Hawk4value

The main problem here is not taxes going down, its indiscriminate spending and corruption going up!! A bailout will not prevent this behavior again in the future. Human beings seem to respond much better to pain and blood in the streets. The lessons learned in the Great Depression were not soon forgotten, until 2004-2007 that is.

The video made an interesting observation which I agree with: Societies that begin with many freedoms and liberties always seem to end up with large, distructive, controlling governments. For example in the US during the 20th Century the size of gov't has exploded. In my opinion the 2 main catalysts were: the introduction of the Income Tax; and the elimination of the gold standard by Nixon. The first allowed gov't to directly confiscate our wealth for its own use; and the second allowed the gov't the unlimited power to print money, debase our currency, and destroy the value of our savings. And it seems like the forseeable future will see much more of the same. Now I ask you: "Are we not on the road to serfdom".

"There are also sectors of the economy where leaders and investors have not learned anything from the crisis. U.S. REIT's is a prime example. Current yield is 4.4% or a very small premium to 10 year treasuries... After...capex, there is no money left to invest or to repay debt. Cap rates remain very low.... Almost a ponzi scheme." I totally agree. Real Estate investing is a joke. Why would anyone want to buy an illiquid investment like RE, deal with all the management headaches, risk loss of rent in a downturn, being completely subject to macro forces, and assume large contingent liabilities (debt), all for the priviledge of earning a lousey 4% to 6% Cap Rate. This is insane and yet people have have been buying this 'bill of goods' for a long time. I personally would not touch a RE investment unless it offered a 10% to 12% Cash on Cash (Unlevered)return----Period.

I am all for gov't grant money for private or university research. In fact this is an example of good capital allocation which can generate huge returns in incremental benefit to society. But the key issue here is that for the most part gov't supplies the capital but does not actually conduct the research or discover anything. Even so, it is my firm belief that the majority of gov't capital allocation is poor and in fact detrimental to society. "Starve the beast" continues to be my motto.

Myth, your points are well taken. I do not espouse myself to be a Republican or Democrat. I look at gov't as an entity that will promote and multiply itself to the detriment of everything in its path. Since gov't does not produce anything, or invent anything, manufacture anything, or innovate new technologies, etc. it must gain sustenence from the private economy for its survival and expansion. Every dollar it sucks out of the real economy is that must less capital that goes into wealth creation and the increase in our standard of living. Now is gov't a necessary evil: Yes, gov't has certain functions that benefit society like security/defence, regulation, etc, etc. But by and large it should be kept small, unobtrusive, and not populated with career politicians. Term limits for ALL office holders should be implemented as soon as possible. Our founding fathers never intended for there to be career politicians. Career politicians build fiefdoms, increase their power, and gerrymander their districts so they never lose an election. There purpose is to grow gov't just like any CEO would grow their company.

Mister..., noticed your comment on HTH. Have been following it for a while but recently was very disappointed by the announcement that Gerald Ford's investment vehicle Ford Financial Fund LP has made a distressed investment of $500million in Pacific Capital Bancorp by buying 225 million shares at 20 cents each, and paying $1,000 each for 455,000 preferred shares that can convert to common. When I called up HTH and tried to find out why HTH shareholders were not part of this deal, I received no response. It seems like Gerald is very conflicted in his behavior. Does this worry you at all???

Thank-you for your comments Two.... Taking it one step further regarding the privitization of gov't programs, and Charter Schools in particular. Who are the biggest critics of Charter Schools??? Teachers that are employed by the Dept of Education, and the Union representatives that are hired by those same teachers, in other words public employee bureaucrats. Why would I even listen to what these people have to say about Charter schools, they are conflicted. Their interests are in direct conflict with the interest of taxpayers. Therefore, the only way to increase the privatization of government, create better capital allocation, and increase efficiency is to mandate it by voting in politicians who have no allegiance to the public employee vested interests. Now even though I am completely agnostic to left or the right, would I hire a Democrat to get this job done. I think we all know the answer to that one.

Just for the record: I am not right or left. I am agnostic and consider myself "practical and rational". Politicians have proven to be poor allocators of capital. If they were investment managers would you give them any money to manage?? I doubt it. So why would I want to give them more and more of my tax money. On the contrary, I want them allocating less capital not more, so I advocate downsizing government by privatizing as many functions as possible such as education for example: Charter Schools, etc.

"I am all for whats going on in New Jersey, and I am for cutting fat, meat, and bone if thats what it takes." I concur with the above. I am of the opinion that you need to "starve the beast" and downsize the system. I think everyone can agree that spending in the US is completely out of control. The federal gov't is bankrupt and so are most of the city and state gov'ts. The only thing keeping everything afloat is the gov't's ability to print money. Our politicians use spending to get re-elected, so how can we look to them to curb it. The only way I can think of is to "starve the beast", do everything possible to limit the amount of money available to them for spending. Term limits is one part of the solution, get people out of office before they can entrench themselves, in which case their re-election is always the most important goal. Another important part is to never advocate tax increases. Tax increases create more spendable funds encouraging more irresponsible behavior.

Apparently from the article Buffett asked to come in and talk to Obama. I guess he is worried about how his boy is running things. Nice to have Buffet as a dutch uncle, but I hope he reads him the riot act and tells him that gov't is not the solution. Encouraging and incentivising business is the way to create jobs not gov't mandated jobs programs. This is a terrible allocation of capital which simply raises the deficit with nothing to show for it except short term window dressing for the purpose of effecting the elections in the Fall.

"...No one has answered how the economy will self correct..." The economy can self correct if their is moral hazard. If people are allowed to get slammed for irresponsible behavior, they will learn a lesson. Unfortunately we have very little moral hazard. The finance reform bill is mostly BS. The biggest problem during the crisis was Fannie and Freddie, and this problem continues today with no end in sight. Guess what: the Bill does not even address this issue. The upper management of these institutions were all politically connected and appointed, they ran these companies into the ground and benefited enormously from bloated salaries, bonuses, stock options. Guess again: no prosecutions are forthcoming for any of these people. Destroy institutions, make the taxpayers pay, no consequences, no moral hazard. Do you really think this is not going to happen again in another way, shape or form. You can count on it.

The crew running the US gov't does not make decisions based on logic. They are ideologues who, as Rhom Emanuel has said in his book, will exploit every crisis to promote their social, cultural, political agenda. The rule of law is not important. In their world laws can be manipulated, obfuscated, and ignored. Think what they did to senior bond holders of GM and Chrysler debt. That was a wake up call. These are gangster tactics.

May that SOB get what he deserves. Go Prem!!

I have been following HTH for a while and was disappointed to learn that Ford's latest acquistion did not include HTH. If I were a shareholder I would be pissed to say the least. I emailed HTH to get an explanation but have not received a return email. Ford's actions demonstrate that he is conflicted given the different sources of capital under his control. It makes me think twice about investing in HTH.

accutronman, thanks for the update. I for one am very interested in everything Michael Smith. Unfortunately its difficult to get info on his dealings.

Correct me if I am wrong, but my understanding is that Biglari sold the GP in the Lion Fund to BH for a dollar--the GP makes the investments for the fund and earns fees. Separate from this Biglari also had a large part of his net worth in the Fund which was liquidated---thats where the $4mil payment comes from. If I remember correctly, he did this to eliminate any conflict between making investments for the Lion Fund and BH. So, the $4mil is not what he sold the Lion Fund for, its more like a return of capital. Correct????

Now that was a concise, thoughtful letter that makes a lot of sense. And the congressman that it was addressed to knew it as well. Congressmen are not idiots, they are highly educated people. The problem is that they do not have the moral fortitude to do the right thing. They don't want to do the right THING. There primary interest is not the fiduciary responsibility to the people. There primary aim is to get money into their campaign coffers and get re-elected. I have always said that mandating term limits across the board for all office holders would go a long way to solving this problem. Career politicians are the worse form of plague that a country can suffer.

So, if I understand this correctly, you buy the warrants at, lets say $7/warrant, which gives you the right to buy 1 share of WFC at $34.01 anytime before 10/28/2018, otherwise the warrants expire worthless on that date. Your breakeven is $41.01/shs. Correct???

My understanding is that the $900k is for the CEO position at SNS, and the incentive package is for value added as a result of capital allocation benefit to the adjusted BV.

Ragnar... you are not the only one. Although I am not happy with what has transpired with Biglari, I am not ready to throw in the towel. I think if his compensation can be modified I probably would not be opposed to it in principle. For example, I believe that the average ROE for American corporations is probably around 10%, and probably higher for a successful fast food restaurant chain. But lets use 10%. If Biglari agrees to increase the hurdle from 5% to 10%, and adjusts for share issuance, share repurchases, and other factors that would be unrelated to his performance, I would seriously consider his proposal. Why?? First, I believe he is a superior capital allocator. Secondly, I would rather have a CEO whose is incentive compensation is totally tied to adjusted book value, then one that is tied to annual cash bonus, stock options, restricted stock, benefits and perks, etc (Pick your "Poison"). The idea being that if BV goes up the stock price eventually follows. I for one am not concerned that the arrangement could make him very wealthy in a relatively short period of time because if he gets wealthy, I get wealthy as well.

I noticed someone mentioned Mass Financial. I have been a holder for a while. Its tough to get info on whats happening with this company. Does anyone have any recent info????

FFHWatcher, Thanks for your response. The negative issues which I raised in my question was not intended to influence anyone's response. Its just that I am trying to understand Prem's interest in this company and Tom Ward in particular. Given the $100mil hqtrs building he recently erected, the shareholder dilution, and the high debt, I don't think he has been a good steward for shareholders.

Can anyone elaborate on what was said about Sandridge (SD). The company has high debt. Seems to have sold cheap gas assets to buy expensive oil assets. Recent $100mil office headqtrs building did not seem like a good use of capital. Also, Prem's recent conversion of 7mil common shares to 8.5% converts seems to mean that recovery in these shares may be a long time in the making. Did Prem elaborate on his opinion about Tom Ward as a CEO. Thanks.

SD, I understand what you are saying and I believe you are correct. But if the objective is employment without efficiency, then the gov't has abdicated its responsibility to act as a fiduciary with other peoples money---namely OURS. The "employment objective" also breeds corruption---politicians essentially bestow "jobs" on friends as political patronage with the objective of extending their power. Whether or not these jobs benefit the community is secondary.

I certainly agree a key fault with public employment is the incredible cost to the system of early retirement. Couple this with the fact that public employees are inherently inefficient, in other words, there are too many public employees doing a given job versus the private sector, and you have a perfect storm of costs spiraling out of control. Productivity is not the cornerstone of public employment. Gaming the system to retire early, and maximizing your retirement pay is the ultimate goal of most, if not all, of these people. And I know this for a fact, I have 3 relatives who are public employees and these are their primary concerns. This is the talk "around the dinner table", so to speak.