E.D. Hart

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147 Comments

    • Thu Jun 26th 16:27 PM | Rating: 0 0
      Commented on:
      Dividends In the News: Seven Companies Raising Dividends
      Citigroup reps also said that they would maintain dividend, right up to the point of cutting the dividend.
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    • Tue Jun 24th 23:34 PM | Rating: 0 0
      Commented on:
      Don’t Worry About a Return to ‘70s Stagflation
      I usually refrain from depreciating remarks--but I hope the author doesn't have a degree in economics, because if he does, he has wasted a lot of money.

      I agree with the others that 1) inflation is double digits, don't believe the government numbers, and 2) the fact that wages are not rising is not evidence of the lack of inflation, but rather the powerful forces of globalization.

      Moreover, the following quote is absurd:
      "A big mitigator is the memory of what happened in the late 1970s—a brutal combination of double-digit inflation, double-digit interest rates, rising unemployment and falling output. The awareness of the negative impacts of stagflation will almost certainly lead top policymakers in the White House, at the Federal Reserve and on Capitol Hill to move quickly to head off stagflation, as we’ve already seen with the economic stimulus checks and interest rate cuts.

      On top of that, exchange rates are far more flexible than they were several decades ago, and the surplus of worldwide labor will serve to hold down any upward pressure on wages."

      We currently have double digit inflation, unemployment is understated and rising, interest rates have no where to go but up, and are poised to raise considerably after the fall election.

      The fact that wages are held down by surplus wages is irrelevant to inflation. Inflation results from the government(s) creating money, and credit globally faster that economic growth. Prices rise in such an environment, and wages can actually fall in the face of rising prices. The authors analysis gets cause and effect wrong, and has waaaaaaayyy too much confidence in the politicians.

      economic stimulus checks are more than offset by the rising cost of energy, and falling interest rates are a very temporary phenomenon that must reverse. Please take off your rose colored glasses.
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    • Sat Jun 21st 22:20 PM | Rating: 0 0
      Commented on:
      'The Time to Buy Financials' Is Still Not Now
      "I really cannot see names like AIG, AXP, Citi, Barclays, LLoyds etc going out of business. Seems to be a panic."

      There is no panic, just a long grinding decline. The consensus bet is to buy finacials now. The contrary bet is to short them. Citi may not go out of business, but so what. Does that mean it wont be dead money for two years, maybe three? No, I sold all my financials in February, and wont buy more until the housing and debt crisis are somewhat turning around.

      Its true you pay a steep price for a cheery consensus, but it is also true that you shouldn't catch falling knives and that you should take what the market gives you.

      The market right now is giving a loud and clear warning that the financials are in serious trouble, and it is based on a collapse of trillions of dollars in asset prices--the US housing market lost 2.7 trillion dollars, and the collapse of debt has been even more serious.

      History shows that it takes a long time to resolve debt collapse, and housing collpases. It will take 5 years or more to resolve. Maybe 10 years. Want to play that trend?
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    • Sat Jun 21st 22:04 PM | Rating: 0 0
      Commented on:
      Energy Bombshell: China Raises Oil and Diesel Prices
      Oil demand from China will not decrease, but in fact will increase as the two big state oil companies buy more to increase what is now a profitable product.

      Demand destruction in China will not occur at these levels as cars are still the purview of the rich and upper middle class. Here in the US, demand destruction is occurring at $4.00 per gallon, but lower US demand is a short term, and modest effect of higher prices.

      Monday should see the spike of Oil as Nigeria takes 10% of its production off line, and Israel rattles sabers against Iran.

      Don't count Israel out--they have struck Syria before, and are saying that a strike against Iran is "inevitable"...

      Look for $150 plus a barrel this summer and beyond. The Saudi's attempt at ramping up production is a sham--they simply don't have the spare capacity to increase in a meaningful rate anymore.
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    • Tue Jun 17th 21:02 PM | Rating: 0 0
      Commented on:
      What China's Stock Market Implosion Means for Oil
      The end of subsidies may be offset by the revaluation in a proportionate amount of the Yuan. Higher Yuan and the prices rising from the end of subsidies dont mean so much.
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    • Fri Jun 6th 15:49 PM | Rating: 0 0
      Commented on:
      Miller and Heebner: A Study in Contrasting Investment Styles
      The real story is not value vs, growth: it is low inflation expectation environment vs, high inflation expectation environment. Heebner has the world macro view of rising inflation and Miller has the macro view that things will revert to the mean and we will come back to 80s, and 90s level inflation. Heebner has the right macro view as the world is currently undergoing a cataclysmic macro change that leaves Millers investing thesis behind. Heebner is also a value investor buying companies for less than their intrinsic value. He just has higher turnover.
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    • Mon May 26th 15:13 PM | Rating: 0 0
      Commented on:
      The Case for Not Drilling ANWR
      Wow, these energy articles sure get people hopping. Lots on peoples minds here. My sentiment is that our country's leadership (both parties) are so interested in the status quo that there is really no incentives to change our dependence on foreign oil--until now, with prices north of $100 per barrel.

      Whos to blame? I blame all of us. Economics is a bit cynical--we act in our own best interest--and as long as oil is cheap, as it has been for decades, there is no incentive to change. But only with rising prices--then there is the crisis. (Capitalism doesn't seem to work well in avoiding long term problems, only addressing them after the fact).

      Why didn't we plan ahead, and see the train wreck coming? Its the same reason we won't respond meaningfullly to global warming as a nation until the cost is evident and overwhelming and fully in peoples awareness.

      Its the same reason we didn't prepare well for terrorist attacks on our nations soil--until after 9/11. As a nation we seem to respond to crisis only after the damage is done, and we are piss poor at thinking ahead proactively. Or is this all nations? Human nature? I don't know, but it is only after we have a pearl harbor--then we get into the war. Only after $135 per barrel-then we say EUREKA THERE IS A CRISIS!

      This doesn't speak well for our nation, our economy, our species.

      I do save a special variety of vitriol for Bush/Cheny because they lied to the nation about the reasons and the need for WAR, at the cost of 2 to 4 TRILLION dollars to our nation, our children and grandchildren. This debt will take generations to pay off, and the outcome is anything but guaranteed.

      A better use of those trillions would have been a Manhattan Project style of response for energy independence that would truly push our nation off the energy status quo. But then, that would have required wisdom, something that we don't see much of in todays leaders.

      Plenty of blame to go around. Bring on higher prices--it may be the only solution.

      People don't respond well ( it seems in the collective) to reasoned analysis, when the alternative of denial is so much more palatable.

      Peak oil? Nonesense--only a theory.

      Global warming--rubbish--unpr...

      Global terror menace to the US--extremely unlikely!--woops wrong about that last one.
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    • Fri May 23rd 19:09 PM | Rating: 0 0
      Commented on:
      Is Oil a Bubble? Part One
      Learn to distinguish between trends and bubbles. Oil is in a trend. Not everything that increases rapidly is a bubble. Oil was $2 a barrel in the 1940s--now its $135. Do we revert to the mean? Or does the worlds diminishing supply and rising demand portend a rising trend?
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    • Tue May 20th 13:57 PM | Rating: 0 0
      Commented on:
      Real Yields and the Market
      It would be interesting to see the graph redrawn with constant CPI data from the 1980 methodology--which would put inflation at 10% and the negative yield much lower. As it is, it appears that your graph is a combination of three different inflation calculations--which makes comparisons with the past not meaningful.
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    • Tue May 13th 20:06 PM | Rating: 0 0
      Commented on:
      China's Inflation Could End the Commodity Boom
      Higher Yuan, lower dollar. Commodities priced in dollars. Oops, greater demand from China. The economy can contract and prices can rise at the same time, and commodities can rise as consumption growth declines--if the growth in the dollar supply continues to increase. I am with Michael B. Smith on this one.
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    • Fri May 9th 19:25 PM | Rating: 0 0
      Commented on:
      Why Inflation Is Lower Than You Think
      Chinese inflation is at about 8-9%. How long before Chinese leaders slow inflation by revaluing the yuan? and thereby devaluing the dollar further? Answer: Soon. This will have the net effect of increasing inflation here at home.

      As the Chinese let their currency rise, the cost of goods to Walmart increases, and the cost of a basket of commodities (priced in dollars) decreases...thus fueling demand by the Chinese. This is a decade long process needed to cure a severe global monetary imbalance.

      There is no commodity bubble but a US treasury bubble, and a dollar bubble.
      View article »
    • Mon May 5th 20:22 PM | Rating: 0 0
      Commented on:
      Is the Commodity Bull Market Over?
      Agree with CT Programmer--gas is a great buy right now. See Mcdep.com with Kurt Wulff
      and his current insights on the great value in natural gas.

      View article »
    • Mon May 5th 20:15 PM | Rating: 0 0
      Commented on:
      Dollar Doldrums Will Soon Be History - Barron's
      This comment is interesting:
      "Despite concerns about the dollar losing its coveted "global currency" status, the IMF noted that dollar reserves were steady at 64% even after its recent plunge, suggesting central banks are in no rush to dump the dollar."

      I would like to point out that the reason for this is the "flight to safety trade" and the fact that the market has been looking for a port in the storm. When the worlds investors wake up to the real inflation rate much north of 4%, treasuries will not look so appealing.

      Currently, 10 year bond holders get 3.86% to guarantee liquidity, and the loss of purchasing power over the next decade. Investors typically overpay for liquidity, and stability--and this is one example.

      Moreover, the 64% figure is actually a substantial decline in relative reserve percentage over the last decade. Look for this long term trend to continue--reserve banks holding lower and lower percentage of us dollar as reserves, as percentage of overall reserves.

      Its not necessary for banks to stop buying us bonds and bills, they merely need to slow the purchase of these assets--and this is what we have seen over the last decade. The bullish case for the dollar is short to medium term--the long term trend is still down.
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    • Mon May 5th 20:03 PM | Rating: 0 0
      Commented on:
      Dollar Doldrums Will Soon Be History - Barron's
      Eventually, oil will be prices in Euros, or a basket of currencies--as a widespread practice. This is just a matter of time.

      When this happens, look for the dollar to drop. Several serious proposals are in the works for this very change.

      There will be less of a reason for foreign governments to hold dollars. This will increase dollar supply, as foreign central banks hold fewer dollars as a percent of overall reserves, and these dollars will be turned into other currencies, or commodities.

      Currently, over half of the dollars in existence in the world today are held overseas, much of it for reserve currency purposes. Some of these dollars are coming back to the US in a tsunami called inflation.

      The biggest bubble in the world today is not real estate, it is US treasuries. Global dollar surpluses have sought out the "safety trade" of treasuries as a way to find port in the storm from recent increases in market volatility.

      Look for inflation to increase, yields to rise, and bonds to fall.

      Those treasuries, prices in dollars, will be converted into other assets--including commodities, and currencies. As foreign governments hold a huge chunk of treasuries, they will continue to diversify away from US bills and bonds to protect their capital. This is already occurring.

      The "flight to safety" bond trade will come to an end, and be replaced by the "inflation trade". This is already occurring.

      Its not that the Europeans, or Chinese, or Brazilians have a stronger economy--(although that helps)--it is far more important that the dollar's role as the world reserve currency is declining, relatively speaking.

      The inevitable decline of US dollar hegemony will take place over a decade or two. Your protection is be long commodities, long high quality dividend paying foreign equities, and short treasuries.
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    • Mon May 5th 19:41 PM | Rating: 0 0
      Commented on:
      Copper Proves the Commodities Bull Isn't Over - Yet
      Markets in backwardation are a bullish sign in commodities, generally speaking. Commodities are also very volatile over the short term, so copper may very well fall 40% from here. But that should not be taken as a bearish sign. The bull case for Cu is that the demand is increasing, and the supply yoy is relatively flat. Similar to the case for oil, and other commodities. Buy companies such as AUY and FXC, and add as prices decline. The secular trend is up. I am long AUY.
      View article »
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