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  • U.S. Stock Market Complacency On Verge Of Collapse [View article]
    I have not looked at your articles since you thought it appropriate, about six months ago, to alert the SA staff about my supposedly offensive comments - which I promptly substantiated as factual, nothing personal, and the staff agreed.

    So, in keeping with my due diligence hat and respect for SA readers, I thought I would check what your current take is. I am dazzled about one thing. Do you ever learn about your mistakes, or do you hope that you'll eventually get it right.? Face it. Yes, headlines gyrate markets, but where has the trend been since you have been a Bear?

    I have not kept track but maybe you will provide me with the answer - it looks like your "followers" count has been steadily going down. I hope this is a false impression, but as a data point on readers' motivation, I would appreciate if you would comment.
    Jul 6, 2012. 05:12 PM | 25 Likes Like |Link to Comment
  • Zynga Earnings Recap: Should Have Bet The FarmVille [View article]
    Should you need class action info, contact me.
    Jul 28, 2012. 06:35 PM | 8 Likes Like |Link to Comment
  • There Will Be No European Liquidity Crisis (Part 1) [View article]
    Thank you for the advice. I'll shrink about it.
    Sep 27, 2011. 04:56 PM | 6 Likes Like |Link to Comment
  • It may be Sunday but there will again be no rest for the wicked as Republicans and Democrats struggle to forge a debt-limit deal before Asian markets open for Monday's trading. Investors have been sanguine so far, but with talks continuing to fail, firms are starting to stockpile cash.  [View news story]
    Obamacare and a few other bridges. Reid and Berkley should go back to fix Nevada, and Boxer and Pelosi California
    Jul 24, 2011. 10:41 AM | 6 Likes Like |Link to Comment
  • Energy Secretary Chu Wimps Out Again [View article]
    Oops. Here goes the confusion again. I am not sure about Secretary Chu. One thing he did right was to put fuel cells on the back burner - this will save a new wave of believers from losing a new wave of investment money. Painting roofs white is not a bad idea, for those of you who have traveled to the middle east and Greece. And HR 1835 should pass, with the proper caveats.

    The confusion is this though, and the caveats have to deal with it, from a resource allocation standpoint. One, do not mix CO2 with particulate emissions. If Reid Bryson was still alive, he would tell you that water vapor has a radiative forcing1000 times greater than CO2, and as you know CO2 is not a pollutant. So fighting pollution has nothing to do with CO2 - leave anthropogenic to Al Gore and the Spelling Bee and google the 566,000 hits for "IPPC mistakes". This is where I mostly disagree with Secretary Chu.

    Two, Oil and Coal don't mix. Oil is used for mobile energy - transportation - while Coal is used for stationary energy - electricity. Last I checked, electricity production consumed only 2% of Oil, i.e. 4% of our imports. Substituting Natural Gas for Coal would do nothing to solve the oil problem - up until we have an adequate vehicle fleet and distribution system. Could happen, and we should try a reasonable 1835. However, check the Netherlands. They have plenty of gas and lots of bicycles - not many gas fueled vehicles, though. So goes France - and they are paying $6 a gallon at the pump.

    If we want to solve the Oil problem, let's go electric. If we want to solve the coal pollution problem, let's call it that way. Natural gas has a role to play, we should look at it too. But remember - we are currently dealing with a projected budget deficit of $9 trillion over the next ten years, versus receipts of $35 trillion. Not the time to be spending trigger happy. So please, in either case, don't add the CO2 hype.
    Aug 28, 2009. 11:18 AM | 6 Likes Like |Link to Comment
  • Spain Announces Beginning Of End: The Unfolding Global Fiasco Is Near [View article]
    That's when I say you are a shor termer. They will. Remember my motto: first guarantee, then nationalize, then monetize. Much easier than the return of Dearth Vader or other Teutonic Knights.
    Jan 21, 2012. 10:11 AM | 5 Likes Like |Link to Comment
  • There Will Be No European Liquidity Crisis (Part 1) [View article]
    Dear Professor, I am humbled by your commenting on my post, as the world's leading academic energy economist who has taught in more than 12 countries. However, I did not mention lineage for university entrance although I agree you could interpret it that way.

    On foreigners attending universities, sure. I personally attended Columbia. The question is, what percent of the local population stays within its own borders? Who is the Dutch student who does not want to attend Nyenrode or Erasmus; the Belgian who does not want to go to Louvain; the British who does not praise Oxford, Cambridge or the London School of Economics, the Spaniard, Barcelona or Madrid; the Italian, Bologna or Padua; the Swede, Uppsala, Lund or Stockholm, or Helsinki; the French, Polytechnique X, Science Po or ENA; the Swiss (and Germans) St. Gallen?

    That being said, when I say "lineage" I refer to jobs - there is a difference between university admission and getting a job, in case you missed it, and I agree with you, it stinks in Europe. I doubt very much that the students who attend a foreign university find a local job. They usually go back to their country. But you must know better, professor. What I know is that in France, 90% of the top 100 companies are run by X or ENA graduates. Name ten top European companies not run by locals.

    Now, you cannot say the same for the US. Sure, most companies are run by Americans, although there are numerous exceptions. But the point is, they can come from any state, any background and more often than not, any religion. There is an Act of Congress for that. That's the difference. While we usually are proud of the State we live in - otherwise we would likely move -, we are 310 million Americans. In Europe, they are Nationals first, Europeans by trade. Check my Instablog of August 11, The Ode to Joy. There is a consequence for the European Anthem having no official lyrics - it can't be sung.

    As for your last comment about teaching American soldiers, I am afraid you've lost me. Thanks for taking the time, though.
    Sep 27, 2011. 12:14 PM | 5 Likes Like |Link to Comment
  • There Will Be No European Liquidity Crisis (Part 1) [View article]
    Ok, let's indulge in a little dialectica esoterica. The periods you are referring to are first the Age ot Aries, caracterised by continuous wars and expanding empires. Second, the Age of Pisces, where monotheism had replaced polytheism and led to religious and more expansion wars. We are supposed to be nearing the Age of Aquarius, where communication, innovation and love of mankind is the theme - remember Hair? While I also am on record as saying that Europe has the potential to be regressing to the Mean - as opposed to the Nice -, I hope it won't happen thanks to the Bildebergers... Then again, I did immigrate to the US a while back, it's scary out there...
    Sep 27, 2011. 11:13 AM | 5 Likes Like |Link to Comment
  • Friday Follies: Did Obama Blow Jobs Speech? [View article]
    mrhowell13, there is nothing wrong with Fox News either. However, on Democrats, I beg to differ. While I respect all people, I have no shame admitting I have no respect for Pelosi, Boxter, Reid, Landreau, Dodd and Frank. With regard to the President, you have to wonder why Europe, which holds a grudge against us since we dared go on our own way and even buy Louisiana from Napoleon, was such a fan of his. I say "was" because they are not complete dummies, after all. There is a reason why the socialist elite over there is called the "caviar left". They know where their wallet is, and Obama did do them much good. They are having second thoughts, don't trust me, just look at the Euro. Unplugged.

    Here is the real problem with the concept of bipartisan politics. Sure, I am all with you, the first one to say we are all Americans, contrary to the alphabet soup Europeans. And I also agree that Socialism is great, conceptually. To quote Churchill, cynically:

    "The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries."

    It was not that long ago that most European countries were under totalitarian regimes. The pendulum then swung, and as we know now, too far. It was a normal reaction, almost a law of physics. The very simple reason is the judeo-christian teaching of sharing miseries. Nothing wrong with that, except it is based on a principle that carries its own selfish limits: I don't mind paying for your expenses, but we have to agree on how much.

    In economic terms, therefore, the question is how far does the pendulum swing? Communism, Socialism, Coalition? The answer is all of the above, until we find a viable equilibrium. Communism - last I looked, China got off the boat. Korea is the remaining pimple. Socialism, yes, Europe! There was a surge of conservatism in 2005-2007, but it is now been challenged, either on the extreme right or on the left (the good news is that the extreme left seems to have disappeared). Sure, these were the boom years. Now that the economic sh*t hits the fan, it's back to Churchill's "the inherent virtue of socialism is the equal sharing of miseries."

    Net net, Socialists under Pelosi, Reid and Obama rammed legislation through, knowing full well it may be their only chance. Last week, Obama even pleaded fo Congress to pass his Jobs Act before it was even written, let alone read.

    mrhowell, there is nothing wrong with being a democrat. There is something wrong being a bully democrat. And when you run out of money, there is something really wrong being a democrat - you can't expect me to pay for you. I am broke as you are.
    Sep 10, 2011. 06:39 PM | 5 Likes Like |Link to Comment
  • It may be Sunday but there will again be no rest for the wicked as Republicans and Democrats struggle to forge a debt-limit deal before Asian markets open for Monday's trading. Investors have been sanguine so far, but with talks continuing to fail, firms are starting to stockpile cash.  [View news story]
    Obama vacapression.
    Jul 24, 2011. 10:33 AM | 4 Likes Like |Link to Comment
  • Outlook For Equities: Time To Take The Foot Off The Accelerator [View article]
    Morningstar, let me counter. It's not my favorite argument, but one that is used in Europe - the people can afford it. I know, it sounds strange, bu it is the basic tenet of socialism, or even in this country, what we would call a short term solution to a crisis. Granted, this crisis is longer than usual, but we been there done that many times. The end result works pretty well.

    Here is my version of "we can afford it" - just to be pragmatic, short term. It is called Household Net Worth (HNW), and Debt to HNW. From 1975 to 2000, Debt to HNW hovered in a 12.5% to 16% range. Then, with the 2003 refi boom, it went to 20%. HNW peaked on Q1, 2007, at $64.3 Trillion; the Debt ratio was 21.9%. HNW collapsed to trough in Q4, 2008, at $51.5 Trillion, with a Debt ratio of 27.6%. It took us a while, but as of Q1, 2012, HNW was back at $62.9 Trillion, and the Debt ratio to 21.3%.

    This is all in my article of yesterday,

    and in my book (see my profile).

    Now, take the Public Debt. In three years, it has gone up by $5 Trillion. Not good. So, take it out of HNW. In 2009, with $10 Trillion,you were left with some $53 Trillion. In 2012, with $15 Trillion, you are left with $57 Trillion. Look at the Macro in the meantime. What is the only sector that can move the economic needle, in terms of job creation - Housing. Housing Net Worth is currently at $8.9 Trillion. Forget about 2007, of course, and take 2004: it was at $12.4 Trillion.

    The point is, as I said in my book, a bit early I must admit, Stocks and Real Estate prices need to recover - see

    They have, and they are going to continue, hence the current Monetary Policy. This is nothing new: go back to Dr. Bernanke's speech on Deflation in November 2002. I will bet you this: within three year, HNW will be higher than today, and the CBO cumulative 10-year Deficit forecast will be much lower.

    If I am correct, since it is the trend that counts, it looks up to me.
    Aug 25, 2012. 09:11 AM | 3 Likes Like |Link to Comment
  • There Will Be No European Liquidity Crisis: The Instable Equilibrium (Part IV) [View article]
    Thanks! I agree with you, certainly over the long term. I started writing this on Thursday, but got carried away by this new theory... I have not been a gold bug before, which is why I don't write about it, but I have to come to the same conclusion. Thanks for LOL.
    Jul 28, 2012. 09:41 AM | 3 Likes Like |Link to Comment
  • S&P Target 1600: The P/E Decompression Stampede - Part IV [View article]
    jh, I take my cue on rates from the M1 Multiplier and Monetary Base charts from the St. Louis Fed, which you can find at

    If the Multiplier breaks out, rates should start to go up on expectation of a Fed change of heart. Also, watch Housing. If this is not a seasonal pick-up, the economy will start to look a lot better. If Housing related stocks continue to climb the Wall of Worry, that's a cue. Personnally, I think rates will be higher by the Elections because of all of the above.

    I do not think we need QE3. We need for the banks to figure out how much Europe, to include CDS, and how much REOs and MBS will cost them. If it's more than the roughly $3Trillion parked as excess reserves at the Fed and the ECB, then we will need QE3 - I don't think so, then the Multiplier will start to come back to life.
    Feb 10, 2012. 02:53 PM | 3 Likes Like |Link to Comment
  • Spain Announces Beginning Of End: The Unfolding Global Fiasco Is Near [View article]
    If Germany gets out of the EZ, the Mark zooms up and there disappears its export driven economy - which is mostly centered in Europe. And they are running out of space and subsidies to build wind and solar farms...
    Jan 23, 2012. 10:00 AM | 3 Likes Like |Link to Comment
  • Global Financial Disaster Looms: European Banks Face Bankruptcy [View article]
    James, ever heard of nationalization, monetization, corporatism and collusion? For a former pro of emerging markets, your analysis is a bit naive and certainly a bit obsolete. Europeans have long been playing a Ponzi scheme, the latest version being a combination of EFSF and EIB, and because industry, finance and politics are so intertwined, they won't fail. You can go back as far as the Italian Renaissance. As a former Global Strategist and Head of Global Prop Trading, remember, be flexible, manage your risk - it's on the upside this time. There will be no financial liquidity crisis, see my 9/27 article
    Oct 19, 2011. 07:57 AM | 3 Likes Like |Link to Comment