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  • Ship Finance Gets Its Christmas Present  [View article]
    Good to have some breathing room in short term. But in the end, if oil drops enough and stays low long enough to hurt drillers, SFL won't be able to pay dividend, no matter how good they are at this game. Top down analysis is the key for the whole sector. I own this stuff, but I'm well aware that I'm merely long oil while collecting some interest.
    Jan 3, 2015. 07:30 PM | Likes Like |Link to Comment
  • A Speculative World About To Blow  [View article]
    Hmmmm, so the copper meltdown is due to Chininese unloading to unwind financing backed by the metal. But as the biggest recent buyers of physical gold, it isn't hard to imagine that this very monetary metal has also been pledged as collateral to get financing. Then why shouldn't gold suffer the same fate as copper?
    Mar 24, 2014. 05:28 AM | 1 Like Like |Link to Comment
  • Ukraine Crisis: A Decision That May Have Sealed The Fate Of The EU  [View article]
    Can they split up Ukrain and let Russia keep the Russian spoken eastern region? Wouldn't this both satisfy Russia's strategic interests and keep the Russian speaking miority out of the harm of nationalist Ukrainians?
    Mar 4, 2014. 12:45 AM | 3 Likes Like |Link to Comment
  • How To Retire At 30!  [View article]
    don't retire. chances are you will be happier than if you did, financial issues aside.
    Jan 30, 2014. 02:19 AM | 2 Likes Like |Link to Comment
  • Is The U.S. Bankrupt?  [View article]
    Everytime when you raise the issues that forced the poorly run local governments out of their misery, a Keynesian will answer with this: they can't issue their currency. This argument reflects the true belief of their bunch: there is no problem as long you can print your way out. It also logically follows that they fundamentally want to run all affairs that are currently being managed by states, because they can then engage the borrow/spend/print on national scale. They will never want to answer the question of "why Detroit becomes Detroit today" - that will be too inconvenient. They only lament Detroit's inabililty to print its own currency, or for that matter, Fed's inablity to launch a separate QE to buy a separate Detroit Relief Bond issued by Treasury. You see, there is no problem, if we can print. Actually, there is no problem if we have strong enough of a military (Krugmann himself once said that a country is nothing more than a welfare entity with guns).
    Jan 29, 2014. 03:14 AM | 2 Likes Like |Link to Comment
  • Is The U.S. Bankrupt?  [View article]
    Plus if you look at the components of GDP, the private sector way out performed the public sector, employment picture being the same. In other words, the slow recovery is the net effect of private sector growing and public sector shrinking - an evidence that hyper government spending isn't necessary. Steroids (debt) stimulated growth is a disaster in the brewing, but the true Keynesians don't mind it. It's easy for them to cry "squeezing the poor" because it makes them sound morally superior. But they are the ones who created the poor to begin with. The more poor they help, the more more poor they create, and the more powerful the politicians are. Ooops, I slilpped into political land...
    Jan 29, 2014. 02:57 AM | 3 Likes Like |Link to Comment
  • Is The U.S. Bankrupt?  [View article]
    Can't agree with you more... The Krugmann bunch are intellectually brilliant but politically dishonest. I read them carefully and I found a common theme - "yes such and such is a problem, but we are not imploding now so why try to fix it". They know very well that only crisis can force out some meager solutions, if at all, painful as they may be. The notion that problems can be solved when times are better is total crap in political reality. They know it, therefore, their real intention - or should I say their belief, is that we should keep rolling the dice of borrow, spend, crisis, borrow more, spend more, bigger crisis, on and on. Keynesianism is a ponzi scheme devised by the elite, wooing to a massive crowd who don't want to take the pain.
    Jan 29, 2014. 02:46 AM | 1 Like Like |Link to Comment
  • Why Bitcoin Matters  [View article]
    Any currency backed by limited supply of some tangible thing cannot be used to make loans - this is a practical concept, not a theoretical one. Say every loan is made to support a healthy legit business, and the new value created can only be measured by the same amount of "hard money". What we then must live with is that the creditor shall get paid less hard money then he has loaned out because with increased value and same amount of money, the money is worth more. If 1 unit of money is lent out as credit and has created 1.05 unit worth of old value, then getting back 0.98 unit of repayment represents a gain of purchasing power. By this rule, workers shall get paid less and less hard money - deflation indeed. With fiat money, it goes the other way. We print money to advance credit, in a hope that the value created by this credit is more than the amount of money that got printed. Since printing is easier than value creating, we always absue it, ending up with creating more credit (money) than the value the credit is suppoed to bring out. Therefore fiat money is well accept because we know too well that human nature is dishonest.
    Jan 28, 2014. 03:45 AM | Likes Like |Link to Comment
  • Why Bitcoin Matters  [View article]
    Agreed. However, it can co exist with fiat money which is gradually debased for sure. Unlike gold that is hard to be transferred easily, BitCoin can. If it can be a meaningful tool for payment, then it can also be a storage of value. The value of the ability to hold value shall be determined by the market.
    Jan 28, 2014. 03:18 AM | 3 Likes Like |Link to Comment
  • Market Decline: Get A Grip!  [View article]
    Dude, let's play a little wager, shall we? How much are you willing to bet for the end-of-month default from China? Specifically we are referring to the China Credit Trust issued and ICBC distributed "Credit Equals Gold #1 Collective Trust Product". I will match your bet, 1 for 1. Yeah?
    Jan 28, 2014. 01:15 AM | 1 Like Like |Link to Comment
  • The Ticking Time Bomb Under The World Economy  [View article]
    Except twice in the past one hundred years Uncle Sam was called in to settle wars among you guys, not to mention its effort to dismantle the Soviet Union who otherwise would likely to have taken Euroland as its play ground.

    Last but not the least, about the FREE stuff that Europeans enjoy and Americans dream of. Please bear with your well educated fine European mind the No. 1 rule of economics , which a Tea Party endorsing peasant surely will not miss out, THERE IS NO FREE LUNCH!
    Jan 27, 2014. 12:16 AM | 2 Likes Like |Link to Comment
  • The Ticking Time Bomb Under The World Economy  [View article]
    Thank you for such a clear explanation of the key idea behind Euro - a monetary constraint that hopefully can enforce the solution to a set of political problems. However, as a none southern European I philosophically doubt its citizen's resolve for painful structural reforms. Yes, as you accruately elaborated, Euro strips away politicians' pre-Euro era convential tools with which they could dance around the problems. But it doesn't mean the illness can be cured - the real medicine can simply be too strong for a body that resists it. Asia had to swallow its pills after 1997, living by a set of supply side rules imposed by IMF. Arguablly they are in better shape today when coping with a looming slowdown and the credit problems associated with it. I ascribe this to cultural qualities, in that Asians place individual rights to prosperity and freedom at a lower priority to their forced loyalty to their rulers. They don't have a sense of entitlement to life's better side and see hardship a necessity in life. Correct me if I am wrong, I don't see these qualities in southern European people. Euro can try to impose upon them, but they will buck it to the point of breaking it. I hope that the slow give-and-take between northern and southern Europeans can lead to a more balanced and structually sustainable Euroland, but I am doubtful that it will materialize.
    Jan 26, 2014. 11:30 PM | Likes Like |Link to Comment
  • Higher Treasury Yields Reflect Less Pessimism  [View article]
    Volatility market agrees with this analysis, in that the reality seems to be more in line with expectation. The rates option levels are very depressed.
    Jan 22, 2014. 11:43 PM | Likes Like |Link to Comment
  • Fed Talks About Price-Level Targeting  [View article]
    Just a gentle reminder: you forgot to add ObamaCare to the list :)
    Nov 29, 2013. 03:01 AM | 2 Likes Like |Link to Comment
  • Don't Underestimate The U.S. Dollar  [View article]
    In defense of the author, allow me to explain.

    Baring a conspiracy, which is another topic entirely, Treasury didn't collude with Fed in monetizing debt. In other words, if Fed didn't do QE, Treasury would sell bonds at its own pace and designated size anyways, albeit at higher cost. The Treasury's borrowing is a function of fiscal policy, ultimately determined by Congress (sequester, debt ceiling, government shutdown, etc.), not the Fed. Once bonds were issued, assets were created - someone would have to use their savings to buy them.

    As the author pointed out, what the QE did was to replace those assets with lendable ones - the "printed" dollars. The intent was to prevent the bond assets from going into the institutions who otherwise would lose the savings reserve, in a hope to force them to sit on the excessive liquidity so they can lend - an inflationary and desireable act.

    But that's not what happend. Institutions simply used the excess liquidity to buy financial assets instead of lending. The supposed inflation (other than that of the asset prices) couldn't happen because the "printed" money couldn't multiply itself - something that it is supposed to do. Unless money is lent out to create M2,or to pick velocity via trading of goods and services, which directly relates to GDP growth, the net effect of QE is pretty close to an asset swap within a credit system.

    I hope this answers your angry question.
    Nov 29, 2013. 02:48 AM | 1 Like Like |Link to Comment