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LKofEnglish

LKofEnglish
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  • Inflation And Investing: A Different View [View article]
    to me the most critical value is the value of the dollar. the dollar collapsed under the Bush Administration...and there was no saving Wall Street as a consequence. To me the "PTB" did exactly the right thing in response to the crisis: "contain, contain, contain." Obviously it was neither pretty nor even legal. The Fed came out in support inflation ("inflation targeting") and expressed no interest whatsoever in calming Congresses "urge to splurge" as well. As a consequence the deflationary impact of the catastrophe sans housing "worked" in the sense that prices of all commodities...to the extent they fell at all in the crisis...zoomed right back after the collapse. Since commodities themselves are a small component of inflation this in fact was not "truly" inflationary in that as a percentage of over all price of a good "labor is by far the biggest component" and it had for all intents and purposes been wiped out in the ensuing collapse. The problem has come in the high handed arrogance of this Administrations opening year in which jobs really played no role in setting policy. Instead "an individual mandate" vis a vis health care dominated the totality of political discussion. THESE costs rising were i think were very alarming as pricing the American people out of the private insurance market as has been done gives rise to the belief that no matter the payments made "there still will be no care." A sentiment i agree with. And of course "this was the tip of the iceberg" in the form of "fleecing savings." Education (public and private), fuel, food, etc...all up in price while the two only assets that matter (house, job) both down to non-existent. The oddity that "no one is truly speaking of these people" (to some extent they are being spoken to of course) is quite extraordinary to me. This IS the American economy! It is amazing "it was for this reason we fought World War II" yet in the midst of a multitude of wars "it's time to give that idea up for good" seems to be the "Atlas Shrugged" whatever of our age. The irony of course is never before have so many solutions been presented to this nation. "Choice theory" indeed. "All the bad ones are to be made" as they say. I simply refuse to add the moniker "by everyone" however.
    Mar 28, 2012. 05:55 AM | Likes Like |Link to Comment
  • Comparing Liquidity Of Microsoft And Apple And Both Compared To Other Cash Rich Companies [View article]
    so what does all this cash do exactly? in other words "where's Berkshire Hathaway on your list?" Microsoft, Cisco, Pfizer and Merck are postal children for why "cash and cash equivalents do not a successful equity make"...at least until recently. Obviously Apple is in the "other camp" at came about their cash through superior product and fanatical attention always "moving the ball forward." Even Exxon/Mobil has failed on that score. So much of US business has been lecturing and hectoring...to the point where the entire US financial system blew up "and they don't seem to care." Well..."what have they done of late?" I'm a huge fan of Oracle cuz if the US Government had listened to Larry Elison instead of Joe Lieberman after 9/11 we'd have a couple trillion less in debt right now. Obviously it shows in the economies of their respective states relative to revenue. California may be broke...but that's still a huge economy. Connecticut is still some type of "tax haven"...for now. The fact of the matter is all this cash only says to me "the company may very well be out of ideas as well." They're paid to take risks..."die trying" if you will. Growing up and living in a sea of dead cities as i do teaches you that. "and so many more dead cities to go" i might add...
    Mar 27, 2012. 01:54 AM | Likes Like |Link to Comment
  • Odds In The Skeptic's Favor [View article]
    i think asking "the price of what" is probably what matters. "the price of a house" is important since for most that is the most important purchase they will make in their lifetime...if they are stupid enough to do such a thing. "the price of little things" remain firm--food stands out...fuel obviously. No one can deny the inflationary bias of the Central Bankers--how can the price of copper soar after housing has collapsed? No one is obviously talking new construction--and that is all that matters when it comes to housing and "moving the ball forward" in that space. This is a generational collapse--deals galore in all sorts of consumer discretionary (boats, cars, televisions, computers, etc) as all of that space is tied to housing. I'm hoping to be long "salmon fisheries" as one cure for debacles such as this. If the government is making lots of baby salmon into big salmon that want to run up raging rivers so that us crazy humans can get a fishing rod and try and catch them then i think a lot of us would stay out of a lot of trouble. As it is "this is still 'merica"--land of hookers, gambling and drink. And a housing market that did this: http://bit.ly/GNlNzW
    Mar 26, 2012. 04:32 AM | Likes Like |Link to Comment
  • Frustrating Friday As Euro, Sterling Bounce Back [View article]
    Germany is going to smash the EU to pieces. They are currently running a budget surplus--while every other nation in the EU plunges into the abyss. Basically "they have enslaved Europe" without firing a shot. The Euro is MASSIVELY over-valued for all but Germany right now--and the threat of the crack-up as a result pushes up US equities, oil, treasuries and the dollar. Gold is clearly getting victimized for the forseeable future as the security follow on's for such a calamity are as grotesque as they are inevitable. Fears of a bank run are causing large amounts of physical capital to be moved to the USA while this plays out. Shall we talk Japan as well? "Additive" comes to mind.
    Mar 23, 2012. 08:27 PM | Likes Like |Link to Comment
  • A Demand Side Revolution? [View article]
    Germany is now running a budget surplus while the rest of the euro-zone literally goes bankrupt. And yet they all have the same currency? For how much longer? Mere weeks?
    Mar 23, 2012. 08:27 PM | Likes Like |Link to Comment
  • Figuring Out The ECRI's Recession Call [View article]
    i'm of course i big fan of the actions taken by the Federal Government in response to the collapse of Wall Street in 2008. There was much to said for a Great Depression-like double dip last year...yet it did not materialize. Ben Bernanke clearly deserves the bulk of the credit with the Fed's brilliantly executed policy of "twist" along with the..."call option" of "interest rates staying exceptionally low until 2014." The Republicans may score political points in calling for the Chairman to resign...but in my view it would be mistake. He has not explained the limitations of monetary policy vis a vis the importance of fiscal responsibility...having said that i'm not sure Congress has been in a listening mood for a decade or more. If there is "Super Mario's mild recession" back here in the USA it should not come as a surprise. The bottom line is however "the USA is ready." I'm not sure i agree vis a vis Europe however.
    Mar 23, 2012. 07:22 PM | 1 Like Like |Link to Comment
  • BATS officially withdraws its IPO, citing "technical issues" that affected trading in its shares and others. The news caps a memorably ugly day for the trading exchange, one that started with a report of an SEC investigation and only got worse from there.  [View news story]
    did they pull it or go bankrupt?
    Mar 23, 2012. 07:21 PM | Likes Like |Link to Comment
  • The Aftermath Of The Housing Bubble Looks Good For Equities [View article]
    "bubble management" is a tough business. the only thing we do know is it takes decades for a market to recover after they collapse. When the DJIA collapsed in 1929 it wasn't until the 60's that it finally broke a thousand. A lot happened in the interim i might add. (cue to Japan and Nikkei 40,000--or Nasdaq 5,000 for that matter.) I agree our "house flipping days" are done in the bubble sense for decades. To me it represents as much an opportunity however as it does a peril. We are talking houses...so what if they're cheap? that sounds ideal for household formation which is the basis of an actual economy--instead of course the "regulators" are all "focused on a number" and "trying to fix a price" because "this can't get paid, that can't get borrowed"...blah, blah, blah. Well....http://bit.ly/GRN5HB
    Mar 23, 2012. 11:27 AM | 1 Like Like |Link to Comment
  • It's too far too fast for KB Home (KBH), plummeting 15.5% premarket on an earnings miss after a 67% moonshot in the shares YTD. Q1 net orders of 1,197 were off 8% from 2011 Q1. Gross margin declined to 9.7% from 12.6% a year ago. Order backlogs represent $460M in sales against $353.6M this time last year.  [View news story]
    "frothy" does seem a fairly accurate portrayal...in the housing space as usual.
    Mar 23, 2012. 09:06 AM | Likes Like |Link to Comment
  • Driving Down The Cost Of Production - Natural Gas Companies Can Still Make Money [View article]
    "bullheadedness" indeed. a little luck doesn't hurt either.
    Mar 22, 2012. 02:24 PM | Likes Like |Link to Comment
  • A Skål To Old King Coal [View article]
    "that 70's show" all over again. these capital expansions are truly massive..yet underneath it all is a revolution that's going to shake the entire commodity mo-mo'ers for a thousand years. Sure natural gas DRILLING is water intensive...but then the drilling stops and "you get the gas." If you want to mine a billion tons of coal...you're gonna need A LOT of water over A LONG period of time. The irony of course is that all these greenhouse gases we've created has made so much abundant sunshine that once the solar plays are unleashed these mega projects are going to end up still born. I will be watching Japan very closely to see how they "residentialize" the solar space. This is "the answer" to the nightmare of nuclear power...and coal. Oh, and..."bone up on some of the engineering on those hydro projects" while you're at it. Stick with United Technologies for energy plays "of today, tommorrow and everyday going forward." GE has obviously had a nice run YTD. We'll see if they can keep pushing forward in spite of all the technologies they created (industrial diamond mfg, gas turbines, fuel cell batteries) but gave or had taken from them.
    Mar 22, 2012. 12:44 PM | 2 Likes Like |Link to Comment
  • BP, Exxon Mobil (XOM) and ConocoPhillips (COP) are discussing a $40B project to export natural gas from Alaska to Asia, sources tell the FT. However, the companies first need to reach an agreement with Alaska's government regarding a North Slope oil and gas field; the government claims oil giants have been too slow to develop the field, and has sought to revoke their lease.  [View news story]
    this would be one hell of a project that's for sure. Don't count out East Asian engineering prowess in pulling it off either. As I recall Sarah Palin wanted the natural gas to go through Canada to the Lower 48 as well. Of course she's in Arizona now so she doesn't have to fight for both Alaska's interests and the USA's...so all the rest of you can celebrate having your nat gas go Westward instead!
    Mar 22, 2012. 12:38 PM | Likes Like |Link to Comment
  • Why Higher Interest Rates Are Not Bad News [View article]
    eh. maybe. Here's how i look at it: "we're now losing money in the treasury complex...which means there's less money to throw around for other things like equities, real estate, etc." i do understand how in theory a "carry trade" can become more profitable for the banks via a "borrow short to lend long"...thus improving credit flow via the credit spread. given how hobbled the US banking system still is (nearly collapsed just last year) it's hard to imagine how even with all their admitted massive amounts of "cash just sitting there" gets used for anything other than share buybacks, dividend increases and...ahem..."more regulatory arbtirage." In other words...ask the guy pictured above here what he thought about "bailouts"...and then you'd understand the difference between a real banker and "what passes for one" these days. And to think..."he volunteered his financial types for a gold standard" unlike the free money standard we have today. All i have to say is "thank God for risk capital." At least someone is trying to grow an economy.
    Mar 21, 2012. 11:23 AM | Likes Like |Link to Comment
  • Portfolio Strategy: In Praise Of Concentration [View article]
    well a company itself can be "diversified." Oracle is good example: constantly buying and selling companies has been a powerful managerial tool for some time now. "Quiet companies" like Buffet's favorite Coke has many advantages however. "Normal humans understand it"...including the CEO and everyone underneath him/her. It's hard to argue with "pedigree"--companies with a history of success. having said that capitalism thrives on "the new new thing." cloud computing, nat gas, solar power, etc...for those that have fit the risk profile...(decades of successful active fund management under the belt) i say go for it--but again, i really have a hard time arguing with Jack Bogle (theoretically of course) when the government is fooling around with the value of money.
    Mar 20, 2012. 09:53 AM | 1 Like Like |Link to Comment
  • Are Risks To U.S. Equity Prices Increasing? [View article]
    Treasuries have sold off. Expect equities to follow suit. "People are losing money" metric. Usually causes "stupidisms."
    Mar 20, 2012. 09:52 AM | Likes Like |Link to Comment
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