David in D's Comments

The Recovery Was Too Expensive

Fri, 18 Sep 2009 01:10:06 -0400

Nice article Chris. I'm curious though, your metaphor of taking a pay cut then borrowing to fill in the gap seems a bit simplistic here. The borrowing, in the case of the nation, comes from itself. While I agree that the fiscal crisis will probably not lead to serious reform, and while it probably cost more than it needed to, I think it is hard to quantify the downside of a crisis. In other words, it is easy (as you admit in your Monday morning quarterback comment) to sit back and say "we are really getting only limited value from this bailout" but this is really an impossible statement; isn't it? How do you know what might have happened if the fed's actions hadn't been taken?

In general, I'm in agreement with you. But I get a little annoyed on Seeking Alpha with all the "ditto heads" and permabears and really, perhaps Bernanke deserves some real kudos. Who knows, my point is we cannot.

We are but fallible humans (actually meaning-making animals) seeking to do the best we can for ourselves in our social contracts. I think it's better to live in gratefulness for what has been done than perenial cynicism.

The Deflation of the American Dream

Thu, 03 Sep 2009 19:04:27 -0400

Robert, excellent article.

Confidence Games and Ponzi Schemes: No Way to Run the World's Largest Economy

Fri, 07 Aug 2009 22:25:31 -0400

Zmartmoney, perhaps you should take another look at Tim's graphs. You will note that it has been the supposed "conservatives" who have expanded the deficit most aggressively. Are you for more "trickle down" economics? It is precisely the wealth gap, generated under conservatives, that has contributed most decisively to the American economic meltdown. So yes, we need the pendulum to swing back towards sanity a bit after the last 30 years... but of course, no one on Fox News is going to tell you that.

On Aug 07 11:22 AM Zmartmoney wrote:

> The liberal/socialist agenda emanating from Washington requires that
> we be awash in easy money. How else will they pay to have most of
> the people sitting in the wagon, and the remaining few pushing?
> The liberal mindset seeks to have wealth for all, taken from those
> with "too much" and generously distributed by an all-knowing, wise,
> benevolent government master to those with "too little." Along the
> way, it wouldn't hurt if the wise masters were able to corner the
> market on power, which would allow them to spread their wisdom that
> much further. Liberals love to castigate conservatives for their
> "stinginess." In truth, that stinginess is actually self-preservation
> - the ant storing harvest for the coming winter, instead of the foolish
> grasshopper who wants to party till the snow comes. Children's stories
> are still quite useful for demonstrating enduring truths of life.
> There is no free lunch - there is only that one taken from someone
> else. Who are you going to take yours from? Welcome to socialism.
> This party can't stop - Washington can't afford for it to, as there
> are way too many things they want to spend money on first, remaking
> America in their image. BTW - don't mistakenly assume that Liberal
> means Democrat and Conservative means Republican. Look at the last
> decade that was run by Republicans and show me Conservatives in leadership
> positions. Party on dude...

U.S. Housing Has Bottomed

Mon, 27 Jul 2009 19:08:29 -0400

I agree with Houston. I'm tired of the perpetual string of perma-bears that post comments on Seeking Alpha. Without a doubt, there is some "thaw" in housing and while the recovery will not be quick or consistently spread everywhere there are definite signs of recovery.

On Jul 27 05:10 PM Houston wrote:

> For a few months all you chicken littles have decried the end is
> nigh and the barbarians are still closing towards the gates...the
> alt-a's, the shadow foreclosures...yet the news keeps improving.
> Maybe because
> overall confidence amongst the many with jobs and money (that no
> one here wants to acknowledge) and low prices have provided a bottom
> that could not be quantified or predicted...just like nothing else
> about this has been quantified or predicted.(except by Schiller)
>
>
> It's like a cold front impacting a warm front early in the seasonal
> change, there are a lot of storms but there are many things offset...so
> often it's not so bad.
>
> The economy is coming back. The impact of the Alt-a's and shadow
> inventory will bleed into it and have an affect but not the catastrophic
> one it would have had when it added burden to an un propped economy.
>
>
> If you're in Phoenix and you bought at the top of the market mand
> are paying your mtg, you're effed for a good while. If you're in
> Dallas, not so bad.
>
> During the 80's oil bust I bought a condo that bottomed at less than
> one third of it's value. I rented, held and took a loss on it for
> 20 years until I could sell it for 2/3 of what I bought it for which
> was breakeven on the mtg at that point.
>
> Cal values will come back faster but it's gonna be a while. But overall
> the sun is beginning to shine.
>
> Don't tinkle on everybody's tennis shoes.

Jeff Bezos: Learning from an Incredible Entrepreneur

Sun, 26 Jul 2009 23:52:40 -0400

I find it helpful to actually read an article or watch a piece before commenting. But perhaps I learned that via my public school education which is clearly inferior to home schooling.

On Jul 25 07:51 AM Mike Stathis wrote:

> I didn't watch the video - didn't need to.
>
> Bezos is NOT a tech innovator. He is a strategist. Even more so
> he is able to EXECUTE.
>
> Here's the deal with Bezos......He has the unique ability to think
> on his feet. He is a leader in creative thought, unlike the vast
> majority of CEOs in America today.
>
> Is Bezos particularly intelligent? Most likely not according to
> standard measures. But who cares about standard measures? That's
> all trash anyway.
>
> His unique personality is what truly makes him a great CEO. He is
> somewhat of a maverick. He manages to get things done regardless
> of the hurdles.
>
> Is he a Steve Jobs?
>
> Not at all. Jobs is arguably the best marketing strategist in the
> world. However, Jobs isn't particularly good as a CEO.
>
> Bezos, on the other hand has a healthy mix of many elements.

>
> I'm willing to bet Bezos was seen as an odd-ball for much of his
> life. In America, that can often be a good sign, as America has
> become a nation of dumbed-down robots.
>
> If Bezos were a youth in today's modern America, it is likely he
> would be singled out as having one of more social/mental deficits
> - not because he is lacking - only because American society is continuing
> to force more youths into this ideal cookie-cutter image. And if
> they don't fit into it, they are claimed to have ADHD or some other
> mental issue.....perhaps "anger management" issues. I won't get
> into the government's atttempts to destroy individuality.
>
> One thing I am sure of...the future great business leaders of the
> future will predominantly come from non-tradiational educational
> backgrounds- perhaps homeschooling. There's no way they will come
> from the public (and in many cases) the private school system.
>
>
> Bezos is one of a kind. And if you cannot relate to his core psyche,
> don't even try to second-guess his judgment or you are likely to
> get burned.
>

The Mac vs. PC Debate Was Never Clearer

Sat, 25 Jul 2009 23:47:15 -0400

Nice article. I think you've pegged the market correctly.

Jon Stewart Takes on Goldman Sachs [Video]

Sun, 19 Jul 2009 00:07:45 -0400

ScroogeMcduck; if by "media's bias" you mean that the media by-and-large is sane (and for instance calls bullsh_ on items like Goldman Sacks), then "yes" the media is "biased."

Bet you can't wait to vote for Bush again or Palin!

On Jul 17 10:00 AM ScroogeMcduck wrote:

> Amazingly he hasnt somehow blamed this on the bush administration.
> His show is a clear example of the media's bias

Unwise to Tax the Rich to Pay for Health Care

Fri, 17 Jul 2009 19:17:56 -0400

user344210, actually I've spent a significant amount of time serving the poor and homeless. You clearly are the one that is disconnected with the plight of poor people in America.

On Jul 16 12:16 PM user344210 wrote:

> Spoken like a typical guy who doesn't know anyone poor. Yeah, they're
> just CLAMORING to buy some tofu burgers, but have to settle for Jimmy
> Dean sausage.
>
> "While many would like to buy healthy foods and eat well, they simply
> can't afford it. Thus, some sort of socially acceptable "food stamp"
> for things like fresh vegetables and fruits at the grocery store
> actually makes good sense."
>
>

Unwise to Tax the Rich to Pay for Health Care

Thu, 16 Jul 2009 11:38:31 -0400

Correction... I meant Mr. Zambardo not Philly Dan in prior response.

Unwise to Tax the Rich to Pay for Health Care

Thu, 16 Jul 2009 11:35:39 -0400

PhillyDan, unfortunately people are generally self-interested. You have to hold people's feet to the fire. That is one of the roles of government.

On Jul 16 09:48 AM Paul Zimbardo wrote:

> @PhillyDan
>
> Why should the "rich" be forced to sacrifice to support the poor?
> The wealthy should feel fortunate for their successes and voluntarily
> donate to those who are less fortunate but the government should
> not force them to do so.

Unwise to Tax the Rich to Pay for Health Care

Thu, 16 Jul 2009 11:33:46 -0400

Ryan, good article in general. I do think the right "first move" on this is to tax the wealthiest 1.5% of Americans. I am in agreement with you that congress will need to find other sources of revenue later, but really the wealthy in America have had a good gig for the last 25-28 years in terms of taxes and it is time for the pendulum to swing back to a more sane level.

I'm a big fan of taxing unhealthy foods. There is no reason why your average Big Mac shouldn't have another $.25 tax on it. If you are going to clog your arteries and then have a public health care plan pay for your bypass surgery, you should pay more into the system. That said, we should also provide some sort of "healthy food" assistance to low income Americans. While many would like to buy healthy foods and eat well, they simply can't afford it. Thus, some sort of socially acceptable "food stamp" for things like fresh vegetables and fruits at the grocery store actually makes good sense.

Unwise to Tax the Rich to Pay for Health Care

Thu, 16 Jul 2009 11:27:52 -0400

Wow, you are jaded and under informed! You speak mostly from fear of what will happen versus the actual reality of what has and is happening. Cynicism is easy, the truer path is to be a compassionate realist.

On Jul 15 07:54 PM Steve in Greensboro wrote:

> "...After running the numbers, the CBO determined that the measure
> would cost $1 trillion over ten years and would result in nearly
> all Americans being covered. A pretty good deal, most agreed..."
>
>
> No. No they didn't.
>
> "...an additional $9,000 burden for a family earning $1 million in
> a single year, these measures will probably act to discourage some
> economic activity among high earning families.."
>
> No. No it won't. It will just cause them to move their economic
> activity offshore. No problem. Raise tax rates all you want. Tax
> receipts will go down in the U.S. and go up in China.
>
>
> "...American also has fairly significant need for large-scale investment
> in things like infrastructure and education..."
>
> And don't forget turtle underpassess. And, and nationalized bikepaths.
> And, and subsidies to vote-fraud organizations like Acorn. Don't
> forget them!
>
> "...Revenues are going to have to rise to avoid a budget crisis somewhere
> down the road. And that means that taxes will have to rise..."

>
> You get zero credit for this answer. The correct answer is: "...Spending
> will have to be reduced to avoid a budget crisis down the road.
> And that means Social Security retirement age will have to be raised
> to a modest 98 years old..."
>
> And now the mask comes off. Obama will increase taxes on the poor
> and middle class.
>
> "...the use of a broadly shared tax burden to fund fairly progressive
> social safety nets in Europe seems to work well..."
>
> Yep. It works great for the drones in the political class.
>
> You poor Leftists. You voted for Obama to reduce foreign military
> expeditions. What did you get? A huge, Iraq-Petraeus-like surge
> in Afghanistan of all places. You voted for Obama to tax the rich.
> And you get a VAT tax, you get a carbon tax, etc. all of which are
> horribly regressive. The Germans have a word for what I am feeling.
> Es ist Schadenfreude.

Positioning for When Water Runs Out: Part II

Mon, 29 Jun 2009 15:07:09 -0400

The author wrote: "These folks are well-meaning but disappointingly misguided, given that the authors are mostly civil engineers. I am 110% in favor of using sun, wind, or tides, but our water problems are pressing now, not in 20 years. Couldn’t we just once plan ahead of a known catastrophe?!! What is available now is nuclear and natural gas, and dirty old coal and oil. You want water? Fess up to the reality that it takes energy, and the energy sources we hope to replace are still the energy sources which we have in abundance -- with a transportation and distribution infrastructure already in place."

Not paying attention to energy consumption and greenhouse gas emissions will prove costly in the end. While I agree with a portion of your post (Joseph), I'd strongly urge to rethink your position here. It is precisely this sort of thinking that has and will accelerate climate change.

The Top 12 Brands Likely to Disappear

Sat, 20 Jun 2009 17:30:05 -0400

I think you are wrong about GAP Inc. I think its three brand lines are actually well-differentiated and while the company may have some lean times ahead, I think it will survive. Furthermore, if you were to cut one of the three, Old Navy is not the one to cut in a down economy. Old Navy is affordable and resonably relevant.

TARP Utilization: Is Obama Above the Law?

Mon, 08 Jun 2009 14:23:10 -0400

Tyler, Dave, Graham/Dodd, and maidenLane:

It's remarkable to me how much blame you have assigned Obama. You might recall that he has been in office a rough total of 140 days. You have VERY short memories.

Obama's administration didn't create the financial mess, he didn't initiate TARP, he didn't hold down interest to inflate the housing bubble, and he didn't run up the deficit for an unjustified set of military spending. While blame shifting seems to be the norm on Seeking Alpha you should at least have the basic sense to understand how long it takes for different governmental actions to occur.

When you claim that "Obam is at fault" when the man has been in office for 140 days you look immature at best and idiotic at worst.

You can judge Obama after he has been in office for about 1,000 days. At that point his early decisions will just be taking effect in the real markets. Otherwise grow some insight or maturity or both. I'm tired of the Obama bashing on this site.

Dollar Chart Tells a Much Different Story than Pundits Do

Fri, 22 May 2009 14:27:12 -0400

Mr. Kim, thanks for the informative read. If you have time would you answer the following question:

I'm definitely no economist or finance wizard, but it seems to me that monetary inflation is actually not a horrible situation for America in the coming decade (assuming it doesn't spin wildly out of control). With the government debt load high, personal debt load higher, and corporate debt moderate, doesn't it make sense to attempt to "jumpstart" an economy (at the potential risk of inflation) with injecting capital into the system. If higher than normal inflation does develop, it makes existing debt easier to resolve. And, debt resolution is critical for long-term fiscal health. So, question, why should most Americans be resistent to inflation if it is a necessary possible implication to stimulating the economy?

Thanks for your time.

The Worst Case Scenario (Someone Has to Say It)

Tue, 12 May 2009 22:54:56 -0400

Perhaps the author can contact Tim Lahaye and Jerry Jenkins (authors of the Evangelical "Left Behind" novels) and work on a third series of apocalyptic thrillers. Seriously, start writing fiction novels because I'm confident you could sell books based on these ideas. That said, I think the majority of what is in the original article is doom-and-gloom nonsense with no real basis in reality.

Dollar's Purchasing Power Annihilated - The Chart They Don't Want You to See

Mon, 11 May 2009 08:37:16 -0400

I enjoy reading Seeking Alpha, but one of the most annoying elements of the site is the massive number of doom-and-gloom prophets attracted to the site. Yes Tyler, we have experienced steady inflation over the last century. This isn't news. Yes (fill in your favorite poster's name here) we'll probably experience continued inflation and maybe even at a rate above our recent 2-3% averages. But folks, get a grip, the end of the world is not coming via a market collapse. We all have a better chance of contracting cancer, getting in a car accident, or having a heart attack than experiencing financial armeggedon.

Lumber's Decline Likely Means Predictions of Housing Bottom Were Premature

Thu, 30 Apr 2009 18:36:59 -0400

I'm not convinced that the presupposition that lumber prices will be a forward looking indicator for home price stability is accurate. It is possible that you could have declining inventories of existing and already constructed new houses, which in turn produces possible price-stability, while still having major homebuilders on the sidelines.

In other words, I think its possible that lumber prices will not preceed house price stability but possible occur simultaneously with stability.

Thoughts?

Housing: The Ship Is Turning

Thu, 30 Apr 2009 18:29:16 -0400

"All real estate is local" as the old adage goes. Therefore, not all parts of the country will experience price stability at the same time. Furthermore, not even all parts of the same city will stabilize synchorously.

My point, backed by actual real market intelligence, is that homes in Denver selling below $275K in resonably desirable areas have (or are in the process) of stabilizing.

Therefore, there is legitimacy to Charles original post.

Housing: The Ship Is Turning

Thu, 30 Apr 2009 18:26:09 -0400

"theseanman",

Not funny, witty, or smart. Seriously, to you and any other respondants on this post, have you actually attempted to buy a house in the last six weeks?

As I stated, I would have been one of you (the Charles-bashers) had I not actually experienced the REAL market versus playing arm-chair economist.

But then again, it is a lot to ask of someone to actually have some real data behind what they post on Seeking Alpha.

On Apr 29 12:02 AM theseanman wrote:

> I expect your real name is S. Puppet.

Pierre Bourdieu, Tim Geithner, and Cultural Capital

Thu, 30 Apr 2009 18:20:03 -0400

I'm glad you are working on a book on this subject. I think there is a lot here to explore. Hopefully, I'll be able to read your finished product some day!

On Apr 28 10:19 AM Clive Corcoran wrote:

> Re DavidinD's comment
>
> I really enjoyed your comment that " modern finance is the purest
> form of American/European religion that exists in our contemporary
> world."
>
> The theme of a book that I am currently writing addresses in a slightly
> modified form to your phraseology - the powerful memes and intellectual
> foundations of the "Anglo-Saxon" mindset which have cunningly dominated
> modern finance and the aspirational culture.
>
> Also the writer of the original article really captures the essence
> of the arrogance and elitism of this tradition in these words about
> Geithner.
>
> (he) has internalized a worldview in which Wall Street is the central
> pillar of the American economy...and anyone who doesn’t understand
> these principles is a simple populist who just doesn’t understand
> the way the world really works.

Housing: The Ship Is Turning

Tue, 28 Apr 2009 08:32:02 -0400

Charles: A couple of months ago I, like several posters above, would have told you that you are nuts. However, my wife and I began looking for a house in southeast Denver/Aurora CO recently and experienced first hand what you are referring to. In short, the best homes on the market (those with good floor plans and priced well) had multiple offers within days. We actually had to really move to get an offer in on the type of house we wanted.

So, to all the "what are you smoking" responses out there, I'd advise you to actually go try to buy a house and see what you find. Certainly ravished areas such as Las Vegas and Phoenix will still be soft, but try buying a house in Denver, Minneapolis, or other more stable markets and see if you still think that Charles is "high."

Good article Charles.

Pierre Bourdieu, Tim Geithner, and Cultural Capital

Tue, 28 Apr 2009 08:16:21 -0400

James, very nice article here. I'd like to see more writing like this on Seeking Alpha. Your connection with Bourdieu is an excellent connection.

Another way to look at this, in my assessment, is to see Wall Street as the center of a modern secular-religious worldview. I'm becoming more convinced that modern finance is the purest form of American/European religion that exists in our contemporary world.

Grand Illusion: The Federal Reserve (Part 3)

Tue, 10 Mar 2009 15:36:46 -0400

James, thanks for a stimulating article. Fyi, I don't know what I think about the Fed, I need to do more research; but with that said you would be more persuasive if you were less polemical. This is intended to be a constructive suggestion because I think you have a lot to contribute to the public discussion on this issue. I've had to learn the same thing myself in the fields in which I have expertise. If you can manage to restrain your tirade, you will be taken more seriously by those who disagree with you or who might be swayed by you. Otherwise, a very good piece of work. Thanks again.

Fiscal Responsibility: Obama Takes the Reins

Tue, 24 Feb 2009 23:09:29 -0500

Good post... and I agree.
dw

On Feb 24 09:37 AM Jason Laurent wrote:

> The comments above are pretty telling. The problem seems to be that,
> even in the era of global and free information, people are still
> so gullible. For example, the GOP has traditionally been the party
> of fiscal responsibility. However, after 8 years of Republican leadership,
> the U.S. inherited a terrible balance sheet in one of the worst financial
> crisis. I'm sure everybody can acknowledge that if the U.S. was a
> business, without the ability to print money and pry tax payments
> out of its citizens, then it would be insolvent and bankrupt.
>
> Also, when not a single Republican voted for Obama's fiscal stimulus
> in the House and only three voted in the Senate, it should be apparent
> that this is not based on economic rhetoric. Instead, it should be
> quite apparent that as a party, Republicans have no interest in supporting
> Obama. I am not condemning their behavior, since this problem is
> a typical example of Nash's Prisoner Dilemma. What if the stimulus
> package is successful? Well, Republicans would get little credit
> for it and Obama and its fellow Dems would be held as saviors. Now,
> if the stimulus fails, then Republicans will sheer in unison: "We
> knew it and told you so". Most likely, they will use a rhetoric similar
> to that posted above by Ergo: "Think about how much could've been
> done with that money if it were focused on something specific" (I
> personally find this statement amusing).
>
> In the end politics are what they are. It's always normal people
> with often questionable ethics who are given too much power. The
> point here is not to blame them and call for anarchy. Their behavior
> is quite natural and generally falls within the idea that the end
> justify the means. However, when we finally get a President that
> seems not to fit the good old Washington mold, it seems like the
> most patriotic and enlightened path is to provide full support to
> his efforts since let's all be honest here, it's been a long time
> we haven't been in such a hole.

Housing Bubble: The Sequel

Mon, 23 Feb 2009 14:27:46 -0500

Sean, there will be no 2nd housing bubble. $8K is nothing in terms of what has been lost. Only in very price depressed areas (with homes selling at $80 to $120 K) will you see this help.

Obama's Housing Plan: Elegant and Costly

Wed, 18 Feb 2009 19:15:32 -0500

I actually agree with you generally in this post... and I'm one who has been saving money to buy a house in the future, thus I have something to gain from falling house prices. BUT, you are wrong that this plan locks people into houses they can't afford... to the contrary, it helps people who might have a chance at affording their home... so it's about as good as you can do in this dismal situation.

On Feb 18 04:02 PM bobomite wrote:

> Felix has written some things that I like, but this one is shockingly
> bad. What is good about locking people into slightly less costly
> mortgages for houses they can't afford?
>
> Housing prices have to come to historical levels. Subsidizing failing
> banks and overpriced houses is slathering bad debt with more bad
> debt. It also punishes those who have been saving money to buy houses
> they can afford. Now they are also on the hook for the greed party
> that this country has been throwing for decades.
>
> And comments to this article mentioned things like "the banks are
> getting all this money, so homeowners should get some too!" Wow,
> this nation is filled with greedy, whining, short-sighted children
> pretending to understand adult matters. I hear the same nonsense
> comments on all the cable news channels too.
>
> So yea if you're happy with it then bravo for you. For me it is like
> watching a slow motion train wreck unfolding.

Obama's Housing Plan: Elegant and Costly

Wed, 18 Feb 2009 19:12:13 -0500

Funkhouser, if you think supporters of this bill are "retarded" you really don't understand the systemic risk at hand. A "retarded" plan would be one that attempted to help all homeowners. This plan puts the money where it might have a chance to make a difference, which is critical for recovery.

On Feb 18 03:19 PM funkhouser wrote:

> You people who think this is a good thing have got to be mildly retarded.
> I don't want my tax dollars to bailout loser bank or individuals!!

How Much More Will Housing Prices Decline?

Mon, 16 Feb 2009 14:52:27 -0500

I think we have much further to fall than 8-10% based on many factors not accounted for in the post. Even if I do limit my analysis to the data presented in the post, your calculations are incorrect.

Price to Rent ratios bottomed at approximately 0.97 on the graph (let's just call it 1.0) the graph reflects 1.3 at the end of the 3Q 2008 off from 1.75 at the high. (1.75-1.3=0.45, 0.45/1.75-1.0=0.60). Therefore, based on you own data, to the end of Q3 6/10s of the drop has occured. Total drop = 19.1% 1/.6 = 32%. Therefore, based on your own data, total drop is roughly 13% from the bottom.

I for one, think we have even further to go... probably in the range of 18% -- definitely not 8-10% and probably not 13%.