Kint's Comments

Dollar Cost Averaging: The Myth That Will Never Die

Mon, 23 Nov 2009 15:05:56 -0500

How would an average investor know when to invest? If they invested a lump sum at the wrong time, they would be screwed. Also, the quote you gave doesn't show DCA doesn't work - it shows that when people don't follow it, it doesn't work. DCA doesn't produce the highest returns, but for the average person, it's the best way to go. If you use "momentum investing," one wrong move and all your gains are wiped out, and then some.

Two Takes on the Financial Crisis: 'Too Big to Fail' by Andrew Ross Sorkin and 'How Markets Fail' by John Cassidy

Fri, 20 Nov 2009 18:02:58 -0500

Having read neither books, I may be missing something, but I disagree with the title "Too Big to Fail," which maybe be a catchy phrase, doesn't accurately capture what the problem was. The issue really is Too Interconnected to Fail - companies can't be allowed to buy unregulated products like CDSes, and with cross-ownership and over-leveraging, it's a system of mutually assured destruction. The subprime crisis is not the issue. Lehman going under is acceptable, and even AIG going under in and of itself is acceptable - but an AIG going down that was going to bring down a host of other financial firms because of the CDSes is not acceptable.

Dollar Forced to Abdicate Its Throne

Sun, 15 Nov 2009 19:53:48 -0500

When the Chinese yuan is weak, everyone complains. When the US dollar is weak, everyone complains. Which is it that you want?? Just let the markets play out - it's not the end of the world.

Employment: Neither Quality Nor Quantity

Sun, 15 Nov 2009 19:24:46 -0500

You raise good points, Whitslack.. and there is actually an example of an economy that's mostly healthcare and finance - Hong Kong. Of course, it's only a city, but if you specialize in something that you do better than other people, you don't necessarily have to produce "things" to lead a high standard of living.

Why Krugman's Analysis of Economists Is Wrong

Wed, 09 Sep 2009 12:55:54 -0400

I'm not sure you understand Krugman's argument - what Krugman is arguing is, monetarists economists are the ones who live in a bubble. Their theory is based on numbers and math, and that capitalism is a perfect system. Krugman says monetarists argue that stock prices reflect all available information - the system balances itself, so very little regulation is required. The non-Keynesian view was there couldn't be a housing bubble, because markets are perfectly efficient - and only behaviorists and Keynesians saw the crisis coming. As we've seen in the CDS market, the one system with no regulation is the one that brought down the whole system. If you accept Krugman's premise, then his argument is perfectly valid.

When to Be a Contrarian

Fri, 04 Sep 2009 16:55:15 -0400

Good post..it takes a strong stomach to do what you say, but it pays off.

Four Reasons We're Headed Even Higher

Fri, 28 Aug 2009 15:57:14 -0400

Good article.. also, good job on your stock picks.

Japan's Past = Our Future?

Fri, 28 Aug 2009 13:43:59 -0400

Agree with Andrew.. we have different social contracts.. actually, what Japan is experiencing now is what we experienced in the late 60s.

Coming Soon: Banking Crisis of Historic Proportions

Mon, 17 Aug 2009 15:53:03 -0400

This article is wrong.. where was this biting analysis *before* it happened? Your error is that you're plotting the future based on past trajectory, which is what people did before the subprime meltdown (home prices will never go down!).. you're making the error on the other side now.

Europe Is Recovering More Quickly than U.S. - Why?

Fri, 14 Aug 2009 16:39:53 -0400

Chap08 got it right.. also, b/c of the social contract the Europeans have, they almost have a built-in recession, so it wasn't much of a shock to their economies b/c it wasn't high to begin with. Unemployment rates in France and post-unification Germany have generally been around 8-9%.. so what we call high unemployment, they call "unemployment."

Economists' Views on Trade Deficit Increase

Wed, 12 Aug 2009 14:50:26 -0400

Wait - you mean free markets actually work? Who would've thunk it..

Case-Shiller Home Prices Rise in May, But Don't Read Too Much into This

Thu, 30 Jul 2009 15:26:33 -0400

That chart is hard to read.. the only easy city to see is New York. How about a chart where if you mouse over the city, the line comes to the forefront?

A Reality Check on U.S. 'Economic Recovery'

Thu, 30 Jul 2009 15:19:48 -0400

On Jul 30 03:07 PM thiazole wrote:
> If you believe that, then how do you know that it wasn't lies and
> fabrications that sank the market in the first place? If I were
> ever to subscribe to a conspiracy theory (which I won't), it would

Agreed - and also, how do you know that the market doesn't know about those bank properties being kept off the market, and as the old cliche goes, the information has already been built-in to the prices?

Bad Unemployment News for the Unskilled

Tue, 28 Jul 2009 03:17:10 -0400

Makes sense.. we need more college graduates anyway, if we're to compete with the likes of China, Japan, Germany, etc..

The Government's Role in the Housing Bubble

Thu, 23 Jul 2009 14:45:57 -0400

When a bubble situation starts, it becomes a self-feeding cycle.. I'm not sure if I buy the low interest argument, but when people start seeing home prices rise and the bubble mentality takes hold, all rational thought goes out the window.

Efficient Markets vs. CAPM

Wed, 08 Jul 2009 16:00:51 -0400

Bogle is a visionary, but props also need to be given to Malkiel for popularizing the idea of index funds..

I Was Wrong About GM Bankruptcy

Wed, 08 Jul 2009 15:57:50 -0400

Good to see someone own up to their predictions.. unlike some talking heads.. Cramer

Why CRA Loans Weren't Toxic Subprime Loans

Wed, 01 Jul 2009 15:44:40 -0400

Remember, there was demand for CDOs at the height of the bubble - and the ratings agencies, banks, Wall St. investment firms all willingly played a huge part. More than anyone, they are to blame.

The Coming Economic Collapse, Part 2

Fri, 12 Jun 2009 17:16:34 -0400

It's pretty clear that many of you don't understand the mechanics of free markets wrt outsourcing. Many of you view it through the prism of "all our good jobs are going, and it's threatening our way of life," which isn't true. In free markets, you can't get something for nothing. If wages are low in India or China, it's because that's how much they're worth, whether it's poor roads and other infrastructure in India, or corruption, the lack of the rule of law, or poor quality in China. If China produces a product as good as one made here, it's not possible for them to sustain low wages, just based on common sense - there is a small window of opportunity, but that window is very small. When that window does occur, though, it benefits countries on the higher food chain, because it frees them to do other more productive things - note the largest sustained period of the economic growth in American history in the 90s, when outsourcing started happening in earnest. But this window closes quickly - there are many articles, like a recent one in Businessweek, that notes that China no longer can compete on price alone (that goes to Mexico now). And if the claim is China is manipulating their currency, China is paying the price - it creates inflation internally. Again, this is not sustainable for China. It's not possible to outsource significant chunks of our economy - nothing that people like Lou Dobbs have predicted have come to pass. And really, nothing people like him say stand up to reason. Pick up an economics book - learn to reason, and think through things..

The Coming Economic Collapse, Part 1

Sat, 06 Jun 2009 14:45:05 -0400

Graham glosses over a lot of details.. the US opens trade with China in 1971, and soon after outsourcing begins?? Outsourcing didn't being in earnest until the mid-90s.. he has a different definition of "soon" than I do. In between, we had stagflation, several recessions, a fear of Japan overtaking us, the longest period of economic growth in American history fueled by US innovations in the tech industry (which really was continuous since the 70s), and a big rise in productivity. Graham isn't looking at the big picture, and is ignoring key factors.

Toxic Assets, Obama's AIG and Budget Woes: Friday's Lou Dobbs Show Transcript

Mon, 23 Mar 2009 01:43:57 -0400

Lou Dobbs is an irrational protectionist, and is generally xenophobic, and latches on to whatever the populist rage de jour is.

AIG Bonuses the Object of Misplaced Outrage

Wed, 18 Mar 2009 16:27:36 -0400

You're wrong Jeff.. before, there wasn't much attention paid to AIG at all by the public. It was, another day, another $30 bil to AIG. Now that anger is being placed at AIG, however misplaced, everything AIG does will be under scrutiny, which is exactly what we want.

AIG: Why Pay Retention Bonuses to People Who Shouldn't Be Retained?

Wed, 18 Mar 2009 16:21:54 -0400

Good commentary.

Why Ford Will Make It

Sun, 01 Mar 2009 17:33:29 -0500

Another factor in Ford's favor is that they don't have as many similar brands, like GM..the exception is probably Mercury.. so Ford doesn't have to do as much reorganization as GM. Not sure what metric you would use to define the better transmission, but GM has been selling their transmissions to BMW for years.. maybe Ford should consider buying GM's transmission group..

A Stimulus Plan to Actually Improve Economy Fundamentals

Fri, 23 Jan 2009 11:36:13 -0500

The answer isn't limiting executive pay - the answer is making executive bonuses truly performance-based. If the company doesn't meet its target goals, there should be no bonus - it should not depend on the goodwill of the executive to turn down the bonuses.

If Obama Doesn't Balance Trade, China Will Steal More U.S. Industries

Tue, 20 Jan 2009 14:10:54 -0500

This argument is ridiculous - the US is right where it needs to be. Would you rather be producing TV sets and radios, as opposed to leading the way, in the form of Google, Microsoft, Cisco, etc? If the US had all these manufacturing industries, we would actually be hurt far more in this current downtown. Mercantilism doesn't work.

The Last Domino Is Falling: Exports

Tue, 13 Jan 2009 17:34:30 -0500

Wouldn't the last domino be something normally thought of as "recession-proof" - say, videogames? If videogames sales fall significantly, that would be one last domino..

The U.S Is Not Japan

Fri, 19 Dec 2008 16:48:46 -0500

Well, Japan took, what, 7 or 8 years before they lowered their rates to 0? The Fed took 3 months. Clearly, the Fed is more decisive..

The Cramer Crash?

Mon, 06 Oct 2008 18:18:47 -0400

It's absurd to think the market is affected by Cramer.. a coincidence doesn't prove a link.

Don’t Blame Wall Street - At Least Not Completely

Mon, 29 Sep 2008 21:19:45 -0400

This is absurd.. this is like saying "society is to blame for that criminal who robbed the bank, because as a society, we all failed the criminal." Before we get into this philosophical debate, we should begin by looking at the hard facts, and those hard facts lead straight to Wall Street. They shoulder 90% of the blame.