DooDiligence

In other news, Canada finally apologizes for Ted Cruz.

I Googled "warren buffett buy japanese company" and came up with some interesting old & new articles. IDK enough about SoftBank to say, but this Forbes article speaks about Masa's attempt to buy Swiss RE and it made me think that he prob wouldn't mind being a part of Berkshires universe. https://www.forbes.com/sites/williampesek/2019/03/26/move-over-warren-buffett-for-this-200-billion-man-from-japan/#4fe2e8702107 --- This one wraps a hand full of icons together as a comparison to Masa, https://www.institutionalinvestor.com/article/b14z9v4ccf7q2z/buying-warren-buffett-richard-branson-and-steve-jobs-at-a-discount --- and this one kind of throws shade on Masa's sun, https://www.asiatimes.com/2019/08/article/is-japans-warren-buffett-losing-his-mojo/ --- Then a Goole search of "warren buffett masa son" turned this up, where Masa tried to put the arm on WEB & Malone, https://www.wsj.com/articles/sprint-executives-have-engaged-warren-buffett-about-investment-1500055560 Could WEB have fallen under Masa Sons spell? Not quite sure how I'd feel about that. Living up to my signature.

Interesting read . It looks like Applied Underwriters was competing for business with Berkshire subs. BRK generally doesn’t integrate their subs and this one had minority interest outstanding, so even if they wanted to, they couldn’t without buying out minority interests. That’s one of the limitations with Berkshire’s modus operandi and a sale is the better option at this point. Also on a side note, workers comp claim stats tend to get far worse when the labor market goes cold in a recession, and competing with questionable side agreements (if I'm understanding this correctly). "DFS said that its investigation found that the formula the RPA used to calculate costs was “complex and the way in which it was presented to employers was misleading,” with a result being that many New York employers ended up paying more for coverage than they would have paid under the workers’ compensation policies alone, according to the officials." https://www.insurancejournal.com/news/east/2019/07/19/533394.htm --- Has BHHC been experiencing the same 30% loss of premiums quoted for Applied or are they taking business away from Applied? Looks like NY has some opportunities now.

Maybe that stuff is irrelevant for stock picking but it's entertaining and the article is refreshing when compared to the intellectual consensus (entrenchment?) coming out of Jackson Hole last August: The World needs a lower USD and lower US-based risk-free rates. Mr. Mark Carney's speech was interesting. https://www.bankofengland.co.uk/-/media/boe/files/speech/2019/the-growing-challenges-for-monetary-policy-speech-by-mark-carney.pdf?la=en&hash=01A18270247C456901D4043F59D4B79F09B6BFBC He basically questioned the consequences of the disproportionate dominance of the USD in global markets and is suggesting (not a tax) an alternative based on fiat currencies. It seems like these guys have realized that the Bretton-Woods framework has lived and will take the next steps in stride. Applying the content of the article would likely result in a rapid reconciliation of the achieved-future-consumption-brought-to-the-present imbalance but i wonder if the author did a good job describing possible ramifications. Maybe those will be covered in a follow-up note. "Taxing incoming Chinese (and other foreign) investment. U.S. Senators Tammy Baldwin and Josh Hawley in late July submitted a bill that would allow the Fed to impose a flexible tax on capital inflows. This measure would make it less attractive to park money in U.S. assets, thereby shrinking the capital account imbalance, and by extension, the trade deficit." I've been looking to buy a spot in the southern US. I guess i will have to look for alternatives. Mr. Josh Hawley (interesting protectionist name) seems to intermittently exhibit distorted logic. He is pushing for radical protectionist policies on the trade front but seems to be unusually globalist when he simultaneously pushes for 1-importation of public price control policies used elsewhere to cap drug pricing and 2-drug reference pricing policies based on prices of medications in foreign countries. This is turning into a swampy post and perhaps the US should tax all inputs originating outside its borders. Maybe they'll make an exception for our good natured northern brothers? ;) ---- Not really related but while looking to see if Trumpty had ever threatened a wall between us, I found this from the BS Journal ( a little bit Onion'y ;D ) https://www.burrardstreetjournal.com/trump-demands-canadian-border-wall-after-learning-mexico-not-only-country-adjacent-to-u-s/

Nice Tweet storm by Tren Griffin.

Agree 1000% but the Cheeto in chief is too stupid to see something as elegant as this. It also wouldn't be anything his base would understand, thus it wouldn't give him any buttons to push with them. He's a button pusher.

You know what Venezuelans said about Chávez early on: “ He runs the country like his hacienda”. The problem with the tariffs and the game of chicken that is played are the knock on effects on confidence. Now China is slowing down, Europe is slowing down and now the US is slowing down as well. How much of this is trade war and how much is just the long economic upturn petering out is hard to know. I don’t think that interest rates and rate cuts at this point are going to make much of a difference, rates are already too low to matter, imo. 1-Our era will be henceforth be known as the Limbo rate years. 2-Trump may not be able to claim the largest real estate transaction ever with a Greenland purchase but he's highly likely to go down as the man who filed the GOAT bankruptcy. 3-Just doing my part to stoke fear. :o (there's no goofy googley eyed emoji so this one will have to do...) 1-It's possible that a temporary truce can be reached with no material effect on the trade balance going forward so we may be in limbo for a while but the best limbo playing show that I've seen was in Hawai'i two years ago. It felt like the fire dancer was able to lower the ground. But it must have been an illusion. 2-Your previous reference to a default is interesting and, in 2016, this issue was 'discussed'. The USA defaulting on its debt sounds outrageous but the following reference originates from May 2016, at a time when negative interest rates were still not considered business as usual and when the left-leaning publication felt that the candidate did not stand a chance to win the contest. https://www.npr.org/2016/05/09/477350889/donald-trumps-messy-ideas-for-handling-the-national-debt-explained 3-Yeah, perhaps the idea is to be able to smile whatever happens and one way for this to happen is to be ready for any eventuality and to remember what Ferris said: "Life moves pretty fast. If you don't stop and look around once in a while, you could miss it." On a more serious note (keeping in mind the long tariff thread), I continue to think that the outcome will be highly conditional on the direction of the global economy as tariffs may only be a side show and not necessarily a precipitating factor. To those who say that walking on the edge of the precipice is OK if you know what you're doing, I can't help thinking about the Smoot-Hawley Act and Mr. Smoot's reaction to the reactions: those who don't support tariffs are un-Americans and use fake-news to spread their weakness. https://www.piie.com/blogs/trade-and-investment-policy-watch/trumps-2019-protection-could-push-china-back-smoot-hawley Here's a reference from one of my favorite movies that I saw as a young adult and that offered one of the first glimpses into the American Psyche. So, can anyone explain what will happen in the event that the global economy really starts to lose steam. Anyone? Wow. I was unaware of the Smoot-Hawley tariffs of the 30's. History sometimes repeats & rhymes (minus the horrible economy for now.) I had seen the piece on Trumps "renegotiation" / "discounting" of US debt instruments. Being able to buy back at a discount seems at odds with his call for rate cuts. I'm going to go out on a limb here & say that we've elected Zippy the pinhead. Bueller's 1st name is my last.

You know what Venezuelans said about Chávez early on: “ He runs the country like his hacienda”. The problem with the tariffs and the game of chicken that is played are the knock on effects on confidence. Now China is slowing down, Europe is slowing down and now the US is slowing down as well. How much of this is trade war and how much is just the long economic upturn petering out is hard to know. I don’t think that interest rates and rate cuts at this point are going to make much of a difference, rates are already too low to matter, imo. Our era will be henceforth be known as the Limbo rate years. Trump may not be able to claim the largest real estate transaction ever with a Greenland purchase but he's highly likely to go down as the man who filed the GOAT bankruptcy. Just doing my part to stoke fear. :o (there's no goofy googley eyed emoji so this one will have to do...)

Haven't the corporate tax cuts been largely nullified by tariffs? --- This guy is running the US just like he's handled all of his businesses. I wouldn't be at all surprised if he started blowing hard about defaulting on US debt. Wouldn't that be fun? --- As to how the Chinese are handling taxation. https://www.cnbc.com/2019/07/24/china-tax-cuts-may-offset-the-effects-of-trade-tariffs-economist.html

My only hope is that this bizarre presidency one day inspires someone to write the best political thriller ever. cc: @netflix Done. https://www.amazon.com/dp/B01N1R9W4X/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1

The guy's an ass clown. China never confirmed that negotiation for a new trade deal have restarted after Trump tweeted that “China wants to do a trade deal badly”. I guess Trump probably just wanted the markets to stop tanking after he had been overzealous bashing China and ordering companies to stop doing business in China. https://www.cbsnews.com/news/trump-china-trade-latest-trump-says-china-called-u-s-trade-team-twice-and-wants-to-make-a-deal-as-companies-are-leaving/ He's a legend in his own mind.

The guy's an ass clown.

Need to add: - uncontrollable compulsion to lie about literally anything

Our Cheeto in chief only wishes he had that kind of power.

Thanks. Here's 2 better ones you might have missed.

The young couple invited their elderly pastor for Sunday dinner. While they were in the kitchen preparing the meal, the minister asked their son what they were having. "Goat," the little boy replied. "Goat?" asked the startled man of the cloth, "are you sure about that?" "Yep," said the youngster. "I heard Dad say to Mom, 'Today is just as good as any to have the old goat for dinner.'" --- A rancher named Clyde had a car accident. In court, the trucking company's fancy lawyer was questioning Clyde, "didn't you say, at the scene of the accident, 'I'm fine,'" asked the lawyer. Clyde responded, "well, I'll tell you what happened. I had just loaded my favorite goat, Bessie, into the..." "I didn't ask for any details", the lawyer interrupted. "Just answer the question? Did you not say, at the scene of the accident, 'I'm fine!'?" Clyde said, "well, I had just got Bessie into the trailer and I was driving down the road... " The lawyer interrupted again and said, "judge, I am trying to establish the fact that, at the scene of the accident, this man told the highway patrolman on the scene that he was just fine. Now several weeks after the accident he is trying to sue my client. I believe he is a fraud. Please tell him to simply answer the question." By this time, the Judge was fairly interested in Clyde's answer and said to the lawyer, "I'd like to hear what he has to say about his favorite goat, Bessie." Clyde thanked the Judge and proceeded, "well as I was saying, I had just loaded Bessie, my favorite goat, into the trailer and was driving her down the highway when this huge semi-truck and trailer ran the stop sign and smacked my truck right in the side. I was thrown into one ditch and Bessie was thrown into the other. I was hurting, real bad and didn't want to move. However, I could hear ole Bessie moaning and groaning. I knew she was in terrible shape just by her groans. Shortly after the accident a Highway Patrolman came on the scene. He could hear Bessie moaning and groaning so he went over to her. After he looked at her, he took out his gun and shot her between the eyes. Then the Patrolman came across the road, gun in hand, looked at me, and said 'How are you feeling?' "Now, what the hell would you say?" --- and finally, --- A goat walks into a bar, sits down and orders a beer. The bartender, amazed that this goat can actually talk, gives him a beer. The goat says, "what do I owe you?" The bartender stops and thinks for a moment, "even though this goat is smart he probably hasn't been in many bars." So the bartender says, "that'll be ten dollars." The goat forks over the money and starts drinking his beer. After a few minutes, the bartender can't restrain his curiosity, so he walks back over to the goat and tries to strike up a conversation. "You know, we don't get many goats in this bar." The goat looks up from his beer and says, "well, at ten bucks a beer, I'm not surprised." --- If I was still a Catholic, I'd have to go to confession for this post. There is no god to punish me for telling crappy jokes.

Jerky chicken is great. I had some persistent coldcaller a while ago who wanted to drum up some funding for animal rights. Nothing really wrong with this, but I hate persistent cold calls. She asked me if I liked animals or not. I told her, it depend on how they taste like. That was the last cold call I got from her. I love animals. Just about anything taste good on the grill. I always wanted to tell a Jehovah Witness when they come to my door that I worship the Dark Lord Satan, but they are always so friendly I can never bring myself to do it. I tell them I'm Catholic, which is the same thing I tell evangelicals. I get evangelicals in my neighborhood A LOT & the look of pity on their faces when I say this is priceless. They may have my house targeted because of this. :D

I think this is an oversimplification. It's a concept. You want something more, go read a book. Thanks for another oversimplification.

I think this is an oversimplification.

Comment by the author, "Until an actual bill is passed there's no way to know how it will be gamed, but there will certainly be attempts to do so. Most derivative obligations will include the tax in their pricing (selling a derivative abroad and hedging it will result in the purchasing of a US dollar asset by a foreign account), so that shouldn't be a problem. more likely is the development of a secondary market abroad for ownership in short-term US assets, but this is probably something the regulators can figure out. Capital controls are never perfect, after all, but they can nonetheless be effective." "It could make reserve management more complex, but the Fed can easily cut deals with individual central banks in cases in which it does not believe the central bank is manipulating the currency, or is willing to allow it." "Unless you believe in a mysterious and beneficent god that manages every country's trade and capital accounts so skillfully that they are always and exactly in balance, Dan, then there must be a direction in which causality flows. My point is that those who argue that trade accounts are always where the primary imbalances lie, and capital accounts simply balance trade, which is what most people assume, are simply assuming an obsolete condition. This is nowhere implied in the accounting identity. In which case you should ask yourself: do you really believe that international capital flows mostly consist of trade finance?" "As for whether limiting capital inflows will drive up interest rates, that is easy to test. Just look at the relationship between US interest rates and the US current account deficit. If you believe reduced capital inflows should raise interest rates, then you would expect that higher current account deficits are always associated with lower interest rates." "Here is a comment I made elsewhere to someone who is sympathetic to this idea but thinks it works by weakening the dollar, which worries him: "A lot of people believe that a tax on capital inflows works by weakening the dollar, Marshall, but I think that’s a mistake. It works by forcing up the US savings rate or, more technically, by preventing capital inflows from forcing down the US savings rate. While causing the dollar to appreciate is one of the ways capital inflows force down the US savings rate, I think it is among the least important. As an example, consider how German capital flows after 2004-05 affected Spain, Italy, Greece, France, etc. The euro prevented any currency adjustment, and yet savings in all of those countries collapsed in an explosion of debt and wealth effects driven by asset bubbles. To me the main impact of an American tax on capital inflows is to reduce American reliance on household and fiscal debt to drive growth."" --- I'll stop here as it's probably better to read these in context with comments other than the authors.

Nonsense. What a bunch of bollocks. Not only the US does not need it to "finance its deficit" it should tax capital inflows. If treasuries are sold, either there's no impact on the US or there's a positive impact. Either that or all the surplus countries, including Germany and Japan increase local demand via adjusting local regulation (this is the reason for the imbalances, suppression of local demand via local regulation). This is not going to happen, of course, any time soon. Once again, in plain English. Since this remains an open-ended question, in relation to the chicken and egg confusion, here goes. Does the trade imbalance come from the rest of the relevant world saving too much and not consuming enough (saving glut, Bernanke 2005 ®) and therefore dependent on the ultimate currency or does it come from the US consuming too much and not saving enough and therefore dependent on the rest of the relevant world to finance the private and public deficits? This is a bilateral dependency but my take is that it is not symmetric (in terms of causes and outcomes) and I side with SD on this one because I think meiroy falls into the now widely defined trap of focusing on the financial aspect of a transaction over the substance of a transaction. In plain English, here's a biased example that hopefully may help. Let's say one has developed a consumer dependency of some kind, let's say an opioid dependence. Let's assume that one has entered the stage where one consumes more than one earns, and one represents the biggest client of the dealer who, somehow, has to accept one's currency and where the dealer has lent one back the currency in order to allow one to continue to consume and the situation has reached a stage where it is felt that the consumption trend is unsustainable. How to deal with this? -The tariff solution Someone figures that the best way to curb the inflow of the currency is to point a finger and to make the drug more expensive. -The meiroy international tax on capital inflows Someone figures that you could point a finger and unilaterally devalue the currency once it has been spent. -Me thinks that diving interest rates will help to extend and pretend but one should do a root cause analysis and deal with the internal saving-consumption imbalance. In all fairness and to balance the biased example above, some 'analysts' whom I respect a lot tend to agree with meiroy. https://carnegieendowment.org/chinafinancialmarkets/79641 The Carnegie article is very interesting. I had never thought about the effects of inflows. I feel like there's a very influential human factor which also contributes to the low US savings rate. We are constantly being sold to & our hot buttons have been pushed so hard that they are stuck. "You'll be happy if you buy, buy, buy." I constantly feel the need to buy a bunch of crap but, like many here on CoBF, have developed a filter and prefer the "feel good" of saving over consumption. CNBC & the like are constantly pushing a similar set of buttons with, so called, investors. "Can't stand still. Bye bye savings." I've mentioned Frederic Pohl's "Midas World" before & believe it's the best satirical illustration of consumerism run amuck. --- Back to the Carnegie piece. If we restrict capital inflow, China will invest heavily in Brasil or India, for example, & create another huge consumption based economy? Seems to me that if China were to keep more capital in their own economy they would accomplish the same thing at home, yes? Why don't they do this? --- My limited understanding inclines me towards the authors arguments in favor of restricting inflows but I do not believe the present administration would understand the authors proposals. They don't present any obvious pain points & he seems to enjoy inflicting pain.

Nonsense. What a bunch of bollocks. Not only the US does not need it to "finance its deficit" it should tax capital inflows. If treasuries are sold, either there's no impact on the US or there's a positive impact. Either that or all the surplus countries, including Germany and Japan increase local demand via adjusting local regulation (this is the reason for the imbalances, suppression of local demand via local regulation). This is not going to happen, of course, any time soon. Once again, in plain English.

translates to : [ ; - ) ] - - - o 0 o - - - I bought it first time in January 2013, then added in 2014, 2015 & 2017. EBVAT/share just continues every year to go up, up, up. What I especially like about it is that I've never received bad news from the company. I just read the company announcements as they come [mostly about new acquisitions or disposals], look at the quarterly financials and the annual report to see if there's any dividend coming my way, most of the year ends the answer is "No", and then I think : "Fine, please just keep my money". Street food is the best.

You must be talking about Xi.

http://mastersinvest.com/new-page-16/ https://buffett.cnbc.com/warren-buffett-archive/ 3rd link's a charm http://www.austinvaluecapital.com/resources.html