Uberrimae Fidei: Legal Solution to CDO and CDS Ethics Problems [View article]
nice article and good points, but you really do not want insurance companies to get involved in CDO's do you? And conversely, you would not want the Wall Street Firms to be regulated by the State Insurance Comissioner, right?
Still your point is a good one, and your theory would probably stand in a court of law.
High Conviction: An Undervalued Classic Developing a New Image [View article]
normally when you hear about a company like Kodak, you expect their cash-cow business (film) keep producing profit and hope that the newer businesses eventually take over. In reality, their film business appears to be making losses especially if you include all the "one-time" restructuring charges.
and besides, the guy bought the stock at $4 which may have been a brilliant move, but now he is pumping it to you at $8, you do the math.
I was thinking the same thing the past couple of days, default isnt going to work - even if we go the 35c on the dollar route, we then need to recapitalize the domestic banks and pension funds, probably costing 20% of GDP all over again. At least if the govt doesnt default we can leave the banks alone - they are fine except for their govnt bond holdings.
Is GE Signaling Stocks Are Going Higher? [View article]
The points 1 through 4 are what drove the market up over 60% in a year, everybody knew it was coming since mid 2009. So, the price action in GE is very impressive indeed, especially given that GE is for old-fashioned well-schooled guys like the author. So, chasing after the stock seems like a stupid idea, unless you already own it in which case sure, keep it. And yes, its easy to predict that the dividend will be raised every year from now till hell freezes over.
I look at the demand chart and see a trend, whereby jewelry demand is continuously going down for nealry 4 straight years. The nation with biggest demand used to be India because of its high inflation and unstable politics, but the situation is probably changed forever now. China had a good year for gold demand in 2009 because of some astrological justification for it being a good year to get married, but dont look for this to repeat in 2010.
Is the Bond Market Screaming Inflation? [View article]
blah blah blah ... i wish someone writing an a article about the failed bond auction would not descend into a doomy rant about how the country is going down the drain.
What you need is a calculation, and let me try here real fast. If the public debt in the US keeps going up and hits 80% of GDP in two years, it will take only an acceleration of inflation to about 5% from the long-term expectation of 2-3% to bring down the real, inflation adjusted deficit back into the 50% to GDP ratio. Alternatively, once the economy starts to recover for real, and the midterm elections are over with later this year, look for the Congress to raise interest rates. It will not take a huge increase to balance the budget, just the 25% to 28%, and the 28% to 33% would be enough.
So stop worrying and relax your sphincter because you are going to be had, no matter rain or shine.
Portuguese Debt: Another Reason to Like the Dollar [View article]
yes, i am european, and yes, we know alot more about america than you guys know about europe or anything else.
you can argue till hell freezes over about whether to include the 4.5T in the national debt or not but the simple fact is that there is no equivalent thing to the Social Security Trust Fund in any european country i know of. So if you include it in the debt, fine, but then there is no comparable figure available for any other country, because they all have pay-as-you-go systems.
However, by the same logic of excluding intragovernment debt, one should also, include debt of any other govt or non-govt entity if its debt is guaranteed by the Treasury. Can you people, who gave the world the Spelling Bee, please spell FHLMC and FNMA? But wait, ... if we include the liabilities of those agencies, then we must include their assets as well, no? Your head should be spinning already.
Portuguese Debt: Another Reason to Like the Dollar [View article]
> If you include those, according to USdebtclock.org we have a $54.8 TRILLION shortfall aka 400% of GDP.
Why not lookup the real debt figures from the Congressional Budget Office (CBO), or the Treasury instead of those clowns at usdebtclock.org ?? The real figure must be calculating excluding the Medicare and SS, because if you include those you should include also the present value of tax revenue Uncle Sam will collect from here to eternity. Besides, even if you disagree, the EU figures also do not include their social security future obligations.
02/02/2010 Current Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding 7,849,743,504,000.83 4,511,200,485,344.65 12,360,943,989,345.48
Google, China and the Founder Factor [View article]
lets get some dose of realism here - these days if a corporation wants to do something it prepares in total secrecy, then announces the move through PR department. Executives are not allowed to come out and say whatever comes to their mind on the spot. And Google is no exception, as much as they would like you to believe the contrary. This is what it is an opinion of one executive - the only thing missing is the little boilerplate at the bottom saying it is not necessarily the official Google position.
What i'm trying to say, if they were ACTUALLY comtemplating closing their china operations, they would never speak about in public before making the final decision.
there is nothing hypocritical here - those who study Buffett carefully know that he is an expert user of the tax code. In this case, he figures that when a corporation pays a dividend to Berkshire or any other corporation, it is taxed at a less than 10% rate, whereas an individual used to pay up to 45% rate. The dividend tax rate has been lowered to 15%, but Buffett is an old man and unlikely to change his habit now.
Moreover, for the companies Berkshire owns directly, there is no double taxation penalty at all, see below.
>But there’s also a powerful financial reason behind the preference, and that has to do with taxes. The tax code makes Berkshire’s owning 80% or more of a business far more profitable for us, proportionately, than our owning a smaller share. When a company we own all of earns $1 million after tax, the entire amount inures to our benefit. If the $1 million is upstreamed to Berkshire, we owe no tax on the dividend. And, if the earnings are retained and we were to sell the subsidiary not likely at Berkshire! for $1million more than we paid for it, we would owe no capital gains tax. That’s because our “tax cost” upon sale would include both what we paid for the business and all earnings it subsequently retained. Contrast that situation to what happens when we own an investment in a marketable security. There, if we own a 10% stake in a business earning $10 million after tax, our $1 million share of the earnings is subject to additional state and federal taxes of (1) about $140,000 if it is distributed to us (our tax rate on most dividends is 14%); or (2) no less than $350,000 if the $1 million is retained and subsequently captured by us in the form of a capital gain (on which our tax rate is usually about 35%, though it sometimes approaches 40%). We may defer paying the $350,000 by not immediately realizing our gain, but eventually we must pay the tax. In effect, the government is our “partner” twice when we own part of a business through a stock investment, but only once when we own at least 80%.
What We Learned from Bad Hedge Fund Shorts in 2009 [View article]
shorting highly volatile stocks is a dumb idea in any economic climate, actually. The most you could make is 100%, and that only if the company went bankrupt. The most you can lose is totally unlimited. And if you were going to short a stable, low volatility stock like Citibank at $44-48 back in 2007 you knew the most you could lose would be $10-15 over a period of a year, but upside well turned out to be nearly 100%. Instead these wise guys probably went ahead and shorted it after it rallied from $1 to $3 believing it is now overvalued.
So aside from not shorting volatile stocks, it helps to not follow the crowd as well, i guess.
Appearing before the Financial Crisis Inquiry Commission, Lloyd Blankfein (GS), Jamie Dimon (JPM), John Mack (MS) and Brian Moynihan (BAC) are braced for some tough questions. In prepared statements, the bank chiefs defended their pay practices but admitted regulatory changes were necessary. [View news story]
Uberrimae Fidei: Legal Solution to CDO and CDS Ethics Problems [View article]
Still your point is a good one, and your theory would probably stand in a court of law.
High Conviction: An Undervalued Classic Developing a New Image [View article]
and besides, the guy bought the stock at $4 which may have been a brilliant move, but now he is pumping it to you at $8, you do the math.
Why Greece Won't Go Argentine [View article]
Why Greece Won't Go Argentine [View article]
Gazprom: Running Out of Gas [View article]
wait a minute, is this really such an exciting topic?
RBS - Preferred Tender Announced [View instapost]
Is GE Signaling Stocks Are Going Higher? [View article]
But me, no thanks, I'll pass.
Gold Demand: Not What You Think [View article]
Is the Bond Market Screaming Inflation? [View article]
What you need is a calculation, and let me try here real fast. If the public debt in the US keeps going up and hits 80% of GDP in two years, it will take only an acceleration of inflation to about 5% from the long-term expectation of 2-3% to bring down the real, inflation adjusted deficit back into the 50% to GDP ratio. Alternatively, once the economy starts to recover for real, and the midterm elections are over with later this year, look for the Congress to raise interest rates. It will not take a huge increase to balance the budget, just the 25% to 28%, and the 28% to 33% would be enough.
So stop worrying and relax your sphincter because you are going to be had, no matter rain or shine.
Portuguese Debt: Another Reason to Like the Dollar [View article]
you can argue till hell freezes over about whether to include the 4.5T in the national debt or not but the simple fact is that there is no equivalent thing to the Social Security Trust Fund in any european country i know of. So if you include it in the debt, fine, but then there is no comparable figure available for any other country, because they all have pay-as-you-go systems.
However, by the same logic of excluding intragovernment debt, one should also, include debt of any other govt or non-govt entity if its debt is guaranteed by the Treasury. Can you people, who gave the world the Spelling Bee, please spell FHLMC and FNMA? But wait, ... if we include the liabilities of those agencies, then we must include their assets as well, no? Your head should be spinning already.
Portuguese Debt: Another Reason to Like the Dollar [View article]
Why not lookup the real debt figures from the Congressional Budget Office (CBO), or the Treasury instead of those clowns at usdebtclock.org ??
The real figure must be calculating excluding the Medicare and SS, because if you include those you should include also the present value of tax revenue Uncle Sam will collect from here to eternity. Besides, even if you disagree, the EU figures also do not include their social security future obligations.
So the actual figure is , from US Treasury official site:
www.treasurydirect.gov...
02/02/2010
Current Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding
7,849,743,504,000.83 4,511,200,485,344.65 12,360,943,989,345.48
so, 7.8T/14.4T = 54.5%
(GDP run rate taken from www.bea.gov/newsreleas...)
This is hardly a number to fret about seriously right now, but it is the direction it takes from now on that worries me.
Google, China and the Founder Factor [View article]
What i'm trying to say, if they were ACTUALLY comtemplating closing their china operations, they would never speak about in public before making the final decision.
Warren Buffett, Dividend Investor [View article]
Moreover, for the companies Berkshire owns directly, there is no double taxation penalty at all, see below.
From the year 2000 Berkshire annual report:
www.berkshirehathaway....
>But there’s also a powerful financial reason behind the preference, and that has to do with taxes. The tax
code makes Berkshire’s owning 80% or more of a business far more profitable for us, proportionately, than our
owning a smaller share. When a company we own all of earns $1 million after tax, the entire amount inures to our
benefit. If the $1 million is upstreamed to Berkshire, we owe no tax on the dividend. And, if the earnings are
retained and we were to sell the subsidiary not likely at Berkshire! for $1million more than we paid for it, we
would owe no capital gains tax. That’s because our “tax cost” upon sale would include both what we paid for the
business and all earnings it subsequently retained.
Contrast that situation to what happens when we own an investment in a marketable security. There, if we
own a 10% stake in a business earning $10 million after tax, our $1 million share of the earnings is subject to
additional state and federal taxes of (1) about $140,000 if it is distributed to us (our tax rate on most dividends is
14%); or (2) no less than $350,000 if the $1 million is retained and subsequently captured by us in the form of a
capital gain (on which our tax rate is usually about 35%, though it sometimes approaches 40%). We may defer
paying the $350,000 by not immediately realizing our gain, but eventually we must pay the tax. In effect, the
government is our “partner” twice when we own part of a business through a stock investment, but only once when
we own at least 80%.
What We Learned from Bad Hedge Fund Shorts in 2009 [View article]
So aside from not shorting volatile stocks, it helps to not follow the crowd as well, i guess.
Appearing before the Financial Crisis Inquiry Commission, Lloyd Blankfein (GS), Jamie Dimon (JPM), John Mack (MS) and Brian Moynihan (BAC) are braced for some tough questions. In prepared statements, the bank chiefs defended their pay practices but admitted regulatory changes were necessary. [View news story]