Wall Street Breakfast: Must-Know News [View article]
The market is pricing Greek debt at what it's actually worth, ditto for Portugese, Irish, and other bankrupt nations' debts. If the Fed had not been monetising US debt in various hidden ways, the markets would have priced US debt at what it's truly worth. Indeed, when the Fed buys GSE debt from the Chinese at face value in return for the Chinese buying treasuries at face value, this is tantamount to the Chinese buying treasuries at 50-75 cents on the dollar, the value of the junk the Fed buys from them to get them to buy treasuries.
The governments in the Western countries are eager to buy, on behalf of their taxpayers, assets (such as Greek bonds) at prices that greatly exceed their market value. This is a breach of their fiduciary rsponsibility to their taxpayers. I sincerely hope that their constituents, perhaps in Germany, will put an end to this irresponsible charade.
Wall Street Breakfast: Must-Know News [View article]
"..The White House's latest attempt to stem the foreclosure crisis is a program that allows homeowners to sell their houses for less than what they owe, and gives them some money ..."
Hmmm... I wonder where that money will come from ... perhaps from further taxation of the productive? or perhaps from further debasement of prudent peoples' savings? Not to worry, at least it may buy some votes in November.
2010: Time to Arrest the Oil Extortionists? [View article]
If we follow the logic of this silly article, we would need to file anti-trust and gouging charges against many, if not most, of our corporations.
The author, and some commenters, are upset that the price we pay for oil greatly exceeds the cost of pulling it out of the ground at the world's cheapest wells. By this logic, how about the price we pay for cereal? Grains cost about $5 for a bushel (about 50 lbs). Most kids need to eat cereal, and their parents are forced to pay $4 for a box that contains 10 cents worth of grain. After adding some sugar, etc, the cost of the contents of a box of cereal is 20-25 cents, yet the poor consumer has to pay 15x-25x that cost. Should we haul the managements of the cereal companies off to jail?
How about clothes? People need underwear and socks, and our retailers sell them for 10x-20x what they pay the Chinese for them, so why don't we haul our retail executives off before the courts or the congress too?
How about tomato soup, or pasta, or soap, or toothpaste? Do you think the cost of ingredients in the package are commensurate with the price charged to the consumer? Should we sue their producers' executives too?
There are many other examples of necessities for which the consumers' final price greatly exceeds the basic cost of the goods or the raw material. This is natural, as there are many other components of cost, and if business cannot profit, it will not make the effort to develop a product and bring it to the consumer. However, the author's deficient logic implies that all these goods have to be subjected to price controls by the state. This is what centrally-planned (aka communist) economies have attempted, and the result was that production of all these necessities dropped, and so did their entire standard of living.
2010: Time to Arrest the Oil Extortionists? [View article]
Oil is too cheap. We waste too much of it unnecessarily, destroying our health by breathing pollution as a result. It is a finite resource, and its price will continue to trend inexorably upwards. We need to accept facts and plan accordingly, rather than bury our heads in the sand and blame cartels and manipulators.
We need to stimulate the economy by investing in jobs for energy efficiency, not by wasting money on pork. We can stimulate the auto industry by subsidizing smaller, fuel efficient cars and can create jobs building high-speed rail that reduces pollution, reduces highway and airport congestion, and reduces oil consumption. Ditto for nuclear and renewable energy.
If high oil prices are the only way to motivate us to implement such necessary changes to our economic model, then they are a blessing, even though those with limited vision are unable to see it as such.
The notion that if only the evil cartel were to pump out an extra 5m bbd then price will drop and all will be well forever is silly. This simply creates a greater crisis for our children and prevents us from implementing policies that create useful jobs that truly benefit our economy.
Preview from Europe: All Fools' Day [View article]
As usual a great, succinct and witty summary. You state that suspending mark-to-market would allow bankers to "...... run their firms with little or no capital and leverage them to the hilt creating the biggest credit bubble the world has ever known ....".
I was under the impression that this has already come to pass.
Four Oil Giants to Keep an Eye on - Barron's [View article]
I've held XOM for three decades (both as Exxon and as Mobil), and have added to my holdings many times over the years. It is solid and low-risk. It is also pricey, reflecting a flight to safety, so I believe its upside potential is modest from current levels. I also hold other oils, and have added to BP, RDSB, TOT, STO and REP in recent dips. I've held PBR for years, and its done very well, but think its a bit pricey at present.
Wall Street Breakfast: Must-Know News [View article]
The governments in the Western countries are eager to buy, on behalf of their taxpayers, assets (such as Greek bonds) at prices that greatly exceed their market value. This is a breach of their fiduciary rsponsibility to their taxpayers. I sincerely hope that their constituents, perhaps in Germany, will put an end to this irresponsible charade.
Wall Street Breakfast: Must-Know News [View article]
Hmmm... I wonder where that money will come from ... perhaps from further taxation of the productive? or perhaps from further debasement of prudent peoples' savings? Not to worry, at least it may buy some votes in November.
2010: Time to Arrest the Oil Extortionists? [View article]
The author, and some commenters, are upset that the price we pay for oil greatly exceeds the cost of pulling it out of the ground at the world's cheapest wells. By this logic, how about the price we pay for cereal? Grains cost about $5 for a bushel (about 50 lbs). Most kids need to eat cereal, and their parents are forced to pay $4 for a box that contains 10 cents worth of grain. After adding some sugar, etc, the cost of the contents of a box of cereal is 20-25 cents, yet the poor consumer has to pay 15x-25x that cost. Should we haul the managements of the cereal companies off to jail?
How about clothes? People need underwear and socks, and our retailers sell them for 10x-20x what they pay the Chinese for them, so why don't we haul our retail executives off before the courts or the congress too?
How about tomato soup, or pasta, or soap, or toothpaste? Do you think the cost of ingredients in the package are commensurate with the price charged to the consumer? Should we sue their producers' executives too?
There are many other examples of necessities for which the consumers' final price greatly exceeds the basic cost of the goods or the raw material. This is natural, as there are many other components of cost, and if business cannot profit, it will not make the effort to develop a product and bring it to the consumer. However, the author's deficient logic implies that all these goods have to be subjected to price controls by the state. This is what centrally-planned (aka communist) economies have attempted, and the result was that production of all these necessities dropped, and so did their entire standard of living.
2010: Time to Arrest the Oil Extortionists? [View article]
We need to stimulate the economy by investing in jobs for energy efficiency, not by wasting money on pork. We can stimulate the auto industry by subsidizing smaller, fuel efficient cars and can create jobs building high-speed rail that reduces pollution, reduces highway and airport congestion, and reduces oil consumption. Ditto for nuclear and renewable energy.
If high oil prices are the only way to motivate us to implement such necessary changes to our economic model, then they are a blessing, even though those with limited vision are unable to see it as such.
The notion that if only the evil cartel were to pump out an extra 5m bbd then price will drop and all will be well forever is silly. This simply creates a greater crisis for our children and prevents us from implementing policies that create useful jobs that truly benefit our economy.
Preview from Europe: All Fools' Day [View article]
I was under the impression that this has already come to pass.
Four Oil Giants to Keep an Eye on - Barron's [View article]