appone's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/274065/comments http://seekingalpha.com/article/178897-is-the-dollar-too-big-to-fail?source=feed#comment-813365 813365

On Dec 19 01:01 AM Paul H. M. wrote:

> If the government started spending more than it took in, that would
> take money out of the economy, which should be deflationary.
>
> But if you go GOP-style and lower taxes while raising debt, then
> you get more inflation because you're putting more money into the
> system than what your taking out through taxation.]]> Sat, 19 Dec 2009 09:37:09 -0500

On Dec 19 01:01 AM Paul H. M. wrote:

> If the government started spending more than it took in, that would
> take money out of the economy, which should be deflationary.
>
> But if you go GOP-style and lower taxes while raising debt, then
> you get more inflation because you're putting more money into the
> system than what your taking out through taxation.]]> http://seekingalpha.com/article/152877-why-gdp-stats-are-still-ugly?source=feed#comment-611640 611640

On Jul 31 07:42 PM FB5000 wrote:

> "Media lies". "Chinese Recovery Lies". Blah, Blah, Blah.
>
> What a lot of emotional nonsense. You seem to have a real axe to
> grind with CNBC and "mainstream media". You sound like Rush Limbaugh.
> You folks just can't stand to see an improvment. You just want/need
> things to be terrible or to get worse. Sorry. You are wrong.
>
> Forget for a moment that Q2 GDP is ancient history. April/May/June
> is an age past. ALL THE NUMBERS - ALL THE NUMBERS ARE TRENDING BETTER.
> It is a simple fact. The recession moderated drastically in Q2 and
> is now over.
>
> The leading indicators are flashing green. The market is up. Recovery
> is here. The question now is how strong. All the rest is beating
> a dead horse and kind of boring.
>
> That's all.
>
> The real stimulus which has directly affected the average Joe has come from him refusing to pay the mortgage, property taxes and (with condos) the maintenance. The money saved on a monthly basis is substantial. With banks slow or reluctant to foreclose and an entire cottage industry designed to delay the foreclosure process, a family can occupy their home, practically free, (or collect rent from an investment property) for a long time. All one has to do is refuse to pay and hire a law firm to delay any attempt at foreclosure. It is likely that at least two years will pass before the property has to be vacated, and possibly a lot longer.
This phenomenon is spreading like wildfire. It is no longer about those who cannot afford to pay. It’s about all those that, for many reasons, decide they just don’t want to pay.
There isn’t a lot of talk about this in the media, but it seems to me that it is becoming an epidemic. Anecdotal evidence: of the people with mortgages, that I personally know enough about to be certain, 10 are no longer paying, and 6 are paying. At the beginning of the year, the number of those not paying was 6.
This behavior is not without a lot of consequences, some short term some long term. I can list a great number, but they are quite evident.
My fear is that if this behavior becomes the norm, there will be political pressure for leniency or complete amnesty. The “delinquent” voters will overrule those that have abided by their contractual commitments. I’m afraid the government has already set a precedent. If most don’t pay, eventually the money will be taken from all by taxes, in order to “right the system”. Not paying may feel good for a while, but in the longer run it will mean the abdication of power and rights.

> ]]> Sun, 02 Aug 2009 12:54:26 -0400

On Jul 31 07:42 PM FB5000 wrote:

> "Media lies". "Chinese Recovery Lies". Blah, Blah, Blah.
>
> What a lot of emotional nonsense. You seem to have a real axe to
> grind with CNBC and "mainstream media". You sound like Rush Limbaugh.
> You folks just can't stand to see an improvment. You just want/need
> things to be terrible or to get worse. Sorry. You are wrong.
>
> Forget for a moment that Q2 GDP is ancient history. April/May/June
> is an age past. ALL THE NUMBERS - ALL THE NUMBERS ARE TRENDING BETTER.
> It is a simple fact. The recession moderated drastically in Q2 and
> is now over.
>
> The leading indicators are flashing green. The market is up. Recovery
> is here. The question now is how strong. All the rest is beating
> a dead horse and kind of boring.
>
> That's all.
>
> The real stimulus which has directly affected the average Joe has come from him refusing to pay the mortgage, property taxes and (with condos) the maintenance. The money saved on a monthly basis is substantial. With banks slow or reluctant to foreclose and an entire cottage industry designed to delay the foreclosure process, a family can occupy their home, practically free, (or collect rent from an investment property) for a long time. All one has to do is refuse to pay and hire a law firm to delay any attempt at foreclosure. It is likely that at least two years will pass before the property has to be vacated, and possibly a lot longer.
This phenomenon is spreading like wildfire. It is no longer about those who cannot afford to pay. It’s about all those that, for many reasons, decide they just don’t want to pay.
There isn’t a lot of talk about this in the media, but it seems to me that it is becoming an epidemic. Anecdotal evidence: of the people with mortgages, that I personally know enough about to be certain, 10 are no longer paying, and 6 are paying. At the beginning of the year, the number of those not paying was 6.
This behavior is not without a lot of consequences, some short term some long term. I can list a great number, but they are quite evident.
My fear is that if this behavior becomes the norm, there will be political pressure for leniency or complete amnesty. The “delinquent” voters will overrule those that have abided by their contractual commitments. I’m afraid the government has already set a precedent. If most don’t pay, eventually the money will be taken from all by taxes, in order to “right the system”. Not paying may feel good for a while, but in the longer run it will mean the abdication of power and rights.

> ]]> http://seekingalpha.com/article/153152-gdp-here-s-a-more-realistic-look?source=feed#comment-611627 611627 This phenomenon is spreading like wildfire. It is no longer about those who cannot afford to pay. It’s about all those that, for many reasons, decide they just don’t want to pay.
There isn’t a lot of talk about this in the media, but it seems to me that it is becoming an epidemic. Anecdotal evidence: of the people with mortgages, that I personally know enough about to be certain, 10 are no longer paying, and 6 are paying. At the beginning of the year, the number of those not paying was 6.
This behavior is not without a lot of consequences, some short term some long term. I can list a great number, but they are quite evident.
My fear is that if this behavior becomes the norm, there will be political pressure for leniency or complete amnesty. The “delinquent” voters will overrule those that have abided by their contractual commitments. I’m afraid the government has already set a precedent. If most don’t pay, eventually the money will be taken from all by taxes, in order to “right the system”. Not paying may feel good for a while, but in the longer run it will mean the abdication of power and rights.]]> Sun, 02 Aug 2009 12:46:06 -0400 This phenomenon is spreading like wildfire. It is no longer about those who cannot afford to pay. It’s about all those that, for many reasons, decide they just don’t want to pay.
There isn’t a lot of talk about this in the media, but it seems to me that it is becoming an epidemic. Anecdotal evidence: of the people with mortgages, that I personally know enough about to be certain, 10 are no longer paying, and 6 are paying. At the beginning of the year, the number of those not paying was 6.
This behavior is not without a lot of consequences, some short term some long term. I can list a great number, but they are quite evident.
My fear is that if this behavior becomes the norm, there will be political pressure for leniency or complete amnesty. The “delinquent” voters will overrule those that have abided by their contractual commitments. I’m afraid the government has already set a precedent. If most don’t pay, eventually the money will be taken from all by taxes, in order to “right the system”. Not paying may feel good for a while, but in the longer run it will mean the abdication of power and rights.]]> http://seekingalpha.com/article/149101-thursday-outlook-commodities-global-markets?source=feed#comment-590402 590402 Thu, 16 Jul 2009 10:24:39 -0400 http://seekingalpha.com/article/148154-the-crash-of-2008-and-what-it-means-by-george-soros?source=feed#comment-587946 587946 present value perpetuity of the stream of rent income is $1,680,000.”


Why I agree with your conclusion, your first word explains exactly why “irrationality “ is at the base of bubble building.
It all hinges on the “IF” part. The irrational behavior is in believing such nonsense (as interest rates will stay at 1%).
The “fair” value analysis only applies in a theoretical vacuum or in an “irrational” bubble, as the main ingredient has to be the belief part.
IF the market can believe that “long-run” interest rates will be 1% the market also believe that prices will only go up for the “long-run”. Thus they behave “irrationally”.


On Jul 12 11:11 PM Arthur Hau wrote:

> I don't know why people still think that a bubble is necessarily
> built by people's irrationality or some sort of disequilibrium in
> the financial market.
>
> When you have a prolonged period of low interest rate, the so-called
> real estate market bubble (similarly stock market bubble) is actually
> RATIONAL!
>
> Suppose you have an apartment that can be rented out at $1,400 a
> month and hence $16,800 a year.
>
> If the market believes that the long-run interest rate is 1%, the
> present value perpetuity of the stream of rent income is $1,680,000.
> That is the apartment's "fair" value is about $1,680,000.
>
> If the market believes that the long-run interest rate is 5%, the
> present value perpetuity of the same stream of rent income is worth
> only $336,000. That is the apartment's "fair" value is only about
> $336,000.
>
> If the Fed keeps the interest rate low for a long while, any so-called
> bubble is only the result of rational computation from some FIN 101
> theory in finance.
>
> Mr. Greenspan correctly contained the internet bubble by flushing
> the stock market with liquidity and low interest rate. However, he
> did not have any exit plan. The right time for raising the interest
> rate steadily back from 1% to 5% should have been the period of 2003-2006.
> Instead, it waited until Dr. Bernanke finally realized that there
> was a possible bubble. Bernanke tried to correct the bubble by raising
> the interest rate, but It was already too late!
>
> The U.S. should have a minor bubble burst in 2006, instead of a major
> bubble burst in 2008. Thanks to Mr. Greenspan, a small financial
> crisis had turned into a financial tsunami.
>
> Now, the interest rate is back to historical low. Is there an exit
> plan? The real estate prices in NYC was down but not by a sufficient
> amount. What will happen when the interest rate rises again?
>
> Monetary policy can only contain a bubble, not correct it. You want
> the bust to go away? You better improve the productivity of the economy.
> Promoting speculative activity by lowering interest rate further
> won't work!]]> Tue, 14 Jul 2009 14:54:00 -0400 present value perpetuity of the stream of rent income is $1,680,000.”


Why I agree with your conclusion, your first word explains exactly why “irrationality “ is at the base of bubble building.
It all hinges on the “IF” part. The irrational behavior is in believing such nonsense (as interest rates will stay at 1%).
The “fair” value analysis only applies in a theoretical vacuum or in an “irrational” bubble, as the main ingredient has to be the belief part.
IF the market can believe that “long-run” interest rates will be 1% the market also believe that prices will only go up for the “long-run”. Thus they behave “irrationally”.


On Jul 12 11:11 PM Arthur Hau wrote:

> I don't know why people still think that a bubble is necessarily
> built by people's irrationality or some sort of disequilibrium in
> the financial market.
>
> When you have a prolonged period of low interest rate, the so-called
> real estate market bubble (similarly stock market bubble) is actually
> RATIONAL!
>
> Suppose you have an apartment that can be rented out at $1,400 a
> month and hence $16,800 a year.
>
> If the market believes that the long-run interest rate is 1%, the
> present value perpetuity of the stream of rent income is $1,680,000.
> That is the apartment's "fair" value is about $1,680,000.
>
> If the market believes that the long-run interest rate is 5%, the
> present value perpetuity of the same stream of rent income is worth
> only $336,000. That is the apartment's "fair" value is only about
> $336,000.
>
> If the Fed keeps the interest rate low for a long while, any so-called
> bubble is only the result of rational computation from some FIN 101
> theory in finance.
>
> Mr. Greenspan correctly contained the internet bubble by flushing
> the stock market with liquidity and low interest rate. However, he
> did not have any exit plan. The right time for raising the interest
> rate steadily back from 1% to 5% should have been the period of 2003-2006.
> Instead, it waited until Dr. Bernanke finally realized that there
> was a possible bubble. Bernanke tried to correct the bubble by raising
> the interest rate, but It was already too late!
>
> The U.S. should have a minor bubble burst in 2006, instead of a major
> bubble burst in 2008. Thanks to Mr. Greenspan, a small financial
> crisis had turned into a financial tsunami.
>
> Now, the interest rate is back to historical low. Is there an exit
> plan? The real estate prices in NYC was down but not by a sufficient
> amount. What will happen when the interest rate rises again?
>
> Monetary policy can only contain a bubble, not correct it. You want
> the bust to go away? You better improve the productivity of the economy.
> Promoting speculative activity by lowering interest rate further
> won't work!]]> http://seekingalpha.com/article/148232-no-one-saw-this-economic-crisis-coming?source=feed#comment-584321 584321 This is not over, not by a long shot (read “The Forth Turning” by Neil Howe, and understand that a crisis was in the making, and those that study history could see it more than a decade ago).
The government is using this crisis, in fact it’s feeding the flames. They cannot stop now, nor do they want to. The roller coaster of history has gone over the tip of the hill and there is a long way down.
For now, Washington is enjoying the moment and crafting the New “New Deal” in a self serving march toward supreme power. The population becomes more helpless and hopeless and continues to ask Washington for advise and help. The politicians (practically the same people who have presided over the entire road to the crises) are all too eager to pontificate and oblige.
“We the people” may have lost the battle, for now. The future economic condition will continue to deteriorate in complete unison with the government’s actions, which appear designed to control the Crisis. They will not control the Crisis but will control he population.
History’s lessons teach us that events taking this course have, almost always led to some major conflict, such as war.]]> Sun, 12 Jul 2009 10:40:28 -0400 This is not over, not by a long shot (read “The Forth Turning” by Neil Howe, and understand that a crisis was in the making, and those that study history could see it more than a decade ago).
The government is using this crisis, in fact it’s feeding the flames. They cannot stop now, nor do they want to. The roller coaster of history has gone over the tip of the hill and there is a long way down.
For now, Washington is enjoying the moment and crafting the New “New Deal” in a self serving march toward supreme power. The population becomes more helpless and hopeless and continues to ask Washington for advise and help. The politicians (practically the same people who have presided over the entire road to the crises) are all too eager to pontificate and oblige.
“We the people” may have lost the battle, for now. The future economic condition will continue to deteriorate in complete unison with the government’s actions, which appear designed to control the Crisis. They will not control the Crisis but will control he population.
History’s lessons teach us that events taking this course have, almost always led to some major conflict, such as war.]]> http://seekingalpha.com/article/126974-the-escalator-of-life-is-going-down-part-2?source=feed#comment-434611 434611 theburningplatform.com...


]]> Sat, 21 Mar 2009 16:16:37 -0400 theburningplatform.com...


]]> http://seekingalpha.com/article/122068-indians-are-selling-gold-is-their-thinking-right?source=feed#comment-399688 399688 Are the "rich" forcing the "poor" to sell the gold at these record prices?
If your numbers are correct, the "poor" have sold 12.20 tonnes of gold.
If my calculation is correct, that is 392,239 troy ounces of gold. At $950 per troy ounce, the "poor" have received $372,627,000 (rounded).
IMO, the statement about the poor is gratuitous and adds absolutely nothing to this article. ]]> Mon, 23 Feb 2009 08:33:20 -0500 Are the "rich" forcing the "poor" to sell the gold at these record prices?
If your numbers are correct, the "poor" have sold 12.20 tonnes of gold.
If my calculation is correct, that is 392,239 troy ounces of gold. At $950 per troy ounce, the "poor" have received $372,627,000 (rounded).
IMO, the statement about the poor is gratuitous and adds absolutely nothing to this article. ]]> http://seekingalpha.com/article/120488-obama-s-housing-plan-what-will-it-really-accomplish?source=feed#comment-386952 386952 If last year's political interventions are a guide, this too will fail, and after a few days, the market will finalize that down move.]]> Fri, 13 Feb 2009 09:22:50 -0500 If last year's political interventions are a guide, this too will fail, and after a few days, the market will finalize that down move.]]> http://seekingalpha.com/article/116237-banking-is-tanking-worse-than-ever?source=feed#comment-364919 364919
unless the banking system is nationalized, then the bank index could fall 100% from here]]> Sat, 24 Jan 2009 10:48:26 -0500
unless the banking system is nationalized, then the bank index could fall 100% from here]]> http://seekingalpha.com/article/113040-is-the-long-bond-cracking?source=feed#comment-345316 345316 Sun, 04 Jan 2009 10:36:57 -0500 http://seekingalpha.com/article/100688-are-big-banks-too-big-to-fail?source=feed#comment-286136 286136 Mon, 20 Oct 2008 08:20:06 -0400 http://seekingalpha.com/article/99335-commodity-collapse?source=feed#comment-278555 278555 Fri, 10 Oct 2008 06:21:54 -0400 http://seekingalpha.com/article/99093-coordinated-rate-cuts-too-little-too-late-the-forex-angle?source=feed#comment-277212 277212 Wed, 08 Oct 2008 17:06:10 -0400 http://seekingalpha.com/article/98465-bailout-1-1-passed-will-we-have-to-go-back-to-the-well-for-v2-0?source=feed#comment-273098 273098 For investors, we come back to the key question of inflation or deflation."
With all the G7 governments doing their best to inflate, the question is who is going to win, the governments (inflation) or the natural economic tendencies of the markets (deflation).
Temporary rallies not wthstanding, deflation is the natural solution and I believe it will prevail. It won't be a nice experience.]]> Fri, 03 Oct 2008 18:42:57 -0400 For investors, we come back to the key question of inflation or deflation."
With all the G7 governments doing their best to inflate, the question is who is going to win, the governments (inflation) or the natural economic tendencies of the markets (deflation).
Temporary rallies not wthstanding, deflation is the natural solution and I believe it will prevail. It won't be a nice experience.]]> http://seekingalpha.com/article/98389-ecri-future-inflation-indexes-indicate-that-worldwide-inflation-is-receding?source=feed#comment-272403 272403 Fri, 03 Oct 2008 06:54:07 -0400 http://seekingalpha.com/article/98389-ecri-future-inflation-indexes-indicate-that-worldwide-inflation-is-receding?source=feed#comment-272402 272402 Fri, 03 Oct 2008 06:53:07 -0400