Mafeking

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  • 2009 Predictions I Hope Are Dead Wrong
    Humans tend to extrapolate from the present and recent past. Most of the predictions above do just that.

    Humans are poor at spotting changes in trends. Predictions 1 to 5 are simply trend following. Predictions 6,7 and 8 are inferences assuming existing trends continue.

    In addition, there is a dependency between predictions 1 to 5 so that if one of the predictions are wrong - say stocks change trend and march resolutely upwards - then it is likely to quickly change the trend discussed in the other projections.

    In essence there is only one prediction: the economic situation will continue to deteriorate in '09 with the linkage that if this happens political instability will increase.

    If economic 'events' had no 'memory' one could argue that there is about a 50% chance of being correct. But the economic world indeed has 'memory' and a tendency to revert to the mean. On this basis alone - as unscientific as the original predictions - I predict there will be a reversion to the long term mean.

    2009 will be an improvement on 2008.
    Jan 02 09:28 am |Rating: +1 -1 |Link to Comment |View article
  • Madoff's Innocent Victims
    Wait a minute, you are blaming everyone except the SEC. Let's face it, if you don't follow the market closely you are probably not aware that this guy is returning 10% p.a. and that is a crazy figure in this economic climate

    Somewhere there is probably a legitimate hedge fund returning 10%, so how do you tell the difference? Answer you don't: you expect the SEC to ensure that reputable companies that have been in business for years are OK.
    Dec 17 15:18 pm |Rating: +1 -1 |Link to Comment |View article
  • The Economic Debate: Did We Need Government Intervention?
    Excellent rational article: both options are unpalatable, but the risk of just watching it completely unravel (as true market believers argue) is just too Draconian and uncharted.

    And to those who say, well it is bad anyway and we don't know what Paulson is doing - you are correct, unfortunately we have to trust him and the other technocrats (or should that be econocrats).

    And sure American government is now socialist and so on, but it is not that suddenly we have all adopted the European model. It is just that there seems little alternative (though personally I'd let the auto makers go into bankruptcy).
    Dec 09 22:43 pm |Rating: 0 0 |Link to Comment |View article
  • UltraShort ETFs: At a Tipping Point?
    SO let me get this right. There is a 50 percent chance that it goes up and a 50% chance that is goes down. Wow this is exciting. Using these odds I'll soon be rich. If I bet one direction all the time I am going to be right about 50 percent of the time. Rich I tell you, rich.
    Nov 17 16:09 pm |Rating: 0 0 |Link to Comment |View article
  • Can a Global Economy Be Managed One Nation at a Time?
    What a dumb article. So this is the level of naive thinking that a Wharton MBA gets you! We have a problem so let's regulate. Come on Fred, there is a living breathing example of the incompetence of 'global' organizations just down the road from you called the UN.

    Following on from the Libyan representative being the head of the Human Rights Commission at the UN perhaps the finance minister from Zimbabwe can be in charge of the global financial situation.
    Nov 17 08:15 am |Rating: 0 0 |Link to Comment |View article
  • A Few Guiding Principles for President-Elect Obama
    "Barack Obama's historic victory has given many in this country, and across the world, hope for a brighter future"

    WTF does this mean? It is just this type of flatulent thinking that has got us into this mess. Obama, like all politicians, has done the old bait and switch promises trick, but like all politicians in this mess will be constrained by reality.

    Obama is lucky. He will ride the climb out of the recession / depression, claim responsibility and get the second term.

    Bright future my a**
    Nov 06 07:35 am |Rating: +1 -1 |Link to Comment |View article
  • A Buy & Hold Forever Dividend Stock Portfolio
    Why not buy a few of the dividend ETFs instead - there is no evidence that your ability to pick dividend payers is any better than the approach used by SDY and DVY
    Nov 03 08:40 am |Rating: +5 0 |Link to Comment |View article
  • Personal Income and Spending: Saving is the New Trend (Again)
    This is not a sea change, this is concern and fear. As soon as the fear subsides Americans will be back to their old ways: new cars even though the old ones are fine, McMansions with granite counter tops, absurdly overpriced coffee.... the list goes on and on.
    Oct 31 13:49 pm |Rating: 0 0 |Link to Comment |View article
  • Is It Finally Time to Buy?
    As a public service I will let you all know when I buy. I have found the moment I buy the market senses it and plunges. I don't plan to buy for a few more days.
    Oct 31 12:14 pm |Rating: 0 0 |Link to Comment |View article
  • How Bad Are Housing Price Declines Worldwide?
    The data is rather misleading. Since it is only the first half of 2008 it gives misleading impressions.

    Canada for example has not declined as much as the US yet the graph covering a specific time period indicates otherwise. Canada's house prices only began to soften in mid 2008 whereas the US decline has been going on for 18 months or so.
    Oct 14 18:57 pm |Rating: 0 0 |Link to Comment |View article
  • America Needs a Turnaround Plan
    Fred, good that you want to repeal the tax cuts. But it is not necessary. There is good news. The tax forms have already a provision to enable people to volunteer additional tax to the Federal government.

    I look forward to you announcing in SA come April 09 that you have contributed extra tax - but please don't speak for me. I do want the government effectively wasting my money. We have seen only to clearly how addtional legislation and coercion (Barney Frank and Fannie Mae etc.) have screwed things up.

    I have put a note in my calendar next May to enquire whether you have volunteered more tax than required.
    Oct 05 12:30 pm |Rating: 0 0 |Link to Comment |View article
  • Fear Goes Hand in Hand with Drama
    As Bespoke pointed out - they did not commit the $700 billion - oh great, but in the meantime the stock market lost around $750 billion today. Since most of us have 401Ks and stock, we lost the value anyway.

    The other way we would have more chance of it coming back.
    Sep 29 16:45 pm |Rating: 0 0 |Link to Comment |View article
  • Golden Arches Safer Than Uncle Sam?
    Be very clear if the bailout does not go through it will affect each and every one of us - not only the rich, or the fat cats, or the CEOs.

    Without credit businesses will not be able to function and begin to collapse. As business collapses and workers are out of work this will affect other business and so on. A vicious circle will ensue and all the smug "no bailout for the rich" guys will be standing in the soup kitchen queues like the rest of us.

    Maybe these guys are on the wrong web site. Maybe they should be reading the "Workers International" or "International Socialism" where knowledge about how markets work is not uppermost in their minds.
    Sep 27 15:51 pm |Rating: 0 0 |Link to Comment |View article
  • Bush's Speech: Surprisingly Coherent
    For all those impassioned Bush haters - never forget that it was under the PC Clinton administration that the seeds of this crisis was born.

    Fannie and Freddie became political instruments for providing housing loans to anybody who wanted them regardless of race color or creed or, more importantly, their ability to repay the loan. The NINJA loan - No Income, No Job loans was improbably born because we could not discriminate (that is, refuse a loan to anyone)
    Sep 25 09:06 am |Rating: 0 0 |Link to Comment |View article
  • Some Housing Schadenfreude
    Garth Turner is a larger than life character on the Canadian scene having served both as a conservative and liberal member of parliament and as a financial advisor who famously urged people in the late 1990s to use equity in their homes to buy stock. Turner has an ability to articulate the 'perceived economic wisdom' zeitgeist and publish a book on it. Of course, the perceived economic wisdom is almost always wrong.

    Here is why Turner's latest book overstates the situation: Even at the peak of the housing boom here home buyers were never as extended as in the US; houses prices have not risen as much as in the 'hot' markets in the US.

    The market with the most dramatic increase was Calgary which is also the headquarters of the Canadian oil boom. So house price increases there were fueled by the 'tar sands' boom rather than a general run up in housing. Calgary house prices have more to do with oil prices than a general housing malaise.

    Also Canadian house price increases were the lowest in the Anglo-Saxon world: UK, US, Australia and NZ have all increased a lot more than Canada.

    Also as far boomers downsizing is concerned the huge immigration boom Canada is experiencing (percentage wise the largest in the OECD - the country will have an Asian majority by 2034) should more than offset any downsizing effect.

    Sep 13 09:59 am |Rating: 0 0 |Link to Comment |View article

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