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  • A Dow Double in 10 years? Easy [View article]
    Inflation will help the dow doubling case. Stocks are commodities priced in dollars. If the value of a dollar falls (inflation) the price of a stock expressed in dollars will go up more quickly.


    On Oct 07 02:13 PM Larry House wrote:

    > It may sound easy enough, but don't underestimate the long-term economic
    > problems we face. Other "experts" who manage billions of dollars
    > are predicting growth of 1-3% for the next few years--a good-sized
    > chunk of the 10 years. Beyond that, we may face high inflation.
    > On top of all, we have growing budget deficits. Stocks will have
    > a hard time averaging 7.2% per year with that backdrop. I hope it
    > happens, but I don't expect it.
    Oct 07 19:30 pm |Rating: +2 0 |Link to Comment
  • Recession Is Over: Long Live Depression [View article]
    It would be nice to see some analysis of cash for clunkers.

    The assertion is that people are being financially reckless making a typical cash for clunkers trade.

    Lets say I own an old car that is worth $5K and is likely to need $2k in repairs in the next 3 years, I do 10,000 miles/year and it does 20mpg. At $3/gallon that is $4.5K. Let's say this car would be worth $2K in 3 years.

    Let's say I replace it with a $15K car which I paid $13K for and it does 30mpg or $3K. Let's say the car is worth $7K in 3 years and has no repairs.

    My cost of ownership of the old car is $9.5K.
    My cost of ownership of the new car is $9K.

    From a cash flow perspective I think I am ahead, or about even if I finance it.

    Why is this so bad?
    Aug 11 08:41 am |Rating: 0 -1 |Link to Comment
  • Q2 Earnings Are Not What They Seem [View article]
    Hmmm. AIG lost what $61 billion and GM what $39 billion?

    How does the chart look if you do the S&P498 and we add $99 billion back?
    Jul 24 23:56 pm |Rating: +3 0 |Link to Comment
  • What's in Store for European Economies? [View article]
    Macroman you continue to delight!

    I found this comment in the referenced torygraph article particularly telling:

    'It became difficult for the shippers to obtain routine letters of credit at the height of financial crisis over the autumn, causing goods to pile up at ports even though there was a willing buyer at the other end.'

    I wonder if the nightly television pundits pumping shipping stocks as the BDI "has now bottomed" would concur!
    Jan 14 18:11 pm |Rating: 0 0 |Link to Comment
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