ndallasj

The Unsustainable Lie of Inflation

How do you figure that inflation benefits the rich? Those who are rich have assets which become less valuable due to inflation; those who are in debt benefit the most from inflation since they can pay back what they owe with less valuable dollars.
This is why the government will allow (cause) inflation to run amok--that will be the only way that they can afford to pay back the massive indebtedness our country is incurring.


On Nov 09 02:25 PM Michael Clark wrote:

> Reading this makes me feel that I'm talking to myself.
>
> Inflation is the rich stealing from the poor. The Keynes' quote is
> wonderful: In this case it is the State-Capitalists (Wall Street
> aligned with Washington DC) that is stealing from its citizenry.
>
>
> Deflation is the poor getting even with the rich. Is it any wonder
> the power center in America (Wall Street and Washington DC) will
> do ANYTHING to protect their inflationary doctrine? They would rather
> destroy America that have to give back any of the money they've successfully
> stolen already.
>
> Deflation is God's way of punishing the rich. Deflation will have
> its day.

Estimating Future Dividend Growth

Although I agree with (and practice) the basic underlying philosophy espoused in the article, to project a valuation based upon historic dividend growth rates is also dangerous. For instance, there is NO WAY that MCD will continue to raise dividends at 27% per annum over the next ten years.

U.S. Bank Picks Up Another Nine Banks

At last--USB now has a presence in TX! I would like to think that this acquisition would enable USB to expand rapidly in TX as Capital One did when they acquired Hibernia. However, given the state of economy and USB's avowed strategy of increasing market share in communities where they already have a presence, I fear this won't happen.

Big Risks in Bonds and Bond Funds

Your point is well taken. I am sticking with my short term bond funds, however, for several reasons:
1) The yield is more than 300bp higher than money market funds;
2) Since I am reinvesting dividends, I will, in effect, be dollar cost averaging as the NAV declines when interest rates rise;
3) Because of their short term-nature, the funds themselves will be buying, on average, about 3% new instruments each month to replace lower-yielding ones that roll off, thereby increasing yield;

The main risk that concerns me is that investors in the funds I hold will panic and sell their holdings, thus forcing the funds to liquidate at the wrong time and limiting their ability to add new, higher yieding securities to their porfolio.

Analyzing Strange Volume on the NYSE

This is a good illustration of why I advocate tracking trading by dollar volume rather than share volume as a better indicator of activity. I would think that the dollar volume could be easily computed and tracked instantly.

Why the Electric Car Mileage Debate Is Meaningless

One reason why the calculated mileage is very important is the contribution the Volt will make to GM's ability to meet increasingly ambitious CAFE standards. Obviously, 230 mpg will weight the overall corporate average upward more than 150 mpg and will help GM produce at least some cars that the many people still want.
The authors point that range is the major differentiator to an individual purchase of an electric car is well taken.

State Street TARP Warrant Deal: The Costliest So Far

I wholeheartedly agree with you that the auction process would be best for determining the "fair" value for these warrants. I do take issue, however, with your phrasing about how much the taxpayers have lost on warrant repurchases. Unless I am misinformed, the government paid nothing for these warrants; they were tacked on to the 5% preferred stock sold to the government.
I own USB stock and am trying to follow this TARP payback issue since I have a vested interest. Banks like State Street and USB apparently were "encouraged" to take more TARP funds than they needed (in USB's case they factored in to the bank's acquiring two institutions that FDIC shut down). Therefore, I don't see a problem with using conservative assumptions to model the value of the warrants. We taxpayers still will make a tidy profit between the 5% preferred interest payments and the warrant repos. We shareholders are being harmed by the bank's use of TARP and the ridiculous FDIC surcharge which is imposed at the same rate for strong banks as for weak ones.

Berkshire Hathaway Stock Holdings and Investment Ideas

Don't you proofread or spell check your postings ("itdon't change much")? Also, the last time I checked, a lot more goods were transported by truck than by automobile. Otherwise, this was an interesting article.

The Intrinsic Value of Gold

Bearfund is right on. I was hoping this article would delve into how the supposed intrinsic value of $400 was derived. Furthermore, there is now way the intrinsic value of gold is static as shown in the chart, although I hope that this is just reflective of how the chart was drawn rather than the author's belief.
The marginal cost of producing gold has little bearing on it's intrinsic value either, at least in the near term.
All in all, a very disappointing piece.

Well-Capitalized Regional Banks: The Bottom Is In

One of us is missing something--banks' loans are shown as assets on the balance sheet. Hence, your statement that "The problem lies in evaluating whether a bank's debt as shown on its balance sheet is likely to be repaid by its debtors" doesn't make sense.

A Modest Proposal for Rising Oil Prices

I'm with you, Al. At some point the shorts have to deliver oil, the longs have to take delivery, or, in either case, they have to close out their positions. If there is an imbalance of speculators (as opposed to hedgers) just prior to the closout deadline, wouldn't the price on the futures market either plummet or skyrocket as the deadline draws near?
In the long run, supply and demand will govern, but recent volatility (like up $12/bbl in two days) seems to be clearly driven by speculation.
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