OldLimey

Comment Stream

Comment Stream
Filter comments by:
Highest rated Latest comments
Or filter by symbol:
  • Is Financial History Bunk?
    Great article and interesting comments. I tend to the view that the broad sweep of history has much to teach us, but that its finer nuances are too dependent upon unique combinations of circumstances, actors, and actions to be a detailed guide to the future. Too often, history is manipulated for use as a weapon rather than analysed as an aid to understanding.
    Jan 06 14:33 pm |Rating: 0 0 |Link to Comment |View article
  • Marking 2008 Predictions to Market
    Cheap shot at the railways, given everything their pricing people are doing to fight deflation.
    Jan 06 14:20 pm |Rating: 0 0 |Link to Comment |View article
  • Fairy Tales: Reassessing the Market Mindset
    Paul Price: "The bad news is we've experienced a huge hit (down around 50% at the nadir) already.

    The good news is- because of that large drop, we could easily see a 50% upmove from the November lows."

    I'm struggling with the causality here. What have I missed?

    rp fund manager: Fund managers earn more in management fees when their assets under management rise, don't they? Guess you must be planning on having a big Christmas 09 then.
    Jan 06 14:11 pm |Rating: 0 0 |Link to Comment |View article
  • Strategists Need Some Help with Their Market Predictions
    Mr. Brown: good piece. Whilst I'm sure Kurtosis has its place in cosmology, I think the real problem has been that the people who design valuation models have been getting paid bonuses on the basis of modelled output. If you could model yourself a seven-figure bonus, I'm guessing you'd overlook kurtosis as well. Nah....I wouldn't do that, of course!

    CautiousInvestor: dead right.
    Jan 06 13:21 pm |Rating: 0 0 |Link to Comment |View article
  • Keynes vs. Von Mises
    Really good article - thanks.

    I see Keynesian policies as a political rather than an economic choice. 'The General Theory' mapped a strategy for getting out of an extant depression in which double-digit GDP shrinkage and very high levels of unemployment were already being experienced. At least as I read it, there was no suggestion that economic cycles could or should be smoothed and fine-tuned using the suggested tools. The myth says otherwise, of course, and politicians (together with those who benefit from their spending of our money) work the myth rather than the actual theory.
    Jan 06 13:07 pm |Rating: +1 0 |Link to Comment |View article
  • Will the Obama Plan Work?
    Thanks for a good piece - well-argued and full of sound advice.

    Regarding Buiter's negativity on the USD, it's important to note that he put its 'demise' into a 2 - 5 year timeframe. Even five years might not sound very long, but think back to 2003 and consider how much of significance has changed in the world in that relatively short span. I'm not sure what the view is in the US, but in the parts of the world I deal with (Europe, Middle East, Asia) the sense that the USD has at best a 5 -10 year shelf-life as the principal reserve currency is now pretty much mainstream. A multi-polar system seems inevitable.
    Jan 06 12:39 pm |Rating: 0 0 |Link to Comment |View article
  • What Does It Mean When Stocks Rally on Bad News?
    Imagine you're in a Flying Fortress returning from a raid. Flak all around, and a shell takes out an engine. Scary stuff. Strap on the 'chute. But the old girl (B-17s are always female) struggles on and sighs of relief are breathed all around. Another shell hits and takes out a second engine. Seriously scary, end of the world sort of stuff. Head for the exits and prey hard. But again, those guys in Seattle know how to put an airplane together and she keeps flying. There's more flak, some passes by a Focke-Wolfe or two; bullets and shrapnel hit the fuselage, but it's not like losing another engine and the shock of each strike is a little less than the previous hit. Sure, a crewmate or two gets wounded - may even die, but first aid keeps them alive for now and hey, at least it ain't you. Then a smooth, calming voice comes from the control tower at base. The worst is over. No crash after all.

    It's human nature - a coping mechanism - that we've been seeing (doubtless with a little source added by vested interests). Sooner or later reality hits home.
    Jan 06 10:59 am |Rating: +3 0 |Link to Comment |View article
  • High Cash Stockpile Available for Buying Stocks to Fuel a Rally
    Great comments above.

    This market reminds me of a bunch of children egging each other into a cold swimming pool, each unwilling to be the first to take the plunge. Meanwhile, the adults sit back and wait for the sun to emerge from behind the clouds and start heating the water. It still looks cloudy to me and there are some storms roiling about that may or may not hit - so my dry powder is staying under cover.
    Jan 06 10:41 am |Rating: 0 0 |Link to Comment |View article
  • Market Expectations for 2009
    Sounds about right. Only question I would have is whether inflation and commodities will be strong as soon as H209. When (not 'if') the disappointment meltdown hits equity markets in the Q2-Q3 timeframe, it will be founded on the belief that the economy is truly stuffed, no amount of wand-waving will save it, and we're headed for GD2 (which we might well be, but probably aren't); this would weigh heavily on the commodity complex unless you're right about inflation taking off. Given inevitable lags in monetary policy I wouldn't have thought that inflation would be firing up quite that soon - although it's always possible that investors might by then be wise to what's coming and start looking for protection in real assets. Of course, we're all sitting in Uncle Ben's test tube, so who really knows how this 'experiment' is going to pan out.
    Jan 06 10:30 am |Rating: 0 0 |Link to Comment |View article
  • When Will Criminal Conflicts of Interest Stop?
    The problem is that in several of the larger democracies - notably the US, but also the UK, Germany, Japan and many of the others - the legislative and executive branches of government have been captured by vested interests. The identity of these interests varies from country to country, and in the US Eisenhower's identified threat from the defence-industrial complex has over the last quarter of a century been supplanted by Wall Street. The only way to tackle this problem is through radical reform of political funding, lobbying practices, and the movement of public officials between jobs in the public and private sectors. I can't see it happening, and certainly not on the watch of a Chicago 'machine politician' whose appointments and outline policies look like a trip back in time rather than a true agenda for change.
    Jan 06 10:01 am |Rating: +1 0 |Link to Comment |View article
  • Too Small to Fail
    The Baltic states - members of the EU, recall - are under immense pressure from Russia. Occasionally it bubbles through to public attention - as with Russia's now well-known cyber-attack on Estonia. Latvia's deal was very, very political.
    Dec 25 13:52 pm |Rating: 0 0 |Link to Comment |View article
  • Inflation Is in Our Future...Not Deflation
    Interesting article, with which I broadly agree except as to timing; I think lags in monetary transmission will prove more significant than the author suggests. At the risk of oversimplifying, it seems that to argue against an inflationary outcome to the current monetary 'experiment' requires the holding of one or more of the following opinions:

    1. The fed (and other central banks) cannot create money fast enough to compensate for its destruction.
    - Whilst timing is always an open question, a central bank operating without effective constraint (which seems pretty much to be the position in the US and several other countries at the moment) can create money at will. Mr. Bernanke has, of course, said as much.

    2. Velocity will stay subdued because a significant proportion of consumers are already overleveraged and/or unemployed and/or concerned about the prospect of unemployment.
    - That these are very real issues cannot be doubted, but to assume they are permanent suggests a culture change of colossal proportions within a space of months. I cannot read the mind of average American consumers from my side of the Atlantic, and from a global perspective it is American consumers that matter most. Here in Britain, I can guarantee that at the first sign of an economic spring the under-40s will be out spending again. (Just yesterday I was talking with a 20-something bank clerk at an institution which failed and had to be nationalised, convinced that the gloom and doom was just media-talk and things really aren't that bad.) The question, as some comments have already pointed out, is whether banks will fuel a rekindled appetite for credit. In this country they most probably don't want to, but we have a government urging them to lend at 2007 levels (i.e., a government whose electoral prospects ride on trying to reflate the Hindenburg - somebody else's metaphor, not mine).

    3. Goldilocks lives, insofar as the central banks will be able to turn off the monetary taps at the optimal time to prevent inflation taking hold.
    - Personally, I don't have a lot of faith in today's central bankers. But prejudice aside, do we really believe economies can be fine-tuned so easily?

    Maybe it's justice European negativity at the winter solstice, but personally I think we're facing an 'either or' situation. I find it tough believing that the guys who let us get into this mess can finesse their way to a 'goldilocks reflation'. Hope I'm wrong.
    Dec 25 13:41 pm |Rating: 0 0 |Link to Comment |View article
  • Why a Revamped Housing Plan Should Be Government's First Priority
    The article and the two comments above illustrate why this sorry drama has years to run. Too many vested interests just will not let asset markets correct to appropriate levels. To determine 'appropriate', think in terms of demand and supply rather than bail-out and manipulation.
    Dec 25 10:57 am |Rating: +2 0 |Link to Comment |View article
  • Bubbly Treasuries Will Disappoint
    Whist I agree with the thrust of the article and the comments, is there not a possibility that the Fed can put a bid under the long end of the curve for quite an extended period if it goes ahead full bore with QE? The bubble must surely burst eventually - I just wonder whether 'eventually' is as proximate as the charts suggest that it should be.
    Dec 25 10:35 am |Rating: +1 0 |Link to Comment |View article
  • What Happened to the American Dream?
    The answer to the question posed by the article's title is pretty simple: a nation of producers with aspirations became a nation of consumers with a sense of entitlement.

    It's not a uniquely American problem; much of the English-speaking world seems to have succumbed.
    Dec 25 10:29 am |Rating: +8 -2 |Link to Comment |View article

OldLimey is a Top 100 Commentor

  • 201 Comments, 71 , 27
  • Total Comment Stream rating - = 44