margel

Stryker Ups Its Dividend by 50%

The point is not the size of the dividend. But an increase of that magnitude says that management is optimistic about the future and expects the company to start growing again. I take that as a very positive sign.

Get Exposure to Earnings Superstars with Broad-Based Tech ETFs

Any thoughts on NASDX? How does it compare to QTEC and IGM?

Feldstein: Empower Patients to Make Health Care Cost Decisions

Feldstein's proposal would reduce health care costs but only by significantly reducing access. The average person does not have the ability to make rational decisions about their health care, especially if they have debilitating or chronic illnesses. Having worked in the health care field for many years, my impression is that only the well-to-do and the highly educated have the ability to perform a cost-benefit analysis on health care decisions, but even they often have difficulty understanding complex procedures. As a matter most patients with serious health cannot even describe in clear language their diagnosis and treatment options.

Effects of the Stimulus Package: Felix Salmon Is Uncharacteristically Wrong

Well, let us assume that Brad De Long is correct. Well, then what should be the composition of a second stimulus package? How much for tax cuts? infrastructure spending? State government support?

Healthcare 'Discussion Draft' Raises Concerns over Quality of Care

You are not too harsh and capitalistic, you just do not understand the way the health insurance industry works and why it is the obstacle on the path to universal coverage. Health insurance industry is not a competitive industry in which price competition prevails. They seem to compete more on the basis of risk selection It is hard to imagine anything like true price competition given how complex the insurance contracts are.

Beware of 'Materialism' in Your Emerging Market ETF Assets

Where can you find State Street's correlation tool on the web?

U.K. Housing Bounces; Will U.S. Homes Follow?

What's your source for UK Housing Prices?

High End Home Market Still Has Further to Fall

I think your numbers do not make sense. Geithner is not a landlord. Plus you are missing the income tax effects of depreciation. In any case, only slum lords expect a 12% cash on cash yield on rental property. Most rental income property yields about 3-5% cash on cash. Income property owners want some cash yield but their main investment goal is appreciation.

Bernanke 'Puzzled' by Collapse of Bond Bubble

I would not discount explanation #1. Look what happened in the fall when the banking system went through a crisis -- long term Treasuries took a huge dive as investors eschewed risk assets and shifted money into US government securities. Long term US Treasuries were up over 10% for the year, and most of increase occurred in the fall. It was clearly a "flight to quality." Some of the recent increase may be due to Chinese portfolio adjustments, but I suspect a large proportion of the change is due to a more optimistic outlook now that the financial community does not anticipate a major meltdown on the scale of the Great Depression of the 1930's.

Consumer Confidence Soars (Don't Get Excited)

Go shopping my friends. All of these pessimistic comments are not based on much real evidence. Something is definitely happening to consumer spending if you go shopping like I do. I am convinced that consumer expectations have improved. I am a regular shopper with my wife at Nordstrom, H&M (my wife), Neiman Marcus, Best Buy, Anthropologie, Williams Sonoma, Banana Republic, Gumps and other major retailers in downtown San Francisco. I have been surprised over the past month at the way these stores are filling up with shoppers. Several restaurants I regularly visit are also filled on the weekends. This was not the case 3 months ago. Whole Foods is also filled with more shoppers. In February and March all these placed were dead despite heavy discounting my retailers. What is happening in your downtown?

StatOil: Attractive Investment with a Big Dividend

Does the Norweigan government charge a tax on the dividend and is it with held when the dividend is paid?

Is the State of California Broke?

This election is not about the failure of the legislature to do its duty, but the failure of California to give the legislature the discretion to make budgets. The reason we are having a special election in California to approve a crisis budget is that over the past 30 years California voters have approved state ballot initiatives that wrote into the state constitution provisions both (a) severely limiting the discretion of the legislators to increase taxes and (b) creating permanent earmarks which mandate levels of state spending for education, mental health and other area. These initiatives have in effect put the California legislature into a fiscal strait jacket. It cannot make major changes to the budget with respect to spending or taxes unless it goes back to the voters and ask them to temporarily or permanently change the constitution itself. Most of the changes proposed are temporary, except for the expansion of the rainy day fund, which involves a very complicated formula which nobody understands. It is another lock which will only make the strait jacket tighter and exacerbate the current crisis. I think it is time for major constitutional change which gives back to the legislature discretionary power to tax and spend.

Chart of the Day: Common Capital vs. TCE

I agree. The stress test has to use metric consistent with the Basel Accord system in order to have consistent method of assessing bank capital over time. Also, both measures have a large degree of subjectivity in measure risk of assets -- TCE does it through assumptions about unrealized losses, and Tier 1 through risk weights attached to assets.


On May 09 07:24 PM Fd wrote:

> This is poor journalism - putting fears into the readers rather than
> explaining the merits of TCE and Tier 1 individually. Buffet, the
> CEO of Wells Fargo, and others have already strongly discredited
> this TCE ratio, which by the way is NOT how things have always been
> done (rather according to the Basel Accord, Tier 1 is most important).
>
> I don't think it is paranoia at this stage to suggest that such analyst
> demand for this ratio comes from a desire to appease the shorts.
>
> I would like to see an honest comparison of the pros and cons of
> each ratio.

Structural Changes: The Economy, Unemployment and Inflation

You are probably right about structural changes in the economy occuring, but most recession involve some degree of structural change. I also think your policy analysis confuses short-term stabilization policies (to bolster effective demand through fiscal and monetary stimulus) with long term public investment and tax policies to address structural changes.

Truth and Consequences of the Fed Purchasing Treasuries

Actually, the Fed has been planning this move for quite awhile. They have been concerned that the "output gap" between actual and potential GDP is supposed to be about $ 2.2 trillion and exceeds by a wide margin the recent government fiscal stimulus of only $785 billion even after accounting for multiplier effects. By dropping intermediate interest rates, this move may spur some increase in private investment. With an output gap of this size (about 1/6 of GDP), the greatest risk is deflation not inflation.