Spekulatius

A few thought son the election: The rift within the populace appears to be deepening. There are regions where 80% of the votes go to one party (Philadelphia and Democrats), while in some rural areas almost 80% of the votes go to Trump /Republicans. This makes it harder for a President to represent all the people. If only half the people feel represented by the current government, then this does not bode well. Many voters are upset enough, that they are willing to roll the dice on a candidate. It is astonishing to see that Trump can actually defeat both parties and win the election. I do think that both of the above increase the risk that we get a very wrong person as a president eventually. I do see some parallel to Germany in 1933, when the Nazis took over. no, I don't think that Trump is a Nazi or even remotely should be compared to a Nazi. I do think some framework is the same, a country that is split in two fractions without middle ground, people that want change and are willing to roll the dice on who,leads the country, as well as people neglecting deep character flaws (I guess because they want change and don't care about the rest). Eventually withnthe above, I think the US runs serious risk of electing someone who will do a lot of change and not for the better. Demagogy works. It's just sad. Both parties seem seriously screwed up in how they elect their leaders. In fairness, Trump rolled over his party, but Clinton was the best that the Democrats could come up with? With a less decisive front runner, they sure should have won this Election. I dislike Trump, but I hope he will be a better President than many think he will be. Much depends on who will run the government with him. My biggest fear is what will happen with the next Elections? The folks that want change now, who will they vote for next, if they don't get the change? It's scary to think that they will double up in change and elect a real whacko? I hope I am too pessimistic here.

I'm not worried at all about inflation. Btw if you get the inflation it means that things are going well and you got nothing to worry about. But now I'd probably take a closer look at those Fairfax hedges. I think the banks are rallying today because Elizabeth Warren won't be the Chairwoman of the Senate Finance Committee. Inflation does not mean that things are going well. I was very young then, but I do remember the seventies and things were definitely not going well. I do think the banks rallied because of the perception that higher interest rates are more likely under Trump.

How about a stockpile of Yen. JPY.USD is up 3%.

Anybody looking at futures? The MXN.JPY urgency future is down 11.5%, the SP500 future ~ 3%. Interesting night. Oops - make that -4%.

In my book, Obama did OK, as far as the economy is concerned. While we give a president credit for the stock market performance during his presidency, the stock market certainly did more than OK. Moreover, I had a real concern in late 2008 and early 2009, that we would go into a 1930 style meltdown. I think Obama and Bernanke did a good job reinstating confidence again in the financial institutions (remember Bernanke's "fireside: chat in front of his parents home in North Caroline?), steering the bailouts for GM (despite the gripes about pensioners getting better treatment than debtholders), slowly getting the economy moving again. I think the slow growth after a big meltdown should not surprise anyone, especially some of the laissez faire Republican's. It is well known, that after a debt binge, often a period of slower growth follows. Could some things have been done better? Yes, certainly but I personally think that just avoiding an economic meltdown itself is a huge victory that give Obama, to some extend the late Bush and Bernanke some credit for.

Most of these unpaid bills stem from Trump firms/properties that went into bankruptcy. It's a bit ironic for me to think that Trump who had several of his firms go into bankruptcy is qualified to fix the US deficit. If I had a choice to make business with Hillary or with Trump, I would chose the former - at least I would be reasonably sure to get paid. I do think I would take a close look at the fine print with both.

MNPP - somebody else actually owns this puppy. I have got a few shares, but it's hard to buy - the stock does not trade every month. My largest positions are LAACZ,BRKb, EEQ,BWP, WPZ,NSS,DISCK, SNI,GRVO.PA, BAC and about 30 more positions. Edit - forgot about FMBL,QUCT and HNFSA (about 4% positions each)

After he has disposed of it.

The Mars is a bad place for a human colony anyways and won't save mankind. It may be a stepping stone to somewhere else - another solar system with Earth like planets, but right now it's more like learning to swim, compared to crossing the Atlantic and discovering America. it would be way easier to build and sustain a autonomous colony in a polluted and toxic earth, than to build and sustain one on Mars. Most of the things that Elon promotes are not new. fore example the hypercompet - I have a future technology book from the 70's that describes how people could travel in vacuum filled tubes by trains powered by magnetic levitation and thrust with speed is 10k km/h our more. The physics allow this to happen and the technologies are known, but the cost and complexity of this are way beyond our time. We can't even keep a supersonic commercial jet build in the 70's flying.

Looks like a low budged Sci Fi movie. The theory well known, but making it happen is hard. Thank you Elon for trying.

You watched Trump making a fool of himself : FWIW, ISIS was probably founded 12 years ago, but has only become a factor 3-4 years ago. I guess he and his foreign advisor do not follow the news very closely.

Reits are not conservative investments at current valuations (record low cap rates). I think it is a terrible time trying to juice pension returns by increasing risk. This should have been done a few years ago, but not know. What is the average employee age of those covered by the pension plan. If a 30 year old workers is covered by a pension plan, when will accumulate new claims against the pension plan, as long as he works for he company. Shutting down the pension plan for new employees won't change that.

These guys are all on loosing streaks. I doubt they will do better betting on election outcome.

Huh, I recall Redding had some very good Mexicans food joints,

Which downturn? Did I miss anything?

Is anyone aware of any case, where a regulating body was sued successfully for taking over or subsequent actions dealing with an entity, that was deemed insolvent at the time, the institution was taken over? I am not, neither in the US , nor in Europe. There are hundred of banks taken out by the FDIC and also insurance companies were dealt with in one way or another. Has the government ever been successfully sued, in any form these cases, to the point that the former owners received significant value?

Jim Rogers in Investment Biker makes the opposite argument. He says that if governments persistently devalue to keep the economy competitive, companies don't innovate. By contrast, governments that sustain a hard currency force their companies to innovate to compete, and by doing so create real wealth (as distinct from money). Europe would appear to be an excellent example: every single one of the Eurozone currencies devalued against Germany in every single one of the five decades before the unified currency. By contrast the mark was one of the hardest currencies in the world. Which Eurozone country has the strongest companies, the most innovation, and is the wealthiest? Inflation does not create wealth. Mainstream economists hate deflation for three reasons: 1. They think it delays purchases. TCC has rebutted this very well - I would just add that if the money in your pocket keeps getting more valuable, aren't you more likely to spend it because you find you can afford things you always wanted? I know I would be. 2. They blame it for the Great Depression. 3. If they accepted hard currencies and market primacy they'd all be out of jobs in which they teach how clever macroeconomic management can prevent the terrible consequences of hard currencies and market primacy ;) Concentrating on #2: First, deflation can be caused by innovation in a hard currency environment or it can be created by a deleveraging event. The first is not dangerous; the second can be. Second, deflation was a symptom of the great depression, but not the cause. Many people thought it was the cause then, and many still do, but if you understand that money is simply a way of measuring activity then you'll understand that price changes can't really be very causal in driving activity. (Relative price changes do drive activity because they signal economic need and guide the allocation of capital, but general price changes don't.) In the 1920s there was a huge credit expansion, meaning money got created through fractional reserve banking etc. This drove prices up (more money chasing roughly the same amount of assets and produce). Starting in 1929, this process went into reverse and prices started falling. This process doesn't have to be harmful to most real activity. What it does do is show who's been using debt to invest in bad projects, as so often happens in a credit boom. And to the extent that those bad projects stop, there's a temporary impact on real activity. Now, if you allow prices to fall in this situation you're ok: less money, broadly the same activity level, lower prices. But you have to allow prices to fall. If you organise labour to keep wages up, and organise pools to buy commodities to keep their prices up, you will cause chaos. As prices of goods fall companies must be able to cut labour costs or go out of business. As market prices of commodities fall, you need to get to the point where they are so cheap people want to buy them, but stockpiling prevents this by a) holding up the price and curbing demand, and b) causing a huge overhang which does cause people to delay purchases. Hoover did everything he could to stop prices falling, because he believed that falling prices was the cause of the problem. He organised labour and commodity pools. Yet in fact, deleveraging and money destruction was the cause of the problem, and falling prices was a natural consequence of that - and a very healthy one, if left to operate properly. A similarly rapid deflation fixed itself in 18 months in 1921, because nothing was done to interfere with markets clearing. It's important to understand that a deleveraging/deflation episode must come to a stop. This is because while deleveraging can destroy all credit-created money, it can't destroy base money, so the amount of money in the system will never fall to zero. If prices keep falling, they will eventually look so cheap that buyers will be motivated to buy, and prices will stop falling. Credit deflations end themselves naturally if markets are allowed to clear. The other alternative solution to excessive leverage is inflation to make the debt go away. This involves price controls (like the minimum wage and inflation targeting, which I think is a really dangerous idea) and rapid creation of new fiat money to offset money destruction via deleverage. This is politically popular - people don't like wage cuts or having to pay their debts by working hard - but as Rogers argues, it probably impairs innovation and wealth creation, and it also means ever-higher levels of debt. In the next 20 or 30 years, we will find out whether fiat money and stunning debt levels are worse than hard money and less debt. Sorry for the long and very off topic post! When prices fall a lot, a disaster is not that far of. We are not talking about consumables here, if prices of houses for example fall by 50%, a lot of people owe more than their house is worse all of a sudden. We know how this is going to end, because that is what happens in CA for example from 2005-2010. lot's of people will default, banks will have to write of loans, some will go under as well. DOesn't sound to healthy to me. Now with widespread deflation, it's not just houses, it will be commercial real estate, resources, land, etc. Lot's of loans will default, banks and is insurance companies, the bond market will crash. No problem, I get paid half and my groceries cost half, so everything is the same, except - I may not have a job any more, I am underwater a few 100k on my house, my bank defaulted, the 401k is down 75%. Well it's great for the that stored their money under a mattress everyone else is going to be screwed.

Global QE is at all time highs (Europe and Japan) and money is leaking to the US, is my guess. Plus China stimulating like crazy and I suspect money is flowing out. With QE, the money is never going, where it is supposed to go. Rather than stimulating the economy, tends to inflate assets often where it is not beneficial. My guess is that a commercial RE crash could cause trouble. Cap rates are at all time lows, but a lot of business renting (banks, shopping malls) are being disrupted. Higher interest rates together with structural problems (malls becoming obsolete etc) could cause a crash that would also affect the financial system, since so many loans from smaller and mid sized banks are secured by commercial RE.

It already is and always has been low margin hardware, particularly on the passenger vehicle side, don't think anyone is making respectful margins BMW, Daimler, Porsche, Audi, Ferrari have pretty good margins, however the value lies either in the brand and proprietary hardware know how. The latter is going to be less important going forward, which I think could hurt the margins of luxury car makers. Who cares about having a sporty car, if they don't drive any more. Maybe not an issue for the super luxury cars like Ferrari, but certainly for the likes of Mercedes, BMW or Lexus.

How did you know that? :o But I guess that's normal with this guy. Having been burned by the Chinese reverse mergers, I guess he finally saved enough money to get back into the game again, so he is desperately needing to swing through the fence and make a large profit. Then he can start bragging about his legendary trade. In his Seeking Alpha I believe he's disclosed taking out a loan and owns 60,000 prefs or something https://twitter.com/donotlose/status/774516681334980608 I think he posted in his newest article that he might default at the end of the month on his loan and/or sell some of his Fannies. All balls and no brain.

Elon Musk strikes me as somebody who always doubles up. Keep doing this often enough and he will go broke. That is what I think will happen to Tesla as well. Somebody else may pick up the pieces and make it work in financial terms. I do give it to him that he did come pretty far. I would not be afraid to invest in a car company because of Tesla. I think the bigger risk is that more and more know how is going to be in the software (self driving car ) and companies like Google and perhaps Apple may make the hay and the exisiting car makes may deal with low margin hardware, just like with smartphones.

If I read a 10-K (often I don't), I spent like 30min on it. I sometimes spent more time, when I try to understand details that management is not talking about (pensions, asbestos liabilities, footnotes), but often it is clear by then, that if I need to dig so deep to understand the true financials, that the stock is not worth investing anyways. I spent some time to read CC Transcripts in Seekingalpha. I like to compare what industry leaders/ good managers say, compared to what the management of the company I am interested states. I found some of the best tidbits in competitors CC or presentations. I agree with others that it is important to understand what drives and industry, what metrics to look for and to distinguish between spin and facts.

A $ in my own pocket, is worth more than a proportionally owned $ in a companies pocket, I own shares in. So, I think cash on a balance sheet should be discounted to some extend, how much depends on the quality of the management

I have bought more cash recently and had to sell shares to do so.