Send Message
View as an RSS Feed
  • The Myth of the Great Bond 'Bubble'  [View article]
    You should account for the role of bond funds & ETFs in the runup in bond assets. You could hold to maturity if you own the bond.

    But should there be liquidity event where others are selling their recently bought bond fund/ETF then the bond manager will have to realize the loss from interest rate increase and sell them. Bond investors will see this loss whether they continue to hold it or not.

    The key issues is the magnitude of the rise in interest rates, shape of yield curve, degree to which bond investors sell off funds/etf.

    Good article, well reasoned.
    Aug 19, 2010. 02:13 PM | 2 Likes Like |Link to Comment
  • Is Deflation Coming?  [View article]
    I would like to second Alex's comment above on the effects of US deflation on production/export economies (China, Japan, Germany)and input economies to them (Australia, Brazil, Canada, Norway). No way that stays within the US borders.

    So far the signs are for slow inflation, not yet in deflation (except for housing). We are still in hypothetical land, in case we forget.

    I also second the author's thoughts on taking on higher quality credits (investment grade) as long as yields are reasonable. Because in a deflationary environment the low quality companies will see declining sales and may run into bankruptcy.
    Aug 10, 2010. 04:50 PM | 1 Like Like |Link to Comment
  • Euro Crisis: The Hidden Agenda  [View article]
    They are also going to see domestic consumption decrease, business investment decrease as Europeans lose confidence and money flow out to the US to fund american growth. Brilliant.
    May 24, 2010. 05:43 PM | Likes Like |Link to Comment
  • More Money Went Into Bond Funds in 2009 Than in Last Ten Years  [View article]
    If you look at the yield curve in 2007, after lehmann, current. It shows a story that short & long bonds took a beating after lehmann, the short end stayed down but long end has recovered to the pre-Lehamann levels. While long term bonds will suffer more for the same % rise in interest rates. My analysis suggests that short end interest rates will rise further from zero than long end (already rise a fair bit).

    It is tradeoff between the larger % increase in the short end versus the higher impact of interest rate increase on the long end.
    Apr 26, 2010. 01:43 PM | Likes Like |Link to Comment
  • In the Throes of a Drawn Out Crisis  [View article]
    He is insightful, willing to consider alternative viewpoints and shares his thinking in constructive way. People recognize the value that he brings.
    Apr 1, 2010. 03:05 PM | 1 Like Like |Link to Comment
  • Three Reasons Analysts Have Rose-Colored Glasses Regarding Chinese Bubble  [View article]
    Good article, very logical. I do blame China for the Sub Prime debacle.

    The flood of liquidity that allowed wall street to package junk and sell it around the world, was facilitated by massive chinese trade surpluses ($200 -$600B) that were funneled into long term US treasuries at below market rates, this drove treasury buyers to seek yield in more exotic securities that drove the housing boom & bust.

    If you remember the downward sloping yield curve conundrum from 2004-05, is now recognized is massive Asian buying of long term US treasuries.
    Apr 1, 2010. 02:11 PM | Likes Like |Link to Comment
  • The Return of the Rand  [View article]
    The world cup is going to be very stimulative for South Africa
    Feb 17, 2010. 04:53 PM | Likes Like |Link to Comment
  • The Real Problem with PIIGS Debt  [View article]
    The deficits everywhere are only 1 part spending, the other substantial part is the collapse of revenues as people lose jobs, businesses close, spending decreases.

    The crowding out is more significant in an up economy where demand for credit is robust than a down economy where it is collapsing.
    Feb 17, 2010. 01:56 PM | Likes Like |Link to Comment
  • Emerging Economies Will Continue to Lead the Way  [View article]
    I agree with the thrust of your argument. But nothing goes up indefinitely and all of this countries will go through some kind of crisis in the future that will setback their growth.

    For now the consumer story is real and doing well.
    Jan 25, 2010. 02:44 PM | Likes Like |Link to Comment
  • The Outlook for 2010 in Commodities  [View article]
    Thank you for the post. You had a good discussion and well reasoned points about each commodity. I agree with many the themes you touched on.
    Jan 21, 2010. 02:20 PM | Likes Like |Link to Comment
  • Why It's Not 1982 Again, Part 2  [View article]
    I like that you presented a case, that I agreed in parts & disagreed as well.

    Part of the consumption decrease was a decision by the 80-90% of employed people to cut back spending and raise savings. When they revert to normal spending, not excessive, this will boost spending. The unemployed are spending from their savings and with government unemployment extensions.

    I am not arguing for a robust recovery in spending but modest one that sustains growth in 2010.
    Jan 5, 2010. 10:53 AM | Likes Like |Link to Comment
  • Why Value Investors Should Avoid Gold  [View article]
    Thanks for fighting the goldbugs and asking the fundamental question, what is the fair value of gold, how do you determine that, before you decide on it being a good investment.

    The vitriol you get doesn't answer that fundamental question.
    Jan 5, 2010. 10:10 AM | 1 Like Like |Link to Comment
  • Why Fear Keynes?  [View article]
    Prof McTeer,
    Thank you for an excellent piece and for the well thought comments after.

    I think the downward spiral and negative feedback loop that you describe where saving leads to lost sales leads to lost jobs and lower incomes which triggers further belt tightening and more pain was an accurate description of the last 2 years.

    I do think that when both people are companies are refusing to spend, govt spending can fill the void and arrest the spiral from private spending cuts.

    I do agree with your thoughts that in good times, govt should have a lower share of the economy and some comments here that the difficulty is in forcing them out of parts of economy post recovery.

    Thank you.
    Dec 30, 2009. 05:43 PM | 1 Like Like |Link to Comment
  • Success in 2010 Requires Investing in Other Countries  [View article]
    Thank you for staying the course in the face of all the negative commentary.
    You have always provided reasoned arguments for investments.
    Thank you
    Dec 29, 2009. 05:08 PM | Likes Like |Link to Comment
  • How Should We Improve Seeking Alpha's Comment Rating System?  [View instapost]
    Let me second this comment. The barrage of up and down comments based on the list below has discouraged many from the site and stopped them from commenting.

    I would also suggest that only the last 500, last 1000 comments be used for rating, some number to reward more recent comments.

    Maybe limit the number of comments per user for a specific user.

    On May 14 05:58 PM mr freddo wrote:

    > Here is the problem. The higher your rating, the more you generate
    > negative votes from other top rated commenters who wish to keep their
    > position. The system is open to blatant ballot stuffing and also
    > blatant negative voting.
    > So I wouldn't get too excited about being a top rated commenter as
    > a result. I could be the number 1 commenter tomorrow if I really
    > wanted to go to all the trouble to give John Lounsbury 1182 negative
    > votes on all of his comments.
    > For those who wish to have highly rated comments, here are a few
    > tips:
    > - say that gold is going to $5000
    > -say that we will be living in caves in 6 months.
    > -say that AIG executives should be imprisoned.
    > -say that Geitner should be fired
    > -say that all Wall Street bonuses should be confiscated.
    > For a low grade:
    > -say that things are getting better
    > -say that everything is going to work out fine
    > -say that the market will rise to 10,000 by year end
    > -say that Cramer is a genius.
    > -say that gold is going to $300 per ounce
    > -say that our system actually is working wel.
    > Personally, I have decided to write what I please and not worry about
    > the rating.
    Dec 22, 2009. 06:27 PM | 3 Likes Like |Link to Comment