joes

The 'Stress Test' Challenge: Transparency and Intellectual Integrity

The "stress test" approach seems to be a simple way of creating a standard for evaluating the banks businesses, a major step up from the Bush-Paulson approach of doing weekend deals that resulted emergency actions, increasing panic.

If I was cynical I would say that the GOP purposely drove panic as they were getting thrown out of town, they never stop campaigning, which explains why they never had time to govern.

Restoring Balance to the Economy

Interesting set of comments on an article without a lot of information. One grossly misinformed individual went the elitist route with the comment on the growing gap being due to poorer people being more likely than the rich to "waste" their money. Anyone that has seen the inside of the NYT or WSJ sees what smart rich people do with their money, $5000 shoes and $50K watches. The poor conversely spend their money on wasteful items like food and housing.

The second worst observation was threats from Russia, China and Japan. The first two countries, Russia and China are third world countries except for a small group and Japan has been stagnate for decades.

What is it about globalization in that it sends normally bright people back in time in search of balkanization?

Stock Market at a Critical Juncture

Nice to see the pessimism, this could be the worst year on record as predicted or it could be up significantly, there is no indication that anyone has a better idea than the next guy.

As Schiller and others have pointed out, we are in the area of psychology and influencers driving the market and there is nothing than can turn around more quickly than investor sentiment.

5 Reasons to Follow Soros's Oil Rebound Play

Soros is most likely averaging down and getting ready to hold PBR, and despite some comments the article below shows that they do have a high level of deep water experience and skills.

"Deepwater pioneers
Petrobras has performed EWTs for many fields and holds the world’s record for the EWT performed in the deepest water, a record set in 1999 using the Seillean FPSO in 6,077 ft of water in the Roncador field.

In fact, the operator has seen many firsts in its three decades of offshore production. Petrobras employed one of the first EPSs in the world on its first producing offshore field, Enchova, in the Campos basin off southeastern Brazil. Enchova was initially developed in 1977 using the Sedco 135D, a converted semisubmersible drilling rig moored in 360 ft of water.

In the early days of offshore production in Brazil, particularly in the Campos basin, Petrobras used the EPS concept extensively. Since that first offshore field, the company has developed a large number of offshore projects around the world, including an installation in 2000 with the RO-8 well in the Roncador field in 6,194 ft. water depth.

www.offshore-mag.com/d.../

As for the author comments on liberal "off the reservation" ( a racist term that is logically used by Reaganista's, a president that built his campaigns on the "southern strategy" of racial profiling.

Mr. Soros has donated Billions to educate, feed and provide health care to people of all races and ethnic back ground. He is a finer man on a bad day than our phony "conservative" president was on his best.

Populist Pandering Won't Solve Crisis - Less Regulation Will

Populist Pandering as the author calls it is a typical step in the cycle of corruption that happens every time some free market Reagan worshipping idiot starts to tell us how well deregulation worked for us in the past, even though by my recollection over the past 50 years Adam Smith's invisible hand is found in the cookie jar a couple of times every decade.

We clearly need more onerous penalties for white collar crime, a new type of Rockefeller Law that sends anyone found guilty of financial crimes up the river for 20 years.

Maybe the temptation to have a bigger house than the guy next store won't be so appealing if the risk is a long trip to the big house.

Crimes need to be punished and enforcing laws to rid the streets of gangsters like John Thains, Alan Greenspans and Bernard Madoff will make the world a safer place to invest and save.

Economic Crisis Is Largely a Problem of Confidence

The problem is not knowing what houses are worth, that is easy to discover, put it on the market and see what you get offered.

It is more the broader definition of wealth and what it means beyond a bank account. By making money "funny" over the past few decades it has created some interesting outcomes.

For example, middle class income has stayed flat or dropped slightly over the last 30 years, but it is easy to see that middle class people have more stuff, maybe because of two incomes but also because 50: TV's are less than $1000. Education and health care are out of control, but they are most likely the next bubbles to go pop. Already Phoenix, EMC and Kaplan are taking a bite out of schools that these students would have gone to for the "traditional college experience" and Minute Clinics of various brands are reducing costs for the most frequent ailments that hospitals used to make the easy money on to support the transplant centers.

The entire world is undergoing an asset reset that will determine what scale wealth is to be measured by in the future, don't think that the answer is in one economics or history book, because it isn't.

Why Deflation Will Persist for Longer Than You Think

Deflation signs are all over the street, in NYC many people have taken paycuts through either actual reduced pay, reduced hours and smaller or no bonuses. The bigger question is if we are in a panic and people have oversold assets or if we are in a reset where asset values are reassessed lower permanently.

This being seekingalpha.com there is no shortage of people that "know" the answer to this, but as always time will tell the true story and we will have to cope with the outcome.

Remember, research has shown that government policy actions are almost irrelevant in the longer term that all investors live in, once again it is a speculators market.

Stimulus Watch: How the Devil Are They Going to Finance All of It?

The continued advice to look at the past for an answer to this problem could be a very bad idea. The logic by many commenters that we need to "examine the fate of other formally wealthy nations" is conservative thinking at its worst. Thinking you can find the answer to a problem by simply not doing what others have done is unsound thinking.

This is going to be a "search and create" mission, we have created all of the wealth that exists today since the beginning of civilization and we will create more wealth going forward. The sooner we redefine wealth to match out place in time, exchanging diamonds (valuable only because people are gullible) for free time, as an example, the better off we will be.

Harley Davidson: Don't Get Too Excited About Buffett's Investment

HD biggest problem is the game it played and won is over. I spent some time in the 80's in York and talked to an individual who was part of the management buy out from AMC. They knew that establishing a brand that appealed to the mid-life crisis of millions of well heeled baby boomers was a great play. The had a waiting list and a cache to die for, but the demographics changed (as they always do) and now they need to put a device to carry a walker for many admirers.

Nice "ride" while it lasted.

Predicting 60% Decline for Manhattan Property; TARP for Trump?

The financial business became bloated and loaded with corruption and inefficiencies, i bought a place in NYC in 2002, sold in 2006 and made enough money that it was clear that the increases were unsustainable.

The problem is that everyone was getting two loans, one for the real mortgage and another, often from family, to make up the down payment and fees.

NY is big and has resilience but it is in for some tough times, it will be the end of premiums for buildings with famous name, until next time.

Wall Street Breakfast: Must-Know News

I don't understand why we can't go back and retroactively set pay limits, AIG, BOA and PNC are three groups that come to mind that took the money and ran through it with little to show.

What are the CEO's going to do, leave with no severance, that isn't likely. It isn't like they have skills that are in demand.

The point is that while shareholders made the choice to pay these losers $20m+ a year, taxpayers had no choice.

Is a New Cyclical Bull Market on Its Way?

While all predictions are doomed to the same binary fate in the long run, there is real danger in slipping into zero sum formulas based on historical perspectives. Just as most of the computer industry growth from 1940-2000 was not predicted, IBM saw the world wide market for computers at six and Bill Gates declared that no one would ever need more than 640K, we have no chance at valuing many of the technologies being developed.

There are new considerations, an example being Lithium used in batteries, 50% of the supply in Bolivia. Wealth is expanded over time for a number of well documented reasons and there is no reason to believe that it will stop now, other than the natural egocentric perspectives that always leads us to believe that we live in "special" times.

As far as the market, it will go up as this new wealth overcomes the pessimism, it always does, whether it will be 10 days, months or years is the only remaining question.

College Endowments Lose at Least $94.5 Billion

I didn't know that they were only spending 4.6% annually, not even the 5% typically spent by the "foundations" and their "let's maintain the high salaries and think carpets instead of actually solving problems" approach to giving away the money none of them earned.

I would like to see a rule that requires at least 20% distributions per year to reduce tuition. Follow the model being set by the new tycoons, Gates, Buffet (recently), Soros, Dell, Omyidar that want to give away large portions or all of their wealth to help solve issues now, not foundation that serve a modern day pyramids and provide reasons for banquets.

Wall Street Breakfast: Must-Know News

As a BOA shareholder as a result of a diversification effort in the fall gone bad there is nothing I would love to see more than Ken Lewis ousted from his job. The guys in government can't do half of the damage of these celebrity CEO's.

We need a program similar to the drug laws, 20 years for any fraud case, life for anything over $10 million and the death penalty for $1 Billion and up. Corruption is a larger danger to our society than terrorism and it needs to be treated appropriately.

Merrill Lynch Datapoint of the Day

The financial industry has become a dysfunctional component of the economy and not by accident.

Paulson, Lewis, Greenspan and many others have been exposed as the charlatans of our times, the same as the alchemists that were reaping huge payments to turn lead into gold. The only difference is that this group has turned trust into pain.