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The_Batman

The_Batman
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  • Turkey delivers big rate hike to defend currency [View news story]
    I can. Inflation is about 7.5%; GDP growth is sub 3%; public debt is low at 35% of GDP and unemployment is 10%. So not your typical crisis scenario. But problem is the net private foreign debt is $200 billion (1/4 of GDP) and the current account deficit is 7%. Without dollars they can't service the debt and more immediately finance the trade deficit. The problem would correct thru a naturally devalued currency but that would drive up inflation (particularly energy) and hurt foreign debtors. Which would further erode the exchange rate and around we go.
    This might work. I think the fear is increasing unemployment and political instability but their good debt position probably gives them some wiggle room if need be. However, you really need to understand their economy if you plan on investing. Headline investing is silly.
    But the bottom line is they can't grow at these interest rates so they need to address the structural issues. Good luck I say. I'll keep my money else where.
    Jan 28 10:29 PM | 6 Likes Like |Link to Comment
  • Obamacare's got an age problem [View news story]
    Not sure if there is an economic incentive to pull out from the exchange. Individual policies both in and out of the exchange must provide essential health benefits. So a bare bones outside the exchange just isn't going to fly. Given there are no subsides outside the exchange and very limited underwriting the only game in town is the exchange. Unless of course you want to focus only on group plans which don't play in the exchange anyway.

    However, I agree with a previous comment that the young will wait until 3/31. Better plans equal more cost. But after this first year I really do think choice and a level playing field plus a larger base will reduce cost trend. But we have to be realistic.
    Jan 14 10:34 PM | Likes Like |Link to Comment
  • General Electric Continues To Remake Itself [View article]
    Do you think they are going bankrupt? The author seems to advocate more debt with his talk of dividends and buy backs and complaints about falling ROE brought about by deleveraging.

    In any event, they are a bank with Ge Capital loaning about $400 million out to consumers and industrial clients.There will be an ipo this year to partially divest them of the consumer finance component.
    Jan 9 01:55 AM | Likes Like |Link to Comment
  • Macy's to close stores, lay off 2.5K; up 5% AH [View news story]
    Well I would say we care more about growth in the company's return on invested capital than growth in revenue, especially for a well established retailer. Closing stores when you have too many drives up returns and as an investor I applaud the move. As a person, I regret the loss in presumably well paying middle class jobs. This action tells us nothing about growth prospects.
    Jan 8 10:06 PM | Likes Like |Link to Comment
  • Is The U.S. Bankrupt? [View article]
    Roy,

    I appreciate your service to our country. However, I do not agree with you.

    Inflation is the rising of all prices, including wages, equities, nominal interest rates, gas and groceries. Yes it hurts idle cash balances but raises your income and home value. Do you want deflation? Why would you ever buy anything today if the price is cheaper tomorrow? All those fancy robots would be out of a job. And that is what everything is all about - maximizing production so we all have the highest standard of living.

    Why would I want an economy based on a yellow rock? That is a ludicrous as fiat money, right? Name a country that has survived on the gold standard?

    We do agree that there is a need for a more modern workforce with the skills to meet 21st century job requirements. So lets make sure we are spending on that please.
    Dec 21 01:01 AM | 9 Likes Like |Link to Comment
  • Is The U.S. Bankrupt? [View article]
    Smcguia,

    Look at you, swiping the Unions because they raise the standard of living for millions. We may have many problems but fair wages in exchange for one's labor isn't one of them.
    Dec 21 12:38 AM | 8 Likes Like |Link to Comment
  • The Big Five: Which Would You Be Willing To Own If They Closed The Market For 20 Years? [View article]
    Any strategy premised on growing loses twice as fast as sales is rock solid.

    Keep digging that moat and disrupting the establishment. With $44m in revenue, up a whopping $6 million in two years they may have already stollen 1/10,000 of Exxon's sales.

    The future is bright, indeed.
    Dec 20 02:51 AM | 1 Like Like |Link to Comment
  • Some Good Reasons To Be Bullish On The U.S. Dollar In 2014 [View article]
    I think the €/$ rate is fairly valued. I haven't given much thought to it but the OECD PPP table yields something like €1.29/$. Hopefully, someone with more expertise here can opine. Now if you factor in inflation and inflation expectations which both run higher, maybe significantly higher for the dollar you are getting pretty close.

    There might have been an overshoot due to the rapidly rising euribor but we are talking 5%. I think the jury is still out on which way the rate will go over the next several months.
    Dec 20 01:23 AM | Likes Like |Link to Comment
  • What It Really Costs To Mine Gold: The Goldcorp Third Quarter Edition [View article]
    Here's the link showing the cash cost as reported by Barrick Gold in their SEC filing:

    http://bit.ly/1aULvVY

    Page 83 shows $584 per ounce.
    Nov 14 01:35 AM | Likes Like |Link to Comment
  • What It Really Costs To Mine Gold: The Goldcorp Third Quarter Edition [View article]
    Ok. Let's just look at the financials. Page 83 of Barricks annual report shows $584 as the "cash cost". That number supposedly excludes depreciation (exploration, development, etc), taxes and a few other things.

    For kickers, Barrick says they will restate the cash cost down to $560 because of stripping costs that need to be capitalized per some accounting pronouncement. Makes you wonder what else they are putting in cost of sales.

    Also, I don't know the source of the Business Insider grid discussed above. But what I do know is that grid shows a non-weighted cash cost of $802 and NOT 1,097. And it is the $802 that excludes those things you mention that I call depreciation. The grid literally breaks it out. So what's the difference between the BI article and the financials besides a year. 1st the BI grid doesn't tell us the weightings per mine and secondly we don't know what the BI includes in costs (e.g does it offset costs with streaming revs?).

    Bottom line: marginal cost is much lower than $1,000 per ounce. So I guess we shouldn't buy gold, right?
    Nov 14 01:33 AM | Likes Like |Link to Comment
  • What It Really Costs To Mine Gold: The Goldcorp Third Quarter Edition [View article]
    The analogy of the flash crash used in this article as a description of the "short run" is not fitting. It implies that the short run is, well, short. Like 5 minutes short.

    Rational firms, including gold mining firms, will produce full steam ahead even if the revenue per unit does not cover the true, fully loaded accounting cost of production, as long as marginal revenue exceeds the marginal cost.

    So one question would be what does it cost to pull one more ounce of gold out of the ground and sell it - without the capex and mine development cost being expensed on the income statement? That is the number that will immediately curtail production.

    Otherwise, miners will reduce future development and capex which will reduce output over years, not weeks. I would not count on bankruptcies either, while there has been and will be some, these companies can last for longer than they should.

    So, in conclusion, the supply side of the gold equation is unlikely to determine price anytime soon. Gold is being driven down because demand is falling. Anyone telling you that a financial statement derived production cost sets a floor is either being disingenuous or very naive. Please note, the author has written several articles which I have not read and therefore do not express an opinion as to his beliefs or motivations.
    Nov 13 11:43 PM | 2 Likes Like |Link to Comment
  • A Black Swan On The Horizon? [View article]
    Sorry but a strong dollar means that foreign products cost less relative to domestic products. It also entails that foreigners accumulate a surplus of US dollars thus tending to maintain the dollar as the world's reserve currency.
    Nov 11 02:11 AM | Likes Like |Link to Comment
  • A Black Swan On The Horizon? [View article]
    Wrong, wrong and wrong. Foreign investors are not divesting from us bonds- total foreign holdings are up year over year and down less than 3% from an all time high set earlier this year. The fed is leveraged 50:1 or so? What are you talking about? Are you looking at "paid-in-capital"? Do you know what that is? If the fed holds to maturity it doesn't take a loss. Even if it sold early the loss wouldn't be $3 trillion - the entire portfolio is only $3.8. I don't think even a loss of hundred of billions would matter. The fed has INFINITE capital. And ample ways to control the cost of funds, including interest on reserves.

    You are touting a loon that calls Australia a puppet government? Seriously. Not to mention you don't seem to fully understand the difference between the federal reserve and us treasury.

    Stop trying to sell gold and stop repeating things you are too ill informed to critique.
    Nov 11 01:56 AM | 5 Likes Like |Link to Comment
  • Asia: 3 Warning Signs Of A Potential Bloodbath Ahead [View article]
    My bet is that there will be inflation when the excess capacity of our economy becomes fully utilized, and/or when inflation expectations become biased to the upside and/or unemployments drops below 5% for a sustained period.

    Minimum wage is about responsibility. It is irresponsible for our society to be subsidizing cheapskate businesses that don't provide a living wage. By subsidizing I mean food stamps and Medicaid benefits to employed individuals. A $1 or $2 increase in minimum wage will not lead to inflation.
    Nov 11 01:02 AM | 2 Likes Like |Link to Comment
  • Asia: 3 Warning Signs Of A Potential Bloodbath Ahead [View article]
    Did the author say he believes we are in a secular bear market since 2000? Hopefully, he sold in that year too otherwise he has sure missed a bunch of gains. Anyways, I'm tired of the backward looking commentaries on debt, borrowing etc. everything is viewed thru the lens of the great recession.

    I suppose you'll be right about the doom and gloom when enough time passes but you will never be insightful.
    Nov 11 12:46 AM | 1 Like Like |Link to Comment
COMMENTS STATS
41 Comments
66 Likes