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kertch

kertch
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  • The Mysterious Selloff [View article]
    It works just as well to blame some nebulous international organization with a secret agenda. When the Bear cycle ends and I'm ready to invest, I'll claim they were defeated by the forces of light and goodness. Whatever works. When I try to explain to people how the world operates in a continuous cycle of creation and destruction, I mostly get blank looks.
    Aug 25, 2015. 02:20 AM | 1 Like Like |Link to Comment
  • The Mysterious Selloff [View article]
    And an increase in interest rates will make that dollar even more lucrative.
    Aug 25, 2015. 02:07 AM | Likes Like |Link to Comment
  • Can Kickers United- Why It's Getting Downright Hazardous Out There [View article]
    "The phrase "Correlation does not =causation" is often used and is often right. But not always.

    When you heat a pot of water, the water boils. Thus, the correlation of heat causing boiling water = direct causation."

    I don't think economists and people in general have a problem with this. It's when they observe a pot of boiling water and come to the conclusion that a boiling pot of water causes heat. This problem becomes very difficult in economics because it describes a system constrained by supply and demand, and either the supply side or demand side can be the constraint at any point in time. The condition where Y is a function of X, for example employment is a function of inflation, or inflation is a function of employment (Phillips Curve), may only hold true under very limited conditions of the system. Once conditions change that correlation may never exist again. Many economists still employ theories developed during a gold-standard economy. Who knows how much is relevant today? You just can't assume that it all will be.
    Aug 23, 2015. 12:15 PM | 1 Like Like |Link to Comment
  • Why The Fed Is Wishy-Washy [View article]
    Asby,

    I think that Japan has tried everything plus the kitchen sink. Easing, new bond issues, fiscal stimulus - and nothing has worked well, yet nothing has completely failed. We are now seeing action/effect results that contradict our orthodox economic expectations. Now the rest of the world seems to be catching the disease, and a new global recession will strengthen that notion. It leads us to ask ourselves: Are we missing something here? Something very basic in our economic thinking?
    Aug 23, 2015. 11:46 AM | Likes Like |Link to Comment
  • Why The Fed Is Wishy-Washy [View article]
    "Eventually, internationalization of RMB will give US$ a punch."

    China has taken a step backward on that path, though probably only a temporary one.

    http://on.wsj.com/1fyVZOF
    Aug 23, 2015. 12:41 AM | Likes Like |Link to Comment
  • Why The Fed Is Wishy-Washy [View article]
    I would think that the biggest effect that raising rates would have would be on the dollar. You've given nervous foreign investors an even bigger reason to buy US treasuries. You are correct in that "The Fed does not chase inflation by cheap dollar investment in fracking and high gas prices nor debased currency with higher prices on everything else." But the Fed can easily entice foreign investors to do so, because the dollar is the 800 lb. gorilla of world currencies and treasuries are the bananas.
    Aug 23, 2015. 12:33 AM | Likes Like |Link to Comment
  • Why The Fed Is Wishy-Washy [View article]
    Well, even if the Fed was able to raise short term rates, it might only lead to a flattening of the yield curve on it way to an inversion. At that point, the Fed would be totally discredited.
    Aug 23, 2015. 12:23 AM | Likes Like |Link to Comment
  • Why The Fed Is Wishy-Washy [View article]
    A year ago it was $100 oil for the foreseeable future, now it's $30 oil for as far as the eye can see. Here news for you - the dip in oil is here. If you're not buying oil at this price, you should just give up investing and buy an annuity. I'm waiting to see how many people will be on CNBC next week telling everyone to start buying. Another 3% drop and they'll all be screaming for Fed intervention. And that's just the first inning.
    Aug 23, 2015. 12:19 AM | 1 Like Like |Link to Comment
  • Can Kickers United- Why It's Getting Downright Hazardous Out There [View article]
    "Ill share a little secret. The market just turned down because the probability of immigration reform went up."

    Complete nonsense. A secret best kept to yourself. Of course it had NOTHING to do with Tsipras resigning or the deteriorating conditions in China, or the reduction in Eurodollar reserves. The slack in the current labor force is so enormous that a few less illegal immigrants will have no effect on labor availability, thus labor costs, thus the economy.
    Aug 21, 2015. 12:08 AM | 8 Likes Like |Link to Comment
  • Can Kickers United- Why It's Getting Downright Hazardous Out There [View article]
    Let's look at the economy in 2007:

    The biggest energy boom in world history (up to that point)? Check.
    Huge move to all time highs in real estate? Check.
    Ridiculous decline in the deficit? Yep.

    Those don't sound like failures to me ...
    Yet the bubble popped and the market crashed soon after. When everything in the economy looks horrible, it's too late - the market has already crashed.
    Aug 20, 2015. 08:05 PM | 5 Likes Like |Link to Comment
  • Trouble Is Brewing In The Markets [View article]
    The ball game hasn't started yet. The cost of solar cells is not a sustainable 50 cents/Watt. As I said, take away the subsidies and economies of scale are reduced. However you are confusing two things: Economies of scale is a purely economic phenomenon, "learning" is a matter of technological innovation applied to manufacturing. They are separate issues. If "learning" really did take place, then removal of the subsidies should create only a limited cost increase.
    Aug 11, 2015. 03:33 PM | Likes Like |Link to Comment
  • Trouble Is Brewing In The Markets [View article]
    I have been interested in investing in solar companies in the valley (private equity) for many years. My problem is that when I bring the business plans to APS engineers and management they shoot holes in them, and they have legitimate arguments. I am used to pitching business propositions to potential customers that increase the top or bottom line, not propositions that ADD to their costs. The only reason that they even talk to me is 15% utility solar energy mandate enacted by our corporate commission. A PV system installed with a grid connection meets that mandate, a PV connection installed off-grid does not.
    Aug 6, 2015. 03:32 PM | Likes Like |Link to Comment
  • Trouble Is Brewing In The Markets [View article]
    In live in Arizona as well, and like most Arizonans and the utility companies, I don't want to subsidize your connection to the grid through net metering. And why should you get credits for buying and installing Chinese made solar panels? A great deal of our power comes from the Palo Verde nuclear plant, so what's the point of expensive solar? I know many engineers who work for APS and they all tell me the same thing about solar: dealing with the intermittency problems requires too much expensive grid infrastructure. Of course we can cloud the economics, like many people do, by only looking at the costs for the home PV user and ignoring the grid and intermittency issues and costs.
    Aug 6, 2015. 02:34 PM | Likes Like |Link to Comment
  • Trouble Is Brewing In The Markets [View article]
    Sorry SU,
    Firstly, most of the cost reduction comes from technological innovations, not economies of scale. Economies of scale drop off rapidly once a critical scale is hit. This can be determined by changes in supply/demand curves. Secondly, the Germans have some of the highest commercial electricity costs in the industrialized world. So high in fact, that to keep industry from leaving they have had to push up residential electricity rates to subsidize commercial rates. PV has been a net loss for the German economy. Only the Chinese have benefitted. Take away the subsidies and the Chinese solar industry shrinks considerably and the economies of scale go away. You have completely ignored what I said. The lower costs achieved by economies of scale must cover the subsidies plus the NPV of any sunk investment. This is just so basic I don't even know how you can argue about it.
    Aug 6, 2015. 02:17 PM | Likes Like |Link to Comment
  • Trouble Is Brewing In The Markets [View article]
    "If monetary policy has led to that massive misallocation of resources, the minimum we would have seen was a substantial investment wave."

    How about companies buying back stocks at record high prices. This is a misallocation of capital.
    Aug 6, 2015. 01:37 AM | Likes Like |Link to Comment
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