The Simple Accountant's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/220228/comments http://seekingalpha.com/article/179750-5-stocks-that-give-the-gift-of-dividend-growth?source=feed#comment-823162 823162
My own preference is for dividend paying common shares of firms with globally diversified revenue sources. This includes a number of non-US firms such as VOD, TOT, BMO, TSM. While I am a short term US dollar bull, in the longer run I think the dollar will resume its decline, and these shares will bring capital appreciation as well as a flow of nice dividends, for a reasonable risk-adjusted total return.

For the smaller investor, I like MAPIX, as the team at Matthews are exceptional investors with a very good understanding of the Asian financial markets

Disclosure: long all the above in various portfolios.]]> Sun, 27 Dec 2009 22:12:56 -0500
My own preference is for dividend paying common shares of firms with globally diversified revenue sources. This includes a number of non-US firms such as VOD, TOT, BMO, TSM. While I am a short term US dollar bull, in the longer run I think the dollar will resume its decline, and these shares will bring capital appreciation as well as a flow of nice dividends, for a reasonable risk-adjusted total return.

For the smaller investor, I like MAPIX, as the team at Matthews are exceptional investors with a very good understanding of the Asian financial markets

Disclosure: long all the above in various portfolios.]]> http://seekingalpha.com/article/179718-5-reasons-why-the-market-is-about-to-change-direction?source=feed#comment-822837 822837 Sun, 27 Dec 2009 16:16:48 -0500 http://seekingalpha.com/article/179525-odd-signals-from-financial-markets-who-s-wrong-here?source=feed#comment-818649 818649
This appears to me to be a market in which exceptional vigilance is called for. No heroic stands, and a willingness to change outlook and allocations at the first sign of an emerging trend. Blue chip global equities are drifting and trendless, while US small caps are staging a modest rally. Investment grade bonds and treasuries are correcting together with commodities and precious metals, which is a bit odd.

My read: the bond markets fear monetary inflation, while the commodity markets fear insufficient demand. The stalemate between the deflationist and inflationist scenarios grinds on. Therefore my allocation remains quite neutral and overweight cash. At some point the markets will signal the move. Until then, as I often advise, sometimes the best move is to do nothing.]]> Wed, 23 Dec 2009 10:05:48 -0500
This appears to me to be a market in which exceptional vigilance is called for. No heroic stands, and a willingness to change outlook and allocations at the first sign of an emerging trend. Blue chip global equities are drifting and trendless, while US small caps are staging a modest rally. Investment grade bonds and treasuries are correcting together with commodities and precious metals, which is a bit odd.

My read: the bond markets fear monetary inflation, while the commodity markets fear insufficient demand. The stalemate between the deflationist and inflationist scenarios grinds on. Therefore my allocation remains quite neutral and overweight cash. At some point the markets will signal the move. Until then, as I often advise, sometimes the best move is to do nothing.]]> http://seekingalpha.com/article/178788-are-we-heading-toward-a-market-crash-by-jobless-recovery?source=feed#comment-812235 812235
Just on the grounds of that inefficiency, one might prefer that the government instead reduce its consumption of capital and allow the private decisions of its citizens and businesses to handle the investment allocation. Remember, there is more than one way to put money into people's pockets; that can happen by simply taking away less in taxes.


On Dec 18 09:51 AM TripleG wrote:

> One of the only things I agreed with from the Obama campaign was
> "shovel ready projects". We, the U.S. need new infrastructure and
> existing infrastructure repair. We are ready for it now. Where is
> it?]]> Fri, 18 Dec 2009 10:58:00 -0500
Just on the grounds of that inefficiency, one might prefer that the government instead reduce its consumption of capital and allow the private decisions of its citizens and businesses to handle the investment allocation. Remember, there is more than one way to put money into people's pockets; that can happen by simply taking away less in taxes.


On Dec 18 09:51 AM TripleG wrote:

> One of the only things I agreed with from the Obama campaign was
> "shovel ready projects". We, the U.S. need new infrastructure and
> existing infrastructure repair. We are ready for it now. Where is
> it?]]> http://seekingalpha.com/article/178625-can-citigroup-flail-its-way-to-solvency?source=feed#comment-811213 811213 Thu, 17 Dec 2009 16:56:09 -0500 http://seekingalpha.com/article/178445-update-on-the-s-p-500-tighten-stops-pocket-profits?source=feed#comment-808256 808256
Morgan Keegan economist Donald Ratajczak has an always interesting commentary with a table of key indicators. The most recent monthly comments are here:
www.morgankeegan.com/N...]]> Wed, 16 Dec 2009 10:12:59 -0500
Morgan Keegan economist Donald Ratajczak has an always interesting commentary with a table of key indicators. The most recent monthly comments are here:
www.morgankeegan.com/N...]]> http://seekingalpha.com/article/178205-another-reason-why-america-s-glory-days-are-over?source=feed#comment-806267 806267
Overly indebted nations with excessive public sector payrolls, such as Ireland and Greece, and states such as California and New Jersey which are comparable to these nations, may not be able to sustain those payrolls much longer.

On a macro level, restoring a sensible balance between private industry and public services is a key to a dynamic economy going forward. In the near term, however, what happens to aggregate demand if significant numbers of public employees join their private sector brethren on the unemployed lists? Score one more point for the deflatonists, and keep a watchful eye on that long commodities/short bonds trade.]]> Tue, 15 Dec 2009 08:44:31 -0500
Overly indebted nations with excessive public sector payrolls, such as Ireland and Greece, and states such as California and New Jersey which are comparable to these nations, may not be able to sustain those payrolls much longer.

On a macro level, restoring a sensible balance between private industry and public services is a key to a dynamic economy going forward. In the near term, however, what happens to aggregate demand if significant numbers of public employees join their private sector brethren on the unemployed lists? Score one more point for the deflatonists, and keep a watchful eye on that long commodities/short bonds trade.]]> http://seekingalpha.com/article/178035-inflation-premiums-at-odds-with-crude-price-behavior?source=feed#comment-805433 805433 Mon, 14 Dec 2009 14:54:26 -0500 http://seekingalpha.com/article/177972-long-term-u-s-bond-stock-allocation-results?source=feed#comment-805058 805058
Current yield is around 3.3%. These returns are comparable to the balanced-conservative model in the table, provide a modest level of capital growth along with income, and come with Vanguard's low .33% fee for investor class shares. Wellesley is a solid vehicle for the strategy Mr. Shaw describes. A retiree should be able to take the distributions + something around 3-4% of capital annually and have a reasonably low risk of depleting the principal base.]]> Mon, 14 Dec 2009 11:14:56 -0500
Current yield is around 3.3%. These returns are comparable to the balanced-conservative model in the table, provide a modest level of capital growth along with income, and come with Vanguard's low .33% fee for investor class shares. Wellesley is a solid vehicle for the strategy Mr. Shaw describes. A retiree should be able to take the distributions + something around 3-4% of capital annually and have a reasonably low risk of depleting the principal base.]]> http://seekingalpha.com/article/177686-bonds-maybe-loaning-money-at-less-than-4-for-30-years-isn-t-a-good-idea?source=feed#comment-801301 801301
If you buy the thesis of a continued massive unwinding of over leveraged and over inflated assets, combined with chronic excess capacity in many industries, all on a global scale, you may conclude that long Treasuries (or perhaps TIPS) give you a real return you can live with - and let you sleep without sweating the latest financial calamity. I'm unlikely to manage my portfolios this way, but it merits consideration.]]> Fri, 11 Dec 2009 09:01:01 -0500
If you buy the thesis of a continued massive unwinding of over leveraged and over inflated assets, combined with chronic excess capacity in many industries, all on a global scale, you may conclude that long Treasuries (or perhaps TIPS) give you a real return you can live with - and let you sleep without sweating the latest financial calamity. I'm unlikely to manage my portfolios this way, but it merits consideration.]]> http://seekingalpha.com/article/177239-are-money-and-bonds-perfect-substitutes?source=feed#comment-798172 798172 Wed, 09 Dec 2009 11:48:11 -0500 http://seekingalpha.com/article/177081-risk-aversion-can-be-a-humbling-experience?source=feed#comment-796236 796236
In hindsight it's clear. My own lesson is to have more courage when the market validates a position, and I regret having stayed in an overly conservative 70/30 allocation when I did re-enter the market in March.]]> Tue, 08 Dec 2009 11:07:06 -0500
In hindsight it's clear. My own lesson is to have more courage when the market validates a position, and I regret having stayed in an overly conservative 70/30 allocation when I did re-enter the market in March.]]> http://seekingalpha.com/article/177062-stimulus-spending-and-lost-hope-for-markets?source=feed#comment-796086 796086
The thesis here, and comments above, reflect an understanding (correct in my opinion) that the globalisation process in general, and labor arbitrage in particular, are devastating to the US working middle class.

The difficult part, as I see it, is how to create a trade policy response that is both effective and appropriate. Let us say, for the sake of argument, that the US government is able to persuade the Chinese government to take actions that have the effect of reducing the cost advantage of Chinese goods in the US market. Would the production of these goods not then shift to Indonesia, Egypt, or some other location, requiring the same sort of actions to be taken serially in successive countries?

Alternatively, let us assume the US policy makers, seeing the difficulty of the above course of action, instead opt to impose effective general limits on the importation of goods, via tariffs, quotas, or some other mechanism. What happens to the price of imported goods, and by extension the living standards of the working class in whose name they are imposed?

Large corporations and their investors have benefited from the profit margins gained through international trade. Workers have arguably benefited from lower cost of goods (though this is offset by wage losses).

My intent in this is not to naysay the desirability of some way to stabilize the middle class standard of living in the US (and other western nations), just to point out the difficulty in actually doing it via governmental policy initiatives. In a global economy, from which there is no turning back, all of the alternatives have serious consequences which cannot be ignored. So I ask, seriously, what is to be done?

The domestically produced energy initiatives Prof. Morici and other suggest appear to be a good place to start, and rebuilding the dilapidated US energy and transportation infrastructures has merit, but how much of this is actually practicable? There have been well reasoned criticisms of ethanol and solar subsidies. What would happen if we protect or offer subsidy to other domestic industries? Would we arrive at a better place than if we allowed the market forces to complete their work of global leveling? I, for one, am unsure.]]> Tue, 08 Dec 2009 09:48:11 -0500
The thesis here, and comments above, reflect an understanding (correct in my opinion) that the globalisation process in general, and labor arbitrage in particular, are devastating to the US working middle class.

The difficult part, as I see it, is how to create a trade policy response that is both effective and appropriate. Let us say, for the sake of argument, that the US government is able to persuade the Chinese government to take actions that have the effect of reducing the cost advantage of Chinese goods in the US market. Would the production of these goods not then shift to Indonesia, Egypt, or some other location, requiring the same sort of actions to be taken serially in successive countries?

Alternatively, let us assume the US policy makers, seeing the difficulty of the above course of action, instead opt to impose effective general limits on the importation of goods, via tariffs, quotas, or some other mechanism. What happens to the price of imported goods, and by extension the living standards of the working class in whose name they are imposed?

Large corporations and their investors have benefited from the profit margins gained through international trade. Workers have arguably benefited from lower cost of goods (though this is offset by wage losses).

My intent in this is not to naysay the desirability of some way to stabilize the middle class standard of living in the US (and other western nations), just to point out the difficulty in actually doing it via governmental policy initiatives. In a global economy, from which there is no turning back, all of the alternatives have serious consequences which cannot be ignored. So I ask, seriously, what is to be done?

The domestically produced energy initiatives Prof. Morici and other suggest appear to be a good place to start, and rebuilding the dilapidated US energy and transportation infrastructures has merit, but how much of this is actually practicable? There have been well reasoned criticisms of ethanol and solar subsidies. What would happen if we protect or offer subsidy to other domestic industries? Would we arrive at a better place than if we allowed the market forces to complete their work of global leveling? I, for one, am unsure.]]> http://seekingalpha.com/article/176275-recession-depression-deflation-inflation-collapse-or-recovery?source=feed#comment-790070 790070
Why omit these other gems of wisdom from the cited article?

"...banks are being told to obtain secure storage for new currency-dollars. They expect official devaluation by the end of the year."

"As you can see, the Illuminist [the dreaded Illuminati - SA] program is going to come quicker than we anticipated."

"The game as we know it today began in 1694 when the Rothschild’s [sic] formed the privately owned Bank of England..."

This is supposed to be a site for serious investment oriented discussion. I have no problem with anyone making a bear case from the observed data, indeed, I'm a market skeptic myself at this juncture, but there is no place for this kind of nonsense.]]> Fri, 04 Dec 2009 09:10:34 -0500
Why omit these other gems of wisdom from the cited article?

"...banks are being told to obtain secure storage for new currency-dollars. They expect official devaluation by the end of the year."

"As you can see, the Illuminist [the dreaded Illuminati - SA] program is going to come quicker than we anticipated."

"The game as we know it today began in 1694 when the Rothschild’s [sic] formed the privately owned Bank of England..."

This is supposed to be a site for serious investment oriented discussion. I have no problem with anyone making a bear case from the observed data, indeed, I'm a market skeptic myself at this juncture, but there is no place for this kind of nonsense.]]> http://seekingalpha.com/article/175978-foreclosing-on-aig-what-can-we-learn-from-this?source=feed#comment-790001 790001
A side note on SIVs and Enron: in that case, if I recall, Enron executives were creating entities which borrowed money from banks and other lenders, with the loans guaranteed by Enron. The entities then purchased Enron shares with the proceeds. Needless to say, the loan guarantees were not properly disclosed and the entities were not consolidated into Enron's financial statements.

In effect, Enron was taking on debt and calling it equity, which materially changed their capital structure, misleading lenders and investors. This also had the effect of making leveraged bets on their own shares. When the market value of shares started to crater after the dotcom bust, the entities began to default, the scheme fell apart, and the entire company imploded. Pretty clearly an egregious abuse of a legitimate financing strategy. Does that, however, mean that special purpose entities should always and everywhere be prohibited? I think not.]]> Fri, 04 Dec 2009 08:42:49 -0500
A side note on SIVs and Enron: in that case, if I recall, Enron executives were creating entities which borrowed money from banks and other lenders, with the loans guaranteed by Enron. The entities then purchased Enron shares with the proceeds. Needless to say, the loan guarantees were not properly disclosed and the entities were not consolidated into Enron's financial statements.

In effect, Enron was taking on debt and calling it equity, which materially changed their capital structure, misleading lenders and investors. This also had the effect of making leveraged bets on their own shares. When the market value of shares started to crater after the dotcom bust, the entities began to default, the scheme fell apart, and the entire company imploded. Pretty clearly an egregious abuse of a legitimate financing strategy. Does that, however, mean that special purpose entities should always and everywhere be prohibited? I think not.]]> http://seekingalpha.com/article/176133-when-to-exit-your-long-positions?source=feed#comment-786602 786602
Your point #2 is a very good one. #3 is interesting; I am unsure and will have to think more about it. #4, my long equity allocation does include some "Asian blue chips" but I no longer regard China to be an emerging market. My allocation to gold and commodities has been liquidated - too early to be sure.

to Mr. Van Knapp,

This 8% rule is an interesting strategy. It seems to me that in some markets we could have corrections over 8% with the primary trend intact, particularly if the correction is on lighter volume. I will certainly have to look more at it. Like mbkelly75, my tendency is to maintain portfolio allocations longer, generally until the primary trend changes.]]> Wed, 02 Dec 2009 12:22:55 -0500
Your point #2 is a very good one. #3 is interesting; I am unsure and will have to think more about it. #4, my long equity allocation does include some "Asian blue chips" but I no longer regard China to be an emerging market. My allocation to gold and commodities has been liquidated - too early to be sure.

to Mr. Van Knapp,

This 8% rule is an interesting strategy. It seems to me that in some markets we could have corrections over 8% with the primary trend intact, particularly if the correction is on lighter volume. I will certainly have to look more at it. Like mbkelly75, my tendency is to maintain portfolio allocations longer, generally until the primary trend changes.]]> http://seekingalpha.com/article/176133-when-to-exit-your-long-positions?source=feed#comment-786250 786250
They drew the primary support line at 1072 because it was a previous resistance level, and the secondary support line at 991 because it was a previous support level. Again, I understand the reasoning for that, though I am not very attached to the exact numbers. For me, watching the price and volume action together will give a pretty good read on where the market is going.

My current portfolio position: 30% long large cap equities, 40% intermediate term bonds, 30% cash. This is down from a previous position of 70% equities / 30% bonds for much of the year. The rally was looking tired and the market indecisive, and the small caps are even shakier. It seemed like time to lighten up and wait for some clearer picture of market direction.]]> Wed, 02 Dec 2009 09:32:34 -0500
They drew the primary support line at 1072 because it was a previous resistance level, and the secondary support line at 991 because it was a previous support level. Again, I understand the reasoning for that, though I am not very attached to the exact numbers. For me, watching the price and volume action together will give a pretty good read on where the market is going.

My current portfolio position: 30% long large cap equities, 40% intermediate term bonds, 30% cash. This is down from a previous position of 70% equities / 30% bonds for much of the year. The rally was looking tired and the market indecisive, and the small caps are even shakier. It seemed like time to lighten up and wait for some clearer picture of market direction.]]> http://seekingalpha.com/article/175749-krugman-the-deficit-doesn-t-matter?source=feed#comment-783177 783177

On Nov 30 03:22 PM Ted Kavadas wrote:

> "Deficits don't matter" may be true, from a political standpoint,
> up until this point. However, from an economic perspective I strongly
> disagree.
>
> I think we, as a nation, have been lulled into a false sense of security
> that we can run high deficits and national debt levels without serious
> consequences. Is this a correct assumption to make?
>
> For those interested I just wrote a blog post on the subject that
> can be found here:
>
> seekingalpha.com/user/...]]> Mon, 30 Nov 2009 16:04:29 -0500

On Nov 30 03:22 PM Ted Kavadas wrote:

> "Deficits don't matter" may be true, from a political standpoint,
> up until this point. However, from an economic perspective I strongly
> disagree.
>
> I think we, as a nation, have been lulled into a false sense of security
> that we can run high deficits and national debt levels without serious
> consequences. Is this a correct assumption to make?
>
> For those interested I just wrote a blog post on the subject that
> can be found here:
>
> seekingalpha.com/user/...]]> http://seekingalpha.com/article/175749-krugman-the-deficit-doesn-t-matter?source=feed#comment-783065 783065
On to what appears to be the substance of the debate: if Prof. Krugman was referring to the national debt, he could still be right, to the extent that economic growth might be enough to render the debt manageable. This was the point he made to George Will, saying that while the debt will increase enormously in absolute terms, it would essentially be the same % of GDP ten years hence.

Where the disagreement appears to lie, is that the opposing camps are making different forecasts of GDP at ten years out. To those of you with some training in forecasting and modeling of various types, what is the confidence level in that sort of thing? Not very high, eh? Seems to me we are arguing points that are not easily proven. The problem to me is that the debt expansion is baked into the cake, so if the economic growth falls short of Prof. Krugman's more optimistic forecast, there could indeed be trouble. We will have to wait and see, and in the meantime position our portfolios according to our own analyses.]]> Mon, 30 Nov 2009 14:38:17 -0500
On to what appears to be the substance of the debate: if Prof. Krugman was referring to the national debt, he could still be right, to the extent that economic growth might be enough to render the debt manageable. This was the point he made to George Will, saying that while the debt will increase enormously in absolute terms, it would essentially be the same % of GDP ten years hence.

Where the disagreement appears to lie, is that the opposing camps are making different forecasts of GDP at ten years out. To those of you with some training in forecasting and modeling of various types, what is the confidence level in that sort of thing? Not very high, eh? Seems to me we are arguing points that are not easily proven. The problem to me is that the debt expansion is baked into the cake, so if the economic growth falls short of Prof. Krugman's more optimistic forecast, there could indeed be trouble. We will have to wait and see, and in the meantime position our portfolios according to our own analyses.]]> http://seekingalpha.com/article/175606-how-come-good-macro-policies-are-political-losers?source=feed#comment-781779 781779

On Nov 29 02:33 PM Kimball Corson wrote:

> To conceptwizard:
>
> very troubling, if true.
>
> Our difficulty in assessing the article's veracity arises from the
> lack of transparency and full disclosure of its programs and agendas
> by our governement. It is hard to evaluate something like this in
> those circumstances.
>
> However, for what bearing it has, Bob Chapman, the driving force
> behind the International Forecaster is a 72 year old doom and gloom
> ex-gold broker who thinks we should all be holding a lot of gold
> and preparing for the worst. He appears to have no special education
> or training in economics.]]> Sun, 29 Nov 2009 15:38:43 -0500

On Nov 29 02:33 PM Kimball Corson wrote:

> To conceptwizard:
>
> very troubling, if true.
>
> Our difficulty in assessing the article's veracity arises from the
> lack of transparency and full disclosure of its programs and agendas
> by our governement. It is hard to evaluate something like this in
> those circumstances.
>
> However, for what bearing it has, Bob Chapman, the driving force
> behind the International Forecaster is a 72 year old doom and gloom
> ex-gold broker who thinks we should all be holding a lot of gold
> and preparing for the worst. He appears to have no special education
> or training in economics.]]> http://seekingalpha.com/article/175606-how-come-good-macro-policies-are-political-losers?source=feed#comment-781723 781723
The policies following the crisis make it plainly obvious to any reasonably informed observer, that the deeply meaningful ideals of free enterprise, governmental fairness, and preservation of the essential role of the working middle class have been compromised in fact if not in rhetoric. To be fair, this has been a bipartisan effort.

You may argue that the policy responses were correct, and the best available under the circumstances. This may be true, and you are certainly far more competent to make that judgement than I am, but all of that is beside the point. Americans understand that through all of this, their country has changed in fundamental ways and that something has been irretrievably lost. They are resentful. Astute politicians sniff out this public mood as surely as trained pigs finding truffles in a French forest. The more cynical among them play this to their advantage, while the more conscientious will share this concern and want to bring it into the policy discussions.

I would also like to commend here the remarks of Mr. Corson, who has recently taken up a line of thinking that is difficult for Americans to discuss honestly, but important if they are to remain the type of Democracy that they are taught to revere.]]> Sun, 29 Nov 2009 14:24:24 -0500
The policies following the crisis make it plainly obvious to any reasonably informed observer, that the deeply meaningful ideals of free enterprise, governmental fairness, and preservation of the essential role of the working middle class have been compromised in fact if not in rhetoric. To be fair, this has been a bipartisan effort.

You may argue that the policy responses were correct, and the best available under the circumstances. This may be true, and you are certainly far more competent to make that judgement than I am, but all of that is beside the point. Americans understand that through all of this, their country has changed in fundamental ways and that something has been irretrievably lost. They are resentful. Astute politicians sniff out this public mood as surely as trained pigs finding truffles in a French forest. The more cynical among them play this to their advantage, while the more conscientious will share this concern and want to bring it into the policy discussions.

I would also like to commend here the remarks of Mr. Corson, who has recently taken up a line of thinking that is difficult for Americans to discuss honestly, but important if they are to remain the type of Democracy that they are taught to revere.]]> http://seekingalpha.com/article/174773-wells-fargo-jpmorgan-and-bank-of-america-stock-prices-can-double?source=feed#comment-774904 774904
Overall I am reluctant to buy the US banking giants, especially when there are (apparently) healthier banks with intact dividends such as BMO and STD. On the other hand, the Fed have made no secret of their intention to nurse these banks back to health, and we all know better than to fight the Fed, so perhaps the thesis has merit.

Disclosure: no current position in any financials]]> Tue, 24 Nov 2009 08:23:47 -0500
Overall I am reluctant to buy the US banking giants, especially when there are (apparently) healthier banks with intact dividends such as BMO and STD. On the other hand, the Fed have made no secret of their intention to nurse these banks back to health, and we all know better than to fight the Fed, so perhaps the thesis has merit.

Disclosure: no current position in any financials]]> http://seekingalpha.com/article/174641-what-the-u-s-long-bond-market-is-telling-us?source=feed#comment-773511 773511 Mon, 23 Nov 2009 12:00:54 -0500 http://seekingalpha.com/article/174811-u-s-government-s-size-the-slow-motion-crisis?source=feed#comment-773468 773468
The result of this is that the ratio of rent seeking activities to value additive economic activities, which has been made possible by the enormous productivity explosion of capitalism and technological progress, has arrived at a crisis point. We have reached a stage where large populations can be adequately supplied with the necessities of life by a relatively small application of direct labour.

To me the problem of surplus labour power and appropriation of the surplus output by rent seekers, is a cultural problem that the present political and economic institutions are ill equipped to address. It will be interesting to see how this dynamic plays out, and how our institutions evolve over the coming decades. My optimistic nature leads me to suspect that this will happen with some amount of rational consideration, and a favourable outcome will result. I do recognize however that quite a few thoughtful and intelligent observers are much less sanguine when considering the prospects.]]> Mon, 23 Nov 2009 11:40:01 -0500
The result of this is that the ratio of rent seeking activities to value additive economic activities, which has been made possible by the enormous productivity explosion of capitalism and technological progress, has arrived at a crisis point. We have reached a stage where large populations can be adequately supplied with the necessities of life by a relatively small application of direct labour.

To me the problem of surplus labour power and appropriation of the surplus output by rent seekers, is a cultural problem that the present political and economic institutions are ill equipped to address. It will be interesting to see how this dynamic plays out, and how our institutions evolve over the coming decades. My optimistic nature leads me to suspect that this will happen with some amount of rational consideration, and a favourable outcome will result. I do recognize however that quite a few thoughtful and intelligent observers are much less sanguine when considering the prospects.]]> http://seekingalpha.com/article/174623-25-reasons-we-will-not-have-a-depression?source=feed#comment-770110 770110
This posting is a salutary antidote to the excessive pessimism often on display here. The challenges are daunting, but as you say, there is much to be done, and it's time to get on with it.]]> Fri, 20 Nov 2009 22:13:15 -0500
This posting is a salutary antidote to the excessive pessimism often on display here. The challenges are daunting, but as you say, there is much to be done, and it's time to get on with it.]]> http://seekingalpha.com/article/174486-velocity-of-u-s-money-supply-is-finally-edging-up?source=feed#comment-768742 768742
My own allocation is presently overweight fixed income, but a good portion of this is TIPS; I have been anticipating putting on the inflation trade for some time now. The trigger event for me would be a material increase in yields, but for now the ongoing inflation/deflation debate remains unresolved.]]> Fri, 20 Nov 2009 09:20:41 -0500
My own allocation is presently overweight fixed income, but a good portion of this is TIPS; I have been anticipating putting on the inflation trade for some time now. The trigger event for me would be a material increase in yields, but for now the ongoing inflation/deflation debate remains unresolved.]]> http://seekingalpha.com/article/174198-the-distorted-shape-of-our-emerging-recovery?source=feed#comment-768019 768019
The macro trends have been in place for decades, and would play out over time even without the near collapse of the global financial system. Global capital mobility, accelerated technological displacement of established industries, excess labour supply in developing markets, etc.

These would eventually constrain the ability of industrialized nations to maintain standards of living for large segments of their populations, absent significant investment in human capital; even then there is no clear programme and no assurance of success. These nations have, however, proven to be remarkably creative and resilient, so I tend not to worry so much as Mr. Corson.]]> Thu, 19 Nov 2009 16:14:22 -0500
The macro trends have been in place for decades, and would play out over time even without the near collapse of the global financial system. Global capital mobility, accelerated technological displacement of established industries, excess labour supply in developing markets, etc.

These would eventually constrain the ability of industrialized nations to maintain standards of living for large segments of their populations, absent significant investment in human capital; even then there is no clear programme and no assurance of success. These nations have, however, proven to be remarkably creative and resilient, so I tend not to worry so much as Mr. Corson.]]> http://seekingalpha.com/article/173977-structural-unemployment-the-only-cure?source=feed#comment-765890 765890
You may have missed Arizona Glen's point: we cannot overlook the fact that the marginal cost to business of additional labour hours per existing worker are lower than the cost of adding headcount. Hence for example the mandatory overtime at automaker plants in the boom years.

Under a work-sharing scheme, which in itself is not a bad idea, there would need to be some kind of policy response to incentivize employers do something along those lines. For example, in several European states, governments are "topping up" wages for employees in firms where hours have been reduced across the board in lieu of headcount reduction. Even this is seen as a temporary measure, until labour markets recover.]]> Wed, 18 Nov 2009 14:53:04 -0500
You may have missed Arizona Glen's point: we cannot overlook the fact that the marginal cost to business of additional labour hours per existing worker are lower than the cost of adding headcount. Hence for example the mandatory overtime at automaker plants in the boom years.

Under a work-sharing scheme, which in itself is not a bad idea, there would need to be some kind of policy response to incentivize employers do something along those lines. For example, in several European states, governments are "topping up" wages for employees in firms where hours have been reduced across the board in lieu of headcount reduction. Even this is seen as a temporary measure, until labour markets recover.]]> http://seekingalpha.com/article/173977-structural-unemployment-the-only-cure?source=feed#comment-765336 765336
It will be interesting to see how US society responds. One possibility is an increase in something that looks more like traditional family structures: one spouse with earned income and one with household responibilites, multiple generations in the same household, etc. Of course, they will not simply return to an earlier time, but will reflect contemporary circumstances

Seen in a longer term historical perspective, the social arrangements over the last six or seven decades, which we have come to view as normal, are really quite exceptional, and may in time prove to have been a temporary aberration. Indeed, simply from a resource consumption standpoint, they never were sustainable over the very long term in any case.

Things will work out, as they always do, and not without some disruption and real pain, but we will come out OK, and probably be a better society for it.]]> Wed, 18 Nov 2009 10:14:58 -0500
It will be interesting to see how US society responds. One possibility is an increase in something that looks more like traditional family structures: one spouse with earned income and one with household responibilites, multiple generations in the same household, etc. Of course, they will not simply return to an earlier time, but will reflect contemporary circumstances

Seen in a longer term historical perspective, the social arrangements over the last six or seven decades, which we have come to view as normal, are really quite exceptional, and may in time prove to have been a temporary aberration. Indeed, simply from a resource consumption standpoint, they never were sustainable over the very long term in any case.

Things will work out, as they always do, and not without some disruption and real pain, but we will come out OK, and probably be a better society for it.]]> http://seekingalpha.com/article/173167-capitalism-is-for-the-other-guy?source=feed#comment-759166 759166
Giving in to pessimism is the wrong way to go here (and it has been a portfolio killer for most of the last eight months). We might lose faith in government officials or bankers, but we can't lose faith in ourselves. Let's see what happens going forward, but in a cultural sense, failure of courage to confront large challenges is not how modern civilization was built. Marx, Spengler, Toynbee and others have gotten it wrong, repeatedly.]]> Fri, 13 Nov 2009 14:41:42 -0500
Giving in to pessimism is the wrong way to go here (and it has been a portfolio killer for most of the last eight months). We might lose faith in government officials or bankers, but we can't lose faith in ourselves. Let's see what happens going forward, but in a cultural sense, failure of courage to confront large challenges is not how modern civilization was built. Marx, Spengler, Toynbee and others have gotten it wrong, repeatedly.]]>