gh
Monday, December 31, 2012
Wednesday, December 26, 2012
NRA revised
I submitted the text of my essay on the NRA from a few days ago to a local newspaper. I got a call from the editor today asking me if I really wanted to go ahead with the article and pointing out a couple things that seemed a little too radical, for lack of a better word...
I am glad she called. In the previous post I made the comment that I believe we should ban the "private sale of firearms". That would be an inaccurate portrayal of my opinion. So I made some changes to the piece. It is below if you care to read it:
A few days ago the leader of the National Rifle Association spoke on national television. The NRA had been silent for some days in the aftermath of the recent tragedy in New England. Mr. Wayne LaPierre took the occasion to cast the blame for the recent incident in Connecticut on a wide variety of culprits in modern American society including violent video games, movies and even the president of the United States, who he accused of cutting funding for school safety. I was astounded at his hubris.
Mr Lapierre went on to state that the tragedy could have been averted if only there had been "one good guy with a gun" at the school. Perhaps it could have. Mr Lapierre lamented the fact that "monsters... walk among us" perpetrating these crimes against civil society and he wondered why we find guns good when they do good things like protecting the President or protecting the country, but bad otherwise. And then the head of the NRA went on to extol the expertise of the NRA in training the police forces of the country and to remind us of the good work they have done for many decades in providing training and education to new gun owners and juvenile hunters.
The main idea presented by Mr. Lapierre on behalf of the NRA was a proposition to provide training to armed guards who would be stationed in schools across the country to deter wouldbe assassins and mass murderers. He stated the the NRA would provide this training free of charge. I believe this is a noble effort by the National Rifle Association and it would probably work in the short term to reduce incidents like this recent one.
However, I do not think that it goes far enough to prevent and reduce the violence that is regularly visited upon innocent people in this country. In fact I think that putting armed guards in schools will only precede putting armed guards in churches and synogogues and is just another escalation of the problem with gun violence.
I am a gun owner. I own several hunting rifles. I own several handguns. I believe in the right of people to own weapons for self defense in their homes and for hunting. While semi-automatic weapons are fun to shoot I think the argument for them in home defense is mistaken. The ordinary person concerned with a weapon for home defense must keep in mind reliability and simplicity. I think of it this way. What weapon does a hunting guide in grizzly bear country use for defense against grizzly bears? The answer is nearly always a large caliber revolver.
We the people must take it upon ourselves to reduce the easy availability of weapons. This means closing the gunshow loophole that allows the transfer of guns without a background check. And then ban the sale and possession of high capacity magazines. The only purpose for high capacity magazines is to enable the killing of people in war. They were an escalation of the ability of soldiers to kill the enemy. They were made for war. The same sentiment holds true for assault weapons. They were meant to kill people in time of war. We know what they look like, now we need to come up with a legal definition that works. These are the first things that need to be done.
Then we need to figure out a way to have all new gun purchasers get screened for mental illness. And the idea that came to me was to use the expertise of the law enforcement and military in weeding out those who are not to be trusted with a weapon. The NRA has close ties to these types of organizations so they should work together to come up with a mental health screening exam that will catch the "monsters".
And finally, the National Rifle Association, after providing prospective new gun owners with training in the safe use of the weapon and after a mental health screen administered by the National Rifle Association (to keep the government out of the process!), Wayne LaPierre will sign the permit to buy the weapon. The NRA can then be responsible for the permits issued. They will actually have some "skin in the game" and will not just be another rightwing lobby in Washington, D.C. What do you think?
I am glad she called. In the previous post I made the comment that I believe we should ban the "private sale of firearms". That would be an inaccurate portrayal of my opinion. So I made some changes to the piece. It is below if you care to read it:
A few days ago the leader of the National Rifle Association spoke on national television. The NRA had been silent for some days in the aftermath of the recent tragedy in New England. Mr. Wayne LaPierre took the occasion to cast the blame for the recent incident in Connecticut on a wide variety of culprits in modern American society including violent video games, movies and even the president of the United States, who he accused of cutting funding for school safety. I was astounded at his hubris.
Mr Lapierre went on to state that the tragedy could have been averted if only there had been "one good guy with a gun" at the school. Perhaps it could have. Mr Lapierre lamented the fact that "monsters... walk among us" perpetrating these crimes against civil society and he wondered why we find guns good when they do good things like protecting the President or protecting the country, but bad otherwise. And then the head of the NRA went on to extol the expertise of the NRA in training the police forces of the country and to remind us of the good work they have done for many decades in providing training and education to new gun owners and juvenile hunters.
The main idea presented by Mr. Lapierre on behalf of the NRA was a proposition to provide training to armed guards who would be stationed in schools across the country to deter wouldbe assassins and mass murderers. He stated the the NRA would provide this training free of charge. I believe this is a noble effort by the National Rifle Association and it would probably work in the short term to reduce incidents like this recent one.
However, I do not think that it goes far enough to prevent and reduce the violence that is regularly visited upon innocent people in this country. In fact I think that putting armed guards in schools will only precede putting armed guards in churches and synogogues and is just another escalation of the problem with gun violence.
I am a gun owner. I own several hunting rifles. I own several handguns. I believe in the right of people to own weapons for self defense in their homes and for hunting. While semi-automatic weapons are fun to shoot I think the argument for them in home defense is mistaken. The ordinary person concerned with a weapon for home defense must keep in mind reliability and simplicity. I think of it this way. What weapon does a hunting guide in grizzly bear country use for defense against grizzly bears? The answer is nearly always a large caliber revolver.
We the people must take it upon ourselves to reduce the easy availability of weapons. This means closing the gunshow loophole that allows the transfer of guns without a background check. And then ban the sale and possession of high capacity magazines. The only purpose for high capacity magazines is to enable the killing of people in war. They were an escalation of the ability of soldiers to kill the enemy. They were made for war. The same sentiment holds true for assault weapons. They were meant to kill people in time of war. We know what they look like, now we need to come up with a legal definition that works. These are the first things that need to be done.
Then we need to figure out a way to have all new gun purchasers get screened for mental illness. And the idea that came to me was to use the expertise of the law enforcement and military in weeding out those who are not to be trusted with a weapon. The NRA has close ties to these types of organizations so they should work together to come up with a mental health screening exam that will catch the "monsters".
And finally, the National Rifle Association, after providing prospective new gun owners with training in the safe use of the weapon and after a mental health screen administered by the National Rifle Association (to keep the government out of the process!), Wayne LaPierre will sign the permit to buy the weapon. The NRA can then be responsible for the permits issued. They will actually have some "skin in the game" and will not just be another rightwing lobby in Washington, D.C. What do you think?
Taleb
And this from Mr. Taleb
http://www.nytimes.com/2012/12/24/opinion/stabilization-wont-save-us.html?_r=0
http://www.nytimes.com/2012/12/24/opinion/stabilization-wont-save-us.html?_r=0
Take your medicine
First of all, I note that the stock markets do not seem overly worried about this so-called fiscal cliff.
But additionally I will propose that the tax "increase" that will occur after the start of the year means that tax rates revert to where they were before G.W. Bush lowered them to stimulate the economy after 9/11. Has it worked? It sure doesn't seem that we have benefitted from this stimulus. That is all that it is. Stimulus. Tax cuts and deficit spending are stimulus. Stimulus being an artificial attempt to cause a rise in economic activity. And the tax cuts over the last decades resulted in a surge in government debt. We have been stimulating the economy for 30 years thru tax cuts and increased government spending. The large part of these rises in asset prices over these years is due to inflation. This is not wealth we have been creating. It is debt. The only ones to profit from this inflation has been those with the financial agility to stay ahead of the "trade". The rich got richer and the poor poorer. The money from the debt has been siphoned off and is sitting in the bond markets, looking for yield. That money is set to spill into the economy. That is what we have wanted to happen for a long time. Now the push is on to avoid a tax hike. So just as the money breaks loose taxes will be kept artificially low so the rich can get even richer in the coming inflation. This is how the game is always played. The public is always behind the curve. And the government is the public. It is our debt and our representatives in government. But we can't seem to see beyond next weeks paycheck and next weeks rent. To our detriment.
On the other side of the "cliff" is the prospect of cuts to government spending. Isn't this what one half of the debate wants? And everyone who dreads the prospect of a drastic cut in government spending and believes that those cuts will slow down the economy is admitting that govt. spending stimulates the economy.
So who loses if we go over the cliff and stay over the cliff? Everybody? Taxes go up, government jobs decline. I thought we were worried about government debt?
I think that if we were able to bring ourselves to take this bitter medicine of fiscal austerity we would find ourselves in a much stronger position a couple years down the road after we digested this change in the debt situation.
The United States of America is hooked on easy money like a heroin addict is hooked on H. The prospect of a fix not forthcoming is fraught with anxiety.
Just thinking,
gh
But additionally I will propose that the tax "increase" that will occur after the start of the year means that tax rates revert to where they were before G.W. Bush lowered them to stimulate the economy after 9/11. Has it worked? It sure doesn't seem that we have benefitted from this stimulus. That is all that it is. Stimulus. Tax cuts and deficit spending are stimulus. Stimulus being an artificial attempt to cause a rise in economic activity. And the tax cuts over the last decades resulted in a surge in government debt. We have been stimulating the economy for 30 years thru tax cuts and increased government spending. The large part of these rises in asset prices over these years is due to inflation. This is not wealth we have been creating. It is debt. The only ones to profit from this inflation has been those with the financial agility to stay ahead of the "trade". The rich got richer and the poor poorer. The money from the debt has been siphoned off and is sitting in the bond markets, looking for yield. That money is set to spill into the economy. That is what we have wanted to happen for a long time. Now the push is on to avoid a tax hike. So just as the money breaks loose taxes will be kept artificially low so the rich can get even richer in the coming inflation. This is how the game is always played. The public is always behind the curve. And the government is the public. It is our debt and our representatives in government. But we can't seem to see beyond next weeks paycheck and next weeks rent. To our detriment.
On the other side of the "cliff" is the prospect of cuts to government spending. Isn't this what one half of the debate wants? And everyone who dreads the prospect of a drastic cut in government spending and believes that those cuts will slow down the economy is admitting that govt. spending stimulates the economy.
So who loses if we go over the cliff and stay over the cliff? Everybody? Taxes go up, government jobs decline. I thought we were worried about government debt?
I think that if we were able to bring ourselves to take this bitter medicine of fiscal austerity we would find ourselves in a much stronger position a couple years down the road after we digested this change in the debt situation.
The United States of America is hooked on easy money like a heroin addict is hooked on H. The prospect of a fix not forthcoming is fraught with anxiety.
Just thinking,
gh
Monday, December 24, 2012
Saturday, December 22, 2012
No surprises from the NRA
Wayne LaPierre spoke yesterday
Watch the video if you didn't have the opportunity. Or if you can't anticipate what he said. There were no surprises. I was hoping that they had experienced some sort of epiphany and were prepared to compromise on issues of gun control. Alas, they are still politicians like we see in national government. To compromise is considered the act of a coward or sissy....
My take on the talk:
A few days ago the leader of the National Rifle Association spoke on national television. The NRA had been silent for some days in the aftermath of the recent tragedy in New England. Mr. Wayne LaPierre took the occaision to cast the blame for the recent incident in Connecticut on a wide variety of culprits in modern American society including violent video games, movies and even the president of the United States, who he accused of cutting funding for school safety. I was astounded at his hubris.
Mr Lapierre went on to state that the tragedy could have been averted if only there had been "one good guy with a gun" at the school. Perhaps it could have. Mr Lapierre lamented the fact that "monsters... walk among us" perpetrating these crimes against civil society and he wondered why we find guns good when they do good things like protecting the President or protecting the country, but bad otherwise. And then the head of the NRA went on to extol the expertise of the NRA in training the police forces of the country and to remind us of the good work they have done for many decades in providing training and education to new gun owners and juvenile hunters.
The main idea presented by Mr. Lapierre on behalf of the NRA was a proposition to provide training to armed guards who would be stationed in schools across the country to deter wouldbe assassins and mass murderers. He stated the the NRA would provide this training free of charge. I believe this is a noble effort by the National Rifle Association and it would probably work in the short term to reduce incidents like this recent one.
However, I do not think that it goes far enough to prevent and reduce the violence that is regularly visited upon innocent people in this country. In fact I think that putting armed guards in schools will only precede putting armed guards in churches and synogogues and is just another escalation of the problem with gun violence.
The American people should take it upon ourselves to ban the private sale of firearms. Close the gunshow loophole that allows the transfer of guns without a background check. And then ban the sale of high capacity magazines. The only purpose for high capacity magazines is to enable the killing of people in war. They were an escalation of the ability of soldiers to kill the enemy. They were made for war. The same sentiment holds true for assault weapons. They were meant to kill people in time of war. We know what they look like, now we need to come up with a legal definition that works. These are the first things that need to be done.
Then we need to figure out a way to have all new gun purchasers get screened for mental illness. And the idea that came to me was to use the expertise of the law enforcement and military in weeding out those who are not to be trusted with a weapon. The NRA has close ties to these types of organizations so they should work together to come up with a mental health screening exam that will catch the "monsters".
And finally, the National Rifle Association, after providing prospective new gun owners with training in the safe use of the weapon and after a mental health screen administered by the National Rifle Association (to keep the government out of the process!), Wayne LaPierre will sign the permit to buy the weapon. The NRA can then be responsible for the permits issued. They will actually have some "skin in the game" and will not just be another rightwing lobby in Washington, D.C. What do you think?
gh
My take on the talk:
A few days ago the leader of the National Rifle Association spoke on national television. The NRA had been silent for some days in the aftermath of the recent tragedy in New England. Mr. Wayne LaPierre took the occaision to cast the blame for the recent incident in Connecticut on a wide variety of culprits in modern American society including violent video games, movies and even the president of the United States, who he accused of cutting funding for school safety. I was astounded at his hubris.
Mr Lapierre went on to state that the tragedy could have been averted if only there had been "one good guy with a gun" at the school. Perhaps it could have. Mr Lapierre lamented the fact that "monsters... walk among us" perpetrating these crimes against civil society and he wondered why we find guns good when they do good things like protecting the President or protecting the country, but bad otherwise. And then the head of the NRA went on to extol the expertise of the NRA in training the police forces of the country and to remind us of the good work they have done for many decades in providing training and education to new gun owners and juvenile hunters.
The main idea presented by Mr. Lapierre on behalf of the NRA was a proposition to provide training to armed guards who would be stationed in schools across the country to deter wouldbe assassins and mass murderers. He stated the the NRA would provide this training free of charge. I believe this is a noble effort by the National Rifle Association and it would probably work in the short term to reduce incidents like this recent one.
However, I do not think that it goes far enough to prevent and reduce the violence that is regularly visited upon innocent people in this country. In fact I think that putting armed guards in schools will only precede putting armed guards in churches and synogogues and is just another escalation of the problem with gun violence.
The American people should take it upon ourselves to ban the private sale of firearms. Close the gunshow loophole that allows the transfer of guns without a background check. And then ban the sale of high capacity magazines. The only purpose for high capacity magazines is to enable the killing of people in war. They were an escalation of the ability of soldiers to kill the enemy. They were made for war. The same sentiment holds true for assault weapons. They were meant to kill people in time of war. We know what they look like, now we need to come up with a legal definition that works. These are the first things that need to be done.
Then we need to figure out a way to have all new gun purchasers get screened for mental illness. And the idea that came to me was to use the expertise of the law enforcement and military in weeding out those who are not to be trusted with a weapon. The NRA has close ties to these types of organizations so they should work together to come up with a mental health screening exam that will catch the "monsters".
And finally, the National Rifle Association, after providing prospective new gun owners with training in the safe use of the weapon and after a mental health screen administered by the National Rifle Association (to keep the government out of the process!), Wayne LaPierre will sign the permit to buy the weapon. The NRA can then be responsible for the permits issued. They will actually have some "skin in the game" and will not just be another rightwing lobby in Washington, D.C. What do you think?
gh
Thursday, December 20, 2012
The Lottery
It has been many years since I've read this short story.
From "The Buttonwood Tree".
The Lottery
Enjoy
From "The Buttonwood Tree".
The Lottery
Enjoy
Dr. Elder
I don't remember how it happened but I was surfing the web and ran into a link Dr. Alexander Elder's site. http://www.elder.com/
I read a book by this man about 15 years ago when I was ravenously reading all credible books that I could find on trading and investing. Along with "Reminiscences of a Stock Operator" and a couple others, Mr. Elder's book, "Trading for a Living" had lessons that I have remembered all of these years. If there are any viewers of my blog who want to learn how to trade profitably, his book is invaluable. It has not been easy. I had to make all of the mistakes more than once. But having the correct principles in mind by way of reading a book that makes sense enables a trader to learn from the setbacks quicker than trying to figure things out from scratch.
On his site here is a video of an interview with Dr. Elder. There are some gems in it.
I have no arrangement with Dr. Elder. I have only read one of his books. He is the real deal.
gh
I read a book by this man about 15 years ago when I was ravenously reading all credible books that I could find on trading and investing. Along with "Reminiscences of a Stock Operator" and a couple others, Mr. Elder's book, "Trading for a Living" had lessons that I have remembered all of these years. If there are any viewers of my blog who want to learn how to trade profitably, his book is invaluable. It has not been easy. I had to make all of the mistakes more than once. But having the correct principles in mind by way of reading a book that makes sense enables a trader to learn from the setbacks quicker than trying to figure things out from scratch.
On his site here is a video of an interview with Dr. Elder. There are some gems in it.
I have no arrangement with Dr. Elder. I have only read one of his books. He is the real deal.
gh
Bonds are in a bubble
There. I said it. It can't be said any more plainly.
Interest rates are set to rise. The economy is set to rise. Inflation is set to rise. There may be some headline risk over the next few months, but the underlying economy is going to pull out of this funk that it is in, and get going again. And interest rates are going to RISE. That means that bonds and bond funds are going to go DOWN. This means they will lose a large percentage of their value. If you are in a bond fund, get out. There may be fluctuations. You may have second thoughts next week, or next month if you take your money out of bonds, BUT, the bond market bubble WILL end. And bonds and bond funds will start down. For the long term.
The specter of interest rates rising is what started this whole debacle 5 years ago. Do you remember when there were riots over the price of rice? Do you remember when gasoline was on the way to $5 a gallon in the U.S.? That was 2006-7. Interest rates were set to go up dramatically, and that is what burst the housing bubble and almost broke the banks and led to this recession. Now, we have worked through those tactical difficulties. And the money that has been printed to paper over those things is going to work it's way into the economy of the world. Now inflation is going to get going in ernest. It won't be overnight. It will be at least a couple years. The first year or two is going to seem like we are in the late nineties again. But then the interest rates will rise with a vengeance as the trend of rising interest rates and inflation gets going. By then it will be too late. Stocks will do very well for most of an inflationary environment. At the end there will be hell to pay. But the job of every investor is to try to keep up with inflation as long as he/she can.
Gold and silver are getting hit hard right now. This is because of the strength of the stock market and the weakness in the bond market. Interest rates are starting to rise and this is threatening to gold. But it won't last. It is a "trade" that is being unwound. The bond market will not be able to keep up with inflation. The bond market will not put inflation in it's place because the government will try to keep interest rates low to preserve the growth of the economy. And by the time we get a strong hand like Mr. Volcker, who tamed inflation in the 1980's, it will be late in the game. The political system will remain behind the curve. Inflation will get out of hand before it is brought under control. This may be five to ten years from now. In the meantime it is important to keep up with inflation by investing in those things that go up with inflation. Buy gold and silver and be patient. Land should hold it's value. Buy stocks now and sell when the tide starts to turn in a couple years or so.
This is my long term outlook. In the short term we will need to manage our risk on an individual basis. This means each investor is responsible for his/her own decisions. If one is not able to go "all out" and put all of ones eggs in one basket, then at least start the shift out of bonds and into inflation hedges.
Don't wait until everyone is panicking. Look ahead and be pro-active.
This is my warning to those I care about.
Here is that chart of bond prices:
Damn that was intense....
But I mean it!
gh
Interest rates are set to rise. The economy is set to rise. Inflation is set to rise. There may be some headline risk over the next few months, but the underlying economy is going to pull out of this funk that it is in, and get going again. And interest rates are going to RISE. That means that bonds and bond funds are going to go DOWN. This means they will lose a large percentage of their value. If you are in a bond fund, get out. There may be fluctuations. You may have second thoughts next week, or next month if you take your money out of bonds, BUT, the bond market bubble WILL end. And bonds and bond funds will start down. For the long term.
The specter of interest rates rising is what started this whole debacle 5 years ago. Do you remember when there were riots over the price of rice? Do you remember when gasoline was on the way to $5 a gallon in the U.S.? That was 2006-7. Interest rates were set to go up dramatically, and that is what burst the housing bubble and almost broke the banks and led to this recession. Now, we have worked through those tactical difficulties. And the money that has been printed to paper over those things is going to work it's way into the economy of the world. Now inflation is going to get going in ernest. It won't be overnight. It will be at least a couple years. The first year or two is going to seem like we are in the late nineties again. But then the interest rates will rise with a vengeance as the trend of rising interest rates and inflation gets going. By then it will be too late. Stocks will do very well for most of an inflationary environment. At the end there will be hell to pay. But the job of every investor is to try to keep up with inflation as long as he/she can.
Gold and silver are getting hit hard right now. This is because of the strength of the stock market and the weakness in the bond market. Interest rates are starting to rise and this is threatening to gold. But it won't last. It is a "trade" that is being unwound. The bond market will not be able to keep up with inflation. The bond market will not put inflation in it's place because the government will try to keep interest rates low to preserve the growth of the economy. And by the time we get a strong hand like Mr. Volcker, who tamed inflation in the 1980's, it will be late in the game. The political system will remain behind the curve. Inflation will get out of hand before it is brought under control. This may be five to ten years from now. In the meantime it is important to keep up with inflation by investing in those things that go up with inflation. Buy gold and silver and be patient. Land should hold it's value. Buy stocks now and sell when the tide starts to turn in a couple years or so.
This is my long term outlook. In the short term we will need to manage our risk on an individual basis. This means each investor is responsible for his/her own decisions. If one is not able to go "all out" and put all of ones eggs in one basket, then at least start the shift out of bonds and into inflation hedges.
Don't wait until everyone is panicking. Look ahead and be pro-active.
This is my warning to those I care about.
Here is that chart of bond prices:
But I mean it!
gh
Trade update 12/20/12
I sold my position in MolyCorp today. On technical considerations. The stock is sitting too heavy on support for the size of my position. Could I sell just part of the position? Yes, I could. But I know myself. If I sell part of a position I will be itching to sell all of the position. Right now the stock appears to want to go down in the short term. I don't know who has been buying, or why, so I don't know what the extent of a decline might be if selling happens. By selling in this way I can clear my mind. If this stock goes down and then immediately goes up to the recent highs I would consider buying some again. IF. If it goes up immediately I will watch it...
I make the point that to me as a trader the price that I pay is a small consideration. What matters is the direction the price is going when I buy, and that is of quite some consideration when attempting to calculate the probability of a profit on the trade. I want my initial buy to show me a profit before I add to the position, and each addition must be to a profitable trade. I don't mind waiting for some time after the initial buy, but don't intend to let the price go very far against me in that case either.
When the buys are spread out over time in the building of a position it has the effect of giving me some measure of patience, as well as ensuring that the trend is going the way that I anticipated. And if I am lucky enough to pick a good stock and get on a full position, I hold it as long as I can stand to do so. Or until it gives me some signal that the easy money is over. (momentum) Yes, I try to just take the easy money. It is not so easy, actually. To do this successfully is the hardest thing I have ever done. It is a constant battle with my emotions as I attempt to "listen" to what the markets are trying to say.
This win (MCP) was a gift. I took a flier on what appeared to be a temporary bottom at $6 and have been pleasantly surprised. The problem with picking bottoms is that it is impossible to hold on forever. At least for me...
Here are charts of MCP, GOL, and STP with commentary on these trades....
How about that RIMM? I think I posted on it some time ago..... I got shook out due to concerns over the broader market quite awhile ago. I always keep in mind the broad market averages and sentiment to the best of my meager ability.
Controlling risk!
gh
I make the point that to me as a trader the price that I pay is a small consideration. What matters is the direction the price is going when I buy, and that is of quite some consideration when attempting to calculate the probability of a profit on the trade. I want my initial buy to show me a profit before I add to the position, and each addition must be to a profitable trade. I don't mind waiting for some time after the initial buy, but don't intend to let the price go very far against me in that case either.
When the buys are spread out over time in the building of a position it has the effect of giving me some measure of patience, as well as ensuring that the trend is going the way that I anticipated. And if I am lucky enough to pick a good stock and get on a full position, I hold it as long as I can stand to do so. Or until it gives me some signal that the easy money is over. (momentum) Yes, I try to just take the easy money. It is not so easy, actually. To do this successfully is the hardest thing I have ever done. It is a constant battle with my emotions as I attempt to "listen" to what the markets are trying to say.
This win (MCP) was a gift. I took a flier on what appeared to be a temporary bottom at $6 and have been pleasantly surprised. The problem with picking bottoms is that it is impossible to hold on forever. At least for me...
Here are charts of MCP, GOL, and STP with commentary on these trades....
Controlling risk!
gh
Wednesday, December 19, 2012
Antifragile
I've been reading Nassim Taleb's "Antifragile". The book is an argument for the idea that there are some things that benefit from disorder and volatility. It seems that the author made quite a bit of money predicting and trading some of the recent "Black Swans" in the financial world. So the message of the book so far, (I am about halfway through) is a perfect fit with the general rules and philosophy of trading as I've come to know trading.
One of the key points of Taleb's philosophy is the concept of "optionality". This refers to the power of an option, which is the right, but not the obligation to make a choice. An option. And people, and systems can grow and profit from the randomness and volatility that is life and trading if they have some capability to use adverse events to their benefit. This means that when an adverse event happens the antifragile person or system is the one that can use that event to learn, and is able to let the adverse event pass without the cost becoming debilitating, and to profit in some way from the event. At the same time the antifragile system or person is able to keep the flexibility to use the rare events to their benefit precisely because they have survived and learnt from the adverse occurances. They have the option.
In trading this is the basis for the classic advice to "cut your losses short and let your profits run". Easy advice to give but sometimes difficult to practice. The antifragile trader would be the one with the system that can recognize losses and stop the losses and at the same time be able to recognize the good profitable trades and get the maximum from them that the system will allow.
System is an easy word to say. But every system has a human behind it who must make the decision to follow a system or to overrule the system. So the antifragile trader is the one who can take a loss without becoming psychologically damaged, who is robust, and yet has the psychologic steadiness to let a profitable trade run it's course and avoids and resists the urge to take a quick, small profit because it relieves the pressure of the trade and comforts the mind and the ego. If a trader can do these things consistently he/she will be antifragile. The trader will be able to profit from randomness, particularly those events that have large repercusions, those "fat tails" that cause so much misery for those of less mental flexibility.
This is the optionality. The ability to keep the trade that has the potential for a large outsize gain even when the outsize gain is in no way predictable. And to keep the losses small. In this way a trader can try on lots of trades and have many small losses while still maintaining the mental attitude to keep the good trades. And the few large wins will dwarf the small losses. Not only due to the time that the winners are allowed to develop, but by the size of the bet when they are winners. This is why it makes sense to buy higher. To add to a winner as it proves itself a winner. In that way the big winning trades are much larger by many factors.
To put it simply trading is a mind game. And the opponent is oneself. You must overcome your own doubts and fears to profit from those same emotions in the other traders.
Richard Russell put it this way: "He who loses least......Wins."
Here is the latest test of trading psychology:
gh
One of the key points of Taleb's philosophy is the concept of "optionality". This refers to the power of an option, which is the right, but not the obligation to make a choice. An option. And people, and systems can grow and profit from the randomness and volatility that is life and trading if they have some capability to use adverse events to their benefit. This means that when an adverse event happens the antifragile person or system is the one that can use that event to learn, and is able to let the adverse event pass without the cost becoming debilitating, and to profit in some way from the event. At the same time the antifragile system or person is able to keep the flexibility to use the rare events to their benefit precisely because they have survived and learnt from the adverse occurances. They have the option.
In trading this is the basis for the classic advice to "cut your losses short and let your profits run". Easy advice to give but sometimes difficult to practice. The antifragile trader would be the one with the system that can recognize losses and stop the losses and at the same time be able to recognize the good profitable trades and get the maximum from them that the system will allow.
System is an easy word to say. But every system has a human behind it who must make the decision to follow a system or to overrule the system. So the antifragile trader is the one who can take a loss without becoming psychologically damaged, who is robust, and yet has the psychologic steadiness to let a profitable trade run it's course and avoids and resists the urge to take a quick, small profit because it relieves the pressure of the trade and comforts the mind and the ego. If a trader can do these things consistently he/she will be antifragile. The trader will be able to profit from randomness, particularly those events that have large repercusions, those "fat tails" that cause so much misery for those of less mental flexibility.
This is the optionality. The ability to keep the trade that has the potential for a large outsize gain even when the outsize gain is in no way predictable. And to keep the losses small. In this way a trader can try on lots of trades and have many small losses while still maintaining the mental attitude to keep the good trades. And the few large wins will dwarf the small losses. Not only due to the time that the winners are allowed to develop, but by the size of the bet when they are winners. This is why it makes sense to buy higher. To add to a winner as it proves itself a winner. In that way the big winning trades are much larger by many factors.
To put it simply trading is a mind game. And the opponent is oneself. You must overcome your own doubts and fears to profit from those same emotions in the other traders.
Richard Russell put it this way: "He who loses least......Wins."
Here is the latest test of trading psychology:
See the Dec. 5th post, "TC".
Keep your losses small.....gh
Friday, December 14, 2012
ALON
A picture is worth a thousand words. (I wrote on the picture!)
Timing is important. Always control risk. If something is costing you, get rid of it.
gh
gh
Thursday, December 13, 2012
Money velocity
Here are a couple of interesting charts of the decline in interest rates over the last 30years and the decline in the velocity of money over the same time frame. I was under the impression that the lack of velocity of money was a recent problem. I guess not.
I suppose that it makes sense that as inflation declines the velocity of money declines due to the lack of urgency to buy things. If you can wait there is a chance they will be cheaper. Not that things have gotten cheaper over 30 years. In dollar terms the prices are up bigtime, we have created a lot of money but in inflation adjusted terms things are cheap..... Hmmmm.
So would raising interest rates stimulate the velocity of money. Or does it take actual inflation to speed up the turnover? I thought that inflation was always and everywhere a monetary phenomenon? Isn't that what the free market, laisse faire guys from Chicago university say all the time?
So if we have a problem of not enough inflation at the present time what will get it going? I think one of the common trends over this timeframe has been the rise of Asia, and China in particular. And having their currencies pegged to the U.S. dollar/world reserve currency has artificially kept the US dollar elevated.
The latest and persistent US Fed effort to debase the US$ will have the continued effect of pushing inflation in the Asian and Emerging market economies. They will HAVE to eventually abandon the peg to the dollar and let it sink to it's natural level. And when that happens the velocity of money will rise.... And China will go from an exporter of deflation to an exporter of inflation.
Look at these charts. Money velocity follows interest rates down. You would think that low interest rates would stimulate turnover.... We have been fighting a losing battle!
gh
I suppose that it makes sense that as inflation declines the velocity of money declines due to the lack of urgency to buy things. If you can wait there is a chance they will be cheaper. Not that things have gotten cheaper over 30 years. In dollar terms the prices are up bigtime, we have created a lot of money but in inflation adjusted terms things are cheap..... Hmmmm.
So would raising interest rates stimulate the velocity of money. Or does it take actual inflation to speed up the turnover? I thought that inflation was always and everywhere a monetary phenomenon? Isn't that what the free market, laisse faire guys from Chicago university say all the time?
So if we have a problem of not enough inflation at the present time what will get it going? I think one of the common trends over this timeframe has been the rise of Asia, and China in particular. And having their currencies pegged to the U.S. dollar/world reserve currency has artificially kept the US dollar elevated.
The latest and persistent US Fed effort to debase the US$ will have the continued effect of pushing inflation in the Asian and Emerging market economies. They will HAVE to eventually abandon the peg to the dollar and let it sink to it's natural level. And when that happens the velocity of money will rise.... And China will go from an exporter of deflation to an exporter of inflation.
Look at these charts. Money velocity follows interest rates down. You would think that low interest rates would stimulate turnover.... We have been fighting a losing battle!
Pass the buck
The U.S. dollar must get weak as a result of the latest stance by the US Fed.
A look at the charts of two of the other major currencys shows what looks like bullish chart patterns forming. Bullish for those currencies. If they go up we go down.... Another currency that makes up a significant part of the basket of currencies against which the US$ is weighted is the Japanese Yen. It has been getting weaker and weaker. But the Japanese have been trying to weaken their Yen for many years with mixed results.
A look at the British Pound and the Euro shows strength for those currencies. Today the Standard and Poors rating service downgraded the Pound. Can you see that massive move?! Look closely, it is up in the right corner.... Yes! That's it! Not so huge, huh?
Both of these currencies are poised to go much higher at the expense of the US Dollar. Timing matters, of course, and as always. A weak dollar is usually associated with an appreciation of asset prices. Perhaps not the bonds if a weak dollar contributes to inflation. Remember, inflation is a monetary phenomenon. To quote a famous economist. Econo Mist.... sounds kind of opaque doesn't it.
gh
A look at the charts of two of the other major currencys shows what looks like bullish chart patterns forming. Bullish for those currencies. If they go up we go down.... Another currency that makes up a significant part of the basket of currencies against which the US$ is weighted is the Japanese Yen. It has been getting weaker and weaker. But the Japanese have been trying to weaken their Yen for many years with mixed results.
A look at the British Pound and the Euro shows strength for those currencies. Today the Standard and Poors rating service downgraded the Pound. Can you see that massive move?! Look closely, it is up in the right corner.... Yes! That's it! Not so huge, huh?
Both of these currencies are poised to go much higher at the expense of the US Dollar. Timing matters, of course, and as always. A weak dollar is usually associated with an appreciation of asset prices. Perhaps not the bonds if a weak dollar contributes to inflation. Remember, inflation is a monetary phenomenon. To quote a famous economist. Econo Mist.... sounds kind of opaque doesn't it.
Wednesday, December 12, 2012
Dollar devaluation
The chairman of the U.S. Federal Reserve bank is intent on devaluing the U.S. dollar. By tieing the interest rates to the unemployment rate he is committing to long term low rates and a lower currency value. That is how we will become an exporter again. He is playing China's game.....
From Bloomberg
gh
And now for the end of the day pictures.
Bonds reacted badly. Interest rates rose in expectation of inflation. Stocks and materials stocks in particular rose sharply and then sold off at the end of the day. Pay attention to the knee jerk reaction of the traders. The traders unwind their day trades and muddy the picture but usually the initial reaction is the correct one. We still have the "fiscal cliff" thing going on, so stocks may tread water till next year or at least till a decision on the federal budget.
But as I have said before, I watch the bond market for clues to where the money is going. If the bonds start losing value it could cause a change of trend of historic proportions. I hesitate to put it that way because it may take some time to get going but the 30 year bond market rally WILL end sometime. A bond is only good if the bond issuer stays solvent. But if you want to sell a bond before it matures, like you have in a bond fund for retirement, you have to hope there is a buyer for your bonds. As interest rates rise, your low interest bond will not hold it's value. Beware of bond funds. Bonds can be like housing. The don't go up forever. We learned that lesson the hard way. This could be the next repercussion of the housing and financial market debacle. The backlash of the remedy! As the government bonds lose their safety! Just sayin'.
Charts of the long bond:
Trendlines in different timeframes again. Why am I seeing more of those lately?
Hmmmm.
Watch your risk.
gh
From Bloomberg
gh
And now for the end of the day pictures.
Bonds reacted badly. Interest rates rose in expectation of inflation. Stocks and materials stocks in particular rose sharply and then sold off at the end of the day. Pay attention to the knee jerk reaction of the traders. The traders unwind their day trades and muddy the picture but usually the initial reaction is the correct one. We still have the "fiscal cliff" thing going on, so stocks may tread water till next year or at least till a decision on the federal budget.
But as I have said before, I watch the bond market for clues to where the money is going. If the bonds start losing value it could cause a change of trend of historic proportions. I hesitate to put it that way because it may take some time to get going but the 30 year bond market rally WILL end sometime. A bond is only good if the bond issuer stays solvent. But if you want to sell a bond before it matures, like you have in a bond fund for retirement, you have to hope there is a buyer for your bonds. As interest rates rise, your low interest bond will not hold it's value. Beware of bond funds. Bonds can be like housing. The don't go up forever. We learned that lesson the hard way. This could be the next repercussion of the housing and financial market debacle. The backlash of the remedy! As the government bonds lose their safety! Just sayin'.
Charts of the long bond:
Hmmmm.
Watch your risk.
gh
Tuesday, December 11, 2012
mcp: now the test
Molycorp announced after the close of trading today that they had let the CEO Mark Smith go. The reasons were not clear. Read some of the reporting here.
Whenever a stock makes a sharp move I assume there is some inside information causing the move. A couple weeks ago the news was that insiders were buying. There is most likely lots of short covering in this latest rally. Whatever the cause of the rise it may not become public for some time, assuming there IS another reason. I think there is. It is hard to believe that the insiders bought the stock without knowing the impending demise of the CEO.
Trading is almost harder when one listens to the news. The imagination takes hold and the decision process becomes much more complicated. But the test of a move is in the reaction that takes place after the move up. Will buying come in or not. And when.... What will the quality of that buying be? The recent consolidation around $9 was tight, like all buyers were content to sit....
This stock will open down tomorrow. Then it may take a couple days for the results.
Control your risk.
gh
Whenever a stock makes a sharp move I assume there is some inside information causing the move. A couple weeks ago the news was that insiders were buying. There is most likely lots of short covering in this latest rally. Whatever the cause of the rise it may not become public for some time, assuming there IS another reason. I think there is. It is hard to believe that the insiders bought the stock without knowing the impending demise of the CEO.
Trading is almost harder when one listens to the news. The imagination takes hold and the decision process becomes much more complicated. But the test of a move is in the reaction that takes place after the move up. Will buying come in or not. And when.... What will the quality of that buying be? The recent consolidation around $9 was tight, like all buyers were content to sit....
This stock will open down tomorrow. Then it may take a couple days for the results.
gh
Correction to previous post
I have kept thinking about the cost of Medicare. In an earlier post on Dec. 12, 2012 entitled "The cost of Healthcare in the U.S." I made a serious error. The median income figure I used is incorrect. I used the number for median household income when I should have used the number for median income. Median income in the U.S. in 2000 was $22346.
A huge difference.
I blush at my foolishness.
I know not many people read this but I fool myself with mistakes like that.
My apologies to any who read it.
gh
A huge difference.
I blush at my foolishness.
I know not many people read this but I fool myself with mistakes like that.
My apologies to any who read it.
gh
Hi O Silver! Away?
The debate is always about inflation versus deflation is the asset markets.
Silver and gold are proxies for these macro-economic sentiments.
To me the Silver prices look to be expecting inflation. I would suspect that the outcome of the so-called fiscal cliff negotiations in Congress will be inflationary. In other words I do not have confidence that our politicians will come to a major decision that actually raises taxes by much nor cuts government by much. Somehow they will paper over the problem. Kick the can, to use the prevalent metaphor.
As a trader I am looking for clues in the markets. Silver offers what I think are clues. I may be wrong of course. The outcome may be different. The silver market participants may be surprised. At least in the short term. Or even for the long term. Though I doubt that Congress will do anything of a long term solution.
Or maybe something else will move the market in a meaningful way. But IF the silver market starts going up and makes some new highs I would expect another meaningful and possibly explosive rally. Silver traders can get really crazy......
The charts.
And as I post this the headline is that the Democrats are saying that they will not present entitlement cuts to the Republicans. The Republicans must present the cuts.
It only sounds fair to me! If they want to cut entitlements they should specify how.
The Dems want to raise taxes and they have stated how much.
Round and round she goes......
gh
Silver and gold are proxies for these macro-economic sentiments.
To me the Silver prices look to be expecting inflation. I would suspect that the outcome of the so-called fiscal cliff negotiations in Congress will be inflationary. In other words I do not have confidence that our politicians will come to a major decision that actually raises taxes by much nor cuts government by much. Somehow they will paper over the problem. Kick the can, to use the prevalent metaphor.
As a trader I am looking for clues in the markets. Silver offers what I think are clues. I may be wrong of course. The outcome may be different. The silver market participants may be surprised. At least in the short term. Or even for the long term. Though I doubt that Congress will do anything of a long term solution.
Or maybe something else will move the market in a meaningful way. But IF the silver market starts going up and makes some new highs I would expect another meaningful and possibly explosive rally. Silver traders can get really crazy......
The charts.
It only sounds fair to me! If they want to cut entitlements they should specify how.
The Dems want to raise taxes and they have stated how much.
Round and round she goes......
gh
Monday, December 10, 2012
Emerging markets
Good news out on the China economy here.
A look at the charts of emerging markets show an interesting situation.
EEM looks to be breaking out of a consolidation on the daily as well as the weekly long term charts. It is a good sign when there are breakouts in multiple timeframes.
And markets are fractals. Meaning that often the same patterns are noticed in charts of different timeframes. Much as a tree is seen in a branch and a branch in a twig....
Notice the cup and handle formation in the weekly and daily charts and the breakout.
EEM:
control risk!
A look at the charts of emerging markets show an interesting situation.
EEM looks to be breaking out of a consolidation on the daily as well as the weekly long term charts. It is a good sign when there are breakouts in multiple timeframes.
And markets are fractals. Meaning that often the same patterns are noticed in charts of different timeframes. Much as a tree is seen in a branch and a branch in a twig....
Notice the cup and handle formation in the weekly and daily charts and the breakout.
EEM:
This may be the start of another long term move in the emerging markets. And may be a harbinger of things to come worldwide. Take another look at the small cap chart IWM....
and while we are here, an instance of support/resistance in MCP:
gh
Saturday, December 8, 2012
Euro-crisis for dummies
The cost of healthcare in U.S.
I apparently have too much time on my hands. I don't know how this got started but I spent most of the day trying to figure out how much the cost was for my health insurance plan. And this was the result.
Health care costs over a lifetime
According to a study by Health Services Research (HSR) here:http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/
The average cost over a lifetime for an American using year 2000 US dollars was $316,579. This includes medical, dental, and vision, as well as nursing home and hospice type care. (All health care costs)
According to the US Census bureau the median wage in year 2000 was $41994 ($42000)
I calculate a working lifetime as those years from age 18 to age 65. Total 47 years.
Dividing the total lifetime healthcare cost by the number of working years.
$316579/47years = $6735/yr.
$6735 represents 16% of the year 2000 median wage.
If individual health care costs increase at the rate of inflation and if median income increases at the rate of inflation then a person would be able to "save" enough for a lifetime of health costs by contributing 16% of his wages to a health cost pool. (insurance plan)
Some would contribute more actual dollars and some would contribute less. Just as some will use more health dollars and some will use less.
I researched what my employer and myself contribute to my present health insurance. If I add my employers contribution for health insurance to my gross wages then the cost of health insurance is 12% of total compensation. Plus the 3% we presently pay for Medicare tax equals 15%.
However, my insurance is only available up to age 65 if I continue to work. Then I go on the government plan. Medicare Part A is free at this time, Part B and C at present will have a premium of approx. $130.
The average Social Security payment is now $1230/ mo. So the above Medicare premium represents 10.5% of SS income. Almost the 11% I am paying now. (Iwillhave more than SS:)
According to the HSR study, the cost of healthcare by age per year:
The cost for a 40 y/o is $2601/yr.
The cost for a 65 y/o is $10,245.
The cost for a 85 y/o is $17,071.
As you can see and as we would expect the cost rises dramatically in our later years. Yet I am paying 12% of my potential income for private insurance now that will dump me when I get to age 65.(And this is a subsidised cost, it is paid in pretax dollars by myself and my employer) And I am paying 3% now for Medicare, the insurance that will be expected to cover the bulk of my lifetime health care cost when I am old. So the bulk of the money that I am contributing to my healthcare costs is going to private insurance that will not be around for me when I incur the vast majority of the costs of healthcare.
Currently Medicare enrollees pay about $130 a month for Parts B & D.
Medicare currently pays only about 75% of medical costs for enrollees. The HRS study is talking about all costs for everybody. The AVERAGE COST for a lifetime.
These are averages. This means that if health care costs were covered by WORKING PEOPLE ONLY it would require 16% of income going to health coverage during working years to pay for healthcare costs. No deductibles. No age limits. As it is the money paid into the private healthcare insurance scheme is paying for coverage that is, for the most part not used by the generally healthier workers. But a significant cost of health insurance is due to cost of providing care to the uninsured. And frankly I'm in favor of sin taxes going toward heath care expenses. Alcohol, tobacco and even firearms could be taxed toward the cost of healthcare. As could sugar.
The bottom line is that the cost of healthcare for a lifetime could be paid for by the equivalent of 16% of income during the working years. During that time and after in retirement there would be no additional cost. I can hear the rich complaining now about the dollar cost of the 16%. But imagine the flexibility provided to the workforce by being able to change jobs without worrying about health insurance. Or going to school and retraining. I imagine there would be upward pressure on wages due to that flexibility as people exercise their right to change jobs...
I suspect that the cost of healthcare would come down with a single payer due to billing simplification and limits to compensation. And how much of present day insurance premiums are the result of just the fear of going broke without insurance. Prices go up and people still demand the coverage. And as prices go up insurance becomes even more of a necessity. What is the price of lifesaving medicine? Isn't that duress? This is part of the self-reinforcing mechanism of increased medical costs.
I notice that on my latest pay statement that my total payroll tax comes to 18.2% of gross: Medicare is a miniscule 1.38%. Social Security is 4%. Federal tax is 7.8%. State tax 5%. Workers comp is 0.06%. (2 deductions, and as a percent of GROSS income. And I should be in the 25% bracket) Think Bush tax cuts. And then there is the 12 % for medical insurance.
I think that my place of employment is on the generous side. I suspect that they pay a larger portion of the total cost than most. They are part of the problem, after all....
Can you see the political problems with asking a minimum wage worker to pay 16%?
Or asking a multi-millionaire to pay a straight 16%?
Is it any wonder that the Federal government is going broke? Would I pay another 4% for peace of mind? And no deductibles. And vision and dental after retirement. YOU BET I WOULD!
I can't believe it actually works out this way. But I've been at this all day and that is what I keep coming up with.
And then there is this from "The Big Picture",
http://baselinescenario.com/2012/12/03/entitlements-scare-tactics/
Just thinkin',
Again...
gh
According to a study by Health Services Research (HSR) here:http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/
The average cost over a lifetime for an American using year 2000 US dollars was $316,579. This includes medical, dental, and vision, as well as nursing home and hospice type care. (All health care costs)
According to the US Census bureau the median wage in year 2000 was $41994 ($42000)
I calculate a working lifetime as those years from age 18 to age 65. Total 47 years.
Dividing the total lifetime healthcare cost by the number of working years.
$316579/47years = $6735/yr.
$6735 represents 16% of the year 2000 median wage.
If individual health care costs increase at the rate of inflation and if median income increases at the rate of inflation then a person would be able to "save" enough for a lifetime of health costs by contributing 16% of his wages to a health cost pool. (insurance plan)
Some would contribute more actual dollars and some would contribute less. Just as some will use more health dollars and some will use less.
I researched what my employer and myself contribute to my present health insurance. If I add my employers contribution for health insurance to my gross wages then the cost of health insurance is 12% of total compensation. Plus the 3% we presently pay for Medicare tax equals 15%.
However, my insurance is only available up to age 65 if I continue to work. Then I go on the government plan. Medicare Part A is free at this time, Part B and C at present will have a premium of approx. $130.
The average Social Security payment is now $1230/ mo. So the above Medicare premium represents 10.5% of SS income. Almost the 11% I am paying now. (Iwillhave more than SS:)
According to the HSR study, the cost of healthcare by age per year:
The cost for a 40 y/o is $2601/yr.
The cost for a 65 y/o is $10,245.
The cost for a 85 y/o is $17,071.
As you can see and as we would expect the cost rises dramatically in our later years. Yet I am paying 12% of my potential income for private insurance now that will dump me when I get to age 65.(And this is a subsidised cost, it is paid in pretax dollars by myself and my employer) And I am paying 3% now for Medicare, the insurance that will be expected to cover the bulk of my lifetime health care cost when I am old. So the bulk of the money that I am contributing to my healthcare costs is going to private insurance that will not be around for me when I incur the vast majority of the costs of healthcare.
Currently Medicare enrollees pay about $130 a month for Parts B & D.
Medicare currently pays only about 75% of medical costs for enrollees. The HRS study is talking about all costs for everybody. The AVERAGE COST for a lifetime.
These are averages. This means that if health care costs were covered by WORKING PEOPLE ONLY it would require 16% of income going to health coverage during working years to pay for healthcare costs. No deductibles. No age limits. As it is the money paid into the private healthcare insurance scheme is paying for coverage that is, for the most part not used by the generally healthier workers. But a significant cost of health insurance is due to cost of providing care to the uninsured. And frankly I'm in favor of sin taxes going toward heath care expenses. Alcohol, tobacco and even firearms could be taxed toward the cost of healthcare. As could sugar.
The bottom line is that the cost of healthcare for a lifetime could be paid for by the equivalent of 16% of income during the working years. During that time and after in retirement there would be no additional cost. I can hear the rich complaining now about the dollar cost of the 16%. But imagine the flexibility provided to the workforce by being able to change jobs without worrying about health insurance. Or going to school and retraining. I imagine there would be upward pressure on wages due to that flexibility as people exercise their right to change jobs...
I suspect that the cost of healthcare would come down with a single payer due to billing simplification and limits to compensation. And how much of present day insurance premiums are the result of just the fear of going broke without insurance. Prices go up and people still demand the coverage. And as prices go up insurance becomes even more of a necessity. What is the price of lifesaving medicine? Isn't that duress? This is part of the self-reinforcing mechanism of increased medical costs.
I notice that on my latest pay statement that my total payroll tax comes to 18.2% of gross: Medicare is a miniscule 1.38%. Social Security is 4%. Federal tax is 7.8%. State tax 5%. Workers comp is 0.06%. (2 deductions, and as a percent of GROSS income. And I should be in the 25% bracket) Think Bush tax cuts. And then there is the 12 % for medical insurance.
I think that my place of employment is on the generous side. I suspect that they pay a larger portion of the total cost than most. They are part of the problem, after all....
Can you see the political problems with asking a minimum wage worker to pay 16%?
Or asking a multi-millionaire to pay a straight 16%?
Is it any wonder that the Federal government is going broke? Would I pay another 4% for peace of mind? And no deductibles. And vision and dental after retirement. YOU BET I WOULD!
I can't believe it actually works out this way. But I've been at this all day and that is what I keep coming up with.
And then there is this from "The Big Picture",
http://baselinescenario.com/2012/12/03/entitlements-scare-tactics/
Just thinkin',
Again...
gh
Wednesday, December 5, 2012
TC
Many of the metals stocks under pressure lately. GG, IAM, FCX, SLW, etc...
This one showing some life for some reason that I am unaware of. (and don't want to know!)
Possible trade here. If Thompson Creek Metals can get above todays high price I see it going to $4. It would stop there for an undetermined time, or decline. If it got above $4 it would be an easy leap to $6.
A lot depends on what the general market sentiment is, as always. But the idea above could be the basis for a trade. Keeping in mind that it may not do as expected and with the resolve to not hold it and hope if it strays too far from the basic expectation.
I guess that is what trading is!!
Based on technical analysis and general market sentiment right NOW.
TC:
And BAC went as expected today. Look at the intraday for what a strong breakout looks like!
gh
This one showing some life for some reason that I am unaware of. (and don't want to know!)
Possible trade here. If Thompson Creek Metals can get above todays high price I see it going to $4. It would stop there for an undetermined time, or decline. If it got above $4 it would be an easy leap to $6.
A lot depends on what the general market sentiment is, as always. But the idea above could be the basis for a trade. Keeping in mind that it may not do as expected and with the resolve to not hold it and hope if it strays too far from the basic expectation.
I guess that is what trading is!!
Based on technical analysis and general market sentiment right NOW.
TC:
gh
Tuesday, December 4, 2012
BAC
The markets still have a good tone.
Bank of America is the latest good looking chart. Feels good on an intraday basis too.
This stock trades at only a fraction of it's historic highs. Not that that is a good reason to buy. There is probably a trillion reasons for a low price on this bank. But for the time being it looks set to make another leg up.
I have not bought this one. I'm working on a couple other things. (FSLR is one....)
Here's the chart: BAC
Control risk!
gh
Bank of America is the latest good looking chart. Feels good on an intraday basis too.
This stock trades at only a fraction of it's historic highs. Not that that is a good reason to buy. There is probably a trillion reasons for a low price on this bank. But for the time being it looks set to make another leg up.
I have not bought this one. I'm working on a couple other things. (FSLR is one....)
Here's the chart: BAC
gh
Something coming?
short note. The markets starting to pick up. Good news coming?? Time 1054 PST....
gh
gh
Countries aren't companies
It is not difficult to see the neccessity of raising taxes/revenue to balance the budget, particularly after 30 years of declining tax rates and increased loopholes. But the advice on controlling costs is different for a country than for a corporation. When a corporation controls spending, they are attempting to control the flow of money OUT of the corporation. They attempt to control the costs of materials or services that they use to produce the product or services they sell. A governments expenses are different in the sense that the taxes raised are spent inside the country. The analogy would be internal spending in a corporation or company between divisions or departments in the company. There is no net loss to the company as a whole. And spending between departments is probably neccessary to the functioning of the company. Tax money is mostly spent INSIDE the country so is more analogous to internal private spending. The loss to the U.S. economy is from the money that flows out of the country balanced against the inflow of money from items sold. In other words the balance of trade/current account is the most important indicator of economic strength or weakness in the longer term.
If we want to control costs we should focus on those things that we do that send our money abroad. Military spending to protect the world comes immediately to mind. The so-called "defense" spending. We spend more than the rest of the modern world combined on our military and we spend it around the world, freeing up those countries that we "protect" to pursue more productive endeavors.
Another cause of trade deficit is the offshoring of our production and import of consumer goods, which is exacerbated by our consumer debt. We buy stuff we don't need and borrow the money to do it!
I think that if we want to get our economy strong again and gain advantage in the world economy we need to stop listening to business leaders who advocate what is good for multi-national corporations. They will find their profits where they find them around the world. And their paradigm is one of the U.S. as a continuing "piggy bank" to be raided to support corporate profits. This is not what is good for THIS country. We need to think of the total United States as a company. Internal spending may be neccessary to change our "business model" to one of increased production of goods and services for ourselves and to export to the world. And while the argument of taxes as a drag on economic activity may have some validity in the short run, in the longer term it is only good for the multinationals. Tax cuts are only another form of artificial stimulus to the consumer and they are temporary. We need to raise money to invest internally and change the rules to encourage/promote exports.
Thinking again
gh
Saturday, December 1, 2012
Social Security under attack
A group of CEO's of major corporations are trying to influence the debate over Social Security in a way that reduces benefits for retiree's. Social Security and safety nets in general are a form of national saving. Money put into these programs is used later for support of the participants. Like savings.
Corporate influence wants to put that money back in the pockets of the taxpayers today, so they can spend it on something that the corporate overlords are selling and thus keep corporate profits up. The same argument and the same motive in all of the tax cut debates. This has been the case for 30 years with the low tax argument. Put more money in the hands of the consumers so they spend it!
Yes, it is "freedom". But it is not in the interest of the nation. Some have no way to save for retirement or illness. Their wages have been reduced through inflation and the assault on labor, as well as the technologic effects of increased production, not to mention oursourcing to other countries.
We should pay for Social Security and Medicare.
From the Institute for Policy Studies.
gh
Corporate influence wants to put that money back in the pockets of the taxpayers today, so they can spend it on something that the corporate overlords are selling and thus keep corporate profits up. The same argument and the same motive in all of the tax cut debates. This has been the case for 30 years with the low tax argument. Put more money in the hands of the consumers so they spend it!
Yes, it is "freedom". But it is not in the interest of the nation. Some have no way to save for retirement or illness. Their wages have been reduced through inflation and the assault on labor, as well as the technologic effects of increased production, not to mention oursourcing to other countries.
We should pay for Social Security and Medicare.
From the Institute for Policy Studies.
gh
Subscribe to:
Posts (Atom)