Comments on: Let’s Get Real About Bear http://www.investmentpostcards.com/2008/03/18/lets-get-real-about-bear/ Prieur du Plessis’s international investment blog Sun, 29 Jan 2012 22:06:48 +0000 hourly 1 http://wordpress.org/?v=3.1.1 By: Richard Le Vieuxhttp://www.investmentpostcards.com/2008/03/18/lets-get-real-about-bear/comment-page-1/#comment-1886 Richard Le Vieux Mon, 24 Mar 2008 10:18:52 +0000 http://www.investmentpostcards.com/2008/03/18/lets-get-real-about-bear/#comment-1886 Oh boyThere goes the Basle Accord.Where are Tier 1 Capital ratios now?Marked-to-market!....Ha Ha Ha......Where is the counterparty now?The mother of all 'flations is in the pipeline people, having been apparently contained in ever inflating house prices but now looking to manifest itself in all manner of real asset classes...If you are correct in your reasoning, John, then it only demonstrates the impotence of the Fed to hold back the tidal wave. Oh boy

There goes the Basle Accord.

Where are Tier 1 Capital ratios now?

Marked-to-market!….Ha Ha Ha……

Where is the counterparty now?

The mother of all ‘flations is in the pipeline people, having been apparently contained in ever inflating house prices but now looking to manifest itself in all manner of real asset classes…

If you are correct in your reasoning, John, then it only demonstrates the impotence of the Fed to hold back the tidal wave.

]]> By: Dan Modrickerhttp://www.investmentpostcards.com/2008/03/18/lets-get-real-about-bear/comment-page-1/#comment-1816 Dan Modricker Thu, 20 Mar 2008 05:17:12 +0000 http://www.investmentpostcards.com/2008/03/18/lets-get-real-about-bear/#comment-1816 Is anyone giving any thought to how using corn to make ethanol is adding to our inflationary problems? Ethanol is not only a "hidden tax", it is also inflationary.One pays the same .. or more .. for a gallon of gas diluted with ethanol .. as for a gallon of just gas. But the gallon with ethanol in it get at least 10% less mileage per gallon.By allowing this situation to continue .. and by fostering development of the ethanol industry .. our government is adding to inflationary woes. The cost of using the kernel of corn for ethanol makes everything from corn fructose to chicken feed and cow feed more expensive. We don't need such misguided nonsense.Perhaps Mauldin can clue-in his friends in high places to the demerits of ethanol. By the way, ethanol also adversely affects (etches) certain parts in an internal combustion motor. Those who use ethanol may wish they never did.So, lets stop masking the true retail cost of gasoline by lacing it with 10% ethanol. Is anyone giving any thought to how using corn to make ethanol is adding to our inflationary problems? Ethanol is not only a “hidden tax”, it is also inflationary.

One pays the same .. or more .. for a gallon of gas diluted with ethanol .. as for a gallon of just gas. But the gallon with ethanol in it get at least 10% less mileage per gallon.

By allowing this situation to continue .. and by fostering development of the ethanol industry .. our government is adding to inflationary woes. The cost of using the kernel of corn for ethanol makes everything from corn fructose to chicken feed and cow feed more expensive. We don’t need such misguided nonsense.

Perhaps Mauldin can clue-in his friends in high places to the demerits of ethanol. By the way, ethanol also adversely affects (etches) certain parts in an internal combustion motor. Those who use ethanol may wish they never did.

So, lets stop masking the true retail cost of gasoline by lacing it with 10% ethanol.

]]> By: Don Rosehttp://www.investmentpostcards.com/2008/03/18/lets-get-real-about-bear/comment-page-1/#comment-1798 Don Rose Wed, 19 Mar 2008 05:34:57 +0000 http://www.investmentpostcards.com/2008/03/18/lets-get-real-about-bear/#comment-1798 John Mauldin makes some compelling points to counter the anger in the popular press about the Fed bailing out the big guys. Analogies can be memorable and useful, so I wrote to my family: 'Mauldin implicitly compares the US economy to a boat that is taking on water and threatening to sink. He argues persuasively that we can't let it sink, because we are all in it together. Extending his analogy, the boat has become flooded [inflated housing values], has been burdened with a top-heavy superstructure [an alphabet soup of financial derivatives], has some rotting pieces [excessive credit] and is springing new leaks [hedge fund collapses, Bear Stearns]. A proper role for the Fed is to apply enough baling wire and duct tape to keep the boat afloat so that it can be brought to a safe harbor for an overhaul. We need to "bail the water out of the boat" [gradually lower the prices of inflated assets] and remove excess superstructure [unwind and control derivatives] on its journey. It will arrive a bit lighter and leaner, but it will be serviceable and repairable.' John Mauldin makes some compelling points to counter the anger in the popular press about the Fed bailing out the big guys. Analogies can be memorable and useful, so I wrote to my family:
‘Mauldin implicitly compares the US economy to a boat that is taking on water and threatening to sink. He argues persuasively that we can’t let it sink, because we are all in it together. Extending his analogy, the boat has become flooded [inflated housing values], has been burdened with a top-heavy superstructure [an alphabet soup of financial derivatives], has some rotting pieces [excessive credit] and is springing new leaks [hedge fund collapses, Bear Stearns]. A proper role for the Fed is to apply enough baling wire and duct tape to keep the boat afloat so that it can be brought to a safe harbor for an overhaul. We need to “bail the water out of the boat” [gradually lower the prices of inflated assets] and remove excess superstructure [unwind and control derivatives] on its journey. It will arrive a bit lighter and leaner, but it will be serviceable and repairable.’

]]> By: gordon kidderhttp://www.investmentpostcards.com/2008/03/18/lets-get-real-about-bear/comment-page-1/#comment-1785 gordon kidder Tue, 18 Mar 2008 16:44:51 +0000 http://www.investmentpostcards.com/2008/03/18/lets-get-real-about-bear/#comment-1785 We are basically on the same wave length so I applaud your comments. Because my politics are rather far left, we would most likely find little else to agree on. I see Greenspan and this administration as the primary architects of this mess. I note that Fleckenstein is all over the ex chairman - I say "pour it on!" When I watched Paulson being interviewed by Stepanopolus on Sunday, I actually felt the pain and stress this guy is feeling, but I feel little compassion because he too is part of the problem. Keep up the good work! We are basically on the same wave length so I applaud your comments. Because my politics are rather far left, we would most likely find little else to agree on. I see Greenspan and this administration as the primary architects of this mess. I note that Fleckenstein is all over the ex chairman – I say “pour it on!” When I watched Paulson being interviewed by Stepanopolus on Sunday, I actually felt the pain and stress this guy is feeling, but I feel little compassion because he too is part of the problem. Keep up the good work!

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