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Philip Mause  

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  • Will Trade Imbalances Cause Constant Financial Instability? [View article]
    I think that the Europeans are stuck in the same currency for the foreseeable future and this will preclude using exchange rate changes to bring trade into balance. In the long run, they need a Euro Treasury (perhaps taxing each country 1 or 2% of GDP0 which would acquire sovereign debt of member countries and issue Euro bonds and make money on the spread. The ECB would buy Euro bonds from the Euro Treasury to provide them with the funds to buy sovereign debt. They could use the revenue from the taxes and the spread to fund infrastructure projects and redistribute some wealth to the poorer countries (subject to various conditions - like a functioning tax system, privatization, etc.). The Euro Treasury could have a countercyclical mandate to borrow and spend during recessions and to cut back if inflation becomes a problem. This is really the only viable direction for them at this time.
    Jul 14, 2015. 11:54 AM | Likes Like |Link to Comment
  • The Value Opportunity In Low P/FFO REITs [View article]
    It looks like they sold some stock at a pretty low price which would be dilutive. Their problem is that the low P/FFO is probably due to their small size but that it is hard to grow because you don't want to issue more stock at these prices and there is a limit to leverage. They acquired the 75% of the hotel which they did not own which seems to make sense. I think that the best scenario here is that either 1. they use the huge cash flow from operations to gradually grow, or 2. they are acquired. It is also possible that they could enter into some kind of deal with an entity which owned 4 or 5 hotels which would push them up to a bigger size level.
    Jul 14, 2015. 11:50 AM | Likes Like |Link to Comment
  • The Value Opportunity In Low P/FFO REITs [View article]
    I agree that it is a starting point but I think that it is probably the best starting point (I feel that way about enterprise value/owner cash flow in the stock market as well). All sorts of factors can justify buying one REIT at a higher P/FFO than another. However, when the difference gets to be extreme, it opens up the possibilities for value investors. I have not been able to find anything which justifies the low P/FFO for LXP and SOHO's low P/FFO is too extreme to be the product of the capitalization of maintenance costs.
    Jul 14, 2015. 11:46 AM | 2 Likes Like |Link to Comment
  • The Value Opportunity In Low P/FFO REITs [View article]
    Thank you. Those are the two in the group which I prefer.
    Jul 14, 2015. 11:42 AM | 1 Like Like |Link to Comment
  • Will Trade Imbalances Cause Constant Financial Instability? [View article]
    The problem is that if you choose to have a central currency, then - to at least some degree - you must have central planning. The next few weeks or months will tell us if Greece is going to withdraw from the Euro and/or default. I sincerely hope something can be worked out but the real focus should be on getting the surplus countries to spend more money and get growth going again.
    Jul 12, 2015. 08:07 PM | 1 Like Like |Link to Comment
  • Will Trade Imbalances Cause Constant Financial Instability? [View article]
    This is the real solution to the EuroZone slump. There is a very limited benefit (if any benefit) to "reform" and austerity on the part of the debtor countries running trade deficits. The real solution is for Germany to stimulate its own economy and make the kind of investments in its future that you describe.
    Jul 12, 2015. 08:05 PM | Likes Like |Link to Comment
  • Will Trade Imbalances Cause Constant Financial Instability? [View article]
    I think that an export tax is unlikely but, for the Chinese, allowing their currency to appreciate in value would have a similar effect. For the Germans, they really have to stimulate domestic demand to bring things into balance.
    Jul 12, 2015. 09:37 AM | 1 Like Like |Link to Comment
  • The Futility Of Retirement Calculators [View article]
    I think that - once you get beyond a certain level - the best approach may be to adjust your expenses to available funds. You can spend very different amounts at different stages of retirement - traveling a lot in the early years, settling down in the "couch potato" phase, and then having to spend more on assisted living. You should monitor where you are with all assets periodically and be prepared to make adjustments in response.
    Jul 8, 2015. 07:30 PM | 6 Likes Like |Link to Comment
  • Greece Should Be Cut Some Slack [View article]
    If Germany were to revert to having its own currency, it would become very highly valued and make exports difficult leading to higher unemployment and dissatisfaction. The current arrangement works well for Germany.
    Jul 7, 2015. 11:29 AM | Likes Like |Link to Comment
  • Is HCP The REIT Buy Of The Year? [View article]
    Great article. I own HCP and may add to the position. It fits into my "buy on low P/FFO" rationale which also includes LXP, SOHO, HPT, and WPG. I think that any P/FFO below 12 deserves careful attention and, if nothing horrible is going on, should be bought. Of course, this approach also tends to focus on high dividend stocks.
    Jun 26, 2015. 11:45 AM | 1 Like Like |Link to Comment
  • Greece Should Be Cut Some Slack [View article]
    There certainly is a big difference between Prussians and Bavarians and between people from Milan vs. Sicilians. In the southern hemisphere, this same contrast seems to appear between people from the extreme South in Brazil - Rio Grande du Sul, Santa Catarina, Porto Allegre - and the North. But - in all of these examples - very different folks have used the same currency for a long time.
    Jun 24, 2015. 03:26 PM | 1 Like Like |Link to Comment
  • Greece Should Be Cut Some Slack [View article]
    I think I have provided evidence that geography is a key factor here. No matter how hard you work, it is impossible to compete if the exchange rate system is rigged against you.
    Jun 22, 2015. 09:03 PM | Likes Like |Link to Comment
  • Greece Should Be Cut Some Slack [View article]
    Austerity - as in government surpluses or lower deficits - makes it harder for the private sector to reduce its debt, which should be the ultimate objective on the path to stability.
    Jun 22, 2015. 09:02 PM | Likes Like |Link to Comment
  • Greece Should Be Cut Some Slack [View article]
    They probably have almost as much control of the continent as they had in 1942. But, if they want to hang on to it, they have to be willing to compromise and make some sacrifices.
    Jun 22, 2015. 09:00 PM | Likes Like |Link to Comment
  • Greece Should Be Cut Some Slack [View article]
    Germany really has to change. As I understand it, their prescription for the EuroZone is to have the zone as a whole run a trade surplus. This is part of the general philosophy that every country should run a trade surplus - a little bit like the notion that every student should be in the top 20% of the class. It simply doesn't work. The easy way to change is for Germany to cut taxes and encourage domestic spending and bring its trade into balance. The hard way to change is for Germany to dig its heels in, force other countries to leave the Euro and devalue, and have its trade come into balance due to competitive devaluation. The easy way is better for all concerned and also helps preserve the "concert of Europe."
    Jun 22, 2015. 01:35 PM | Likes Like |Link to Comment
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