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  • Not a Short Covering Rally [View article]
    I agree with some of this, but not with the conclusions. It seems that the business climate is very favorable for large companies with international markets, but that they don´t need to increase their US workforce to increase profits.

    The question that baffles me is this. There are tens of thousands of Americans who can make a better hamburger than McDonalds or a better pizza than Dominos, so why are they not setting up in business for themselves to compete with a better product and a better service. If I was a young American, this is what I would want to do.

    Where are the neighborhood hamburger joints with ambitions to expand to become worldwide franchises?

    I think that if you looked at this issue, you would find that there were many more barriers to entry,, even or such a simple business, than one would think, but these things that are barriers to high school or community college graduates are not barriers for corporations that have attorneys, staff trainers, and quality compliance experts already on staff.

    However, I do see a lot of Mexicans and Hispanics running small businesses to serve their own community, and I patronize their businesses, but the snag for mainstreaming these businesses is that I speak Spanish and it is a matter of complete indifference to me whether I speak to people in English or Spanish, but for most customers that is not the case.

    To tell the truth I prefer to deal with Hispanic businesses, because I find that they are keen to expand their markets and are generally more honest and value for money than US gringo businesses that are full of tricks.

    For example I would NEVER take my car to a repair shop run by a born American, because they subscribe to trade magazines full of hints on how to cheat customers, for example charging a large fee for diagnosing a problem that is quite obvious from the get go, like changing a slipping belt. The MUSLIM guy I have taken my car to for 15 years is 100 per cent reliable. I just tell him to do what he thinks is necessary and tell me how much, no questions. And I know the bill will not be stuffed with pork!
    Jul 9, 2011. 01:00 PM | 1 Like Like |Link to Comment
  • What the VIX Is Telling Investors [View article]
    One of the best recent articles on SA.

    @Convo. Making money is definitely good, and there are almost inumerable strategies available. Right now I am short OTM AAPL put spreads in the expectation that the stock will continue to run up into earnings for the next few days, intending to close position before earnings and possibly sell OTM call spreads after earnings.

    By selling call spreads on VXX you are essentially short VIX or long the market. By setting a baited line and selling onto spikes, you are juicing the potential of the transaction, but the biggest danger is that sudden negative news (say a political assassination) drives the VIX quickly upwards outside the limits of your spread.

    The question is really whether the risk to reward of this particular trade offers gains greater than can be had elsehwhere for less or the same risk. Why not sell bull put spreads too at times of antispikes and make it into an iron condor? I t seems to me that the VIX can only revert to a level when fear subsides, and has little potential to spike sharply downwards.

    Or when volatility spikes does this have an inverse effect on the price of VXX puts so that more expensive SP500 puts cause cheaper VXX puts?
    Jul 9, 2011. 10:50 AM | Likes Like |Link to Comment
  • The Black Hole of Financialization: Zero-Sum Profits vs. Beneficial Wealth Creation [View article]
    Seems to be true. As it happens I am reading The Decline and Fall of the Roman Empire right now and there are many parellels to the US today. If GW Bush had been a great reader before he became president rather than during, he might have avoided extending his empire´s resourcers in fighting pointless overseas wars.

    Incidentally, with all this deficit talk, it is interesting that there is relatively little said about reducing the bloated Legions that account for so much expenditure.
    Jul 8, 2011. 07:09 PM | 1 Like Like |Link to Comment
  • America the Jobless Ghost Ship Sails Onward [View article]
    Quote

    And it will only begin when the dollar nosedives and peope take to the streets demanding a total restructuring of our govt system.

    Unquote

    Indeed, sir. It may not be long before CNN is setting up a camera post on the Mall in Washington DC where pro democracy citizens are protesting in front of the cameras with signs written in Chinese pleading for help.
    Jul 8, 2011. 04:58 PM | 2 Likes Like |Link to Comment
  • The Black Hole of Financialization: Zero-Sum Profits vs. Beneficial Wealth Creation [View article]
    My understanding is that credit default swaps are actually insurance, only by another name to avoid regulation. Compare this to women offering something called body rubs to avoid being regulated by the state board of licensed massage therapists. I would assume that now the game has been exposed no sophisticated investor would get sucked into CDS without knowing that the game is rigged. Perhaps there are some tribal chiefs with teepees on oilfields somewhere who have not heard about VDS yet.
    Jul 8, 2011. 04:26 PM | Likes Like |Link to Comment
  • The Black Hole of Financialization: Zero-Sum Profits vs. Beneficial Wealth Creation [View article]
    “When Goldman wins on a trade, someone else loses the same amount. “

    But is this right? Does the difference between the capital value of Apple when the shares were first issued and its value now represent money lost by other corporations?

    If I eat a hamburger, does that count as a hamburger not eaten by you?

    If your theory is right, then there is no such thing as investment, only gambling.

    I agree that people in the US are removed from the real economy. I thought this spilled over into the Casey Anthony case, where the jury seemed to be obsessed with an abstract idea of reasonable doubt, without wanting to explain in concrete terms what their doubts were and why they were reasonable. They just could have said “we didn´t believe a word of the evidence about the chloroform“ and left it at that, but actually it sounded like after hearing the evidence they did believe that she was guilty, but they were divorced from their own feelings.

    So goes it with the economy. I am here in the Dominican Republic for the summer where people really do live hand to mouth without any safety blankets provided by the government. Any third world country can stand as a model of what US conservatives want to achieve. Is this good or bad, I don´t know. But once they give us our economic freedom, all the restrictive practices like zoning will have to go, because people will be fighting for basic survival.
    Jul 8, 2011. 03:58 PM | 3 Likes Like |Link to Comment
  • Why Android Tablets Are No iPad Killers [View article]
    Yes, I am sure this is true, but without saying what the apps are and why you find them essential, you don´t convey much information. Are there apps that make it possible to do things with an iPad that you cant do with a netbook. I had an Android pad and there were thousands of apps, but most of them not particularly useful or just bog standard things like pdf readers or file organizers.

    Sorry about lack of punctuation. Am using Spanish keyboard with certain characters hard to access.
    Jul 8, 2011. 02:07 PM | 2 Likes Like |Link to Comment
  • Why Android Tablets Are No iPad Killers [View article]
    I agree, and another factor to take into consideration is that a Netbook like the Toshiba that I am using to write this message via hotel room wifi is a very viable alternative to an Android pad, that can be used as a music player, video player, Skype communicator, etc. etc. AT A VERY FAVORABLE PRICE POINT compared to an Android pad. You dont need apps either, because you can run full web sites, java etc. for example Internet radio. If you can´t type on the keyboard that I am using for this, you can add a USB lightweight keyboard from Walmart for $10 and you have most of the features of a desktop at your disposal.

    I had this little device with me in Haiti after the earthquake and was able to use it to record interviews and rescue scenes and to assist residents to call families overseas via Skype, store photographs, write emails etc, and you can buy one now for under $300.
    Jul 8, 2011. 10:58 AM | 2 Likes Like |Link to Comment
  • Mongolia: An Economic Boom Investment Guide [View article]
    Nice article. There was a feature about the expected expansion and growth in the Monglian economy this morning on Aljazeera TV. Nothing special, but interesting pictures.
    Jul 6, 2011. 09:13 AM | 3 Likes Like |Link to Comment
  • Monday Madness - Greece Is a Drop in the Bucket Compared With Us [View article]
    OK, basically your problem is that you don't like democracy, so will you agree not to use public highways, or to use the US dollar as currency, ot to use any medicines or vaccinations for your family that may have been developed with public funds, or to seek a passport for foreign travel? Would you like to disband the US army?

    No, of course not, you want taxes to be collected and used to pay for things that you want and not for things that you don't want. You want to pay less taxes so that you have more money for yourself. Your motives are purely selfish and not driven by any kind of idealism that serves your fellow man as a whole.

    I sympathize with your sister and brother in law. Probably they can do a better job of caring for their handicapped son without the help of government psychologists, day care, etc. but what about all the people with mental handicaps and disabilities who don't have such caring families, or whose families are themselves impaired or disabled in some way? And what about all the people, some of them motivated by religion who have chosen careers caring for the disabled? Are their lives and careers not valid?
    Jul 5, 2011. 08:56 AM | 1 Like Like |Link to Comment
  • The median pay for top execs at 200 big firms jumped 23% in 2010 to $10.8M, in line with net profit increases. The median gain in shareholders’ total return was far lower at 16%, while the salary of the average American worker in late 2010 was just 0.5% higher than a year earlier - representing a fall in real terms.  [View news story]
    As I recall there was one period of about 50 years when a very high proportion of emperors died in office due to a high incidence of backstabbing, but there were also periods under certain emperors like Trajan and the Antonines when there was relative tranquillity for long periods. The legions didn't leave Britain until 383 a.d.
    Jul 4, 2011. 12:11 PM | 1 Like Like |Link to Comment
  • Monday Madness - Greece Is a Drop in the Bucket Compared With Us [View article]
    Yes, but the teaching of Christianity includes the concept that all men are brothers, and the teachings of Jesus, such as the parable of the Good Samaritan strongly support this concept.

    I would imagine the ideal would be for the parents of a handicapped child to do whatever they can with the support of the whole community if and as needed.

    I am here in the Dominican Republic as I write, and there is no welfare or unemployment here, but on the other hand you have people who are mentally handicapped working as unpaid labor in family business, disabled people begging in the streets, and many single mothers supporting their children by prostitution.

    I guess you would say this is good, because they all maintain their independence, but I think there has to be some kind of equilibrium to maintain a balance between independence and state interference and to prevent the complete breakdown of orderly society. We see often enough on TV via the Middle East how quickly a seemingly orderly nation can break down into complete disorder. People think it couldn't happen here in the US, but I would not bet the farm on it.

    I'm not religious, but clearly there are many different perspectives that all claim to be theologically correct.
    Jul 4, 2011. 12:00 PM | Likes Like |Link to Comment
  • Why Covered Call Writing Is No Free Lunch [View article]
    In the case of a stock like AAPL that has no dividend, it would certainly appear that the covered LEAP is a more efficient use of capital. One might buy three or four LEAPs with a decent delta, depending on your taste for risk, for the price of 100 shares, and thus get 3 or 4 x the return on covered calls.
    Jul 3, 2011. 04:15 PM | Likes Like |Link to Comment
  • 8 Reasons Cisco May Have Put In a Bottom [View article]
    Most of Bret Jensen's picks seem to do well.

    The fact that everyone hates CSCO makes it interesting. Maybe a CSCO, RIMM, NOK trifecta for 2012.
    Jul 3, 2011. 03:40 PM | 2 Likes Like |Link to Comment
  • The median pay for top execs at 200 big firms jumped 23% in 2010 to $10.8M, in line with net profit increases. The median gain in shareholders’ total return was far lower at 16%, while the salary of the average American worker in late 2010 was just 0.5% higher than a year earlier - representing a fall in real terms.  [View news story]
    Currently in the Dominican Republic and interesting to note that the cable TV has two versions of CNN, one for the rest of the world and a second dumbed down version for the US with celebrity interviews and real crime shows!

    Was studying by the pool this morning reading "The Decline and Fall of the Roman Empire" in an ink and papyrus version and noted that although the economy of the|Empire in its heyday revolved mostly around meeting the needs of the super rich in their villas and estates, those who were talented but not landed were able to share in the wealth as the owners would hire many artists and skilled workers on beatification projects, and it was common for billionaires to spend their own money on public works such as parks, stadiums, baths, fountains, etc. so as to enhance the public areas of the cities they lived in.

    There was considerable concern that the annual voyage of 120 ships from Egypt to Sri Lanka and back to pick up fragrances, incense, aphrodisiacs, spices, and other luxury items was devaluing the denarius in the pursuit of luxury goods for the adornment of women and leading to a dilution of the weath of the Empire.

    What a ridiculous empire it must have been with hundreds of years of peace and prosperity! No wonder it fell apart.

    Actually it is quite interesting to note that the first 3 vols were published prior to 1786 and were clearly quite influential on the Authors of the Constitution, especially with respect to the separation of Church and State, although one never sees this discussed anywhere. The Romans, however, being the softies that they were, had greater legal protections for slaves.

    Well worth a read, at least in the abridged version, as there are numerous parallels with the current state of the union, and it really leaves you thinking that history is a closed loop system.
    Jul 3, 2011. 03:28 PM | 4 Likes Like |Link to Comment
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