Comments on Mijka Samora's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/mijka-samora/articles http://seekingalpha.com/article/81611-s-p-500-who-needs-a-hedge-fund?source=feed#comment-187054 187054 Tue, 17 Jun 2008 10:44:59 -0400 http://seekingalpha.com/article/81611-s-p-500-who-needs-a-hedge-fund?source=feed#comment-186898 186898 Tue, 17 Jun 2008 06:11:57 -0400 http://seekingalpha.com/article/77872-expecting-a-ppi-shock?source=feed#comment-170314 170314 Tue, 20 May 2008 00:45:03 -0400 http://seekingalpha.com/article/77872-expecting-a-ppi-shock?source=feed#comment-170205 170205 Mon, 19 May 2008 17:26:38 -0400 http://seekingalpha.com/article/77872-expecting-a-ppi-shock?source=feed#comment-170140 170140 Mon, 19 May 2008 14:52:58 -0400 http://seekingalpha.com/article/77872-expecting-a-ppi-shock?source=feed#comment-170124 170124 Mon, 19 May 2008 14:23:08 -0400 ]]> http://seekingalpha.com/article/77260-the-fed-s-secret-guests?source=feed#comment-168065 168065 Thu, 15 May 2008 10:51:05 -0400
www.federalreserve.gov...

Who owns the Federal Reserve?
The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.

As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as "independent within the government."

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

]]> http://seekingalpha.com/article/77260-the-fed-s-secret-guests?source=feed#comment-168032 168032 Thu, 15 May 2008 10:23:58 -0400
TakeBackTheFed.com

TakeBackTheFed.com

TakeBackTheFed.com]]> http://seekingalpha.com/article/77260-the-fed-s-secret-guests?source=feed#comment-167979 167979 Thu, 15 May 2008 09:27:30 -0400
Here's a research project for you: Find out which banks own the Fed and their respective shares. Then see if there is any "public" ownership interest. I think you'll find there is none. ]]> http://seekingalpha.com/article/77260-the-fed-s-secret-guests?source=feed#comment-167815 167815 Wed, 14 May 2008 23:32:33 -0400 http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-166952 166952 Tue, 13 May 2008 13:59:19 -0400 http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-165647 165647 Sun, 11 May 2008 00:37:22 -0400
The company I worked for was fortunately at the end of the list to be taken out so I had a job for eight years.

The post Sept. 2001 boom eventually overheated from factors that included very loose lending standards that allowed prices to continually be pushed up. That has ended.

In each area of the country home prices will have to fall to levels that are affordable for buyers who pass very strict and conservative lending criteria. Meanwhile, rising energy and food inflation is hampering consumers ability to pay down credit cards etc to meet higher standards, I would assume. Plus wages are not soaring 7 or l8 percent a year because the continual influx of illegal labor is depressing wages.
]]> http://seekingalpha.com/article/74446-is-the-fed-bankrupting-america?source=feed#comment-165615 165615 Sat, 10 May 2008 20:59:22 -0400 zeitgeistmovie.com to understand how deep this all goes. ]]> http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-165523 165523 Sat, 10 May 2008 14:31:48 -0400
I forgot the Sheriff of Nottingham is still alive and well and in competition for our own money.

]]> http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-165520 165520 Sat, 10 May 2008 14:25:54 -0400
If the planning departments allowed “granny flats” where possible, Mom and or Dad could easily allow one of the kids to take over the house by either selling or a multiple of other means including gifting and move into the newly built “in-laws” quarters built over the garage, on the side by the pool or wherever.

It seems that the change to allow more in-laws quarters solves a whole raft of problems such as less housing coming on the market, the added work of construction and the ability to have someone near an aging loved one.

But the big problem is that politicians and bureaucrats need to get going. That is a slow moving bus!

]]> http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-165114 165114 Fri, 09 May 2008 16:27:57 -0400
Suppose I'm in Chicago and want to move to Denver. I put my home on the market (that's 1 home in existing inventories). But I ask too much and it doesn't sell. And I won't buy a house in Denver until my Chicago home sells.

Jim lives in Denver and wants to move to Miami. He puts his house on the market (that's 2 homes in inventory). It's ideal for me, but I won't buy it because my house hasn't sold.

Sallie lives in Miami and wants to move to Chicago. She puts her home on the market (that's 3). It's ideal for Jim, but he's not biting because I haven't bought his house.

This situation creates an "existing inventory" of three houses for sale. Months of inventory looks even worse, because homes aren't being sold at a very fast pace.

But then I finally get realistic I finally get realistic about price and sell to Sallie. I buy Jim's house. Jim buy's Sallie's house. POOF! The "existing inventory" is gone - without any need for household formation...

Because of this, many people focus on the number of vacent houses. This number looks big (all time high, they say), until you realize that it's been on an uptrend for 40 years - and it really isn't that much more than it was 1, 2 and 5 years ago.

The builders are currently building at a rate much lower than household formation, whereas the problem was created when they built at a rate much higher than household formation. This will eventually work itself out - just like any commodity cycle.

The investment decision rests on just how long you think this will take...]]> http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-165053 165053 Fri, 09 May 2008 15:05:46 -0400 http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-164819 164819 Fri, 09 May 2008 10:47:04 -0400 Good jobs...Americans need to buy GOODS and services made and provided by Americans. Look on the bottom of your toaster. That's where the good jobs went.
Have a nice day...]]> http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-164596 164596 Fri, 09 May 2008 00:53:20 -0400 http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-164413 164413 Thu, 08 May 2008 17:25:46 -0400
And most glaring is the WSJ author's failure to either realize or acknowledge that his affordability argument fails to acknowledge that we are arguably in an affordability TROUGH. Mortgage rates may not get back up to the 18% of the 80's the author cites but they are unlikely to go lower any time soon. The author fails to mention that the '91 rate was better than 9%.

But doesn't that make his argument for him?

No, because what house owners want to see is rising LIQUIDITY in the housing market. And that's where the WSJ author's argument falls apart. Since the 80's the US market has not only seen a reduction in interest rates, but also a tremendous increase in total credit available for housing. Thus we have seen home ownership RATES in this country have increase dramatically since '94 and peak in 2004. The WSJ author fails to note that the '91 crash in real estate prices was in the middle of ten years where home ownership rate basically went sideways.

To speak to Vikram's point about household formation, the last time home ownership RATES peaked and fell like this was '80-'81 to '86-87.Banks are lending cheaply, yes, but it is unlikely they will lend more cheaply. During the last fall in home ownership rates, mortgage rates fell about 45% or eight thousand basis points - eight thousand.

Does anyone think we're going to see 3% mortgages? In 2002 the US mortgage security market surpassed the Treasury market in liquidity. Is anyone anticipating that kind of increase in securitization?

The problem is exactly household formation. You can call a two-percent drop in home ownership rates a loss of two million *owner-occupied* households. I would not expect landlords to offer a price subsidy for taking up that slack. If we need two million new landlords then housing prices have to get to a place where it is profitable to rent. ]]> http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-164346 164346 Thu, 08 May 2008 15:42:12 -0400
While argument is plentiful for the law of supply and demand to be the governing factor for pricing and valuation, one need not forget that it is financing itself (or FACT) that keys the pricing that directly affects and determines real estate supply and demand cycles.

Demand for desirable, affordable, and well priced real estate is a given. To measure or predict housing and real estate pricing/valuation trends use the FACT gauge.


]]> http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-164315 164315 Thu, 08 May 2008 14:51:54 -0400 http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-164213 164213 Thu, 08 May 2008 12:25:11 -0400 http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-164148 164148 Thu, 08 May 2008 11:02:32 -0400 Have a nice day...]]> http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-164106 164106 Thu, 08 May 2008 10:18:27 -0400
My first reaction as a housing bear was that the author thought he could talk the market into bottoming out. Won't happen.

Having said that, has anyone looked at the new housing and existing housing markets not just as markets that are correcting cyclically but as as a new price war? One reason builders PEs remained low during the boom was that investors anticipated this correction and weren't willing to overpay for companies that historically have gone through booms and busts like the one we're experiencing.

Why, then, have builders' stocks rallied this year? Fools rush in? Speculators and swing traders play the bounce? HIgher interest rates, tighter lending standards, poor consumer sentiment and rising unemployment will restart the housing boom at still very high and unaffordable prices? I never trade against the tape, but sometimes I refuse to go along.]]> http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-164096 164096 Thu, 08 May 2008 10:10:21 -0400
You have generated a solid threat of discussion. That's a good thing.

Even though comment threads have a general tendency to lean toward criticism more than toward praise, stimulating a critical discussion is better than writing articles that receive no comments at all.

Demographic trends are one of the most powerful drivers of long-term investment trends. You are on track by focusing on demographics as a force in the market.

I don’t have a view on whether the particular data you chose is the "right" data or if your conclusion would be modified by incorporating some of the additional factors mentioned by some of the commenters, but I do believe your intent to uncover the demographic underpinnings of the long-term housing market is a good idea.

In addition to housing, demographics will drive other key elements of our economy and the economies of other countries. One that may be of interest to someone out there is the likely portfolio allocation decisions of that growing 70+ cohort in terms of stocks versus bonds.

If they use traditional rules of thumb and heavily allocate to bonds, there may be noticeable interest rate consequences, or equity demand consequences. On the other hand other strong forces such as international investor behaviors, government deficit or surplus budget conditions, and the proportion of the population in an asset accumulation stage versus those in an asset consumption stage will be apply other forces. That area might be fertile ground for research.

Some high profile demographics are likely to drive economics in other parts of the work too. The excess of young males in China is an issue. The graying of Japan and Europe versus the slower graying of the US due to immigration rates is an issue.

The apparent fact that literacy is a driver in economic development, and the fact that literacy is very low in some countries may help predict where economic growth in the emerging world is more likely to be high and low.

The current and future shape of the population pyramids (which you are in effect describing in a different graphical format); can be useful in predicting consumption patterns for a number of goods and services.

As a baby-boomer myself, I have watched my cohort distort every thing it encountered. We were like the picture in Antoine de Saint Exupery's children's book "The Little Prince" of the snake that swallowed the elephant. We expanded demand beyond supply for each new private or public good or service appropriate for our then attained age. As we aged further, we left supply greater than demand for goods and services no longer of demand to us – the follow-on group was smaller in size than our own. That created real economic consequences and flux.

Anyway, I am happy to see dialog around demographics as an investment driver and hope that you and others will keep it going here and with other articles.

Richard Shaw
QVM Group LLC
]]> http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-164076 164076 Thu, 08 May 2008 09:53:02 -0400 http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-163866 163866 Thu, 08 May 2008 00:01:51 -0400 http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-163835 163835 Wed, 07 May 2008 23:00:24 -0400
For the article to be credible, the author should have compared the new household formation rate instead of selected demographics. A decline in home ownership rates does not mean a decline in housing demand. A lot of people rent their homes. The distribution between renters versus buyers which may change, not the overall demand for homes.

There is a misconception that as soon as boomers hit retirement age, they will sell their homes and go and live in a nursing home. Thanks the advances in health and technology many boomers are in no rush to quit their lifestyle. In fact there are many studies which suggest that the anticipated rush to the sun-belt by retiring boomers is over-hyped. People do not dump the community they have spent a life-time in just to enjoy warmer weather. Even if they decide to down-size and move to a smaller home, they are likely to buy another home in the same community.

When it comes to state of the housing market, new homes are a critical metric since they correspond to the additions to the housing stock; existing homes do not change the total number of homes. Further, unlike home owners, who in many cases are not in a rush to sell, home builders are much more likely to reduce prices to drive sales since an unsold home costs them a lot of money. Home owners continue to live in their home, while they wait for their home to sell; something which contributes to the stickiness of home prices in down-cycles. The downward pressure on home prices is primarily driven by sales by builders; home owners typically are the last to reduce their price. As a result if new home prices stabilize, existing home prices will follow quickly; existing home market lags the new home market by a few months, but it still follows it.

And finally the comment about Traxis' equity exposure to home builders and financials are irrelevant. Any smart money manager will be building a position in these cyclical sectors after they have been beaten down so much; they will recover as the economy moves out of the downturn.]]> http://seekingalpha.com/article/76109-the-wsj-is-wrong-on-the-housing-crisis?source=feed#comment-163632 163632 Wed, 07 May 2008 16:10:52 -0400 Mike, where do you get the charts?

Also, it appears that the age of materialism is largely over, thankfully, and that "Less" in the "new more."

Welcome to Century#21.

Time to some REAL crises ... like health care and energy. ]]>