Forecasts & Trends - All Comments

re: Economic Recovery vs. Rising Unemployment

dteglia — Tue, 27 Oct 2009 22:34:01 GMT

Why is it Obama's potential doubling of the debt is a "liberal experiment", but Bush's actual doubling of the debt wasn't a "conservative failure" as a result of tax breaks for the wealthy that wiped out the Clinton budget surpluses, plus tacking on two unpaid for wars. Your commentaries are obviously biased by partisan politics.

re: Stratfor: Odds of War with Iran Spiking

Miroslav Durmov — Thu, 15 Oct 2009 22:21:14 GMT

A brilliant analysis and the author deserve applause but, there is an issue with America’s capabilities for a third war. My knowledge of US military doctrine reminds me of two and a half wars as the limit. Of course, a new military engagement may be a booster for economy in reception but it could produce deteriorating results as well and I am skeptical about the imminence of a military action against Iran. To describe the current situation much more acceptable is a presumption that we are witnessing a mixture of diplomatic and intelligence activities from different sources and why not a hypothesis that there is a Russian and/or Iran initiative as well. For instance a conclusion about a redirection of Iran’s petrol flow toward north has to be very intimidating for United States and its allies and with significant strategic impact for Europe that could have a restraining impact but not for Russia. In addition, a question exists about President Obama’s Nobel Peace Prize. Just imagine a situation-the Nobel Prize winner is opening a new war which may be successful at the very beginning but unpredictable in the long term. Creation of a coalition would be extremely difficult and the public opinion would not be supportive. I agree with Stratfor team’s opinion that Russia has to be monitored as a new destabilization factor, but please do not be pretty optimistic. The West simply missed its chance in the last decade of the twentieth century.

re: Healthcare Reform or Government Takeover?

Goody — Wed, 23 Sep 2009 00:21:49 GMT

It's interesting that you stated that your goal for this post was to provide some information on health care reform and then proceeded to walk down the list of far-right talking points, all of which are slippery slope, worst-case scenarios of what might happen if the evil liberals gain control of things. You even go so far (or so shallow) as to raise the specter of how (of course) liberals just want to take over our lives (!) via expanding government and of course you threw in the token Reid / Pelosi bugaboo to solidify your status as someone who is so partisan he doesn't even realize that not everyone in the country thinks of Reid / Pelosi as the 3rd and 4th horsemen of the apocalypse.

I believe there are valid arguments against the health care plan as stated, but did you miss the whole point of how Obama is trying to go about this reform? He's setting out goals he wants to achieve and letting Congress work out the details in law. That's how the system should work, and any true conservative would be happy that Obama is trying to reign in the imperial presidency that has evolved over the last 40 years.

Oh and rationing is just an economics term that happens in all markets everywhere, currently we ration health care by price. From a moral standpoint I want everyone covered and I'm willing to wait a little longer for care during the few years it'll take for the supply of medical professionals to catch up to the demand. I find it selfish and immoral for people to continue allowing 22,000 of their fellow Americans to die every year for lack of coverage, just because they're worried about adding 10% to their wait times for a doctor's office.

We're willing to go to war and spend $100-200 billion a year for 10 years when 3,000 people die in one attack, but not willing to spend the same per year to save 7 times as many people (each year) and another 700,000 from medical bankruptcy (each year). As an investment adviser, you're going to have to explain the ROI on that to me.

re: On the Economy & Obama's Trillions

Goody — Tue, 22 Sep 2009 16:27:10 GMT

I would agree with Kirkydu, the political rhetoric is just amazing in this article. Liberals want to take over our economy, nationalize our health care, and steal your children! Then you berate people for not reading the health care bill, which you clearly did not read yourself, since it isn't nationalization of the system whatsoever.

I guess you only read "the highlights that are readily available on the Internet", most likely highlights posted on the same websites that call Obama Hitler in disguise. You need to be explicit when you are making slippery slope arguments i.e. it's one thing to say that you think a public option might lead to a crowding out of private insurance providers and it's another thing entirely to assert that it will definitely happen and that you're basing all of your scary scenarios based off that assumption.

re: On the Economy & Obama's Trillions

Kirkydu — Tue, 15 Sep 2009 04:22:17 GMT

In fairness to Dr. Krugman, he is a Noble Prize winner in Economics, so belittling him as just some commentator really demeans the effectiveness of your argument. Also, this is minor, but Krugman did not say that the debt in a decade would be 40% of the GDP, he said the "added" debt would be equal to 40% of GDP. He also said that debt is a problem, just not crushing, which, I not only agree with, but I wrote in my letter to clients a couple of weeks ago. Also in fairness to Krugman, his GDP growth estimate is considerably lower than the administrations, so I don't think he really qualifies as a crony.

While I respect you quite a bit, I hate to see good points lost in rhetoric. I think your politics got the better of you this time.

re: Cap-and-Trade: Bad For The Economy & Us

travis199 — Mon, 20 Jul 2009 23:54:57 GMT

A wonderfully cogent analysis of a disaster in waiting. I can only hope that enough people will get on board against this eternal ruination of the United States, and bury this idea next to Lenin's tomb.

re: Is America On The Road To Financial Ruin?

JCHarper — Thu, 25 Jun 2009 03:17:37 GMT

<< We have had more good economic news in the last couple of weeks. Most importantly, the Index of Leading Economic Indicators (LEI) rose a better than expected 1.2% in May, following a 1.1% gain in April. These were the first back-to-back monthly increases in almost three years. >>

I finally looked up just what goes into the LEI and how it is weighted by the Conference Board. Interestingly, It is dominated by M2 Money Supply, Average Weekly Hours (manufacturing) and the Discount Rate/10 year spread. Together, they account for over 2/3 of the LEI. That isn't what I thought.

The FED controls the money supply and discount rate, which together account for 46% of the LEI. If FED policy works as it has in the past, then the LEI is indeed a good indicator. However, some (including me) suspect that current FED policy may not lead to economic growth in these extraordinary times. If that is the case, the LEI is a misleading economic indicator.

I copied the following components and weighting from the Conference Board website. (See page 3 at www.conference-board.org/.../rainstorm.pdf)

U.S. Composite Economic Indexes: Components and Standardization Factors

Leading Economic Index Factor

1 Average weekly hours, manufacturing 0.2549

2 Average weekly initial claims for unemployment insurance 0.0307

3 Manufacturers' new orders, consumer goods and materials 0.0774

4 Index of supplier deliveries – vendor performance 0.0677

5 Manufacturers' new orders, nondefense capital goods 0.0180

6 Building permits, new private housing units 0.0270

7 Stock prices, 500 common stocks 0.0390

8 Money supply, M2 0.3580

9 Interest rate spread, 10-year Treasury bonds less federal funds 0.0991

10 Index of consumer expectations 0.0282

Coincident Economic Index

1 Employees on nonagricultural payrolls 0.5439

2 Personal income less transfer payments 0.1873

3 Industrial production 0.1497

4 Manufacturing and trade sales 0.1191

Lagging Economic Index

1 Average duration of unemployment 0.0371

2 Inventories to sales ratio, manufacturing and trade 0.1238

3 Labor cost per unit of output, manufacturing 0.0608

4 Average prime rate 0.2825

5 Commercial and industrial loans 0.1127

6 Consumer installment credit to personal income ratio 0.1872

7 Consumer price index for services 0.1959

There is a lot more information there if anyone is interested.

Cordially,

John C. Harper

re: Obama On Course To Double National Debt

mking — Wed, 17 Jun 2009 15:47:25 GMT

I agree with you completely on the Obama deficit situation, Gary. Thanks for having the courage to stand up and call it the way it is. I believe we are nearing the endgame of hyperinflation. It was a great country while it lasted, but all good things must come to an end. Zimbabwe here we come!

re: Carbon Emissions: Environmental Or Political Issue?

hafretheim — Thu, 14 May 2009 03:47:42 GMT

Time is actually running out for the people who have sought to scare us with the CO2 global warming Hypothesis (it has never actually qualified as a theory- there is a five part test for that, one of them being the ability to predict what was previously unexpected or unpredictable- Einsteins General theory predicted that gravity would bend light- and it does). But I just wanted to stop and set your mind at rest about one thing- the idea that the world can ever get as much CO2 back into the air as it had 500 or so million years ago. That is now impossible. The reason is that most of it has been turned into limestone- if you live anywhere from Iowa south to Texas, etc your are standing on top of it. The limestone is thousands of feet thick in many places. It got there because over hundreds of millions of years diatoms and similar plankton took it out of the air and combined it with calcium to form their shells. After they died they dropped to the bottom where their shells compacted to form limestone while the oil that they had used for bouyancy leaked out and pooled under salt domes- which is why so much petroleum comes from areas with thick layers of limestone- like Texas, Louisiana and Oklahoma. If we could burn all of the fossil fuels in the world we could maybe get the CO2 level up to 1500 PPM- temporarily- the ideal level for plant growth. But even then the CO2 would only be a tiny fraction of greenhouse gases in the atmosphere (water vapor is a great deal more common than CO2).

re: Support Wanes For Obama's Huge Stimulus Plan

PaulL — Thu, 12 Feb 2009 20:55:02 GMT

I was hoping for some solid economic insights but the logical disconnect evident in the claim that lowering taxes on profits encourages reinvestment therefore creating jobs is Alice in Wonderland. Even the most unsophisticated entrepreneur can see when filling out his Schedule E that reinvestment (employees, capital) reduces tax exposure. Its the lowing of taxes that encourages profit taking and starving of a business and its employees (the "demand" side of the equation I learned in Econ 101).

re: Support Wanes For Obama's Huge Stimulus Plan

Goody — Thu, 12 Feb 2009 18:23:21 GMT

If you're going to cite Gallup at least be honest with your readers. Gallup shows steady and increasing support for the stimulus plan:

www.gallup.com/.../Stimulus-Support-Edges-Higher.aspx

I can't believe you're conflating Gallup / Rasmussen results to make your point.

And what's with the strange language obsession with "tax cuts" = "stimulus" while "spending" = "pork"? They must really beat that into you at the Republican brainwashing course. Does anyone outside of your own little echo chamber buy that any more?

re: Support Wanes For Obama's Huge Stimulus Plan

uncdubya — Wed, 11 Feb 2009 13:27:25 GMT

"Most of the people i talk to are against Obama's plan and its full of pork" In addition to the people he is talking to, how about the 63% and counting Americans who are against it. You apparently are in the 37% and dwindling category.

re: Support Wanes For Obama's Huge Stimulus Plan

hunt — Wed, 11 Feb 2009 00:10:29 GMT

I wonder who you are talking to when you say you say that "most of the people i talk to are against Obama's plan and it's full of pork." Seems to me that most economists feel that the proposed spending plan, coupled with tax cuts, is on the low side of what is required. I know that Republicans and Democrats can look at the same thing and believe that it is a totally different animal. So, clearly, your hard right leaning leads you to see "pork" where others see "stimulus." I don't see it that way.

re: A Eulogy For Buy-And-Hold Investing

Ptolemy — Wed, 28 Jan 2009 14:18:50 GMT

"this program should only represent a small percentage of your overall portfolio"

So, if we put say 5% into Scottia and 5% into Niemanns and you bieleve modern portfolio theory and 'buy and hold' are dead, what do we do with the remaining 90% of our funds?

re: Obama's Tax Policy: None Dare Call It Welfare

Jerry C. — Sun, 18 Jan 2009 07:48:08 GMT

I hope you are wrong.