The tax-cut deal is likely to deliver small benefits in return for very large costs, Paul Krugman worries. "The question... is whether a year of modestly better performance is worth $850B in additional debt, plus a significantly raised probability that those tax cuts for the rich will become permanent." Krugman says no. [View news story]
The exploding debt must be addressed asap. It is the biggest threat to Americas future and competitiveness. For once Krugman is looking at the long term horizon and maybe has shelved his uber Keynesian deficit spending proposals. However, eliminating the tax cuts should be coupled with spending cuts- so both sides of the aisle bear their share of the pain and voter anger. It is being reported that Americans want to reduce the deficit but maintain entitlements. With a childlike, have my cake and eat it too electorate, what can be expected from the politicians. Maturity and sober truths seem to be incompatible with our national mentality. Obviously, the country will opt for the wait and see option. Just wait and see .
The tax cut extension so far is only a "framework," and judging from these heated remarks, Obama still has some selling to do - to Democrats. James Kwak's reaction sums up the disenchantment in the liberal blogosphere: Obama could have killed the tax cuts and "done more good for our nation’s fiscal situation than anyone will be in a position to do for many years to come." [View news story]
The tax cut extension so far is only a "framework," and judging from these heated remarks, Obama still has some selling to do - to Democrats. James Kwak's reaction sums up the disenchantment in the liberal blogosphere: Obama could have killed the tax cuts and "done more good for our nation’s fiscal situation than anyone will be in a position to do for many years to come." [View news story]
Who were fiscally irresponsible presidents? en.wikipedia.org/.../N... Cutting taxes is popular and easy. The devil is in the spending side. Should have passed the balanced budget amendment when the economy was in better shape. To prevent budget forecasting monkey business, the current years' revenue should be the spending limit for the following year. Revenue could drop, buy over time it all would balance out. Nice pipe dream.
The bond market looks to be the story today with the yield on the 10 year treasury soaring 23 basis points to 3.16%. It's the highest yield since July and about 65 basis points higher than when the Fed began its program designed to lower long term rates. [View news story]
10 yr or 30 yr.- the yields were so low, that the potential for large losses was obvious and imminent. Congress and the Pres. seem in no hurry to get the deficit down, (au contraire- they are busy increasing it). The AAA rating on Treasury debt is a joke. This is one instance where the Chinese rating agencies got it right. The rest are way behind the curve. Bernanke just can't keep juggling the balls forever. It seems like they are dropping one by one.
Is the deficit scare just another in a line of horror plots out of Washington? All of the terrifying scenarios - bond buyer's strike, hyperinflation, plunging dollar - collapse if given serious thought. It may be a better idea to look at the motives of those pushing the horror story. [View news story]
Just keep doing business as usual (DC) and you will see the horror film jump off the screen. There are many ways we may arrive at the denouement- but all spell disaster.
Fiat's NatGas Cars Could Solve America's Oil Dependence [View article]
Most cars sold in Brazil in recent yrs. are flex- run on alcohol and gasoline. Alcohol becomes the cheaper option when it is 70% or less of the price of gasoline. Although new natural gas sources are coming online, Brazil for the time being buys ng from Bolivia.
Fiat's NatGas Cars Could Solve America's Oil Dependence [View article]
Lots of Fiats on the road in Brazil. I think the quality must have made a "great leap foward" . While my buddy was having his 128 problems , i was driving a used Renault 12 in 76-77; bit more reliable,roomier but not first class mechanically. My favorite ride in the 70s was the Saab 99, not as thrifty as the above cars but solid and safe. (curiously both the Saab and R12 are fwd but the engine is not placed transversely)- by the way, nat. gas may be cheaper down here but thats relative- gasoline in Br. is 2.8 reals a liter alcohol around 2 reals (but in some places and seasons it is lower- alcohol prices vary depending on the cane harvest, sugar prices etc) - the dollar is worth around 1.68 reals so i think it rounds out to about 6 bucks a gallon for gas and over 4 for alc. Brazil is expensive whatever fuel you use- with the overvalued fx it is the Switzerland of S.America
Fiat's NatGas Cars Could Solve America's Oil Dependence [View article]
Most of the taxis where i live in Salvador Brazil run on nat. gas as it is cheaper than alcohol or gasoline. However, they have to adapt the cars for n.g. and there are a limited number of stations to fill up at. Also the large tank uses up a lot of trunk space. I have been flabbergasted by the delay in the USA to move to alternative fuels esp. an abundant one like n.g. Brazil started the alcohol fuel program in the 70s. Kudos to Marchionne for helping America help itself (hopefully). I just hope that Fiat quality has improved since the 70s. Had a friend who bought a new 128 and had so many problems he junked it at 25,000 miles.
Gold ETF investing is coming to China. Authorities have given the go-ahead to a mutual fund that will invest in foreign exchange-traded gold funds. Inflation running at nearly 4.5% while bank deposit rates offer 2.5% have driven interest in precious metals investing. [View news story]
"Inflation running at nearly 4.5%" Why do some people accept stats as if they were written in stone. With a myriad of ways to manipulate inflation stats and knowing how the Chinese system works; how can anybody take this number seriously. I can assure you the Brazilian real inflation number is not the reported number either. The benefits derived from understating inflation to governments and other institutions are easy to understand.
Petrobras: A Blue Ribbon Stock for Long Run [View article]
Would be a great company if you could take the politics out of the decision making. As long as the person who ultimately calls the shots is the Pres. (soon to be Dilma), profits take a back seat to milking the state controlled Petro cow. PBR is no Exxon; the unions and Partido dos Trabalhadores have the control. Don't oversing the praises of "pragmatic" Lula and Dilma. The damage they leave behind will be revealed in the coming years. Compare PBRs' performance to Vale and you will see the difference between a government run company and an actual privatized one.
It's not just the U.S. where price indexes aren't reflecting real inflation, Marc Faber says - China's inflation is really more like 10% per annum. Talking to Bloomberg TV, he says "China and the U.S. are on a collision course, both economically and politically." [View news story]
Understating inflation is commonplace and advantageous to govts. Brazilian inflation is probably around 10% too. There are so many ways to adjust weighting and manipulate the stats. Food inflation in Brazil is predicted to be 20% next yr. and i think China as well.
Brazil: The Other Election ETF Investors Need to Watch [View article]
I know Serra is desperate to get elected but this "centrist" is promising a 13th monthly payment for the Bolsa Familia program -just like salaried workers get. He also promises to raise the minimum wage from the current 510 reals to 600. The proposal of the current govt. is a rise to 538. He appears to trying to outdo the PT in fiscally irresponsible vote buying but it isn't working as he is 12 points behind Dilma.
Just One ETF: Small-Cap Composition Makes for a Brazilian Consumer Play [View article]
To put in perspective the quandary that Brazil is in regards to the hyper-overvalued Real observe the following: in 1994 when the Real was introduced the Real was in rough parity with the US dollar staying in the .8 to 1.2 range until early 99. The minimum wage was 65 Reals in 94. The min. wage is now 510 and slated to rise to 538 next yr. The dollar is now at 1.68 So we are looking at an eightfold rise, while the fx adjusted barely 2X. Other basic costs such as energy,communications, transport, and fuels have seen increases similar to the minimum wage, which is a critical, determinant factor in Brazilian inflation. Commodity price rises have cushioned the blow for agricultural and mineral exporters . It is the manufactured export sector that has suffered. The huge rise in imports from China and elsewhere is outpacing exports. To reverse this process is difficult as long as Brazilian interest rates remain so high, govt. spending (and borrowing) growth continues to surge with the PT poised for another 4 yrs. at the helm, and the flood of foreign money pouring into to bonds,stocks etc. With international reserves on course to hit 300 billion if the Central Bank continues its interventions, one can assume that the current account deficits will not poise a problem for a long time. With unemployment low by historical standards, there is little clamor for protectionist measures at this time apart from certain sectors facing the Chinese onslaught.
Petrobras' (PBR -1.1%) $70B stock sale was an “abomination” that treated minority shareholders unfairly and may signal an "IPO bubble," Templeton's Mark Mobius says. "It means that people are just not looking at the values and irrationally buying these things.” [View news story]
Do you think that marxist Lula is worried about creating value for the stockholders? Caveat emptor when buying these govt. controlled entities. Politics and unions have more sway than normal business priorities.
Whirlpool Ready to Clean Up in Emerging Markets [View article]
The tax-cut deal is likely to deliver small benefits in return for very large costs, Paul Krugman worries. "The question... is whether a year of modestly better performance is worth $850B in additional debt, plus a significantly raised probability that those tax cuts for the rich will become permanent." Krugman says no. [View news story]
The tax cut extension so far is only a "framework," and judging from these heated remarks, Obama still has some selling to do - to Democrats. James Kwak's reaction sums up the disenchantment in the liberal blogosphere: Obama could have killed the tax cuts and "done more good for our nation’s fiscal situation than anyone will be in a position to do for many years to come." [View news story]
The tax cut extension so far is only a "framework," and judging from these heated remarks, Obama still has some selling to do - to Democrats. James Kwak's reaction sums up the disenchantment in the liberal blogosphere: Obama could have killed the tax cuts and "done more good for our nation’s fiscal situation than anyone will be in a position to do for many years to come." [View news story]
The bond market looks to be the story today with the yield on the 10 year treasury soaring 23 basis points to 3.16%. It's the highest yield since July and about 65 basis points higher than when the Fed began its program designed to lower long term rates. [View news story]
Is the deficit scare just another in a line of horror plots out of Washington? All of the terrifying scenarios - bond buyer's strike, hyperinflation, plunging dollar - collapse if given serious thought. It may be a better idea to look at the motives of those pushing the horror story. [View news story]
Fiat's NatGas Cars Could Solve America's Oil Dependence [View article]
Fiat's NatGas Cars Could Solve America's Oil Dependence [View article]
Fiat's NatGas Cars Could Solve America's Oil Dependence [View article]
Gold ETF investing is coming to China. Authorities have given the go-ahead to a mutual fund that will invest in foreign exchange-traded gold funds. Inflation running at nearly 4.5% while bank deposit rates offer 2.5% have driven interest in precious metals investing. [View news story]
Petrobras: A Blue Ribbon Stock for Long Run [View article]
It's not just the U.S. where price indexes aren't reflecting real inflation, Marc Faber says - China's inflation is really more like 10% per annum. Talking to Bloomberg TV, he says "China and the U.S. are on a collision course, both economically and politically." [View news story]
Brazil: The Other Election ETF Investors Need to Watch [View article]
Just One ETF: Small-Cap Composition Makes for a Brazilian Consumer Play [View article]
Petrobras' (PBR -1.1%) $70B stock sale was an “abomination” that treated minority shareholders unfairly and may signal an "IPO bubble," Templeton's Mark Mobius says. "It means that people are just not looking at the values and irrationally buying these things.” [View news story]