Victor84

Goldman Sachs' Latest Initiative: Business Plan or Charitable Donation?

It's not even a "donation", it's an investment just like any other, which also happens to double as a convenient PR stint.

Whatever they can do to make a buck, they will do. Ethics, morals, charity have absolutely no room in the world of investment banking; anyone's who's been in the business knows it is a completely ruthless world. You either get burned out after 1-2 years or you become hardened.

And while they have no direct link to the average American, goodwill is incredibly important for any public company. The constant scrutiny they are under and the fact that it is currently untenable to support GS cannot be positive for Goldman.

Markets Cheer the Buffett Buy

He makes mistakes too, but I'm sure he has done 1 million times the research that this author has done regarding the deal, ergo I will give him the benefit of the doubt.
There is still no better way to transport goods across this vast nation of ours. Transportation costs will steadily increase over time (check out exploding Fedex/UPS rates) and this is a vital industry. He got a bunch of hard assets cheaply by buying with overvalued BRK stock.

Today's Stimulus Comes with a Depression of Potential Expansion in the Future

If we took a hands off approach to this mess, where would it have left us? Probably in the same place in the end, but possibly even worse off. There would've been a snowball effect --- faster job losses, faster deterioration of assets, a greater risk of economic collapse in the short/medium term, and guaranteed deflation. Bash what was in the stimulus, not the thought of stimulus itself.

Still Concerned About Tone of Market's Advance

Eventually you SA'ers will be correct and a pullback will occur. Just like it happened at 700, 800, 900, 1000. Not saying you're wrong, but it does get comical after a while.

The Government Sponsored Bubble

Even accounting for inflation, housing has been a positive-sum game for decades. For everyone who is underwater or lost significant value on their home, someone else has gained as much as you have lost. The author is surely right that America has a difficult road ahead, but casually blaming government for this "bubble" is ignorant at best and fearmongering at worst. Acknowledging the severity of the crisis and concluding that the reason for the Great Depression was due to the meekness of the response, the government has gone "all in" in an attempt to avert disaster. Now whether they did more harm than good will be left for history to decide.

Will Q3 Earnings Slow the Rally?

There may be a correction on better than expected earnings, but that would appear to be a decent buying opportunity. If the past months have taught us anything, behind the scenes, there seems to be a lot of momentum promoting a synchronized global recovery. With the dollar losing value, liquidity levels either normal or improving on most fronts, interest rates at a low for the foreseeable future, it's hard to imagine another panicked flight to safety.

From a value perspective, small caps, European companies, and corporate bonds seem attractively priced, absent another recession.

Doug Kass: A Self-Sustaining Recovery?

We're losing the jobs because people in China/India work for $5/day. You can talk all you want about how currency is artificially depressed, but the fact of the matter is, we are due for some lifestyle correction. It is not a birthright that every American own a home. We have not had to deal with legitimate global competition for a long time and now it is time for us to awaken from our fairy tale.

Why E*Trade Is a Must Buy

EBIDTA is roughly $300-350 million a quarter, not a year. E*Trade has a great first-in-class platform, both from a presentation and the technology standpoint. I agree that their administrative and customer services can be cleaned up, but there's a reason why E*Trade is growing even in this environment.


On Sep 21 06:30 PM buddhabill wrote:

> "E*Trade expects total net charge-offs of between $350 million and
> $375 million during 3Q09, down from $386 million in 2Q09"
>
> ...so they are losing 1.3 Billion per year on their loan portfolio,
> and have EBIDTA of $305mm. No spank you.

Is the Recession Really Over?

I believe time is the rarest of commodities during a full blown recession such as this one. Households, small business, large corporations alike are adjusting to the "new reality". Coordinated global stimulus and universal low interest rates have bought people time to adapt, innovate and eventually thrive in the seemingly distant future. Indisputably, the long term direction of the market is up; why else would we invest in the first place? Debt, unfunded liabilities, and job losses seem to be the biggest reasons for extreme pessimism. Jobs will inevitably turn flat/positive at some point. The debt is not crippling as the earning power and confidence in the US is intact even with the staggering numbers out in the open. We have had continually increasing 40%+ Debt to GDP ratios for many decades of this bull run, but now everyone is freaking out because this increase has happened drastically as opposed to stealthily bit by bit.

Consumer Deleveraging

No one is saying our economy will grow back to the heights of 3 years ago. These 'esteemed' economists are just saying that we will possibly return to growth this quarter based on where we are right now. Jobs are stabilizing albeit not improving. Inventory, stimulus, and unlimited interest free money in the financial markets makes for a fertile environment. It's not about how much GDP we have already lost, it is about if things have improved enough to be classified as growth.

Bears Might Miss a Remarkable Recovery

The "faith based" rally will keep on rewarding through the end of this year. To the reader who said that freedom not confidence is the key to the economy, What are you not free to do? Confidence is the glue that keeps this pyramid upright. Confidence that x company will keep churning profits and dividends for years to come, confidence that your favorite spec play will bust out, confidence that your real life dollars are being invested in companies with real worth. Looking at the PE of an index or the "fundamentals" of the economy will not get you very far in the market; everyone has access to that information. What almighty being says that the GDP has to grow at a 4% rate to justify this level? There's been a 5% increase in unemployment, but a 1% increase in salary (to those still employed) and a 4.5% increase in purchasing power (according to this article). There's been an enormous downtrend in revenue, but that downturn was an immediate capitalistic reaction by the consumer to deleverage as quickly as possible during the heart of the recession. YoY revenue cannot help but be up significantly as we end the year and I believe we will see a slight overall revenue uptick every quarter.

We are not the only country to offer extraordinary stimulus. I'm sure some here will decry some worldwide conspiracy of helping the rich and stealing from the poor. At what point in human history has this not happened?

Tuesday Outlook: Commodities, Global Markets

This is funny. I remember the last "mild" recession in America. People were blaming the government back then for all their troubles looking for conspiracy theories under every nook and crany; the 2008-? edition is just 10x worse in economic severity and blogger sensationalism.


On Sep 01 09:33 AM Speakeasy wrote:

> Seeking Advice, in my community town hall meetings have been packed
> by individuals who were previously politically inactive. I for one
> am a registered Independent whose family fled communism many years
> ago. The tactics and policies of this administration bring back
> far too many memories of the old country. No "partisan stimulant"
> here - this runs deep and for once many in this country are waking
> up to the fact that the mainstream media's role has been to keep
> the masses sedated!

What Investors and Traders Should Do Right Now

He's just sharing what he's invested in. I like the idea of mixing up some solid dividend plays with some small caps and speculative homerun picks. For trading purposes, speculation can even defeat the trend. Corporate, investment grade debt is also very attractive right now.


On Aug 20 03:51 PM Alan Young wrote:

> Am I missing something here? Does this article say anything at all
> except "buy the stocks I'm long in"?

No Great Depression Redux

Just curious, but where did the 12 trillion number come from? Backstopping up to 12 trillion does not equal 12 trillion more debt. As long as the yield curve stays flat, the present dollars are directed wisely, and the printing spigot turns off at some point, we should be OK.

No Great Depression Redux

How is the public innocent when we're the ones fueling this insane consumption pattern? We take these luxuries for granted and are quick to blame the big institutions for collapsing the fairy tale that we live in. It is ultimately individual Americans who thought it was a great idea to buy a laughably unaffordable house or to buy things to the point of negative net worth. As for jobs, the ones that are needed will come back and the ones that were BS will not. We are so far behind other developed and even a couple emerging countries (India/China) in math/science/technology, that no wonder we were losing hundreds of thousands of jobs a year through outsourcing. Working in finance is not productive, building another mall or housing complex is not productive, building millions of surplus cars that no one wants is not productive. Sorry for the tangent.