thefatbaboon

You say that we are allowed to see the other side but has anyone else been shocked how quickly Russian news sources like RT have been forbidden? Not that he will care about my appreciation - I am a nobody - but Elon Musk went up in my opinion when he said that he would have to be threatened by a gun to ban Russian news on his Starlink and that all news is to some degree propaganda.

I agree with Xerxes. I had never really thought about it before but when I went through the sanction history they don't seem to have helped - not once. Cuba must be 6 decades under sanctions and it's been Fidel Castro and his brother. NK - father and son. Iran - a couple of ayatollahs. Venezuela - Chavez and Maduro...etc. I guess if you find a ghetto, rife with crime, controlled by mafia bosses, would you increase or decrease the population's chance of getting out from under their crime lords by "ghetto-izing" the area even more? It is politically popular to talk about "punishing". Punishing crime and drug lords, punishing international malefactors. It is sad that more thought doesn't go into to this. There are 40 million Ukrainians whose lives and country is getting destroyed. There are 150 million total isolated Russians who's net worth has been obliterated over the last week, can't fly out of their country, who have no access to most of the daily goods and services that we all take for granted. And there are hundreds of millions of of average Europeans and Americans who's costs of living are soaring. Also, another thought I had, if we don't buy Russian energy don't we have to buy someone else's energy? And if we buy someone else's energy then that country is not selling it to whoever they were selling it to before we bought it and that entity who can't buy it from whomever they were buying it before will have to buy it from.... Russia...no one has 10 million bd of hydrocarbons sitting in their cupboard. Anyway, the peace deal of neutrality/demilitarization and handing over Crimea and the Donbas looks good to me. Not perfect but the alternatives are worse. Hopefully they agree it because both War and Sanctions are lose/lose propositions.

Ive been wondering over the last days whether sanctions ever work? These are all the main countries sanctioned by America - some for more than half a century. Haven't all these countries' leaders consolidated and grown old in power, often even establishing dynastic dictatorships for brothers, children etc? iraq (removed only after invasion) iran cuba venezuela syria north korea russia Seems obvious that sanctions work to impoverish a people and keep a country economically and militarily weak but never to help the country "rise up" and escape from under a dictator. No idea why every politician and media pundit goes on about sanctions punishing dictators.

I am reading too much about how firms (and I guess by extension their employees) should be “punished” for share repurchases or dividends. I believe this entirely misses the point and reflects a dangerous misunderstanding of what is going on. 1. This virus while bad is not worth entering a Great Depression for. Indeed it would be better to let it run, implement harsh triage rules for the use of ICUs and kill many of our elderly and infirm and not shut everything if the result is an economic cataclysm. 2. We are a wealthy society with the resources to take a long “holiday” however so that we can deal with this health issue more humanely. 3. As such we should treat it as a health holiday and place everything on hold. No firing, no defaults etc. With the governments paying everyone to not work and stay quietly at home for a number of weeks/months. 4. We absolutely do not want to destroy many important industries and companies and jobs for no good reason. 5. Furthermore we do not want to have the economic survivors emerge from this and spend the next x years delevering and investment freezing because they believe they must prep for zero revenue scenarios. So, let’s not waste time overcomplicating things with who should be supported, who should be punished, diluted, preferred stakes, equity stakes.... All that is nonsense. 6. In conclusion, put an end to recriminations, stop this firing, let’s simply go on a health retreat for the next month or so, everything paid for or guaranteed by government borrowing and come back in a little while when we can easily pay it back when our economic engine is firing on all cylinders.

Does anyone know where i can find data for hospitalization by age cohort? And within hospitalization the split between oxygen and intubation also by age cohort. Thanks

Thing is though how much of running bond issues or acting as stock transfer agent or partnering on rail car deals ends up as actual revenue on WFC books? WFC had approx $80bn revenue last year so the relevant levels are $8bn, $4bn and $1.6bn. Also, what happens if it is a one-off? Say most years its just fee income and commissions for some deal flow, debt issuance and general banking services and these (guessing) are less than $1.6bn of actual Wells revenue. But every so often Berkshire buys something where Wells is principal owner in something like the Homeservices lending jv mentioned which say Wells is principal owner and therefore all sale amount counts and revenue goes over the $1.6 level. Do you have to modulate down for one year and then can buy back the next year??

What is known, if anything, regarding the "business relationship" between Berkshire and Wells? The FRB's new rule has restrictions at 5% of revenues or expenses for 10% to 15% shareholders and 2% of revenues or expenses for greater than 15% shareholders.

You're probably right, I have exaggerated and perhaps it's unfair. And I don't really mean my argument to be taken to it's extreme. But what I don't get here is the Why?! Why do they bother with such contrarian positions when they are not compelled to by inflationary pressure? I understand standing against the crowd pushing rates low when markets are collapsing and market forces have rates stubbornly high. I understand standing against the crowd have lifting rates if the economy is over heating and inflation has gone past target. But I don't understand being a stubborn contrarian when there is no need. As things are they are simply behind the market, a kind of parrot with delay. 1. Powell: we are a long way from neutral and will have to raise many times. Market: you might have reached neutral and raising might not be good idea. 2. Powell: we are less sure where neutral is, but we will raise at least twice next year and run off the balance sheet on auto. Market: you've probably past neutral, and you won't raise at all next year. 3. Powell: we probably won't raise at all this year. Market: you'll probably cut. 4. Powell, we might have to cut....etc etc And all this why? Inverting the curve, having all durations cheaper than overnight! Why do that? Is inflation running at or past target? Powell is peculiar and a stark contrast to the thoughtfulness shown and expressed by Yellen during her tenure.

The Wizard Powell. We have a "symmetric" target of 2% inflation. We raise preemptively 8 times before reaching this target as the data suggests we may reach this target at some point. We never really reach the target and inflation expectations turn down. Question: so why aren't you cutting this meeting? Because we are waiting for more persistent data. Someone needs to explain the words symmetry and target to this guy! Reflect for a minute on the last 12 months. The arrogance of this man is staggering. Everything he says is contrary to what the rates markets are telling him at the time he says it. Think of this from a gambling point of view. The bookmakers with all their trillions of $ at risk along all durations of the bond market expect a lower neutral rate, undershooting inflation and lower growth and believe that hitting 2% is unlikely and price trillions and trillions and trillions of bonds accordingly. This wizard then repeatedly backs the long shot contrarian position: that the neutral rate is higher, and that inflation and growth will increase. Like most long shot gamblers he has been losing all his bets. Ok, so this isn't ideal, it would be better if the guy wasn't always wrong. But really more remarkable than all these lost long shot bets is that Powell has been walking into the bookies when HE DOESNT EVEN NEED TO. He has a target of 2% he doesn't need to gamble on any outcomes until we hit 2% and spend some time symmetrically around it. So not only do we have long-shot-larry running the Fed but he's compulsive and runs out to make these bets when he should be sitting quietly at home.

I’ve said this before but I think Brainard’s aboutface is possibly political. She’s a democrat and donor and she abandons a steadfast cautious position that she spoke to many times in public to support a whole series of hikes. Obviously she could have changed her mind on the basis of changing fundamental data but it doesn’t make sense to me as inflation never got to target.

Continue to be amazed at the recklessness of Powell. Pushing through those eight sequential hikes...especially the december one. And then within a few days he's speechifying in January and again now dialing it all back in the face of data that was already rather obvious to even the most casual observer. Clown

Schiller: it’s One little rate hike? It’s 8 hikes in a row squeezed into 2 years. Schiller: We need to the raise cost of money so it costs least a bit about zero in real terms. Didn’t he see the 10 year at 2.8, and 30 at 3, and all the inflation inputs crashing. Didnt that tell you that the great majority see inflation falling? So it’s not really a matter of “just” getting money to real zero, we might have passed that four hikes ago.

SD, Not sure if you reply directed at me or another, but I was questioning fed not treasury sec.

Cardboard, I find it unnerving that I now don’t understand where the Fed is coming from so I have no idea what they will do. What happened to take the fed from being so cautious under Yellen to reckless under Powell? Why did no one want to pause to see so many hikes flow through before doing anything more? It is so different to the fed behaviour of 2015 and 2016. I am neither a trump supporter nor a conspiracy theorist but there was no real data to support their latest move and out of their own mouths both Powell and Williams were both saying that economic growth was already slowing and inflation below target. So what is motivating Powell& co? Can they really have so much confidence in their modelling guesses of neutral rates that they would base action on that alone against every other economic stat and financial market?

I guess I see things total opposite to you cigarbut except for the bit where you caution for caution in the face of an unknowable future. But as for your little economic history I would reply simply that I would much prefer to have lived through and looked for work in 1973-1983 compared to 1929-1937 and I would much prefer 2007-2009 to 1973-1983. In each case the recessions were significantly milder and the recoveries more potent compared to the size of the decline being dealt with. Why not look to the mid 19th century and the pax britannica if you want a better idea of how growth rates and interest rates can moderate and debt capacity increase? I think it’s possible that the current American peace with higher levels of prosperity, lower population growth, the internet, and greater peacefulness should have a good chance of carrying more debt for longer and at lower rates than the British empire.

Facts: Average annual growth of GDP during recoveries before 1990: 4%+ 1991-2001: 3.5% 2001-2007: 2.7% 2009-now: 2.1% Before sliding into political nonsense, please remember that this downward trend has transcended the political dimension and similar associated trends are in plain sight for progressively weaker recoveries in employment, business capital investment, real productivity etc What great recessions happened in the 90s? Or 00-07? What are these statistics referring to? Rrecoveries from the ‘98 EM stuff, nasdaq bubble, 9/11...stuff like that? That’s not what we are talking about here. Are you honestly saying recoveries were easier from 1929 and 1973? And that things are just getting harder because we keep carrying more debt into these massive every 40 year type crashes? Bah Anyway back to the Fed narrative. Just to be clear my comments earlier have little to do with the recent stock market gyrations. That stuff happens from time to time. I just question the constant raising with nary a pause to see where is the actual neutral rate. Williams and Powell talk like they know where the neutral range is but obviously they don’t because no one does. And the credit markets have staked trillions and trillions of dollars between 2 and 30 years and these guys have been of unwavering view over many months that the neutral rate is below where we are. Even the worlds forex markets don’t believe the Fed otherwise the dollar would be significantly stronger than it is versus a bunch of 0% currencies. If the Fed happens to be right here it will be one of the greatest contrarian bets I’ve ever seen.

Nonsense. It wasn’t historically hard. Just hard. Compared to the 1930s it was a walk in the park. And compared to the mid 1970s it was easier. So I totally reject your premise that things have been getting harder and harder on account of debt or anything else. . I just meant it was hard enough to merit being treated with caution instead of charging higher relentlessly without waiting to see what effect it will have.

I personally found this to be an awful interview where he made zero sense. He kept saying that they are listening and paying attention to the data etc etc. But what data are they paying attention too? Over the last two years they have raised rates from 0.5% to 2.5% in a straight line without pausing to take stock of what effect it is having. Every single economic data point has or is in the process of rolling over. Every single credit market is in the strongest disagreement with their outlook. What exactly are they waiting to hear? It was terribly hard to get the economy going again after 2008 and America has been one of the few countries where they seem to have gotten their noses above water. Why not be at least a tiny bit cautious as you stamp on the brakes?

Can someone help me understand why I keep hearing about how this economy is "booming"? The Fed has it at around 3% this year and that's in a year with the huge one-off filip from the tax cut. Then the Fed projects it slowing to 2.2% next year. Is 3% after some horrible years "booming"? And how tight is the labor market really if the participation rate is at an all time low and there isn't enough tightness to get wages to go up? If there are not sufficient inflation pressures to get inflation to target, and many of the inputs are anyway falling dramatically, and you ALREADY have the GDP growth rate projected to fall by nearly a third from over 3% to around 2%, exactly what data is it that the fed is using to justify their 4th raise this year? At the moment it is difficult for me to see how this Fed is anything but either (i) reckless/doctrinaire or (ii) politically motivated to create a recession in time for 2020. And my best guess at the moment is that it is a combination of both depending on each of the governors. For example how does Lael Brainard go from the cautious positions she held under Yellen to now voting to raise so many times in row without a single pause to see what effect the raises will have? For historical context please see https://www.ft.com/content/769267b4-8cb1-11e6-8aa5-f79f5696c731 and https://www.federalreserve.gov/newsevents/speech/brainard20151012a.htm It is not often I find myself agreeing with Trump....but this raise was a weird one for me to understand because i don't know of any objective data that would argue for it let alone a preponderance of data. The Fed has already tripled the cost of short term funds over the last year and a half, the fed says economic growth is slowing down, inflation is below target, global economies are weak and weakening, commodity inputs have collapsed, the bond market is pricing in a recession and rate cuts in the not too distant future...Is there even a single piece of data that actually supports the Fed here?

Also, where the idea is either a bolt-on or a 3G target I think the self-imposed requirement that it be "friendly" is impractical. Say 3G/KraftHeinz wanted to buy Pepsi or Coke or Unilever and make them all fly coach, fire half the c-suite, close a bunch of factories, wring out synergies etc...is it reasonable to expect that they want to be bought.

Agree totally with cigarbutt. Research based, margin of safety type value investing is a vocation - and in my experience suited to very few. On the other hand, I think indexing can be taught to many people. To that end I think the following are a couple simple precepts to get across: (1) Understand and respect and marvel at the power of compounding. Do arithmetic together. Show them how to do compound interest calculations over 20/30/40/50 years. Analyse jokes about how the cost of NY might have been better invested in bonds. Look at how small annual differences have monumental effects when compounded over time. (2) Realise that it's ok to do nothing and that investing activity is often an enemy. Tell them that it is ok and normal to not know the future. Look at examples of good performing long term assets where the greatest decision every day was to take no decision. Even if the market price declined in 1973/4 or 1987 or 2008/9 - show them how clever it was to stay put. (3.) Teach them what an index is and help them understand that in owning an index they own all the wonderful businesses that make up their lives. That it's not just a number. It's the car they drive, their phone, the movies they watch, the coffee they drink, the clothes they wear, the chocolates they love etc. Encourage affection and attachment.

I don't really understand this less/more opportunities thing many investors refer to. Personally, I never have many ideas. Last year I had a couple ideas. The year before I had a couple. This year i've already had one and hope I'll have one or two more. Sometimes I have too many ideas like 08,09. But as I can't guess when massive crashes come I cannot go to cash or raise my hurdle rate in expectation. So my money runs out and the surfeit of ideas is of no use. Using simple arithmetic and the historical fact of the great infrequency of severe crashes I can calculate that it is FAR better to assume every year is normal and look for and take my normal couple ideas than it is to prepare for unpredictable crashes. Obviously if you're not finding ideas then you're not finding ideas - and of course you musn't go buying things you don't want. But the financial world is massive and financial information abundant and I bet there are many good investments out there to be found. Unless of course you see an important market crash around the corner?!

Have a look at nanyang. It's probably the only one I have found where they have consistently bought back a lot of stock over many years.

He talking about futures not options.

Hahahaha