Comments on Philip Gvinter's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/philip-gvinter/articles http://seekingalpha.com/article/120126-petroleum-inventory-data-show-an-interesting-trend?source=feed#comment-387026 387026 I think the refiners have more control on the inflow of crude to > their refineries, whereas the raw crude producers have a greater > difficulty in shutting down production. Think about it, is it easier > to prevent delivery of crude to your refinery or is it easier to > shut down an ocean rig or a derek in Alaska. Oil production is > a much more difficult engineering process. I doubt refiners are > more adoit at identifing market demand than producers, refiners just > have greater flexibility in controling the process.]]> Fri, 13 Feb 2009 10:10:41 -0500

On Feb 12 09:29 AM Jebeatsfish wrote:

> I think the refiners have more control on the inflow of crude to
> their refineries, whereas the raw crude producers have a greater
> difficulty in shutting down production. Think about it, is it easier
> to prevent delivery of crude to your refinery or is it easier to
> shut down an ocean rig or a derek in Alaska. Oil production is
> a much more difficult engineering process. I doubt refiners are
> more adoit at identifing market demand than producers, refiners just
> have greater flexibility in controling the process.]]> http://seekingalpha.com/article/120126-petroleum-inventory-data-show-an-interesting-trend?source=feed#comment-385395 385395 Thu, 12 Feb 2009 09:29:17 -0500 http://seekingalpha.com/article/120126-petroleum-inventory-data-show-an-interesting-trend?source=feed#comment-385278 385278 Thu, 12 Feb 2009 08:38:14 -0500 http://seekingalpha.com/article/109613-are-we-seeing-housing-market-manipulation?source=feed#comment-324441 324441 Tue, 09 Dec 2008 07:53:15 -0500 http://seekingalpha.com/article/109613-are-we-seeing-housing-market-manipulation?source=feed#comment-324074 324074 "Prices must absolutely correct back to where median income can support > median price." This would come as quite a shock to metro areas of > California, where price/income > 5 for decades while most of country > is 3 to 4. How can this be supported? I suspect that most "owners" > make minimal payments and are thus little more than a peculiar type > of renter with rights to a capital gain (or default) when they roll > over into another house priced with a gain built in.]]> Mon, 08 Dec 2008 15:24:43 -0500

On Dec 08 12:58 PM nym wrote:

> "Prices must absolutely correct back to where median income can support
> median price." This would come as quite a shock to metro areas of
> California, where price/income > 5 for decades while most of country
> is 3 to 4. How can this be supported? I suspect that most "owners"
> make minimal payments and are thus little more than a peculiar type
> of renter with rights to a capital gain (or default) when they roll
> over into another house priced with a gain built in.]]> http://seekingalpha.com/article/109613-are-we-seeing-housing-market-manipulation?source=feed#comment-323943 323943 5 for decades while most of country is 3 to 4. How can this be supported? I suspect that most "owners" make minimal payments and are thus little more than a peculiar type of renter with rights to a capital gain (or default) when they roll over into another house priced with a gain built in.]]> Mon, 08 Dec 2008 12:58:59 -0500 5 for decades while most of country is 3 to 4. How can this be supported? I suspect that most "owners" make minimal payments and are thus little more than a peculiar type of renter with rights to a capital gain (or default) when they roll over into another house priced with a gain built in.]]> http://seekingalpha.com/article/109613-are-we-seeing-housing-market-manipulation?source=feed#comment-323915 323915 Mon, 08 Dec 2008 12:36:22 -0500 http://seekingalpha.com/article/109613-are-we-seeing-housing-market-manipulation?source=feed#comment-323893 323893 Mon, 08 Dec 2008 12:20:12 -0500 http://seekingalpha.com/article/109613-are-we-seeing-housing-market-manipulation?source=feed#comment-323891 323891 Mon, 08 Dec 2008 12:19:49 -0500
The majority of people in a position to buy are first-time home owners. And how many of them have down payment money or outstanding credit scores? How much of a dent would they really make?

No the real answer is market forces: foreclosures, a MAJOR correction in real estate values and a long, slow recovery period. Given the recessionary economy and increasing unemployment, the chance we'll see a recovery in real estate before 2010 seems slim to none.]]> http://seekingalpha.com/article/109613-are-we-seeing-housing-market-manipulation?source=feed#comment-323827 323827 Mon, 08 Dec 2008 11:33:06 -0500
The assumption about the merit of supporting current house prices has an analogy in education. The price of college tuition has risen to the point that students and their families cant afford to purchase an education. There is no moral or economic justification for current tuition costs and efforts to maintain them should not be made.

The market should set prices, not Henry Paulson. ]]> http://seekingalpha.com/article/109613-are-we-seeing-housing-market-manipulation?source=feed#comment-323758 323758 The issue: Foreclosures and high inventory, which are bringing down > everyone's home values. > > Solution: Get rid of them > > How? 4% 30-yr rates will clear this inventory out LIKE NO OTHER. > > > Then: Once they're mostly flushed from the system inventory levels > as a number and as of composition (not majority bank owned) will > get things to normal]]> Mon, 08 Dec 2008 10:29:05 -0500

On Dec 08 09:54 AM sickofthehype wrote:

> The issue: Foreclosures and high inventory, which are bringing down
> everyone's home values.
>
> Solution: Get rid of them
>
> How? 4% 30-yr rates will clear this inventory out LIKE NO OTHER.

>
>
> Then: Once they're mostly flushed from the system inventory levels
> as a number and as of composition (not majority bank owned) will
> get things to normal]]> http://seekingalpha.com/article/109613-are-we-seeing-housing-market-manipulation?source=feed#comment-323704 323704 Mon, 08 Dec 2008 09:54:04 -0500
Solution: Get rid of them

How? 4% 30-yr rates will clear this inventory out LIKE NO OTHER.

Then: Once they're mostly flushed from the system inventory levels as a number and as of composition (not majority bank owned) will get things to normal]]> http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-323397 323397 Sun, 07 Dec 2008 21:33:44 -0500
From en.wikipedia.org/wiki/...)

Deflation in economics is a persistent decrease in the general price level[1] of goods and services - a negative inflation rate. When the inflation rate slows down (decreases, but remains positive), this is known as disinflation.
Inflation destroys real value in money. Deflation creates real value in money. Alternatively, the term deflation was used by the classical economists to refer to a decrease in the money supply and credit; some economists, including many Austrian school economists, still use the word in this sense. The two meanings are closely related, since a decrease in the money supply is likely to cause a decrease in the price level.

From www.investopedia.com/t...

A general decline in prices, often caused by a reduction in the supply of money or credit. Deflation can be caused also by a decrease in government, personal or investment spending. The opposite of inflation, deflation has the side effect of increased unemployment since there is a lower level of demand in the economy, which can lead to an economic depression.

Declining prices, if they persist, generally create a vicious spiral of negatives such as falling profits, closing factories, shrinking employment and incomes, and increasing defaults on loans by companies and individuals. To counter deflation, the Federal Reserve (the Fed) can use monetary policy to increase the money supply and deliberately induce rising prices, causing inflation. Rising prices provide an essential lubricant for any sustained recovery because businesses increase profits and take some of the depressive pressures off wages and debtors of every kind.


That certainly seems to make my point of a combination of reduction of prices as well as reductions in M3 (www.shadowstats.com/al... (2nd chart) seem to mean deflation. I also still stand behind the point that the true aggregate amount of money rotating through our economy is no longer accurately reflected by M3 as M3 does not include significant funding sources which fluctuate and have significant equally effects on the availability of capital for non government purposes.



]]> http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-323361 323361 Sun, 07 Dec 2008 20:01:24 -0500 http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-323349 323349 Sun, 07 Dec 2008 19:32:41 -0500 http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-323329 323329 I would appreciate actual constructive criticism of the points made > rather than a blanket rejection with absolutely no alternative point. > It is this kind of behavior that takes value away from a forum such > as seeking alpha. My point is that the money supply statistics no > longer accurately represent real amount of money available in either > the US economy. The increased use of securitization and the variable > reserve requirements imposed on lending institutions which are effected > as much by the ratings of assets held as by deposit volume has taken > many of the actual sources of money out of the transactions which > compose the data points used for calculating real money supply. I > am very interested in hearing a counter point to this contention > but do not think that simply saying "you don't know what you are > talking about" and putting previously posted information in quotation > marks suffices to offer a counterpoint.]]> Sun, 07 Dec 2008 18:44:18 -0500

On Dec 07 05:17 PM pgvinter wrote:

> I would appreciate actual constructive criticism of the points made
> rather than a blanket rejection with absolutely no alternative point.
> It is this kind of behavior that takes value away from a forum such
> as seeking alpha. My point is that the money supply statistics no
> longer accurately represent real amount of money available in either
> the US economy. The increased use of securitization and the variable
> reserve requirements imposed on lending institutions which are effected
> as much by the ratings of assets held as by deposit volume has taken
> many of the actual sources of money out of the transactions which
> compose the data points used for calculating real money supply. I
> am very interested in hearing a counter point to this contention
> but do not think that simply saying "you don't know what you are
> talking about" and putting previously posted information in quotation
> marks suffices to offer a counterpoint.]]> http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-323292 323292 Sun, 07 Dec 2008 17:17:08 -0500 http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-323283 323283 I believe that it would be rude to suggest that my disagreement with > the calculations of money supply inherently imply a lack of understanding > of the term money supply. Money supply is a statistical measure meant > to show the total amount of money circulating in the economy. I feel > that the statistics can be misleading because there exists a tremendous > amount of discretion in determining how any securitized debt plays > into the formulas. Combined with variable reserve requirements placed > on financial institutions who hold securitized debt bought with borrowed > funds and reserved against with customer deposits can skew the real > amount of money flowing through the economy. In short I feel that > real money supply is an extremely important component of the economy > but that the current methods used for calculating it are highly flawed > and extremely inaccurate.]]> Sun, 07 Dec 2008 16:53:13 -0500

On Dec 07 12:29 PM pgvinter wrote:

> I believe that it would be rude to suggest that my disagreement with
> the calculations of money supply inherently imply a lack of understanding
> of the term money supply. Money supply is a statistical measure meant
> to show the total amount of money circulating in the economy. I feel
> that the statistics can be misleading because there exists a tremendous
> amount of discretion in determining how any securitized debt plays
> into the formulas. Combined with variable reserve requirements placed
> on financial institutions who hold securitized debt bought with borrowed
> funds and reserved against with customer deposits can skew the real
> amount of money flowing through the economy. In short I feel that
> real money supply is an extremely important component of the economy
> but that the current methods used for calculating it are highly flawed
> and extremely inaccurate.]]> http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-323252 323252 Sun, 07 Dec 2008 15:56:25 -0500
www.shadowstats.com/

You can see a sharp drop in M3, but it is still well above reasonable expectations of deflation...it's around 7% annual growth right now. Admittedly, I'm not sure how the last couple months have treated the aggregate, but there is still enough slack to keep from worrying just yet.

At some point when asset prices cease crumbling, money velocity should pick up and then we'll be left with an excess money creation issue. I fully doubt central banks will be capable of absorbing excess liquidity.
]]> http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-323057 323057 Sun, 07 Dec 2008 12:29:20 -0500 http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-322968 322968 Sun, 07 Dec 2008 11:18:39 -0500
It is clear, however, that modern governments have learned to live happily with inflation because inflation makes payment of debt easier.

Most of the governments who were involved with World War I didn't want war OR inflation but they got both.

What governments want and what they are forced to live with are clearly two different things.

Inflationary and deflationary forces are at war with each in the contemporary world and it isn't clear which will dominate. What seems clear is that once either one predominates over the other, it will tend to perpetuate itself.

Since there are enormous investment consequences, the inflation/deflation debate will be heated and distorted by self-interest.]]> http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-322956 322956 Sun, 07 Dec 2008 11:03:17 -0500

Assume the USD is "gold" and all other currencies are backed by it... Now look at the economic indicators and see how much sense they make.

]]> http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-322951 322951 Sun, 07 Dec 2008 10:57:53 -0500 You have done your readers a great disservice by allowing such meaningless gibberish to be presented as thoughtful and reasoned commentary. Why oh why do people insist on writing about something that they know nothing about???
Would it be rude to suggest that it is clear that Mr. Gvinter has no idea what the term money supply means.]]> http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-322943 322943 Sun, 07 Dec 2008 10:49:39 -0500 http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-322897 322897 Sun, 07 Dec 2008 10:02:54 -0500 http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-322852 322852 Sun, 07 Dec 2008 09:25:48 -0500
So it costs only $30 to fill my tank now instead of $60, and I can get a sweet deal on that flat-screen TV at Best Buy. Big friggin deal. I still have all those other crushing monthly bills to pay, so will have to pass on the TV and will continue to drive as little as possible. Until economists start addressing the true costs of living, arguments such as the one posited here remain hollow and irrelevant IMO.]]> http://seekingalpha.com/article/108955-a-100-year-bond-the-ultimate-money-printing-device?source=feed#comment-322843 322843 Sun, 07 Dec 2008 09:17:03 -0500 Treasury is being advised to issue extremely long term debt at insanely low rates. It would make some sense for investors back in 1996 to want to purchase IBM yield with a yield of 7.22% it makes absolutely no sense to purchase long maturity treasury debt at historically low yields. ]]> http://seekingalpha.com/article/108955-a-100-year-bond-the-ultimate-money-printing-device?source=feed#comment-322844 322844 Sun, 07 Dec 2008 09:17:03 -0500 Treasury is being advised to issue extremely long term debt at insanely low rates. It would make some sense for investors back in 1996 to want to purchase IBM yield with a yield of 7.22% it makes absolutely no sense to purchase long maturity treasury debt at historically low yields. ]]> http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-322826 322826 Sun, 07 Dec 2008 09:05:58 -0500
Actually this comment is syntactically & semantically intact but in the inverse further supports his argument ; the point is NOT that bond prices are high , rather that bond yields which track the inflation rate are asymptotically approaching ZERO ...... deflation !

]]> http://seekingalpha.com/article/109517-defining-deflation?source=feed#comment-322771 322771 Sun, 07 Dec 2008 08:00:38 -0500
Not Phillip- he sees deflation clear and simple because credit is tight. Tight credit means deflation never mind all the central bank massive printing, bailing, stimulating and much more. I think Phillip has contributed an important insight here.]]>