Kiisu

Hedge Fund Redemptions May Crash Q1 Markets

I'm a soon to be retired Fed (10 days). And though I've looked, I've not found any references to a "Madoff-effect" on the TSP.

The Deflation Scam

For years, inflation robbed "widows, orphans, and retirees" or anyone else who lived on a fixed income of purchasing power, substantially eroding their living standard.

I've lived well within my means. I've not leveraged my future into oblivion. Thus the prospect of deflation, whether Austrian or common, is long awaited, as it stretches the value of my savings.

Inflation financed fables. It empowered the insatiable. It funded massive government intrusions. It enabled a host of social and political "evils". It destroyed the value of saving for one's future.

Deflation rewards unleveraged savers at the expense of the profligate... and that is not a bad thing.

Deflation unwinds accumulated financial nonsense... and there is a lot to unravel.

Deflation denies funding for the insatiable, the untenable, and the intrusive.

Surely a round of deflation is in order, no?

Six Reasons for Cloudy Skies on the Solar Energy Industry

It has been nearly 40 years since I studied the topic, so I expect my recollection of the subject will be a bit dated.

However, if I recall correctly, there are alternative engineering solutions to current commercial reactor technology... breeder reactors being one that comes immediately to mind (a properly designed breeder can produce more "fuel" than it "burns"; it is "old" technology; and breeders can be designed to use the more plentiful Thorium instead of Uranium).

And as I recall, some radioactive waste is "waste" for political, not-technical, reasons. With proper reprocessing, that waste can be reused in properly designed plants.

And to throw a bit more gasoline on the fire, I've thought US commercial reactor design to be a bit backward in an engineering-economic sense... instead of building and debugging a series of one-off designs, I've thought the better approach would be to create a small set of standardized power plant designs. As lessons are learned, the standardized design set would be updated. Once debugged, major system components could be mass-produced... thereby reducing the plant unit-cost.

Just a few bits of trivia to sidetrack an interesting discussion.

--Kiisu

It Might Be Impossible to Stop the Decline of Housing Prices

Perhaps I missed something, but regarding:

* "a buy-back program with the Federal Government offering to buy from owners..."

* "the government should create a new lending entity guaranteed by the full faith and credit of the U.S. Gov. that makes loans..."

* "A job creation program..."

* "Take all the low prices homes that have been foreclosed on and give them to the homeless..."

* "A program which subsidizes rents of homes..."

And all similar Federal Government-oughta-dos....

I've read the US Constitution.

I've yet to find a clause that permits the Federal Government to assume any of those powers.

Though it seems obvious from history that many of our legislative, executive and judicial leaders have consistently and willfully violated their oaths to "protect and defend the Constitution against all enemies foreign and domestic"... I fail to see how proposing additional violations of the Constitution would solve any of our perceived problems.

As my grandfather might have said, "unconstitutional expansions of the Federal Government are not the solution... they _are_ the problem."

If you truly desire to remove the limits and give such powers to the Federal Government, then it is right, just, and appropriate to amend the Constitution accordingly.

Until then "we the people" should not be begging the source of the problem to illegally assume even more power.

Changing the Nation's Mindset About Housing

John,

"Take a deep breath, hold, out slowly, relax." Instructions from Drill Sergeant Reeves, 1975, Ft Jackson, SC. Son, I was wound a bit tight back then, but found his words good advice... then as well as now. So I'm passing on the favor, and handing those words to you...

Changing the Nation's Mindset About Housing

Strange... I took basic economics in a rural junior high in a backwater state. Really basic stuff: budgeting, balancing a check book, debt fundamentals (loans, mortgages), etc. The class was optional, the subjects uncomplicated, and I put the topics to good use avoiding the money traps that snared my parents.

Of course I had the incentivizing advantage of being scrawny and half starved. My clothes were twice my age, and the house I lived in would have been illegal if a prison (I hot-bunked with a sib, and had one drawer and 12 inches of closet space to call my own).

The class paid off.

I bought a small farm two weeks ago. I retire in 64 days… having set the date 10 years ago.

I'm not rich, but I’ve been able to accumulate the resources I need for what I want to do for the foreseeable future. Seems to me, opportunities abound, even now, if you're hungry enough to dig for them.

The Nationalization of AIG

"it's even foolish to discuss the merit of the deal"

Really?

All statements must be viewed with skepticism and be subject to scrutiny. Central or authoritarian regulation of debate, study and inquiry makes truth difficult if not impossible to find.

If it is foolish to discuss the merits of anything, then we are in worse shape than I had imagined...

Financial Crisis: Our Founding Fathers' America

"Rule of law is an essential requirement for any civilization to thrive in the long term."

True, but only so long as it is obeyed.

If you read the US Constitution, then review current laws, judicial mandates, and Executive Orders, you'll quickly realize that the Constitution is in turned deliberately ignored, malevolently misinterpreted, and maliciously mangled.

The very folk who swear to “support and defend the Constitution of the United States against all enemies, foreign and domestic” are the very parties responsible for such malign behavior. For the last century, they have, almost without fail, violated every restriction imposed by the Constitution.

Furthermore, the redefinitions and circumlocutions provided as justification invert logic and foreshadow a more virulent strain of 1984 Orwellian Newspeak.

If the Judiciary, the Legislative and the Executive are the guardians of Constitutional Law, then who watches the guardians? Quis custodiet ipsos custodes? Who cures the malignancy festering in the heart of America?

And you wonder why we have a few problems?

KBE's Forward Yield Pays You to Wait

Sir, did you really mean ...long-term earnings being permanently impaired... "due to lack of an irresponsible lending market"?

I thought we had one of those.

I assume you meant "due to the lack of a responsible lending market"... but as stated, the comment really tickled my funny bone... and humor can be such a rare commodity.

Homeowners Associations: Villians Or Victims in Foreclosure Crisis? [Housing Tracker]

I've had an admittedly difference experience... after a wee bit of a revolution where we removed the entire previous board, fired the attorney who obviously represented the management company, and fired as well as the management company... (we had a number of good financial and legal reasons for such drastic action)

We went self-managed. Our finances are now in very good shape (per our last annual audit, instead of at the brink of bankruptcy), our annual fees have remained unchanged in years and the property looks better and is better managed... needed repairs are being completed... at a reasonable cost... no more triple billing, contractors are held to their contracts (instead of hiring a 2nd contractor to fix the first's errors, and a 3rd contractor to fix the second's).

Not saying our approach works for everyone, nor that it is perfect, but it is dramatically than before and is definitely working for us...

And it is nice to no longer be held hostage to and act as a cash cow for a management company.

3 Long Ideas: Mitcham Industries, Key Technology and New Frontier Media

Looked at NOOF earlier this year. I liked the zero debt and decent dividend... but could not (and still cannot) figure out how that was possible with a 246% dividend payout ratio.

And because I did not (and still do not) understand such magical processes, I've stayed away. (stats from finance.yahoo.com/q/ks...)

Any enlightening explanations would be appreciated.

Kiisu.

Payrolls Drop - And You Ain't Seen Nothin' Yet

ummm... a failing of mine is that I like to tack generalities to specific examples... sometimes relationships pop up.

For example, my extended family can be divided into 3 groups based on education. Those same groupings have, as best as I can determine, a 100% positive correlation with both household income and household wealth.

The first group for the most part did not finish HS. Most of the group (there are 2 counter examples) engage in what I consider risky behavior (drunkenness, smoking, drug use, minor drug dealing, cons, petty theft, & casual sex). For the most part they live from paycheck to paycheck... when there is a paycheck (the majority of the group have never held a full time job for a year... and as a SWAG the group averages a paycheck perhaps 30% of the year). For the remainder of the year they live on charity, con, theft and hand-outs. Their assets consist of junk cars, a long gun and whatever else they've been able to steal or scrounge. All have been in jail, some have been in prison.

The second group graduated from HS, and perhaps attended a bit of college or tech school. They hold steady, but minimal paying jobs, have little if any financial reserves, retirement is a fantasy, most have rented for years before finally scraping together enough cash to finally afford a house (though I suspect most here, if they could see the dwellings would scoff and label them shanties). They survive via hard work, diligence and perseverance. I was born into this group.

The third group graduated from college, some have advanced technical degrees, usually engineering. Most have pensions, health benefits, cash reserves, and multiple investments. Some own their own businesses, others consult part-time as well as work full-time.

In cataloging and reviewing the members of my family, the one determining factor seems to be attitude. In my family, attitude determines:
* If the individual can defer immediate gratification.
* If the individual takes advantage of available education.
* How the individual manages financial decisions.

Being able to defer immediate gratification means the family member mortgages the present to secure a better future, improves his education and learns to make better financial decisions.

However, education and wealth say nothing about the “quality” of an individual… for example, one of our best educated family members is self-righteous arrogant scoundrel who my wife and I avoid when ever possible. While her brother, a member of the first group, is a real pleasure to be around… despite his brushes with the law.

Your family may be different, but the above describes mine.

Combating Financial Illiteracy

While I agree with the sentiment, I believe there is also an underlying assumption that should be examined. Namely, the educated never make stupid, unwise or irrational decisions, never misread the environment, and never misdiagnose the solution... which if true would mean lawyers would never break the law, doctors would always be in perfect health, ministers would never sin, etc. Yet even a casual glance gathers numerous counter-examples.

That cursory examination leads me to believe that while education is absolutely essential, education-by-itself is insufficient. Making good decisions also involves avoiding hubris (I'm guilty of that one, big time), understanding when and where to apply the rules (not too good at that one either), understanding the limitations of the rules (I've blown that one numerous times), and a host of other things I've not mentioned (and probably misunderstand).

At times indeed, the culprit is "what I know that ain't so"... which dear experience has shown to be one of my major failings.

New Frontier Media: Adult Pay-Per-View Co. Yields High Dividends

I looked at NOOF earlier this year... liked the dividend, liked the zero debt, but could not figure out how all that was possible when the payout ratio was 246%... so I stayed away. Anyone know how NOOF manages such a thing? (financial stats from finance.yahoo.com/q/ks...)

Hokey Religions and Economic Forecasting

“The public sector, so vital to the real humans that libertarian and conservative discount in their ideologies, would do its job a whole lot better if conservative ideologues would stop interfering with its operations with artificial budget-balancing cuts during economic downturns and learn to accept the reality of cyclicality built into the economy.”

What?

Since when did the public sector, euphemistically the Federal Government, become “so vital”?

You can’t survive without it? Really? Such a claim beggars the imagination.

And are not libertarians and conservatives “real humans”? When I last checked, the ones I know certainly looked like real humans.

A "slight" difference is that investing in the Fortune 500 is entirely voluntary. However, current taxes and the future tax burden implied by deficit public spending are very much involuntary.