It Figures

Keynesian Economics: Why Krugman and DeLong Need to Read More Carefully

This strikes me as somewhat of an "inside baseball" type of post, but anyone making the point that Krugman and DeLong are mistaken is probably on the right track.

Dodd's Push for Regulatory Reform Has Unintended Consequences

Nothing unexpected about this. And it's not backfiring - it's proceeding as planned. Dodd gets to sound like a "people first " politician while actually protecting his financial industry donors from any meaningful change.

You don't get to stay in the Senate as long as he has by screwing your donors, or playing it straight with the voters.

Does True Competition Among Credit Card Issuers Exist?

The most transparent and objective measure of competition in an industry is the profitability of the participants. Sustained above average profitability is a sign of lack of competition - think drug companies in the '80's and '90's, or MSFT a decade ago.

Given that most credit card issuers are losing money right now, and have for the last year or so, it is hard to characterize the sector as lacking competition in any economic sense.

Folks would benefit from trying to separate their personal "beefs" with these companies from their economic/investment analysis

Not Even Delinquencies Inspire Capital One Financial Shorts

Quit whining. Maybe you should reconsider being short a company you consider to be "completely idiot-proof".

Investing isn't about what you feel should be. I'ts about what is.

Fiscal Stimulus: The Evidence Based View, As Opposed to the Keynesian View

Your "evidence" is anecdotes. Your experiment lacks a control. Besides the consensus thinking of Wall Street and some academics, where's your proof a recovery wasn't already in the works - stimulus or not?

It was October, before the election, that Buffett publicly said buy stocks. Many others did as well. Do you think they didn't know a recovery was around the corner, well before we even elected a President, much less any talk of size or shape of a stimulus package?


As for the argument that it must work because everyone is doing it - is that a joke? Politicians spend money, whether they have it or not, because that's what they do. Show us some instances of when they DON'T spend and you will be more persuasive.


This recovery is what standard business cycle theory, and automatic stabilizers, are all about. Downturns are followed by upturns, stimulus or not.

Did the stimulus influence the upturn? Probably. Did it cause it? Not proved.

Credit Conditions in the Absence of Consumer Protection

Your cereal comparison is wrong. You cannot eat the cereal without eating all the ingredients. The charges you want incorporated into "APR" are almost all discretionary, and differ by customer, so by their nature they cannot be "rolled up" into a meaningful single number representative of actual cost.

If I pay late all the time and you don't, we have decidedly different costs. The "APR" , by your measure, would be maybe 42% for me, but only 8% for you. So would you average these two results to decide the APR on this product is 25%? Ridiculous.

What you are missing is that CUSTOMER BEHAVIOR DETERMINES THE CHARGES, not some secret and mysterious credit card company conspiracy.

If you want credit users to pay less, support efforts to help them protect themselves from themselves. Disclosure is a good first step. Your idea is not.

Healthcare Tax: What's Going On Here?

What a surprise - you blame Ronald Reagan!

Why not give some thought to blaming the actual people in Congress and the Administration today who are attempting to impose this monstrosity on us.

Most economists understand and agree taxes are ultimately paid by consumers regardless of where they are imposed. This is Econ. 101.

It would be very useful if a well known, respected, liberal leaning economist such as yourself would LOUDLY raise your voice against this charade. If the nation truly wants these programs, so be it. But don't let the politicians get away with trying to trick the unsuspecting into thinking we taxpayers are not picking up the check.

Tracking the Odds of Positive Economic Growth in Q309

I usually like your posts, but this is just useless. What you're telling us is that a bunch of people who got it totally wrong in March are now wildly positive on 3Q GDP.

This is nothing more than a measure of current sentiment. It tells us nothing about the future.

This index will be accurate as long as in-place trends continue, but wrong at turning points, as it was in March.

It is virtually guaranteed to be wrong the next time real GDP turns negative again, whenever that is.

Lower Credit Card Fees = Lower Credit Card Profits

After a several month period of adjustment the card issuers will have new profit models from which to operate. These will probably include new and higher fees, smaller credit lines, higher interest rates and reduced availability for less creditworthy borrowers. So the price of limiting sometimes egregious fees for the late and non-payers is higher costs and less convienence for all of us. And less and much more expensive credit for those who need access to credit most.

Good job, Washington!

30-Year Fixed Mortgage Rates Remain Low as 10-Year Treasury Yield Climbs

It would be interesting to see how this spread compares with the 10-20 year spread history. My impression is, but I am not sure, that since the mid '90's it has averaged near 180 bps. If that is correct, today's spread is tighter that during the panic of earlier in the year but can't really be considered tight vs. history.

There is good money to be made in mortgage lending today, with spreads wide and (new loan) credit quality better than in many, many years. Just look at Q1 mortgage origination profitability at the big mortgage players - JPM, BAC, WFC, etc.The wipe-out of the "crazies" over the last few years has signicantly changed the competitive landscape.

Treasury Accepts Lowball Price for TARP Warrants

Dear ditto,

And exactly why should the banks that neither wanted nor needed govt. money be required to "open their books" to these bungling power grabbers?

In what world is it justified for the govt. to come in uninvited to dictate terms to private companies, thus robbing shareholders of value?

For those REQUESTING help, certainly the govt. has a right to know the details. But for those resisting gov.t "help", like Wells, GS, State Street, etc., they have no right whatsoever.

Adding to Capital One Financial Short Position: Gotta Love the Stress Test

Not clear from this why you are short, and continue to short, this stock, other than because "the system" is all screwed up. The little substance you do provide - regulators seem to be on their side, recent stock performance - suggest it's a better long.

You would do much better, I think, shorting some of the past 6 month's winners that are now pretty tired and are not participating in this rally.

Capital One Defies Even Constanza Logic

Most of your facts are approximately accurate but your conclusion is wrong. Those paying attention knew all these terrible things were coming months ago. That's why the stock trades in the teens today instead of near $50, where it was in the fall when they sold stock to bolster their capital. You are too late.

Krugman vs. Sachs on PPIP Loopholes

If your facts are correct, this would not be the first time these two guys spoke before they thought things through. As you say, reading the docs might help too.

What Created Market Misunderstandings About Lamar Advertising?

Very nice analysis and summary.

While I'm sure there are some who came to their negative conclusions based on these factors, you may be underestimating the more human aspects. There are a great many so called investors who simply can't get beyond Q1 revenues feared to be down 15%, especially when accompanied by "questions" about LAMR possibly violating covenants. In other words, fear and momentum are as important these days as fundamentals in understanding recent performance.

You obviously did your homework. Thank you.

And for the record, I think "billboard guy" nailed it as well.