Jun 28, 2011

Mark Zandi sees an improving economy in 2H 2011

Some of the headwinds that caused us to slow are turning into tail winds.

~ Mark Zandi, chief economist at Moody's Analytics, "Why economists see a stronger second half in 2011," Associated Press, June 27, 2011

Jun 17, 2011

Berkowitz on financial holdings: it's all just a little bit of history repeating

Well, to me, it's very much déjà vu all over again with the financials. This is exactly what I did in the early 90s. It's very reminiscent of the early 90s. And how can you not buy companies selling tangible book value that are essential to the country?

~Bruce Berkowitz, founder, Fairholme Funds, CNBC interview, June 9, 2011

David Einhorn says "gold is money"

To me gold represents money. There are different types of money – some people think gold is a commodity and they like to think about jewelry demand and how much is coming out of the ground and so forth – I think of gold as money. You can have dollars, or you can have Yen or Euros or Pounds, or you can have gold. I think the merit of gold is that given our current monetary and fiscal policy [in the US] as well as the problems in the other major currencies, gold is the money of choice that we would like to have a meaningful amount of our assets denominated in.

~David Einhorn, founder, Greenlight Capital, interview, May 2011

Jun 13, 2011

Pimco fund manager on the commodity boom

Dramatic gains that we’ve seen, primarily liquidity driven, are unlikely to be repeated [in the next three to six months].

Large parts of the global population, particularly in China and India, are going through a particularly commodity-intense growth phase, [which bodes well for commodities’s longer-term prospects]. We see significant supply-and-demand mismatch.

~ Mihir Worah, portfolio manager with Pimco who leads several of the firm’s top performing commodity-based funds, "Why commodities still belong in your portfolio," MarketWatch.com, June 10, 2011

Jun 4, 2011

Patri Friedman on competing with government

Government is an industry with a really high barrier to entry. You basically need to win an election or a revolution to try a new one. That's a ridiculous barrier to entry. And it's got enormous customer lock-in. People complain about their cellphone plans that are like two years, but think of the effort that it takes to change your citizenship.

~Patri Friedman, "seasteading" entrepreneur and innovator, Wired.com, May 19, 2008

Kevin Duffy on quantitative easing and the stimulus bubble

QE1 and QE2 have not created wealth by replacing savings and hard work with speculation and food stamps. Stimulus is like taking water from the deep end of the pool, pouring it in the shallow end, and expecting the water level to rise. In this case, capital was taken from the real economy and poured into the political and speculative economies. You can see the result in vital signs of the real economy – unemployment stubbornly high, housing market moribund, weak GDP numbers, and this morning a lousy jobless claims number. You see the result in the DC economy – monster debt and deficits and the lowest unemployment rate in the country. And you see the result in parabolic moves in cotton, silver, lululemon, Baidu, et al.

~ Kevin Duffy, May 5, 2011