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The alternative is a slow painful path to the same end. The banks can have their capital requirements adjusted after the writedown to deal with the writedown issue. These countries could stay in EU without the Euro. Packer

The only way out is to let Greece and other countries who will not accept austerity by choice is to default. This is the way it has been dealt with in the past as it cleans out the old debt and gets the economy going again. Packer

In reality, most capital gains timing is elective. Therefore, if the rate is increased, the amount of capital gains will decline and visa-versa. So in my mind this discussion is nice in theory but in practice has smaller impact. If you really wanted to raise taxes in this way, you would tax unrealized gains, which no one is talking about. Packers

Myth, Thx for your reply but isn't the current model unsustainable over the long term and is dependent upon the rest of the world not moving to a rules based system/culture? Isn't another alternative to encourage folks to focus on being educated in fields where there are jobs. At this point people may be saying this but the incentives are not there. Why not charge less tuition for folks in those fields to encourage folks to enter those field and provide loan amounts based upon expected earnings like any other loan. I think you may get Joe and Jane to become engineers if the incentives are there. Now you don't know as the incentives are not. Packer

Is there any particular time or in the monetized where you have been able to roll over the cheapest? How have you dealt with the large bid/ask spreads on some of the LEAPs? Packer

As to pollution, in those countries the regulations are unenforceable due there non rules based culture/way of doing business. As to solar, China, a place where IP is commonly stolen due it's non rule based culture, is the best place to flatten out the pricing as the IP will be stolen and spread around to all competitors with lower prices for consumers as it will become a commodity. Packer

To what extent do you want to extend the social safety? Where do you see the lack of opportunity? As far as I can see people can educate themselves and excel if they wish to do it way the society rewards. I know there are scholorships for students who have lack of funds. However, they need to study something that they can earn good money at (science/engineering). I know it will be harder for someone coming from a disadvantaged background but it has always been this way and what is important is not that it is hard but that it exists. When you compare there situation with folks in other non rules based socities, it is easy because at least they know the rules to obtain wealth and they are not dependent upon having the right relationships to obtain wealth. What I find incredible is that so many of the slots for these well paying jobs are filled with foreigners. What does that tell you about the choices folks make. It tells me on the surface that we have a huge requirement for these folks but Americans do not want to take these jobs. The has happened on the low skill end of the spectum as well. I am all for the Jublilee concept (returning the means of production to popultion every 50 years) but I think this is happening all the time but folks are not taking advantage of it. Packer

Since when does population size equal consumption? The differential rates of consumption are due differences in wealth and what its citizens can afford to buy. Just because the rest of the world outside the rules-based nations (US, UK, Netherlands, Canada, Australia & Singapore) choose to hold back thier common people to protect thier priviledged class, does not make these nations consumption bad just because they have more of it due to their wealth. Packer

I really wonder if this disparity of wealth argument has much relevance in developed countries, where for the most part even the poorest are fed, have shelter and can get an education and become an engineer and make a decent living with a modest amount of effort. The real question is how much money do you need to do what you want and does lack of money prevent that. In this age of increased productivity, the basics of life are cheap and getting cheaper so is the issue more of expectation that one will receive money from others or having enough money to do what one wants to do. If the goal is the later, the cost may not be high. Referring to the past for this argument, I think is misleading because then you really had starving people - like you have today in some parts of the developing world. So for the benefit of the entire world, shouldn't the focus be on raising the living standards of those who are going hungry rather than increasing "relatively" wealthy poor in the developed world and feed there passions with a income disparity agrument that looks silly when compared to the developing world? Packer

I got hurt in the downturn also. I was up in double digits and ahead of the S&P 500 but now I am up about 2.7% YTD. My focus is the LT term where I am up about 16.5% per year for the past 5 years and 19.9% for the past 10 years. Packer

I don't know about the S&P but the stocks I hold (outside by bond equivalents - FFH and SSW) still have significant upside to reach normal valuations (at least 50% to a few hundred % based upon riskiness). Packer

This is unbelieveable. According to this data, if you have a 1% tax it raises about $700b per year. So we can solve the deficit issue with a 6% tax which will raise about $4 trillion per year. It sounds to easy - easier than a VAT. If this even close to be true, either party latches onto this it will have a winning platform. Packer

I think this is a much better way to raise revenue than increasing income taxes. In addition, it will reduce trading which I think is a good thing. The only reservation I have is that it must be implemented worldwide with no exceptions. However, there may be some unintended consequences that I can't think of at the moment which must also be considered. Packer

I think what people have a problem with is some of the IB and IM pay with adding little economic value to the system. These are some of the highest paid in our society and in general add very little in economic value. They are rent seekers and charge high fees bacause they can. If we want less of this activity, we should tax both the activity via a transaction tax and an excess profits tax. However, if we do this, we may lose this some of this activity and its assocated fees which support real business people. In any case, this is what the OWS should be pushing for. Just my 2c. Packer

I look at FFH and SSW as my fixed-income proxies in my porfolio. Packer

I would challenge that capital gains are not worked for. Just ask folks here if they are working at trying to increase their wealth. Also, this money has been taxed once already when it was earned or when it was inherited. Since it appears the financial intermediaries are collecting alot of fees relative to others for the value they are adding (see who rules america thread) why not tax their activities? Maybe a transacation tax and and an excess profits tax for fees greater than 1% of AUM? This would definately disincentivize financial transactions (a good move in my mind). Packer

That is my observation also. My dad is an engineer and his brother was an electrical tech. My sister and myself are engineers and my uncles daughters are an engineer and a math professor. Packer

You can vote up to 2 times if your area of study was different in grad vs undergrad (i.e. Engineering undergrad; Business grad)

I think the missing piece is these derivatives are like call options on deflation and Fairfax purchased these options with very little "time premium". Since these are MTM (either by an option model or a trade) an increase in deflation volatility can also increase the value of the call when the underlying CPI is steady or slightly increasing. Packer

Nice perspective. Maybe wehat we need is a tax on the financial intermediaries to capture a portion of the wealth they siphon off. That would liven up the debate. Packer

It sounds like we have alot of former or current engineers/science/math types. This board must be like a fly trap to these types. I am one. Packer

The first quote I heard out of Greece was that there was to be more additional austerity. If this is true, all the other PIGS are going to want in. Packer

This is what I don't get. There is a large demand in this sector for employess along with the engineering sector but we give equal incentive to English majors and engineering in terms of financial aid/cost. Why should my tax money be used to subsidize an english major who could have made the choice to be an engineering with the right incentives? And now the President thinks it is a good idea to incentivize folks to do more of this by having debt re-payments be a % of income. Packer

The only part that would not fit is the mortgage insurance piece. FFH took the opposite side of this bet in the mid-2000s. It looks like picking up those pennies is pretty expensive now. Packer

This may be good for the banks but how does it solve the southern european overspending issue? Packer