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I think looking at polls to find out who the public blames is like backward looking stock selection, it tells you where you have been not where you are going. Also asking Congressional approval overall is the wrong question (as it is easy to blame others in a crowd). The correct question is do you approve your own Congressperson's performance and a better one to compare to a Presidental approval. What folks are looking for is someone to act like an adult (take some hits for the team) and not be concerned about credit. Today I think Romney appears to be the winner in that category. A contrary view. Packer

I am not concerned with whose fault it is (it really deosn't matter). He has shown he cannot work with the opposition. I think his approach is not correct. When you negotiate with someone you sit down with them (after having developed a relationship with them - which is missing here (look at what Regean did, he called every Democrat in Congress and developed a rapour with them - Obama on the other hand developed a relationship with one senator so he could get 60 votes in the Senate. No outreach to anyone in the opposition until he was forced to with Boener and then only the minimal effort to appear to be working with him. I would guess if he had a choice he would not work with them at all by his attitude.), they put thier demands down and you do the same and negotiate. You keep the details quiet to help both sides keep face. You as leader try to enforce this. You do not call the opposition your enemy as by your leadership you are condoning much worse action by your colleages. Finally, you sincerely give every one credit and move on. Can you see Obama doing this? I cannot. His approach of putting what he thinks they want in a proposal and call it his own is another thing you don't do. You give credit to everybody and don't worry that you won't get credit because people won't remember who got credit or who should have they will remember whether something got done or not. How would you feel if your negotating partner did the things the Obama has done to the Republicans (call them enemies and unreasonable every chance he gets because he doesn't have the skills/willingness to really negotiate and share credit) to you regardless of who is "right" or "wrong". You can argue that Republicans are unfair to Obama but what President did not have to deal with that from the opposition? Presidents need to rise above the unfair issue and take one for the country and he/she will be rewarded. Obama is not willing to take one for the country and is mired in the fairness argument. I think the result has as much to do with the style Obama pursues as his substance. Why else would he not be able to get the opposition to agree to someting 80 to 90% of the public agrees to (increasing taxes on the rich). If he spent half as much time on being concerned on how the his opposition can save face versus world dicatators, we would be fine. I think a major defect is his style which I do not see changing so anyone else with a halfway decent style should be able to defeat him. Just another take. Packer

To the contrary, I think all the US bearish sentiment around is an indication we not go down much further. If you look at a the VL average we are at the same level as 1994 and the S&P 500 1998. This sideways movement may continue but I think a large scale decline (absent an economic collapse) is unlikely. This period is similar to the late 1970s with low US confidence and declining real returns to stocks. I think once the debt issue does what it is going to do in Europe (most likely selective default and Euro ???) and China has its own bubble burst (not to mention the fraudulent accounting), the US will once again be the place where capital flows. Packer

I think you have hit the nail on the head. As both sides have not developed a trusting or even respectful relationship with each other. In the past, the President has developed those relationships (think Reagan, Clinton and Bush) to carry out/push forward his agenda but these folks have tried a different path (try to develop relationships with combative language - which may play well with base but pushes away opposition leaders) with the results we have today. We need a President that can develop effective relationships with a large enough portion of the opposition to move us forward. Packer

I would recommned his latest book (Decade of Delusions) as it puts the events in context in the 00s that I have not seen before. Packer

We will see but I would not be surprised that the admin does someting to prevent this from occuring. You have to remember you are dealing with a college professor who thinks he is right and everbody else is wrong and has not developed a working relationship with the opposition. I hope they do get it right for everybody involved. Packer

How is that book? From my understanding, it is from the perspective of a businessman in the middle part of the US. Sounds like an interesting read. Packer

In the spirit of trying to kill an idea, I would like to get feedback on radio/TV firms (the independent operators). This busness' growth rate has slowed considerably and appears to be growing at GDP or slightly below GDP levels. Most of these firms are highly levered and therefore can do nothing if there stock declines to support value. A few can and for the most part there share prices reflect this (i.e. the are buying back shares). The biggest challenge for these firms is continued generation of advertising revenues. Over the past five years, most of the radio firms have had significant declines in FCF (5 - 10% annually) but two have had increases based thier niche positions (SGA - small market; SALM - Christian). Most of the TV firms have has steady or slowly increasing FCFs. Over the past year or two, these declines have turned around in contrast to newspapers where the decline continues. All of these firms have developed an internet/mobile presence and thus may co-opt the internet/mobile (like telcos and cell phones) versus being hurt by the internet/mobile (like newspapers and the internet). Some bears (Morningstar and other folks) have stated radio and TV are going away - displaced by cable and internet firms (such as Siris and Pandora). I disagree as I think folks listen to radio and TV for more than music or national programming. Those who only offer mucic and national programming will be hurt the most by Sirius and Pandora and are in terminal decline. Thus, the firms that generate the most local and original content will be the most successful. Even with longer term growth forecasts of 1.5% to 3%, the firms are selling from 2.1 to 5.8x FCF. These multiples imply terminal declines for these firm. Any feedback would be appreciated. TIA. Packer

[amazonsearch]The Crash and Its Aftermath - Wigmore[/amazonsearch] This a Prem recommended book from 2 years ago annual meeting. It describes in detail the bond, stock (including individual industries and companies) and currency markets from 1929 to 1933. It was written by a Goldman Sachs partner in the 1970s. It is about 550 pages of text so there is alot here but this the best Depression history book I have read. Packer

[amazonsearch]The Great Wave - Fischer[/amazonsearch] This is great history book about prices and inflation/deflation since the Middle Ages. It provides some great historical perspective on the current debate. It does get a little political in the modern age but other than that it is best history book I have read on the subject. Another good short read on the suject is Irving Fishers "The Debt Deflationary Theory of Depressions" which is available via pdfs in the public domain. Packer

Frank Martin has great article up on his web site called the Forgotten Man. It is a description of the side effects of low interest rates on the market. It includes a description of the Forgotten Man concept that Amity Shales popularized in her book about the Depression. A great short read. Packer

The only problem with this type of solution for shareholders is typically this involves a BK filing. I know most of the asbestos firm's equity went to 0 and the place to invest was the post-BK equity or pre-BK bonds. Packer

I am not sure how good of an ace this is. It may be good on paper but not so good in practice (generates little or no re-patriation). Why would you bring money home with this crew when in a 18 months you may have a more "business freindly" crew there. I see his only ace as 0% taxation re-patriation given the current view of this crew by business. I agree with Myth, a liberal trying to implement conservative policies is a loose/loose. You need a conservative or a fiscal conservative like Clinton to get the business community on board. Packer

I have used term life insurance assocaited with the IEEE (I am an engineer) and it has been affordable. You may want to see if any groups you are affiliated with offer group plans like the IEEE. Packer

I think the only viable solution is a break-up if the Euro becasue we are dealing with a solvency issue not a liquidity one (where TARP worked). Does anyone have any ideas how this would impact the US and stocks? Maybe the new Euro would become really strong with continued selling of the $? Packer

I agree the Fed will get its inflation (it may not happen until much of the consumer debt is paid off) but it will be offset to a large extent with the debt deflation we are experiencing. I think deflation is beyond most peoples experience because we have lived in an inflationary world as "The Great Wave" describes. I think Irving Fisher's "Debt Deflationary Theory" best describes the situation we are in with no Fed action. The additional Fed action is trying to do what was done in Sweden in that paper (trying to offset the deflation with money supply or at least not making the deflation worse with tight money). At one time, gold was a currency officially accepted as a store of value (coins were minted in gold) but unless I missed the press release I can't go out and buy my food with gold I need $ in the US and unless gold becomes a standard of exchange again I still view it as a commodity. None the less, I think undervalued equities will provide the best store of value in either case (gold is a commodity or it becomes a currency). Packer

There were many times in history when the money supply went up and there was little or no inflation. The Renassiance, the Enlightenment and the the Victorian era. See the "Great Wave" for details. The assumption of inflation assumes constant velocity. The other side of the equation is the demand for money. When you have a debt/deflation scenario, the demand goes down (as folks pay down thier debts) so increases in money supply lead to little or no inflation. Debt is future consumption consumed today. Paying off the debt is the reverse forgoing consumption to payoff past consumption. This is what history has shown. So what has happened is there is more money available and some of it has bid up asset prices but most of it has ended up back on deposit at the Fed. The gold run-up is a function of a portion of the $ driving all commodity prices higher. As soon as the excess liquidity is gone, gold and every other commodity will decline. The only scenario I see gold retaining its value is if the world gov'ts/bankers agree to a new gold standard (a long shot in my estimation). Packer

Sanjeev, Is there any way to set up another raffle versus an auction as it gives everyone rich and not so rich a possibility of winning. The downside of the auctions are that they are one by one with alot of $ and they may not benefit to the extent of others. Packer

I am feeling the same squeeze with performance lagging the market (S&P 500) by 260 bp (down 5.6% YTD) when historically I have beat the benchmark by 18% over 10-yrs and 22% over 5 years at mid-year. I guess this reflects that small value stocks have had a YTD performance of -9.0%. Packer

I think this was a technology bet plain and simple more akin to VC investing. Not the typical Berkshire fair. Packer

In Howards new book he described undepriced assets as having the following characteristics: 1. Little known or nor fully understood 2. Fundamentally questionable on the surface 3. Controversial, unseemly or scary 4. Deemed inappropriate for "respectable portfolios" 5. Unappreciated, unpopular and unloved 6. Trailing record of poor results 7. Recently the subject of disinvestment versus accumulation I know we have had some good examples from some high tech cos (MSFT, HPQ) and financials (BAC, C) but what are other industries/segments have folks been finding underpriced assets in? One of the segments I have found is radio/TV. There are at least 9 firms selling at less than 5x TTM FCF. (SGA, SALM, EMMSP, EVC, ETM, BLC, SBGI, TVL and NXST). Some with modest amounts of debt. (SGA, EMMSP (post transaction), SALM, EVC, BLC, SBGI and TVL). I know these meet criteria 2 so I thought I would see what others thoughts are. Packer

Buying hated companies. I seem to have alot of #2 stocks. My most hated stock is LNET. Packer

A question for the bulls - how confident are you that BAC is similar to FFH (i.e. a stock that was punished but had management of impecable integrity that you could really trust)? This stock sounds tempting but my historical weak spot has been leveraged financials and I would only invest in something like this if the management team was similar to FFH in actions. Do you have examples of management putting shareholders in front of thier own interests? TIA. Note: historically, these bank turnarounds typically take quite a long time to happen (BAC from 1988 to early 1990s and C 1989 to early 1990s). Packer

I think an interesting idea is to refinance all gov't guarenteed mortgages @ 3.5% and buy-back all guaranteed "under-water" mortgages from the banks and give the banks a longer time frame to fill the capital hole left. This would cease a good part of the litigation and provide cash to home owners. In exchange for the prinicple foregiveness on the "under-water" loans, the gov't/Fed will get all or a large portion of the upside in the property upon sale. This will give bones to most of the players and should get rid of the overhang in the real estate market. Packer

I think you are missing the point. He does not say that the rich should not pay less than (even on a % basis) less than the less well off. I see very few if any folks stating this. Most of the proposals retain a progressive system of taxation (even giving folks money if they don't earn enough). He states that the tax system needs to be reformed by removal of exemptions, make sure that every pays something (has skin in the game) and better accoutabilty of the money spent. To argue that you want to increase taxes with current system of expemptions and no additional accountability of results to me appears to be the illogical alternative. Why is Buffett paying a lower tax rate? Because he responding to an incentive to invest long-term with a lower long term capital gains tax. What would be the logical solution to this problem? That is the question (not just increase rates with no accountability). Packer