John Walter's Comments

Why the Stock Market Should Crash

Wed, 18 Nov 2009 12:00:31 -0500

" The median income has been skewed upward by the top 10% whose earnings have risen significantly."

The author is wrong. Even if the income of the top 10% exploded by ten times, it would not affect the median. Such careless mistakes in an article grounded in statistics make it hard to take his gloomy scenario as gospel.

That's not to say a crash won't happen, but I'm skeptical of the author's analysis proving why it will.

With all that's riding on the results of the government's stress tests, Bronte Capital wonders who on earth is leaking the results, and what's their motivation?

Mon, 04 May 2009 12:27:28 -0400

I can hear (channel?) George Costanza:

"It's only a leak if you believe it."

Clearly Citi and BA are the biggest firms to have been outed, and I'm still looking for the definitive move. And with the stream of head fakes (aka "lies") coming forth from the mouths of CEOs ("We don't need the money"), whom do you believe, leakers or liars?

Woody Allen's take on Madoff, Ponzi schemes and a pair of lobsters.

Mon, 30 Mar 2009 11:04:56 -0400

Thanks for the levity. Woody still tells a great story!

An Obama Speech to Light Wall Street on Fire

Tue, 24 Feb 2009 14:36:08 -0500

Do away with mark-to-market?

It seems to me that, in the aftermath of Enron, regulators understandably changed the rules. The banking industry (collectively) decided that the rules changes didn't affect their models of collateralization, since the market for these illiquid securities would always move higher.

It reminds me of traffic at times on urban expressways: everyone tailgates at 70 MPH and as long as nothing unforeseen happens no one gets hurt. But the moment there's an unexpected stoppage, the chain-reaction damage is enormous. Your argument reminds me of a driver who might argue "Changes are unnecessary; let each driver judge for himself the proper speed and spacing. It's in his own self-interest to be prudent." The problem is that some drivers will always prove to be reckless or exercise poor judgement, and will cause accidents for others.

Here is another idea: leave mark-to-market in place. For prudent institutions, it provides rules-of-the-road that keeps the industry safer (even as it limits the speed at which one will arrive at his destination). Reckless institutions must pay attention to the rules or pay a heavy price.

New rules require new behavior, something that the financial industry is learning too late, to the detriment of our economy.

Please, GM, Don't Slit Your Own Throat

Fri, 20 Feb 2009 14:42:22 -0500

User 283977--

Do I close my dealerships and sit on the land? Raze the buildings and sell the property as undeveloped?

I agree with you about the Saturn brand, but really don't know what the best option would be. To get the cash to repay me (the taxpayer) in the short term, I'm still thinking that selling the dealerships (maybe minority-partnering with Tata, with whom I could never compete on price) would be better.

Ah well, I guess we'll find out in due time...

Rick Santelli: The Best Five Minutes in CNBC History

Fri, 20 Feb 2009 14:34:08 -0500

How fine that we have so many experts in freedom and free markets here! The topic can't be too complicated...just look how many people get the big picture!

Suppose, hypothetically, I live in the great state of Florida (or California, or Nevada, or numerous other former growth states). I moved here after college in 2001, opened a flower shop (look at me, the entrepreneur!), got married and (after renting for a few years and saving a down payment of $40,000) bought a house for $400,000 and started a family.

I owe $340,000 on a house that the market values at only $200,000 today. Some of my conservative free-market neighbors, being in a similar position, sent their house keys to their lenders with the message "Nothing personal...just business". I'm underwater by at least $140,000 due to the foreclosures and abandonments (and the market's still falling).

I've an opportunity to work in another state that hasn't been hit as hard, but I can't afford to buy out my mortgage, so I've got to stay.

And my business which once was doing so well is now off over 40% from last year. Unemployment's rising, local and state tax revenues are falling (as are services like police, education, highway maintenance, etc).

Sure hope the government does nothing to help! Serves me right! Damn those liberals! Maybe Rick Santelli has some ideas!

---

I do think we're dealing with a very difficult problem, both in scope and in depth. I'm tired of hearing the same simple platitudes that fail to take into account both the proper role of government and the effect of the economic downturn on much of the population. I elected a national leader with the expectation that he would lead. I haven't elected anyone on the Street, and frankly they work for themselves, not for me. Which explains so much of their advice, "Let's do it the same way we've been doing it!"

Please, GM, Don't Slit Your Own Throat

Fri, 20 Feb 2009 13:56:48 -0500

Not sure I understand.

RCA licensed patents, without which the overseas manufacturers presumably could not manufacture compatible TVs. If GM can get $$$ for dealerships it would otherwise close, how is that a negative?

Couldn't Chinese and Indian manufacturers set up their own distributorships right next door to GM?

Maybe I just don't understand the car business ( <--- likely).

Rick Santelli: The Best Five Minutes in CNBC History

Fri, 20 Feb 2009 07:34:19 -0500

Thomas--

Thanks for your keen insight into the solution to our economic crisis. Clearly your years of experience, knowledge of history and the markets, and understanding of the collective human condition have put you in a unique position to lead us to a brighter future.

If only someone would put you (or Rick Santelli) in charge of the economy.

We've had too many years of the financial markets (and their regulators) behaving like selfish children, throwing off restrictions, generating incredible wealth for itself and creating tremendous risk in the global economy. I'm hopeful that some adults have finally entered the kindergarten and are trying to get the youngsters to behave.

Rick, Thomas: pay attention to those with more knowledge and wisdom than you. Sit down. Be quiet. You've run things "your way" for too long, and many people are tired of it.

You and I are part of the same society. Why not do what we can to make it better?

Inflation Concerns? That's So Yesterday

Tue, 16 Sep 2008 11:30:27 -0400

Does anyone else worry that the recent strength of the dollar is VERY temporary under the best of circumstances given this country's massive debt and increasing responsibilities in the private sector?

If the author forecasts that the Fed will pour money on our liquidity problem, it seems to me that, given just a little spark (e.g. threat to shipping in the Persian Gulf, or a major bankruptcy by a company like GM or Ford), inflation caused by an imploding dollar has the potential to raise commodity prices so rapidly it'll make early 2008 look tame.

Face it. We were on a balance beam which is quickly narrowing to a 2x4 and then to a tightrope. The Fed has precious little margin for error and the stakes are very high to the economy.

As usual, my 2 cents.

Browser Wars: What Are They Good For?

Thu, 04 Sep 2008 10:17:59 -0400

captainccs is right, but there are other stakes.

Google has implemented a browser "substructure" called Gears, that has been available for use for many months now. Gears speeds up routine web database operations by caching recently-accessed information, which reduces internet traffic and increases perceived speed. Chrome integrates Gears.

Additionally, Google says they have reduced the memory footprint and improved the stability of the browser; it wouldn't surprise me at all if they have provided software hooks to allow developers to create a wider variety of well-behaved add-ons than are currently doable. MySpace has already created a Gears-aware environment that (it is said) is far faster that their previous non-Gears application. And the end-user doesn't have to change anything but their browser...apps that use Gears just run faster and with less network overhead when accessed with a browser that supports it.

My initial reaction is that the company with the most at risk in the current environment is Adobe. Apple has gone on record as not supporting Flash in their handhelds. Google's handheld is expected a few months from now. There's no doubt in my mind that Android (the Google cell phone product) will incorporate Chrome. Suddenly, Adobe's role in the hottest part of the IT market is unclear. While visually flashy (pun intended) Flash is piggy with memory and CPU cycles.

I've used Chrome and aren't won over from Firefox and Safari (yet). But the opening shots have just been fired, and the game is far from over.

Where Are the Bank Failures in This Financial Crisis?

Mon, 01 Sep 2008 15:58:52 -0400

Perhaps more than anything this lack of failures is due to a restructuring of the banking industry.

In the S&L days, failures were regionalized due to the localized nature of S&L (indeed, even commercial) lending. There was little or no repackaging or tranching of loans. When a region saw a disproportionate number of loan defaults, may of the regional banks were in trouble.

Consequently, the losses incurred by those institutions that failed were simply too big for them to swallow, given their relatively small size.

Today, the same magnitude (more or less?) of losses is being absorbed by much larger firms, who are more well equipped to handle the write-downs and/or are deemed "too big to fail", either one of which keeps them in business.

It's not to say that the losses, and consequent shaking of faith in the stability of the system, aren't still very serious.

...my two cents.

The Inconvenient Truth of the Slowing U.S. Economy

Thu, 21 Aug 2008 22:20:05 -0400

Would I expect foreign currencies to provide the same inflation protection as precious metals? It sounds like Mr. Kim believes that inflation will ravage American purchasing power much more than in other countries, due to the inevitable printing of massive amounts of dollars...

How To Solve the Housing Crisis Tomorrow

Wed, 16 Apr 2008 11:17:38 -0400

Maybe I just don't understand, but these ideas are less than half-baked, they're completely uncooked.

* where does the government get the several trillion bucks to give homeowners in exchange for half their homes? (Ans: it prints the money. Hello, big-time inflation.)

* what does the government do when mortgages are unpaid (Ans: it kicks out homeowners and forecloses, just like banks. This is improvement?)

* what kind of country is it, where the govt owns a significant share of all private property? (Ans: starts with 'C')

The list goes on and on; I fail to see how this plan solves ANYTHING. Someone correct me so I don't have to question the judgement of Seeking Alpha's editors in allowing such idiocy on these pages...

World's First Cancer Vaccine Approved; Expect Interest in Antigenics, Dendreon

Tue, 08 Apr 2008 13:29:26 -0400

A couple points-of-fact:

Oncophage is hardly the first vaccine against cancer. I think that the US approved Gardisil (a vaccine against the human papillomavirus (HPV)) in 2006 or 2007; it's currently being marketed like crazy. It is claimed to prevent most, but not all, cervical cancers.

It's no surprise Oncophage wasn't approved by FDA...it ,a href="seekingalpha.com/artic...">failed its Phase 3 trial!

Why Hollywood Hates the TiVo Consumers Love

Mon, 31 Mar 2008 18:49:02 -0400

AFAIK, TiVo has done nothing illegal. They came up with a better timeshifting mousetrap, marketed it, and built a business.

It sounds to me like Hollywood is telling them "You should have come to us first, so we could gouge a part of either the functionality or revenue out of your business. That would have been better."

Ha! If Hollywood loses too much money and goes out of business, someone with smaller margins or better content will come along to take their place and make a business in this age of new media distribution.