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Tack

Tack
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  • The U.S. Economy Appears To Be In Trouble [View article]
    "I think this time this will be different (higher rates will trigger hardship) since there is so much debt and margin. I think when interest rates rise, and margin calls begin, it will trigger selling. "

    Again, you have missed the historical data.

    There isn't so much debt, when viewed in the context of who has used it. In 2007, we had debt held by people who has no business owning homes or taking out massive no-docs mortgages. Now, we have debt held by corporations, most of whom have maintained all-time-high cash balances, and by consumers with sensible credit worthiness, and by sovereigns, who have virtually no risk of default.

    And, as far as margin debt goes, it always follows stock valuations in lockstep; it's not higher than at other times, in fact lower, as a percentage of GDP. Margin calls don't occur because rates rise. That rise is almost immaterial to the investment picture. They occur in broadly-falling markets, which are initiated for other reasons, not because shares are purchased on margin.

    The whole 2008 escapade has traumatized so many that they think a whole new set of economic rules apply and that imminent and repetitive crashes are the new norm. It's be a very costly philosophy for those who have maintained it.
    May 28, 2015. 08:58 PM | Likes Like |Link to Comment
  • The U.S. Economy Appears To Be In Trouble [View article]
    saw:

    And, oil and all other commodities down, too.

    http://on.wsj.com/1KBBtdt

    Does it seem like housing is about to lead an economic or stock-market collapse?
    May 28, 2015. 07:01 PM | Likes Like |Link to Comment
  • Banks named in FIFA scandal [View news story]
    E:

    I fully understand that. I just get tired of the notion that anytime some private parties engage in nefarious activities, it's the bank's fault. This is just a ploy for deep-pockets lawsuits and to line the coffers of government with fines. We all pay for this nonsense, just as we do with insurance, paying for everyone else's mischief.
    May 28, 2015. 03:46 PM | 1 Like Like |Link to Comment
  • The U.S. Economy Appears To Be In Trouble [View article]
    "The FED's job is to fix the economy, not the stock markets. "

    No, the Fed's job is to provide liquidity at the lowest risk-free rate that does not cause inflation.
    May 28, 2015. 03:42 PM | Likes Like |Link to Comment
  • The U.S. Economy Appears To Be In Trouble [View article]
    "When interest rates rise, stocks crash, and house prices collapse."

    Of course, if one examines the historical record, one discovers that asset prices, including stocks and home prices, rise in tandem with interest rates until such time that the yield curve inverts very late in the rate cycle.
    May 28, 2015. 03:41 PM | Likes Like |Link to Comment
  • Banks named in FIFA scandal [View news story]
    E:

    Apparently, nobody cares about privacy any more. Why should banks have the right to monitor my or your affairs just because you lend them money? Somebody might be growing marijuana in their homes in your neighborhood. Want the community association empowered to inspect your house? Or, should automobile companies be held liable if you misuse your car? Government intrusiveness via private entities is everywhere and growing.

    The other reason that parties always try to imply some banking impropriety is so they can sue somebody with deep pockets. This is now automatic in our society.
    May 28, 2015. 02:51 PM | 2 Likes Like |Link to Comment
  • The U.S. Economy Appears To Be In Trouble [View article]
    "INterest rates are low to make debt service easier. But debt loads are higher than ever. What happens when interest rates rise?"

    I don't know; you tell me.

    What happens when a consumer has refinanced his mortgage down to very low rates, fixed for 30 year years, and interest rates rise?

    And, beyond that, why do interest rates rise?
    May 28, 2015. 01:32 PM | 1 Like Like |Link to Comment
  • Banks named in FIFA scandal [View news story]
    Banks are now supposed to be the nannies for every kind of financial transaction that may occur in society. Apparently, they're supposed to be omniscient and/or prying into the private affairs of the citizenry to uncover every sort of wrong doing and report it to the authorities. Of course, as soon as they set up exactly the vigilance to accomplish these kinds of totalitarian aims, then society will be aghast and screaming about NSA-like invasions of privacy.

    Simply put, bank can't win these days and will remain a poor investment choice in this type of punitive regulatory and litigious climate.
    May 28, 2015. 01:17 PM | 3 Likes Like |Link to Comment
  • Consumer sentiment declines yet again [View news story]
    My view on all sentiment indicators is "watch what they do, not what they say."
    May 28, 2015. 11:19 AM | Likes Like |Link to Comment
  • The U.S. Economy Appears To Be In Trouble [View article]
    Consumer debt service as a percentage of income at 30-year lows.

    http://bit.ly/MiNM1D
    May 27, 2015. 11:46 PM | 4 Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #76 [View instapost]
    LMH:

    The environmental issue is all political baloney.

    There's not an energy production resource that doesn't have "environmental" issues, including producing vast quantities of batteries and solar cells. The whole idea that man is suddenly destroying the planet or using up all its resources is almost as old as civilization itself and has certainly been the mantra of Luddites ever since Thomas Malthus' erroneous musings.
    May 27, 2015. 05:33 PM | 2 Likes Like |Link to Comment
  • The U.S. Economy Appears To Be In Trouble [View article]
    http://yhoo.it/1BnTu6C

    This is what always happens when the economy and housing markets are failing, right?
    May 26, 2015. 06:23 PM | 2 Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #76 [View instapost]
    Today is just another episode of the Greece silliness, nothing more.

    Oh, and, as usual, look what happens to rates the moment fear enters the equation.
    May 26, 2015. 01:27 PM | 1 Like Like |Link to Comment
  • Resource Capital Needs To Get Its Act Together [View article]
    M:

    Of course, it's not after tax. Who computes or reports investment data "after tax," when no one can know what someone's tax rate might be?

    http://bit.ly/MIOmnS
    May 25, 2015. 07:42 PM | 3 Likes Like |Link to Comment
  • Growth In The Era Of Human Capital [View article]
    m:

    Part of the problem too is that society has insidiously arrived at the notion that "being smarter" or "doing better" than others is somehow "elitist" and "unfair," so absolute "equality" has been placed on a throne to be worshiped. The problem, of course, is that people cannot all be "equal," either in endowment or in motivation to achieve, so the only way to mandate equality is to dumb things down to the lowest common denominator.
    May 25, 2015. 01:52 PM | 3 Likes Like |Link to Comment
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