Alf Landon

Let's Not Get Carried Away: It's Still a Bear Market

Some guy on CNN pegged it right. This market move was RIGGED. Nothing more nothing less. Hopefully, we go a little higher so some bagholders can get out. Wait until earnings and a new waft of bad news comes out in a few weeks.

In Defense of CNBC (Sort Of)

You are arguing for low expectations. And yes, people do take the "experts" at face value.

The Unintended Consequences of Levying a .25% Stock Transaction Tax

My main concern is that there might be loopholes attached for market makers, specialists and other insiders whereby they are exempt from the rule and have the playground all to themselves. The tax is a bad idea to begin with. Strategies, however, could be implemented to trade against the new rule if it applies to everyone. If there is an exemption though, then we are looking at legalized bank robbery again.

Betting: The Line on 'Depression'

We will never have a depression again. Conditions might rival the "great" one, but even then the spin doctors will keep changing the terms, the definitions and the stats to goose the public into a favored view.

It boggles the mind that so much automatic credibility is granted to economic policymakers and stock analysts when their predictive abilities are so uniformly bad. Our childrens' future relies on the insights of glorified chicken entrails readers.

Want to Reform Wall St.? Bring Back Partnership Investment Banks

But how would they access secondary markets for more money? And bailout money? How would equity holders defer risk onto simpletons? I don't understand. Being too big to fail has its advantages, and state dictated economic activity is socialism. Yeah.

We Are the Mushrooms of This Economy

Now is the time for progressive pols to attach all sorts of ideological pet projects- some big, some small- to the Grand Experiment v. 1.0. From salmon ladders to universal healthcare, the best projects can't be offshored and all benefits will accrue in our fair land. We should see a gold rush of shelved ideas making a resurgance. It must heady times for most politicos at this point.

It is best to strike while the iron is still hot. After v. 1.0 fizzles in strength and as conditions deteriorate, the populace will become more cynical and stingy.

Real Unemployment Closer to 18%: Watch Those Long Positions

Just typical politicking. Expect 7 million created jobs to emerge if politically warranted. The "jobs of tomorrow" aren't building bridges and roads or "shovel ready" by the way.

I expect this plan to be the most pork-laden bill ever. Let's hope it works. I have my doubts.


On Jan 11 10:16 AM Herbert Hoover wrote:

> The statistics coming out of this administration are highly suspect
> - the revisions keep coming and - in case you haven't noticed - they
> are always on the downside. Politicians are liars and the Bush people
> are really good politicians.

Will 2009 Bring Ring Three of the Financial Circus?

Yes, the bulls frequently say that the market is a great value. They also say that all hell is priced into the market. Their arguments seem specious, but what they don't say as much is that there are lots of stocks trading at below book value and with a lot of cash on hand. Shouldn't this trigger an m&a boom and a private equity boom if the valuations are real? Maybe we see companies chopped and sold off like in the 80's. The ultimate arbitrage would be buying out a big company like BK, dissolving it and walking away with a risk-free 15 billion dollars. Where's Buffett?

Preventing the Depression of 2009

My remark above assumed a top-down earnings estimate and a blanket p/e for the index. I don't have a clue how else it could be done.

Preventing the Depression of 2009

I wouldn't be too surprised if this idea was ultimately used, as a short-term last resort fix, if Bernanke and Paulson were somehow magically allowed to continue in some alternate dimension. The results would be great for academic research if done in a fishbowl.

It seems problematic as a permanent mechanism. First, it would stifle innovation by quashing incentive. A company in the S&P wouldn't be properly rewarded for outperforming with growth or innovation or fiscal prudence. They would be valued on the same metric as the rest of the staid group. Worse, laggers could ride on inertia. Corporate lethargy would prevail. Investors would be turned off and the government would ultimately subsidize incompetence. Second, any US index does not exist in isolation. Better opportunities abroad would become apparent. Better domestic alternatives would even be available. Fourth, outperformers would be unfairly squeezed from raising capital in secondary offerings, etc.

There are undoubtedly many more negatives. It seems prima facie a bad idea. Nothing, however, seems off the table now. How to avoid bubbles and the ramifications? Some other way.

Dennis Gartman: Go Long Infrastructure, Short Everything Else

A few ideas need to be addressed by the experts. First, the infrastructure plan, regardless of eventual size, will not replace the demand that has been lost from China and the rest of Asia. Asia, afterall, has been the driver for metal and scrap metal price and volume increases over the last few years. Those markets are decreasing not increasing and rapidly. A real blowout in China, although not seemingly contemplated at this point, would accelerate commodity declines. Second, not all of the touted plan's money is going to roads and bridges nor is its future certain. Republicans are already talking filibuster. In my mind this infrastructure plan smells of political posturing, unreasonable expectations and inevitable pork. Third, it is probably priced in the stocks. Fourth, no consideration for price gouging by foreign suppliers is considered. Foreign suppliers with stockpiles tend to slash prices based on more favorable production costs and government subsidies. Also, favor in rising protectionism and the winners will be strictly domestic metals traders getting a bump in volume.