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Norm Young

Norm Young
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  • A Perfect Storm For Lead Economic Indicators? [View article]
    Why are the shipping stocks on fire over the last couple of trading days if the BDI is showing things so bad?

    The market thinks somethings up.
    Feb 14, 2012. 10:59 PM | Likes Like |Link to Comment
  • When Will This Market Top And How Much Will It Fall? [View article]
    Amen brother. And so far, with really great results.
    Feb 14, 2012. 06:18 PM | Likes Like |Link to Comment
  • The Right Decision Is For Greece To Finally Default [View article]
    What if, say, Alabama borrowed too much and the feds stepped in to bail them out. Wouldn't the rest of America require Alabama surrender their economic sovereignty during the work out process as a price for the bail out? Would that be so wrong? During bankruptcy the bankrupt surrender their economic sovereignty to the court and it's considered normal. Why is Greece so different? They want to be part of a federation of states; quickly changing to a federal government of states of sharply limited sovereignty; their sovereignty is the price. In our past, small tribes surrendered their sovereignty to larger confederations, to city states, then to states, then to nations in order to survive. Going forward in our globalized world, can a small European state afford to stay out of a confederation like the European union? It's just a continuation of a millennial long trend...join or be crushed.
    Feb 1, 2012. 10:25 PM | Likes Like |Link to Comment
  • Golden Cross Can Lead To Golden Loss [View article]
    Seems like the smart money is bearish on SA today, just like they've consistently been since early last fall. At some point, they'll be right. I think the salient points for me, as simplistic as they are is: (1) don't bet against the house, and (2)don't fight the Fed(s) (kinda the same thing). When the fire is out and normality comes again, I'll be leaving for some nice fat bond yields, but not before then.
    Feb 1, 2012. 09:53 PM | 1 Like Like |Link to Comment
  • Traders Should be Shorting This Rally [View article]
    Lets see; the entire European sovereign debt space is off limits, US is next; China is going off a cliff, but non-convertible anyway. Where is the big money going to park itself? Brazil? :) I'm with you, Zankudo, this is a political problem and since the big boys don't want to loose the whole works, they are going to pull out all the stops. If yesterday's actions by central banks, ex-European(!) addressing a European problem doesn't speak volumes about that determination, I don't know what would. Now you need to ask yourself, do you want to fight the house? Are we in for a rough time; yep, not denying it. Will it result in apocalypse? No.
    Dec 1, 2011. 02:35 PM | Likes Like |Link to Comment
  • The Fed, ECB, BoJ, BoE, Bank of Canada and Bank of Switzerland announce coordinated action to boost liquidity, lowering the interest rate on dollar swap lines by 50 bps and extending their authorization through Feb. 2013. U.S. futures rocket: Dow +1.6%, S&P +1.9%.  [View news story]
    Before bitching about what's going on, consider what would happen if it didn't. Seems very fashionable to disparage the efforts to keep the world from going into depression these days, especially on SA. In such a scenario, it seems probable that more grim reminders of our violent past could could emerge; such as war. If globally we are all doing fairly well, or at least the path seems at least somewhat upward, most people will want to play along. Pull the rug out from underneath that hope, and despite being short the S&P, I'll bet an investors life will get considerably nastier over the next couple of years. Especially when the mobs start looking for someone to blame for their misery.
    Nov 30, 2011. 10:58 AM | 3 Likes Like |Link to Comment
  • Wireless Access Is The Future: Ways To Invest In This Changing Landscape [View article]
    Please be aware that wireless will never be able to deliver the throughput necessary for mass adoption of video over IP. Netflix and it's ilk is a killer for wireless ISPs; it destroys the business model completely; which was that not all the customers would want all their bandwidth all at once. If you have any doubts about this, go look at Clearwire's stock price. There isn't enough RF spectrum to satisfy what is essentially unlimited demand (well, unlimited at a price of free, anyway); especially in urban areas.

    If you want to ride the wave of video over IP adoption; paradoxically you need to look at the landline companies; such as Comcast, Charter, Frontier ,CenturyLink or their suppliers. They are the only players that can deliver the gigabits of bandwidth necessary to households to make video work...over fiber or hybrid fiber-coax. Wireless is good for low bandwith, mobile applications; and due to the physics of the problem will always be limited to these uses.
    Nov 29, 2011. 10:55 PM | Likes Like |Link to Comment
  • An Economist's View Of What Will Signal The Next Huge Bull Market [View article]
    But, ignoring all the possibly knee-jerk morality responses doesn't it seem rather obvious that if middle income families were suddenly endowed with say, an extra $40k, they'd spend it? Now, do the same thing for an upper middle class family and they'd immediately just stuff it into a bank...not even think about putting it to work in investment, as all markets are far too risky now. :) The bank will just invest it with government securities, rather than say, fund the small business owner I was talking to today, who needs working capital that he cannot get from the bank he's done business with for 30 years. Thus, more dead money laying about. No job creation. Further useless, negative, and destructive deflation.

    I think John is on to something here; let's find a way to get money into the hands of people that would spend it. Maybe an infrastructure bank funded by the fed? Let's rebuild our roads, create more public amenities like bike trails, campgrounds, upgrade our national park infrastructure, lay fiber optics in the rural areas, and spend $$ on basic research (you know, like DARPANET...the granddaddy of the Internet), as a small sample of positive things we could do. Let's get some paychecks in the hands of working people and create something good instead of wasting lives and engaging in ever more serious public unrest that could lead to something we all will regret.

    Let's drop the Germanic moralizing and get on with we have the firepower; since the ECB won't loosen and is turning the EU into a cluster*, the world is in a panic to park their dead money with us. If they can't figure out how to spend it constructively, let's do it for them. :) The alternative is a dark vision of conflict, wasted lives, and possibly even war.
    Nov 22, 2011. 12:05 AM | Likes Like |Link to Comment
  • Welcome To The Collapse Of 2011 [View article]
    So, to boil it all down, America needs to work at a wage competitive with the rest of the world. Politically, that sudden step change down is going to really piss people off. Bad enough that per capita real wages have stagnated since the 60's; now a sudden change downward. Consumption is going to go off a cliff, and many of the services that we have taken for granted such as world class universities, good roads, and reliable utilities are also going to go to hell too. In short, a significantly lower standard of living dead ahead. Sounds to me that any political force that can stand up to these trends, or at least promise to, will have carte blanche to do what's deemed necessary.

    As an example of what can happen; I've seen comments in FT recently that governments in trouble ought to just seize financial assets within their borders to assign them to government bonds, much like Argentina did with the pension system a few years ago. A real vigorous discussion about the merits of free trade is also going to be on the table---notice the distinct lack of political enthusiasm on the part of politicians in the last years despite the pushing of their business masters. From the perspective of the electorates of the developed world, "liberal" economics have been given a good run over the last four decades and found very, very wanting. Get ready for some serious push back.
    Sep 26, 2011. 10:58 AM | Likes Like |Link to Comment
  • Welcome To The Collapse Of 2011 [View article]
    I don't get it; what are your solutions? Just let 'er collapse and capitalism will figure it out? What's going to happen with half of the developed world out of work? Do you think proprieties about "property rights" will withstand so many hungry and angry people? Not saying that the developed world hasn't got a problem with debt/unbalanced trade that needs to be worked out--it does. Now that we've peered over the abyss we'll pursue long term solutions, but getting all worked up and just jumping over the edge and hoping we sprout wings before we hit bottom seems a bit impetuous at the least. It's as if capitalism were religion with certain fervent and vocal advocates and we're being told to just believe and jump. I think many of us are agnostics; believing in bridges and airplanes rather than rapture when it comes to dealing with the effects of gravity.
    Sep 24, 2011. 10:36 AM | Likes Like |Link to Comment
  • Welcome To The Collapse Of 2011 [View article]
    Ever read Kurt Vonnegut's Player Piano? Might be a bit of a dark way of looking at it, but yes, it's a major quandary. The solution is a better educated work force....and perhaps a hard look at how society's benefits are allocated.

    Exclusively to capital? That's what happened in the 20's...from 1919 to 1929 productivity increased 43% as technology improved with most of the proceeds going to the top 1% while simultaneously a series of conservative governments lowered the top tax rate to 25%, lowest in 80 years. The results weren't pretty; by 1929, the richest 1 percent will own 40 percent of the nation's wealth. The bottom 93 percent will have experienced a 4 percent drop in real disposable per-capita income between 1923 and 1929. Sound familiar?

    We've seen this movie before, and we know how it ends. By the time FDR was out of office, the top tax rate was 91% and our debt was 123% of GNP due to the war spending. The economy also boomed and the great American middle class was created...which is how most of us here ended up with some investable assets .

    We'll need to make another adjustment if we don't want to end up with some sort of global society sporting high technology with feudalism....with lots of terrorism as the bottom 95% fight the rest with access to technology a bit more destructive than pitchforks. Al-Qaeda is just a tiny preview of what happens when educated would-be combatants use modern technology against a modern society.

    This is the fear that Warren Buffet is trying to address with his tax proposal; this rush to the apocalypse where only a few are left at the poker table because the rest have lost their pot and will not be just content to watch the game from the sidelines. Remember that economics is an artifact of society, not the other way around, and if society is sick, there can be no healthy economy. This also goes in spades for the rest of the world...the Chinese government is trying to address this very problem right now.

    Can we make everyone in the world a dividend investor? Would that work? It would sure enable lots of consumption and deal effectively with the probably meteoric rise in productivity as robotics really kick in (see the recent news article about FoxConn). Can the environment hold up to such consumption? We've got some thinking to do about what we want for our future.
    Sep 24, 2011. 09:53 AM | 2 Likes Like |Link to Comment
  • Welcome To The Collapse Of 2011 [View article]
    Possibly. Great video and song. What next? Better to think about this now and communicate it than while in a foxhole fighting WW3 because we didn't. Remember what Einstein said about WW3? He didn't know what weapons would be used to fight it, but he did know what would be used in :)
    Sep 23, 2011. 07:04 AM | Likes Like |Link to Comment
  • Welcome To The Collapse Of 2011 [View article]
    Our method of "storage" in the recent :) past was social trust. I trust you to be there to fix my car and I'll be there to fix your roof. Money is just a medium to enable that transaction. The trust in that medium is currently very high, compared to it's derivatives such as certain European government bonds and stocks. But social trust as a whole has been eroded by the global economy, with all being set against all. It won't work just like the "economy" of the Titanic didn't, except for the very richest. We are more dependent on each other than bees in a hive; I certainly can't build my next generation of computer from hoarded parts or produce the hot chocolate I will have in morning. I depend on other specialists to keep on innovating and believing in a positive future to provide that for me. Perhaps it would be good to recognize that and realize that hoarding of anything isn't going to save us if the whole hive goes down. I wonder if all these ructions in the markets, which are social constructs, are just just an forward indication that global society itself is about to go through some necessary major changes. Hopefully we can wrap our head around what is necessary to segue into a future of real and sustainable prosperity without the accompaniment of physical warfare, which in the past seemed constitute our species method of "thinking" our way through transitions.
    Sep 23, 2011. 06:55 AM | 3 Likes Like |Link to Comment
  • Welcome To The Collapse Of 2011 [View article]
    And just keep repeating this for the next 100 years, and what will we have? A sewer with a very, very low standard of living. I don't fault your analysis about why some people are at the head of government; it's about power. But then again, with all the screaming going on about how government and environmental regulation is evil, who else would want the job of telling you that the place that uncounted generations of frogs and migratory birds have called home for the last 15,000 years shouldn't be filled in, and that you should have recognized that before you pulled the trigger to buy it? Hard truth, but our economy isn't just unbalanced in it's use of debt from a monetary standpoint, but it's also borrowing unsustainably from the future and our true life support system, the planet. Ok, I don't know where that leaves us, but clearly we are confused...and that's what the markets are telling us now. Confusion and fear on a large scale. We don't know where "safe" is. Perhaps we need to start thinking out of the box. What is it we really want? What does that life look like? Can we obtain that life without borrowing from our kids in either a monetary or environmental sense? Because if we cannot, as you've said, we're doomed.
    Sep 23, 2011. 06:26 AM | Likes Like |Link to Comment
  • Welcome To The Collapse Of 2011 [View article]
    So why is it that we've heard this drivel for what, 40 years now, and we find ourselves in this place now? Don't you think there might be something wrong with this worldview? Not that governments are 100% efficient allocators of capital, but what is socially more beneficial; a road or a Coke plant? The road provides transportation to anyone for the cost of tax on the gas they consume, enabling all sorts of economic and social benefits from transporting goods, to people enjoying vacations. The Coke plant produces a substance that rots teeth and causes obesity and eventually diabetes. So, should we "get out of the way" of Coke and let them market even more non-food poisons to us, and let the roads go to heck? Time to put on the thinking cap and ask ourselves what it is we want out of life as a culture and then figure out how to get it without resorting to tiresome old propaganda about how all government is evil.
    Sep 23, 2011. 06:12 AM | Likes Like |Link to Comment