Annualgain

China Natural Gas: Deeply Undervalued

I have to side with Diego on this debate. If a company can consistently get a 25% ROE, then reinvesting the cash it generates makes more sense than paying a dividend, whether it's a utility or anything else.

I like this pick.

Time for California Muni Bond Investors to Take a Stand

Next area of speculative investing: Buying CA state IOUs at $0.50 on the dollar.

Breakout or Fake-Out?

I'm not a technical analyst, but the S&P's inability to break through the 50-day MA today spells sell-off on Monday to me.

stockcharts.com/h-sc/u...

Bernanke Is a Man with a Plan

A man, a plan, a canal, panama
style inflation.

Using DRIPs for Faster Compounding of Dividends

Many DRIPs have recently become defunct due to abandoned dividends. (What are they called if the dividend is suspended - RIPs?)

This Week in Solar: Thin-Film Players Steal Spotlight

Share price activity is not news, in my book. Fundamental business developments are news.


On Dec 26 12:08 PM R Herbert wrote:

> Thin film steals spotlight? That's what happened in solar this week?
>
>
> How about TSL hitting new highs as well as strong momentium with
> CSIQ, JASO and SOLF. These were the big moves during this short
> week.
>
> The article mentions ENER which finally showed some life but is still
> short of the 50dma.
>
> Oh, and dividing the capital cost of a new plant into the annual
> capacity with no consideration of operating costs for Solyndra seems
> flawed to me, unless they only last one year...

U.S. Economic Recovery and the Housing Sector Mirage

"During the Great Depression it would have been plausible for the economy to “recover” even if employment, housing and consumer spending were all still in decline (as they are in the United States, today). However, the current U.S. economy is built entirely atop a housing-bubble, and a level of consumption which can only be maintained by ever-increasing consumer debt."

Mr. Nielsen:
The last time I commented on one of your articles, you responded and I think the tone between us became contentious. That is not my intention here, I really just want to learn from you and others. So here's my comment:

How is the recent housing bubble so different from the credit bubble that brought on the great depression? Whether the borrowing was backed by houses or stocks, when the assets declined in value, all the loans were under water. Right?

Now, here's where I think you and I might really differ in our views, i.e. the consumer debt vs. spending balance. Not only is consumer revolving debt down recently, total consumer borrowings are down in aggregate. At the same time consumer spending is increasing, albeit at an anemic rate.

How can consumers pay down debt and increase spending at the same time? Well, despite the fact that the U.S. has more unemployment, personal income is increasing in aggregate. The reason we are going to have very very muted recovery in the U.S. is that consumers are putting some their income increase towards spending and some towards debt reduction.
Consumer Loans: research.stlouisfed.or...
Personal Income: research.stlouisfed.or...
Personal Consumption Expenditures: research.stlouisfed.or...

I don't disagree with the housing stats you provide in your article. I guess I just disagree with the interpretation.

AG

Despite What Cramer Said, Housing Has Not Bottomed

Maybe Cramer is using the Case-Schiller Index

Where Have All the Buybacks Gone?

Frankly, it has been lack of capex opportunities that is hurting this economy so much right now. The rampant buybacks of 1-5 years ago were symptomatic of lack of innovation and opportunities to grow.

Wharton's Jeremy Siegel revisits his controversial dispute of S&P 500's earnings measurements. After dismantling a "flawed" response from S&P's David Blitzer, Siegel concludes, again, that "the true valuation of the market is no where near as dismal as the aggregate earnings reported by S&P suggest... the market is cheap by historical standards."

Here's a simple solution to ending this debate: remove C, AIG, and BAC from the S&P 500. That will remove their minuscule market caps and huge losses.

"After watching the Liddy debacle on C-SPAN, it has become painfully clear to me that our federal government is a joke. Those jerks were personally attacking a man working very hard to pull our collective butts out of the fire, all at great risk to his reputation, and for only $1 per year. I was angered and saddened."

This comment is right on. The government is on a witch hunt the likes of which we haven't seen since Joe McCarthy. Somebody needs to stand up and stop them.

Barron's Plan to Save the Economy - For Just $200B?

While it's true that the first place the credit crisis showed up was in sub-prime land, the same issues that have plagued sub-prime are true elsewhere. Easy credit inflated the value of assets. Housing, yes; but it's also true that we have too many retail stores, too many hotel rooms, capacity to produce autos well beyond the level of "normal" demand, the list goes on. Fixing subprime mortgages in the way suggested by Barron's only addresses one small aspect of the excesses created by easy credit.

Restaurant Spending, Then and Now

Your just a little late to the game. Restaurant visitation per capita has been declining for the last 4 years.

Former Fed Chief Paul Volcker blasts financial innovation, calling for a "shred of evidence" that there has been any benefit. Credit-default swaps and collateralized debt obligations "took us right to the brink of disaster." The one innovation he favors: the ATM. "It really helps people, it’s useful."

From the article: "His idea of reform? A return of something like Glass-Steagall. Commercial banks should be tightly regulated as well as protected. Trading, speculation and financial innovation should live outside those companies so that if they fail, they fail.

While many resist this idea, Mr. Volcker had few doubts. “I’m not alone in this and I think I’m probably going to win in the end.” "
I hope he is right on that front.

But I think even Volcker would agree that there are some financial innovations that have helped, maybe things like the 30-year mortgage (with the proper underwriting standards) or the mutual fund. Or the ETF.

Talent shift: Could a high-IQ exodus from finance lead to stronger productivity growth and a more robust economy?

High IQ's on Wall Street? Where?