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  • President Obama is a "defender of free markets," Paul Volcker tells Fox Business, "not a wild-eyed leftist radical." It's not surprising that "people are a little cautious about investing," he says, given the depth of the recession, but Obama is right to point out excess in the financial world - "and it happens to be accurate."  [View news story]
    Exactly right. He singlehandedly slew the stagflation monster during the early 80s. When politicians complained about the ensuing pains, Volcker basically told them to kiss his @$$ and go to hell. We can only hope that every Fed chairman will be as wise and independent as Volcker.
    Sep 22, 2010. 11:07 PM | 4 Likes Like |Link to Comment
  • The U.S. government needs to sell all its General Motors stock at an average $133.78/share to fully recoup the $49.5B spent to rescue the automaker, according to an administration official. The price is $39.15 greater than the highest level old GM shares ever reached.  [View news story]
    "Had bankruptcy been allowed to take its natural course ..."

    A faster rebound? Without government help, GM would not be a phoenix rising from the ashes. It would have been dead, buried, and a million jobs would have been lost in a flash. Anyway, what private investor is large enough to have taken on GM? Nobody.

    "Wagoner was prepared to do it the correct way ..."

    You're kidding, right? Wagoner was the last in a line of arrogant, tone deaf GM CEOs who seemed like they'd never seen the inside of a car dealership. If he couldn't even run his company well during good times, what makes you think he was up to the task in GM's darkest hour?
    Sep 22, 2010. 10:52 PM | Likes Like |Link to Comment
  • Buffett fan Janet Tavakoli lashes out at Charlie Munger, who told students this week (video) we shouldn't be "bitching about a little bailout;" we should have wondered why the bailout wasn't even bigger: "We bailed out banks that were the key architects of much of our national misery... Those living in poverty will have a much more difficult time bettering themselves, as much of the middle class sinks."  [View news story]
    Well, Munger could have chosen more elegant words, but he grew up during the Depression when people had to suck it up without government safety nets. When the market crashed in 1929, there was no FDIC, unemployment benefits, Social Security, or Medicare. We're softies compared to that generation. People really should quit complaining.

    Of course, the teabaggers want to get rid of things like the FDIC, unemployment benefits, Social Security, and Medicare/Medicaid. People would really be bitching then.
    Sep 22, 2010. 05:33 PM | Likes Like |Link to Comment
  • The U.S. government needs to sell all its General Motors stock at an average $133.78/share to fully recoup the $49.5B spent to rescue the automaker, according to an administration official. The price is $39.15 greater than the highest level old GM shares ever reached.  [View news story]
    In Nero, do you mean Reagonites advocating self-regulation, promoting outsourcing, pushing regressive taxation, spending and borrowing like drunken sailors, believing that budget deficits do not matter when they are in power, and engaging in international misadventures? If so, then yes, I completely agree!
    Sep 22, 2010. 05:16 PM | 1 Like Like |Link to Comment
  • The U.S. government needs to sell all its General Motors stock at an average $133.78/share to fully recoup the $49.5B spent to rescue the automaker, according to an administration official. The price is $39.15 greater than the highest level old GM shares ever reached.  [View news story]
    Say what you will about the bailout, but I think the government should not sit idly and watch the decimation of what is left of our manufacturing base. That would be truly analagous to Nero fiddling as Rome burned.

    Asian carmakers have the full support of their respective governments, and that is one of the reasons for their success. You can be sure that if something ever happened to Toyota or Hyundai that Toyko and Seoul would pull out all stops to prop them up.
    Sep 22, 2010. 05:02 PM | 1 Like Like |Link to Comment
  • Market recap: Stocks fell and investors fled to safety in reaction to the Fed's enhanced concerns about deflation. Techs especially took it on the chin after Adobe's dim outlook and Microsoft's disappointing dividend hike. Gold hit another high at $1,296.20 before paring its gains a bit, the dollar continued to fall sharply, and Treasurys rose. NYSE decliners led advancers two to one.  [View news story]
    Adobe fell back to where it belonged, as its meteoric rise the last few weeks was entirely unjustified.

    As for Microsoft, the dividend might be relatively small, but the dividend grew a healthy 23%. Maybe investors were looking for a 2004-style special dividend, considering the billions of dollars Microsoft has thrown down the toilet over the past decade.
    Sep 22, 2010. 04:49 PM | 1 Like Like |Link to Comment
  • Late Tuesday, Microsoft (MSFT) raised its quarterly dividend by $0.03 to $0.16, and said it would borrow up to $6B in short- and long-term debt, saying the move "reflects our commitment to returning capital to our shareholders and our confidence in the long-term growth of the company" - which it has done to the tune of $170B over the last 10 years.  [View news story]
    Microsoft is borrowing at historically low rates to reduce float. That's smart business.

    What does being a Republican or Democrat have to do with this, anyway?
    Sep 22, 2010. 04:41 PM | 1 Like Like |Link to Comment
  • The 9 Elite Dividend Stocks of 2010 [View article]
    Interestingly, these stocks do beat the market. You might not have as much fun doing so, but you'll be under less stress, too.
    Sep 22, 2010. 03:44 PM | 8 Likes Like |Link to Comment
  • President Obama receives just 30% approval in Bloomberg's Global poll, roughly in-line with equally uninspiring French counterpart Sarkozy and Japan's Kan. Chinese President Hu Jintao's economic policies were viewed favorably by 58%, while Germany's Markel garned a sky-high 70% favorability rating among investors.  [View news story]
    Perhaps the polled investors like Germany's universal health care, strong trade unions, and high taxes. Now that I think about it, maybe Merkel does deserve her high marks!

    I find it funny that so many approve of China's "socialism with Chinese characteristics." Did investors recently hear that China will soon unveil its twelfth Five-Year Plan? Five-Year Plans sound so, oh, I don't know, Stalinish. Of course, the current crop of technocrats are much smarter than Stalin or Mao, but a Five-Year Plan is a Five-Year Plan. So much for the empty talk about wanting free markets.
    Sep 22, 2010. 03:15 PM | 4 Likes Like |Link to Comment
  • Even a rabid revolutionary like Lenin knew how to pretend to be flexible when necessary, Steve Forbes writes, and so it will go with Obama - surprising us by extending the Bush tax cuts to help win re-election in 2012 so "he can go back to his intensely felt mission to increase government power over the economy and the 'rich.'"  [View news story]
    Steve Forbes should be grateful that he won the genetic lottery and keep his ignorant mouth shut. If not for his grandfather and father, he would not be complaining about tax cuts expiring because he would not be rich.
    Sep 22, 2010. 12:01 AM | 5 Likes Like |Link to Comment
  • Charlie Munger's (BRK.A) remarks defending bailouts and saying that people in economic distress should “suck it in and cope" are not only "arrogant" and "insensitive" but wrong, Mish Shedlock writes. The bailout "made too big to fail, too bigger to fail... We preserved a culture that benefits billionaires like Munger and greedy CEOs that helped cause this mess."  [View news story]
    There was systemic risk. AIG's collapse would have brought down all the reinsurance companies. Do you think insurance companies are going to insure anything if they cannot offload some of the risk to the reinsurance companies? If insurance companies cannot buy reinsurance, then they would not take on new risk. How would that have gone for business?

    I'm not saying that Bush's bailout went well, and I share your disdain for the big banks, but to say that there was no systemic risk is incorrect.

    By the way, Munger is awesome.
    Sep 21, 2010. 04:49 PM | 1 Like Like |Link to Comment
  • A majority of Americans want the government to cut the budget deficit even in hard economic times and believe that closing the fiscal gap would create jobs, a new poll shows.  [View news story]
    To help Social Security, do a majority of Americans want an increase in the retirement age and the removal of the income cap on the FICA tax?

    To help Medicare, do a majority of Americans want an increase in the age of Medicare eligibility to match the retirement age? Do they want fewer benefits, or would they be talking about death panels?

    Do a majority of Americans want the government to cut the wasteful, bloated defense budget (Republicans especially love this flavor of pork)?

    Any realistic effort to cut the budget deficit would require reform of all three, which consume the lion's share of the budget and do not contribute to job growth (other than the military-industrial complex). Government spending on infrastructure, scientific research, and development of new technologies and industries, however, does contribute to job growth.

    Until I see polls favoring meaningful entitlement reform and cutting the defense budget along with cutting spending in general, then I will continue to believe that a majority of Americans are unrealistic at best and stupid at worst.
    Sep 21, 2010. 04:08 PM | 2 Likes Like |Link to Comment
  • Aug. Housing Starts: +10.5% to 598K vs. 545K expected and 541K (revised from 544K) last month. Permits +1.8% to 569K vs. 560K expected and 559K last month.  [View news story]
    The homebuilders must want to pad their inventories.
    Sep 21, 2010. 08:44 AM | 2 Likes Like |Link to Comment
  • Deflation Again a No-Show [View article]
    The absence of deflation is the product of central bank intervention. It's not the dog that didn't bark--its the dog that was muzzled.
    Sep 17, 2010. 12:05 PM | Likes Like |Link to Comment
  • Deflation Is Still a No-Show [View article]
    Do you know why money is not in short supply? Because the Fed, fearing deflation, has flooded the market with money. Had the Fed not increased the money supply, both of your conditions for a deflationary depression, weak demand and a shortage of money, would be present. That would have been fun.
    Sep 16, 2010. 01:53 PM | 1 Like Like |Link to Comment