Yodaorange

Revamping Traders' Pay

"Hall’s contract would be worth bupkis if Citi had gone bankrupt; the only reason it didn’t was that the US government bailed it out."

Same logic appies to the Goldman Sachs bonus pool. If the feds had not stepped in and let Goldman convert to a bank holding company with access to the discount window, where would they be know? Just as insolvent as Citi and BofA. Would they still be talking about $800k per person bonuses for this year?

Picking on Geithner

"Geithner hasn't demonstrated that he has any character. His testimony before Congress and has been evasive and dishonest. "

It seems that there are only two choices on the job that Geithner has done:

a) He is lacking in character.
b) He is lacking in competence.

Hard to tell from a distance which one is the dominant choice? The end results are the same. Consistent lack of foresight and understanding of what the problems will be, aka "There is no housing bubble, the problem is well contained, etc."

There is a consistency in Geithner's late responses. Put the taxpayers on the hook for the bad judgments that Wall Street has made.

After reading Gretchen's article, does anyone really believe that Geithner has the taxpayer’s interest as top priority above Wall Street interests?

Geithner is saying to himself: I have a tough choice to make. Get a free meal at the Four Season's in New York with Wall Street CEO's or stand in line with the common folk at McDonalds. Pretty clear which path he has taken.

Must-Know Criteria for Picking Inflation Proof, High Dividend Stocks

Hi Cliff, I agree that the dividend growth and stability of these companies is likely to keep pace with inflation. However, if you ignore share price, the total return might be less than Tbills. So on a total return basis, you could have a negative return for a very long time.The challenge with rising inflation is to find investments that have a positive total return that exceeds inflation. Not a simple task. to find these. You might want to make this clear in your articles, because some investors will not understand that risk.

Thanks, YO


On Apr 15 05:38 PM Cliff Wachtel wrote:

> Thanks for your well thought out input. Dividends follow earnings
> and cash flow. Since these recomended mlps are virtual monopolies
> in their areas of operations for an essential product for both suppliers
> and buyers, that suggests that they have pricing power and will be
> able to pass along higher operating costs to their customers- i.e.
> keep earnings and cash flow up with inflation.
>
> Regarding their SHARE PRICES, that's something else. They will follow
> the market. Market risk exists for any stock shares. These aren't
> the only inflation hedge, but are far easier to to manage than real
> estate and pay income while you hold them. Cliff

Must-Know Criteria for Picking Inflation Proof, High Dividend Stocks

Cliff, I disagree with the premise that companies with high dividend yield, plus high dividend growth companies like these will do well in a high inflation environment. It sounds good that dividend growth can beat inflation, but it leaves out the fact the falling PE's will more the negatively compensate for rising dividends.

For example, in the 1973-1974 bear market, BP lost ~ 70% & ATT lost ~ 30% from peak to trough. When you have that magnitude of capital losses, it is difficult for the dividend growth to overcome it.

I do not think any of the MLP's existed back then so we can not say for sure how they will react, but there is no basis to think they will not take serious share price hits if inflation spikes again.

Thanks, YO

The Delusions of Greenspan's Self Defense

What it more troubling about Greenspan is that he consistently said there was NOT a housing bubble. Bernanke was saying the same as recently as June 2007. Since the fed did not think there was a housing bubble, they were not able to investigate any of the causes. They did not ask questions like: "Who would give a 10X income loan to this family and where did the money come from?"

If you could not answer the bubble question correctly, you stood no chance of getting to the larger, more important issues.

This is not only an indictment of Greenspan/Bernanke but of the entire fed. What value did they add to the US in this period of time?

David Einhorn: The Irony of It All

"Yet many of Einhorn's warnings have proved prescient" is correct." He was correct about the problems at the Detroit office of Business Loan Express (BLX). However, he was 100% wrong that ALD was systematically over valuing its holdings. During Einhorn's holding period, ALD sold many of their holding. Many if not all, were sold for more that what ALD carried them on their books at.

Also, there was no mention of the ALD dividends that Einhorn has paid out on his short position. From Q1 2002 through today, the cumulative dividend paid out is $15.38. So Einhorn has net lost money on ALD.

I have no position in ALD.