Thomas J. Gordon

Are U.S Voters the Most Economically Literate in the World?

Michael, You make a good point about things running in cycles. We all have to be patient and let the master plan unfold. Although we certainly have a large part in determining our own destiny.

Consumer Credit: Dreadful

I think Karl is being disingenuous here. For years he has bitched about consumers having too much debt. Now people are getting rid of that debt and he's telling us all that's a bad thing. If debt is reverting to healthy levels that's a good thing. I understand that may cause some job dislocation in the short run.

App Mania: The Big Business of Downloads

I want to be clear about my comments on the itunes app store. I have no beefs with apple, they treated me really well. I'm sure some people will be successful with itunes apps. but the way you make money appears to me to be converging with the way you make money on the web.

App Mania: The Big Business of Downloads

I actually did an itunes finance app and it was not what I expected. My thought going in was that the iphone was a platform where a person with a good idea could make some money off of software. I wasn't interested in doing something for free on the web and then figuring out how to make money on it. The wintel pc platform hasn't had any new paid software by independent developers in a long time. The iphone app store is now becoming just like the web. You have to offer the software for free or really cheap and find other ways to make money off it. Everything on the iphone app store is getting shoved towards offering the app for free and making money off advertising or in app purchases. Which is just what the web is.

PCI / Spend: Not Good News

j-dub, Thanks for clarifying. One of tne characteristics of text based blogging, can't pick up the nuances in peoples' statments.

PCI / Spend: Not Good News

j-dub Some people are arguing that the dow is at 10k because the way the gov't is giving out money is giving certain financial institutions the ability to buy stocks. The gov't doesn't have the money to give in terms of tax take so if the gov't is propping up the stock market, that is neither good nor sustainable. Some people argue oil is being propped up the same way. I'm not sure I agree with this argument, but I just wanted to give you one scenario where the dow is at 10k and oil @ 80 and all is not well.

5 Questions and Compliments for the U.S. Treasury

I agree with what David says about GMAC. Ford is competing with General Motors. If the federal gov't is subsidizing GM's financing arm that's a big deal. Yet the politicians might do that because they want GM to succeed so the bailout won't make them look bad. This is the kind of malarky you get into when the gov't steps into the private sector.

The Intrinsic Value of Nothing, Part 1

Tetrapod: I find this Austrian argument that if you increase the money supply you have inflation for that reason alone unconvincing. If you don't see the response in the prices of things people buy every day then it's not inflation. There is velocity, there is your money being used as a reserve currency, there are many things that translate increased money supply into inflation. If the Austrian school wants to give a name to increasing the money supply, then call it something other than inflation.

The Intrinsic Value of Nothing, Part 1

A lot of us have lamented gov't spending in excess of tax take. It's not clear to me that genuine borrowing (borrowing with the intent of paying it back later) is inflationary. Although clearly the u.s. is borrowing a lot more than they have in the past and you would think that would have a bad effect somewhere, at minimum drive interest rates up. but so far obama and geithner are getting away with it. they are spending a ton of money they don't have and there are no new bad effects. no inflation (defined as a rise in the overall price level), u.s. treasury rates are low, the stock market is rising. so when do obama and geithner pay the piper?

How to Value Amazon?

Good article. I see msft and intc with true monopolies in their segment (and I don't imply the got that position in a nefarious way) with stocks that have made no serious move in the last five years. And amazon with no monopoly pricing power is a stock darling. As far as I'm concerned the only explanation is the momo day traders and fad favoring money managers have latched on. It's a short but telling when to step in is extremely difficult.

Mathematical Realities Will Trump the Dollar

TeresaE: Agree about Clinton, one of the luckier guys you're ever going to meet. Perot guaranteed his first election as president. Reagan did all the heavy lifting on the international front and he had 8 years of our enemies in retreat. The Internet Bubble (unsustainable) made the economy excellent (people would kill for that economy now) and he looked good on the economic front and left his successor to deal with the bursting.
Yellowhoard: I don't think Obama is too bright. They said Reagan was stupid, they said Bush was stupid. They say all conservatives are stupid. Well now I'll say it. What Obama knows about economics you could put in a thimble.

Mathematical Realities Will Trump the Dollar

Agree with what Karl says. But so far no one has paid the piper. Obama and Geithner spend like drunken sailors and u.s. treasuries rates are very low, inflation is no where to be found, and the stock market is going up. I suppose you could argue that high unemployment was caused by deficits but that's a causal chain that few people understand. I think the most important thing we people of good will have to push for is a mathematical insistence that the federal budget is only equal to tax take.

The Dollar as a Reserve Currency

I disagree with the statement below. I think there was a huge increase in demand for dollars from China and Russia from yr=2000 to the present as they converted off of communism. I think this dollar demand masked the bad effects of the Bush administration deficit spending. Losing reserve currency status is a big deal, and will have the inverse effects from what I mention above, and will kill any politician responsible for losing reserve currency status if the electorate is smart enough to assign the correct causality.

"Over the years, however, the world accumulated as many dollar reserves as it needed and increasingly wanted to exchange some of them for gold, which they had the right to do. "

Fannie and Freddie: Worthless?

There is no fnm/fre for a retail investor to short hence this is an academic discussion. It looks like you can buy options so maybe there is some point in discussing this. From an accounting standpoint you have to say there is no value. All common equity has been wiped out by losses. It would be interesting to see what would really happen if the fed stopped buying their debt. fnm/fre probably aren't recognizing all the losses they really have. From a political standpoint the left leaning people in power place common shareholders low on the list of people to show mercy too. But you never know. Maybe Barney Frank would somehow feel some sense of redemption if fnm/fre original shareholders had some value in the marketplace. But that's hard to believe.

The Declining Dollar: Is There a Government Solution?

genghis khan, excellent point. I have really been pounding this theme lately. if one party is promising goodies and the other party is saying "we can't afford that", that's a tough road to hoe. I think the u.s. electorate is better at resisting the temptation to steal from the productive than any other, and that's why we are the wealthiest large nation on earth. I want to write an article about this sometime. People ove re-act to this last election. Reagan was the best and he got only 3 terms, Clinton had the internet bubble going for him and still couldn't get Gore elected. The u.s. switches horses every 8-12 years even if they like the president. And the u.s. is brutal on a sitting president.