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  • Riding the Rails: Why BNI Was Berkshire's Best Bet - And Vintage Buffett [View article]
    Excellant analysis. Good objective data, you made your point, I understand Buffet's reasoning and agree that this would be good for the country on many levels.
    Nov 3, 2009. 05:59 PM | 6 Likes Like |Link to Comment
  • Krugman: Recession is Over and Trade is Worse then the Great Depression [View instapost]
    Options girl Krugman had been giving fairly pessimistic outlooks for most of this year, even though he is a self proclaimed liberal economist.
    Oct 14, 2009. 02:21 PM | 4 Likes Like |Link to Comment
  • Niall Ferguson: Dollar Is Doomed, U.S. Empire Over [View article]
    Brick,
    I am encouraged by the very modest uptick in capacity utilization over the past 2 months. But I do share your concern about the degradation of skills and human capital as the short term unemployment stretches to a long term unemployment problem.
    Something needs to be done to retrain or remploy these people before they become the permanent free riders and hold back the economy, I agree with Bill Gross's concern on this point.
    On Oct 21 11:12 AM bricki wrote:

    > I think that the view that the devaluation of the American dollar
    > means the fall of America is cart before the horse. The strength
    > of the dollar derives from the productivity of the US economy, not
    > the reverse.
    >
    > Yes it is quite the case that our fiscal house is not exactly in
    > order. However that is not a unique occurrence in American history.
    > It has indeed happened several times that the dollar has had to be
    > devalued, taken off the gold standard and so forth. During the 19th
    > century there were cases where we even ran completely out of gold
    > and had to borrow some.
    >
    > Other empires have also gone through crises of this nature and done
    > fine.
    >
    > The issue here is that we have poor capacity utilization. Unless
    > that is reversed we will lose significant productive capacity. That
    > will be hard to recover.
    Oct 21, 2009. 01:20 PM | 3 Likes Like |Link to Comment
  • Will Chimerica's Demise Take Down Global Economy? [View article]
    China needs the US more than America needs China. The underpinning of the relationship is China's ability to export more than 200B (2008). They have chose to give cheap financing to their biggest customer by buying treasuries. My post below gives a more detailed account.
    seekingalpha.com/insta...
    Sep 15, 2009. 01:18 PM | 3 Likes Like |Link to Comment
  • Has the Government's Effort Failed? [View article]
    No doubt the consumer is in horrible shape. The million dollar question is whether they can cut deeper than they already have during this recession. The credit availabilty is a critical element and a troubling data point. The question is whether this was credit that would have fuel spending or banks cutting unused cards, HELOCs.

    The banks do have exceptional low borrowing rates and can make a lot of money lending as long they make good credit decisions.
    Sep 9, 2009. 01:30 PM | 3 Likes Like |Link to Comment
  • How Should We Improve Seeking Alpha's Comment Rating System? [View instapost]
    Freya makes a good point. There is lot of articles that are a stretch of the truth if not outright lies with definite agenda. A lot of good authors & commentators have simply voted with their keyboards and left. A few like Thiazole have taken a lot of abuse and are still sharing their thoughts generously, some like John Lounsbury have handled the ugliness with a equinamity and courtesy that I really admired. It is tough to be polite when people are shouting at you.

    I myself post a lot more on Morningstar.com these days and find that people are more polite and do not lash out just because they disagree, a lot less agendas more people trying to invest better.

    I also think that highlighting the commentator board leads to most of this behavior, as people fight and claw to get to the top of the list. On morningstar, there is no reward for commenting a lot and people respond when they have something to ask, tell or say. They also highlight quality comments by picking specific threads and picking out the best comments. I got a mention recently that really motivated me to comment there in quality not quantity.
    news.morningstar.com/a...

    Bottom line is that you do not have a shortage of comments & commentators, maybe time to work on the quality, netiquette and argue fairly.

    On Dec 22 06:39 PM Freya wrote:

    > David, no matter how bad an article is:
    >
    > The Authors go unscathed. An Article can be totally misleading, provide
    > false statements, use opinion as Fact, provide links which dispute
    > the Article itself because the Author Just read the Headline and
    > ran with it.
    >
    > When confronted with Facts, They attack you and get their followers
    > to attack you. That's the Main reason I do not bother with Articles
    > anymore, there is no recourse against a truly abusive Author. <br/>
    >
    > And they rarely retract the False and Misleading Opinions they just
    > presented as Facts.
    >
    > I would like to add 2 buttons at the bottom of each Article. Fact?
    > Fiction?.
    >
    > Commentators should be able to vote on each without being Attacked
    > by the Followers of the Author.
    Dec 23, 2009. 10:20 AM | 2 Likes Like |Link to Comment
  • The Dollar as a Funding Currency [View article]
    ECB cares when EU exports to the US drops by more than 50% in the first 9 months of 2009.

    On Nov 10 03:52 AM Dave Wrixon wrote:

    > It is not even in the ECB remit to track the dollar. All they care
    > about are monetary conditions within the EU itself. Of course the
    > dollar may impact upon that indirectly but it will never be a primary
    > focus. Newton may have discovered gravity, but nobody as yet has
    > worked out how to control it.
    Nov 10, 2009. 01:50 PM | 2 Likes Like |Link to Comment
  • The Dollar as a Funding Currency [View article]
    Need to separate the reversion to mean dollar returning to the level pre-Lehmann after spiking during the crisis, from the loss of confidence or gain in confidence for other currencies.
    Nov 9, 2009. 05:39 PM | 2 Likes Like |Link to Comment
  • Two Strong Africa ETFs [View article]
    I would also look at GAF (I own it) because of the length of history will give some comfort from a risk standpoint. The drawback is that it is primarily invested in South Africa & Isreal and doesn't give you broad representation like AFK will.
    Oct 27, 2009. 04:30 PM | 2 Likes Like |Link to Comment
  • Krugman: Recession is Over and Trade is Worse then the Great Depression [View instapost]
    Micheal,
    The crux of the decoupling argument as I understood it was that domestic demand in emerging countries especially in Asia was growing with rising incomes and would lead exporters to look inwards and supply these markets versus the excessive dependence on the slow boat to America that opened them to severe outcomes when the American consumer pulls back.

    The evidence has been mixed from this recession. While their exports did crash and burn, some of the chinese demand did pull Asian economies up, along with continued increases in domestic demand.
    On Oct 15 06:38 AM Michael Clark wrote:

    > Oxymoron: a combination for epigrammatic effect of contradictory
    > or incongruous words (as cruel kindness, laborious idleness).
    >
    > Clearly there is NO CONNECTION between global trade and economic
    > health. Perhaps this is the legendary 'decoupling' we have been told
    > for years now was occurring. (I think the decoupling is actually
    > between rationality and wishful thinking. Rationality is now the
    > empty house; and wishful thinking is on that slow boat to China.)
    Oct 15, 2009. 11:05 AM | 2 Likes Like |Link to Comment
  • Krugman: Recession is Over and Trade is Worse then the Great Depression [View instapost]
    John,
    Thank you for your reasoned comment. I was first introduced to Krugman by a conservative economist at U of Chicago, who was a big fan of his work on international trade, not so much of NY times columns. I also had a class where we used his textbook on international trade.

    He definitely has Keynesian impulses but much of his writing doesn't quite fit that bucket. He has studied the mechanism of international trade, the role of deficits, role of specialization, monetary flows. He is probably the authority on Globalization and its effects.

    He is definitely a cheerleader for liberal economics.

    I hear your point on financial engineering. But I would add that we could go back to the simple world from the turn of the last century, where you applied for a loan at the bank and got approved for it (or not). Adding credit swaps does allow risk averse investors to hedge against the loans they provide, this probably increased the funding of new startups, emerging technologies. The problem was when these instruments started being used as trading vehicles for the proprietary desks at investment banks. There needs to be limits put on this activity to reduce the level of speculative versus investment activity, to avoid the overinvestment & bust cycles.
    On Oct 14 03:12 PM John Lounsbury wrote:

    > Commenters - - -
    >
    > Krugman is a conflicted "liberal" economist. He is an avowed Keynsian.
    > He is also an independent thinker. That leads to some unexpected
    > opinions and conclusions. On the bottom line, he is data driven and
    > that keeps him grounded. He can wander off the track I tend to follow
    > with data, but he always seems to stay logical. That means he can
    > be reasoned with, which is a valuable characteristic of which some
    > economists with labels don't have a very long supply.
    >
    > One place he has settled, along with Simon Johnson, James K. Galbraith,
    > William Black, Joseph Stiglitz and others is a place I came to at
    > the beginning of 2009. That place is the one that is calling for
    > a reintroduction of the principles of capitalism to financial markets.
    > It is a place where the capital markets compete to intermediate the
    > financing of production and commerce and do not use up capital to
    > trade securities and create more "money" through credit instruments
    > that serve no real purpose beyond producing "creation" fees and a
    > larger artificial trading market.
    >
    > This means separating commercial and investment banking. This means
    > regulating interdependencies that create the opportunities for stacked
    > dominoes to develop. This means assuring (through regulation) that
    > capital markets are competing to provide financing for production
    > of things of utility and commerce involving such items. Derivatives
    > with values orders of magnitude greater than the underlying real
    > assets provide no value to the world outside of the financial engineers
    > who create and trade them. There must be some optimal relationship
    > between the total nominal value of derivatives and the value of the
    > underlying assets. I don't know where that level is, but I am quite
    > sure it is not 1000 times (or more), which is where we have gotten
    > to.
    >
    > This entire area is one of great research potential. Done properly,
    > it could well be Nobel Prize quality work. I wish I had the capability
    > to tackle it. The most I can probably contribute to this is to be
    > a cheerleader.
    >
    > Thanks for letting me clutter my own comment stream with a rant.
    Oct 15, 2009. 10:59 AM | 2 Likes Like |Link to Comment
  • China Scrambles for African Resources [View article]
    Angola is in Southern Africa next to South Africa and is not a neighbor of Guinea which is in West Africa. Same continent but a long way apart.
    Oct 14, 2009. 03:48 PM | 2 Likes Like |Link to Comment
  • Obama's Tire Tariff Could Help the U.S. Win a Trade War with China [View article]
    Howard,
    Why would chinese knowingly undermine nearly a trillion in investments? They will try to diversify slowly because of the size of their holdings and the loss they would take by selling too quickly. The irony of this is that with size of their domestic consumer base, china has the ability to grow as rapidly as the US did at the turn of century by meeting domestic demand, exports came later.

    On Sep 15 01:36 PM Howard Richman wrote:

    > Tony,
    >
    > I do not claim that China will "ALWAYS buy our bonds, stocks, etc."
    > I actually expect them to pull the plug on the dollar once they have
    > finished stealing what they wish to steal of our industry.
    >
    > My guess is that in about 3 years they will allow the dollar crash
    > to occur, especially if they can succeed in the meantime with getting
    > their dollar reserves converted into SDRs by the IMF so that that
    > will be guaranteed by the values of a basket of currencies.
    >
    > Howard
    Sep 15, 2009. 04:42 PM | 2 Likes Like |Link to Comment
  • Obama's Tire Tariff Could Help the U.S. Win a Trade War with China [View article]
    Howard,
    There is a real misunderstanding of who had more to lose in a trade war (China) who exports over $200B last year and imported far less. They are asking for talks at the WTO in a bid to calm things down, an escalation will shot down the factories in China and cost US consumers some inflation offset by income growth. My detailed post below.
    seekingalpha.com/insta...


    On Sep 15 08:41 AM Howard Richman wrote:

    > Old Guy,
    >
    > Let's suppose that we buy tires from Vietnam. Vietnam doesn't practice
    > mercantilism, the strategy of maximizing exports and minimizing imports.
    > They will buy imports with the money that they earn from the tires.
    > Whoever they buy from will buy other imports. The result will be
    > that the United States will get more exports.
    >
    > China is the black hole in world trade. US economic demand goes into
    > China and never gets reflected back. As I pointed out, China buys
    > only 25 cents from us for every $1 we buy from her.
    >
    > Howard
    >
    Sep 15, 2009. 04:37 PM | 2 Likes Like |Link to Comment
  • The Simple Economics of Student Loan Crises [View article]
    I am starting a 529 for my 12 week old so that he will be able to afford it by the time he is growing whiskers.
    Sep 15, 2009. 01:06 PM | 2 Likes Like |Link to Comment
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227 Comments
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