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Ted Barnhart  

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  • TIPS: An Under-Appreciated Workhorse [View article]
    Gratian,Thanks for taking the time to comment.
    Jun 13, 2012. 09:34 AM | Likes Like |Link to Comment
  • TIPS: An Under-Appreciated Workhorse [View article]

    Thanks for the kind words and observation.

    As I mentioned in the article, I gave a "simplified" explanation of the mechanics (with link to a more nuanced explanation).

    I did so for a couple of reasons: 1) to someone who is not familiar with TIPS it gets a bit complicated and distracts from a general understanding and 2) The thrust of the article is in regards to the TIP ETF and from an editorial standpoint I felt it was more important to discuss some of the issues the ETF investor may be likely to face.

    Thanks again for the observation. Perhaps I could have given a better explanation of my "simplification."
    Jun 11, 2012. 10:17 PM | 1 Like Like |Link to Comment
  • TIPS: An Under-Appreciated Workhorse [View article]
    Tanning, I think we will know soon enough, and I can only speak in relative terms.

    As mentioned in 2008/9 the ETF fell by about 17% , in the midst of a 57% drop in the S&P500. The scenario you describe could easily trigger a similar reaction.

    At some point however the political pressure for somebody to step up with inflationary fiat will be unbearable. It of course won't solve any economic problems but will continue to drive the back and forth between inflationary and deflationary train wrecks.
    Jun 11, 2012. 03:44 PM | Likes Like |Link to Comment
  • TIPS: An Under-Appreciated Workhorse [View article]
    Hopple, thank you for the kind words.
    Jun 11, 2012. 03:36 PM | Likes Like |Link to Comment
  • Why Are Bond Yields Soaring? [View article]

    On this we are in complete agreement. While I consider myself a "purist" in theoretical terms, I try to use that theory to understand what the real cost of various policy decisions will be and as you say invest accordingly.

    From a real world "advocacy" standpoint point I am very pragmatic.

    Between these two approaches I manage to anger both Republicans and Libertarians, but I can only call them as I see them.
    Dec 17, 2010. 03:35 PM | Likes Like |Link to Comment
  • Why Are Bond Yields Soaring? [View article]

    Respecfully, we simple "Accounting 101" folk actually understand how it works quite well.

    Do you know how we describe a banking system "which doesn't and never has operated on a closed sytem basis."

    Privatized gains and socialized losses.

    Do you realize what causes a financial system to grow to the point it is "too big to fail?" Moral Hazard.

    The greatest insurance policy ever created was the Greenspan Put. The beneficiaries never even had to pay a premium.

    Now those same beneficiaries can live in the "comfortable confines of our internet connected world" while we kick the can down the road and let our kids and grandchildren pay for thier mistakes, by working harder and longer for less due to the inflationary effects that (if succesful) will follow.

    It may be the way things have always been and the way things always will be; but to imply that those who see through the charade are angry,ranting , simpletons is either height of aloofness at best, or the height of arroagance at worst.

    I understand full well how the government is attempting to deal with the situation, but any way you slice it, in "real" terms its a default. The only question is who pays for it.

    I disagree that the chaos that ensued (from mass default) would still be ongoing for 98% of the population. Which is not to say that there would not be major adjustments and changes. That, is a topic beyond the scope of this reply, but in short, the real assets in an economy don't vanish when the financial values do.

    This debate has actually given me an idea on how I might structure an essay on the topic.

    If (when) I complete such a piece I will gladly give you a headsup for your reply.
    Dec 17, 2010. 12:27 PM | 1 Like Like |Link to Comment
  • Why Are Bond Yields Soaring? [View article]

    At a certain level or scale of debt, I could get on board with that conclusion.

    However, in 2008 many (if not all) of the major financial institutions, had "level 3 assets" that were multiples of company equity.

    It would not take much of a haircut on those valuations to render these companies insolvent, which is why they aren't lending now.

    I didn't see anything specific in you comments (a brief look) on the subject, but if you are interested in discussing again, point me in the direction of a discussion you had in mind, and I will gladly add my 2 cents (for better or worse).
    Dec 17, 2010. 09:56 AM | Likes Like |Link to Comment
  • Why Are Bond Yields Soaring? [View article]
    "Where have all the toxic assets gone?"

    That's a good question. It is amazing that they just seemed to disappear and/or no one talks about them anymore.
    Dec 16, 2010. 11:03 AM | 2 Likes Like |Link to Comment