Johnc

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21 Comments

    • Thu Oct 23rd 09:49 AM | Rating: 0 0
      Commented on:
      Five Presidents and Three Federal Reserve Chairmen Later...
      Completely ignoring the previous two comments, which were obviously copied and pasted from a political rant that started somewhere else, I appreciated the article because I think one needs to think in historical terms to get a grip on current financial events. We are experiencing the "fat tail" or a "Black Swan" and the normal trending market rules are not going to help us out now. This is one for the history books and only a properly long perspective will aid in the analysis.
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    • Thu Oct 23rd 08:46 AM | Rating: 0 0
      Commented on:
      Bailed-Out Banker Compensation: A PR Disaster in the Making?
      It's a good idea but it may not work in the near term because the bulk of the value creation at most firms is one or two management levels down from the CEO's office. The longer dated the options, the less net present value. The first people to figure this out will be the big producers that drive any given firm's revenues (remember the old 80/20 rule...it actually works out pretty closely most of the time). Unless you could get all firms to agree to this at the same time, some firms would break ranks to take advantage of that world beating trait of the US market: labor mobility.
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    • Mon Jun 16th 21:28 PM | Rating: 0 0
      Commented on:
      James Galbraith Joins the Obamanomics Team
      I take issue with the statement that savings are not required for investment (not that the good Prof doesn't know it but the fact that I don't like the idea). I assume that soundbite means American savings are not required for US investment. That has been true in the past. The US has been very good at recycling the rest of the world's savings. However, I would be very nervous of any economist who assumes that the "gravy train" has not been disturbed by recent events. I am all for free trade and free capital flows but a slightly higher savings rate in the US might actually be a decent idea. Perhaps the next administration can take some of the disincentives for savings out of the tax code. Not as sexy or quick as a rebate check but it might put the country on a firmer footing.
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    • Sun Jun 8th 21:19 PM | Rating: 0 0
      Commented on:
      Aberration in Clear Thinking by JP Morgan
      I like the article and I think the issues raised will take us back to March lows (demonstrating that the last two months was a bear market rally). However, I think we should be looking to pick up long positions if the SPX can hold above March lows. While there is bad news a plenty, very little of it is new. It just takes a while for it to sink in. However, now that it is starting to sink in (and we'll see that process over the next few weeks), it will be time to swim against the crowd.

      I am talking my own book, of course, and hope that someone will be kind enough to lift my GLD at 100 (missed it last time around).
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    • Mon Jun 2nd 22:18 PM | Rating: 0 0
      Commented on:
      Why Lower Home Prices Are in Your Interest
      While I have made money in real estate, I tend to agree with Wakeup that the experience was less than pleasant with all the expenses that dangle from the investment. I am a happy expat now so the issue of home ownership has been deferred for a while.

      The real issue I fear is that Americans are not psychologically prepared for the kinds of drops implied for the UK market. I have seen past real estate meltdowns in the UK and in Hong Kong. I am not sure that the US is really ready for what might come in the next 18 months. With an untested Democrat in the White House and a trigger happy (with my tax dollars) Congress, I fear the policy response could cause tremendously unpleasant unintended consequences.
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    • Sun Jun 1st 09:48 AM | Rating: 0 0
      Commented on:
      Two Ways To Profit from Frontier Markets
      One thing to watch out for on oil is the subsidies in India and China. While China can afford the subsidies (which are apparently driving a 500k new car a month market), India is running out of room. Agree that high priced oil is here for the medium term but watch out when one of these big BRIC countries abandons their gasoline/diesel subsidy regimes.
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    • Thu Apr 24th 09:37 AM | Rating: 0 0
      Commented on:
      Boeing Soars While Airlines, Ambac Fall
      Booking flights in the Asian region is still a chore. And pricing is firm to say the least. Not surprised that non-US airlines are scooping up newer, more fuel efficient planes from the US$ producer. Do you really care if you step onto an Airbus or a Boeing? I don't as long as I can get the schedule I want. Most of the time, I can't tell the difference. Obviously the purchasers of such multi-million dollar assets are voting with their wallet as the Euro flirts with the 1.60 level. You should probably look at some of the Asian carriers before you can assume that all airlines are near bankruptcy. Pain, yes. But traffic growth is still strong.
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    • Thu Apr 24th 09:17 AM | Rating: 0 0
      Commented on:
      Robert Shiller on America's 'Speculative Culture'
      "America has been a speculator nation since day one" Amen. May it never change!
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    • Thu Apr 24th 09:13 AM | Rating: 0 0
      Commented on:
      What Does the President Know, and When Did He Know It: "We're not in a recession..."
      I agree with richjoy. ECRI told me everything I needed to know late in 4Q for $149 a year. Let NBER declare a recession in June/July so that we can start trading the recovery.
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    • Wed Apr 16th 23:59 PM | Rating: 0 0
      Commented on:
      Who's to Blame for the Commodities Boom?
      Wow! Some of the comments here are scary!
      Speculators were not invented in the last 100 years. The process of price discover goes much further back than that. I would argue that the Government should work against markets getting "cornered" but other than illegal short term manipulation, the government has no business telling the market what the "right" prices are. If ETF's accellerate this price discovery, allow me to get some hedge against inflation and sends signals around the world about the money to be made by planting certain crops, developing promising new energy sources, re-engineering products to protect gross margins and a message to Central Banks about how we feel about their potentially inflationary policies....well, I'm not sure I see what the problem is.
      Economic dislocation will be the result. No denying it. Buggy whip makers, mainframe computer manufacturers and coal miners in England offer just a few well known examples of economic dislocation that happened well before commodity ETF's came on the scene.
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    • Tue Apr 15th 21:14 PM | Rating: 0 0
      Commented on:
      Going for Gold
      Good article...I like the comparison of gold supply growing 1-2% while Shadow stats shows M3 at high double digits. There's high inflation and low growth abroad in the world. It's something I vaguely remember as a young teen and I don't think we should be happy to return to that scenario.
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    • Mon Mar 24th 08:49 AM | Rating: 0 0
      Commented on:
      Memories of Deflation and Hyperinflation
      Not just German central bankers...the Chinese had several bouts of hyperinflation in the 30's and 40's which still haunts central bankers in both China and Taiwan today. Goes a long way towards explaining why the People's Bank of China has no problem ignoring pressure from the US Treasury or Congress.
      The article is useful because it underlines a key risk to one rosy glasses scenerio which sees all the Central Banks getting together to reflate the global economy. Basically, there are a few non-US central bankers who are too allergic to the inflation that such a concerted policy is sure to breed.
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    • Mon Mar 24th 00:00 AM | Rating: 0 0
      Commented on:
      Is Palm Management Doing Enough to Get Back on Track?
      The problem with Palm is that they lost focus and stopped making improvements on a great product...the Treo. People will pay up for a great product (note Apple iPods and iPhones, RIMM products) but will only commit to a platform if there is demonstrated committment to incremental improvement (bug fixes and feature enhancements). A Palm with Windows Mobile? Palm has little control over the software, hasn't come up with any great new "must have" features and is not a cost leader. Hard to see how a consumer products company that is "neither here nor there" can prosper. The sports analogy is misleading. A sports team is protected by a league (TV revenue share, for example) and there will always be die hard fans. If Palm disappeared tomorrow, there would be sadness (I loved my Treo 650 to pieces, literally) but the smartphone market will hardly skip a beat.
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    • Sun Mar 23rd 23:36 PM | Rating: 0 0
      Commented on:
      iShares Taiwan ETF: A Bet on Improved China Relations
      The market has outperformed the region YTD in a large part because the KMT (Ma's party) was expected to win. Now that Ma has won, the hard work of rebuilding the economy and restructuring the cross straits relationship begins. I am very positive (and hold EWT) but would warn against anyone expecting a "quick pop". The story will unfold over the next two years. And, when that story does unfold, the front runners will have changed. Taiwan is in the early stages of a transition from a manufacturing led economy to one with a much larger services component. I expect Taiwan's economy to look much more like Hong Kong's or Singapore's than South Korea's in two to three year's time. EWT will participate but may lag behind a better constructed portfolio of Taiwan stocks.
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    • Tue Mar 18th 10:37 AM | Rating: 0 0
      Commented on:
      How Do You Cure a Credit Bubble?
      You are right but the devil is in the details. As an American who lives in Asia, I understand but am constantly amazed by the household balance sheet carried by most of my upper middle class friends in the US. How do we get the deleveraging without collapsing the whole system? The Austrian School is right (and crowing about it) but it will take years to reeducate the average American consumer to see the benefits of saving and productive investment. And with the likely tax regime under the next administration, I fear we will move further away from a simple and flattish tax policy that would point the way towards the deleveraging you correctly identify as the cure for our (US and global) ailments. Reverse Nixon price controls...very nicely put. History rhyming but not exactly repeating.
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