Roscat's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/335580/comments http://seekingalpha.com/article/132196-vikram-vs-kenny-which-ceo-will-be-ousted-first?source=feed#comment-472207 472207 Wed, 22 Apr 2009 05:40:42 -0400 http://seekingalpha.com/article/126909-a-graphic-depiction-of-distressed-real-estate-sales?source=feed#comment-433279 433279
]]> Fri, 20 Mar 2009 08:23:02 -0400
]]> http://seekingalpha.com/article/124497-who-will-win-the-economic-battle-for-ukraine?source=feed#comment-415929 415929
As you state, there will probably be no winner in the fight for Ukraine. it will continue to have Russian influences in the east and EU influences in the west. I just hope that will not become another divided Germany. The outcome would not be pretty.

It will be fantastically hard for Ukraine to manage the situation diplomatically but, they can certainly use all the help they need. Yushchenko and Tymoshenko need to understand that this issue is bigger than any of them individually.

A first step is the elimination of dependency of Russia. I am sure they understand that but, it is generally hard to implement since the vision and results are quite long-term.

I wish them the best.

]]> Fri, 06 Mar 2009 10:49:48 -0500
As you state, there will probably be no winner in the fight for Ukraine. it will continue to have Russian influences in the east and EU influences in the west. I just hope that will not become another divided Germany. The outcome would not be pretty.

It will be fantastically hard for Ukraine to manage the situation diplomatically but, they can certainly use all the help they need. Yushchenko and Tymoshenko need to understand that this issue is bigger than any of them individually.

A first step is the elimination of dependency of Russia. I am sure they understand that but, it is generally hard to implement since the vision and results are quite long-term.

I wish them the best.

]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-415733 415733
Here's why:

On Mar 05 06:55 PM Chester Sing wrote:

>
> How big is £12.3 trillion or $17.3 trillion? According to this (flagcounter.com/factbo...)
> source, the latest GDP of the US is $13.8 trillion. And this is just
> the exposure of banks in the EU.
>
> A portion of this amount will probably get purchased and honored
> if a fire sale is held. How much? I do not know. One thing I know,
> however, is that a fraction of this amount is big enough to wipe
> out many.

All those gains are only on paper! They rely on assets that should have never been valued at that price. They are off-balance sheet. They cannot be compared with assets on the balance sheet.


> Therefore, the argument that the unemployment increase will be marginal
> if financial institutions are allowed to fail, to me, is not believable.
>
Believe you me, it is not only about employment. It is about fixed costs of employment. These are two inter-related items.


> A number of you seem to be absolutely sure that the outcome in the
> event that financial institutions are allowed to fail would be better.
> But I have yet to see any strong proof.

Here is some proof. Housing in the CA, FL, NV, AZ markets was allowed to fail. Guess what happened? Assets were purchased at fire-sale prices, with cash money on hand. Extrapolate that.

> Is Japan’s decade-long stagnation really attributable to the rescue
> made to its financial institutions after the crash of the late 80s?
> Are you absolutely sure that is not because of other factors?

Pretty sure, just like many economists before you and I.

> Economics is not a hard science. Controlled experiments are unheard
> of in macroeconomics. Please try to keep this in mind.

Actually Economics is a hard science and extrapolation can be achieved using the right examples. If you need help with that, please let me know. See example above, and many other economies before this time.


> Now, a commentator suggested that the Great Depression could have
> been shortened if banks were allowed to fail. I have news – they
> were allowed to fail.
>
> “In the first six months of 1929, 346 US banks collapsed, and that
> was just the beginning of a series of bank runs.”
> *Source – (www.independent.co.uk/...)

Yes, but your timeframe if insufficient. If they were allowed to continue failing, the market was going to adjust itself. They were eventually bailed-out.

> It is a misconception that President Hoover acted exactly the way
> President Obama is acting now. On the contrary, President Hoover,
> probably did the opposite.

Probably? Not.

> Is there proof that the Great Depression could have been shortened
> if a Jim Rogers-like approach was taken? I am not aware of any so
> pray enlighten me.

Here's enlightenment for you. The aforementioned foreclosures, and the Sweden example. It is very similar.


> I also have yet to hear a case wherein an economy recovered as a
> direct cause of allowing failed financial institutions. Once again,
> I would like to be enlightened.

Here's how you envision this: take the profits now, but take the losses in 10-30 years. How is that for pain? Because in the end, you will still follow that curve giving you 3-5% growth. Yes, it's demographics plus advances in productivity. Baring that, you cannot get to the numbers showed recently.


> A rational human being submits to logic. Trust that I will submit
> if sufficient evidence is presented.
>
> I have the utmost respect for Jim Rogers which I thought should have
> been apparent by reading the first paragraph of my article. Please
> do not get me wrong. I am merely criticizing his position on the
> crisis.

Yes, but barely. If you read more about him, you would understand his position better.


Regards.]]> Fri, 06 Mar 2009 09:07:55 -0500
Here's why:

On Mar 05 06:55 PM Chester Sing wrote:

>
> How big is £12.3 trillion or $17.3 trillion? According to this (flagcounter.com/factbo...)
> source, the latest GDP of the US is $13.8 trillion. And this is just
> the exposure of banks in the EU.
>
> A portion of this amount will probably get purchased and honored
> if a fire sale is held. How much? I do not know. One thing I know,
> however, is that a fraction of this amount is big enough to wipe
> out many.

All those gains are only on paper! They rely on assets that should have never been valued at that price. They are off-balance sheet. They cannot be compared with assets on the balance sheet.


> Therefore, the argument that the unemployment increase will be marginal
> if financial institutions are allowed to fail, to me, is not believable.
>
Believe you me, it is not only about employment. It is about fixed costs of employment. These are two inter-related items.


> A number of you seem to be absolutely sure that the outcome in the
> event that financial institutions are allowed to fail would be better.
> But I have yet to see any strong proof.

Here is some proof. Housing in the CA, FL, NV, AZ markets was allowed to fail. Guess what happened? Assets were purchased at fire-sale prices, with cash money on hand. Extrapolate that.

> Is Japan’s decade-long stagnation really attributable to the rescue
> made to its financial institutions after the crash of the late 80s?
> Are you absolutely sure that is not because of other factors?

Pretty sure, just like many economists before you and I.

> Economics is not a hard science. Controlled experiments are unheard
> of in macroeconomics. Please try to keep this in mind.

Actually Economics is a hard science and extrapolation can be achieved using the right examples. If you need help with that, please let me know. See example above, and many other economies before this time.


> Now, a commentator suggested that the Great Depression could have
> been shortened if banks were allowed to fail. I have news – they
> were allowed to fail.
>
> “In the first six months of 1929, 346 US banks collapsed, and that
> was just the beginning of a series of bank runs.”
> *Source – (www.independent.co.uk/...)

Yes, but your timeframe if insufficient. If they were allowed to continue failing, the market was going to adjust itself. They were eventually bailed-out.

> It is a misconception that President Hoover acted exactly the way
> President Obama is acting now. On the contrary, President Hoover,
> probably did the opposite.

Probably? Not.

> Is there proof that the Great Depression could have been shortened
> if a Jim Rogers-like approach was taken? I am not aware of any so
> pray enlighten me.

Here's enlightenment for you. The aforementioned foreclosures, and the Sweden example. It is very similar.


> I also have yet to hear a case wherein an economy recovered as a
> direct cause of allowing failed financial institutions. Once again,
> I would like to be enlightened.

Here's how you envision this: take the profits now, but take the losses in 10-30 years. How is that for pain? Because in the end, you will still follow that curve giving you 3-5% growth. Yes, it's demographics plus advances in productivity. Baring that, you cannot get to the numbers showed recently.


> A rational human being submits to logic. Trust that I will submit
> if sufficient evidence is presented.
>
> I have the utmost respect for Jim Rogers which I thought should have
> been apparent by reading the first paragraph of my article. Please
> do not get me wrong. I am merely criticizing his position on the
> crisis.

Yes, but barely. If you read more about him, you would understand his position better.


Regards.]]> http://seekingalpha.com/article/124552-another-european-bank-problem-good-news-for-the-dollar-and-inflation?source=feed#comment-415538 415538
It is preferred to have more money in the market, even at the risk at running a high inflation for the short term. That can always be resolved later, if managed appropriately (perhaps an improved version of the 70's and 80's cycle).

]]> Fri, 06 Mar 2009 06:41:30 -0500
It is preferred to have more money in the market, even at the risk at running a high inflation for the short term. That can always be resolved later, if managed appropriately (perhaps an improved version of the 70's and 80's cycle).

]]> http://seekingalpha.com/article/124335-bofa-wells-fargo-no-equity-after-accounting-for-bad-loans?source=feed#comment-415492 415492 --------------
"But continuing the analogy, if the fire sale price that I could sell my house for in 1 day is $20k, but I could put it on the market and sell it within 6 mos for $150k, and perhaps 1 year for $180k, what's the house actually worth? To me, it's $150-180k, because I have no intention of giving it away at a fire sale."
-------------

The problem with your analogy is that it will take 10-30 years for the assets to raise to the same level as in 2007, not 6 month. Thiese aren't futures you are selling but, hard, tangible products.

There is a reason why houses shouldn't have been securitized. Because selling the underlying security assumes that one holds that house for 30 years. But, investment firms took the haircut immediately, vs over 30 years. Simple short-term vision.

So, if it's worth $20k now and you need to sell it, that's what you get and even if you wait a few more months you're still not gaining much. In this market, you're lucky if you get even that price.

It is all about asset protection, not about making money out of housing.




]]> Fri, 06 Mar 2009 04:58:35 -0500 --------------
"But continuing the analogy, if the fire sale price that I could sell my house for in 1 day is $20k, but I could put it on the market and sell it within 6 mos for $150k, and perhaps 1 year for $180k, what's the house actually worth? To me, it's $150-180k, because I have no intention of giving it away at a fire sale."
-------------

The problem with your analogy is that it will take 10-30 years for the assets to raise to the same level as in 2007, not 6 month. Thiese aren't futures you are selling but, hard, tangible products.

There is a reason why houses shouldn't have been securitized. Because selling the underlying security assumes that one holds that house for 30 years. But, investment firms took the haircut immediately, vs over 30 years. Simple short-term vision.

So, if it's worth $20k now and you need to sell it, that's what you get and even if you wait a few more months you're still not gaining much. In this market, you're lucky if you get even that price.

It is all about asset protection, not about making money out of housing.




]]> http://seekingalpha.com/news/market_currents/post/19262?source=feed#comment-414391 414391 Thu, 05 Mar 2009 12:01:12 -0500 http://seekingalpha.com/article/124348-u-s-automakers-race-to-the-bottom?source=feed#comment-414329 414329
GM, F, and Chrysler should find their own innovative solutions to sell their brands.]]> Thu, 05 Mar 2009 11:33:17 -0500
GM, F, and Chrysler should find their own innovative solutions to sell their brands.]]> http://seekingalpha.com/article/124335-bofa-wells-fargo-no-equity-after-accounting-for-bad-loans?source=feed#comment-414310 414310 The homes do not have a $0 value because someone will pay a fire-sale price for them even in this market. It has been proven already in CA, NV, AZ and FL.

Waiting 10-30 years to get those assets back to 2007 values is unacceptable.
]]> Thu, 05 Mar 2009 11:25:39 -0500 The homes do not have a $0 value because someone will pay a fire-sale price for them even in this market. It has been proven already in CA, NV, AZ and FL.

Waiting 10-30 years to get those assets back to 2007 values is unacceptable.
]]> http://seekingalpha.com/article/124332-genentech-s-bullish-forecasts-are-not-in-line-with-wall-street?source=feed#comment-414298 414298 Thu, 05 Mar 2009 11:20:36 -0500 http://seekingalpha.com/news/market_currents/post/19219?source=feed#comment-414016 414016 Thu, 05 Mar 2009 09:27:36 -0500 http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-413776 413776
1. It is not half the population that made these irresponsible investments in housing. The percentage touches 10%, as previously stated elsewhere, from which many were just pure investors.

2. If you save the 10% at the expense of the 90%, you have just entered Socialism and disregarded all the tried and true bankruptcy laws, older than many of us, implemented by our forefathers with a view to re-inventing oneself.

3. Bankruptcies do not imply massive layoffs beyond what have already taken place and what is coming anyway. In bankruptcy, Ch 11 - a la Lehman, the assets are being sold at fire-sale prices to the higher bidder. The operations continue the next day.

4. If we take example from other economies (So, Korea), wage reduction should be applied, not layoffs. A company needs to reduce the fixed cost and be flexible; unlike UBS that just increased base wages to make up for bonus losses.

5. The underlying obligations that banks claim should not be written off at market-rates will need 10-20 years to recover. Thus, it is more than just paper money, it is as if it doesn't matter anyway.

6. There are several manufacturers, banks and other industry companies that would love to pick up assets at reduced prices. These will continue running the businesses and the concentration of power will spread just like diversifying a portfolio.

7. Jim sees more blades of grass on his farm because he has seen both farms in person, and probably many more farms than many of us will see in a lifetime (read more about him).

We should all be lucky like that.

Regards.

]]> Thu, 05 Mar 2009 07:12:38 -0500
1. It is not half the population that made these irresponsible investments in housing. The percentage touches 10%, as previously stated elsewhere, from which many were just pure investors.

2. If you save the 10% at the expense of the 90%, you have just entered Socialism and disregarded all the tried and true bankruptcy laws, older than many of us, implemented by our forefathers with a view to re-inventing oneself.

3. Bankruptcies do not imply massive layoffs beyond what have already taken place and what is coming anyway. In bankruptcy, Ch 11 - a la Lehman, the assets are being sold at fire-sale prices to the higher bidder. The operations continue the next day.

4. If we take example from other economies (So, Korea), wage reduction should be applied, not layoffs. A company needs to reduce the fixed cost and be flexible; unlike UBS that just increased base wages to make up for bonus losses.

5. The underlying obligations that banks claim should not be written off at market-rates will need 10-20 years to recover. Thus, it is more than just paper money, it is as if it doesn't matter anyway.

6. There are several manufacturers, banks and other industry companies that would love to pick up assets at reduced prices. These will continue running the businesses and the concentration of power will spread just like diversifying a portfolio.

7. Jim sees more blades of grass on his farm because he has seen both farms in person, and probably many more farms than many of us will see in a lifetime (read more about him).

We should all be lucky like that.

Regards.

]]> http://seekingalpha.com/news/market_currents/post/19109?source=feed#comment-412352 412352 Wed, 04 Mar 2009 08:21:25 -0500 http://seekingalpha.com/news/market_currents/post/19037?source=feed#comment-411163 411163
There are sufficient banks with strong balance sheets that would love to take over failed businesses and make it their own. Give them the chance.

]]> Tue, 03 Mar 2009 11:21:28 -0500
There are sufficient banks with strong balance sheets that would love to take over failed businesses and make it their own. Give them the chance.

]]> http://seekingalpha.com/article/123757-jim-rogers-it-s-better-to-let-financials-fail?source=feed#comment-410631 410631
It seems to me that the government is looking to replace the bankruptcy courts when the best job is instead done by filing Chapter 11, re-org.

For the government plan to work, the values of the bubbled assets need to be revived. Does that mean 10, 20, 30 years? Surely the same government will not even be around by that time to realize that this choice was not feasible.

Unfortunately, most us will be around and we will only have us to blame if we don't ask for these companies to go bankrupt now. Take the medicine now - it tastes bad, but the downside if it's not taken, is that the virus could mutate in a worse shape.


]]> Tue, 03 Mar 2009 06:38:49 -0500
It seems to me that the government is looking to replace the bankruptcy courts when the best job is instead done by filing Chapter 11, re-org.

For the government plan to work, the values of the bubbled assets need to be revived. Does that mean 10, 20, 30 years? Surely the same government will not even be around by that time to realize that this choice was not feasible.

Unfortunately, most us will be around and we will only have us to blame if we don't ask for these companies to go bankrupt now. Take the medicine now - it tastes bad, but the downside if it's not taken, is that the virus could mutate in a worse shape.


]]> http://seekingalpha.com/article/123374-how-the-death-of-citigroup-can-give-life-to-the-markets?source=feed#comment-407559 407559
I believe that more gains are to be achieved by letting Citi go bankrupt. Selling it at discount for parts to all those interested will be more beneficial in the long term.

As an individual, I am not interested in any of the assets I would receive as part of the government purchase. Somewhere has been mentioned that it will take another 10 years to get to the same bubbled prices of 2007. I would rather invest my money elsewhere during that time.

Yes, letting Citi go is the only viable option but, I want my options in investing my money any way I want.

]]> Sun, 01 Mar 2009 07:32:49 -0500
I believe that more gains are to be achieved by letting Citi go bankrupt. Selling it at discount for parts to all those interested will be more beneficial in the long term.

As an individual, I am not interested in any of the assets I would receive as part of the government purchase. Somewhere has been mentioned that it will take another 10 years to get to the same bubbled prices of 2007. I would rather invest my money elsewhere during that time.

Yes, letting Citi go is the only viable option but, I want my options in investing my money any way I want.

]]> http://seekingalpha.com/article/123313-jpmorgan-chase-lays-off-12-000-and-blames-wamu?source=feed#comment-407554 407554
Overall, this is a poorly written article that hardly justifies a comment.

]]> Sun, 01 Mar 2009 07:24:24 -0500
Overall, this is a poorly written article that hardly justifies a comment.

]]> http://seekingalpha.com/article/123049-how-innovation-sustains-prosperity?source=feed#comment-406807 406807
Does the ratio mean that MBAs are less meaningful? Perhaps less impactful but, certainly just as meaningful. Innovation and Development can be initiated both by engineers and MBAs. The first look at the details and discover something amazing, sometimes by chance. The second want something new in a certain direction but, don't know how to get there. They meet in the middle and create Innovation.

]]> Sat, 28 Feb 2009 06:22:50 -0500
Does the ratio mean that MBAs are less meaningful? Perhaps less impactful but, certainly just as meaningful. Innovation and Development can be initiated both by engineers and MBAs. The first look at the details and discover something amazing, sometimes by chance. The second want something new in a certain direction but, don't know how to get there. They meet in the middle and create Innovation.

]]> http://seekingalpha.com/article/122963-will-canada-s-housing-slump-play-out-like-america-s?source=feed#comment-404984 404984
Many of us may have wished that the US housing market had a slower ascend to remain consistently growing over the years instead of bubbling up at times with disastrous consequences for many.]]> Thu, 26 Feb 2009 16:43:08 -0500
Many of us may have wished that the US housing market had a slower ascend to remain consistently growing over the years instead of bubbling up at times with disastrous consequences for many.]]> http://seekingalpha.com/article/122246-time-to-rethink-the-thirty-and-out-retirement-program?source=feed#comment-404109 404109
Yes, it becomes more apparent when the demographics skew toward the elderly, but that will continue since we plan on living longer.

If you retire at 55 and live until 85, who's money are you using those 30 years? Your children and grandchildren? How fair and realistic is that?

]]> Thu, 26 Feb 2009 07:09:00 -0500
Yes, it becomes more apparent when the demographics skew toward the elderly, but that will continue since we plan on living longer.

If you retire at 55 and live until 85, who's money are you using those 30 years? Your children and grandchildren? How fair and realistic is that?

]]> http://seekingalpha.com/article/122787-as-gm-goes-so-goes-the-nation-part-2?source=feed#comment-404104 404104
Re-group, find your core competencies (as suggested above) and use them wisely.]]> Thu, 26 Feb 2009 07:02:07 -0500
Re-group, find your core competencies (as suggested above) and use them wisely.]]> http://seekingalpha.com/article/122786-fixing-the-economic-crisis-in-six-easy-steps?source=feed#comment-404097 404097
Nationalizing will do nothing to the taxpayers but increase their burden. That includes you too.

So, I sold my shares in BAC and C so you can force them down my throat by purchasing them through the government and then lose even more money because they are insolvent? Let me just say that I don't subscribe to that point of view.

There are old and very good bankruptcy laws that are very alive and well. They were invented in Capitalism. Use them wisely. Take example from Saab.

Regards.]]> Thu, 26 Feb 2009 06:57:43 -0500
Nationalizing will do nothing to the taxpayers but increase their burden. That includes you too.

So, I sold my shares in BAC and C so you can force them down my throat by purchasing them through the government and then lose even more money because they are insolvent? Let me just say that I don't subscribe to that point of view.

There are old and very good bankruptcy laws that are very alive and well. They were invented in Capitalism. Use them wisely. Take example from Saab.

Regards.]]> http://seekingalpha.com/article/122807-dramatic-changes-in-the-u-s-dollar-gold-relationship?source=feed#comment-404090 404090
Nonetheless, since we know that the dollar has been strong in the last 1 year or so because of the dollar denominated redemptions in the market, the chart seems to suggest that inflation is coming.

This should correlate with a number of economic reports that the market is now more predictable. At least that's how I see it.
]]> Thu, 26 Feb 2009 06:46:03 -0500
Nonetheless, since we know that the dollar has been strong in the last 1 year or so because of the dollar denominated redemptions in the market, the chart seems to suggest that inflation is coming.

This should correlate with a number of economic reports that the market is now more predictable. At least that's how I see it.
]]> http://seekingalpha.com/article/122270-the-daily-double-martin-mayer-on-cds-nouriel-roubini-on-the-banks?source=feed#comment-401648 401648
disclaimer: no BAC or C stock - sold them years ago.]]> Tue, 24 Feb 2009 12:54:01 -0500
disclaimer: no BAC or C stock - sold them years ago.]]> http://seekingalpha.com/article/121774-please-gm-don-t-slit-your-own-throat?source=feed#comment-397161 397161 Fri, 20 Feb 2009 17:22:27 -0500 http://seekingalpha.com/article/121377-russia-s-pact-with-china-will-others-follow-suit?source=feed#comment-397155 397155
The oil deal is just the beginning of the dollar fall. China will pay in roubles and thus will support the Russian currency by selling the dollar. China will further buy Eastern European currencies against the dollars they have in order to diversify.

This will support the EE countries, China's diversification and the US dollar needs of more capital.

But, it needs to happen faster and China only likes things incremental.

Regards.
]]> Fri, 20 Feb 2009 17:16:32 -0500
The oil deal is just the beginning of the dollar fall. China will pay in roubles and thus will support the Russian currency by selling the dollar. China will further buy Eastern European currencies against the dollars they have in order to diversify.

This will support the EE countries, China's diversification and the US dollar needs of more capital.

But, it needs to happen faster and China only likes things incremental.

Regards.
]]> http://seekingalpha.com/article/121694-eight-reasons-bank-of-america-is-going-to-20?source=feed#comment-397149 397149
How can you call BAC at $20 when you can barely hope for 5 bucks in 2011? You must be joking. And you just lost those calls.

Post again in a year and follow-up on this every year...that is, if BAC is still listed anywhere.

Regards.]]> Fri, 20 Feb 2009 17:07:51 -0500
How can you call BAC at $20 when you can barely hope for 5 bucks in 2011? You must be joking. And you just lost those calls.

Post again in a year and follow-up on this every year...that is, if BAC is still listed anywhere.

Regards.]]> http://seekingalpha.com/article/121567-rick-santelli-speaks-for-the-silent-majority?source=feed#comment-395647 395647
What Obama is doing is nothing less than selling Socialism to America.

]]> Thu, 19 Feb 2009 16:30:31 -0500
What Obama is doing is nothing less than selling Socialism to America.

]]> http://seekingalpha.com/article/121448-too-big-to-bail-lehman-brothers-is-the-model-for-fixing-the-zombie-banks?source=feed#comment-394734 394734 Thu, 19 Feb 2009 08:26:36 -0500 http://seekingalpha.com/article/120680-canada-vs-u-s-whose-banks-are-safer?source=feed#comment-390147 390147
www.reuters.com/articl...

]]> Mon, 16 Feb 2009 05:37:23 -0500
www.reuters.com/articl...

]]>