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  • Markets Plunge Following Geithner's Plan - And That's Not a Bad Thing [View article]
    We all know the government can't really control the economy. We want to believe they can, but it's a complicated mix of factors. There are no silver bullets here. It is well-known, however, that specificity manages expectations and can inspire confidence. Platitudes and bromides only win the buzzword bingo game. I like the stress-test idea - we should do that with goverment as well, including zero-based budgeting. We can't go back to the same old consumerism, negative savings rate, and reckless risk management.
    Feb 11 08:22 AM | 10 Likes Like |Link to Comment
  • Matt Taibbi: Obama's Big Sellout [View article]
    This all reminds me of the classic quote by Peter Lynch:

    Go for a business that any idiot can run - because sooner or later, any idiot probably is going to run it.

    I don't think Obama is an idiot - from any cognitive functioning sense - but I just don't think he can really control this trillion dollar economy. It seems that his answer is to throw money at the problem and hope for the best. It's no secret that we live in a plutocracy - money talks and every lobbyist knows it - but when it's writ large for all to see (e.g., the Citi bailout and backstop), it's not pretty. I think Matt T. is more right than not and helps to put a mirror on the whole situation - what is looking back at us is grotesque, bloated, and distorted. I don't have a simple answer here ... as they say, who is watching those who are watching - it can become never ending.
    Dec 13 05:32 PM | 8 Likes Like |Link to Comment
  • Recession Ends for Summers: Anyone Else? [View article]
    Summers is staying on message ... he is going to sound optimistic as that is what people want to hear ... we do have a 2nd order of growth - getting less worse - but there will be a lag and the growth will be slow. I just don't see how we are going to get back to 5% unemployment - read Mauldin's piece from this weekend. The net jobs added that we need in the next 10 years seems like a pipe dream. The job creation engine has to go beyond taxpayer $ (govt spending) - I think the administration is starting to thinking about small business owners who create the majority of the jobs, but the language is often incongruent - tax here but incent there. The program and package for small business needs to be more internally consistent and long-term.
    Dec 14 09:04 AM | 6 Likes Like |Link to Comment
  • What Do We Need In 2009? More Failure [View article]
    This piece is on-target. The mark of a psychologically healthy person or company is their ability and willingness to take responsibility for their actions and choices. The playing field is not always clear-cut, but the themes are usually clear - do you have an internal locus (personal responsibility) vs. an external locus on control (something outside your control). There are many things outside of our control, but our attitude and language around them is pretty telling. We all know people or companies that typically blame something or someone outside of themselves for their problems without taking-on some responsibility. The real issue is doing a clawback on those who knowingly and willfully planted (and cultivated) the seeds of failure and walked away with millions.
    Jan 1 11:10 AM | 6 Likes Like |Link to Comment
  • Why the Housing Stats Are Lumpy [View article]
    In terms of extrapolating the info, it would be nice to disaggregate via multiples (e.g., 2x, 3x, etc.) times median income for the market ... in some areas of the country, a million will get you quite a home, in others, not so much. Given the local flavor of the markets, I think we need to look at multiples of median income vs. a nominal dollar value.

    Good analysis - I like when people disaggregate or de-average the numbers - you can generally get a better picture and be more specific in recommendations. I think the government will have an uphill battle if they are trying to "re-create" the housing/mortgage bubble we are currently de-leveraging from - it's not an exemplar for the economy. Consumerism and leverage will eventually break down - you can only get something for nothing for so long. The dot-bomb showed us that the fundamentals of business, economics, and valuation eventually come back home.
    Jan 17 11:01 AM | 5 Likes Like |Link to Comment
  • The Reagan Counterrevolution [View article]
    The author makes some good points and some points that could be challenged. I'm amazed (not really) at all the partisan rhetoric in the comments. Most people view the world in a partisan fog on both the left and right. The dualistic view of the world is scary indeed. The issues today are not the result of one party - both are culpable. When you socially engineer the free market, you will get many unintended consequences - add a mix of high-leverage, malfeasance, misguided incentives, etc. and you get a significant event. Most people in this country are centrists, some with slighly left leanings and some right. The challenge for our president elect is whether he will be able to govern from the center given a strong pull from the far left. I'm hoping that he will be able to do that and not succumb to heavy protectionism, unionization, or regulatory frameworks - the balance is tight. We need some additional regulation (e.g., CDS marketplace), but remember that many in Congress thought Fannie/Freddie were fine three months before they went bust - their opaque balance sheets and financial ledgerdemain were not without some eyes on them. Most importantly, we need to ensure good jobs are created as that is the ultimate foundation for a growing economy. The Ireland precedent gives some credence to creating a tax-friendly corporate environment - note that personal tax rates were not changed much, but jobs were created given the low corporate tax rates. They are now in the trough of the business cycle, but not without 10 years of 6.5% GDP.
    Nov 9 12:52 PM | 5 Likes Like |Link to Comment
  • Serious Problems with the BLS Unemployment Numbers [View article]
    These are the type of pieces I love to see on SA because they educate and elucidate. The B/D adjustment is suspect right now as historicals are not that as relevant - frankly, BLS could do some sort of exponential smoothing to re-weight more recent numbers ... if you look at overall forecasting in the corporate sector, exponential smoothing has been found to be fairly accurate - more so than more complex models. I'm glad someone is unpacking to assumptions to see how tenuous they really are ... the true unemployment picture is a significant anchor to growing our GDP and improving consumer spending ... the new normal is still pruning.
    Jul 5 10:05 AM | 4 Likes Like |Link to Comment
  • Cramer's Mad Money - Obama's Revenge (3/5/09) [View article]
    Cramer is like anyone who talks a lot (forecasts, asserts, etc.) - he will be right some of the time and wrong on others. The hit rate and materiality are important. My big issue w/ the administration is that they are trying to do too much at the same time ... health care, taxes, capital injections, etc. When the world is unpredictable and in a state of change, capital sits on the sidelines. In this environment, predictability is often more important that the perfect policy, which doesn't exist anyway. Today's problems were yesterday's solutions.
    Mar 7 11:46 AM | 4 Likes Like |Link to Comment
  • Fernholz vs. Taibbi [View article]
    I agree w/ Felix - the differences here seem much ado about nothing - the general themes are aligned. Matt is definitely a polemical writer - he does a nice job of thumbnailing and creating caricatures of people - most of it seems accurate, but key points are amplified and dramatized. He reminds me of Hunter S. Thompson at times. There were a couple of key principles in Matt's latest screed - (1) follow the money; (2) understand the power center and who is appointed to positions w/ power/teeth. Watch what people do; don't listen to what they say.
    Dec 14 09:26 AM | 3 Likes Like |Link to Comment
  • Trying to Understand Airline Executive Compensation [View article]
    CLH - are you serious ... is that the same comp that retained all the talent in financial services ... most of the top execs make the most in margin-rich industries ... software, pharma, IB, etc. As a whole, the airline industry has a challenging business model - esp hub and spoke. Expensive hard and soft assets. There are just too many exceptions to your if-then statement. Based on the pay for performance (explicit or implied) contract and empirical research over the last five years, please expand on the "how private enterprise works." I have worked with many Fortune 500 firms.
    Nov 24 07:29 PM | 3 Likes Like |Link to Comment
  • Ritholtz, Ratigan Take on the 'Giant Vampire Squid' [View article]
    The GS/Govt relationship is clear for all to see ... per Barry, GS has a nice quid pro quo going ... they are getting exactly what they paid for. The size of their latest bonuses is basically ridiculous, given the taxpayer backstops and the way the bankruptcy rules are applied differently for GS.

    The real shame would be if no one speaks up ... I have written my senators and congressman - I may be delusional, but if enough people speak up, it could become politically unfavorable for GS to pay out what they are looking to ... think John Thain and his 10m payout ...
    Jul 19 03:42 PM | 3 Likes Like |Link to Comment
  • Running Strong Again: The Four Horsemen of Technology [View article]
    We all know about the periodic table of returns ... sectors and industries rotate up and down the stack. However, we also know the data about chasing returns and mean reversion. I think we need to look at slices within certain industries - healthcare technology, bread-and-butter banking, greentech, etc.
    Jan 24 03:16 PM | 3 Likes Like |Link to Comment
  • Microsoft: The Big Short [View article]
    I get the argument ... it's not new per se - we know that MS gets ~97% of their revenue via the Channel and the master areas are OS and Office, which are under attack via some viable players ... I also understand the cloud enviro and the move it's making in the SaaS, PaaS and IaaS spaces ... we also know that MS is not a $5b up-and-comer anymore ... law of large numbers ... the OEMs also can search for margin if the demand pull is sufficient and the alternatives are feasible ... I stipulate all of that ... I think the main issue is timing and M&A activity + some other bets that MS could make and needs to make ... I think it will be more of a slow drip, but as you say, if the inflection point hits the terminal value, it could begin to anchor the whole edifice ... the puts make some sense given the management of capital exposure ... I wouldn't make the bet at this point, but it's not my $ ... good luck.
    Oct 21 06:05 PM | 2 Likes Like |Link to Comment
  • Microsoft: The Big Short [View article]
    Good piece ... thought provoking ... per the comments, the business customers are not going to change Office or OS anytime soon ... the productivity hit would be significant - think of the Ribbon change - not pretty ...I used Google apps for 6 mos ... they are fine for certain things, but you pay a significant "price" for collaboration - buggy, slow, CPU hog at times, and feel a bit like toys. But I do understand that power users are probably not their sweet spot. I'll be interested in how Office 365 works out .... what sort of uptake and pricing model ... if the pivot here is the OEM's - I think they will need some user pull to make a change ... Dell is more business customer than consumers, for example ... follow the demand pull curve.
    Oct 21 11:42 AM | 2 Likes Like |Link to Comment
  • Can Obama Meet His Great Economic Expectations? [View article]
    There is a well-known saying that can often be heard from sales reps - "Don't confuse selling with delivery." Sales reps often promise things that they can't deliver on and set expectations that can't possibly be achieved (note: I've done this myself and paid for it in the end).

    Managing expectations is one of the most critical skills in politics, business, and relationships. My fear with lofty rhetoric and over-reaching promises is that they set people up for a fall ... I hope Obama is successful - it's partly my money after all - but I do think he needs to be careful with over-stating his case, which is one of the quickest ways to lose credibility and status.
    Jan 9 09:13 PM | 2 Likes Like |Link to Comment
COMMENTS STATS
79 Comments
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