Bob Misko

22 Comments

    • A Closer Look At Inflation [view article]
      Check out Shadowstats.com (Shadow Government Statistics)
      Bob       May 22 03:26 PM
    • Conflicting Data Points: Growth and Employment [view article]
      Vic,
      Stagflation has been on the horizon for a few years. Absent the supply shocks of the 1970's, the U.S. monetary and fiscal policies aid the 'flation, and my guess is the productivity of the American worker cannot continue to bail out the 'stag. If the feds ease look for a (even) weaker dollar and higher prices. Last thought - The world is fiercly competing for resources, and will add to the cost of production, even as labor costs decrease.       Apr 27 11:59 AM
    • Conflicting Data Points: Growth and Employment [view article]
      "On the other hand . . . " That's what economists do. We'd even have more explanations if we had more hands. I have used 3 indicators over the years that seem to have held up as a group. 1) The S&P U.S. speculative grade default predictor model. (85% accurate). 2) P.M.I. (I still believe that manufacturing leads the economy). 3) Senior Loan Officer Opinion. (This economy equates liquidity with credit - expansion or contraction.
      I consider the level and trend for each of these 3 indicators. Check the historical correlations for each for yourseld and you have a short cut mothod of predicting the economy. "On the other hand . . ."       Apr 26 01:01 PM
    • The Income Gap Continues to Widen [view article]
      One of the earmarks of the Great Depression was the schism of the middle class. Simply put: who are the owners of the means of production going to sell their stuff too? If the middle class erodes, our socio-economic make-up will resemble that of developing nations (small upper, minute middle, and a huge lower class. Apr 02 01:54 PM
    • Handicapping the FOMC: The First Easing is Always the Hardest [view article]
      Bill,
      I agree. With dollars sloshing around the world, the Feds are in a real bind. Did you notice the latest revisions to productivity (1.6%) and wage increases (6.6%)! These seemed to go under the radar, but to me this is alarming. This should force the Feds to RAISE rates in a prudent policy for inflation (and help the sagging buck).
      This is likely to be accompanied by the world central banks balancing their reserves with (as you suggest) more euros. And other currencies (Yen?). Why would anyone hold dollar denominated assets, when their is a viable substitute now?
      Thanks for your comments.
      Bob       Mar 15 02:41 PM
    • Margin Debt Hits New Record [view article]
      It is impossible to quantify the sestemic risk to the financial community: funny money loans, a mountain of derivitives, margin buying, global markets, and floating currencies (to mention a few).
      The key question is will the financial community collapse under its own weight, or will the dynamics of capitalism keep holding it up. My vote is with Joseph Schumpeter and capitalism. Sometimes we simply must hang on durng some bumpy rides. ( VIX as you suggest.)       Feb 27 01:02 PM
    • Why I Disagree With Bernanke [view article]
      To pull the covers off inflation merely disaggregate the equation of exchange. What the heck does that mean. Simply, check the components of the P X Q side. Yes, consumer prices is the focus (67%+ of the economy) but also taken into account are commodity, labor, capital and asset classes like real estate, stocks, and bonds. The Money X Velocity side will pop-up in one or more of these components(save the increase in productivity). "Too much money" will always find its way to Price X Quantity. I'm sure your assessment of fulture commodity inflation has a good risk/reward ratio. Jimmy Rodgers will second your vote. Feb 16 04:38 PM
    • Exploring Joel Greenblatt’s Magic Formula for Picking Value Stocks [view article]
      I have followed Joel Greenblatt for a few years. His first book, "How to Become a Stock Market Genius", was by far most informative than the "Magic Formula" (corney title but good book). Arn't we all looking for good companies at a cheap price? Isn't that the name of the game?
      I have developed a similar screen that I use to sort these companies out. It focuses on FCF to EV and adds growth as a factor. Value is created by the ROIC being higher than the cost of capital. I also look for stocks with EBITDA margins either high (and likely to stay there) or improving.
      There are a few others, but that is the jest of it. Good hunting!       Feb 15 03:23 PM
    • Burgernomics: Profiting from the Big Mac Index [view article]
      The "big mac index" is an interesting way to get a snapshot of comparative countries and their exchange rates. However, domestic prices (inflation) and the local domestic economy also play a big role in determining the prices.
      Currencies typically face a crisis when the current account approach 6% of a countries GDP. Have a look at the U.S. merchandise trade deficit. This puts our Feds in a bind. High interest rates help prop up the dollar, while slowing the economy; low interest rates would have the inverse effect.
      I'm a long term bear on the dollar. Also, if the war in Iraq is anything like the war in Vietnam, we will not know the total cost for quite a while. You might recall the inflation pressures following that war. Supply and demand are fundamental to determining the value of the dollar, and we simply have "too much money chasing too few goods".       Feb 13 02:11 PM
    • Voices of Reason: David Walker to Speak About US Fiscal Challenges [view article]
      The past few years, I have shared a 2002 quote by David M. Walker with my economics class.
      "Without meaningful reform, the long-term financial outlook
      for Medicare is bleak. . . When viewed from the perspective
      of the entire budget and the economy, the growth in Medicare
      spending will become progressively unsustainable over the
      longer term."
      It took 40 plus years to get to this point, my guess it will take 40 years to righten the ship. Maybe we should start now?       Feb 12 03:51 PM
    • UnitedHealth Robust Despite Backdating - Barron's [view article]
      UNH is a cash flow machine. It is the most consistant, growing, free cash flow company that I can find in my stock searches. It ranks as one of my facorites at this price. Feb 12 01:59 PM
    • Recipe for an Expensive Market [view article]
      John Kenneth Galbraith said that "financial genius comes in a rising stock market". However, I don't buy markets, just stocks. Yes, it is more difficult to tip-toe through a difficult market, but it is still quite possible to make some money. May I suggest you look into individual issues. Oh and by-the-way big caps during the 1991 recession returned 12%. Feb 07 05:26 PM
    • U.S. Worker Productivity, Labor Costs Come In Ahead of Forecasts [view article]
      Once again (still) the American worker and the dynamics of capitalism have bailed out our monetary policy. Americans ARE the best (most productive) workers in the world.
      Joseph Schumpeter was right, "capitalism is dynamic". Hats off to the 145 million employed who got up and went to work today! Thanks for bailing us out, again.       Feb 07 03:26 PM
    • Going Long Sallie Mae? Consider Shorting First Marblehead [view article]
      FIG,
      Nice analysis, I trust you saw the recent drop in Sally.       Feb 06 12:40 PM
    • The Disconnect Between Federal Deficit and Debt [view article]
      Mr. Panzner,
      You are right on. I've been telling my economics classes for years about the clear misrepresentation of the Federal "budget deficits". When you include the off-budget expenditures and pull out the Social Security surplus from the General Fund, our annual "deficits" have been closer to $700 Billion the past two years. Since September of 2006 (past 5 months) our Federal Debt has risen from $8.4 trillon to $8.7 trillion.
      I wish your message could be conveyed to the American public.       Feb 05 12:50 PM
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