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tomierna's Avatar Picture tomierna (Admin) – December 08, 2007 02:37AM Reply Quote
Talk about industry stock market mumbo-jumbo here.

Wobs – July 14, 2015 05:16PM Reply Quote
This actually started about The Greece Crisis! But it Morphed into Parenting! :-)

"Mommy State" vs. "Daddy State" I guess!!! LOL.

ARL (Moderator) – July 14, 2015 07:01PM Reply Quote
Apologies if my post yesterday was a bit tetchy or blunt.

I lost a seven figure sum during the GFC (which I am still to fully recover) so I have little reverence for the "masters of the universe" and considerable sympathy for any of their victims.

(But yes I of course concede Greece did themselves no favours)

Edited 1 time(s). Last edit at 07/14/2015 07:03PM by ARL.

Wobs – July 14, 2015 09:45PM Reply Quote
No offense taken, at least on my part. I regret I wasn't PUBLICLY Active in the years leading
up to '08; as I wasn't there to Issue THE SELL SIGNAL Like I Did Right Before The Market Top
in 2000; I was able to give people days to position themselves. It SUCKS Because I Was
Speaking Privately But A Lot Didn't Want To Listen.

Sorry You Got Hurt For Seven Figures. THAT TOTALLY BLOWS!!!

P.S.: Jonathan R. MORGAN! STOP STALKING ME ON THESE BOARDS! "Snuff Films?" "Celebrity Porn?" REALLY?

Edited 1 time(s). Last edit at 07/14/2015 09:49PM by Wobs.

El Jeffe – July 15, 2015 04:55AM Reply Quote
What a journey.
Just sound alarm for this next time we need to move to cash or similar.

ARL (Moderator) – July 15, 2015 06:40PM Reply Quote
Sadly Bill, nobody rings a bell at the top (or bottom) of a market...

Wobs – July 15, 2015 09:47PM Reply Quote
REALLY? The Monks Should Remember an RFI FLASH on/about 4-6 March 2000.

ARL (Moderator) – July 15, 2015 11:33PM Reply Quote
It's merely a turn of phrase.

I can't comment on your stock-picking or market-timing prowess - but if it's as good as rumoured, you're the exception not the rule.

Edited 1 time(s). Last edit at 07/15/2015 11:34PM by ARL.

Wobs – July 15, 2015 11:57PM Reply Quote
"The Street" HATED Me! Alternately I was either called "A Boy Scout" for NOT "going along,
or "The Bad Boy of Wall Street" because I told the TRUTH, no matter whose ox got gored.

BUT They also subscribed to RFI, OR They Read AppleRecon! FWIW, when they heard my
name for a question on a conference call, one of them confessed to me: "Oh SHIT! There
goes MY MONEY!!!" And it did.

ARL (Moderator) – July 16, 2015 09:19PM Reply Quote
I don't know why I'm getting so worked up about Greece or indeed Europe when I've got this to focus on.

(Somewhere on the interwebs there's also a interesting table of the money supply with all the QE of the last five years - jaw-dropping.)

I am more bearish than Biffy and have been since getting out of the market in 2010 just before the PIIGS contagion started. I have questioned the wisdom of this strategy on numerous times since then (especially after reinvesting around 2012 at a good discount only to pull out 6 months later - something my adviser later admitted was a mistake) to the point I wondered if my adviser had become a "permabear."

Maybe has has, maybe he hasn't - but I'm starting to think he may be right about the "once in a lifetime" investment opportunity. That or I'm a fool.

We shall see.

Wobs – July 16, 2015 11:16PM Reply Quote
Agreed. BUT China HAS the CA$H to Bail Out It's Economy! LOL!
Paid for By The U.S., et al!!!

James DeBenedetti – July 17, 2015 12:52PM Reply Quote
If by cash, you mean China can print its own currency (like any country not on the Euro), then yes, it has plenty of cash. If you’re referring to its foreign reserves though, um… no.

Michael Pettis
But I do disagree very strongly with Mervyn Davies’ claim that because the PBoC is “very rich in reserves” it will not be much of a challenge to recapitalize the banks. China’s reserves only matter to its credit position if China faced a problem of external debt.

It doesn’t, and so the amount of reserves are almost wholly irrelevant...

A much more important objection is that the idea that reserves can be used to clean up the banks (or anything else, for that matter) is based on a misunderstanding about how the reserves were accumulated in the first place. There seems to be a still-widespread perception that PBoC reserves represent a hoard of unencumbered savings that the PBoC has somehow managed to collect.

But of course they are not. The PBoC has been forced to buy the reserves as a function of its intervention to manage the value of the RMB. And as they were forced to buy the reserves, the PBoC had to fund the purchases, which it did by borrowing RMB in the domestic market.

This means that the foreign currency reserves are simply the asset side of a balance sheet against which there are liabilities. What is more, remember that the RMB has appreciated by more than 30% since July, 2005, so that the value of the assets has dropped in RMB terms even as the value of the liabilities has remained the same, and this has been exacerbated by the lower interest rate the PBoC currently earns on its assets than the interest rate it pays on much of its liabilities.

In fact there have been rumors for years that the PBoC would be insolvent if its assets and liabilities were correctly marked, but whether or not this is true, any transfer of foreign currency reserves to bail out Chinese banks would simply represent a reduction of PBoC assets with no corresponding reduction in liabilities. The net liabilities of the PBoC, in other words, would rise by exactly the amount of the transfer. Because the liabilities of the PBoC are presumed to be the liabilities of the central government, the net effect of using the reserves to recapitalize the banks is identical to having the central government borrow money to recapitalize the banks.

This is the point. Any government that is able to borrow money can borrow money to recapitalize its banks, whether or not it has large amounts of foreign currency reserves. The amount of central bank reserves that China or any other country has is wholly irrelevant, except perhaps to the extent that without those reserves the central government would lack the credibility to borrow domestically, which hardly seems to be a concern in China’s case.

Bailing out the banks, it turns out, is conceptually no different than transferring debt from the banks to the central government. China can handle bad debts in the banking system, in other words, by transferring the net obligations from the banks to the central government, and the large hoard of reserves held by the PBoC does not make it any easier for China can resolve any future debt problems. In fact if anything it should remind us that when we are trying to calculate the total amount of debt the central government owes, the total should include any net liabilities of the PBoC, and that these net liabilities will increase by 1% of GDP every time the RMB strengthens against the dollar by 2%.

Wobs – July 18, 2015 06:28PM Reply Quote
The Chinese were FORCED by the Western Developed Economies BECAUSE of the Aforementioned Currency Manipulation, and it also has HUGE Current Account Surpluses BECAUSE of the HUGE Trade Imbalances. And THAT'S also why PRC has gone on Bond Buying Binges but STILL can't keep up the pace.

Yes, a Chinese Recession WILL Cause a Global Recession, BUT it will Hammer the Chinese the Hardest. And WHENEVER a Totalitarian Government Faces Internal Turmoil, They LOOK for an EXTERNAL Enemy & Bang the War Drums. This is ESPECIALLY the Case in The PRC Because of China's "Mandate of Heaven." When the Emperor / Gov't LOSES Its Mandate of Heaven, It USUALLY Fails & Is Replaced by Another. In the Case of the PRC? I Fear that it will be a Combination of SEVERE Internal REPRESSION & EXTERNAL AGGRESSION!

bahamut – July 21, 2015 04:05PM Reply Quote
Investors are insane. Apple has record quarter results, with a 38% increase in growth. Meanwhile, the stock went in the toilet after-hours. Meanwhile Amazon gained 10% in the last month, notwithstanding that it has no real profits, really can't sell a whole hell of a lot more than it already does, and makes no money.

johnny k – July 21, 2015 04:35PM Reply Quote
Yeah, but AAPL will have its due. It steadily creeps up, just not at earnings when everyone's paying attention. AMZN made clear from the first investor's letter that it would rather roll profits back into expansion until it ruled the world, so it has a ready-made excuse. Which isn't to say I understand.

Roger – July 21, 2015 05:05PM Reply Quote
Yeah, I'm baffled as well, though I guess this is a buying opportunity. People seem to be pointing to the iPhone numbers as not as huge as rumored, but I have to suspect this is the first round of the inevitable "disappointment" with the Watch (before the inevitable "surprise" that version 3 becomes a huge profit center a few years from now).

ARL (Moderator) – July 21, 2015 08:49PM Reply Quote

Wobs – July 22, 2015 02:38PM Reply Quote
Until the U.S. pulls its head out and drastically reforms and lowers its Corporate Tax Rate,
A plethora of U.S. Multinationals will continue to accrue Immense Cash positions
overseas and starve the U.S. of not only Tax Receipts but seriously needed capital
in the U.S. Economy. "Yeah, we got a Corporate Tax Rate of 35%, But No One is
paying it!"

Forget "Tax Holidays" and other gimmicks! Lower the rates so you will at least
generate REVENUE. 100% of Nothing isn't as good as 10-15% of BILLIONS!

James DeBenedetti – July 22, 2015 05:10PM Reply Quote
The US doesn't need more capital - we already have trillions piling up earning virtually nothing because there's no demand for it.

Wobs – July 22, 2015 06:54PM Reply Quote
James DeBeneditti
The US doesn't need more capital - we already have trillions piling up earning virtually nothing because there's no demand for it.

Giving the companies incentives to repatriate their overseas Cash Hoards will generate Tax Revenues for the U.S. Government,
which it SORELY Needs -- rather than having it stowed in places like Ireland, Australia, etc.

It will also repatriate Capital that can be used to develop & bring to market "The Next Big Thing," and again --
domestically. It would also act as incubator cash. And again, Generating Tax Revenue into the U.S. Coffers.
Rather than piling up IMMENSE CASH RESERVES Which for all intents & purposes is "Dead Money" as far everyone
is concerned. All to Avoid "A Taxable Event!"

The "Left" Wants Companies to Pay The Onerous Rates. The "Right" Wants the Levels Low Enough to attract
capital repatriation. Until this mess is fixed -- and it's going on 30+ years, Apple & All The Others Will
Carry On as Before, and "Park Their Money" To Avoid High Taxes "To Enhance Shareholder Value." This
is NOT in Anyone's Best Interests. Agreed?

ARL (Moderator) – July 22, 2015 07:17PM Reply Quote

I was surprised to learn how high the company tax rate is in the US.

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