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  • Do Dividend Yields Indicate That Stocks Are Undervalued?  [View article]
    Albertarocks,
    I think commodities would be a logical asset to move into as they are now. Why is copper trading so high?. But once again I do not see the dollar falling as much as you do, because as long as China depends so much on exported goods and imports of commodities they must trade in dollars. I am often perlexed too, and sometimes feel it is like trying to solve a rubik's cube. I will make the puzzle even more complicated. I also think our Congress should be more hands on with sound fiscal policy and not depending only on a monetary solution. This is the group of idiot's that really dropped the ball, not the Fed, and my fear of the dollars fate rests with them. The one thing I am sure of is this. I don't want to be stuck with a 10 year treasury note paying 2.5% and the only way for the price of that note is down.
    Sep 5, 2010. 04:43 PM | 2 Likes Like |Link to Comment
  • Do Dividend Yields Indicate That Stocks Are Undervalued?  [View article]
    Albertarocks,
    My thoughts are that bond prices only need to fall to a more normal range to put the 10 year yield around 4%. This should be enough to persuade a robust move into equities. The real losers will once again be the retail investor who lost his 401K gains, and will now lose it again after chasing bond funds. I don't envision the dollar falling off the cliff. China, and any other foreign countries who wants to sell here must purchase the dollar. Also, China, Japan and the smart money trades are already lowering their treasury holdings.
    Sep 5, 2010. 03:37 PM | 2 Likes Like |Link to Comment
  • Do Dividend Yields Indicate That Stocks Are Undervalued?  [View article]
    John,
    With treasury yields at historical lows, my belief is that bond prices will have to fall dramatically. I believe this is what the Fed is trying to accomplish. I personally do not buy into the deflation argument, and the dreaded inflation scenario will come with growth.
    Sep 5, 2010. 01:42 PM | 2 Likes Like |Link to Comment
  • Do Dividend Yields Indicate That Stocks Are Undervalued?  [View article]
    John,
    Are you suggesting the bubble in treasuries is about to burst? Because my thoughts have been that this is the Fed's current motive to force investments back into riskier assets.
    Sep 5, 2010. 01:02 PM | 4 Likes Like |Link to Comment
  • In Defense of Alan Greenspan: 'The Age of Turbulence' Revisited, Part 2  [View article]
    Andrew,
    Thank you for writing this article and explaining how there is much blame to be shared by all. Presidents, congresses, bankers and the average Joe's on the street were very happy when asset prices were always going up, up and away. How quickly we forget the God-like status this man had when life was somewhat of a fairy tale. What is even more interesting to me is the high praise he was receiving from those who promote social liberalism. Surely, he was not considered a disciple of Ayn Rand at that time.
    Aug 29, 2010. 02:52 PM | 1 Like Like |Link to Comment
  • Should the Fed Take a Hike?  [View article]
    Tim,
    A few years may turn into 25 years. The market crashed in '29 and finally returned to pre-crash levels in '54. Since then the followers of Keynes have been gloating, see it works. The answer of today will be the same. We will never know.
    Aug 29, 2010. 12:26 PM | Likes Like |Link to Comment
  • The Fed can print money - flooding banks with liquidity in an effort to stimulate growth - but it can't buy confidence - demand for the money - George Melloan says. One thing the Fed and the government are providing plenty of these days: uncertainty.   [View news story]
    One can only hope that we are nearing the end of "social liberalism", and a return to "classic liberalism". Individual liberty, small government that is only in place to protect personal properties, and free trade.
    Aug 24, 2010. 07:26 PM | 13 Likes Like |Link to Comment
  • McDonald’s Corporation or Yum! Brands, Inc.?  [View instapost]
    YUM is better positioned for growth in China and India. They have done a better job of changing their menu to appeal to the local taste of those countries. YUM also has more franchises and planned openings in these two countries. MCD may get the nod as the better investment now, but I feel YUM may be the better for future growth and dividend growth. I have chosen to invest in YUM over MCD.
    Aug 22, 2010. 09:21 PM | Likes Like |Link to Comment
  • Dr. Keynes Killed the Patient  [View article]
    I guess we now know what Maynard meant when he answered his naysayers with "don't worry about it, we will all be dead by then".
    Aug 18, 2010. 06:49 PM | Likes Like |Link to Comment
  • Fed Avoids Finding an Exit Strategy  [View article]
    $200 billion of treasuries may seem symbolic for this purchase, but what about next month and the next month and so on. This is just the next option the fed has with the fed fund rate near zero and no way to go lower. I am convinced the feds motive is to slowly burst the bubble in treasuries, and force the investors hand into moving to riskier assets. This notion of deflation is nonsense. How can you pump over a trillion dollars into an economy and deflation occur? I don't think this was in Maynard's playbook. I think the Fed should fear what they ask for. With the path they are laying out, it is possible for us to go from a very low interest environment to a very high one in a short period of time.
    Aug 15, 2010. 06:37 PM | 1 Like Like |Link to Comment
  • Does the Money Multiplier Exist?  [View article]
    Edward,
    Such are the times we live in. An economy based on consumerism and borrowed money. At the end of Greenspans term as fed chief, and the beginning of Bernankes reign, the fed raised rates 15 times to 4.5 % up to June of '06. I am convinced the Fed burst the housing bubble on purpose. I am also convinced with the Fed's latest program to buy treasuries this week, their purpose will be to burst the bubble that exists now in treasuries to force investors into riskier assets and to spend on business and job creation. You can call it money multiplier, or velocity of money, or any other term. It is nothing more than spending money to make money. If one fears he will spend money to lose money, it is money that is never spent. You are correct, we can print all the money we want with no effect, because the money supply is sufficient now. It is a matter of money flow from one account balance sheet to another. Fear must be replaced by confidence. You may state that Milton Friedman's theory was baloney, but one thought of his I agree on is his statement that the Fed always gets it wrong.
    Aug 15, 2010. 12:13 PM | 2 Likes Like |Link to Comment
  • Can Treasuries and Stocks Both Be Right? We Think Not  [View article]
    The stock market needs volume on days like today. I don't see this changing until we have a reversal of the inflows into bond funds, and the shorts start getting haircuts.
    Aug 2, 2010. 07:21 PM | Likes Like |Link to Comment
  • Is Wall Street Undervaluing American Oil Companies?  [View article]
    A well written argument for the bullish case for oil demand going forward. Throw in the demand from the emerging economies and you are spot on. Also OPEC will keep supply artificially low to prop up prices to stay above $75 a barrell. When the world economies do return to solid growth, and money does leave the safety of treasuries, I believe this asset class will be the first to benefit.
    Aug 1, 2010. 12:31 PM | 5 Likes Like |Link to Comment
  • The China Property Bubble  [View article]
    With China's desire to urbanize the rural population, and the governments willingness to stimulate, the demand will be in the formula. Unlike the US where affordability is driving down demand and prices, China will subsidize home ownership.
    Aug 1, 2010. 11:36 AM | 1 Like Like |Link to Comment
  • The China Property Bubble  [View article]
    Tim,
    What is the percentage of home ownership in China vs the 70% ownership in US? I would expect it to be smaller and demand for housing may cushion the blow to any bubble.
    Aug 1, 2010. 09:23 AM | 2 Likes Like |Link to Comment
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