jlounsbury59

http://www.piedmonthudson.wordpress.com
Total Rating:
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283 Comments

    • Wed Nov 19th 13:32 PM | Rating: +1 0
      Commented on:
      Super Cycle Critical Point
      TimR - - -

      See my article Stock Market Cycles, Part 6: Super Cycles

      seekingalpha.com/artic...




      On Nov 18 02:23 AM TimR wrote:

      > Interesting.
      >
      > What is the time frame for the other super cycle bear markets?
      View article »
    • Tue Nov 18th 10:51 AM | Rating: +1 0
      Commented on:
      General Motors Bailout: Consider Other Alternatives
      rm said:

      "Now, to the hybrid issue...

      60% of our electricity is produced by coal-burning plants. "Plugging in" every night will increase that amount substantially. Is this acceptable?

      Furthermore, we already see brownouts in major cities when temperatures rise. Will the electrical infrastructure support a massive shift to electric cars?"

      Answer to question 1: It is not acceptable. But neither is 60% of our electricity produced by coal burning plants we already have. For many reasons, diversification of energy production is critical to our economic future.

      Answer to question 2: No, current infrastructure will not support the additional demand of plug-in electric autos in wide use. But as you point out, the electrical infrastructure we have now is insufficient. Since it must be improved, let's do it with a plan that recognizes additional uses and capacity demands in the future.

      I agree with your criticism of quick fixes. If you take big steps with no plan the risk is a 50/50 chance you will move in the wrong direction. If you leave your house in New York on a cloudy day (no sun for reference, travel on roads with no directional signs, and have no map, compass or landmark references, what are the chances that you will be able to find Chicago?
      View article »
    • Mon Nov 17th 12:25 PM | Rating: 0 0
      Commented on:
      Peak Oil, Cars, and Depressions
      billp37 - - -

      The shortage you refer to is why there is so much talk about the need build a new electrical grid and bring new generation sources online. If the correct investment is made there is no shortage. Will we wait until there is an emergency to start action?


      On Nov 17 09:52 AM billp37 wrote:

      > "For example, if Obama decides to invest heavily in electrified light
      > rail transport systems, that might create some viable investment
      > concepts."
      >
      > I am reading about electricity shortages in the US starting within
      > several years.
      View article »
    • Mon Nov 17th 11:21 AM | Rating: +1 0
      Commented on:
      How Long Until the Bulls Regroup?
      Wow! You should write more often if this is what is produced by waiting two weeks. A lot of useful information and opinion, but I thought I was reading a book.

      Two specific comments:

      1. I don't believe the bulls are yet in hiding. We keep having sharp rallies (that fail to follow through) almost weekly. Some bulls are still getting sucked into bear traps. When this pattern stops, either with a sustainable rally (the bulls regroup), or, IMO more likely, with fewer brief bear market rallies (the bulls are really in hiding), we have a condition that will allow a bottom to be defined.

      2. The most likely bankruptcy for GM is Chapter 11. In this case, liabilities are removed and GM reorganizes with its remaining assets. This process will almost certainly have some government involvement (good or bad?). How much the loss in employment in this process is open to debate, but it is certainly a lot less than the 2-3 million that would occur with a Chapter 7. Without government involvement, Chapter 7 (liquidation of GM) is quite likely.
      View article »
    • Mon Nov 17th 10:45 AM | Rating: +1 0
      Commented on:
      Buy And Hold: Beware the Devil You Don't Know
      IMO, the debate about buy and hold (in its many personna) is less important than a discussion about the heralded Efficient Market Hypothesis. The essence of this hypothesis is that, on average, market timing can not be successful because the market is huge (all investors) and the market reacts instantaneously to all information as it occurs. Thus, it is simply a matter of luck as to which investors can profit from new news and the same investors can not repeatedly profit by following the news because the competitive investor population is simply too vast.

      The hypothesis states that all new information is instantaneously incorporated into price so the average investor can not profit more than the market average because the sum of the average investors is the market average.

      There are three fatal flaws in the Efficient Market Hypothesis.

      (1) There are very few (if any) average investors. Therefore, applying the hypothetical average investor label to an individual has no reality.

      (2) Much information is dis-information and the ability of investors to evaluate information varies widely. Sometimes there is a herd mentality to new news (correct and incorrect) and sometimes valuable news is slow to sink in to a wide audience.

      (3) Some market action is due to "sentiment" and "emotion", which selectively emphasizes and ignores various news items.

      If any readers have opinions regarding this famous theory (or is it hoax?), could we hear from them?
      View article »
    • Mon Nov 17th 10:16 AM | Rating: +2 0
      Commented on:
      Wall Street Breakfast: Must-Know News
      Prudent Man - - -

      Good point. I believe that during the TARP "disbursement&quo... phase, all executive salaries should have been capped at some nominal level, say $300,000 per year max per individual, and some limit on the total for all executives within each company. There could be a formula for resurrection of higher compensation during the "repayment" phase. This applies incentives for "rehabilitation&q... as well as inflicting some level of pain on the perpetrators.

      Some history: Lee Iacoca worked for $1 a year during the Chrysler rehab project. A cut to $300,000 (or less) allows the fat cats to still make enough to pay the mortgage on their mansions and second homes and to buy groceries and personal necessities. Tough if they have to temporarily give up their domestic servants, lurxury vacations and third and fourth status-mobiles. If they don't want to work for $300,000 per year they can leave. There are plenty of qualified (maybe more qualified) people in the finance world who would work for that and for a better future.


      On Nov 17 08:14 AM PrudentMan, CFA wrote:

      > In my fifty years of professional investment experience, my intuition
      > is that governments should be minimal and usually are part of the
      > problem instead of the solution. It is obvious in this "crisis",
      > which is actually not as serious as the economic situation of the
      > seventies when the people of Kansas had to bail out New York City,
      > calls for less government intrusion rather than more.
      >
      > When people are told that any government agency is going to solve
      > their problems those people have a lack of a sense of reality. In
      > the case of derivatives and leverage the government could have easily
      > ameliorated the risks by raising rates and Congress should have given
      > the SEC the tools they need though I believe they already have those
      > tools but, for political reasons, failed to take away the punch bowl.
      > After all, the member of the House of Representatives run for reelection
      > every two years and they like bull markets and never ever want to
      > decrease the money supply.
      >
      > If the Administration would have announced in 2007 that the Free
      > Market would have to clean up any messes it got itself into the markets
      > would have corrected accordingly and quickly. Now everyone who made
      > a stupid, greedy or both mistake is waiting for some government organization
      > to bail them out. The line continues to lengthen and the G-20, beings
      > a political organization, is clueless as to the ability of markets
      > to correct their own mistakes.
      View article »
    • Sun Nov 16th 23:13 PM | Rating: +2 0
      Commented on:
      The Right Kind of Bailout
      GM still exists in a Chapter 11 bankruptcy, which removes liabilities and enables the assets to be used for restructuring. This is what Felix was referring to.


      On Nov 15 05:37 PM casey00001 wrote:

      > Felix your comment, "but I do think that if GM is to declare bankruptcy,
      > it should do so with the support of the government and a clear plan
      > to come out of bankruptcy". just does not make any sense. You say
      > let them go bankrupt and then have the Federal Gov't bail them out.
      > That can not work. Once they go backrupt that is it they are GONE.
      > If you want GM around, the Gov't has to help them prior to bankruptcy.
      > The precedent has already been set with Chrysler in the 70's.
      View article »
    • Sun Nov 16th 13:10 PM | Rating: +1 0
      Commented on:
      Stock Market Cycles, Part 6: Super Cycles
      I do not equate the study of history with numerology. If important events occurred in the past and we do not try to understand them, we can not hope to do better in the future, except by dumb luck. I believe it was Winston Churchill who said (forgive me if it was someone else): "Those who do not learn from history are doomed to repeat it."

      Of course, you can always find people who proclaim: "This time it is different." Has anyone kept track of how many times that statement has been right and how mnay times wrong?
      View article »
    • Sun Nov 16th 13:02 PM | Rating: +1 0
      Commented on:
      Deflation? What Deflation?
      One other comment - The article seems to equate deflation with dis-inflation. The most common meaning of deflation is falling prices. The most common meaning of dis-inflation is a slowing of the rate of inflation. I am sure that there may be other (better?) definitions of the terms, but these are the most common.
      View article »
    • Sun Nov 16th 12:58 PM | Rating: +2 0
      Commented on:
      Deflation? What Deflation?
      Big Jake - - -

      Your interesting article is missing one important factor: debt is money. The huge debt on balance sheets and against inflated home equity was used as currency. This debt is money that has already been spent. (fatcat recognized this in his comment.) So, what is happening now is the government (Federal Reserve and congress) is liquidating some of the debt by printing money. This shows as up as an increase in M1, but does not go into circulation; it remains on the books of financial institutions to reduce their leverage. To the extent that not enough money is printed to replace the money already spent, defaults will occur until all the assets worth less than the debt incurred are wiped out.

      Deleveraging is occurring through a combination of bankruptcy and printing money already spent. If all deleveraging occurred via bankruptcy, wide spread deflation (depression) would occur. If deleveraging occurred exclusively via printing more money, deflation would be limited and inflation would be increased. We are getting both treatments and so the deflation/inflation picture is mixed.

      The problem with the current course taken is that the balance point between deflation (too much bankruptcy) and inflation (too much currency printing) is probably more like a knife edge than a broad platform. The danger of not staying on the knife edge is great.

      View article »
    • Sun Nov 16th 12:39 PM | Rating: +1 0
      Commented on:
      Alternative Energy Storage: Cheap Will Beat Cool
      I remember the Xerox prototype system Lisa in the early 1980's. I was at IBM and we thought it was clever. Microsoft and Apple not only thought it was clever but they had far better business vision than IBM in this area and the rest is history.

      I agree with the cheap chemistry proposition. I have positions in ABAT and CBAT.



      View article »
    • Sun Nov 16th 00:16 AM | Rating: +1 0
      Commented on:
      Sentiment Overview: Still Too Many Optimists
      Some thoughts:

      1. The narrower range might be something akin to base building on a price chart for a stock. One possible argument against that is that the lows of this range are above 100, whereas the recent lows before the range started were much lower, arounf 60 or so.

      2. The recent range actually has a flat base but a decending series of upper limits. This looks like a descending flag in a longer term descending pattern. This is a bearish pattern.

      3. If the pattern does move to much lower lower sentiment will the contrarian indicator do a better job than it did in early 2008? Then we twice hit levels around 60, but the rebound in sentiment was very short lived and dropped back into the current range by May.

      4. Perhaps we need a negative sentiment extreme that lasts more than one week to get a better wash out in price and a longer lasting rally.
      View article »
    • Sat Nov 15th 12:28 PM | Rating: +1 0
      Commented on:
      Consumers Buy Into Disinflation
      What specific actions did Carter take to promote inflation? Or fail to take to fight inflation? In my opinion, the causes of the inflationary spiral in the 1970's were:

      (1) Johnson's guns and butter fiscal irresponsibility (Vietnam War and printing the money to pay for it and the Great Society),

      (2) Nixon's removal of the gold standard and ill conceived attempts at price controls.

      (3) The oil embargo and 300% price rise when we were even more dependent on enrgy in our economy than we are today.

      If you want to include Carter on this list please be specific as to why. And please say something more than that he was an ineffective president, which is an opinion few will argue with.


      On Nov 15 09:53 AM sickofthehype wrote:

      > After the short blip of inflation taking off there will be inflationary
      > pressures on employers as well. Raw materials, supplies, etc, will
      > all go up in price, forcing businesses to charge more.
      >
      > Perhaps there will be more of a distance between businesses that
      > sell products versus service oriented businesses.
      >
      > Anyhow - wage pressure will build once inflation takes off, but regardless
      > the mid 1970's will be eerily familiar.
      >
      > Carter, an unknown Democrat promoting CHANGE, was elected into office
      > and an inflationary campaign was created. Then 4 years later we needed
      > 21% prime rate to halt the measures in motion. Then a recession in
      > the early 80's occured. We could be in for a similar pattern.
      View article »
    • Sat Nov 15th 10:36 AM | Rating: +1 0
      Commented on:
      Washington Post on the Quiet Windfall for U.S. Banks - For Shame!
      The tax ruling may have been an appropriate temporary emergency measure. If so, it should have been identified as temporary and a time limit placed on it. Any other action appears to be illegal. Finally, congress should have been informed up front, not treated like mushrooms (kept in the dark and fed horses--t).
      View article »
    • Sat Nov 15th 10:12 AM | Rating: +3 0
      Commented on:
      The Right Kind of Bailout
      Felix - Great article.

      Commenters - Great discussion.

      One question: If the fox is the only one watching the hen house, why would you expect to get a count of the chickens?
      View article »
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