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Tom Lindmark

 
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  • Moving on From Fixed Rate Mortgages [View article]
    I don't think Kling is arguing that the 30-year mortgage should disappear, rather it should just be priced at a market rate.
    May 28, 2010. 11:27 AM | 2 Likes Like |Link to Comment
  • Home Sales Raise More Questions Than They Answer [View article]
    Great comment! Thanks. I like the last sentence a lot, but it also scares me.
    May 26, 2010. 12:42 AM | Likes Like |Link to Comment
  • Congress: Behind the Economic Fraud [View article]
    To all who caught the fact that F&F will likely cost us $400 billion, not $400 million, I apologize. Just wishful thinking on my part.
    Apr 21, 2010. 09:11 PM | 1 Like Like |Link to Comment
  • What's the End Game for a Long-Term Recession? [View article]
    To all who objected to the term Tea Baggers let me assure you that it was not meant as a slight. It was in fact a simple error. I should have used the term Tea Party. Sleep deprivation is my excuse.

    I have no particular animosity towards the movement and think some of their positions are worth serious consideration. At the same time, I do feel they are a bit too inflexible. At any rate, that's a subject for another post, so for now take the phrase I used as having been inadvertant with no slight intended.
    Jan 31, 2010. 08:54 PM | 1 Like Like |Link to Comment
  • China's Inevitable Dominance [View article]
    Nice comment. The reference to the Soviet Union was not meant to imply that China is as centrally planned as was that economy. It was intended to draw attention to the fact that China, if it wants to continue to grow meaningfully, must take steps to not only privatize the commercial sector but ultimately move towards a democratic society that abides by a rule of law above the control of the government. Not an easy task, and given events of the past 18 months in this country not an easy system to abide by.
    Jan 16, 2010. 11:16 PM | Likes Like |Link to Comment
  • China: The Consumption Conundrum [View article]
    Nice comments. I hadn't thought about the currency exchange effect but you make a valid point. The question remains, though, as to whether Chinese policy will work to encourage consumption or continue to thwart it as Pettis maintains.


    On Dec 11 09:20 AM mna wrote:

    > I think Michael Pettis brings me fresh perspectives on the Chinese
    > economy. Although I may not agree with him on most things, I find
    > that his pessimism keeps me in check and makes me double check assumptions
    > about my investment positions in China. I for one welcome his bearishness
    > to balance out my bullishness on China, even if I find his arguments
    > to be somewhat too narrowly focused and tend to miss the big picture.
    > I've pointed out what I believe are flaws in his article below:<br/>
    >
    > The necessary consumption rates cited in the Pettis article do not
    > factor for currency exchange rates. If you believe that the Yuan
    > is undervalued, then the appreciation in the next couple of years
    > will both allow the nominal GDP to grow AND allow Chinese consumption
    > to grow at a healthy clip (from the increased purchasing power).
    > The currency exchange rate effect is far from trivial, and I believe
    > leaving it out is a big mistake.
    >
    > I would also add that chinese retail consumption grew at a very healthy
    > 15+% for the past year, even through the recession. So although
    > the numbers cited are high, perhaps it's not quite an unrealistic
    > number for the Chinese economy.
    Dec 11, 2009. 11:53 AM | Likes Like |Link to Comment
  • The Consequences of Underemployment [View article]
    Interesting take on the subject. I agree completely that any job you can take your dog along with you on is not half bad. But I do disagree that the guy was overpaid.

    The problem as I see it is that a lot of jobs require skills that don't necessarily require a college education. These are precisely the kind of jobs that have been sent overseas to workers that don't produce the quality of work that one would expect to see. In the end we import inferior products from low wage countries. Our workers are out of jobs, our consumers have to put up with shoddy products and we lose both ways.


    On Dec 01 08:48 PM Scrapmaster wrote:

    > A big part of the problem is that this guy was making $100,000 a
    > year.
    > He operated heavy equipment. How much education does this take?<br/>What
    > kind of skill set does he have?
    >
    > Lest you think I'm a W.S. Banker or something - I have a handyman
    > business. I do a little bit of everything, bust ass, have a $5000
    > health ins duductable, no vacation, sick, or holiday pay,
    > and have never made 1/2 of what he made.
    >
    > You may think I want some sympathy - wrong. I love what I do and
    > I'm the boss. Hey, any job that you can bring your dog to can't be
    > too bad!
    >
    > The point is, he was way overpaid in the first place. Now, he is
    > certainly underpaid, I agree. However, the salaries that many (certainly
    > not all) manufactoring workers made was plain and simple way too
    > much.
    >
    > Time to accept the new reality and stop the pity party.
    Dec 1, 2009. 10:58 PM | 2 Likes Like |Link to Comment
  • Regulatory Reform: The New Geithner Plan [View article]
    Not bad advice. I agree with a lot of your points.


    On Sep 05 04:29 PM Stimpy wrote:

    > We are on a path towards a utility model of banking. Banks will emerge
    > (as credit is re-privatised) as the central intermediary structure
    > in our economy, replacing the non-bank securitizing model.
    >
    > Banks will continue to use securitization (more of a covered bond
    > model with clear, formal reps and warranties) as a balance-sheet
    > optimization tool.
    >
    > We will see a (Fed and Treasury sanctioned) evolution towards 5-10
    > large banks with virtually total market share.
    >
    > These banks will be almost beyond profitable--in a very low risk
    > sense.
    >
    > The economies of scale they will enjoy will allow spread lending
    > to sustain profits WITHOUT excessive leverage.
    >
    > Credit velocity in the general economy will suffer (relative to the
    > 2006 orgy-years) as a result, making equities of all kinds a less
    > favorable asset class.
    >
    > Banks will be the one exception; in a sense they will be taxing the
    > rest of the economy for many years to come.
    >
    > These regulations make much of this both clear and inevitable.<br/>
    >
    > Buy the biggest banks and avoid all other stocks over tyhe medium
    > to long term.
    Sep 5, 2009. 05:11 PM | 3 Likes Like |Link to Comment
  • Do We Want the Government Backing Fannie and Freddie Forever? [View article]
    I thought of the FDIC angle when I wrote the post and I agree it has parallells. I tend not to be so concerned about the exposure to loss as I do think the proposal can insulate the taxpayer if adhered to as I am the concept of further subsidizing housing. As it is, it receives the largest federal subsidy of all, the tax deductability of mortgage interest.

    We've probably relied too much on housing as a driver of the economy for well nigh on 40 years and perhaps it's time to let it stand a bit more on its own two feet and see if investment gets channeled into other sectors.


    On Sep 02 08:22 PM Alan Young wrote:

    > From my reading of your excerpt, it seems that the mortgage lenders
    > would finance the insurance pool, making it no different from the
    > FDIC in function. So, yes, I'd say you are overreacting.
    >
    > Of course there were plenty of people who thought the FDIC was a
    > Socialist plot when it got started, too. I wonder how many people
    > still think that, and whether they all self-insure their bank accounts?
    Sep 3, 2009. 12:05 AM | Likes Like |Link to Comment
  • Conor Clark: Surprising Data on Federal Wages [View article]
    Thanks for stating the other side of the argument. You make some very valid points. It isn't as simple as it looks and you're comments about those at the top of the pyramid raking in an excess amount of the pie resonates.


    On Sep 02 12:32 AM Carolina wrote:

    > Comments from a City Employee (Municipal vs State or Federal noted
    > here- none the less, a government staffer if you will)
    > I have spent the last 18 years, earning less than the average wage
    > in my field of expertise, and though I hold the valid degree, and
    > necessary experience, (often much more than others in the private
    > sector) I have over the years made much, much less in both salary
    > and benefits..Granted, could be because I am not in the higher levels
    > of management- or those favored within any government system to recieve
    > a higher salary than their real worth to the job produced on the
    > market. Therefore, I am a somewhat maddened to see what is obvious
    > to us on the gov side- and that is...during the flush years - most
    > people I know (all walks of industry..made a fortune, in both salary
    > and bennies...gov employees are on a wage sheet, and benefits creep
    > up slowly, many of us are Y rated after a few years in salary, not
    > gaining a penny more in salary...unless, we get promoted, and often,
    > there are few job promotions, or any merit plans. Most work ot, don't
    > get the car allowances, phone allowances, cars, or any other perks
    > allotted in private industry. And as said here, work in expensive
    > communities, and must do the commute, not allowed to telecommute,
    > have laptops etc.....
    > The bottom line for me at least is that I accepted the lame conditions,
    > for the future hopefully locked in benefits of a retirement salary-
    > still just a pittance, when compared to others in private sector
    > who took 6 figures for years, and the combined living perks (so fewer
    > cash expenses as well) again bottom line- often spent their $$$ over
    > the last 10 years along with the American gluttony- vacations, cool
    > cars etc, while we watched on, only hoping that at least, during
    > retirement,, could make our wages as promised.....so my comment after
    > this diatribe, is "now that the cash cow of the dot com, and realty
    > bust is real, and now that the $$ hogs at the top of the private
    > industry have taken it and continue to rake it , all the general
    > employees will lose the work, and are now reviewing just who has
    > $$$ which is not them- standing in unemployement lines and dealing
    > with the anitiquated systems that we gov employees have had to deal
    > with, since few vote in extra money for our gov systems to be upgraded,
    > or add $ to help out when systems fail...bottom line, these folks
    > look to who has the work now, love to point the fingers at gov.
    > I don't think overall it is the average gov employee ripping them
    > off- look within- it is the hierarchy of the large company bosses-
    > that lost in the recession, and wadded their pockets, and let their
    > employees go...luckily gov still has employee assoc- to help us out,
    > but in anyevent, look around, it is not the ave gov employee who
    > is in the Caribean or driving that sports car- bet your prviate bosses
    > still have the cash...so I ask all of you reading this to review
    > how many gov jobs are really above your wages over the long haul
    > and if so, who it is that is raking it in on both sides of this issue
    > - the exec.managers....not the frontline people who make any business
    > work.
    > Orange County , California
    Sep 2, 2009. 12:57 AM | Likes Like |Link to Comment
  • The Face of Employment: Permanently Changed? [View article]
    One of the best comments I have ever received on any post. I particularly like your last sentence.


    On Aug 27 05:39 PM Pat C wrote:

    > I bet we will be seeing a large shift in society's views on employment
    > and working in general. I, like you, disagree with Mr. Ferrell's
    > conclusions on savings and microenterprises at least for the short
    > to medium term. There just isn't enough savings and profitable microenterpises
    > to go around. Let's face it, labor has been commoditized with the
    > opening up of 3+ billion people in China, India and the Soviet Bloc
    > competing for work. Tehnology and modern business processes encourage
    > the transfer of labor. We simply have not made the social changes
    > to adapt to this phenomena. Business and finance is operating in
    > an international arena but our government and social structures are
    > national or local. We have a tax based government and consumer economy
    > that is dependent on taxable and disposable wages - right?! We have
    > had our heads in the sand for the last 20+ years. It is absolutely
    > astounding how long human beings can look the other way, delude ourselves
    > into thinking that we were only outsourcing the unpopular stuff in
    > the middle, etc. etc.
    > How long will US and Western European societies put up with it?
    > I just don't know. If this current healthcare debate has showed us
    > anything, it is that our ability for intelligent dialogue is severely
    > hampered by outrageous demagoguery and media hype. Reasoned change
    > is frought with unreasonable special interests. Will we hit a tipping
    > point of revolutionary change? I have accepted it, but I honestly
    > don't know when it will hit everyone else to get to the revolutionary
    > scale to tip things over.
    > You know what's really scary? I'm a reasonable person and I just
    > typed and published this.
    Aug 27, 2009. 07:30 PM | Likes Like |Link to Comment
  • France's Bank Bonus Rules: What Were They Thinking? [View article]
    Thanks for the comment. I reread some of the material and I have to agree with you. A trader would apparently not be held liable for others failures. I interpreted a couple of provisions incorrectly. I apologize for the error.


    On Aug 27 01:43 PM Paul Hodgson wrote:

    > From what I can tell, M. Sarkozy didn't say that bonuses would be
    > forfeited if a trader's department lost money, though you would certainly
    > get that impression from the English translation of his comments.
    > But when he was speaking in French, he only ever referred to the
    > singular. In other words, if in the two years following the award
    > the trader loses money, then the bonus will be clawed back or forfeited.
    > Here is what M. Sarkozy said in French: “attendre trois ans pour
    > toucher l'intégralité du bonus et si dans les deux années qui suivent
    > son activité perd de l'argent, il ne touchera pas son bonus. Pas
    > de bonus sans malus, ce n'est pas à tous les coups on gagne. “ Which
    > roughly translates as: “wait three years to get the whole of the
    > bonus and if in the two years following his activity loses money,
    > he won’t get his bonus. No bonus with malus, it’s not heads I win,
    > tails I win.” Not their activity, but his activity. With this in
    > mind it seems more reasonable, at least to me, though I can't be
    > said to be a fan of government interference in this process. But
    > no one else seems keen on making the jump except the Swiss banks.
    >
    > Paul Hodgson
    Aug 27, 2009. 02:27 PM | 2 Likes Like |Link to Comment
  • Thoughts on New Home Sales and Durable Goods Data [View article]
    Actually, the new homes sales data is based on contracts signed not escrows closed. There are always some cancellations and during the worst of the crisis there were many. The figure isn't absolute but it's useful for period to period comparisons and now that things are settling down, the cancellation rate is trending towards the norm.

    As for the spec homes that you point to as seeing a decline in sales, most are guessing that the bulk of new home buyers have been first time buyers who are opting for stripped down smaller houses. The existing inventory tends to be bigger homes with lots of upgrades, thus out of the price range for fist time buyers.


    On Aug 26 08:03 PM qqq fox wrote:

    > I am surprised no one has dug into today's new home sales report.
    > If anyone bothers to get to page 4, they would find that sales of
    > new homes that are finished and ready for occupancy were actually
    > down 6%. The category showing the biggest gain, 33%, was for homes
    > that haven't even been started yet. In other words, they are merely
    > sales contracts that are entered into without any mortgage financing
    > being lined up. Desperate builders will sign these no money down
    > contracts with the understanding that nothing will happen until the
    > buyer comes in with a downpayment and mortgage financing. That these
    > sham deals are allowed to be counted at all shows the political clout
    > of the NAHB. Very misleading to say the least !!!
    Aug 26, 2009. 08:39 PM | 3 Likes Like |Link to Comment
  • Smaller Banks Not Immune to Securities Losses After All [View article]
    Agreed, but it can make the difference if the bank is on the edge of the cliff.


    On Aug 21 08:25 PM Big Al45 wrote:

    > A bad investment portfolio is usually not enough to bring down a
    > bank. Most of the failures also made a lot of poorly underwritten
    > loans - particularly AD&amp;C loans.
    Aug 21, 2009. 08:44 PM | Likes Like |Link to Comment
  • What Strong Homes Sales Numbers Mean [View article]
    It's a good question and I don't have a good answer. I think you can assume a lot. Since most of the buying is at the low end it's reasonable to assume that many were first time home buyers. Take out the investor purchases and you can probably come up with a decent estimate. If I see the answer I will post it.


    On Aug 21 07:20 PM Jiang Nan wrote:

    > Any data on how many of the buyer receives the US$8000 tax credit?
    Aug 21, 2009. 07:59 PM | Likes Like |Link to Comment
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