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  • Nothing Fails Like Success [View article]
    This seems at odds with Richard Koo's claim that what is needed is private sector borrowing and spending.
    May 14, 2013. 12:17 PM | Likes Like |Link to Comment
  • Are Currency Wars Leading To Hyperinflation? [View article]
    Excellent thanks. I probably read a minimum of two gurus a day making investment decisions and recommendations based on all central banks in the world debasing their currencies simultaneously. Buy gold. Sell bonds. Etc. A lot of these folks are real smart but have foolishly accepted a mantra as fact.

    I think there are other factors at work in currency pricing. For example, EZ stocks up, euro up. US stocks up (they tend to move with EZ stocks), then US dollar down as a rule. The two currencies are, of course, valued inversely.

    Why EZ stocks have been going up while the EZ is in recession, is beyond me but as long as austerity is aggressively pursued, it can't continue. Recently EZ stocks, the dollar and the euro have reversed. Trend reversal? US stocks to follow suit? Don't know but limiting one's "thinking" to non-existent currency wars is blind man's bluff.

    Anyway, really appreciated your article. The gurus should read you, Krugman, and Koo (bought and read his excellent book at your rec).
    Mar 14, 2013. 04:34 AM | Likes Like |Link to Comment
  • Euro Depression [View article]
    What I find confusing is the failure of mainstream politicians, left or right, to come out against austerity. (Except maybe Berlusconi who was not exactly mainstream at the time). I always thought the primary objective of all pols was to get elected. Embracing austerity is a surefire way of not getting elected. Syriza may be mainstream now but only because he opposed austerity. Now we have Berlusconi back from the dead and Grillo out of nowhere. Seems a no brainer for an aspiring pol to hop on an anti-austerity bandwagon. Meanwhile the mainstream pols stand around and watch their poll results drop.
    Mar 5, 2013. 12:53 PM | 2 Likes Like |Link to Comment
  • Debt Crisis Could End In War, According To Kyle Bass [View article]
    As others have mentioned, the more likely wars are civil. Democracy seems to have fallen by the wayside in Southern Europe.

    The majority of the people hate the austerity embraced by their leaders. But, outside of Greece, there's no opposition. Why?

    It appears the centrist parties throughout the South serve the bankers and could care less about what the people want. Meanwhile their countries and citizens are being bled dry with, as you say, no end in sight. Meanwhile the Southern countries are being forced to sell themselves to the highest bidder. See healthcare in Spain.

    The only likely opposition to austerity must come from the extremes as long as all mainstream parties serve those imposing austerity. People in opposition have less and less to lose and democracy is not providing an alternative.

    Why is there no opposition? Any major party adopting an anti-austerity stance would be swept to power. Apparently they'd rather sit this one out and stay out of power. That's not like any political party I've encountered. Why?
    Jan 10, 2013. 12:29 PM | 1 Like Like |Link to Comment
  • The Misdirection Of Currency Wars [View article]
    Thanks Marc. Currency Wars belief leads some folks down the path of "the dollar is being debased, yields will skyrocket any day now, short bonds, runaway inflation is just around the corner." This wears a little thin after several years of not happening. And it doesn't help making investment decisions like going long the dollar as the gentleman wrote above.

    Will buy your book tomorrow.
    Nov 15, 2012. 12:17 PM | 1 Like Like |Link to Comment
  • Obama's Economic Record [View article]

    This is a little off topic but I can't resist replying to your call for reducing malpractice lawsuits. Also called for in comments to the last Shareholders article.

    I'm a retired trial lawyer (not malpractice) but I have lots of experience with judges. It's easy to stem frivolous malpractice cases and excessive awards of damages. Let the juries decide liability and judges award damages. They won't be fooled as juries are and they are inherently conservative in a non-political sense. End of problem. Ask any trial lawyer.
    Nov 6, 2012. 12:40 PM | Likes Like |Link to Comment
  • Helicopter Money, The Logical Conclusion Of Demand Management? [View article]
    People who believed expenditures on education, infrastructure, etc produced little value spoke in generalities. Here are some specifics.

    To the claim that fixing infrastructure doesn't increase productivity, consider the reverse. A failing infrastructure hurts productivity. Unsafe roads & bridges, airports, rail systems and unreliable electric grids definitely diminish productivity and competitiveness. Spending money on them helps productivity.

    Our higher educational system is broken. It costs way too much and is no longer a good investment for those who must borrow to take advantage of it. Many who must borrow face a lifetime of indentured servitude to the lenders. The loan system is probably beyond repair as the US government is held captive by special interests. But building an alternative through Internet education is doable. I use podcasts to educate myself through my broker and they work. Building a successful Internet higher education system would eliminate excess expenses and open up educational opportunities to the many talented people who are denied because of today's costs. Those unfilled engineering positions, among others, could be filled.

    The US health care is ranked between 19th & 32nd in the world, depending on which outcome ranking is used. Still it's #1 in cost. It's a drain on demand eating up profits and income that could create demand. Reform is difficult because of the control of special interests like the HMOs who are a major factor in creating excessive costs.

    But there are still ways to reduce expenses. For example: As long as MDs are graduating with 6 figure education debts, they are going to expect very high earnings. Change the education system. Start medical school upon high school graduation. Engineers and architects do it. Why not MDs? That's what is done in France which has the world's #1 ranked health care. Have the government pay for the education in return for setting fees for those whose education is paid for by the government. Prohibit universities from making a profit on medical education as they do now.

    Not every MD must, as is generally the case in the US, must be a specialist. The Europeans with better and cheaper health care use GPs. Less education. Less cost. And because they co-ordinate most treatment prescribed by specialists, they see the whole patient. Specialists operate, for the most part, as consultants. It's a better less expensive system.

    Spending government money in the areas described above would help stimulate the economy while investing in future productivity and competitiveness. That's a win win.
    Oct 27, 2012. 01:16 PM | 3 Likes Like |Link to Comment
  • Hold The Press: The IMF Changes Sides [View article]
    Ah expansionary austerity. It's worked so well in Ireland, Greece, Spain, Italy and Portugal.

    The IMF used countries whose economies were similar to the peripherals and ended up with a multiplier that reflected the reality of what's been happening. That's as opposed to the old multiplier including very different economies. Let's see. One works. The other doesn't.
    Oct 14, 2012. 01:13 PM | Likes Like |Link to Comment
  • Hold The Press: The IMF Changes Sides [View article]
    Thanks for the thoughtful article. You've been right about this all along.
    Oct 12, 2012. 11:51 AM | Likes Like |Link to Comment
  • Should You Buy European Shares? [View article]
    It seems increasingly "reforms" or even "structural reforms" are used in place of "austerity." So cuts in health care and education in Spain are incorrectly depicted as reforms that will lead to greater competitiveness. To my mind the word "reforms" should be used for actual labor law and tax changes that actually do create (eventually) greater competitiveness.

    Consistent with your excellent article I see that today the IMF has predicted it will take a decade for Europe to recover from this crisis. Not exactly an advertisement to buy peripheral stocks.

    Recent events re Catalonia appear to make Spain's situation even grimmer. Should Catalonia gain tax independence from Spain, that will eliminate Catalonia's subsidy of the rest of Spain and push Spain further into deficit. I don't see how Spain can survive in the euro under the austerity yoke.
    Oct 3, 2012. 11:34 AM | Likes Like |Link to Comment
  • Euro Rally Isn't Welcome [View article]
    Really interesting thought GR. Another consideration is the fact that by definition the euro & dollar trade inversely. So if the dollar goes down, the euro goes up. And the euro & EZ stocks generally trade in sync, the exact opposite of the dollar and US stocks. So euro, EZ & US stocks go up and the dollar goes down.

    Go figure.
    Sep 16, 2012. 10:00 AM | Likes Like |Link to Comment
  • France's Slow Transition To The Eurozone Periphery [View article]
    Nice article although I'm not so sure about a French housing bubble. French home are, as I understand it, sold before building. Most new homes are, and have been for some time, starter homes. So no overbuilding glut as in Spain, US, Ireland. And nothing like Spain for overbuilding apartment complexes.

    France needs to become startup friendly. The government makes impossible assumptions and taxation demands on new businesses. Very difficult to begin a business here and last for more than 2 years. The result is there are as many French in the UK as there are Brits in France. Problem is the French in the UK are there are employment opportunities. They tend to be educated, bi-lingual, upwardly mobile and wanting opportunities denied them in France. The Brits in France are looking for cheap (relatively) housing and to make enough to get by. Few speak French.

    When I first moved to France I was very impressed by the large numbers of husbands and wives working together in small businesses. That was until someone explained employees are so expensive for taxes and so much employees for life, husbands and wives working together eliminate the need for an employee.

    Taxes on startups, excessive taxes on employees for life are penny wise pound foolish. They certainly prevent growth and raise unemployment.
    Sep 14, 2012. 01:25 PM | 3 Likes Like |Link to Comment
  • How Strong Is The Netherlands? [View article]
    "A particular danger sign is the high mortgage debt in the Netherlands. It stands at 111% of GDP, the highest in the eurozone. Combine that with a recession and declining house prices and you potentially have the same recipe for serious trouble that got the likes of Ireland and Spain in deep trouble."

    Ireland and Spain got into trouble, as did the US, with a housing bubble caused primarily by over building way beyond foreseeable demand. The Netherlands has pent up demand. Not the same thing.

    I was in Spain before it burst. In the small town outside of Madrid I visited, there was apartment complex after apartment complex under construction as far as one could see. I asked people "is there a population explosion, mass migration? Who will live in these apartments?" The response was blank looks. Meanwhile on Brit TV there were all kinds of ads to buy villas in Spain. It was an absolute mania.To the best of my knowledge most of those apartment complexes were never completed. Ditto for the villas.
    Sep 11, 2012. 12:01 PM | Likes Like |Link to Comment
  • Draghi Gets It Right, But Is This A Game Changer? [View article]
    If I understand Paul Krugman and Richard Koo correctly, they go beyond just less emphasis on austerity but stop it and substitute stimulus. Cutting spending and raising taxes in a recession/depression is the road to disaster. But you folks are the experts.

    It's hard to see the EZ moving from austerity to much less initiating stimulus. Although "austerity" has become the word that must not be mentioned. It's all "fiscal restructuring" or "implementing reform" to the point it's sometimes hard (for me anyway) to figure out what people are saying. Pleasure to read Ambrose Evans-Pritchard who clearly says what he thinks which seems pretty much on target.
    Sep 7, 2012. 11:49 AM | Likes Like |Link to Comment
  • There Has Not Been Any Supply-Side Revolution [View article]
    "In short, I have no interest in paying someone more without an economic reason (value) to support it,"

    Perhaps that's why workers unionize. Also what causes the inequality that's hurting our economy today.
    Sep 6, 2012. 01:13 PM | 1 Like Like |Link to Comment