Apr 30, 2010

Marc Faber on the logic of the Greek crisis

In a democracy, no problems are solved, they are just postponed until the ultimate crash destroys everything.

~Marc Faber, editor, Gloom, Boom and Doom Report, Bloomberg TV, April 30th, 2010

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Donald Tang on the symbiotic relationship of the US and China

In this ocean, underneath the surface at the very bottom is an anchor of a symbiotic relationship, an interdependency between the US and China. And that's the real story. Everything else going on up above the water I think is noise. Waves come and go, sometimes it's calm, sometimes there are stormy waters and that's noise.

It happened in the Clinton years, Bush I, Bush II, it happened for the last two decades and it will continue to happen. But the end story is China will need the United States, the United States will need China and we can coexist very well and benefit each other and each other's people.

~Donald Tang, CEO, Citic Securities International Partners, CNBC Closing Bell, April 29th, 2010

Donald Tang on the Chinese Bubble and China's effective stimulus efforts

Last year, people talked about, "They can't make 8% [growth], it will be 2% or negative." Today, everyone talks about how it's uncontrollable, [the growth] will keep on going 10, 15, 20%, the bubble is going to burst. The same people who were talking about not making [the growth targets] now are talking about too much [growth]. The fact of the matter is that they are, or they were ahead of the curve of the cycle. [The Chinese government] put out a very effective stimulus package that led us out of the depression-like kind of recession.

And now, they are ahead of the curve again doing the recapitalization of the banks and taking the administrative measures to make sure that property prices do not get out of control. So, all of those things tell me that the leadership in China is really paying attention.

Everything else that they talk about in the media is noise. [The Chinese government] is really doing a good job of trying to stay ahead of the curve.

~Donald Tang, CEO, Citic Securities International Partners, CNBC Closing Bell, April 29th, 2010

Apr 29, 2010

Napoleon on history

History is a set of lies agreed upon.

~ Napoleon Bonaparte, Corsican, military commander and emperor of post-revolutionary France

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Michael Rivero on the psychological underpinnings of faith in government

Most people prefer to believe their leaders are just and fair even in the face of evidence to the contrary, because most people do not want to admit they do not have the courage to do anything about it. Most propaganda is not designed to fool the critical thinker, but only to give moral cowards an excuse not to think at all.

~Michael Rivero, political investigator and social commentator

Apr 28, 2010

Jim Chanos on the unseen participants of speculative bank bubble bets

We were short IKB in 2007 because we looked at what they were doing and it was madness. It was absolute madness. They were basically taking a German bank balance sheet and leveraging it up and going long all this toxic stuff to make an infinitesimal spread.

There is one unstated aspect that is vitally important to this whole thing. There was a participant at the table in these deals who didn't know he was there. In this case, it was the German taxpayer. But in many cases it was the US taxpayer, who was on the hook for banks making dumb deals. At the end of the day you can't put the taxpayer, who doesn't know that he or she is at the table in these speculative trades, at risk.

~James Chanos, president and founder, Kynikos Associates, CNBC's Squawk Box, April 27th, 2010

Bill Ackman on the role of shorts in preventing bubbles

What caused the housing industry to become one of the great bubbles of all time? The answer is that there really was no way to short the housing industry until really in the last several years when development of synthetic CDOs and other structures allowed people like Paulson to make big bets against housing. Had there been a mechanism to short housing earlier, there probably wouldn't have been a bubble. If you didn't have shorts, if you couldn't short stocks, the probability of stock market bubbles would be much greater.

~William Ackman, managing partner, Pershing Square Capital Management, CNBC's Squawk Box, April 27th, 2010

Bill Ackman on the cause of the credit crisis

What caused the credit crisis was that more and more risk was hidden away in the system by companies that didn't have the wherewithal to meet their obligations. I remember people asking the question, "Where was all the risk going?" was the question people were asking, you know, five years ago. And the answer is that the risk was going to companies like MBIA and Ambac and the risk was going into CDOs, and the risk was going into companies like AIG Financial Products. There was a lot of 'pass the hot potato' and very little attention paid to it by regulators.

~William Ackman, managing partner, Pershing Square Capital Management, CNBC's Squawk Box, April 27th, 2010

Lloyd Blankfein on financial regulation

Clearly the world needs more regulation.

~ Lloyd Blankfein, Goldman Sachs CEO, testifying before the Senate Permanent Subcommittee on Investigation, April 27, 2010

Apr 26, 2010

Lionel Robbins on planning vs. socialism

Nothing but intellectual confusion can result from a failure to realize that Planning and Socialism are fundamentally the same.

~ Lionel Robbins, British economist, The Great Depression, 1934

Apr 23, 2010

Philip Fisher on growth stocks for the long-haul

The greatest investment reward comes to those who by good luck or good sense find the occasional company that over the years can grow in sales and profits far more than industry as a whole. It further shows that when we believe we have found such a company we had better stick with it for a long period of time.

The past gives us a further clue that this growth is often associated with knowing how to organize research in the various fields of the natural sciences so as to bring to market economically worthwhile and usually interrelated product lines.

~ Philip Fisher, "Clues from the Past", Common Stocks and Uncommon Profits, 1958

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Philip Fisher on inevitable bond-killing inflation following a recession

What is really important concerning the attractiveness of bonds as long-term investments is whether a similar trend can be expected in the period ahead. It seems to me that if this whole inflation mechanism is studied carefully it becomes clear that major inflationary spurts arise out of wholesale expansions of credit, which in turn result from large government deficits greatly enlarging the monetary base of the credit system. The huge deficit incurred in winning World War II laid such a base. The result was that prewar bondholders who have maintained their positions in fixed-income securities have lost over half the real value of their investments.

As already explained, our laws, and more importantly our accepted beliefs of what should be done in a depression, make one of two courses seem inevitable. Either business will remain good, in which event outstanding stocks will continue to out-perform bonds, or a significant recession will occur. If this happens, bonds should temporarily outperform the best stocks, but a train of major deficit-producing actions will then be triggered that will cause another major decline in the true purchasing power of bond-type investments. It is almost certain that a depression will produce further major inflation; the extreme difficulty of determining when in such a disturbing period bonds should be sold makes me believes that securities of this type are, in our complex economy, primarily suited either to banks, insurance companies and other institutions that have dollar obligations to offset against them, or to individuals with short-term objectives. They do not provide for sufficient gain to the long-term investor to offset this probability of further depreciation in purchasing power.

~ Philip Fisher, "Clues from the Past", Common Stocks and Uncommon Profit, 1958

Marc Faber on President Obama

Mr. Obama will do everything he can to get re-elected and that may involve some very bad decisions. He is like a roman emperor; he just gives out bread to the mob and produces games and circuses.

~ Marc Faber, "Gold Run not Over," Kitco, April 23, 2010

Apr 22, 2010

Marc Faber on the impossibility of driving an economic car

Either you believe that a government can steer the economy like a car, you put the brakes on and then you put your foot on the accelerator, and so forth, and you can perfectly steer it-- that is not my view. I think that governments eventually create a misallocation of capital, and measures they undertake either through monetary policies or fiscal policies or regulations, always lead to some unintended consequences.

~ Marc Faber, editor, Gloom, Boom and Doom Report, Bloomberg TV interview, April 21st, 2010

Marc Faber on the risks of the Chinese bubble bursting

First of all, the Chinese stock market is still well below its peak in 2007. Secondly, the stock market in China is lower than in August 2009, and is lower, as is the Hang Seng Index, than in November 2009. In other words, we have essentially a boom in properties not reflected in the stock market. I think maybe the stock market is giving us a signal that not all is right in China. And, all I am maintaining is that if the bubble bursts in China, you don't want to be in say, Australian stocks, in the Australian dollar, in commodities and industrial commodities like copper and nickel and aluminum, because the demand for commodities in a scenario of the Chinese bubble bursting is going to go down very substantially.

There's a risk now, it may not happen right away, it may only happen next year, but an investor should keep this in mind-- that when a bubble bursts in China, and for sure, if it doesn't burst now it will burst in 6 months, and if it doesn't burst in 6 months it will burst in 12 months or in 18 months, but the longer it doesn't happen the worse it will be.

~ Marc Faber, editor, Gloom, Boom and Doom Report, Bloomberg TV interview, April 21, 2010

Apr 21, 2010

Andrew Carnegie on being bossy

Boss your boss just as soon as you can; try it on early. There is nothing he will like so well if he is the right kind of boss; if he is not, he is not the man for you to remain with-- leave him whenever you can, even at a present sacrifice, and find one capable of discerning genius.

~ Andrew Carnegie, "The Road to Business Success", The Book of Business Wisdom

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Malcolm Forbes on failure as an ingredient of success

A vital ingredient of sustained success is occasional failure.

Apparently, it is not a long leap from being right most of the time to the assumption that one is right all the time. At this point there is nothing as essential as an unmistakable mistake of some magnitude to restore the perspective that is needed to ensure continued success.

~ Malcom S. Forbes, "A Vital Ingredient of Sustained Success", The Book of Business Wisdom

Joshua Reynolds on man's impulse to avoid the work of thinking

There is no expedient to which a man will not resort to avoid the real labor of thinking.

~ Joshua Reynolds, as quoted by Thomas Edison in "They Won't Think", The Book of Business Wisdom

Thomas Edison on thinking

Why do so many men never amount to anything? Because they don't think.

The man who doesn't make up his mind to cultivate the habit of thinking misses the greatest pleasure in life. He not only misses the greatest pleasure, but he can not make the most of himself. All progress, all success, springs from thinking.

~ Thomas Alva Edison, "They Won't Think", The Book of Business Wisdom

Art Hogan on pent-up tech demand and top line revenue growth

I think obviously the comps [comparisons] are pretty easy, but the thing is, it's not just the fact that we're getting easy comps from a year ago on a year-over-year basis, it's the sequential growth that we're seeing and the fact that the estimates are so conservative regardless of how disastrous a year or so ago was. So, think about it like this-- when we came into the earnings reporting season we thought we were going to earn about 35%, now we think we're going to earn about 40% in the S&P 500 on a year-over-year basis.

I think if you look at Microsoft and everyone remembers the Vista roll out, and what an utter failure that was, people aren't giving them enough credit for two things: the fact that the latest roll out, the 7 roll out, is a huge success; but also there's pent-up demand coming from the enterprise side. We're actually seeing a successful roll out at a time when enterprise really needs to update their software.

When you think about it, we've had 80% of the companies that have reported so far beat the bottom line, 63% of them are beating the top line, so the revenue growth is actually there. That's the one thing we were lacking three quarters ago and two quarters ago, but the last two quarters top line is actually coming in. That's the important thing, I think we're actually seeing real demand coming back into this economy.

~Art Hogan, global equity product director, Jefferies & Company, Power Lunch, CNBC, April 19th, 2010

Brian Belski on bipedal market rallies

The growth cyclicals, as we like to call it, such as consumer discretionary, industrials and technology are driving the earnings. We think they're really driving the growth in the economy, as well, and the key thing to this is there's really legs to the growth in terms of the rally. There's more fundamental strength coming from those three sectors in particular.

[IBM] is one of the growth engines in technology.

~ Brian Belski, analyst, Oppenheimer & Co., Checking the Market Pulse, CNBC, April 19th, 2010

Ken Heebner on the US economic recovery

I think the earnings surprises have been strong all throughout 2009 and I think they're going to be very big in 2010. Productivity is growing at record rates. Contrary to the negative views you're getting, the American economy is really shooting the lights out, under the circumstances it's confronted with. Inflation is low. When you look at all the key parts of the economy, retail sales are surprising to the upside, new home sales are picking up, I know some of the recent government numbers have gone the other way but the numbers I look at say things are getting stronger. Industrial production is growing at a good clip. The outlook is strong and getting stronger by the day!

~ Ken Heebner, portfolio manager, Capital Growth Management, CNBC, March 9th, 2010

Ken Heebner on Goldman Sachs

Goldman Sachs is one of the greatest corporations in the world. Their franchise has been strengthened by the disappearance of competitors. They earned at a $32-rate in the December quarter.

Here's a company that's going to grow strongly for the next couple years. It's going to earn over $25 next year. It's only 7x the minimum estimate and it's one of the greatest companies in the world.

~ Ken Heebner, portfolio manager, Capital Growth Management, CNBC, March 9, 2010

Charles Gasparino on the Goldman Sachs spin machine

When the Fed report came out and basically showed that their whole line for the past year has been that they did not get bailed out, that they did not need bailout money, that they just accepted the money, that Fed report that came out about AIG showed that if AIG went under, Goldman Sachs was in serious trouble. It just gave credence to what everybody believed and what they won't admit, what Lloyd Blankfein won't admit, this sort of absurdity that he's trying to promote, this fantasy that Goldman wasn't bailed out. When that report came out it just underscored the fact that they were, to me, and that everything he's been saying is a joke and it's going to keep dogging the firm.

What they've been trying to create is this sort of fantasy-- that they weren't bailed out, that they don't have sharp elbows, their clients come first. He [Blankfein] makes these public statements all the time that this is true, and yet all you have is evidence built upon evidence that that's not the case, that they were bailed out and that, by the way, they are a pretty aggressive, sharp-elbowed firm where the clients don't come first, they come first.

They have no qualms about sticking an elbow in a client's face.

~ Charles Gasparino, Market Watch Media Matters Interview, April 19, 2010

Fred Hickey on gold bubbles

I’m not sweating $1100 gold as the top like so many others in this country. They see bubbles everywhere in gold. They never saw the bubble in real estate, never saw the bubble in stocks, never saw anything. However, all these people in the U.S. see a bubble in gold. I don’t see it. I sleep like a baby with my gold position.

~ Fred Hickey, Wall St. Cheat Sheet Interview, April 20th, 2010

Apr 18, 2010

Jefferson on legislators and natural rights

Our legislators are not sufficiently apprized of the rightful limits of their power; that their true office is to declare and enforce only our natural rights . . . and take none of them from us. No man has a natural right to commit aggression on the equal rights of another; and this is all from which the laws ought to restrain him . . . and the idea is quite unfounded, that on entering into society we give up any natural right.

~ Thomas Jefferson, letter to Francis W. Gilmer, June 27, 1816

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Thomas Jefferson (1801-1809)

Todd Salamone: Market reaches "acceptance" phase, buy the dip

In monitoring various sentiment-based indicators, it appears that we have entered the "acceptance" phase of the bull market. Acceptance has much to do with acknowledgement of an economic recovery. We find this intriguing, as investor bearishness has been due to the perceived "disconnect" between a weak economy and stock market strength.

For those of you new to sentiment analysis, I'll quickly review the various psychological market phases. There are four stages of investor sentiment as we move from a market bottom to a market top. At the bottom, sentiment is characterized by "despair" and an utter lack of hope ("despair stage"). The initial rally off the bottom is simply not believed ("disbelief stage"). Once the rally has been sufficiently lengthy and has come sufficiently far in price, and evidence of an improving economy becomes incontrovertible, it is finally accepted that we are in a bull market ("acceptance phase"). And, ultimately, there comes the flat-out belief that the bull market will last forever ("euphoria phase").

Below, I list recent headline stories that reflect mounting evidence of a move into the "acceptance" phase of this bull market. For the short term, this sudden emergence of optimism could leave the market vulnerable to a mild correction or range-bound behavior in the weeks ahead. That being said, I would be remiss not to mention that the contrarian approach is most useful when sentiment is counter-trend to market performance; that is, for example, when strong market performance is met with disbelief. Instead, what we are currently seeing is growing optimism within the context of a sharply rising market.

  • BusinessWeek April 19, 2010 cover story: "The Hot Hand – Obamanomics Is Working Better Than You Think"
  • Newsweek April 19, 2010 cover story: "America's Back! The Remarkable Tale of Our Economic Rebound"
  • The Economist April 3, 2010 cover story: "Hope at Last"
  • The New York Times April 8, 2010 article: "Why So Glum? Numbers Point to a Recovery"
  • The Wall Street Journal April 15, 2010 article: "Evidence Mounts of Strong Recovery"

A marked pullback should be viewed as a buying opportunity, as buyers of this market have been hedged players who are less likely to panic sell on disappointing news.

~ Todd Salamone, "Dow Conquers 11,000, But Goldman Suit Overshadows Week," Schaeffer's Monday Morning Outlook, April 17, 2010

Apr 16, 2010

Dick Bove on Goldman Sachs' over-capitalized balance sheet

Let's assume that the firm is charged $1 billion, for whatever reason, the decision is made that this firm must pay $1 billion to solve this problem. That will lower their capital somewhat, it will inhibit their ability to grow their balance sheet, but you have to remember the company is over-capitalized at the moment and it's not growing its balance sheet at the moment because it doesn't use its balance sheet any longer as a driver of earnings. So, again, it'd be a significant, one-time charge... it would not inhibit or hurt the company's long-term growth and after the payment was made Goldman Sachs would still be out there doing business the way it traditionally does. And I think it's a superior firm and therefore if this stock goes down meaningfully as a result of this information, I would aggressively buy it.

~ Dick Bove, Rochdale Securities, CNBC, April 16, 2010

Dick Bove on the long-term soundness of Goldman Sachs

If we're looking at the company over a long period of time, is this something that is going to inhibit their ability to do business in a normal fashion? Is it something that will lower their secular earnings growth? It will not. So, it's a short-term problem, there will be a definite charge to the company related to it, but for long-term holders of the stock it's something that will pass.

~ Dick Bove, Rochdale Securities, CNBC, April 16, 2010

Charles Peabody on "too interconnected, too big to be indicted"

"History shows, if you go back to boom-bust cycles, like the commercial real estate-cycle of the early 90's and Salomon Brothers was threatened with an indictment mostly because of their bond trading, there was no final indictment. Bankers Trust in the mid-90's was threatened with indictment because of their selling of unsuitable securities, no final indictment. And then Credit Suisse after the Tech Bubble, the same sort of thing. Individuals might be indicted, like Grubman[sp?] but it's very, very rare that a broker-dealer will, of this magnitude. So we may have here, a new phrase-- 'too interconnected, too big to be indicted.'"

~ Charles Peabody, Portales Partners, Bloomberg News, April 16th, 2010

Charles Peabody on valuing Goldman Sachs in spite of SEC allegations

Our rating currently is a 'Buy' rating for Goldman Sachs. [...] Let's say Goldman produces $5 of earnings on Tuesday when they report. That's maybe a mid-, hi-teen ROE, book value will be around 120, 1.5x book, which is what a mid-to-hi-teens ROE supports, would imply $180, $190 stock.

~ Charles Peabody, Portales Partners, Bloomberg News, April 16, 2010

Jim Cramer on the SEC's flimsy case against down-and-out Goldman Sachs

Yes, indeed, I did work for Goldman Sachs. Yes, I am not proud of the way Goldman has handled this particular period. But this may be a situation where Goldman is being overrun, and I think will ultimately win. The SEC does not win every case it breaks. And I know they do not pick out the names from a phonebook, but they do not win every case.

~ Jim Cramer, stock-pumper and GS-apologist extraordinaire, CNBC Street Signs, April 16, 2010

Jim Bianco on the potential for massive CDO fraud in 2007

We've seen more of this coming and that's really what's going on that if we're going to criminal-- alright, I shouldn't say criminalize. But if we're going to say that the selection of these loans was fraudulent, that's going to be the game-changer because everybody used some kind of bias in selecting these loans. Were all those biases disclosed? Probably not in most of the cases. And if the SEC is going to say that that's what's happened, then all of these 2007-deals are going to have to be reviewed.

~ Jim Bianco, Bianco Research, CNBC Street Signs, April 16, 2010

Jim Cramer on the non-criminality of investor fraud

If they were criminalizing this it would've been the Justice Department. This is not criminal. Let's make that point. It's really important for people to understand the distinction between the SEC, and the Justice Department. The SEC does not put people in jail. They can't do that. They're procedural.

~ Jim Cramer, stock-pumper and GS-apologist extraordinaire, CNBC Street Signs, April 16, 2010

Jim Cramer on Goldman Sachs as victim in Abacus fraud

I have information, that leads me to believe that Goldman, was an investor IN, not against, but IN Abacus, and I think that's a game-changer when it comes to what the case is and what we've heard all day. [...] If this were an open-and-shut case, believe me, this is the way it works: Goldman Sachs says, 'You know what? We're sorry we did this. We're gonna throw over this guy, he's a 31-year-old-guy, he didn't know what he was doing, he was poorly supervised, we're also going to take out his supervisor, we're gonna take him out and shoot him because we understand the way the law works.' They are not doing that. Why are they so confident? Because my understanding is they were an INVESTOR, NOT shooting against the client, and that's a very important piece of... that's a very important FACT.

~ Jim Cramer, stock-pumper and GS-apologist extraordinaire, CNBC Street Signs, April 16, 2010

Goldman Sachs as the American Dream Factory

They're an American Dream Factory at Goldman Sachs [...] someone's gotta straighten out the PR problem there more than the SEC problem, frankly. [...] Like it or not, perception is 90% of reality on Wall Street. This firm, for 150-plus years, had a fantastic, client-centric position and reputation. For whatever reason, it's gone from client-centrism to where clients feel that they are potentially a counter-party to Goldman Sachs. I don't think anybody inside Goldman Sachs feels that way, but they've certainly done a horrific job of expressing that client-centrism. [...] This is really a public relations problem, this is one securities-infraction on a 30,000 person employee base... $12 billion [of lost market-cap on GS] is way overblown. [...] Listen, if you've worked on a trading desk on Wall Street you know someone can hide a ticket in a drawer. I don't care how much compliance you have, I don't care how much intensity you have in the supervisory process, it could happen to anybody. And so, I think probably people didn't know about it. You can knock Goldman for being arrogant, you can knock Goldman for being bad in PR, ya can't knock Goldman for a lack of ethics or compliance-centrism. That's been a hallmark of this organization forever. [...] Guys, you sound like a bunch of media-types trying to start a populist fire. Let's not try to start a populist fire, let's look at this clinically: you had a rogue inside this organization. You don't think there's rogues there? There's rogues everywhere.

~ Anthony Scaramucci, managing partner, Skybridge Capital, and ex-Goldman Sachs employee, CNBC, April 16, 2010

Becky Quick on Jamie Dimon

Jamie Dimon didn't take the economy down. He's one of the last men standing.

~ Becky Quick, CNBC, April 16, 2010

Apr 15, 2010

Ken Heebner on the stock market

I think it's a historic buying opportunity... The consumer is coming back. The consumer is going to be a strong supporter of this recovery.

~ Ken Heebner, as appeared on CNBC, April 15, 2010

Apr 14, 2010

Newsweek cover story on the economic recovery, part 2 (2010)

The last two expansions have been 120 months and 92 months, respectively. If the U.S. continues to adapt as it has, and if it produces a few more game changers like Google and Apple, there's no reason that the expansion that started in July 2009, against all the odds and predictions, can't last just as long.

~ Daniel Gross, "The Comeback Country: How America pulled itself back from the brink—and why it's destined to stay on top," Newsweek, April 9, 2010

Newsweek cover story on the economic recovery (2010)

The tale of the economy's remarkable turnaround is largely the story of swift reaction, a willingness to write off bad debts and restructure, and an embrace of efficiency—disciplines largely invented in the U.S. and at which it still excels. America still leads the world at processing failure, at latching on to new innovations and building them to scale quickly and profitably. "We are the most adaptive, inventive nation, and have proven quite resilient," says Richard Florida, sociologist and author of The Great Reset: How New Ways of Living and Working Drive Post-Crash Prosperity. If these impulses are embraced more systematically and wholeheartedly, the U.S. can remain an economic superpower well into the current century.
~ Daniel Gross, "The Comeback Country: How America pulled itself back from the brink—and why it's destined to stay on top," Newsweek, April 9, 2010

Senator Paul Tsongas on Japan Inc. (1992)

The Cold War is over, and Japan won.

~ Sen. Paul Tsongas, 1992

Jim Cramer on gambling in worthless stocks

Do you hold your nose and buy ABK because of those rallies? I believe, oddly, yes. Now, there is simply no percentage in admitting you would ever recommend a worthless security. But this is a game of performance, not a game of valuation. There are plenty of genuinely worthless stocks that have gone up huge. There are tons of cases where gigantically worthless stocks -- almost every dotcom circa 1999-2000 -- gave you great returns.

~ Jim Cramer, thestreet.com, April 13, 2010

T. Boone Pickens: $95 oil by end of 2010

You'll be at $95 a barrel at the end of the year.

~ T. Boone Pickens, as appeared on CNBC, April 14, 2010

(Crude oil at $85/bbl.)

Apr 12, 2010

Ned Riley: Dow 14,000 (2010)

I still think stocks are going much higher. I've set a target of 14,000 on the Dow before we have to worry about different things... I really think that people are frightened, they are on the sidelines. Joe [Battapaglia] is right, the consumer isn't really bouncing along, and that's my second phase of economic recovery. That'll be the area which will eventually bring us enough revenue to kick profits even higher.

~ Ned Riley, as appeared on CNBC, April 9, 2010

Apr 10, 2010

Kevin Duffy on the recently passed Health Care Bill

There is no "solution," no magic bullet, no utopia [to health care]. There are moral arguments and practical arguments. In my mind the moral is always superior - the ends don't justify the means. The goods news is that there is a natural order to the world. There is vastly more good than evil; otherwise, no one would ride the subway or travel on a plane. Evil means leads to scarcity and chaos; moral means leads to harmony and abundance.

Look at all the failed socialist experiments from the Soviet economy to the U.S. public education system - all based on coercion and all miserable failures. Now look at the freest parts of the economy: technology, consumer electronics, retail, entertainment, etc. We get constantly improving quality at lower prices. Look at the cost of cell phones over the past 10 years, or the cost of a cashmere sweater.

Health care is a classic example of how government intervention is gumming up the works. Despite that, there have been incredible medical advances. Can you imagine how much further this relatively immature industry would be without all the impediments to innovation?

I remember what it was like to go to the doctor's office as a kid - I hated it. It wasn't because of needles, plastic gloves, or worse; it was because of long waits. Yet when my mom took me to get an ice cream cone the lines were short and the service friendly. Of course the doctor visits have only gotten worse (and more expensive) precisely because the government has been involved. A complete takeover can only create worse service, more scarcity (as people leave this sector in droves), and soaring costs in an economy struggling under the weight of heavy-handed government. The solution, of course, will be rationing. How will you like your life to be in the hands of a $20,000 a year bureaucrat with a sociology degree? Welcome to Ted Kennedy's vision for Amerika.

~ Kevin Duffy, Facebook post, March 23, 2010

Senator Bill Bradley on Social Security

Social Security is the best legislation the government's ever passed. It's a compact between generations.

~ Senator Bill Bradley, as appeared on CNN's "I.O.U.S.A.: Solution---America's Debt Crisis," April 10, 2010

Apr 6, 2010

Leon Cooperman on the stock market

The market is very rationally priced in my opinion.

~ Leon Cooperman, investor, as appeared on CNBC, April 6, 2010