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  • Obama's Economic Failure [View article]
    The following article by Bruce Krasting appeared in Seeking Alpha on April 24th of this year. I find it to be rather persuasive....
    Jul 13, 2009. 05:54 PM | Likes Like |Link to Comment
  • Obama's Economic Failure [View article]
    It is too soon to call this "Obama's economic failure". This economic failure was in place long before Obama took office.

    Obama's role, so far, has been analagous to that of a emergency room surgeon who is trying to repair the injuries following the aftermath of several reckless-driving teenagers crashing into "whatever". He did not create this mess. Rather, his team is trying address the aftermath. Unfortunately, his "nursing staff" is Congress. (I do, indeed, agree with the comments of "Cautious Investor" above.)

    The names of the reckless teenagers are many. They include members of BOTH parties (Christopher Cox, Alan Greenspan, Phil Gramm, Robert Rubin, Bill Clinton, Henry Paulson, the plutocractic Cheney / Bush Presidency, and the corrupt bond-rating agencies). The root cause of their crash was getting drunk on a blend of deregulation and the easy money sourced from inadequately-regulated Collateralized Debt Obligations and Alan Greenspan.

    Ultimately, too many economic resources were caused to flow into the residential real estate bubble (over the past several years). Now those excess resources have to reallocate themselves to other areas where society has a greater need. Ideally, this is best done via the free market. Unfortunately, for many, the necessary transition period for this to happen can mean homelessness, hunger, and untreated disease when no safety net exists.

    A key variable that has not been explicitly mentioned in this discussion is "monetary velocity". It is the catalyst by which money supply can be converted to inflation. Right now it is very low. Perhaps that could be good topic for a future article?

    The return of soldiers from World War II (and World War I) likely caused a significant increase in "monetary velocity". This probably compensated for the reductions in government expenditures that were made at those times.

    What alternative economic fix are you proposing, instead? Say's Law (supply-side economics), perhaps? or simply Darwinian Laissez-Faire?

    Jul 9, 2009. 09:40 PM | 2 Likes Like |Link to Comment
  • Goldman Sachs: Thoughts on the Developing Stolen Trade Secrets Scandal [View article]
    I have forwarded this article and a few by "Tyler Durden" to one of the Senators representing my state (Robert Casey of Pennsylvania). Those of you who can vote in the United States should also contact your respective Senators and Representatives about this matter.

    Jul 7, 2009. 09:03 PM | 2 Likes Like |Link to Comment
  • Capital Goods Orders Aren't Falling [View article]
    In the realm of capital investment, tax effects will be less influential upon investment decisions than a company's expectations regarding the pre-tax value of the expected future benefits as well as that company's cost of capital.

    Strong tax-based incentives already exist for capital investment. Among them are (1) accelerated depreciation of the capital investment for tax purposes [such as MACRS} and (2) the "tax shield" for the bond component of a company's weighted average cost of capital [which is the tax deductability of bond interest].

    Furthermore, the time value of money, makes those early years of an investment (when MACRS depreciation is in effect) more influential in the investment decision than the later years.

    To clarify, I am NOT saying that the corporate tax rate has zero effect. What I am saying, though, is that OTHER factors have a much stronger influence upon a company's decision to invest in capital.

    Jun 24, 2009. 01:34 PM | Likes Like |Link to Comment
  • How Should We Improve Seeking Alpha's Comment Rating System? [View instapost]
    I have read several excellent comments / ideas in this discussion. Among those that have "resonated" well with me are the following:
    1) Having separate ratings for (a) article quality and (b) one's personal agreement / disagreement with the conclusions. (as was described by Shaw and Lounsbury)
    2) As was stated by Ergo, I, too, have learned much from some of the comments in various articles.
    3) In support of Mikebrah's comment, the ratings from the well-respected commentors and contributors should, perhaps, have more weight.
    4) I am intrigued by "31October"s weighted average solution. It appeals to me.
    5) This leads me to an idea: I would be very interested in how Geoff Considine might approach the rating question. I hope the staff will seek his input / ideas.

    Even though I have been reading this website for many months, this is my first comment on this website. Since, I don't consider myself an "expert" on the various topics covered, I merely read and try to learn. (Incidentally, my favorite contributors are Richard Shaw and Geoff Considine.)


    May 13, 2009. 07:53 PM | 7 Likes Like |Link to Comment