Thomas J. Gordon

Japan to the U.S.: 'We Don't Want to Exclude You, But...'

Excellent and interesting comments. Giving up the dollar's reserve currency status is criminal. I think the u.s. got a lot of benefit being the words' reserve currency. And all it takes to keep it is a little discipline to keep it. In terms of a long 3 years, if we want Obama out we need some new bad things to happen that people associate with borrowing tons of money you don't have. Like higher gas prices, higher interest rates, general inflation that people notice. So Obama and Geithner are two of the luckier guys you will ever meet. They are spending money like drunken sailors and there are no bad effects.

Capitalism, Socialism and 10-Year Returns of Country ETFs

To have the kind of test Gary is advocating you'd have to have 1/2 the countries start socialism and 1/2 the countries start capitalism and then measure the results from there. I'm not sure what the significance of measuring 10 countries, starting 10 years ago, when they've already had policies that effect their returns prior to the 10 years, is. It's an interesting idea though. His proxy for socialism is tax rate, which isn't terrible. I wrote a similiar article a while back.

Ray Dalio: A Long and Painful Depression - Barron's Interview

Did everyone see that graph in the Barron's article? It was Household Debt Service. I assume they had it in there because Dalio thought it was important. I guess they were saying that Household Debt Service being at 13/14% was a big deal. Going from 5% to 13% over 60 years is going to break the country? And what about other debts like mortgages, which are much larger percentage wise. I think some of the debt deleveraging arguments are valid but focusing on Household Debt Service seems too narrow.

Calculating Country Risk Observed by Betas

this is an interesting article and the author clearly has training in formal financial theory. I question her "country correlations" though. I find all world markets for the last year or more to be highly correlated (I would guess .9 or greater). If I believed this chart, I would invest in czech republic and I wouldn't get creamed when the u.s. markets go down. But for the last year all I see is everything moving together and no where to hide. I'm not offering any computed data to prove this, but this is what I observe.