Egg's Comments

Why I'm (Cautiously) Optimistic About the Future

Sun, 29 Nov 2009 02:35:34 -0500

I, for one, do NOT believe we will be better off in 20 years than we are today.

We have been living above our means (debt/deficit) for way too long and yet we still continue to live above our means. Eventually the day of reckoning will come and the credit card bill (debt) will come due which will force us to live below our means for a long time. The standard of living will be down in real terms for decades.

Don't delude yourself into thinking otherwise.

If Dubai World's "standstill" is just that, and any damage is contained to some U.K. banks, then dominoes don't have to start tumbling. Todd Harrison sketches the somewhat worse scenario: a default leading to a flight to dollar safety, killing the dollar carry trade and causing a pile-up at the asset off-ramp as everyone gets out at once.

Sat, 28 Nov 2009 14:19:21 -0500

The thing about the safe dollar idea is that Bernanke will get out the helicopter fleet (almost literally) if the dollar rises again.

So it'll just be a short term pop again. (6 months to a year max)

Banks have found plenty of creative ways to lose billions over the past few years. So it may not be surprising, after past misadventures in Argentina and Russia, that Western banks poured more than $10B in loans into a little-known bank in Kazakhstan - most of which have gone bust, and may have been diverted by the bank's chairman.

Sat, 28 Nov 2009 14:14:42 -0500

It was all Azamat's fault.

He make glorious benefit for himself while Borat and the people of Kazakhstan suffer.

Are We Near a Peak in Farmland Prices?

Thu, 26 Nov 2009 02:00:04 -0500

Farmland will continue to rise. It'll probably be the only real estate to rise in real terms.

The grains produced on farmlands are priced in dollars based on worldwide demand so farmland will continue to become more and more valuable in dollar terms as the dollar declines and ag inflation rises. Even if there is deflation farmland will rise, too. That is because Bernanke will flood the market with so many new dollars to stave off that said deflation, it'll force inflation eventually.

Unless protectionism takes hold and farmers are forcibly prevented from exporting worldwide, farmland will rise in (weaker) dollar value. That is the only scenario I could envision farmland not rising.

Watching the USD Drop? Here's What You Should Really Be Watching

Tue, 10 Nov 2009 02:35:54 -0500

I would agree eventually the yen will crumble more than the dollar.

Part of the reason I didn't see mentioned is that the Japanese has no military power to support their yen. There is no incentive for the world to intervene if/when the yen plummets. The dollar, on the other hand, is backed by the strongest military in the world.

What Buffett's Burlington Northern Buy Really Means

Mon, 09 Nov 2009 02:15:51 -0500

The book value for BNI is $36.

So your "pennies on the dollar" quote is a tad off...unless you meant 300 pennies on the dollar.

Elliot Wave: The Dollar Is Set for a Major Rally

Sun, 08 Nov 2009 01:24:19 -0500

Yeah, ok, tell Prechter I'm still waiting for the $200 gold he promised back in 2004.

JG Boswell: Former Giant Still Appealing

Thu, 05 Nov 2009 13:59:20 -0500

Thanks for the update.

I also have a small position in Boswell and have difficult time getting information.

One question though. You always say Boswell pays a quarterly dividend of $3.50. I show it's only a yearly dividend of $3.50.

Congress Still Looking at a Stock Trading Tax

Sun, 25 Oct 2009 13:52:06 -0400

A 10-25 basis point tax on every trade would destroy daytraders and swing traders alike. Especially the higher tax. (And then double that since you would have to presumably pay when you buy and sell.) Not to mention you pay the tax on even losing trades.

Online brokerages would be gutted also with the drop in volume.

My guess is Congress will never pay such a debilitating law, at least not now. But it will stay in the hopper and one day when the federal government has its own California-esque fiscal panic/crisis (it will happen) then everything is on the table. That's when we will have a trading tax.

E*Trade: A Solid, Deep Value Stock

Tue, 20 Oct 2009 15:01:23 -0400

Most of the ETFC holders predicting $5 and (gasp) $10 shares prices are truely ignorant. Factoring in eventual dilution, the all-time high for ETFC is $3-$3.50.

Yes, that would be an all-time high market cap. I say again, all-time high. As high as when the stock was $25/share. Before ETFC blew up their company with bad risks.

So if ETFC goes to $3.50, it WILL be at an all-time high. And why would anyone think ETFC would trade at an all-time high after the mortgage debacle they are still unwinding?

Dilution kills.

The World’s Biggest Gold Reserves

Tue, 20 Oct 2009 14:53:49 -0400

So, did the World Gold Council actually enter Fort Knox (and the other locales) and verify those #s?

Dole Foods: Ripe for a Successful IPO?

Tue, 20 Oct 2009 14:50:20 -0400

One other thing besides the debt that does concern me about DOLE is the fact that a substantial block of their plantations are located in Honduras.

Hopefully, nothing will affect DOLE from the political situation there, but if it does, DOLE stock will be hit hard if those plantations are at risk.

I'm still considering buying, but it it pops too much then I'll pass.

E*Trade: Expect a Takeover Any Day Now

Fri, 25 Sep 2009 14:44:23 -0400

E*Trade currently has approximately 2.9B shares outstanding (counting all soon to be converts) and you expect $5 per share? That would be 14.5B market cap.

That's much, much higher than their all-time high. Yes, the $25 per share high. That old high was with approximately 400M shares and was only 10B. So you think E*trade should be worth more now than before their mortgage debacle? Heck, that market cap is nearly as big as Schwab itself.

C'mon, really...factor the dilution to your math. There are so many day traders and bottom fishers who cannot get past the sub $2 share price (thinking it's dirt cheap) when it's really not.

Dilution kills.

U.S. Federal Deficit at $1.3 Trillion and Counting

Sun, 09 Aug 2009 10:04:30 -0400

Oy vey...."Defecit?"

Eye usd 2 bee a gud spellr till eye startid comming onlign.

Why Is Deflation Scary?

Mon, 03 Aug 2009 02:46:58 -0400

Well said.

I've always thought deflation was something to be welcomed and would be beneficial to a lot of people. Especially people with low debt. Buying power increases even without wage increases. Most people in Japan during the 90s deflation have actually thrived.

The obvious reason the U.S. government fears it so much is, of course, the growing national debt since deflation (in real terms) increases the principal owed on top of paying the interest.

So the people who would benefit are out of luck since the government has run up such a massive debt in their names. The Fed will print and print in order to destroy the dollar and keep inflating away the debt. And even though deflationary pressures exist, I have little doubt the government will eventually get its way.

The DVR Continues to Be a Life Changer

Sun, 02 Aug 2009 23:09:33 -0400

RichardGC, correcting grammar? Really?

If you demand others be perfect, you should be also. There's something called a question mark you missed:

"Doesn't anyone proofread their copy anymore."

That certainly sounds like a query, doesn't it? (<-- see question mark)

Anyways...enough of you. Back to the article. DVRs! Sooooo true. I couldn't watch TV without my DVR. One of the greastest innovation in tech in recents years, if you ask me.

Shorting the U.S. Dollar: Too Easy to Work?

Sun, 02 Aug 2009 05:37:52 -0400

Neither V- shaped recovery, double-dip recession, nor gloom of night will keep Bernanke from printing dollars.

Your last sections says it all; if the markets falls and the dollar rises it'll only be short term and will only create an environment whereby Bernanke prints even more dollars. Thus causing the dollar to plummet harder later.

Really, the ONLY way the dollar can rise (and stay risen) is for the government to gut spending dramatically. (i.e. balance the budget.) And since we had a Republican prez (who ought to have known better) refuse to cut spending for 8 years, you can bet your last falling dollar that Obama will do what democrats do and spend, spend, spend for the next 4 years.

Cramer's Mad Money - 5 Mistakes Amateur Investors Make (7/31/09)

Sun, 02 Aug 2009 05:23:36 -0400

He forgot mistake # 6:

"Amateurs listen to my Mad Money show. A big no, no, no. Turn me off. Do it. NOW. Never take advice from a man who blows a horn while picking momentum stocks."

From Obama's weekly address: "When we receive our monthly job report next week, it is likely to show that we are continuing to lose far too many jobs in this country. As far as I’m concerned, we will not have a recovery as long as we keep losing jobs. And I won’t rest until every American who wants a job can find one."

Sat, 01 Aug 2009 17:57:57 -0400

Some people defend Obama and trash Bush.

Others defend Bush and trash Obama.

When will people learn that (from a fiscal perspective) they should both be hated and reviled? Both blow/blew up the deficit and refuse to cut spending. Both are/were set on destroying the dollar. In fact, they are both really the same, fiscally speaking.

So, be like me, hate them both.

Ballmer: 'Nobody Gets' the Microsoft-Yahoo Deal

Thu, 30 Jul 2009 16:35:34 -0400

Au contraire...

Everyone "gets" the deal. It's just Yahoo was priced for something more. Either a complete merger or at least the boatloads of cash promised by Carol.

I actually think Ballmer knows that all too well and his statements are just a face-saving gesture for Yahoo management. He doesn't want to rub the reality in anymore than WS already has.

Will Dollar General's IPO Succeed?

Wed, 29 Jul 2009 23:08:33 -0400

Haven't people learned the lessen yet to NEVER buy an IPO for a company (DG) that was recently taken private?

This is basically nothing more than a huge insider sell.

Dow Theory Points to New Cyclical Bull Market

Mon, 27 Jul 2009 18:38:01 -0400

Oh great...after a 40% + bull market since March the Dow Theory finally says it's time to buy now.

I'd be so lost without that theory.

Government to Sell $205B in Debt This Week

Mon, 27 Jul 2009 17:34:41 -0400

In other words, Bernanke to print 205B this week.

Ban 'Flash Orders'

Mon, 27 Jul 2009 17:31:34 -0400

What about banning day trading?

That should eliminate front running if you are required to hold a position for at least one day. I would dislike this personally since I do daytrade on occasion, but I'd adjust...and it'd hurt others more than me.

Eminent economists Nouriel Roubini and Anna Schwartz square off on the NY Times' op-ed page over the reappointment of Fed chief Ben Bernanke. Schwartz contends Bernanke's over-accommodative policies will only increase the severity of the recession; Roubini says Bernanke's genius averted a second Great Depression.

Mon, 27 Jul 2009 00:52:03 -0400

Machiavelli999, if you really think that if the government forgoes stimuli givebacks and instead kept some semblance of a balanced budget (which I strongly believe in) that economies would never recover from recessions then you are beyond hope.

This idea that the economy must always grow and continue to grow unabated has been wrongly baked into the government's and politician's consciousness for decades now...and it's going to lead to eventual disaster. The excesses never get wrung out of the system like they should during recessions. The government just props up another bubble and everyone thinks everything is fine and dandy. But the excesses linger below the surface and make each following downturn worse (as this one is.) Try a collapsing dollar and sky high interest rates for the next down cycle.

And let me tell you, basically the government currectly is just putting a rug over a big huge hole in the floor of the proverbial house. What's going to happen when the hole engulfs the whole house next time?

Eminent economists Nouriel Roubini and Anna Schwartz square off on the NY Times' op-ed page over the reappointment of Fed chief Ben Bernanke. Schwartz contends Bernanke's over-accommodative policies will only increase the severity of the recession; Roubini says Bernanke's genius averted a second Great Depression.

Sun, 26 Jul 2009 22:03:28 -0400

Do any economists nowadays not think that it is better to sometimes just go through a recession, or even depressions and not try to artificially end them with low rates, stimulus, and other giveaways?

All I see out there are economists that think we must end a recession as soon as it starts. Recessions are normal and healthy parts of economic cycles. They should be welcomed and allowed to pass just like winter is to seasons.

All these artificial measures to shorten recessions are only going to make the next down cycle that much worse. Like this last (current) cycle is so much worse because of Greenspan and GW.

What happens during the next, next one. When it's so freakin' big no artificial stimulus or zero greats can stave it off? That's what I think I current Keynesian economists are leading us to....instead of just dealing with bad times as they come, they're going to lead us to one hellacious bad time that keeps lasting.

No Exit for Bernanke

Sun, 26 Jul 2009 02:42:41 -0400

Well said....(as unfortunate as that is for us.)

But still, well said.

Book Review: Trading Options at Expiration, by Jeff Augen

Sat, 25 Jul 2009 21:28:53 -0400

Oh, the irony. If the book is successful and lots of traders start trying to use the method then the method itself gets so watered down that it doesn't work anymore.

In other words, it's just another get rich quick scheme that won't work for the masses.

Only one thing about Western Union's (WU) earnings call wasn't in line with expectations: The company has apologized to Piper Jaffray analyst Robert Napoli after an impostor using his name got into the call and fired an expletive-laden tirade at CEO Christina Gold. (You can see the call transcript - minus the disruption - here.)

Tue, 21 Jul 2009 20:59:25 -0400

Awww....you should have left the distruption in. Much better reading.

Argentina's Road to Ruin: How to Make Nothing Out of Everything

Mon, 20 Jul 2009 23:26:26 -0400

Nice article.

One thing I would note though from a contrarian's perspective is that a country (Argentina) that was once 10th and is now 58th in the world, Argentina offers a very attractive risk/reward investment.

Beneath all the political problems and mismanagement, Argentina is still a very rich country resource-wise and if the political situation improves, the farmers would once again be very productive. That clearly won't happen overnight, but just last month the mid-term elections cost Cristina Kirchner her power grip on the country. Kirchner is still president for 2 more years, but she no longer has absolute authority to do as she (and the Peronists) please. At least not legally.

Like the proverb, Argentina won't turn on a dime, but over the next decade plus there are a lot of potential positive developments that could arise and Argentina might very well start climbing the success charts. And if they don't? What's the downside from 58th?

That being said, I live in America and there are not a lot of options available in order for one to buy into the Argentine economy. The only one I currently own is Cresud. (Although you will be happy to know it has some Brazil assets also.) It's not the safest of stocks, but I still like the possibilities if things go well down there. Or at least don't get any worse.