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  • Entrepreneurs and business owners take note, President Obama says: "If you've got a business - you didn't build that. Somebody else made that happen." The comment, made at a speech the President gave at an appearance in Roanoke, Virginia recently, has gone viral, with the internet swamped with images of the President telling innovators such as the Wright Brothers, Thomas Edison, Steve Jobs and others "they didn't build that." Kevin Costner's famous line in "Field of Dreams," parodies Obama: "If you build it... we'll still say you didn't really build it."  [View news story]
    It gets not better with the whole quote as it shows a mindset and a Pres that doesn't get it. The commitment, the risk the pain of starting a business and trying to make it go. And most fail.

    I guess if an entrepreneur cannot take credit for starting a business then the rest of can take no credit for anything. But Obama can take credit for a lot of things and no responsibility for problems.

    Jul 18, 2012. 03:49 PM | 8 Likes Like |Link to Comment
  • Rex Nutting's column asserting "Obama's spending binge never happened" has created a buzz in some high places, and it's true that the president's spending levels are little changed from FY2009, the last Bush budget. But that was a TARP-inflated one-off, and Obama must take the blame for choosing not to reverse that elevated level of spending... or for not spending enough.  [View news story]
    The general feeling amongst the working class at all levels is that they are not willing to pay more taxes while the government continues to spend at record levels. They don't trust the extra taxes will do anything but add more fuel to the fire. For government officials to talk about more taxes as a responsible measure while they have done nothing responsible in a very long time has created a chasm of trust. Government officials are not leading and that is what they were elected to do not point fingers back at the working class. We have the largest dearth of leadership in WDC in a number of decades.

    Another issue is that the tax code is so complicated that it does not engender trust either and the working class is getting hit with AMT which is the biggest "gotcha" kick in the teeth and breeds cynicism.

    The only way I believe we can get our government back under control is to downsize it. They play one interest group off against another to maintain their power all the while taking more from the economy. The suckers are the people and especially the working class and future generations that are having a debt load dropped on them along with inflation.

    It is debatable if our fiscal condition is already too far gone as our debt and obligations appear to be 2X our GDP and 1X is a trigger point for serious problems but certainly it will not get any better on the current trajectory. And as pointed our already our cost of debt is unbelievably low right now for unsustainable reasons.

    The most important observation I can make is that it is critical for large government to maintain its power by obfuscating the real issues and pitting people against each other. Ideally if issues are laid out clearly with balance most people will come to similair conclusions but that does not create a power base for politicians and that is their primary objective.
    May 26, 2012. 11:25 AM | 8 Likes Like |Link to Comment
  • Three JPMorgan (JPM) execs connected to its $2B trading loss will leave the firm this week, according to the WSJ. Bruno Iksil - "The London Whale" - will be stripped of trading duties.  [View news story]
    All large banks were forced to take the TARP funds. Do some reading.

    The Fed's low interest rates are related to bailing out our massive federal deficits not banking. A steeper yield curve advantages the banks.

    Might as well make a clean sweep............comments about Obama and Congress are dead on. They have squandered Trillions.
    May 13, 2012. 07:57 PM | 8 Likes Like |Link to Comment
  • The housing crisis is five years old. But for local governments that depend heavily on property taxes, the lag between falling home values and property re-assessments means the housing market bust is just beginning to ravage tax revenues.  [View news story]

    Actually the unnatural deployment of capital to the housing industry has been going on for many decades and started by Dems. You probably already knew that but you are too busy deflecting and not accepting responsibility.

    So how about this for size? Obama apparently was really good at community organizing and fixing problems.

    What has he fixed so far? NOTHING.
    Dec 26, 2011. 07:20 PM | 8 Likes Like |Link to Comment
  • So the U.S. lost S&P's AAA rating for the first time in a 70-year history; so what? Mark Thoma says this is S&P erring on the only side it can after blowing the pre-crisis situation. Always pragmatic Warren Buffett says solvency's not an issue when the debts are all in currency the U.S. can print; inflation, that's another story. Ready to buy on this coming dip?  [View news story]
    Considering our trajectory and their trajectory it does make sense.

    Our government takes ownership through regulation and taxes. Never mind they took stakes in all the banks, AIG and GM.
    Aug 6, 2011. 12:30 PM | 8 Likes Like |Link to Comment
  • So the U.S. lost S&P's AAA rating for the first time in a 70-year history; so what? Mark Thoma says this is S&P erring on the only side it can after blowing the pre-crisis situation. Always pragmatic Warren Buffett says solvency's not an issue when the debts are all in currency the U.S. can print; inflation, that's another story. Ready to buy on this coming dip?  [View news story]

    We suck less but we still suck. We don't have control of our finances and we will only control them once a gun is to our head. In that sense we are no different than Greece. More downgrades are coming on our current trajectory and we must believe in our own BS if we believe it will not have consequences.

    Our debt is a problem and your logic around owing money to ourselves is illogical and uninformed. Real countries and people own that debt including a ton of Americans that depend on it through 401K's, pension funds, insurance companies, etc. Parsing the debt load based on who owns it does not relieve the debt burden and defaulting is not an option.

    With respect to capitalism; Every rationale country and person is a capitalist when they make decisions. They just don't admit it. Do you invest in A with a 10% return or B with a 2% return and all things are equal. So you have just made a capital decision.

    Now do you invest in A with a 10% return or give money to B which will spend it on personal consumption and come back for more? If you pick B then you are more socialist. You are not looking for a return but rather you are giving away wealth. By this measure the US has a pretty big socialist streak in it.

    People give their capital to money managers to make these decisions for them and they are deploying it around the world as the US has low returns and a lot of uncertainty. So people talk a big game with other peoples' money but then they invest outside of the US. US Corporations are investing outside of the US. Foreign corporations are pulling capital out of the US. See HSBC's recent announcement.

    At this point China has a better grasp of capitalism then does the US.
    Aug 6, 2011. 11:45 AM | 8 Likes Like |Link to Comment
  • The sky hasn't fallen, and the Obama administration's persistent warnings that the market would react negatively to the debt ceiling crisis may have undercut its negotiating position. “They have lost all credibility,” former TARP chief Neil Barofsky says. “It’s so typical of the way Treasury and the Fed treat everything - always to warn that Armageddon is coming.”  [View news story]
    First Barack is an egotist. Then everything comes after that.
    Jul 26, 2011. 11:28 PM | 8 Likes Like |Link to Comment
  • "The debt level of the U.S. is disastrous," says Eurogroup chief Juncker, scratching his head over why the EU is the "epicenter" of sovereign debt worries. Is he not aware of the U.S. privilege of being able to create the money to service its debt with just a few keystrokes?  [View news story]
    This is an ugly contest and it is hard to declare a winner when one peels back the layers of the onion. The US has no political will to really manage its debt and Europe has certain member countries with the same problem.

    I am starting to come to the belief that if the US collapses so will Eruope and vice versa. The connections between our economies is too great.
    Jun 11, 2011. 08:30 PM | 8 Likes Like |Link to Comment
  • Over the past month, the percentage of Americans pessimistic about the direction of the economy has jumped to 39% from 26%.  [View news story]
    Are you talking about the top 2% IRS filings or are you talking about the people with old money that own all the moldy municipal bonds, stocks and real estate and don't pay much in taxes?

    People paying top 2% in IRS filings come and is not the same population every year. Should they complain that they get raped for marginal tax rate that is 50% or more when you add it all up? Or should we all work for the government for 4 to 6 months per year before we take home one dime?

    Should Americans complain that they pay SSA for 40 to 50 years and then on average only get 6 to 12 years of benefits? That is organized robbery. Maybe the government should let people work and collect SSA so they are not so damn poor. Also cut off the

    Should I pay for someone elses children? Tell me why. I have kids and neices and nephews that could use my help. I would like to have 5 kids come to think of it but I am too busy working to support other bums with kids which come to think of it totally refutes Darwin's Survival of the Fittest theory. So if two breeding age people want to get together and pump out kids and work 3 jobs to support them then they should do it. Just don't send me the bill because I have an extended family that could really use a leg up and they don't get checks from the government.
    Apr 22, 2011. 07:58 PM | 8 Likes Like |Link to Comment
  • The question is worth raising again: “Why, in the aftermath of a financial mess that generated hundreds of billions in losses, have no high-profile participants in the disaster been prosecuted?” Gretchen Morgensen's take suggests that the FBI, SEC and Treasury Department may have quashed attempts to be more aggressive. (earlier)  [View news story]
    So you put Terry Killinger of WAMU or Mozillo of CountryWide on the stand and start to tear them a new one and then they say something like "well when I had dinner with Barney Frank and the head of Fannie Mae in 2008 they thought I was doing a great job. And that was after years of beating me up to extend lending to low income people."

    That's why we don't have any prosecutions.

    Never mind fraud is very tough to prove because it involves proving knowledge and intent and that is a high standard.
    Apr 14, 2011. 07:06 PM | 8 Likes Like |Link to Comment
  • QE2 is working precisely because it is weakening the dollar and driving stock prices higher, Paul Krugman writes: "In a highly indebted society, you might hesitate at policies that would increase private debt further, but if stocks are driving the story, the consumers now spending more aren’t the same people who are in debt trouble - so that’s actually OK."  [View news story]

    Since the government is 25% of GDP and also has the power to regulate the other 75% then I would say that we are more centrally planned than anyone could have imagined when we started this poor little outpost almost 250 years ago. As a matter of fact we cast off the central planners in England to gain our own economic freedom and lo and behold we have ventured back to where we started from.

    Central planning is really a form of arrogance that we the few know more than the unwashed masses but at a baser level turns out to be just another way to transact money for power for even more money. We need government that works for the people rather than works them over. Every day we are being robbed by deficit spending that we cannot pay back.
    Apr 4, 2011. 08:43 PM | 8 Likes Like |Link to Comment
  • You may not see it when you look at your paycheck, but you just took a pay cut, as wages remain stagnant while inflation surges. "Bernanke has created an environment of high corporate profits and falling wages, which makes it cheaper to hire and, voila, the unemployment rate goes down [but] if companies do not hire before inflation takes hold, then the entire experiment fails."  [View news story]
    The altered reality is when people say the economy is improving and they ignore the massive amount of debt and promises that the government sector has piled up and the falling living standards of most Americans and long term unemployment. And a housing sector that sucks and increasing costs of food and energy. Other than that the economy is just hummng along and everyone is happy.

    People are paying attention and they are not comfortable with all of these issues and they see the trajectory going the wrong way on a number of them. Each household now owns on average about $200K of Federal debt and there is another $50 to $100 Trillion of unfunded government promises looking for funds.

    How are we going to avoid massive inflation and/or taxes with numbers like these?
    Apr 2, 2011. 10:15 AM | 8 Likes Like |Link to Comment
  • "I wouldn’t panic about what I’m about to say," but... Jamie Dimon (JPM) says "a hundred" municipalities "may not make it." Not quite channeling Meredith Whitney, "it's not going to be in the thousands," he reassures. Zero Hedge sees one ultimate winner: Jamie, provider of "ingenious" solutions that will see his bank "end up with even more assets formerly belong to taxpayers."  [View news story]
    Jamie was way rich before he even took the Bank One job never mind JPM. Actually he was very useful in the 2008 crash because he had built a very strong balance sheet and operation and was one of the few banks that could even consider taking on some of the failures like Bear and Wamu.

    Don't forget JPMorgan's fiascos in the early part of last decade with Enron. They could really make a mess of stuff all by themselves before Jamie arrived.

    I don't know how he grows the bank a lot bigger as he is battling the law of large numbers.
    Mar 30, 2011. 07:09 PM | 8 Likes Like |Link to Comment
  • "I wouldn’t panic about what I’m about to say," but... Jamie Dimon (JPM) says "a hundred" municipalities "may not make it." Not quite channeling Meredith Whitney, "it's not going to be in the thousands," he reassures. Zero Hedge sees one ultimate winner: Jamie, provider of "ingenious" solutions that will see his bank "end up with even more assets formerly belong to taxpayers."  [View news story]
    Jamie has been around Wall Street forever so he is probably talking from really good information as he has seen a list or he has extrapolated from a list of known problems. He also says it is not "thousands" but there is a lot of room between 100 and thousands.

    It is pathetic that we have munis going broke at any level. Just don't spend and speculate like crazy and collect the taxes. How hard is that?
    Mar 30, 2011. 06:32 PM | 8 Likes Like |Link to Comment
  • The Truth About the U.S. Housing Market [View article]
    My points are that the "bubble" was driven by many factors lining up to drive housing upwards past the point of affordability and land use policies have been part of the story forever but are only part of the story to explain the activity of the past 10 years. In addition these markets are so different that we are comparing apples and oranges. Detroit is thrown out for obvious reasons but we also need to throw out NY as that is an international real estate market not domestic. You could argue the same about Miami. Chicago is land bound on one side which is important because unlike Atlanta you can only push out in 3 directions and really perhaps only 2 directions have land to develop since as you go south you are hemmed in by a lot of industry and the Indiana border takes over where Lake Michigan left off. As you go north and west you find yourself 30 to 40 miles outside Chicago with horrible traffic and you are willing to pay anything to live closer or change jobs because your quality of life is terrible sitting in traffic every day or bouncing around on the train. Looking at marginal land use policies loses some meaning as the marginal land may be so far from the city they are no longer connected.

    In addition land availability is not a real market where the laws of supply and demand exist. There is ridiculous cronyism on zoning boards and there is no supply available to the home buyer because it is a market dominated by large land developers and they hold the land hostage for higher prices because there is no other place to go for the buyer.

    What is really needed is a very large amount of land like in places like Texas where the buyer has a lot of choice, zoning boards have little importance and developers and the like cannot corner the supply.

    I don't have a problem with the analysis as it is useful and looks at one of the elements driving housing but real estate is much more complex than what is being stated. If it was this simple we would have worked through this problem a long time ago.

    It reminds me of my finance professors who really knew investment theory but were not active investors because their theories were challenged constantly and they lost money. I still valued their insight and their models but being religious about models ignores the reality on the ground.
    Jan 7, 2011. 11:02 AM | 8 Likes Like |Link to Comment