biomedlives

PIMCO's Bill Gross Sees a Bleak Future

If the economy has been robust and vibrant, why have we had budget and trade deficits rather than surpluses?


On May 31 08:15 AM CautiousInvestor wrote:

> While somewhat troubling, I happen to share his view as it seems
> most consistent with the facts.
>
> I f you take PIMCO's view and compare it CBO forecasts, it is immediately
> apparent that the CBO is not buying into the new normal or simply
> ignoring it; they are forecasting nominal growth of 4.5% a year through
> 2015.
>
> If PIMCO ir right, which I believe they are, and CBO wrong, it has
> enormous implications for the budget deficit.........which will only
> get worse. And this will spill over into tax policy, another piece
> of the new normal.
>
> With the most optimistic forecasts and creative accounting, the administration
> is being challenged to balance the budget; Obama and the administration
> will be forced to raise taxes to balance the budget and will be forced
> to increase them further to fund healthcare reform.
>
> Obama wants to raise income taxes for high earners, impose new levies
> on business and tax greenhouse emissions, but those moves would not
> generate enough cash to cover the cost of health care, much less
> balance the budget, and they have not been fully embraced by Congress.
> Lawmakers are considering other ways to pay for health reform, including
> new taxes on sugary soda, alcohol and employer-provided health insurance.
>
>
> The latest revenue generating idea is the Value Added Tax, a tax
> imposed upon the profit generated at every level of manufacturing.
> Effectively it is a national sales tax cooked into the price of a
> finished product as opposed to 10% slapped on at the register.<br/>
>
> Taken together all of these taxes, assuming they pass through Congress,
> will drain the live out of what was once a robust and vibrant economy.
> This will come to characterize our new normal, something the Europeans
> have been dealing with for some time inside their sluggish and sclerotic
> economies.

DryShips Looks Good, Even Without Its Dividends

Even before DryShips suspended its dividend, it was reasonably clear that, these days, a company's ability to cover a dividend is no guarantee that the company will continue to pay it. Note the example of Diana Shipping.

I agree with other posters that the conflicts of interest at DryShips are a bright red flag.

Let's Hurt the American Financial Services Industry

If there's a brain drain from the financial services industry, we may have fewer "innovations" like CDSs, subprime mortgages, and CD squared securities in the future. That situation would suit me.

CEOs Must Bring Investors Along for the Ride (WSJ)

It amazes me that boards of directors are so concerned about paying CEOs well in order to motivate them but completely oblivious to the fact that cutting the salaries and benefits of people in R&D, sales, customer support, manufacturing will have a negative effect on the motivation and loyalty of the latter group. On the whole, the lower ranking people have a larger impact on the success of a company than its CEO does.

Williams Coal Seam Gas Royalty Trust: Income You Can Believe In

I understand that, unlike the Canadian royalty trusts, WTU does not acquire additional reserves as time goes by. What is the estimated lifetime of its existing reserves?

Protectionism by Any Other Name

I ask James Kwak, Robert Weinstein, and other free trade advocates if they believe our long-running trade deficit is a problem and, if they do, how they propose to fix it. I'm not a fan of protectionism, but I speculate that NAFTA and every other trade agreement the U. S. has signed in recent years has made our trade deficit worse.

If the people whose in manufacturing and software programming went oversease still had those jobs instead of lower-paying positions with poor benefits, they might not have to borrow to pay for their lifestyles.

Deepwater Drillers: Not in a Very Deep Hole

I wonder about the possibility of renegotiation of deepwater contracts at lower dayrates or cancellation. The recent renegotiation of some long term dry shipping contracts is a useful analogy, in my view. I recognize that if a lessor was able to cancel a contract, there would be a cancellation fee. That fee would probably be considerably less than the present value of the revenue stream, however.

Climate Change: How to Invest for the Possibility

My understanding is that there a number of people who have concluded that global warming is a real possibility have scientific credentials that are considerably more substantial than those of Penelope Cruz, Tim Robbins, and Harry Hamlin (or Rush Limbaugh).

In Search of an American Job

The problem in a nutshell. There's hope, though - John's subprime mortgage was created and packaged, and the package sold, by workers in the U. S. A.

Schlumberger Forever

SLB is a great company, but I don't think growth of 6-8% and a dividend of 1.5% justify a P/E ratio of 14 (2008) or 21 (2009 estimate).

How Treasury Favors Banks over Taxpayers in Warrant Negotiations

If the banks wanted to avoid a government rescue of the financial system, they should have come up with their own free market solution to the crisis. They didn't, so the government had to step in.

I say that the government should forget theoretical calculations and hold an auction of the TARP warrents.

Atlas Pipeline Makes Progress in Deleveraging the Company

I'd be interested to know if it's possible to figure out how the two sales will affect the book value and the EPS at APL.

Credit Card Cancer

AMEN!


On Mar 14 11:06 PM WesAttaway wrote:

> A great article. My concern has always been that since the basic
> problem is that Americans have been spending more money than they
> have then how can we expect "demand" to go back to where it was.
> The answer is perfectly explained in this article. Without a continuation
> of unsupportable credit we can't do it. Smart businesses are already
> readjusting to the reality of decreased demand.

How the Crash Will Reshape America

Which political party was in control of the White House for the last eight years and Congress for six of the eight?


On Feb 14 06:36 AM NITRAM wrote:

> We are not, and never will be again, the financial capitol of the
> world. Our GREED and the largest group of LIERS AND CHEATS in our
> government. One of our enemies will be the new financial capitol
> of the world. Obama , Pelosi and the other court jesters will destroy
> we from within
>
>
> On Feb 14 05:32 AM Dave Wrixon wrote:

What Is Going On With Gold?

I agree with American in Paris. The trade deficit will eventually catch up with us.