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  • Gabelli Utilities Fund And The Stealth 50% Dividend Cut: Bad Mojo At A Decent Fund? [View article]
    UTG UNII as of last annual report is less then a cent.

    I am not sure of the details of 2007 to 2009, but from what I see if the market flattens or declines the dividend would need to be cut or they would have to start using ROC. I would have to look further into how much capital gains that have racked up which could carry them for some time in a downturn, but its not a sustainable path IMO.

    I am not saying UTG is a bad fund, but personally I do not feel its worth the extra management expense and leverage risk compared to alternative income plays at least in the long term.

    Dividends should be based on income.

    UTG should really have a lower dividend with an annual capital gain "special" dividend. This would present a more transparent picture in my view.
    May 22, 2015. 12:21 PM | 2 Likes Like |Link to Comment
  • Gabelli Utilities Fund And The Stealth 50% Dividend Cut: Bad Mojo At A Decent Fund? [View article]
    Part of UTG "dividend" comes from long/short term cap gains, what happens when market flattens or falls?
    May 21, 2015. 11:26 PM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: UBS Settles Forex, Libor Scandals [View article]
    As someone who leans libertarian I agree with you regarding how we waste too much resources overseas rather then domestically.

    As for your comment "no matter what we do -- there will be significant numbers of unemployed people since modernity has brought us to the state where much is automated and less workers are needed to provide it."

    The same was said during the industrial revolution when everyone feared mass production. As time went on that proved to be far from the truth as is the case every other time in history we have had technology advance.

    Will this time be different? Maybe.

    See, back in the "old days" of the industrial revolution, the government did not subsidize people nearly as much, so population was more contained. Now a days the people who produce the most economic value tend to ironically produce the least children.

    I believe minimum wage shouldn't be doubled anytime soon. I would instead argue for expansion of the earned income credit. The earned income credit is funded by the people who can afford it, the "rich." On the other hand minimum wage hikes in my opinion hurts the middle class and has no real impact on the rich. So if the goal is to help "income inequality" I don't understand why the earned income credit isn't the way to go.

    Reason is it doesn't make as good of a PR stunt to "protest" for earned income credit hike since most Americans probably barely even know what it is.
    May 21, 2015. 11:23 PM | 2 Likes Like |Link to Comment
  • Wall Street Breakfast: UBS Settles Forex, Libor Scandals [View article]

    I read through your reply twice and for the life of me can't even figure out what exactly you are trying to convey in reply to what I said above other then a rant about how things are these days. None of what you said is any actual policy proposal or economic theory to apply.

    The best way to help "the masses" as you say is to foster an environment conducive to small business. Small business need managers, need people to repair their sidewalks, etc.

    Ironically a lot of the policies people support to help the poor like min wage help big business who can absorb it while hurting small business that offer more opportunity for escaping poverty.
    May 21, 2015. 03:27 PM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: UBS Settles Forex, Libor Scandals [View article]

    What you say sounds good on the surface. But I am of the belief that more people working at a lower wage (within reason) is better then less people working at a higher wage.

    The reason is that generally the most sure fire way to have increased overall GDP and growth is more people working. Increased income does as well, but not as much as increased employment.

    If I personally get a raise, I am not going to the movies any more then I do now. My extra income is likely to go to savings, savings which the bank currently does not lend out enough.

    On the other hand, if I get no raise but someone else gets a job, that person may start going to the movies where before they were not going at all. Enough of these extra people doing the same will cause the movie theater to increase staff, improve their infrastructure, etc all of which contribute more to growth then me saving money.

    The moral of the story is the most important issue we have to me is getting people working which ironically is often inversely related to the wage for the entry level positions (min wage in the case of some industries).

    The so called studies are flawed, often because there are other factors occurring concurrently like usual economic growth. Min wage does have an impact on unemployment.

    Don't believe me? Lets say everyone that is unemployed now could legally and be willing to work for free! I am sure many companies would find something for such people to do and you would have zero unemployment. I am not advocating this to occur, what this idea is showing is that at some point wage does influence employment.

    I also have concern that people in the middle class will be squeezed. If someone is now making 16 an hour, you really think their wage will double along with the min wage worker? If they are lucky they will go to 20$, but even so their real relative value is actually declining even if their work performance is great.


    You need to realize the best way to help the economy is not helping the poor, its helping the middle class. Because its the middle class who when doing well lift up the poor with small businesses, inter class relationships, increased spending, etc.
    May 21, 2015. 01:18 PM | Likes Like |Link to Comment
  • Wall Street Breakfast: UBS Settles Forex, Libor Scandals [View article]

    I disagree

    If unemployment falls below 4% along with a high workforce participation rate then its time to start considering a minimum wage hike. I would also throw in looking into disability, as I have a hard time believing the exponential growth in claims is legit.

    We are not at this point, unemployment is about 5.5% but more importantly workforce participation is low.


    You must remember one thing. Every increase in the minimum wage before full employment means someone will be losing a job all else held equal.
    May 21, 2015. 11:48 AM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: UBS Settles Forex, Libor Scandals [View article]
    The Minimum wage is a political farce to win votes.

    Any reasonably intelligent person should realize the earned income credit is a far better mechanism for helping "the poor". The problem is it doesn't win votes and isn't as good of a talking point.

    Most "poor" would choose a higher minimum wage for themselves over higher earned income tax credit even if the latter were so high that their overall annual income would be higher. Why? Its ego. People want to feel better making more per hour even if they are no better off.

    The whole justification for local min wage increases is that the constitution affords local government the ability to pass laws superseding Federal law only if such law is more beneficial to the citizen.

    My question is what if a law is beneficial for one citizen while less beneficial for another? I would think a business owner could take it to court and argue the Federal law provides them better benefit. When min wages at a local level were a dollar more it was not worth consideration. But when you are talking double the rate I think its only a matter of time before this happens.

    That is why being too greedy often backfires at some point.

    The best way to help the poor and wages is not by legislating a arbitrary price control its by fostering an overall environment conducive to strong growth. If GDP were increasing by 5% a year with 4% unemployment there would be no need to discuss minimum wage.

    I also don't understand where some of these so called studies claim there is no influence on unemployment. Here in NY my local barber who I have been going to for 25 years laid off all his employees and he and his wife just work longer and harder. My local chiropractor laid off both his receptionists and now has an electronic system for scheduling and check ins. Both told me they did so because of the increasing min wage and associated labor costs. Maybe this is an odd fluke, or at least that's what the liberals will claim.
    May 20, 2015. 08:35 AM | 12 Likes Like |Link to Comment
  • Waiting On Wages [View article]
    " You would think, with the increase in minimum wages enacted at the end of last year, that non-supervisory workers would have seen faster increases recently. But that is not the case, particularly in service industries where wage gains for non-supervisory segment slowed versus faster gains for the total service sector including supervisory. Trends in service sectors are important to monitor, as they represent the lion's share (84%) of workers."

    There is no free lunch, any increase in min wage the business will likely increase prices, cut hours, reduce staff, or worse close all together. The min wage "fight" workers are in will lead to their own demise. This is because very often min wage jobs are in businesses that have a lot of elasticity of demand. If the price of a hamburger goes up to much, I am unhappy with the poor service due to less staff, etc. I very easily can simply not go. Hence, why you see McD struggling.

    I often tell people I do not know the right answer for some of the economic issues we have, but I do know what's the wrong answer, a lot of which is what our foolish government is doing.
    May 13, 2015. 10:25 AM | Likes Like |Link to Comment
  • Fifth Street Finance: What Comes Next? [View article]
    Why don't they discuss fees applied to the existing AUM?

    Its nice to talk about fees on future equity when you are really in no good place to issue equity anytime soon anyways.

    I think there are too many companies out there especially in the BDC space that lose sight of the fact that they exist to serve and bring value to shareholders.
    May 12, 2015. 08:37 AM | 6 Likes Like |Link to Comment
  • History rhymes: The China tech boom [View news story]
    How would China falling really hurt the US?

    If it means we have less cheap junk we import, we can simply re vive more factories and make more stuff ourselves, not exactly a bad thing especially for people looking for work.

    I also think it would lower commodity costs, again not a bad thing.

    I think we would be in bigger trouble if Europe crashed.
    May 11, 2015. 11:54 AM | 2 Likes Like |Link to Comment
  • Why McDonald's Can't Save Itself - The Myth Of Core [View article]
    The McDonalds competitive advantage in my view has always been a combination of price and speed of service. The soccer moms needing a quick fix for the kids.

    An issue for McD is that commodity costs experienced a lot of appreciation a couple years ago especially meat. Also the socialist slant of the population and government will put pressure on wages, you have some cities now going toward a minimum wage double the national rate.

    McD can't really change the socialist slant or commodity issue so they need to focus on the speed of service as much as possible.
    May 11, 2015. 11:22 AM | Likes Like |Link to Comment
  • This High-Dividend Stock Yields Over 10%, Has 20% Dividend Growth, Will Pay A Special Dividend In 2015 [View article]
    I think if you are paid a dividend in shares its a "negative" only if they are perpetually issuing new shares to do so. If the shares paid are actually shares held in treasury then its not a knock on NAV. What it does do is probably decrease future NAV gains as earnings that were part of shares held in treasury will now be part of shares held publicly.
    May 11, 2015. 09:14 AM | Likes Like |Link to Comment
  • Prospect Capital's Results For Fiscal Q3 2015 - My Assessment [View article]
    This company more and more makes me think of Teldar Paper and Gordon Gecko saying on the managers basically are just concerned with their own pockets and wasting shareholders money.
    May 11, 2015. 08:58 AM | 5 Likes Like |Link to Comment
  • Main Street Capital Disappoints On NII, Surprises On NAV [View article]

    I would not count on MAIN price elevating beyond any short term new bounce. I think the market is bearish on BDCs with rate increase fears even though in the medium to longer term rate increases should help some BDC earnings.
    May 8, 2015. 09:13 AM | 3 Likes Like |Link to Comment
  • Main Street Capital Disappoints On NII, Surprises On NAV [View article]
    A lot of NAV increase can be attributed to the secondary offering.
    May 8, 2015. 08:45 AM | 1 Like Like |Link to Comment