Eye Forget

10 Top Oil and Natural Gas Exporting Countries

"Russia is a very rich country that many persons associated with this
site like to think of as being a poor-house."

They've been a very rich country for centuries. What do they have to show for it?

Resurrect U.S. Manufacturing

Competence in U.S. manufacturing began to fall apart in the 70's. To resurrect it would be a futile effort.

Manufacturing competence was replaced by PIP (Profit Improvement Programs), cash milking mindsets, constant cost reduction programs, a refusal to advance technologically, poor labor/management relations at many of the leading manufacturing firms, lack of engineering talent and, perhaps most important, a complete lack of quality control.

While unfortunate, rebuilding the U.S. manufacturing base to competitive levels is virtually impossible.

Chrysler Models Already on the Chopping Block

"i do not know any model of fiat which will hold up to the miles driven on usa roadways"

A luddite view reminiscent of the early days of Toyota and Honda.

"the smaller models of fiat are too small for fat americans."

The model range sizing is comparable to the smaller Far Eastern cars. Does not appear to be much of an issue.

Why Volkswagen, Mercedes, Honda and Porsche Are Cars with APEAL

Let me provide another viewpoint.

We've owned 5 BMW's, 2 MB's and a Porsche in the last 12 years. We currently have one of each.

BMW #1: ABS never worked. More niggling problems that I could ever recap here. Sold after 5 years with less than 10,000 miles on it.
BMW #2: HVAC never worked and was sent back to the leasing company early.
BMW #3: No problems.
BMW #4: Over an inch thick stack of work orders including a new engine.
BMW #5: Squeaks and rattles throughout.
BMW All: Wretched service. MB is phenomenal versus BMW.

MB #1: A two inch stack of work orders.
MB #2: Entire front suspension replaced, at least a once a year problem, usually electrical/electronics and usually +$1,000.

P #1: Engine failure (at 35 mph) within 10,000 miles. More rattles than shaking a can of nails.

I now buy my own cars. Since I no longer get a free status trip (which is what sells these cars) I will no longer be looking at German cars.

These surveys are worthless. When people stop buying status they will buy based on word-of-mouth. Try to find a German car buyer that believes he got his money's worth.

Fortunately for the Germans, there are plenty of developing markets where they can foist their cars.

Oh, and they all handled and drove beautifully. But, how much of a market is that?

New U.S. Natural Gas Pipeline Displacing Canadian Gas

Conversions will be too difficult to implement and control.

Cost <$1,000 (less than $200 for a pickup and DYI).

Needs approval of EPA. Even though the EPA says natural gas emits 93% less toxic emissions than comparable use of gasoline. No individual can afford to get his conversion certified. No idea how these folks do it now but, assuming the conversions are technically illegal, if the nation switched en-mass there would be dangerous cars all over the place with no inspection capability available in most states. Won't happen.

The car companies will have to do it and that's where any incentives have to go. Cost would be a small premium over gasoline (assumes NG only).

Distribution needs to be in place before cars are mass produced. Distribution capacity takes time and will be virtually dormant until cars are in the mass market. Car companies can turn on capacity much quicker but will have to wait for distribution. At home filling? How many of us want half our neighbors filling up compressed NG in their garage?

Makes a lot of sense but bill 1408 is a product of zero knowledge on the part of another of our brain trusts in Congress.

The Prospect of Deflation and What to Do About It

"The best deflation trade that we have found is to be long bonds."

I agreed with this article until I saw the above. Swinging from 30 day paper to 20 year bonds has a lot of time between them. What prices one market has little or nothing to do with the other.

I agree the Fed has no choice but to hold down the short end. However, going forward, the long end is characterized by the Fed's requirement to fund growing deficits during a period China (for that matter, all of East Asia) is redirecting its excess cash internally. In the absence of buyers, the Fed will have no choice but to revert to printing. Whether meaningless backward focusing USG CPI statistics show mild deflation or inflation, at the 20 year end inflation expectations will be built in. Thus, downward price correction in the secondary markets and higher yields.

I think a better place to look is to find vehicles that make money on the spread.

Are High Yielding aMREITs Ready to Run?

"manage the risk of a flattening yield curve"

This is the key to dividend security in these stocks. My belief is the yield curve will widen in the near-term and begin to flatten later. However, even once it flattens, there will be an unusually high spread remaining.

The short end will remain low as long as the economy is sluggish and there are concerns about any deflation. The long end will come under increasing pressure as China redirects it excess funds internally and the Fed starts printing more money (as they are the only buyer left than can fund the deficits).

Good article.

Are High Yielding aMREITs Ready to Run?

Other should understand this is one person's opinion of something he admittedly does not understand. One might ask the question how an investment with the implicit guarantee of the USG can blowup. A rather simple question that appears absent from this comment.


On Jun 28 09:09 AM David Van Knapp wrote:

> Very good article, thanks. I am not an expert in aMREITS, but while
> I was reading the description of what they invest in, and considering
> myself as a possible investor in them, I couldn't help but think
> that this is the same kind of thing that blew up for so many banks
> and led to the banking/financial crisis we are in right now: Leveraged
> bets on packages of mortgage-backed securities with hard-to-believe
> returns.

Seeds of Growth for Monsanto

I admire MON and SYT but they are fighting an uphill battle with little chance of winning in developing countries. Rightly so, hungry children will come first.

In developed countries they face the EU "natural foods" lobby and protected markets all over the place that allow farmers to plow postage stamp size fields with oxen and sell to local populations unhampered from competition.

The end result is US farmers will have more costs than the competition, cry louder, hire more lobbyists and force the US consumer to pay for a Hollywood directed mentality towards absurd intellectual property rights legislation.

I've traded in and out of both companies. They tend to be good short term plays but I have my doubts they will flourish in the long-run. Sort of like picking up free dvds (that replenish themselves) in the privacy of one's own fields. Even if the seed use spreads, the income steams won't.

Give Obama 40 More Years in Office!

You misspelled Obama. Its spelt Congress. Opps, lobbyists.

Natural Gas: The Next Big Thing

Don't I recall reading that new supplies of oil are getting harder to find yet I hear about new "mega" gas fields every day. Where are the new applications for all this gas? 10 years out with fuel cells. Cars can run on LNG quite well. But that would take something like a national energy policy. Renewable energy utility plants with gas providing the flex fuel? Probably takes another act of our national assets in congress.

Too much supply, not enough demand.

The Sound and the Fury of Bond Market Vigilantes

Good article.

"Greg Mankiw of Harvard are calling for the US government to run significant inflation" Assuming I understand the context, a bigger concern is he probably "educates" our brightest.

"More not so good news: Chinese and large sovereign holders of US Treasury debt may actually be part of the bond market vigilante posse." Not sure I agree that this is not good news. Someone has to run this country. The electorate certainly has chosen not to.

The Low Hanging Fruit of Credit Downgrades

"What, if any, is the golden nugget we have in our back pocket this
> time..."

Don't sell us short. Financial innovation, tort law, Congress (oops, lobbyists), leverage at every level, education, the world's healthiest gun (oops, crime) industry, health care, extremest political (oops, religious) groups and a public too preoccupied to bother getting involved.

The rest of the world need not advance, we will do it for them.

Mac Pricing: Value Is in the Eye of the Buyer

You have to look beyond the hardware. Apple sells a package of well built, technically decent machines, superb service, unmatched integration, superb design and a great OS. What that's worth to people is their decision. Judging by their sales and profits history, they appear to know what they're doing.

The lower prices are as much a competitive response as it is a reflection of costs. Apple was, and probably still is, the lowest cost manufacturer of pc's. Their operations area gets little press but it is an envy of manufacturers.

Palm Pre: You Call 50,000 Sold a Success?

"Apple sold 146,000 units its first weekend."

Try 270,000 in the first 30 hours.