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Dialectical Materialist

Dialectical Materialist
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  • Google, China and the Founder Factor [View article]
    It is hardly just idle speculation that China employs hundreds if not thousands of young hackers to breech sites of both foreign governments and organizations of special interest to the Chinese government. The problem is they are very good at it. While the world is naively expecting all nations to treat the internet the same, China is quietly developing a huge lead in how to infiltrate and strangle internet sources at will. Google's concerns about China stem from their own egos and how offended they are that they were used as patsies. But anyone could have seen this coming. Other nations will need to decide how they want to deal with China's emerging control over anything they want to control in cyberspace before China gets too far ahead of the curve.
    Jan 15, 2010. 10:53 AM | 8 Likes Like |Link to Comment
  • John Paulson's High Risk Hubris [View article]
    TXBanking: "Spend more time listening and less time bashing, you just might figure out that while you might not like that some on Wall St earn vast sums of money..." and "It's been my experience that only the small minded speak in sweeping generalizations and condemn entire industries."

    The original response was to someone who questioned the value of the lowly stock clerk. It is this kind of bashing that proves so many of the "numbers guys" are out of touch with who does the real labor in an economy. Sure we need bankers. But the second someone suggests that there is no real value in stocking grocery shelves is when I respond to suggest we need stock boys at least as much as bankers. As others have suggested, all the capital in the world will not feed your family. Far from being "uneducated" my response was grounded in the real world that so often escapes the notice of those who view the world through their charts on their computer monitor. Happily there are a great many people even in the world of finance (as these comments attest) that understand it takes a butcher, baker, and candlestick maker to have a real economy and their jobs should not ever be called valueless. To make such a suggestion when so many are our of work is even more inexcusable.
    Jan 15, 2010. 12:42 AM | 4 Likes Like |Link to Comment
  • John Paulson's High Risk Hubris [View article]
    "How much intrinsic value is there for example in placing products on supermarket shelves?"

    If you are refering to the stock clerk, I would argue the value of the work he is doing is a lot greater than that of most bankers when viewed from the actual productivity involved. The real work is done by folks who produce and transport and lug and package and carry real products. Sitting back making money off of moving numbers around on a computer may yield a higher profit (and hence have more "value") but it lacks any productive contribution to our society. This very fact is what will ensure that our economy stalls for years to come as we try to recover from our overindulgence in unproductive but lucrative activities at the expense of having an actually productive economy.
    Jan 14, 2010. 02:34 PM | 10 Likes Like |Link to Comment
  • Apple: At Cheapest Level of Steve Jobs Era [View article]
    The cash still counts, even if it is just sitting in the war chest. In fact one of the criticisms is that Apple doesn't earn much on all this $35B they have laying around. But I am so glad they did not do what Etrade did and try to get a return on their excess cash by venturing into something more speculative like MBS. So many companies got their fingers burned for going near that stove and Apple just walked by whistling, happy to be getting their 4%. The power that cash hoard affords them in terms of flexibility, the ability to take a defensive posture, or the ability to ride out any sudden downturns the economy may yet experience, is huge. It doesn't need to be given back in the form of a dividend to help the share holder.
    Jan 14, 2010. 11:07 AM | 1 Like Like |Link to Comment
  • Apple: At Cheapest Level of Steve Jobs Era [View article]
    If Econ 101 had anything to do with the way stocks actually perform, there would be no one making a ton of money in the market and no one going broke. Vast generalizations about patterns of how things work over time have very little value in predicting short term movements in stock and short term prospects for companies. On the flip side, such generalizations are equally useless at predicting the future, since the most important factor affecting the future is generally something that we don't know that we don't know. (e.g. trying to imagine life in the 2000's from the viewpoint of 1960 would be hard since you'd probably miss the impact of the internet.) Econ 101 is probably the worst starting place for an investor, although it might lead to a reasonably comfortable life in academia where things aren't as messy as in the real world. (c.f. Taleb's The Black Swan)
    Jan 14, 2010. 02:36 AM | 1 Like Like |Link to Comment
  • Housing Bubble: In Defense of Bernanke? [View article]
    Whoops, missed that. Just saw your picture and assumed. Sorry!
    Jan 11, 2010. 01:23 PM | Likes Like |Link to Comment
  • Humor for the Coming Week [View instapost]
    You should be able to thumbs up articles...
    Jan 11, 2010. 12:55 AM | 5 Likes Like |Link to Comment
  • Expect Apple to Lead Tablet Race Too [View article]
    Apple's desktop share is growing. And more to the point, if you have a point about market share it must be related to what...? That the company is not or will not be successful? And this is where profit margin fits in. If we were talking car companies and I said Mercedes or Porche had little market share, would that say anything about the possible success of their products? You are right that Apple does not have dominant market share. So what? The company is making boatloads of cash and has no debt and a 35 billion dollar war chest. It sounded like you were trying to say something about their prospects as a company, but if all you were saying was they do not have dominant market share, I'd say you're right.... and so?
    Jan 10, 2010. 11:53 PM | 1 Like Like |Link to Comment
  • The Financial System: More Dangerous than an Al Qaeda Attack? [View article]
    Good job. Thanks for steering folks to the NY Times piece, and your added color commentary is eloquent and spot on. I enjoy learning more about things I think I know.
    Jan 10, 2010. 10:06 PM | 3 Likes Like |Link to Comment
  • Expect Apple to Lead Tablet Race Too [View article]
    Poor marketing? Apple? We're talking about the tech company right, not the music label or some fruit stand or something? Because Apple Inc. has fierce marketing skills. And they are crushing the competition in profit margins. I have heard many criticisms of Apple, some legitimate. But this is the first time I have hears someone say they have bad marketing. Did you like those Jerry Seinfeld and Bill Gates ads better than "Hi I'm a Mac" by any chance? 'Cuz that would explain a lot.
    Jan 10, 2010. 09:34 PM | 1 Like Like |Link to Comment
  • Expect Apple to Lead Tablet Race Too [View article]
    I have a similar "if only I hadn't sold at $40" story. I'm sure lots of folks do. But in reality it was a nice profit at the time and waiting just in case it reached $300 seemed like fantasy at the time. Just be happy that you made money on the sale and try to move on. At least that's what I have been trying to do.... retirement sure sounds more fun than trying to remember why I sold them, but that is why I now continue to buy -- even in the low 200's. Hate to look back in 10 years when it is a split adjusted $1000 and say "gee if only..."
    Jan 10, 2010. 09:19 PM | 2 Likes Like |Link to Comment
  • Housing Bubble: In Defense of Bernanke? [View article]
    Edward, Randy Wray argues that low interest rates do not cause bubbles. You say you agree with him, yet I recall that you have stated or implied in the past that an asset bubble is forming in equities because people are chasing returns they can not get through other means because the interest rate is so low. Please comment and steer me straight if I'm mistaken.

    Regarding housing, you could argue an increase in interest rates did fuel demand for exotic loans that circumvented normal interest rates, so I don't think that the low interest rates were in an of themselves the problem with the sub prime mortgage crisis. But cheap money sure encourages leveraging and it was excessive leverage (on many fronts) that was the real root of the problem.

    Lastly, I take issue with this comment, "[...] combined with tight fiscal policy (which forced people to go more into debt and use their homes as an ATM proxy, with these horribly toxic mortgages)"

    Who forced people to use their homes as ATM's just so they could go on vacation or buy a nicer car? The House as ATM era was full of rampant consumption, and I do not recall a lot of stories about home equity being used to avoid trips to the food shelf. No, people greedily cashed out equity to get a piece of the good life by and large. Who would have thought that might not end well?
    Jan 10, 2010. 08:25 PM | Likes Like |Link to Comment
  • In Search of Economic Expansion [View article]
    Or instead of "Seasonally Adjusted" we could have "Seasoned to Taste"
    Jan 10, 2010. 06:30 PM | 3 Likes Like |Link to Comment
  • In Search of Economic Expansion [View article]
    What always stuns me about these "analyses" is that someone took so much time and presumably so much brain power to produce a document that even upon casual inspection, reflection, or research is patently false. Most of this is not even intriguing enough for a political thriller fiction novel. If the new world order has been a quest of these groups going back for the hundreds of years the usual claims maintain, these groups are clearly not competent enough to be a threat. And since they are not competent, they are certainly not capable of executing the fine scale tuning of international events that is also part of the usual tale.

    In short, we have been on the "brink" of this New World Order stuff for so long that I have grown tired of reading it even for the diversion it provides.
    Jan 10, 2010. 06:26 PM | 2 Likes Like |Link to Comment
  • No Hiring Yet [View article]
    Yeah the fed has been zirping the stuffing out of us. Or perhaps I'm thinking of another word.
    Jan 10, 2010. 02:41 AM | 1 Like Like |Link to Comment