lorddarley

Total Rating:
+6 / -2

21 Comments

    • Wed Nov 12th 20:20 PM | Rating: 0 -1
      Commented on:
      Paul Krugman + Al Gore = The Way Forward
      This really isn't hard, except for the Protestant belief by many of us non-Protestants that you are supposed to work and save, and be punished if you do not.

      We better grow up.

      Work and savers made their money in an economy where others borrowed and spent. How else could a thrifty shop owner make money? We all inadvertantly abetted this wastrel lifestyle, even if we were savers.

      Objectively, it's just money. How it is processed is more about lifestyle and religious bent, rather than hard facts.

      The truth is that because of the contraction in lending -- there are not enough willling lenders, and not enough able borrowers -- our money supply has contracted wildly. We need to expand it again, or we will have a cataclysmic contraction.

      Print the money. It will not cause inflation. The printed money will replace the money which is not circulating through the system. Without printed money, we will return to an era where doctors earned $25,000 per year, lawyers earned less, and a good factory worker earned about $7,000. It sounds poetic, but that's a recipe for a 15 year disaster.

      Print the money.

      LordD



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    • Tue Nov 4th 08:24 AM | Rating: +5 -1
      Commented on:
      The Shallowest Generation
      This was an extraordinarily superficial article. People are people. The boomers, like every generation, have heros and villains. For the most part, of course, they are just plain average, caring more about self and family than "the common good." That's human nature, not a character flaw.

      The boomers were the first to create the politics of youth, which stood up to an older establishment. They resisted the Viet Nam (of Kennedy, Johnson, and Nixon). They bled in Chicago. They were murdered in Ohio. They then grew up, put on suits, and went to work.

      Throughout their careers, they have paid vast sums into social security to support their parents, the "great" generation," in comfort well beyond what they had saved. They also support millions of immigrants and people of different ages who can't (or won't) work.

      They now are told there is nothing for them, except what they have saved. So they will keep working, because hard work --they should be called the workaholic generation -- is a trait of the boomers. They cannot retire at 62 with a fishing pole like so many of their parents, or like so many of the government workers who are humorously called civil "servants."

      No one generation can take credit or be blamed for the present, which is a product of centuries. Nostalgia about the past is silly, and a flaw of every current generation since the beginning of time. We should focus on the present and how to make it better. Whether there is a place in our future for the ideals of the previous "great generation" -- patriotism and love of God-- is a question for Generations X, Y and Z.

      LordD







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    • Mon Nov 3rd 08:11 AM | Rating: 0 0
      Commented on:
      Raw Data Report: Quiksilver, American Eagle Outfitters, Macy's
      Shares of AEO at today's price are an absolute gift.
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    • Sun Nov 2nd 11:27 AM | Rating: +1 0
      Commented on:
      In Defense of the U.S. Taxpayer: End Deferred Compensation and Its Tax Subsidy
      There is some wisdom to this post, but also a bit of unfortunate populism.

      The tax "subsidy" of deferred compensation is a chimera. Corporate and individual rates are essentially the same. A corporation cannot deduct deferred compensation until it is paid. In the year of deferal, the executive des not pay tax (but the corporation pays tax on the deferred amoutn). It's a wash for the Treasury.

      I'm in favor of eliminating deferred compensation, but it's more for "fairness" rather than Treasury collections. Under Dept. of Labor rules, it's not allowed to defer compensation unless you are a "top hat" employee. Theoretically, that prevents average people from subjecting deferred compensation to the risk of corporate bankruptcy. In the real world, it gives the "top hats" exclusive rights to a tax planning technique not available to the masses.


      LordDarley

      The suggestion that equity grants be
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    • Sun Oct 5th 12:27 PM | Rating: 0 0
      Commented on:
      America Needs a Turnaround Plan
      Raising tax rates will not necessarily raise tax collections, which are at an all-time high. Entitlements have to be cut.

      Which politician has the nerve to tell voters:

      1./ the sacred cow of Medicare must require larger co-pays from the middle class. No one has paid enough into the system to justify 2-3 decades of transplants, implants, and obscene waste to prolong a the final months of life.

      2/ tort recovery for medical malpractice must be eliminated, and replaced by an arbitrated system without recourse to the courts. Getting the lawyers out guaranties a less safe (but more affordable) system. It will still be better than any other country's system.

      3/ candidates must be taxed on political contributions in excess of federal limits, and the excess in political warchests must be refunded after applicable elections. Elected office should not be big business. That leads to a corrupt decision-making process that is at the heart of our problems.

      4/ elected service should not be credited towards federal or state pensions. (See # 3.) Elected office should not be a career.

      Hell, I (and you) have got a long list of "untouchables.&qu...

      The right president would get us started on a path of announcing a program of fiscal and political reform that would convince the world (and our citizens) that we can be the masters of our destiny.

      We won't do that, of course, so the world's marketplaces will decide instead. That won't be pretty.

      LordDarley




      2./
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    • Sun Oct 5th 11:05 AM | Rating: 0 0
      Commented on:
      Fannie and Freddie Did Not Cause This Crisis
      The problem is with leverage and derivative products. It's not just the fault of too many subprime loans and the irresponsibility of the securitization process.

      I'd lay much of the blame with the SEC and the 2004 decision to permit investment banks with brokerage units to borrow more than permitted. That is the cause of 30:1 leverage and obscene risk-taking.

      I would also fault the total lack of regulation of insurance company parents, who seem to have skipped state and federal regulation altogether in a rush to issue "insured" products that were technically not "insurance." It's those products, with swaps and instruments originally intended to limit risk ($40 trillion, or so, give or take), that are causing the meltdown concern, not the few trillion we may expect from defaulted ALT-A and subprime mortgages.

      The total failure of the regulators to have seen this coming means that we will now have a lot of well-meaning regulation in future which will stifle economic growth.

      And I doubt that new regulators will be any smarter than their predecessors in addressing the next crisis: the default of municipal and state governments on issued debt. Just as with Fanny and Freddie, the politicians will be afraid to touch this until it explodes.

      LordDarley



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    • Sun Sep 28th 11:21 AM | Rating: 0 0
      Commented on:
      9 Reasons Why We Are Close to, If Not Past, the Bottom
      Pull up a chart of the DOW or S&P for the last 20 years. Does this look like a bottom?

      Assuming that credit starts flowing again, interest rates will have to go up or we will have serious inflation.

      Ask yourself. If interest rates were at 8%, where would the market be?

      LordDarley
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    • Sun Sep 7th 13:11 PM | Rating: 0 0
      Commented on:
      Friday's Employment Report: A Sobering Dose of Reality
      The amount which the average US resident (including illegals) has to spend is higher than anywhere else in the world. The percentage of those who are gainfully employed in the US is also the highest IN THE WORLD.

      There is always movement among classes. Some folks go up; some go down. Those on the way down always speak loudest that the system is broken.

      The problem is that interest rates were kept too low, too long, and people who were not middle class got to spend as if they were. And people who were only middle class spent as if they had rich uncles.

      Maybe the government should have forced people not to spend beyond their means?? Who would want that?

      Economic cycles, and ups and downs are a normal part of life.

      LordDarley
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    • Sun Aug 24th 12:30 PM | Rating: 0 0
      Commented on:
      Real Estate Bubble Is Only in 4 States: CA, FL, NV, AZ
      The problem is nationwide, and not solely due to speculation in 4 states. The problem is that the national mindset changed in the way that second morgatgaes were regarded. In the long ago past, only the down and out borrowed with second mortgages. In the recent past, many, many persons used the "equity" in homes to pay inflationary bills and, sometimes, to have a good time.

      Who is the culprit? Is it the financial "genius" who developed these products and securitization? Is it Madison Avenue, that induced people to swap equity for silly things made in China? Is it a college faculty, that insists on tenure and small teaching loads, and which inflated the cost of tuition?

      It's all of them, and all of us, that are to blame. We lived too high; we must atone. It's much more than a 4 state housing binge.

      LordDarley

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    • Sun Aug 3rd 10:35 AM | Rating: 0 0
      Commented on:
      Bill Miller on This Tough Market
      <<Financials are not cheap, and just because they are down in some case over 50% from their peaks, the market is right in bashing these stocks. Their fundamentals are still very poor and deteriorating. >>

      That's absolutely right. The problem for financials is that the core business -- good loans to good credits -- does not justify their multiples. And there is the copetition of the bond market. Good credits just go there. Why bother with a bank?

      The result is that banks, to achieve returns, have to go to risky areas (unsecured credit card, investment banking, etc.) where they do not have a competitive edge and where they face inordinate risk.

      Buying a bank for a little more than book (and after being comfortable that book is for real) is about all that I would spend to invest in this sctor.

      Miller has it all wrong, and is a stopped clock.

      LordDarley
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    • Fri Jul 11th 20:06 PM | Rating: 0 0
      Commented on:
      Who's to Blame for the Current Economic Situation?
      It's not too long before there will be a major scare about sub-$1 valuations for money funds.

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    • Thu Jun 26th 09:44 AM | Rating: 0 0
      Commented on:
      Is the Equities Party Over?
      I don't think there is much sense to this "analysis."

      The entire capitalization of the world's equity markets is only 50 trillion or so (as of 2007). Some of this is crap, so the stocks of quality companies, which are needed for pension funds and insurance company portfolios, can't be more than 30 trillion market cap.

      Assuming a reasonable cap rate, you could buy all the world's quality stocks (theoretically) for $3 trillion or so a year. Do you really think stocks are undervalued?

      Helping to finance this theoretical purchase is the labor and ambition of billions of people just getting started on the path to prosperity.

      Stocks of the world's quality companies are a screaming, unbelievable buy if you can think past the next few quarters.

      LordDarley




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    • Sun Jun 15th 14:15 PM | Rating: 0 0
      Commented on:
      How Much Inflation Will We Have to Endure?
      We all know that the government is willing to rig its indices. TIPs are a very poor way, in my view, to shelter for the future. The author's "bold" recommendation to allocate 5% to TIPs is hardly worth a lengthy discussion.

      If asset inflation really were the future, wouldn't the solution be to borrow a large fixed amount now and to buy US assets? The dilemna is that broad-based asset inflation is not what we are faced with in the US (or overseas). What we are really seeing is a process of diversification from traditional passive assets (stocks and bonds and real estate) to a broader range of assets. In the short term, there is some enthusiastic overbidding for the new class of assets.

      Commodity asset prices won't stay at this level for too much longer; they have been inflated by speculation and you can count on high prices to produce more supply in a free market. Malthus was wrong in the past and his disciples are wrong today.

      As for the dilemna of US mandates (income replacement for older working wealthy, and high technology medical care at levels undreamed of ten years ago) that can be resolved politically without eroding necessary safety nets.

      And if we really needed new income sources for our overreaching government, there are reasonable solutions which will cause a lot of squawking, but raise the money.

      LordDarley

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    • Mon Jun 9th 04:38 AM | Rating: 0 0
      Commented on:
      Headwinds for Gold?
      To evaluate gold in the short term, don't you have to consider the much lower cost of production?

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    • Sun Jun 8th 11:06 AM | Rating: 0 0
      Commented on:
      Black Gold or Yellow Gold?
      Gloom and doom. Less than 400 million people have rights to a huge land mass with incalculable resources, a stable system of democracy which protects property rights, and the best educational system in the world (at the top end, and also at the bottom end for our lower tier, who are ignored in other systems).

      A main problem is a stupid president who did not understand that he should be a steward of his country's wealth. He wa captured by the oil industry and oligarchs who want to pass on trillions to their offspring without taxes.

      I am hopeful our next president has read more than comic books, and will chart a program that makes it possible for the US to grow.

      We can double our population (easily done) and we have growth.

      The current malaise is just a blip, with dislocation among two groups that have disporportionate shouting rights: out of work Wall Streeters and "moiddle class" people who were seduced by Madison Avenue and lived beyond their means.

      The US is the best bet of any country on the planet. Keep the whining in proper perspective, and don't elect another president who was near the bottom of his class. Presidents should be well educated and smart.

      We have bright prospects, if we work and stop whining.

      LordDarley


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