on their yachts or mansions. Their only big decisions will be which yacht or which mansion should they use this week. They own so many. How is the weather in France this time of year?

    The don't know, nor do they care, about how this thing is affecting the average American.

    Now, if the government announced multiple times that all deposits of less than $250,000 would be insured and made multiple recommendations to the public that to make sure that they do not have more than $250,000 in an account with any one bank as part of a public service marketing blitz and called it one of many efforts to ensure against another possible bank crisis in the future, after a few months most people would heed the advice. Then, what is the big deal in letting a major bank or two fail? The creditors get wiped out, the bondholders get wiped out, the bad assets get purged from the system, a few thousand highly paid people lose their jobs, a few thousand more real people like us lose their jobs, the good assets are taken over by several other banks with more conservative management and solid balance sheets, the deposits are still available to customers on the following Monday. Most of the lower paid employees get rehired by the new bank to man the branch banks that reopen. So, mostly the people that are left out are the idiots that got us here in the first place. The economy and taxpayer no longer need to prop up the underwater mortgages and CDO/CDS assets because most of them have been written down in one massive swipe called the bankruptcy court.

    The people who took the big risks, the bank executives, the shareholders and the bondholders, all get whacked! That sounds like justice to me! And the economy can drop anchor and cut the rope holding us back. With the overhang of bad assets off the books, banks can lend, the private sector can grow, and jobs can be created. That's how capitalism works!

    I'm sorry but I just don't buy into the bankster lies.
    Dec 19, 2009. 10:05 AM | 5 Likes Like |Link to Comment
  • Cramer's Stop Trading! Buy the Heck Out of Citigroup (12/17/09) [View article]
    I doubt that Cramer makes much in stocks if he follows his own advice. But he makes plenty from his show. All he needs to do is sock it away under the mattress and he'll be fine. He needs viewers and advertisers to make ends meet very nicely.

    As a matter of fact, he seems like a pretty good contrarian indicator.
    Dec 18, 2009. 10:57 PM | 10 Likes Like |Link to Comment
  • Will the Dollar Continue to Rally? [View article]
    Davewmart - Good points, especially about Europe's dependency on ME oil. Europe can ill afford a disruption at this point with their financial system seemingly more fragile than that of the US. Higher oil prices may be only the beginning of the outcome as the house of cards begins to tumble. Of course, I'm not sure if Iran has thought that far out because another protracted economic recession in Europe would not help oil prices. And if it spreads to other regions, we could see... well, I don't need to reiterate what has been said so many times by so many others.
    Dec 18, 2009. 10:36 PM | 4 Likes Like |Link to Comment