roger maxims

China: Exactly Where Japan Was in the 1980s?

Which world exactly do you live in? Jupiter or Mars?

You mean Japan is the Asia Pacific version of Alice in Wonderland?

You mean Toyota and Sony's technologies are dreamt up by Mr Watanabe and Mr Tanaka overnight when they saw fairies?

You mean over 80% of ministers in the current Japanese cabinet / opposition politicians are idiotic lawyers having graduated from sandboxes like the University of Tokyo, or passed the 1.7% success rate bar exam (lowest in the world btw)?

You mean industrial revolution on its alone made middle-class people millionaires and entrepreneurs billionaires?

You really should consider joining the law firm Morrison & Forrester, better known by itself and others as MoFo.


On Aug 27 04:54 PM Yaudy wrote:

> Roger, blind faith like yours in Harvard and lawyers is exactly the
> source of America's problems. Japan does not have any school that
> can compare to Harvard, and does not have a ton of lawyers which
> the US has, so how come Toyota makes better cars than GM? How come
> GM's Harvard and Wharton MBAs and lawyers now live on government's
> charity to survive. It is workers, Chinese or American, who drive
> the economy, not the top executives who makes 200 times the workers
> salary. See the problem?

China: Exactly Where Japan Was in the 1980s?

You mean, Yaudy, that a country can grow by itself? You mean by making peasants / factory workers rich and earn yuan, and drenching China's US$ reserves to buy raw materials and machines, China will become even one-quarter as powerful as any of its friends at G7? A factory is a factory, even if you paint it green and put in glass facades.

What you are proposing, dear Yaudy, is that First World countries like America would have grown rich since 1949 just as quickly WITHOUT Princeton, Yale, Harvard, Silicon Valley and Wall Street. That high-paying jobs could have been replaced by 10,000 McDonald's outlets hiring kids to flip burgers.

The only end result of crazy growth of 20% in 2nd and 3rd tier cities is crazy inflation. Do teach me how, without innovation, to squeeze more productivity out of China's workers when your Walmart Levis jeans are US$8.99.

In baby economists' terms, China has NO tertiary industry. None. What use are lawyers when the government debars them for disturbing Beijing's peace? And what use are bankers when your currency / stock market is closed to the outside world, like Monopoly?

You only need to read my opponent's response below to smell the rot of your argument. Need I say more.

On Aug 25 05:13 AM mna wrote: [excerpt]
[...]
> This kind of thinking is reminiscent of China in the 17th century,
> when their emperors thought they were the center of the world, and
> congratulated themselves on how advanced they were and how they didn't
> need anyone else, as they were the most powerful country on the planet.

China: Exactly Where Japan Was in the 1980s?

And therefore, whilst logic is stupidity's worst enemy and ignorance is the latter's best friend, tell me your reasoning.

Time to teach you about natural resources:

The only way that China can grow is by gulping mountains of steel and lakes of oil. What else can you use to feed machines that manufacture and to fill workers' rice bowls (extra virgin olive oil)?

Au contraire, the only way that the real First World can grow is by inventing new technologies, which requires a nanocentimetre of reinforced steel for their Swiss-made heavy duty sketch pens and a pea-sized drop of saffron oil to cleanse the free roaming mind.


On Aug 25 05:13 AM mna wrote:

> Wow... just wow. There's actually people out there who's STILL this
> misguided? Mr Roger Maxims: You sir, have given me a whole new outlook
> on the US. With people still this clueless about the upcoming competition
> we're facing, the nation's absolutely, positively doomed.
>
> This kind of thinking is reminiscent of China in the 17th century,
> when their emperors thought they were the center of the world, and
> congratulated themselves on how advanced they were and how they didn't
> need anyone else, as they were the most powerful country on the planet.
>
>
> Think about that.
>
> On Aug 25 04:04 AM roger maxims wrote:

China: Exactly Where Japan Was in the 1980s?

Much obliged. In entertainment and joy, Sir, you will recall that:

(1) China has no modern technology of its own: (i) space rockets are Russian technologies from 1960s; (ii) automobiles are copied from BMW, Mercedes-Benz, and [your favourite brand]; (iii) drugs are what they are literally - they're killers rather than cures.

(2) Whatever technologies the Japanese, Americans or Germans license China, they range from one generation (in technology) to one decade behind! Reason: national / commercial / self-interest in the real world outside Pyongyang you know baby.

(3) China's best scientists, doctors and mathematicians live next door to you and teaches at Princeton having graduated from Yale and collected a Nobel prize in Stockholm with another planning.

(4) Cultural revolution + 1989 takes 15 years off China's clock whilst the rest of the world thinks about reinventing the telephone, culminating in companies with weird names like Nokia and Ericsson.

(5) As a "consumer" economy, China doesn't care about R&D. All it want is to make peasants rich and bureaucrats richer. Even if it did try, the combination of (2) - (4) above means that its technologies will never make international standards, come hell or high water. How can you get rich selling chow mein and dragon dances?

(6) No country would be willing to contribute its newest technologies in "scientific co-operation" with China, because of national interests.

These six are the very reasons why China has to suck up to the US even under present circumstances. It simply has no way out.

So pack up your optimism, save some US$, buy some more burgers before they are priced in yen or yuan.


On Aug 25 12:03 AM HaavBline wrote:

> Entertaining. But since no country has all items on your list, what's
> your point?
>
> BTW, China does already have your items 4, 5, 6 in some very competitive
> way. So I suggest you come back to check your list at least once
> a year.

China: Exactly Where Japan Was in the 1980s?

With all due respect, my friends, where lies the argument (1910/65/89 Japan)?

China is but a huge consumer economy, akin to the US or Japan or Germany, minus:

(1) the military technologies ($billion stealth jets);
(2) the aeronautical technologies ($billion spaceships / 787s);
(3) the manufacturing technologies (Fanuc - largest manufacturing robot firm in the world, listed in Tokyo, debt free);
(4) the vehicular technologies (Prius and friends);
(5) the environmental technologies (solar panels and nuclear alike);
(6) the pharmaceutical technologies (Tamiflu etc);

and also

(6) artistic / Midas touches (Milan / Paris);
(7) "entertainment / education" films / websites (the unions in California);
(8) justice system to protect foreigners' money; and
(9) currency system to let foreigners TAKE OUT the money they put in;

If such a country were to grow in any meaningful sense, it would be in the American cents...which doesn't mean much anymore.

Berkshire Hathaway Q1 Portfolio Changes: Does It Pay to Follow Buffett's Moves?

Hi Felix

Another idiotic comment coming from you: " According to this paper a portfolio that mimicked Buffet’s stock investments would have outperformed S&P 500 by 14.6% annually between 1976 and 2006."

If this was to hold true from 2007 to 2037, Bear Stearns and Lehman would not have failed; GM and Chrysler would not have gone Chap. 11; Citi and Goldman would not have needed government help; and most importantly, you would not be sitting there making knee-jerk comments.

My Economic Plan

Dear old Robert,

If just 10% of Americans implement your Personal Plan and start saving, clear their credit card bills month in month out, then soon enough you won't feel much difference between your country, Japan or Russia anymore.

The reason why novelty companies like Apple can survive is because there are so many card-swipers who hit the limits like they're on a Vegas winning streak. Once domestic consumption slows, US is done for the remainder of the century.

The rest of the world simply postpone their wine and fridge purchases and continue eating their humble sushi, pasta and chow mein as before.

Own Gold? Time to Fold

I tend to agree with the author, but for reasons other than inflation expectations.

1. No return to Bretton Woods

The economies of the G7 and China have been benefiting immensely from the fiat currency standard since its establishment. There is no way that any of them would agree to resume the gold standard and limit their pace of growth to the supply of gold.

2. Gold is sold in US$

If US were to default on its Treasuries, US$ would become worthless. Gold price would rise exponentially to US$1billion / ounce, which is equal to GBP 0 / EUR 0 / JPY 0. Bit of a one-way trip for gold bugs really.

Then again, US would only default on its Treasuries if China refuses to sweep up the freshly printed ones due 2038. (Japan is already downsizing its holding, Europe doesn't care.) China will always be kind to Uncle Sam, not because of the nuclear drone planes, but because US is China's top credit customer. Losing US demand for its Walmart toys means putting back years of growth.

3. Conclusion

Gold will trade in a range no doubt, as EUR/USD, JPY/USD have done this year due to risk aversion. Doubt it will be much higher than $1100 since most mutual and hedge funds (aka the real players) are still stock-focused.

Governments don't want to touch their gold reserves as they are saving the REAL economy with paper money that buys loaves of bread.

Madoff Scandal: Where Was the SEC?

With due respect, Madoff ended up like this because the markets failed him. If you ask doctom stock traders in 1999 or real estate stock traders in 2006, 10% guaranteed return in a bull market is next to nothing.

Not only Ponzi schemes, but NYSE also falls apart when everyone wants their money out. Particularly borrowed, leveraged money as such.

Three Financial Stocks Worth Holding

I love this article. The author says Wells Fargo has "excellent management" and JPMorgan has "solid management", which presumably made the wise decision of concentrating most of their risks in the US housing market. And then the markets failed them.

Also, I applaud the fact that "the BOA name has significant goodwill". It very much explains the $16.24 portion of its current quote of $16.25, the remaining penny being the cost of the share certificate some may soon want as a momento.

The only case where shares of a company plummeted and now represents a bargain is when the steep fall was caused by margin calls on its shareholders, not the company itself.

Citi: A Sell at $3.00?

Stock price = discounted cash value of forward EPS

As at Dec 2008, Citi's stock price should fall between:

0.98 [2% inflation] x ZERO [2009 loss]
to
1.03 [3% deflation] x ZERO [2009 profit]

which gives a price range of absolute zero to positive zero.

Please don't tell me 3 years or 5 years later Citi will become profitable again. All banks profit on ever-increasing leverage, that's what mortgages and credit cards are all about.

Imagine what would happen if Citi reduces your mortgage by half and your credit card limit by a third now.

To stop the train is hard, to drag it in reverse when there's still coal in the boiler is suicide.

Cramer's Now a Market Timer?

Jason, "buy and hold" does not cover the truth of "bust". A lesson which many value investors have learned recently with Bear Stearns, Lehman Brothers and many soon to be:

GM (see you in Chapter 11),
Yahoo! (say goodbye to your $1 salary Yang),
Dell (laptops are now cheaper than mobiles, Michael),
Wells Fargo (overdue mortgages / credit cards make you an unprofitable, CCC-grade bank like the japanese gov-funded zombies), and
[enter a value stock that Buffett will buy 10% preferred in].

Honestly, (1) how can GS or GE pay Buffett 10% a year starting 2009 or (2) how they can redeem the preferred in 2011 (earliest possible) except diluting the common by issuing double the preferred quantity at half the price etc. Banks would not want to lend to them after even peeking at their balance sheets.

Quitting the Hedge Fund Game - Mark Sellers

Two possibilities really:

1. Seller is getting redemption requests flooding in right this minute, and like all his hedgie peers, is using the one-to-two year period to sell down gradually rather than capitulate. At least he can collect another two years of management fees. Possibly some performance fee @20% of a meagre return.

2. Seller could not figure out the bankruptcy risk of the investment-bank-holdin... he is using as broker dealer and leverage provider. Nor could he identify a reliable one out there. Without leverage, his hedge fund cannot return 65% p.a. or the 20% performance fee for him. Someone who gets paid in billions will be aghast at having to accept paychecks that has only eight zeros after the first digit.

Either way no fund manager, real estate agent or financial planner ever loses out when prices rise or fall. Nor do incompetent civil servants either.

Credit Crisis Sharpens Anger Over CEO Pay

Egg: No, it is not right to compare CEO pay to MLB players. The whole baseball team is made up of a dozen or so players, each of them is capable of changing the outcome of the game. And they alone bring in all that sponsor revenues.

And no again, US CEOs can easily go to Japan (Carlos Ghosn for Nissan) or Dubai or London etc to get exactly the same pay, parachutes and pancakes from Mackey Dees. This is because you cannot learn management skills of a multinational with 100k workforce by running a small factory in the countryside or getting an MBA from Harvard.

Are We There Yet? Not Even Close.

How did you figure out the 60-day rule? Aptly-named Bear Stearns (Mar 18) to Lehman Brothers (Sep 15) is more like 6 months, Sunshine.

Your predictions sound so much like those "oh here's peak oil" or "oh investment banks are trading below book value let's go shopping" analysts folks who are carrying their belongings in carton boxes.

The end of the tunnel is not the when confidence comes back. It is rather when all have lost faith and Buffett, private equity and sovereign funds come in.

Of course, by then you and half the lower Manhanttan expese accounts would have evaporated into the hot air you sold us in the first place.