Blackeyebart

Why Apple Is Worth $80

AAPL is clearly AAPLing to many. The strength of their loyalty and sensitivity to criticism is clear. They should "hold" onto their positions and trust their own judgement. And Kai is free to short and say why.

But there is another issue. If these analysis tools are so apparently so wrong in this case, can they be relied on, in any case? As the writer says these tools are widely used.

If not these tools, which tools? Or are we all emotion now?

Here's Why Asia Must Eventually Ditch the Dollar

50 years is too big a gap for most western readers to bridge. We are wedded to the ultra short term. We are trained to ignore the facts and watch the market. The concept of reinflating the bubble is based on the premise that confidence trumps reality. See - its working! (But don't look too hard.)

This short term focus makes reform impossible. Long term success is held hostage to short term failure. Reforming the banks would cause a (temporary) drop in the market as the changes work through. The greater long term benefit is ignored.

Everyone knows that long term the US is destroying its currency. But short term it all feels fine. For any outsider it just looks insane. Only those in the asylum support it.


On Oct 26 07:40 PM E.D. Hart wrote:

> Except that they think incrementally, and 50 to 100 years out. They
> already are de-emphasizing the dollar as reserve currency. It took
> well over 3 decades for the sun to set on the British Empire (read:
> the Pound Sterling), and we may be looking at two or three decades
> to replace the dollar as the worlds primary trade currency. Its already
> happening.

Don't Worry, the Government Will Pay Your Rent or Mortgage

It is amazing how fast a past conservative policy becomes inconceivable on the grounds that it is too way out and wacky for words.

In the past the government controlled interest rates on mortgages. As we know the government is the ultimate risk taker on many such investments.

For example: Reducing interest rates to say 3% on existing mortgages would have a very significant effect. The home-owner would not want to sell. Millions of houses would come off the market. And the effect on house prices???

Sure most of these policies have been sliced and diced, but Goldman Sachs would find a way to adjust them. Jeez they would probably make money doing it!

Next year when the green shoots have become fully grown crabgrass, the interest rate could be increase to 3.5% or even 4%.

Yeah I know - whacky! I'll try again next year.

Game Over, CIT

Lets imagine what would have happened if CIT was bailed. All those small businesses would have a direct line through their favourite political representative for special treatment from CIT.

Unreasonable - but hey, you gotta ask!

The political risk gets worse for Obama as you descend from the towering heights. He will know that.

Buy Puts on Geithner

Whoop Whoop Pull up! pull up! Crash!!!
That the sound of complacency meeting reality!.

Why do people think that a change of government after 55 years will not really be any change at all? Japan's new DPJ Government will do what all new government must do - they will make the changes they have to make while they can still blame the old Government for the problems.

Yes there are problems with their economy, but their problems are different from the US problems. They have more money so more options. They need to diversify from the US so they will. Why not? If the Chinese want a new currency, then why not get in early?


Their big problem is North Korea. Japan wants quiet influence in the region, so North Korea sounds their horn in the middle of the night. Annoying but worse it attracts attention from the US, a nation as strong and calm as a 25 foot tall teenager on speed. Japan thinks that if only North Korea would shut up the US would forget where it is in a couple of years. They are probably right.

The other big problem Japan has is a defining issue.An underlying purpose, what is Japan all about in 20xx? Every new Government needs this. Will they look out at the world in financial meltdown and see a purpose - possibly - if so we just recreated the German Japanese alliance, but in a much more benign way.

Austrian School of Economics Is on the Rise

RR didn't say it because he believed it. -
He said it because you believed it.

More on the Workings of Debt

The idea that a recession can be significantly reduced, provided that the Government is prepared drop enough money from the helicopter and the attached idea that the cost of a recession is greater than the cost of the cash that is "wasted" by this exercise are both being tested.

My guess is that they will both be proved wrong. Both seem nutty to me, but who knows? Given that the money is already gone we can only hope.

The Debt Conundrum, Part 2

The trouble with allowing the housing market to work through a situation where more than 40% of mortgages are upside down is that it maximises the costs. The market is bound to overshoot - hence the debate on averages- and as the market overshoots trillions of capital dollars are wiped out. This is bad public policy.

Much better for the Government to regulate interest rates down to say 3% for five years on existing mortgages. This would give home owners a reason to hold. They have to live somewhere.

While mortgage holders would scream blue murder they would on average be much better off. (Do the maths yourself, if you doubt that statement.)

I know that many of these mortgages have been sliced and diced but solving the resulting financial problems is the reason we pay those bankers all that money.

It wont happen but. This administration only adopts programs that bankers like.

Indiana Pensioners Using Goverment's Argument Against It

You guys are weird. Obama didn't wake up one day and say "let's screw the GM bond holders". The US Auto Industry has been involved in an slow-motion car-wreck for forty years.

After the unions, the workers, the management, the designers, the directors, the investors, the bond holders, the dealers, the subcontractors and Jack's brother have failed to sort GM's problems, they all turned to the government and said "Fix this." Then they bitch about how unfair it all is. Don't forget you are volunteers.

And no-one will invest in a Union run company ever again? At the first sign of "green-shoots" investors will rush in holding their technical noses.

The Bernanke Conundrum

If your favourite nephew asked for financial advice, you would probably urge him to save regularly, invest wisely, buy only those things that really made his life better and avoid "get rich quick" schemes.

It is odd that so many people on this site are hoping against hope that the "great hoi polloi" will ignore all the above and and borrow and spend like there is no tommorrow. We call this recovery. It would be a form of collective madness. We all know it won't work.

So just who are we kidding?

Let the Financial Scapegoat Go

There is a valid point in all this. There is enough blame to go around. As always investors must protect themselves from emotional enthusiasm. Not always easy when many people are making money by backing horses that have an odd number of legs.

Still we have all learned our lessons haven't we? It's all logic and common-sense now - right?

PS Commodities just had a record month!

Sorry Arnold, TARP Can't Be Used to Bail Out the Golden State

I love it: California is the USSR!
So I guess Hollywood is the Kremlin
Arnold is Leonid Brezhnev
and Silicon Valley is the Volga Blazing Star Tractor Factory.

You should report that lazy worker to the Glorious Peoples Committee and Social Club. They would shoot the B****ard.


On May 27 06:14 PM CLH wrote:

> CA has shown (as did the USSR in 1990) that socialism does not work.
> As it collapses, the rest of the country will learn and Obama will
> also collapse.
>
> No one is interested in giving their money to those who are lazy.

Using Sovereign CDS as a Proxy for Relative Risk

It's possible that a lot of CDS use Yen/$US as a surrogate for national performance, US/Japan. I don't know that for sure - just a suggestion.

Meet the Top Ten Creditors to the USA

How about some of that personal responsibility that is talked about so much? The dooflickies that China sell in the US are not much bought by the USG. Most kids today have half a tonne of useless plastic in their bedroom. The consumer has to consent to the use of their credit card. People choose to run up vast amounts of debt and often can't remember what they spent the money on.

I know economists think that all this is "good for the economy" but the fact that everyone thinks like you do, does not mean you're not insane.

Allamad says" The Chinese are making over $100 billion a year just on the interest from all the U.S. debt they own. Makes me feel good that I'm helping to fund the Chinese military (which is now building aircraft carriers, nuclear submarines and space-based missle interceptors). Thanks George and Barak. "

Are Credit Markets Back to Normal Now?

Why would one expect the economy to come right until it stops sinking? Many signs suggest that the immediate decline is slowing down but the recovery is still some time away.

How could credit markets come right in such a climate? Good people are losing their homes, their jobs, their health Insurance. As a lender one has to be more cautious in such times. A young chap with a good job in GM's marketing division, will find it harder to get a mortgage.

The economy may need banks to start lending again, but that won't happen until reality changes. When it is safe and profitable to lend, Banks will lend.