R. Richard Schweitzer

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152 Comments

    • Tue Jun 3rd 09:52 AM | Rating: 0 0
      Commented on:
      Bill Gross: Prepare for Coming Inflation
      A further factor is the point that the "reported" rate of U S inflation is a fabrication of statisics which makes them unrelaible, and probably misleading if not false. He has written about this in his June opinion at Pimco. The global inflation rate is probably running at around a 7% baseline. The true U S rate should likely be closer to that range than to the 3% range being assumed.

      The underlying "reasons" (read: pressures) for inflation are that debts can not be devalued (reset lower) and so the the unit of account for relative values (the fiat dollar) is debased instead. Existing debt holdings become worth less in relation to other (hard or commodity) assets; historically to the point that we can't meet commitments to feed the Goths and Alrics come storming in.
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    • Tue Jun 3rd 09:33 AM | Rating: 0 0
      Commented on:
      United Healthcare: Sterilization or No Insurance
      The basic errors begin with the conflation of insurance with "Health Care." (pre-paid medical need).

      Insurance is the transfer of risk.

      Insurors are in the business of SPREADING (not TAKING) risks.

      Imagine for a moment a concept in which all medical costs risk insurors could only be organized as mutual insurors. How should they classify the risks all members are required to share?

      Contracting to pay the costs of "normal" pregnancies and deliveries is NOT insurance. Such births are not risks of fortutitous events, but the anticipated expenses that can be covered by pre-payments (as was the case in the old format of Blue Cross- Blue Shield, basically Mutual by agreements with participating MDs and Hospitals).

      Politicians have legislated the loading of extensive non-risk benefits onto what had been contracts for actual risks. Example: in vitro fertilization; as well as many other "elective" issues.

      Ultimately the benefits have to be paid for out of premiums and from the investment of those funds whilst held. The related internal services costs must be covered as well.

      We must begin to once again separate the function of insurance contracts from requirements to provide all ranges of health related benefits. If so, a pure insurance function will require proper analysis of each form of risk covered in order to be fair to thsoe amongst whom the risk is spread - the policyholders.
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    • Mon Jun 2nd 14:36 PM | Rating: 0 0
      Commented on:
      'Index Speculators' Hoarding Commodities
      sorry: "...what their staffs write."
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    • Mon Jun 2nd 14:35 PM | Rating: 0 0
      Commented on:
      'Index Speculators' Hoarding Commodities
      You can't be so naive about legislative hearings. They are held so the legislators may hear themselves speaking what their staffs.

      Those appearing are selected to propagate specific perceptions, or as "foils" for, or "targets" of, legislative showmanship. In D C are many showhorses and some workhorses, but all deliver the same end product.

      Now, there is some "flow effect" on spot commodity prices vs Futures. As a holder or producer of a commodity, I may well be moved to sell a contract for future delivery of what I produce or hold rather than accept the current spot price, based on the time value of money (amongst other things). When that happens, the spot price may rise, since my part of the supply is removed from the market. That is a great over-simplification, but has served me well in timing grain transactions vs cots of money.
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    • Mon Jun 2nd 14:14 PM | Rating: 0 0
      Commented on:
      Why Won't the U.K. Join the Euro?
      There are studies on the duration of monetary, unions, authorities and other such agreements. Historically, conditions have not allowed them to exist permanently.

      And as to backing of "currency," what "backs" the Euro? Bonds (sovereign debt) of member nations, right? Thus resources are dependent on factors outside the issuer's influence, let alone control. But, most "money" is not "currency," it is credit, and Britain's retention of control over its own internal credit has a better track record than that of the ECB with its members.

      Buiter is undeniably one of the best minds on this topic, but his views seem narrow historically.

      Should the U S join? By treaty, of course!!
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    • Mon Jun 2nd 07:44 AM | Rating: 0 0
      Commented on:
      Markel's a Buffett-In-Waiting - Barron's
      There is a difference in the policy of buying operating businesses and aggregating their results (ROC) etc., from picking good "investments"... in the form of stocks or interim capital provisions.

      However, there is something to be said for a program of investing premiums for gains rather than "yields" in the fashion of Carl Lindner. But even that can get snagged in things like Chiquita and Kroger.

      Unique means what the dictionary says.
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    • Fri May 30th 11:48 AM | Rating: 0 0
      Commented on:
      Analysts Down on Dell Following Earnings
      One can also see why HPQ is trying to set up an exit from "commodity" type businesses and move to services, etc that have some degree of customer "inertia" (if not loyalty), with the possibilities of porticulus if not moat.
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    • Fri May 30th 11:45 AM | Rating: 0 0
      Commented on:
      Analysts Down on Dell Following Earnings
      No. I think he means that now that it has dropped below 24, it is now a short candidate.
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    • Wed May 28th 12:56 PM | Rating: 0 0
      Commented on:
      Wall Street Breakfast: Must-Know News
      Is the S A format (page presentation) being changed?
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    • Sun May 25th 07:40 AM | Rating: 0 0
      Commented on:
      Dryship's Transformational CEO
      The necessity [?] to establish steady revenues (via more charters, less spot) may have created a sense of uncertainty for particular classes of investors (prudent speculators, e.g).

      The necessity [?] is probably generated to obtain reasonable financing terms for the build-out of two (maybe more) drill ships.
      And, don't forget the insuring costs for those.

      Disclosure: Also long DRYS, GNK & NAT
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    • Sat May 24th 11:55 AM | Rating: 0 0
      Commented on:
      The White Elephant That Could Destroy Your Portfolio, Part I
      Back in 1933 the small book "Sacrifice or Chaos" suggested that in the U S we all agree to reduce all dollar denominated obligations by some agreed per cent, say 50%. A $5,000 insurance policy would then become a $2,500 policy; a $10,000 mortgage would become a debt of $5,000 and so on. There was, of course, the impairment of contracts problem (strictly then just applied to states).

      Never happened, of course - foolish idea, to devalue debt!

      So, what have we done to debt obligations over the years? Well, we have worked things out so that the dollars in which they are denominated are reduced in value (and a lot more than 50% since 1933!).

      The merits of those procedures (effectively constantly devaluing debt obligations) gave rise to a new and burgeoning class of entrepreneurs, today our "political class."

      The procedures made (and make) it possible for them to use debt creation (at all levels of governments) to fund (by bribing the public with its own money) the increases in their aggregate powers and influence (which has proven better than plowin').

      There is no easy escape, and as long as there are periodic surges in relative productivity increases, all costs will be covered over time. That is, so long as we are able to create more with less efforts, which is quite different from just trying to get more with less effort.

      Gee! And it's not Sunday yet.
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    • Sat May 24th 11:12 AM | Rating: 0 0
      Commented on:
      Complex Simplicity: A Better Portfolio of ETFs
      Compare the terms (limits on getting out and getting back in) of Vanguard's VEIEX and its ETF VWO. Then look at respective results in markets price trends.

      Long: VWO
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    • Fri May 23rd 11:52 AM | Rating: 0 0
      Commented on:
      Under The Radar News - Thursday
      C'mon, if you're going to paraphrase Bill Gross, do so with more care. Here is what he wrote:

      "What are the investment ramifications? With global headline inflation now at 7% there is a need for new global investment solutions, a role that PIMCO is more than willing (and able) to provide. In this role we would suggest: 1) Treasury bonds are obviously not to be favored because of their negative (unreal) real yields. 2) U.S. TIPS, while affording headline CPI protection, risk the delusion of an artificially low inflation number as well. 3) On the other hand, commodity-based assets as well as foreign equities whose P/Es are better grounded with local CPI and nominal bond yield comparisons should be excellent candidates. 4) These assets should in turn be denominated in currencies that demonstrate authentic real growth and inflation rates, that while high, at least are credible. 5) Developing, BRIC-like economies are obvious choices for investment dollars."

      Note what he really said about TIPS.

      Redo that please.
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    • Fri May 23rd 11:34 AM | Rating: 0 0
      Commented on:
      Wall Street Breakfast: Must-Know News
      "weary" may be appropriate; but the sense is "wary."
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    • Fri May 23rd 08:15 AM | Rating: 0 0
      Commented on:
      What Should We Make of Warren Buffett's Stake in Mega-Financials?
      Now, how about a comparison of the the "Net Cash Flow" of BRK (and any chnages in its rate) to the composition of its holdings.
      View article »
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