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  • Why Michael Kors Is Falling  [View article]
    Kors will continue to grow for the next several years. Coach could have kept their top spot as the "must have" bag if they didn't move their product line towards a younger demographic, which killed their core market. Kors bags are well within reach of professional working women and the color palette works for all seasons. Just dropped $600 on a bag and wallet for Christmas. Plan to get another in the spring. Keep an eye on their returns for next quarter. If all holds steady, buy!
    Dec 16, 2014. 03:50 AM | Likes Like |Link to Comment
  • The Ticking Time Bomb Under The World Economy  [View article]
    That's because we're in a long-wave contraction. Hard to move into hyperinflation territory when we're only 5 years into a 10 to 15 year contraction cycle. Whether it's slowing devaluing a la QE or ZIRP, or taking it on the chin in hard landing, doesn't matter; massive amounts of wealth are being shed along the way. I'm watching all these peaks and valleys, waiting for the second big valley. All the Fed and ECB are doing is papering over the dips. Once I accepted that it was happening, everything made perfect sense.
    Jan 27, 2014. 12:33 AM | 2 Likes Like |Link to Comment
  • Michael Kors: The Uptrend Will Continue  [View article]
    Posted about 6 months ago that Kors was the new Coach. Coach lost it's key market (working business women) by chasing a younger demographic. Guess they forgot that "trendy" doesn't always equal "money." Gone are the days of moms splurging $600 on handbags for their daughters. Kors appeals to working professionals, in office friendly colors, at price points within reach of anyone earning a solid paycheck. First rule of business: know your customer! Kors and Brahmin are the way to go.
    Jan 23, 2014. 12:45 AM | 1 Like Like |Link to Comment
  • What Accounts For The Decrease In The Labor Force Participation Rate?  [View article]
    People are claiming disability for any number of things. Sorry, I've worked through several debilitating conditions; my dad worked while he had terminal cancer. It's become the new welfare, when it was intended to be the "last resort" for people who were seriously injured or ill. Nowadays, if I really wanted to get on disability, I'd start taking drugs, go into a rehab program, and would instantly qualify. So nice to know I'm blowing part of my children's future by providing for people who chose to screw up their own!
    Jan 19, 2014. 09:09 PM | 2 Likes Like |Link to Comment
  • The U.S. Economy: How Did We Get Here? Where Are We Headed?  [View article]
    I can still remember in the 1990's when I learned that then Senator Daschle was requesting $444 Million in foreign aid to prop up Russia's early missile detection system. My jaw dropped.

    Now, we send billions overseas. You are right to be concerned.
    Nov 15, 2013. 10:29 PM | Likes Like |Link to Comment
  • The U.S. Economy: How Did We Get Here? Where Are We Headed?  [View article]
    Jason, you can find the report entitled "Finding The Tipping Point: When Sovereign Debt Goes Bad" at the World Bank website. NBER may also have a copy. SSRN has a direct link:

    It was a study done several years ago to determine at what point a country's debt can have a negative impact on the economy.

    That being said, TCMDO is the real number to watch, which is why I listed it first. A country with heavy sovereign debt, but low TCMDO, can absorb or bring the TP77% ratio back into line very quickly by raising taxes, because individuals have enough excess income that they can afford to pay more in taxes.

    You and I are in agreement on the reckless and wasteful spending by Government. I am not against incurring debt, as it can be a vehicle for future wealth creation, but it should be productive debt (not tossing money down a rat hole, or, to use your analogy, gambling with it). Don't understand where the perceived disagreement is between us?
    Nov 15, 2013. 10:18 PM | 2 Likes Like |Link to Comment
  • The U.S. Economy: How Did We Get Here? Where Are We Headed?  [View article]
    When it comes to debt ratios, there are two numbers to keep an eye on. TCMDO as a percentage of GDP, and sovereign debt as a % of GDP.

    Most of the PIIGS experienced substantial financial turmoil when their TCMDO reached 360% of GDP. Kyle Bass of Hayman made a fortune by watching TCMDOs and betting against those countries. It's not just the debt the government incurs on our behalf, it's all the debt individuals and business assume that stresses economies.

    Next is the "Tipping Point" at 77%. Once a country's federal debt level exceeds 77% of GDP, any increase above that causes a contraction in the private sector. Debt is no longer a vehicle for future growth, but a drag.

    There is productive debt and wasteful debt. Productive debt (to build, create, improve efficiency) generates jobs and opportunities, builds wealth over time. Wasteful debt are non-productive programs, fraud, graft, etc. We have far too much wasteful debt.
    Nov 10, 2013. 11:23 AM | 2 Likes Like |Link to Comment
  • The U.S. Economy: How Did We Get Here? Where Are We Headed?  [View article]
    You are absolutely correct, Angelou. This is exactly what is happening (along with a global contraction).

    This is a natural course of events: countries or companies will go through power/wealth consolidations, and when an aggressive competitor comes along, their wealth/power wanes. Someone makes something faster, cheaper, better. The only thing constant is change; just when you think you've got it all covered, the ground shifts out from underneath you.

    Business people understand this. They are constantly trying to stay ahead of the curve.

    The politicians in Washington fail to understand this, and have unintentionally undercut the American worker for more than 30 years. Onerous regulations that raised operating costs, making it more profitable to offshore production, billions sent abroad in foreign aid that helped create some of the competitors we face today, threats of lawsuit or actual lawsuits against people who try to innovate, or operate within safe standards, because it served some politician's pet "social" purpose. Toss in several giant leaps in technology reducing staffing needs, and you have an extremely tight job market.

    Now, layer on top of that a long-wave contraction, which is another global event, and you have a depression (not a recession). It will take years to come out of this. People can point to GDP growth or other indicators that should show a "recovery." I point to the millions who are unemployed, underemployed, or who left the workforce altogether as proof we are not.

    Obviously, people without money can't buy their products, but America is NOT the only market out there. This is a global economy, and producers can sell anywhere in the world. This is another key point politicians refuse to grasp.

    We are in the "new" normal. The America we grew up in controlled 80% of the world's wealth and power. By the time this shakes out, we will control 60% of the world's wealth and power.

    Unfortunately, the funding mechanisms for our unfunded liabilities is predicated on the 80% model. Again, politicians are blind or ignorant. They will not address the problem, for fear of how voters will respond at the ballot box.

    Doesn't matter which side of the aisle you're on. We all created this mess, and the end result will not be pretty.
    Nov 10, 2013. 10:51 AM | Likes Like |Link to Comment
  • The U.S. Economy: How Did We Get Here? Where Are We Headed?  [View article]
    Move to Texas, my friend. No state income tax and low property valuations means low property tax bills.
    Nov 10, 2013. 10:18 AM | Likes Like |Link to Comment
  • Reality Check For Peter Schiff  [View article]
    Dear Wyostocks,

    I see you point, because I have also seen examples of shrinking packages and a rising cost of fixed products in my neck of the woods over the last year. I agree, it is harder for people to get by.

    But Birdman is correct when he states that we are in a deflationary cycle similar to that of the Great Depression. In fact, he is spot on.

    In the January 4, 2014 report by the Board of Governors of the Federal Reserve to Congress on the state of the housing market, they estimated that Americans lost $7T in wealth just in the value of their homes. Salient Capital in their 3Q 2011 Macroeconomic Report pegged the current conditions correctly. Grab a copy and take a read; make may things much clearer.
    Nov 3, 2013. 01:36 PM | 2 Likes Like |Link to Comment
  • Reality Check For Peter Schiff  [View article]
    Recusant: On some of your points, I agree; on others, we will have to agree to respectfully disagree. Education is important because we need informed citizens in order to safeguard our republic (although what passes for education today is, in too many cases, laughable). Our founding fathers were wise enough to recognize that.

    A lot of the other "social" programs created during the Great Society period should have expired and been left behind; instead, they turned into wealth sucking Ponzi schemes with trillions in unfunded liabilities.

    I had grandparents who were dirt poor during the Great Depression, and others who were well off. Both told the same stories; neighbors helped neighbors, families helped families, churches and religious institutions did what they could for those in need.

    Now, there is no connection between those receiving assistance and those who are paying for it; no sense of obligation or even gratitude for those struggling and paying, and those who put nothing in but get benefits out. It's created an entitlement mindset that is pervasively corrosive, and allows politicians to buy votes to maintain their own power.

    Home prices became inflated when people could get into them for nothing, because inventory continued to move even though buyers didn't have the resources to sustain them.

    From tuition rates, to the fees doctors charge, to abuses of EBT cards, and more...each time the Fedgov starts seriously meddling with an industry or pumping money into it, it gets abused and distorted.
    Nov 2, 2013. 01:12 AM | 2 Likes Like |Link to Comment
  • Reality Check For Peter Schiff  [View article]
    The Fed engaged in a pump and pray; what other choice did they have? The alternative was wave after wave of contraction.

    But let's be clear, unemployment has not come down because people are gainfully employed or even marginally employed. Unemployment has come down because people have exhausted the 2 years of benefits and still don't have a job. They are now swelling the ranks of disability.
    Nov 1, 2013. 01:55 AM | 1 Like Like |Link to Comment
  • Reality Check For Peter Schiff  [View article]
    I told my friends to sell when it came close to $2K an ounce. Gold as a hedge if things really went south made no sense whatsoever. People would shift to necessities; medicine, fuel, food. Those who listened made a killing.
    Nov 1, 2013. 01:30 AM | 1 Like Like |Link to Comment
  • Reality Check For Peter Schiff  [View article]
    Schiff was not the only one calling for substantial contraction. Ray Dalio, Kyle Bass, Bill Gross, and a number of others anticipated substantial contraction. I don't think any of them expected a "pump and pray" mode by the Fed. As for the latest upswing, if you look at long-wave contraction charts, that's not unexpected. Sadly, they do not last (unless the Fed continues to paper over the dips). As for where we're going to end up, see "The West and the Rest" and "6 Killer Apps" on youtube.
    Nov 1, 2013. 01:26 AM | Likes Like |Link to Comment
  • Reality Check For Peter Schiff  [View article]
    I'm going to respectfully disagree, Recusant. The US crisis was the not a failure to properly combine socialism or capitalism, but the distortion created when one tries to combine the two. Congress should have stayed out of the housing market; all their attempts at social engineering fail in a spectacular fashion (war on poverty has only increased poverty). As you most correctly stated above, toss is a hearty dose of amoral behavior that allowed people to legally exploit the system, and viola! Disaster. Niall Ferguson pegged in perfectly; countries don't fail due to economic hardship, they fail when people have little faith in their institutions, corruption runs rampant, and when morality and decency are no longer the norm.
    Nov 1, 2013. 01:17 AM | 5 Likes Like |Link to Comment