Tuesday, December 7, 2010
Sunday, December 5, 2010
Tuesday, November 30, 2010
Why A "Down" Dollar Is Okay...
Hardly a day goes by that one country or another doesn’t complain about the value of the dollar. These countries are concerned that our government not only would not be upset if the dollar declined in value — it would actually welcome it. This is the case, even though the dollar is generally considered to be overvalued against the currencies of those countries with which we are running our biggest deficits. This list includes China, Malaysia, Russia and South Korea, to name just four.
It goes without saying that if the dollar is too high in value, the goods we export will be priced out of many markets — including those in our own backyard. As a consequence, imports will exceed exports, thereby resulting in a trade deficit.
On a balance-of-trade basis alone, it should come as no surprise that the dollar is weakening. In the absence of intervention, it is the markets’ way of trying to establish equilibrium.
This development should assuage the complaints of those countries that worry about all the dollars they are accumulating as a result of our trade deficit with them.
But are these countries happy? No, Virginia, they are not. They also don’t like to be criticized by us for keeping their currencies too low in value, thereby allowing them to accumulate a sizable trade surplus.
In my view, if these surplus countries can’t accept a fairly valued dollar, then maybe we should look elsewhere for goods to satisfy our needs. As you know, we as a nation Consume More Than We Produce. We take care of this demand by importing goods from abroad, so why are these countries complaining? Many countries produce more than they consume, thus they need to sell us their excess production. I am sure that they would not like it if we stopped buying their goods and began producing more than we consume like they do. Actually, these countries want the dollar to remain overvalued, since it serves their main priority these days: It relives them of the need to stimulate domestic consumption.
This way they can focus on reducing their budget deficits, which seems to be an overarching concern nowadays. At the same time they believe that they can feel free to lecture us on our seeming lack of fiscal probity.
Our economy virtually cries out for a budget deficit. Cutting it now will reduce buying power at a time when, if anything, it needs bolstering by the government.
It goes without saying that if the dollar is too high in value, the goods we export will be priced out of many markets — including those in our own backyard. As a consequence, imports will exceed exports, thereby resulting in a trade deficit.
On a balance-of-trade basis alone, it should come as no surprise that the dollar is weakening. In the absence of intervention, it is the markets’ way of trying to establish equilibrium.
This development should assuage the complaints of those countries that worry about all the dollars they are accumulating as a result of our trade deficit with them.
But are these countries happy? No, Virginia, they are not. They also don’t like to be criticized by us for keeping their currencies too low in value, thereby allowing them to accumulate a sizable trade surplus.
In my view, if these surplus countries can’t accept a fairly valued dollar, then maybe we should look elsewhere for goods to satisfy our needs. As you know, we as a nation Consume More Than We Produce. We take care of this demand by importing goods from abroad, so why are these countries complaining? Many countries produce more than they consume, thus they need to sell us their excess production. I am sure that they would not like it if we stopped buying their goods and began producing more than we consume like they do. Actually, these countries want the dollar to remain overvalued, since it serves their main priority these days: It relives them of the need to stimulate domestic consumption.
This way they can focus on reducing their budget deficits, which seems to be an overarching concern nowadays. At the same time they believe that they can feel free to lecture us on our seeming lack of fiscal probity.
Our economy virtually cries out for a budget deficit. Cutting it now will reduce buying power at a time when, if anything, it needs bolstering by the government.
It will also ensure that today’s softness will become tomorrow’s recession.
Monday, November 22, 2010
Hey guys, been busy, lately. No excuses for neglecting Posts, though. Here's Our Current Master. There are Good Prospects for Next Year, here.
ABAT ACLS AMLM.OB ATAX
BAK BBBY BGP BKCC BKCC BKPG.OB BQR
CAGTF.PK CAKE CBL CENX CHS CIIC CLWR CQB CSX CTIC
DDS DKS DRE DUK DUSA
EDD F FDX FLO FMIOX FRPT FSII FTR FWLT
GEA GMCR GSB
HCKAX HD HIT HON
IGD IID IROG.OB
JVA KSP KSP
LJPC.PK L LTHU.PK LVS
MCD MGM MLC MLC MLCTF.PK MOT MRO MRO MRT MSY
NEU NGD NHWK
ODP OZM
PAG PDLI PG PIKE PIKE PSID
RAD RDS-A RUTH
SIRI SMRT STD STX
T TGIC.OB TIE TLB TMRFX TOO
WFC WSCE.OB WY
X XOMA
The SMRT deal is baffling; it may have been a rookie move, but if it is, I got a broker friend to bitch to (the real Rookie Move was not taking Profs last week @ 10.60+ [In @ 10.14]). We currently have no Positions in SIRI or CLWR, but we've funds to reinvest when the price is right. Finally got our break with GMCR. CSX should have a good year-end; took profs in Oct., but won't even revisit that prop 'til mid-2011.
...
Tuesday, November 16, 2010
Help with the Tax Pinch Right Under Our Noses...
Last Month, we were beginning the talk of what a pinch Taxes for the year were going to put in our pockets. Even with the "Heroes" now in Congress, taxes are still a major pain. Income/Property/Profits, take your pick and it still adds up the the same thing; a dent in the budget.
That's when we took a look at the "Holding" Accounts we had and all those Divs coming in. By Cashing Out the Last Q's Divs for the year, we could mitigate the out-of-pocket expenses of the Tax Burden. Now, it's not exactly a Strategy one must attenk Wharton for, but it is a pretty good idea.
That's when we took a look at the "Holding" Accounts we had and all those Divs coming in. By Cashing Out the Last Q's Divs for the year, we could mitigate the out-of-pocket expenses of the Tax Burden. Now, it's not exactly a Strategy one must attenk Wharton for, but it is a pretty good idea. Hell, if we don't blow the proceeds on Christmas Shopping, we'll have a nice Tax Fund. And really, if we were taking them for Christmas Shopping; we wouldn't have done very well this year...
(Hey, don't forget to put the Accounts back on Rollover
after the New Year!!!)
Readers Site Pick...
A couple guys have left me Favorable Comments on this site. Haven't currently added it to my Toolbox, but it has a Good Hook and might be worth a look...
Monday, November 15, 2010
Off-Topic - Rant...No Cheap Advice...
Based on yet another interruption on Friday night, as The Clique must field questions from outsiders...
My Clique has had it's personality clashes over the past year and consensus on what Positions to Buy, Sell and Hold does get contentious. On Friday's, we've had our alcohol-fueled disagreements (Johnny Walker is our 7th Partner), vowing dissolution of the partnership contract, only to pal up on Saturday morning at Borders/Starbucks. But...
At a couple of venues, it's known that we are "Market Mavens" and we get people coming over and picking our brains; or, at least trying. Our conversation is about Stocks like the guys at the next pool table talk Sports. We are leery of people outside our group asking for Investment Advice. It's not such a big deal if someone wants an opinion on a particular stock, has been watching it and has his own opinion; but Heaven Help the Advice Moocher who just wants to know where to put his "piddle". Particularly with me, if a person hasn't put in any effort into Market Research (and is not a client paying 15% of Port Profs), I can't stand the inquiry!
I'm not discussing You Guys leaving me queries in the Comments App; that gives my brain a workout. I don't consider Readers of my blog to be strangers. Cetainly not like someone invading my space, attempting to be a buddy, while I'm Bellying Up to the bar. And I can just anticipate the question when someone I don't know comes over. If they're not Market Savvy, well, you've just go to be there as I, the cat, toys with that mouse... 
Subscribe to:
Posts (Atom)
