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  • What's Your (Dividend Growth) Number?: Part 4 - Creating And Surpassing Goals  [View article]
    Hi Mike,

    I'm a retired Wall St. trader and market maker. Long time value player, who also emphasizes income. Originally noticed you because we share the same last name. I truly appreciate your writing, both for the intelligent content and also for its pleasant and classy style. Checked out the blog too. Keep it up................ hope to be reading your stuff well into the future. Good luck.

    David
    Jul 10, 2014. 02:52 PM | 2 Likes Like |Link to Comment
  • Should Income Investors Give General Electric Another Chance?  [View article]
    Kudos to gig for being the first here (I think) to mention the finance unit! In my opinion being a world class manufacturer isn't enough to overcome the financial opaqueness of that unit.
    Jan 21, 2014. 01:48 PM | Likes Like |Link to Comment
  • Cisco Is A Great Company, But It Needs To Get Ahead Of The Curve  [View article]
    Seems to me that much of the accumulated earnings seem to have ended up as goodwill or intangibles. Am I wrong? If I'm right should I be concerned?
    Dec 18, 2012. 07:40 AM | Likes Like |Link to Comment
  • Contradictory, Inconsistent And Incredible: The September Employment Report  [View article]
    As bad as the BLS methodology is, it is still consistent for both the ups and the downs. I can't buy the conspiracy stuff. The penalty for getting caught would be political death, and way too many people are involved to keep a lid on it, if that were actually the case. On the other hand I could easily accept that the executive branch is in a position to time how and WHEN money gets pumped into the economy. I'm sure both Parties have played that game.
    Oct 5, 2012. 02:45 PM | 4 Likes Like |Link to Comment
  • 10 Scary Charts: May 10, 2012 Update  [View article]
    Breno, I missed your earlier reply. I have responded above.
    May 14, 2012. 09:13 AM | Likes Like |Link to Comment
  • 10 Scary Charts: May 10, 2012 Update  [View article]
    Breno,

    Two points here. First of all Europe has some serious issues, that threaten the poorer southern countries, and will put a real burden on the richer northern countries too. By the way, the US won't escape unscathed from Europe's ills either. Still, whatever their stresses and imperfections, Europe's health care systems are not the reason for their angst. The simple proof of this is that in terms of GDP, they spend about half of what we do for health care. Furthermore, since their GDP's are in all but a couple of cases lower than ours (In a few cases much lower.) the actual true expenses for health care are actually somewhere between 1/3 and 1/2 of ours. Once again Europe and other wealthy countries (along with several developing countries) pretty much have universally better overall outcomes in terms of national health. In short when it comes to health care we are fools accepting a system that is bleeding us to death, and which will prevent any true economic recovery.

    So what screwed Europe up so much? Well, we can start with a poorly thought out attempt at a common currency. Countries with diverse differences in wealth, education, work ethic, political differences, etc. simply cannot have equal enough productivity to maintain a common currency over an extended time period. Now add in the vast safety nets these countries offer not only their own populations, but also in many cases large numbers of "invited workers" as well. Given their wealth and public support for a strong safety net, a Sweden, Austria, Germany, or Holland's ability to support such a net is possible. On the other hand, when a country like Greece or Portugal with tiny real economies chooses to hand out unproductive government jobs, rediculously early retirements, and many other government supported perks at rediculous rates, it's only a matter of time until the sky falls. Of course without a common currency the sky would have cracked years ago. The bond and currency vigilantes would long ago have forced Greece to live within its means. Didn't happen though. With the blessings of the EU and some pretty stupid banking policies Greece and other poorer countries were allowed to continually borrow and let things get out of hand. Still, for all those mistakes, their health care system, which delivers better results than ours for maybe a third of what we pay was not the villian here.

    Secondly, You'd better reread what I said about the economy in the 80's until the collapse. What I tried to point out was that we had a boom in the sense that all of the numbers implying prosperity seemed to be going in the right direction. For most of that period we simply rotated between good and great. Trouble is we missed something. From the mid 80's until the collapse, the debt to GDP ratio soared skyward at rates unknown in peacetime. I'm talking all debt here....public, corporate, and private debt all went parabolic in the mid 80's and never looked back. Our debt bubble fueled a huge surge in consumption (unfortunately much less so in terms of investment though). The consumption binge then created jobs, the debt bubble also pushed up housing prices and the stock market. The newfound wealth effect then fueled our bubble mania even further.

    In short, Americans simply confused debt with prosperity. Of course our politicians, and business leaders now seeing themselves as the architects of another "this time it's different" perpetual boom acted as cheerleaders to America's own "Tulip Mania".

    Simply put, without the debt bubble consumerism mania, America's economic growth would have been far, less robust. Conservative estimates suggest that maybe half of our "growth" from the 80's until the collapse was not real growth, but simply borrowed growth from our future. Well the future is here. We learned little from a very similar Japanese bubble, or even from our own Depression. Once again, the Piper has shown up to get his due. The Piper is going to be staying around for some time too.

    We certainly agree that the US is a great place to be. Unfortunately with a health care system that is reducing our living standard by a percent and a half or so each year, after year, it is becoming a bit less great. Health care inflation (all health care...not the Medicare straw dog) is by far the true domestic threat to our Country. Every other peer nation has it under control. We must too, or we all go down!
    May 13, 2012. 09:46 AM | 1 Like Like |Link to Comment
  • 10 Scary Charts: May 10, 2012 Update  [View article]
    Blaming Medicare is a straw dog. Without Medicare, there'd be no way for the vast majority of the elderly to get insurance...that is the reason Medicare came into being to begin with. Without Medicare, seniors would be faced with destitution and become burdens on their families and the taxpayer. Worst case...many would die from cureable diseases.

    Does Medicare have its share of fraud and mismanagement? Sure, but the private side is also loaded with fraud and mismanagement, and has much higher overhead to boot. Heck, your private insurer even gets to charge you for some of those dumb real estate investments of the bubble years! (A point in defense of Medicare is that most medical fraud is discovered when the patient observes and reports a questionable irregularity. Given the aged and infirm state of many Medicare recipients, they are hardly in a position to recognize and report irregularities. Private insurers have no such excuse though.

    The issue has never been Medicare. The issue is simply why we pay twice what the rest of the First World pays for health care. Every one of our peer Countries has figured out how to get this right. Sure, their systems are faced with many stresses, but only in America are we faced with a system than can truly bring us down.
    May 12, 2012. 10:52 AM | 1 Like Like |Link to Comment
  • 10 Scary Charts: May 10, 2012 Update  [View article]
    Jak, In terms of the wealthy nations, pessimism is certainly reasonable, but doom is likely avoidable. Japan has been slogging along for decades. Not a good situation for them, but hardly intolerable for most. With sensible policies, richer countries will still have the resources for many jobs and a reasonable safety net. Still, I think we're talking about an extended period of high unemployment and low growth and opportunity. I fully expect the political spectrum to gradually veer towards strengthening the safety net....and paying for that net with some moderate degree of wealth redistribution.

    Any hope? Once again, getting health care costs substantially down would help a lot. Of course there's always America's historic "ace in the hole" of entrepreneurialism and some kind of great techological advance? Unfortunately most of the stuff from the tech pipeline has been of the nature of the deflationary job killing variety, or simply social networking/game playing fluff. Certainly impressive in terms of code writing talent, but the exact opposite of something that will get living standards growing. (Maybe we can help a bit by taking advantage of our cheap natural gas supplies?) Still, these are hopes, not strategies. I remain pretty pessimistic about the economic future of the First World Countries. Sadly, it seems the poorest countries will truly remain very stressed going forward.
    May 12, 2012. 09:31 AM | Likes Like |Link to Comment
  • 10 Scary Charts: May 10, 2012 Update  [View article]
    Bypasses are just an example. MRI's, hospital rooms, stents, and even flu shots, etc., etc. are far cheaper all over the First World. Reason? Our peer nations use price controls plain and simple. Does that mean rationing...of course it does, but they make efforts to keep the rationing fair and sensible. Remember, no country rations medicine more than we do, not even close. And we ration in the worst way....by denial of care. Denial of primary care of course often leads to expensive emergency care which the taxpayer ends up picking up. Pretty expensive and cruel way to ration. By the way studies seem to be showing that nearly half our bypasses are unecessary. By product of profit driven medicine? (We do have for profit medicine. We certainly do not have free market medicine though. Plain an simple the free market for several reasons is doomed to failure in health care.)

    Thinking that we're giving away our superior medical system is way off base. We lead the world in crisis care and surgery for sure, but that's pretty much it. We're decidedly ordinary in chronic and degenerative care, and absolute and pathetically bottom of the barrel in preventive care. (Seems for profit medicine has little incentive for good preventive care. How do you get paid when people don't get sick?) Maybe one reason we're so good at crisis care is that we get so much practice? Bottom line is that we pay twice the going rate for the worst health outcomes in the First World. Beyond dumb....we pay with out pocketbooks, our economy, and most of all with our lives.
    May 11, 2012. 12:38 PM | 4 Likes Like |Link to Comment
  • 10 Scary Charts: May 10, 2012 Update  [View article]
    Amazing that so many mainstream economists have got this wrong. Somehow most of them are only beginning to understand that a banking collapse recession is very different than the garden variety inventory cycle (often Fed induced) recession. The latter of course is self correcting and pretty well understood. The banking collapse on the other hand, is not well understood, and definitely not self correcting. Fact is that other than the Great Depression and Japan, we really haven't seen this type of collapse until recently.

    Simple fact is that since the mid 1980's to date the economy has been broken. A debt bubble that began in the early 80's covered a great deal of the problem up, and created a temporary and unsustainable increase in employment. The debt bubble may well have accounted for about half of the "growth" from that period until the bust. I am not only talking government debt. I am talking also about the grossly excessive consumer and businesses borrowing. With our politicians and business leaders acting as cheerleaders, our population simply confused debt with prosperity. Now the "piper" gets his due, and will for a long time to come.

    We really have only two choices. (1) Depression type collapse and debt expungement, or (2) a Japanese form of seemingly endless low/no growth economy. Given the social instabilities of the former, combined with the fact that there is no guarantee of real recovery, the Japanese option has been chosen. It really is the only workable choice. Get used to what we have today, it's going to be our future for a long time.

    Any way out? Probably not. An extreme Keynesian push similar to the ones of the 30's and 40's might work, but I feel it is extremely dangerous. There is however another very large pool of wasted capital that could be released, and help the economy. Simply put, we spend twice what the rest of the First World spends on health care. (I believe a bypass in France is about $13000, vs. something like $63000 in the US. Oh yeah, the French and pretty much every other First World country shame us in health terms.) Given that our results are quite ordinary (that may actually be generous). If we could somehow get our health care costs down (all costs...not the Medicare straw dog), the influx of capital might goose the economy. Of course the reduced health care spending would hit those involved, but since we're paying twice the price for no extra benefit...that extra expenditure is not really creating true wealth...pretty much just inflation. Getting that money into the truly productive, wealth producing part of the economy would do wonders.
    May 11, 2012. 07:59 AM | 5 Likes Like |Link to Comment
  • 4 Myths Concerning the U.S. Economy  [View article]
    The unfunded liability crisis is not about Medicare, but about the cost of health care in general. Get health care costs down to Western European levels, and the unfunded liability crisis becomes very manageable. On the other hand let health care costs keep rising by 10% or so annually, and all health care, not just Medicare will collapse. It would be an economic AND SOCIAL crisis of horrific proportions.
    Jun 9, 2011. 02:05 PM | 1 Like Like |Link to Comment
  • 4 Myths Concerning the U.S. Economy  [View article]
    You are correct about myth #3, that borrowed money isn't income. Unfortunately, this isn't a recent phenomena though. Much of America's so called growth from the early 1980's up until the crash was based on little more than debt. For 25 years our Nation has lived an economic lie. We fueled an orgy of consumption with public, private, and corporate debt.............and pretended it was prosperity. All the while our politicians cheered us on, while taking credit for our supposedly great living standard increases.

    Incidentally it should be pointed out that our debt financed "good life" came at the expense of investment, which since the mid 80's has been shrinking (as a percent of GDP). Any guesses as to what the Chinese, South Koreans, Indians, etc. were doing with their investment rates while we were shrinking ours?

    We have two choices, the current Japanese style slog (or worse), or a true financial collapse. Our policies in the near future will determine which path. Our Nation conveniently forgot that 1+1=2, and now the "Piper" wants his share. We will be paying a price for many years to come
    Jun 9, 2011. 08:41 AM | 1 Like Like |Link to Comment
  • Unemployment and Stimulus: Maybe No Action Is the Best Action  [View article]
    Tony, Depending on our "choices", I'm saying the the near decade is a choice of a Japan like funk, or a financial collapse. Humpty Dumpty can't be put together again.
    Jun 7, 2011. 09:34 AM | Likes Like |Link to Comment
  • Unemployment and Stimulus: Maybe No Action Is the Best Action  [View article]
    Ben Gee, Absolutely !!

    For 25 years we replaced investment with debt fueled consumption, and then listened while the politicians called it prosperity. For 25 years we lived an economic lie....now we need to pay the piper. Trouble is that we'll be down for a decade or more, burdened by a sick financial system, and a health care disaster that saps nearly 20% of GDP while returning mediocrity.

    (By the way, what do you think the Chinese, Koreans, Indians, etc. were doing with investment while we were reducing ours?)
    Jun 7, 2011. 09:28 AM | Likes Like |Link to Comment
  • Unemployment and Stimulus: Maybe No Action Is the Best Action  [View article]
    The banking system is pretty likely insolvent. No stimulus might well mean a serious leg down foe asset prices, and a possible financial collapse. Stimulus won't fix much, but no stimulus has some very serious downside too. Not getting better isn't good, but it's not the worst outcome either when you're sick.
    Jun 7, 2011. 08:50 AM | Likes Like |Link to Comment
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