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  • Why Nokia Falls in China but Apple Soars [View article]
    But supposing the next generation of Nokia phones are glitzier than the iPhone?
    Jul 26 12:27 PM | Likes Like |Link to Comment
  • Here's What to Do About the Debt Ceiling [View article]
    Excellent article, and it is good to hear this coming from someone with a distinguished resume and considerable credibility.

    It is interesting that so far the markets have not panicked, but it is entirely possible that if the Administration does not play an adult role and step in to stop this nonsense, then we may indeed end up with a constitutional crisis as the country descends into the anarchy that some extremists seem to want. Then, I think, you will see the markets responding all right.
    Jul 26 12:23 PM | Likes Like |Link to Comment
  • $2 Trillion Tuesday: Still No Deal [View article]
    In 2002 Obama made a speech against the Iraq war, before it even started, pointing out that it would cost the country unlimited funds and would last for an unknown duration.

    Where were the Tea Party back in 2002? Why did they not acclaim his as a visionary and make him their leader? Well, obviously they didn´t exist at the time.

    When Clinton dismounted, the deficit was on the way out. The simpleton President Bush the Younger blew our heritage with his two insane wars and his supposedly temporary tax cuts, and for his final coup de grace managed to collapse the whole housing and mortgage industry which had been deteriorating for 8 years on his watch while he fell off the sofa while watching sports on TV with his Nubian concubine whom, like Nero making his horse a general, he had appointed to advise him on National Security.

    Now how the hell do we reverse engineer this fiasco? One way is to elect a Know Nothing anarchist party to power so that we can end two hundred years of progress and import consultants from Somalia to tell us how to get by without a government. Nice plan, but it all depends on the quality of the warlords you get.

    Or we can end the foreign wars, reverse the tax cuts, cut back on warmongering in general, make swords into ploughshares, tighten our belts all around, and try to perpetuate the American Revolution and avoid another Civil War.

    I just hope all this does not end badly with an assassination or something like that, because if it does, all hell may break loose.
    Jul 26 12:08 PM | 10 Likes Like |Link to Comment
  • Peabody Energy's Conference Call Suggests That Coal Prices Will Be Stronger for Longer [View article]
    Excellent article and analysis. I want to see more articles of this quality. I just hope that not too many other people see it before I have finished loading up on the black stuff.

    Long BTU, ANR, RIO.
    Jul 26 11:18 AM | 4 Likes Like |Link to Comment
  • Why Amazon.com Is Significantly Overvalued [View article]
    Yes, this seems like a good idea too, although I think that computer programs can work out different tax rates, based on delivery address.

    But even if they just collected one average rate for each state and left out the different local taxes, it could be left to the states receiving the revenue to distribute it to local jurisdictions as they wished.

    But, then again, how does Tiger Direct deduct its Florida sales taxes? Maybe they have technology they can sell to Amazon?
    Jul 26 08:54 AM | Likes Like |Link to Comment
  • Why Nokia Falls in China but Apple Soars [View article]
    Perhaps the Chinese just want to be patriotic and buy a product (Apple) that is made in China.

    “As one female Chinese millionaire told me, “I used to be a loyal Nokia customer, but everyone has one now, even my maid. I don’t buy their phones anymore.” “

    So wait a minute. There are more millionaires than maids, so that is where the money is? If Nokia is getting $4 from Apple in royalties for every iPhone sold, then how much can Nokia make from selling phones to maids?

    Probably what Nokia needs to do is to launch a line of phones called Billionaire Bitch and market it to aspiring maids.
    Jul 26 08:47 AM | 2 Likes Like |Link to Comment
  • The Debt Limit Will Be Raised [View article]
    ¨I really wonder if budget cuts will 'slow down the economy' in a material way. A handful of corp's will have reduced revenue, effecting employment in those sectors/industries.¨

    That is a very bold statement.

    In the small city where I live 400 jobs were recently cut at a state facility. That means about $20 million less flowing into the local economy, affecting all kinds of businesses like stores and automobile repair shops, gas stations, banks, churches, landlords, rentals, making homes even more difficult to sell, increasing the likelihood of mortgage defaults and bankruptcies, leading to write downs for money already spent and reducing property tax collections, and thus creating additional job losses over several sectors, simply because the $20 million is not there to be circulated.

    Every cut in government spending will surely lead to loss of velocity in money in the affected communities. Why is this not so in your view?
    Jul 26 08:29 AM | 2 Likes Like |Link to Comment
  • Why Amazon.com Is Significantly Overvalued [View article]
    Yes, the tax issue is interesting. Bret, Tiger Direct is an electronics mail order and Internet outfit based in your part of the world (Miami). They add Florida sales tax (voluntarily?) to in-state purchases. It would be interesting to know how this affects their business, if such information is publicly available, and whether such a pattern would form a template for Amazon, should more states insist on tax collection.

    I really don´t see why Congress doesn´t pass an Act that would make it obligatory for all mail order and Internet businesses to deduct state and local taxes for the address the product is being sent to. Even Amazon already does this in places like Canada and the UK and I am not hearing about them suing governments in those places.

    Such a law seems like a no-brainer. Probably that explains why Congress has not enacted it.
    Jul 26 08:15 AM | Likes Like |Link to Comment
  • The Debt Limit Will Be Raised [View article]
    ´´A quick glance at the bond market, where 10-yr Treasuries are trading at 3%, is enough to know that the market is not at all concerned about the possibility that the US might actually default on its debt obligations.´´

    However, the market could just be dead wrong, although perhaps the author is suggesting that behind the scenes in-the-know politicians are telling bankers that the anarchists are all a charade. Let´s hope that is the case.
    Jul 25 06:58 PM | Likes Like |Link to Comment
  • Nokia: The Story's Not Written Yet [View article]
    You can sell the NOK $7.50 January 13 puts and buy 3 NOK $7.50 January 13 calls with the proceeds.

    If the stock hits $10 in January 13, then you would make 100% return on capital at risk in 18 months. If it goes higher, then more. Your maximum loss would be $100% if the company goes tits up, but given that it has as terrific patent portfolio and is getting about $4 for every iPhone sold, I can´t see it.

    I think the odds of making a 100% or more return are much better than than the odds of making a 100% loss, so game theory would suggest that it is worth a punt.
    Jul 25 11:46 AM | 1 Like Like |Link to Comment
  • Nokia: The Story's Not Written Yet [View article]
    I did very well with BP and had the good luck to pick the bottom. I think there is a good chance that Nokia may provide outsize returns over the next couple of years, but I would not bet the farm on it.

    The dividend is only paid annually, and cannot be considered to be safe at this point, but if the Windows phone takes off in the fall, then one assumes the dividend will be paid and the stock will go up to, providing a nice reward in the future.
    Jul 25 11:23 AM | Likes Like |Link to Comment
  • Positioning Investments for a Debt Ceiling Decision [View article]
    I don´t want to exaggerate, and in some ways the Dominican Republic is a better place to live than the US and in certain respects there is more freedom for individuals, though possibly not if the individual is a corporation.

    On the Happy Planet Index the Dominican Republic ranks ·14 in the world and the USA number 150 in spite of the USA being number one in consumption of antidepressants.

    en.wikipedia.org/wiki/...

    However, what I am saying is that if the population of the US really wants a radically different kind of society, it needs to know what it is getting into and what the dichotomies might be.

    For example, is it better to have guys selling bootleg Viagra or other prescription drugs on the street corners than to have food stamps? Do you mind if people convert their automobile, in which they sleep, into a mobile shoe store in the parking lot of the mall or in front of the court house rather than have unemployment benefit?

    You could well argue that at least they are supporting themselves and not bothering the government, and if that is the greater good, then so be it.

    Would it be OK for people to get private health and dental insurance in other countries that border on the US, and would employers facilitate this?
    Jul 24 10:45 PM | Likes Like |Link to Comment
  • Positioning Investments for a Debt Ceiling Decision [View article]
    At the time of writing I am here in the Dominican Republic, where there is no welfare, food stamps, unemployment benefit, or anything of that kind. There are some free or subsidized health programs.

    It is common to see Haitian women here in the street with a small bowl containing mangos and avocados that they have probably picked from someone´s yard, and are selling for less than a dollar.

    If you are traveling on a bus, at each stop it is very likely that vendors will jump on board selling home made snacks, desserts, or fruits.

    It is almost universal that young mothers will accept money for sex, or that they have Western Union boyfriends (sometimes several) who send them remittances to buy baby formula, etc.

    As many as 40% of homes have illegal electrical hookups for which they are paying nothing to the power companies. If they are disconnected, they soon find electricity company employees willing to fix them up for a small fee.

    One of the most common forms of transportation is the publico taxi, which is usually a Toyota Corolla carrying four adults in the front, plus TWO adult passengers in the front seat, and, of course the driver. If you go on a bus, you may have to share a seat with a chicken or a sack of avocados.

    Any decent apartment building has an armed guard who sits outside all night with a shotgun in his lap. The same for any large homes or homes in the country, where armed robberies and home invasions are common. One guy I knew had FIVE home invasion robberies, before he sold his house.

    If a burglar is shot by a security guard and the police are called, they will typically further beat the robber, and only call for medical assistance as an afterthought. The householder will have to pay for the police to attend, including their taxi fares.

    Thieves are often beaten to death by vigilante mobs, or killed by the police to save paper work.

    Is this the future for the US as envisaged by the Republican Party-Tea Party coalition? It sure looks that way.

    There is nothing wrong with this per se, if it is really what people want, but surely voters ought to have a chance to decide and weight their options.
    Jul 24 09:23 PM | 3 Likes Like |Link to Comment
  • Positioning Investments for a Debt Ceiling Decision [View article]
    If there are to be large scale cuts, then military spending needs to be a large part of it.

    People may not join the military to get rich, but they get subsidized housing, health care and education and often walk into various kinds of government jobs with a veterans preference after they leave the military with a pension.

    The US spends an incredible amount compared to the rest of the world on so-called defense and could easily cut by 50% without putting the territorial integrity of the US at any risk.

    These points are rarely discussed, but now that the T party has raised the basic idea of disbanding government as we know it, military spending really is the elephant in the room.

    We really need to have a general election to debate these issues on a much wider scale. Now is not the time and place.
    Jul 24 08:47 PM | 1 Like Like |Link to Comment
  • President Obama says House Speaker Boehner has decided to walk away from debt limit negotiations. Earlier today, Boehner had suggested talks would continue.  [View news story]
    ´´Do you seriously believe Al Gore has all those SS withholdings in a lock box buried somewhere on the grounds of his Tennessee estate?´´

    I never understood the lockbox thing. Down here in Florida a lockbox is a thing that real estate sales people attach to the front door of a house that is like a kind of padlock with a little box that contains the key that gives access to the house. I think Gore just meant that SS funds should be maintained in a different bank account with a different accounting system and should not be fungible with general funds.

    He might just have lost that election here in Florida, because no one knew what he was talking about.

    I´m not sure that anyone younger than baby boomers is guaranteed a loss of capital on SS contributions. As far as I know the equation to calculate SS returns has not yet been changed, and depends on factors like how much you were earning and, of course, how long you live.

    One calculator I looked at suggested that someone born around 1980 and earning about $40000 per year would get a return equivalent to about 2% or a shade more.
    Jul 24 04:40 PM | Likes Like |Link to Comment
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