The Failure of Capitalists to Act Like Capitalists [View article]
Another problem we have is that big corporations no longer reward creativity and risk taking. Large corporations today promote "yes" people who know very well what gets them to the next wrung of the ladder and that is to make sure their boss looks good. The great companies in this country to did not get that way with that type of culture, they got that way by rewarding risk taking and thinking beyond the current parameters. These types of people today do not get promoted because they would be disruptive to the fiefdoms that their superiors have created for themselves. I worked for large publicly traded corporations for almost 20 years and was passed over many times for promotion because I thought more like an entrepreneur than a "yes" man. I was told several times that this is not the kind of thinking that gets one promoted. So I went out and started my own business and now I compete very successfully against my larger and extremely predictable competition.
The Failure of Capitalists to Act Like Capitalists [View article]
I disagree that it is entirely the shareholders' burden to force a change in management. These executives and boards have made it very difficult for shareholders to even have a say in compensation issues, let along hiring and firing issues. Furthermore, in an ever increasing short-term oriented equity trading market, a large portion of a company's float is in the hands of non-fundamental investors who could care less what is actually happening at the company. Being a fiduciary is a legal standard and can be challenged in the legal system. I would like to see SEC regulators take on the role of examining whether or not executives are acting as fiduciaries. I think that just the threat of being held personally liable for corporate decisions would change behavior dramatically for the better.
The Failure of Capitalists to Act Like Capitalists [View article]
This article obvious inflamed a lot of nerves in people who believe that virtually anything a corporation does in the name of profit is to be glorified. However, a publicly traded corporation is obligated to reinvest capital in order to earn the highest return for shareholders adjusted for risk. That is their fiduciary obligation as corporate officers to the shareholders of the company. In an environment of virtually zero percent return on cash, it is hard for anyone to believe that these corporate executives cannot find any capital expenditures, research and development or merger/acquisition investments which will not return greater than zero percent. I believe that is the authors primary point.
Furthermore, this cash hoard has been occurring at an increased pace for about a decade. A decade which has seen an almost parabolic rise in executive compensation. This decision to pay out some of that cash hoard in the form of obscene bonuses, stock options and salaries, while at the same time we have seen the average wage for workers in this country actually shrink in real inflation adjusted terms must call into question the judgment of the leaders of these corporations.
I share the opinion of many who have responded to this article that government should not meddle too much in the capital allocation decisions of corporations. However, I do believe that we need to find ways to strengthen the enforcement of fiduciary standards of corporate executives. More and more I see the actions of corporate executives of publicly traded corporations appear to increasingly resemble the actions of the owners of privately owned companies in that decisions are made which appear to put the interests of the executives of these corporations above the interests of the stakeholders of the company. Regulators, in my opinion should be looking for these breaches in fiduciary duty.
Richard Koo, Nomura's chief economist, says reducing fiscal stimulus now would be folly, given that the private sector is still deleveraging. "Until people realize that they have contracted a completely different disease called balance sheet recession - where the private sector is minimizing debt instead of maximizing profits - a constructive policy dialogue is not likely to be possible." [View news story]
I agree with your assertion that an unlimited fiat currency creates inflation of asset values and a resulting depreciation of currency purchasing power. However, there is more at play here than a simple mathematic equation. The proof is standards of living across the globe have increased substantially as a result of these growth policies and growth and increased standards of living stimulate innovation which stimulates additional growth and increases in standards of living. The global economy is not a zero sum game.
Richard Koo, Nomura's chief economist, says reducing fiscal stimulus now would be folly, given that the private sector is still deleveraging. "Until people realize that they have contracted a completely different disease called balance sheet recession - where the private sector is minimizing debt instead of maximizing profits - a constructive policy dialogue is not likely to be possible." [View news story]
I don't know that austerity will save the dollar if indeed one presumes that it needs saving. Fiat currencies depreciate in value by nature as more currency is floated to soak up demand created by an ever expanding global economy. In contrast to an asset backed currency which is more stable, but then the underlying asset must appreciate in order to backstop the expanding currency base or one manages the value of the underlying asset by restricting the supply of currency, which in turn stifles economic expansion. From my point of view, Fiat currencies are the only viable solution in an every expanding and ever more global economy. I am also working under the assumption that of all of the developed countries in the world, the U.S. has the best chance to use a combination of economic growth and more efficient fiscal spending to arrest the expansion of our deficit to GDP ratio. However, I believe that these measures must stress sustainable growth first and then sustainable spending.
Richard Koo, Nomura's chief economist, says reducing fiscal stimulus now would be folly, given that the private sector is still deleveraging. "Until people realize that they have contracted a completely different disease called balance sheet recession - where the private sector is minimizing debt instead of maximizing profits - a constructive policy dialogue is not likely to be possible." [View news story]
I believe that we are faced with two undesirable courses of action. We can continue to prime the pump through fiscal spending and monetary accomodation in order to stave off economic stagnation and deflation or we can inact an austerity program, collapse the domestic and international economies and risk throwing the entire developed world into a deflationary spiral and Japan like economic stagnation. The austerity scenario would most likely lead to greater deficits and debt than the prime the pump scenario over the next 3 to 5 years and it would also likely derail the world's new economic engines of China, India and Brazil. The outcome of this would be very painful at best and the likelihood of it resulting in actual trade wars, if not actual wars would be greatly increased.
Richard Koo, Nomura's chief economist, says reducing fiscal stimulus now would be folly, given that the private sector is still deleveraging. "Until people realize that they have contracted a completely different disease called balance sheet recession - where the private sector is minimizing debt instead of maximizing profits - a constructive policy dialogue is not likely to be possible." [View news story]
Thank you for the apology. I have spent over 15 years in this business "competing" against the asset gatherers which have tainted your impression of my profession. I have dedicated my professional career to differentiating my firm from those who are so obviously ethically challenged.
Richard Koo, Nomura's chief economist, says reducing fiscal stimulus now would be folly, given that the private sector is still deleveraging. "Until people realize that they have contracted a completely different disease called balance sheet recession - where the private sector is minimizing debt instead of maximizing profits - a constructive policy dialogue is not likely to be possible." [View news story]
You questioned my integrity, so I responded. You are most certainly a believer in free markets and I responded as I did to illustrate that in a free market when almost every investor was scared and distrustful, we grew. The free market validated that we are trusted because we are not sales people, we are serious fundamental investors who consider our fiduciary duty to our clients as our highest calling.
Your criticisms are without grounds and yes I do take it personally when some who has no knowledge makes a generalized comment which groups me with those in my industry who I detest.
Richard Koo, Nomura's chief economist, says reducing fiscal stimulus now would be folly, given that the private sector is still deleveraging. "Until people realize that they have contracted a completely different disease called balance sheet recession - where the private sector is minimizing debt instead of maximizing profits - a constructive policy dialogue is not likely to be possible." [View news story]
Archman Investor, why so hostile? Yes, I am the Chief Investment Officer of the fastest growing independent investment firm in our region and that is a testament to the fact that we are objective and very good at what we do. We do not sell investment product, of which I am highly critical. We are a boutique asset management firm, which means we get paid to execute highly customized investment strategies utilizing our own proprietary processes. The reason I responded to this article as I did was that I do a tremendous amount of reading and Richard Foo makes a very compelling case for why Japan's recession has lasted as long as it has. He says that twice during the last 20 years political leaders in Japan were elected into office to cut spending, cut the deficit and reduce debt. Each time they attempted this, they pushed the Japanese economy deeper into a recession and deeper in debt, which exacerbated the private sector's leverage which was mostly concentrated in the banks.
Richard Koo, Nomura's chief economist, says reducing fiscal stimulus now would be folly, given that the private sector is still deleveraging. "Until people realize that they have contracted a completely different disease called balance sheet recession - where the private sector is minimizing debt instead of maximizing profits - a constructive policy dialogue is not likely to be possible." [View news story]
Richard Koo has written several books and is a renouned expert on what Japan has done wrong during their 20+ year recession/depression. For this reason policy makers in this country should take his comments very seriously. All you have to do is look at our money supply over the last 12 months and you can see why we cannot remove stimulus or tighten monetary policy. Money supply, inspite of all of the government intervention has continued to remain very weak.
Social Security as Your Fixed Income Allocation? [View article]
I have successfully used Bogle's logic regarding the capitalized value of a SS annuity stream when working through a retirement asset allocation when the client's required draw down amount is in-congruent with their risk tolerance and life expectancy. In these situations where the client really requires at least 60% in equities and they believe that they can only tolerate 30%, explaining how much in fixed income would be required to generate what they are receiving in SS can help the client rationalize a greater equity component.
Who do you trust: Bernanke or the markets? Bernanke's rosy economic view conflicts with reality, Michael Pento says, and stocks and commodities are casting their votes. The Fed's failure to listen to the markets is the key reason for its "miserable record" of economic projections. "For the betterment of the nation, the next appointment to serve at the Fed should be someone from a trading pit and not from Princeton." [View news story]
Out of almost 60 years of his working life Volcker spent five years at Chase Manhattan Bank as an economist. Have you ever worked at a bank? How many economists have you actually known or worked with? I spent 20+ years at various commercial banks and the economists that work at banks do not typically make real world business decisions and see the successes or failures of their work. They build models and make forecasts the same as they do when they work for the government or in academics. What you are trying to argue does not work with economists, just like it would not work with a meteorologist. A weather forecaster who works for the National Weather Service is no less experienced than one who works for a the local news channel. They both analyze data and make forecasts.
What you want to do is bash academics, which I don't entirely disagree with in the context of many different areas of study, but economics is not one of those areas of study where private sector experience as an economist make the person a better economist.
Who do you trust: Bernanke or the markets? Bernanke's rosy economic view conflicts with reality, Michael Pento says, and stocks and commodities are casting their votes. The Fed's failure to listen to the markets is the key reason for its "miserable record" of economic projections. "For the betterment of the nation, the next appointment to serve at the Fed should be someone from a trading pit and not from Princeton." [View news story]
Silentz, my anology is not flawed. Being an economist is an academic pursuit, like it or not. Even one of our most widely admired Fed Chairman, Paul Volcker, was a career economist/public servant. Volcker attended Princeton, Harvard and the London School of Economics before starting his first job at the Fed n 1952. He spent five years as an economist at Chase Manhattan Bank and then joined the U.S. Treasury Department.
My point is that we want the smartest and best trained individuals for any critically important job whether it is the best trained soldiers, many who take on critical missions based upon training alone as many did not possess "real" combat experience prior to 2002, or the best trained economists in the role of Fed Chairman.
Who do you trust: Bernanke or the markets? Bernanke's rosy economic view conflicts with reality, Michael Pento says, and stocks and commodities are casting their votes. The Fed's failure to listen to the markets is the key reason for its "miserable record" of economic projections. "For the betterment of the nation, the next appointment to serve at the Fed should be someone from a trading pit and not from Princeton." [View news story]
Teresa, obviously you have not read my Bio. I am a small business owner and just this year we added two new positions and filled them with very qualified professionals. We hired these individuals because we have almost doubled our revenues over the last three years.
Who do you trust: Bernanke or the markets? Bernanke's rosy economic view conflicts with reality, Michael Pento says, and stocks and commodities are casting their votes. The Fed's failure to listen to the markets is the key reason for its "miserable record" of economic projections. "For the betterment of the nation, the next appointment to serve at the Fed should be someone from a trading pit and not from Princeton." [View news story]
We have the best higher education system in the world and students from every corner of that world come here if they can afford to in order access university education in the U.S. On top of that, Harvard, Yale, and Princeton are the pinacle of this premier university system that we have in this country. It never ceases to amaze me how when it comes to attempting to steer the largest and most complex global economy in the world, there are people like Teresa who denegrate our best intellectuals and think that we should put this enormous and difficult task in the hands of second rate minds. That would be like saying to a general who wants to send in the elite Navy Seals to secure a strategically important site during the early stages of an important military operation that we don't want the elite best trained soldiers for the job, we should just send in the army infantry instead because they are plain thinking folks just like the majority of Americans that they are fighting for.
The Failure of Capitalists to Act Like Capitalists [View article]
The Failure of Capitalists to Act Like Capitalists [View article]
The Failure of Capitalists to Act Like Capitalists [View article]
Furthermore, this cash hoard has been occurring at an increased pace for about a decade. A decade which has seen an almost parabolic rise in executive compensation. This decision to pay out some of that cash hoard in the form of obscene bonuses, stock options and salaries, while at the same time we have seen the average wage for workers in this country actually shrink in real inflation adjusted terms must call into question the judgment of the leaders of these corporations.
I share the opinion of many who have responded to this article that government should not meddle too much in the capital allocation decisions of corporations. However, I do believe that we need to find ways to strengthen the enforcement of fiduciary standards of corporate executives. More and more I see the actions of corporate executives of publicly traded corporations appear to increasingly resemble the actions of the owners of privately owned companies in that decisions are made which appear to put the interests of the executives of these corporations above the interests of the stakeholders of the company. Regulators, in my opinion should be looking for these breaches in fiduciary duty.
Richard Koo, Nomura's chief economist, says reducing fiscal stimulus now would be folly, given that the private sector is still deleveraging. "Until people realize that they have contracted a completely different disease called balance sheet recession - where the private sector is minimizing debt instead of maximizing profits - a constructive policy dialogue is not likely to be possible." [View news story]
Richard Koo, Nomura's chief economist, says reducing fiscal stimulus now would be folly, given that the private sector is still deleveraging. "Until people realize that they have contracted a completely different disease called balance sheet recession - where the private sector is minimizing debt instead of maximizing profits - a constructive policy dialogue is not likely to be possible." [View news story]
Richard Koo, Nomura's chief economist, says reducing fiscal stimulus now would be folly, given that the private sector is still deleveraging. "Until people realize that they have contracted a completely different disease called balance sheet recession - where the private sector is minimizing debt instead of maximizing profits - a constructive policy dialogue is not likely to be possible." [View news story]
Richard Koo, Nomura's chief economist, says reducing fiscal stimulus now would be folly, given that the private sector is still deleveraging. "Until people realize that they have contracted a completely different disease called balance sheet recession - where the private sector is minimizing debt instead of maximizing profits - a constructive policy dialogue is not likely to be possible." [View news story]
Richard Koo, Nomura's chief economist, says reducing fiscal stimulus now would be folly, given that the private sector is still deleveraging. "Until people realize that they have contracted a completely different disease called balance sheet recession - where the private sector is minimizing debt instead of maximizing profits - a constructive policy dialogue is not likely to be possible." [View news story]
Your criticisms are without grounds and yes I do take it personally when some who has no knowledge makes a generalized comment which groups me with those in my industry who I detest.
Richard Koo, Nomura's chief economist, says reducing fiscal stimulus now would be folly, given that the private sector is still deleveraging. "Until people realize that they have contracted a completely different disease called balance sheet recession - where the private sector is minimizing debt instead of maximizing profits - a constructive policy dialogue is not likely to be possible." [View news story]
Richard Koo, Nomura's chief economist, says reducing fiscal stimulus now would be folly, given that the private sector is still deleveraging. "Until people realize that they have contracted a completely different disease called balance sheet recession - where the private sector is minimizing debt instead of maximizing profits - a constructive policy dialogue is not likely to be possible." [View news story]
Social Security as Your Fixed Income Allocation? [View article]
Who do you trust: Bernanke or the markets? Bernanke's rosy economic view conflicts with reality, Michael Pento says, and stocks and commodities are casting their votes. The Fed's failure to listen to the markets is the key reason for its "miserable record" of economic projections. "For the betterment of the nation, the next appointment to serve at the Fed should be someone from a trading pit and not from Princeton." [View news story]
What you want to do is bash academics, which I don't entirely disagree with in the context of many different areas of study, but economics is not one of those areas of study where private sector experience as an economist make the person a better economist.
Who do you trust: Bernanke or the markets? Bernanke's rosy economic view conflicts with reality, Michael Pento says, and stocks and commodities are casting their votes. The Fed's failure to listen to the markets is the key reason for its "miserable record" of economic projections. "For the betterment of the nation, the next appointment to serve at the Fed should be someone from a trading pit and not from Princeton." [View news story]
My point is that we want the smartest and best trained individuals for any critically important job whether it is the best trained soldiers, many who take on critical missions based upon training alone as many did not possess "real" combat experience prior to 2002, or the best trained economists in the role of Fed Chairman.
Who do you trust: Bernanke or the markets? Bernanke's rosy economic view conflicts with reality, Michael Pento says, and stocks and commodities are casting their votes. The Fed's failure to listen to the markets is the key reason for its "miserable record" of economic projections. "For the betterment of the nation, the next appointment to serve at the Fed should be someone from a trading pit and not from Princeton." [View news story]
Who do you trust: Bernanke or the markets? Bernanke's rosy economic view conflicts with reality, Michael Pento says, and stocks and commodities are casting their votes. The Fed's failure to listen to the markets is the key reason for its "miserable record" of economic projections. "For the betterment of the nation, the next appointment to serve at the Fed should be someone from a trading pit and not from Princeton." [View news story]