history repeats

Motorola Droid: A Promising iPhone Challenger

Apple's greatest strengths have always been the operating system and the user interface (UI). the limited availability of software has been a negative - not to me personally, but to many. the beautiful thing about the iPhone is that Apple moved into a space where the existing UI was even more horrible than Windows, AND they now have more, not less, software (apps) than the competition. as phones evolve into mini-laptops, with the UI even more critical with a tiny screen, nothing is going to challenge the iPhone without challenging Apple's superior UI. it will be interesting to see if Google has the creativity to do that - microsoft surely cannot.

iPhone users will not switch to droid. however, the rate of migration to the iPhone will slow if droid is good. a lot of VZ customers think about switching to get an iPhone. droid might keep them from doing that.

How the Copenhagen Climate Treaty Will Affect Equity Markets

one thing is clear, the extreme right reacts to climate science like a religious zealot having his faith questioned.

anyway, i love international bonds.

U.S. Government Squanders “Trust Funds”

well said, jeff.

" The reason why that fund had such a large surplus (past tense) is that for more than 50 years the U.S. government has known there would be massive draw-downs on that fund when the baby-boomers retire."

sometimes this is discussed as if the looming boomer retirements were a recently discovered surprise!! in fact, as you say, we "fixed" SS in the 80s and the working and middle class HAVE ALREADY PAID FOR IT.

now consider that the tax cuts for the wealthy would not have been possible without the gvt having the revenues from the trust funds. so, the middle class has paid for tax cuts for the wealthy. talk about class warfare!

Welcome to the New Normal

"In 1975 the top marginal tax rate (for an annual income of $200,000) was 70%. In 2008 the top rate ($357,000/year) was 35%. Add to this various exclusions for dividends, and lower cap gains rates, and it is easy to see what the "neo" in "neo-conservative" really means."

i'll never understand the anti-tax rhetoric. we are in a historically low tax environment. the middle class has been far better off in post-WW2 high-tax periods than in recent years. any apparent prosperity since 1980 is imo the prosperity of a homeless junky with a credit card.

the debt binge has been fueled by the SS payroll tax. soon the right will claim that honoring the SS bonds is "unsustainable". insofar as spending the SS tax made tax cuts at the top possible, any reneging on the SS bonds amounts to theft by the wealthy from average Americans.

trying to fire up the debt engine again will just put our children deeper in the hole.

A Moment of Minsky, Redux

"Aside from constraining the total leverage of the economy, which I have suggested in the past, there is no way of escaping the pains of the boom-bust cycle."

that is exactly right. and i'm afraid that, whenever times are good, there's no way to avoid removing the constraints.

i don't know enough about dueling economists to know who said what, but it's obvious that weakly-regulated capitalism is unstable. if some models show the contrary, that's just "garbage in, garbage out".

PIMCO Continues Its Campaign for the 'New Normal'

On Sep 01 05:51 PM CautiousInvestor wrote:


> In recent past we had science to help us out........Bell Labs, RCA,
> Xerox PARC, DARPA, and NASA......and from this we gave birth to a
> suite of industries including the PC, Internet, Internet infrastructure
> and cellular industries, all born in the 1980's and 1990's.
>
> Some of these institutions, though are gone and the remaining ones
> have gutted. Without new industry, I'm pretty much resigned to us
> taking the path of least resistance by continuing uncontrolled fiscal
> spending, implementing politically acceptable tax increases and borrowing
> until the costs and consequences are so high that the process implodes.
>
>
> At that point we may be reduced to going to the IMF and imploring
> them for funding, only to be told we have to right our fiscal house.

Bell Labs, DARPA and NASA have been huge factors in our prosperity. Since Bell was supported by the AT&T monopoly and the other 2 are gvt agencies, their scientists were able to innovate without beancounters looking over their shoulder.

We still have an amazing partnership of gvt-supported basic research with the corporate sector in the biotech area. typically university scientists supported by NIH, NCI, NSF etc develop new technology and license it to biotech startups, which then make deals with larger companies.

i expect a declining standard of living in the USA during the "new normal", but one thing working in our favor will be biotech, unless some ideological fanatic gets in power and decides that gvt shouldn't support basic research.

i always listen to bill gross, even if he does have his own interests.

4 Dividend Stocks to Hedge Against Social Security Failure

On Aug 26 02:34 AM RatWatcher wrote:


> Sorry, no. The SS Trust Fund is nothing more than a US Gov IOU in
> the US Gov's own pocket. This is neither savings nor debt; it is
> an unfunded promise to make future payments, but the expected payment recipient has no legal right to the funds.

ah, the genius of the far right - the US Gvt can honor IOUs to every gvt in the world, but is free to default on American retirees. I REALLY hope some future wingnut president actually tries this, as then we can finally rid the USA of the curse of "reaganomics".

No Surprise: Apple Beats for Q3, Jobs 'Thrilled' over iPhone Sales

my cost basis on aapl is single digit :)


On Jul 21 06:41 PM JW.PhD wrote:

> "No surprise" to those of us who've been shareholders and users of
> their products for years.
>
> Apple just continues to impress.

Employment Numbers Uniformly Horrible

some like to call the euros socialists, and china protects its markets like crazy, so you are saying that we won't be able to compete with protectionists and socialists if we engage in socialism and protectionism. do i have that right?


On Jul 02 06:51 PM billddrummer wrote:

> To socialism cannot compete!
>
> You seem to think that we're not moving inexorably toward a socialistic
> style of life now. And if your moniker is accurate, socialism won't
> be able to compete with the Chinas, Indias and Eurozones of the world.
>
>
> Protectionism increases costs for all traders, discourages international
> cooperation, fosters discord among trading partners, promotes retailiatory
> trade barriers from other nations, and results in a lower standard
> of living for everyone.
>
> Why some think this is a good idea eludes me.

Boeing's Misstep Is Indicative of Broader Misconceptions of Risk

computer simulation is not limited to "known data". models with very simple rules can yield very complex, surprising, unknown outcomes.

the relevant point is that every simulation is based on an approximate model. even if one could simulate every atom in boeing's airplane, it would be necessary to use approximations for the forces between the atoms. the actual simulations are of course not atomistic and rely on approximate laws of material properties. while "linear" laws for small stresses and strains are well known, nonlinear behavior is poorly understood. the simulation can't be better than the underlying model. this is a longwinded way to say the 1'st commandment of simulation, "garbage in, garbage out".

most simulators i know are acutely aware of the limits of their model. others, especially those who had nothing to do with making up the model but were handed a canned program to run, can fall into the trap of taking it much more seriously than is warranted.

Reverse Converts and Vince Fernando's Straw Man

keep up the good work, felix. actually, a banker - not an investment banker, a regular local branch banker - tried to sell me these things when i was buying some CDs a few months ago. even tho i'm a rank amateur in this area, after he explained how my return depended on the S&P, i asked him if they were writing a put with my money, he said yes, and that was the end of it.

meanwhile, "advanta" is advertizing high-yield instruments which i think are straight junk bonds! you can never let your guard down...

John Hussman: We Need Government Coordination Not Money

I'd like to thank John Hussman for his brilliant management of the Hussman funds.

I'm not sure if I have this right, but I think he has suggested something like, instead of giving the struggling mtg holders a freebie writedown, have them give the gvt a share in any property appreciation. That's the best win-win idea I've heard....tom

Could Lehman's Failure Cause a Systemic Meltdown?

the criminals are the bankers who leveraged themselves to buy ABS backed by guys working at the 7-11 making payments on a macmansion.

U.S. Treasury to Make Open Market MBS Purchases

this has already ended up very badly, due to the private sector managers in the banks and brokers who snorted subprime paper like crack.

the gvt screwed up big time all right - by buying into the voodoo economics of 'regulation is bad'. any common sense regulatory action would have reined in the insane behavior of the bankers long ago.

Freddie/Fannie Plans In Motion; Why Are They Being Underplayed?

nobody is going to ask Joe to pay for this. the cost will show up in the destruction of the dollar....but will he connect that to bush's no-limit chinese CC? i doubt it.

there is nothing wrong with reasonable gvt regulation that can nip insanity in the bud. we put that in place following the first great depression and it didn't stop the great expansion of the middle class in the 50s and 60s.