Imagi-Natives advice on:
0 0
Daily Needs
Mind Needs
 Learn Quotes (4980)
 Imagine Quotes (1904)
Plan Quotes (1654)
 Focus Quotes (2113)
Persist Quotes (5274)
 Evolve Quotes (1494)
Progress Quotes (287)
 General Quotes (280)
Body Needs
 Health Quotes (562)
 Exercise Quotes (413)
 Grooming Quotes (146)
 General Quotes (821)
Money Needs
 Income Quotes (237)
 Tax Quotes (525)
 Save Quotes (186)
 Invest Quotes (4007)
 Spend Quotes (318)
 General Quotes (1226)
Work Needs
 Customers Quotes (135)
 Service Quotes (1021)
 Leadership Quotes (3212)
 Team Quotes (492)
 Make Quotes (280)
 Sell Quotes (1434)
 General Quotes (1034)
Property Needs
 Clothing Quotes (144)
 Home Quotes (151)
 Garden/Nature Quotes (964)
 Conservation Quotes (281)
 General Quotes (344)
Food Needs
 Food Quotes (205)
 Drink Quotes (226)
 General Quotes (529)
Friends Needs
 Friends Quotes (776)
 Partners Quotes (615)
 Children Quotes (1673)
 Love Quotes (792)
 Conversation Quotes (4566)
 General Quotes (8662)
Fun Needs
 Gratitude Quotes (1686)
 Satisfaction Quotes (955)
 Anticipation Quotes (1249)
 Experiences Quotes (626)
 Music Quotes (280)
 Books Quotes (1297)
 TV/movies Quotes (177)
 Art Quotes (653)
 General Quotes (2647)

 Imagi-Natives Search 
 
Quote/Topic  Author
Contains all words in any orderContains the exact phraseContains at least one word
[ 50 Item(s) displayed from page 42 ]


Previous<<  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  
27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  42 43  44  45  46  47  48  49  50  51  
52  53  54  55  56  57  58  59  60  61  62  63  64  65  66  67  68  69  70  71  72  73  74  75  76  
77  78  79  80  81  Next Page>>

  Quotations - Invest  
[Quote No.30712] Need Area: Money > Invest
"To Prevent Bubbles, Restrain the Fed: On Nov. 14, 2008, the Dow Jones Industrial Average closed at 8497.31. On Nov. 13, 1998, the adjusted (for dividends and split) close was 8919.59. There has been great volatility, but no net capital accumulation as measured by the Dow in a decade. Other indexes, such as the Nasdaq, tell a similar story. Capital has been invested but as much value has been destroyed as created. The U.S. cannot afford to have another lost decade. Or to see the dreams of another generation of Americans who had been told to take responsibility for their financial health by investing in the stock market dashed by failed monetary and fiscal polices. Today, the most urgent task facing President-elect Barack Obama is stabilizing financial markets by instituting policies that foster economic growth and prevent the type of boom and bust cycle that has just wiped out a decade's worth of wealth accumulation. Mr. Obama's task is made all the more difficult because there has been a perfect storm of bad policies and practices. Laudable goals, such as fostering more homeownership, went terribly awry. Financial services regulation has failed at its most basic task, protecting the soundness of the system. And a dysfunctional compensation system has given corporate managers incentives to take excessive risks with investors' money. None of the policies and practices that are now widely criticized suddenly appeared in the past decade. But they were kindling for a financial firestorm that needed only an accelerant and a spark. Both were provided by a policy of easy money that came in response to the bursting of the dot-com bubble in 2000-01, the ensuing recession, and the Sept. 11 [2001 terrorist] attacks. At first Fed easing was in order. The central bank needed to counter the 'irrational exuberance' of the dot-com bubble. And by May of 2000 the Fed had done that by raising the fed-funds target to 6.5%. That needed to come down when the bubble burst. Aggressive cutting brought it to 2% in November 2001. The problem is the rate remained at 2% or less for three years (for a year it was at 1%). During most of this period, the real (inflation-adjusted) fed-funds rate was negative. People were being paid to borrow and they responded by often borrowing irresponsibly. Mr. Obama needs to stop the next asset bubble from being inflated by imposing a commodity standard on the Fed. Consider subprime mortgages. In 2001, there was $190 billion worth of subprime loan originations - 8.6% of total mortgage originations. In 2005, there was $625 billion worth of subprime originations - 20% of the total. In the same period, the percentage of subprime mortgages securitized - loans that were packaged and sold to investors - rose from just about 50% to a little more than 81%. (These numbers all trailed off slightly in 2006.) The great easing in monetary policy ended (with a lag) when the Fed began raising rates in June 2004. The subprime saga follows a familiar pattern. Easy credit begets a boom and then the inevitable tightening of credit bursts the bubble. What is not familiar is the scale of the devastation wrought in this boom-bust cycle. Never before had financial markets evolved such a complex superstructure of interlinked securities, derivatives of all kinds, and special-purpose investment vehicles. Professor Gary Gorton of the Yale School of Management has best described that complexity in his paper 'The Panic of 2007', published by the National Bureau of Economic Research. He makes clear that as this system evolved there was not a sufficient guard against systemic risk. No president could want these events to repeat themselves on his watch. But they could be repeated. The economy now confronts deflationary forces. If past is prologue the Fed will concentrate on those deflationary forces for too long and rekindle an asset boom of some kind. The fiscal 'stimulus' being contemplated by Congress could be another economic accelerant. If both the fiscal and money stimulus efforts kick in just as market forces also kick in, we're likely to see another unsustainable boom that will be followed by a bust. The incoming administration must think about that possibility because the timing of boom and bust cycles seems to be shortening. The next bust could come five or six years from now - or about in the middle of an Obama second term. Should that happen, Mr. Obama would be unable to blame Republicans for the mess and would be tagged as the second coming of Jimmy Charter. To avoid such a fate, Mr. Obama needs to stop the next asset bubble from being inflated by imposing a commodity standard on the Fed. A commodity standard (such as a gold standard) imposes discipline on a central bank [and the government] because it forces it to acquire commodity reserves in order to increase the money supply. Today the government can inflate asset bubbles without paying a cost for it because the currency isn't linked to the price of a commodity. With a commodity standard in place, the government would also have price signals that would alert it to the formation of a bubble. Why? Because the price of the commodity would be continuously traded in spot and futures markets. Excessive easing by the Fed would be signaled by rising prices for the commodity. In recent years, Fed officials have claimed that they cannot know when an asset bubble is developing. With a commodity standard in place, it would be clear to anyone watching spot markets whether a bubble is forming. What's more, if Fed officials ignored price signals, outflows of commodity reserves would force them to act against the bubble. The point is not to deflate asset bubbles, but to avoid them in the first place. Imposing a commodity standard is a practical response to the repeated failures of central banks to maintain sound money and financial stability. What would be impractical is to believe that the next time central banks will get it right on their own." - Gerald P. O'Driscoll Jr.
a senior fellow at the Cato Institute, was formerly a vice president at the Federal Reserve Bank of Dallas. This article appeared in The Wall Street Journal on November 17, 2008.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30719] Need Area: Money > Invest
"[The sub-prime loan debacle and subsequent credit crisis and global recession, according to Austrian and monetarist/Friedmanite economists, was primarily due to the interference of the Federal Reserve which kept interest rates too low and money supply too high, as is all too easy to do with a fiat currency and a fractional reserve banking system.] A more standard way for evaluating whether the Fed was overly expansive [with the money supply] is the 'Taylor Rule', the formula devised by economist John Taylor of Stanford University for estimating what federal funds [interest] rate would be consistent, conditional on current inflation and real income, with keeping the inflation rate at a chosen target. As calculated by the Federal Reserve Bank of St. Louis, the Fed from early 2001 until late 2006 pushed the actual federal funds rate well below the estimated rate that would have been consistent with targeting a 2 percent inflation rate for the PCE deflator. The gap was especially large — 200 basis point [2%] or more — from mid-2003 to mid-2005... The remedy for the mistaken government monetary and regulatory policies that have produced the current financial train wreck is to identify and undo policies that distort housing and financial markets, and dismantle failed agencies whose missions require them to distort markets. We should be guided by recognizing the two chief errors that have been made. Cheap-money policies by the Federal Reserve System do not produce a sustainable prosperity. Hiding the cost of mortgage subsidies off-budget, as by imposing 'affordable housing' regulatory mandates on banks and by providing implicit taxpayer guarantees on Fannie Mae and Freddie Mac bonds, does not give us more housing at nobody’s expense. [History has shown time and again, government interference in free markets, however noble the aims, always ends badly in the end for all concerned. So the sooner politicians learn to judge their policies on long-term economic consequences rather than short-term political vote-getting and let the free market do what it does best - allocate capital, the sooner the economy will run smoothly. If they and their constituents don't learn from the past they will be doomed to repeat these very painful lessons until they do.]" - Lawrence H. White
F.A. Hayek Professor of Economic History at the University of Missouri, St. Louis and an adjunct scholar at the Cato Institute. Quoted from his article 'What Really Happened?', published 2nd December, 2008, at cato-unbound.org.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30720] Need Area: Money > Invest
"Do not take yearly results too seriously. Instead, focus on four or five-year averages." - Warren Buffett
Highly successful value investor, chairman of Berkshire Hathaway and one of the richest men in the world.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30724] Need Area: Money > Invest
"[What do you call an 'unrealistic or unsustainable' level of debt?] We always say interest coverage of three to four times based on sustainable earnings is what we want. When we saw companies trading on one, one-and-a-half, two times interest coverage over the last few years, we didn’t invest in them because in our view they were completely unsustainable. Those stocks were some of the best performers in 2006 and 2007: it was like the more debt you had, the quicker you went up, and so that was a harder period to invest in – when you’re holding good, sustainable stocks and the unrealistically leveraged stocks are performing beyond your belief. But those stocks basically have been found out now and they’re not going to come back. Things like interest coverage shouldn’t go in and out of fashion, it’s just something that you should always look at, you should always reconcile cash flows and P&Ls and we’ve always stuck to those disciplines. And that’s helped us avoid some of these [financial] engineers." - Paul Fiani
Funds manager for Integrity Investment Management.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30725] Need Area: Money > Invest
"In economic terms, the relationship between China and the US has been a simple one over the last decade [1998 - 2008]. America transferred [due to their ability to produce goods cheaper] vast chunks of its manufacturing capacity to China and the Chinese (plus the Japanese, Koreans and others) lent America the money to buy their imports [by for example, putting their profits into U.S. government and Freddie Mac and Fannie Mae bonds]. But the collapse of the American banking system [due to irresponsible lending] changed the rules. China must now stimulate its own economy [following the principles of Keynesian economic theory where government spending replaces falling consumer spending and business investment in GDP downturns]. It will face enormous pressure from the US and Europe to increase its clamps on carbon [emissions]. China, Japan and Korea want to spend more money on stimulating their own economy yet if they don’t also fund the American stimulus package [by continuing to buy U.S. bonds] and the US is forced to simply print money instead [by the Federal Reserve buying Treasury bonds] the American dollar will fall dramatically which will substantially reduce the value of the money they have already ploughed into the US [in the form of U.S. denominated debt]. During December [2008] the leaders of China, Japan and Korea met and this conundrum was amongst the issues they discussed. After centuries of rivalry, a loose alliance between these three nations could produce a new global power base." - Robert Gottliebsen
Highly respected Australian financial journalist. Published in 'The Business Spectator', 22nd Dec 2008.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30726] Need Area: Money > Invest
"When recessions loom the very first shares to sell are those companies with high debt to equity levels and low interest cover ratios. These shares will be the ones that fall the most as they are forced by falling revenue and profits to write down, write off and/or sell assets into a falling market, raise equity diluting existing shareholders and eventually reduce dividends. Some may even go bankrupt." - Seymour@imagi-natives.com

Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30733] Need Area: Money > Invest
"[The terms Gross National Product (GDP), fiscal (e.g. government spending) and monetary (e.g. interest rate) policy are usually well understood. However this is not always the case with terms relating to the balance of trade and therefore this article is quite helpful:] Understanding The Current Account In The Balance Of Payments: The balance of payments (BOP) is the place where countries record their monetary transactions with the rest of the world... Transactions are either marked as a credit or a debit. Within the BOP there are three separate categories under which different transactions are categorized: the current account, the capital account and the financial account. In the current account, goods, services, income and current transfers are recorded. In the capital account, physical assets such as a building or a factory are recorded. And in the financial account, assets pertaining to international monetary flows of, for example, business or portfolio investments are noted. In this article, we will focus on analyzing the current account and how it reflects an economy's overall position. --The Current Account: The balance of the current account tells us if a country has a deficit or a surplus. If there is a deficit, does that mean the economy is weak? Does a surplus automatically mean that the economy is strong? Not necessarily. But to understand the significance of this part of the BOP, we should start by looking at the components of the current account: goods, services, income and current transfers. -Goods - These are movable and physical in nature, and in order for a transaction to be recorded under 'goods', a change of ownership from/to a resident (of the local country) to/from a non-resident (in a foreign country) has to take place. Movable goods include general merchandise, goods used for processing other goods, and non-monetary gold. An export is marked as a credit (money coming in) and an import is noted as a debit (money going out). -Services - These transactions result from an intangible action such as transportation, business services, tourism, royalties or licensing. If money is being paid for a service it is recorded like an import (a debit), and if money is received it is recorded like an export (credit). -Income - Income is money going in (credit) or out (debit) of a country from salaries, portfolio investments (in the form of dividends, for example), direct investments or any other type of investment. Together, goods, services and income provide an economy with fuel to function. This means that items under these categories are actual resources that are transferred to and from a country for economic production. -Current Transfers - Current transfers are unilateral transfers with nothing received in return. These include workers' remittances, donations, aids and grants, official assistance and pensions. Due to their nature, current transfers are not considered real resources that affect economic production. Now that we have covered the four basic components, we need to look at the mathematical equation that allows us to determine whether the current account is in deficit or surplus (whether it has more credit or debit). This will help us understand where any discrepancies may stem from, and how resources may be restructured in order to allow for a better functioning economy. Here are the variables that go into the calculation of the current account balance (CAB): X = Exports of goods and services, M = Imports of goods and services, NY = Net income abroad, NCT = Net current transfers The formula is CAB=X-M+NY+NCT. What Does It Tell Us? Theoretically, the balance should be zero, but in the real world this is improbable, so if the current account has a deficit or a surplus, this tells us something about the state of the economy in question, both on its own and in comparison to other world markets. A surplus is indicative of an economy that is a net creditor to the rest of the world. It shows how much a country is saving as opposed to investing. What this means is that the country is providing an abundance of resources to other economies, and is owed money in return. By providing these resources abroad, a country with a CAB surplus gives receiving economies the chance to increase their productivity while running a deficit. This is referred to as financing a deficit. A deficit reflects an economy that is a net debtor to the rest of the world. It is investing more than it is saving and is using resources from other economies to meet its domestic consumption and investment requirements. For example, let us say an economy decides that it needs to invest for the future (to receive investment income in the long run), so instead of saving, it sends the money abroad into an investment project. This would be marked as a debit in the financial account of the balance of payments at that period of time, but when future returns are made, they would be entered as investment income (a credit) in the current account under the income section. A current account deficit is usually accompanied by depletion in foreign-exchange assets because those reserves would be used for investment abroad. The deficit could also signify increased foreign investment in the local market, in which case the local economy is liable to pay the foreign economy investment income in the future. It is important to understand from where a deficit or a surplus is stemming because sometimes looking at the current account as a whole could be misleading. Analyzing the Current Account: Exports imply demand for a local product while imports point to a need for supplies to meet local production requirements. As export is a credit to a local economy while an import is a debit, an import means that the local economy is liable to pay a foreign economy. Therefore a deficit between exports and imports (goods and services combined) - otherwise known as a balance of trade deficit (more imports than exports) - could mean that the country is importing more in order to increase its productivity and eventually churn out more exports. This in turn could ultimately finance and alleviate the deficit. A deficit could also stem from a rise in investments from abroad and increased obligations by the local economy to pay investment income (a debit under income in the current account). Investments from abroad usually have a positive effect on the local economy because, if used wisely, they provide for increased market value and production for that economy in the future. This can allow the local economy eventually to increase exports and, again, reverse its deficit. So, a deficit is not necessarily a bad thing for an economy, especially for an economy in the developing stages or under reform: an economy sometimes has to spend money to make money. To run a deficit intentionally, however, an economy must be prepared to finance this deficit through a combination of means that will help reduce external liabilities and increase credits from abroad. For example, a current account deficit that is financed by short-term portfolio investment or borrowing is likely more risky. This is because a sudden failure in an emerging capital market or an unexpected suspension of foreign government assistance, perhaps due to political tensions, will result in an immediate cessation of credit in the current account. Conclusion: The volume of a country's current account is a good sign of economic activity. By scrutinizing the four components of it, we can get a clear picture of the extent of activity of a country's industries, capital market, its services and the money entering the country from other governments or through remittances. However, depending on the nation's stage of economic growth, cycle, its goals, and of course the implementation of its economic program, the state of the current account is relative to the characteristics of the country in question. But when analyzing a current account deficit or surplus, it is vital to know what is fueling the extra credit or debit and what is being done to counter the effects (a surplus financed by a donation may not be the most prudent way to run an economy). On a separate note, the current account also highlights what is traded with other countries, and it is a good reflection of each nation's comparative advantage in the global economy." - Reem Heakal
Downloaded from investopedia.com, 22nd December, 2008.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30735] Need Area: Money > Invest
"When markets are going your way, the feeling is brilliant, more intoxicating than champagne, more exhilarating than sex." - Nick Leeson
Infamous trader whose illegal, unchecked risk-taking caused the collapse of Barings Bank.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30741] Need Area: Money > Invest
"When you hear about 'animal spirits' that drive risk taking and investing, people are really talking about the market's confidence and optimism. Bull markets rise on rising animal spirits and bear markets fall on falling animal spirits." - Seymour@imagi-natives.com

Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30742] Need Area: Money > Invest
"Now that Bernanke [Chairman of the U.S. Federal Reserve] has run out of conventional weapons [lowering interest rates which are now at 0-0.25%, increasing liquidity by accepting assets for loans not previously thought worth the risk and even paying interest on bank reserves], investors are beginning to guess what happens next. In short: he's gonna drop the big one. He's going to go nuclear. He's not going to stick with [economists] Keynes and Freidman, in other words; he's gonna go Gono. [Gideon Gono is the current Governor of the Reserve Bank of Zimbabwe who's monetary policies caused hyper-inflation in Zimbabwe.] Yes, the Fed says it will now use 'alternative' means of getting some juice in the economy. It will buy Treasury debt itself. This is what is known as 'monetizing the debt' [sometimes called 'quantitative easing' or simply 'printing' money]... turning an increase in U.S. debt into an increase in the amount of currency in circulation. It's a swell trick. If it works, Bernanke will be able to keep the rate of consumer price inflation above zero [as his priority is to avoid deflation]. He will probably try to get it well above zero - so as to encourage people to spend their money now, rather than wait for lower prices [which is the great danger with deflation]. The spending is supposed to be the magic that gets the consumer economy going again. [The difficulty is that consumers have an irresponsibly high percentage of debt to disposable income and assets (which are still falling) and therefore they are trying to pay off more of this debt - called deleveraging or sometimes balance sheet restructuring/repair, they are concerned about becoming unemployed and therefore are trying to save more and banks have raised their lending standards (including lowering their loan to value ratios) making getting further loans harder. These all work against the Reserve's desire to get people spending more. Therefore the government will try to compensate for this lack of aggregate spending by consumers and business through borrowing (by issuing bonds that are bought by the Federal Reserve increasing the quantity of money and thereby lowering the value of each dollar and causing inflation) and then spending, as a fiscal policy stimulus, to increase the velocity of money moving through the economy and therefore also their tax revenues with each exchange, in accordance with Keynesian economic theory.]" - Bill Bonner
The Daily Reckoning Australia - Monday, 19th December 2008.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30745] Need Area: Money > Invest
"Regrettably, many people believe that their leaders can always positively control the future. It is a mistaken belief that always costs them dearly. Every market move is always followed by a reaction. The bigger the up move the bigger the down side. There is no historical comparison with the sheer magnitude of the worldwide investment mania that is currently in force [2003-2007]. Thus, the down side threatens to rock the very foundations of capitalism and democracy. As Epicitus put it, ‘the extreme of any position will ultimately become its opposite.' As night follows day, a boom is always followed by a bust; the bigger the boom the bigger the bust. The bust always catches the majority unawares, coming as it does from a zenith of apparent prosperity and speculative excess. At this time, the crowd is imbued with an impetuous fervor encouraged by the affirmations of its leaders... That so many people trust in the power of their leaders to offset the natural progression from boom to bust in the economy is incredible. It can be demonstrated time and time again that leaders have always failed in their quest to arrest economic and financial decline. In fact, the more that these leaders [arrogantly] believed in their power to maintain the status quo, the greater the ultimate damage and the greater the suffering endured by the people who had blindly placed their trust in them. [In 2008 share markets around the world dropped between 40 - 60%]" - Ian Gordon
Quote from 'The Long Wave Analyst Special Addition - This is It!', August - November 2007.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30746] Need Area: Money > Invest
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The question is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." - Ludwig von Mises
The great Austrian School economist.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30748] Need Area: Money > Invest
"A recession uncovers what the auditors missed. [Like Warren Buffet's 'When the tide goes out we see who has been swimming naked!']" - stock market axiom

Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30751] Need Area: Money > Invest
"You may read about Hard Currency but what does this mean? It is a currency, usually from a highly industrialized country [which is politically and economically stable], that is widely accepted around the world as a form of payment for goods and services. A hard currency is expected to remain relatively stable through a short period of time, and to be highly liquid in the forex market. The U.S. dollar and the British pound are good examples of hard currencies." - Seymour@imagi-natives.com

Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30754] Need Area: Money > Invest
"If everyone [in the market] is thinking alike then somebody isn't thinking." - George S. Patton

Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30790] Need Area: Money > Invest
"My favorite show-me-the-money metric is the price-to-cash flow ratio (P/CF). Cash flow should be at least 10 percent of price (the market capitalization of the company - share price times the number of outstanding shares available). For example, Verizon has a market cap of $87 billion and a cash flow of $27 billion. Its cash flow is 30 percent of its market cap. That's very good. It beats the minimum cash flow I look for by three times… Investing in a company that has cash on hand and a nice cash flow doesn't mean you get a company immune from those wild [share price] swings... or from seeing its markets shrink and its sales drop. But it does give you a company that won't get ambushed by banks [forcing it to raise equity or sell assets at the worst possible time] or its own excessive spending needs [reducing profits when they are falling anyway]... so it can come out of the recession intact and primed for growth." - Andrew Gordon
Investment consultant
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30798] Need Area: Money > Invest
"High investment [especially involving debt, for example in equipment or buying other businesses during an economic boom, especially the latter stages] does not automatically translate into high growth [over the long term]. It can also translate into excess capacity and bankrupt companies if the investment has been made in areas for which demand dries up, as happened during the Asian financial crisis. [and other recessions]" - Swaminathan S. Anklesaria Aiyar
research fellow at the Cato Institute's Center for Global Liberty and Prosperity.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30799] Need Area: Money > Invest
"The spread/difference, between interest rates/yields on corporate debt paper and safe Treasury securities increases when fear and risk aversion rises. The mechanism behind this is based on the idea that investors become more concerned about the return of their investments rather than the return on their investments. Risk-free Treasury securities usually have lower yields than riskier corporate bonds to reflect their lower risk of default [and both usually offer higher rates the longer the term, except when the yield curve is inverted at the peak of the business/market cycle], but when there is risk of an economic slowdown/crisis money seeks a safe haven while the 'storm' passes and so demand for Treasuries increases driving up their prices and therefore their [nominally fixed] yield falls as a proportion of their cost. While this is occurring less money is going into corporate bonds and therefore corporations, to encourage sales, raise the rates they offer. These two effects can be seen in a widening spread/difference between the yields between these two types of fixed income investments, and is used by many analysts as a way to determine the degree of fear in the market." - Seymour@imagi-natives.com

Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30814] Need Area: Money > Invest
"The average P/E ratio at [S&P500] market bottoms [accompanied by recessions since the Second World War] was 10.4 with the median at 9.5 (we'll round this off at 10). We note, too, that in 5 of the 10 observations, the P/E bottomed in single digits ranging from 6.3-to-8.0. In the other 5 instances the P/E troughed in double digits between 11.0 and 15.5. ...while the trough P/Es cover a wide range of 6.3-to-15.5, a closer inspection of the data provides some hints as to whether an eventual P/E [for the 2008/9 recession] will bottom in single or double digits. For this purpose we note that a secular bear market ended in 1949 with the subsequent secular bull market lasting until 1966. The market then remained in a secular bear market through 1982, followed by a bull market from there until 2000, when the current secular bear market started. Since secular bear markets comprise periods where P/E ratios are declining [as interest rates are rising] while secular bull markets are periods where P/E ratios are expanding [as interest rates are falling], it is logical to assume that cyclical P/E ratios are low at the end of secular bear markets and the first few years of bull markets [with relatively high interest rates]. In contrast, cyclical P/E ratios are high in the last few years of bull markets and at the beginning of bear markets [with relatively high interest rates]. It is not a stretch to say that this is exactly what our data shows... As for levels, we believe that the secular bear market is now in its 8th year, meaning that the P/E ratio is more likely to end in the bottom of its historical range than the top. Therefore a final low P/E ratio of about 8 on smoothed earnings is not far fetched. Taking all of the above into account, where are we now? At today's S&P 500 close of 845, the market is at 12.8 times our trailing smoothed reported earnings of $66. That is nothing to sneeze at since it's the lowest P/E seen since the 1987 crash, and is also under the long-term average of about 15. It is also a vast improvement over the P/E ratio of 37 at the 2000 high and a P/E of 24 at the October 2007 peak. Therefore, predicting a lower P/E from this point is no longer the layup it was at far higher levels. However, we note that in 5 of the 10 data points in the table the P/E bottomed at 8 or less, and that would entail a big decline, even from this point. In addition those occurred either during secular bear markets such as the one we are in now or early in secular bull markets when investors did not yet recognize the new uptrend. It also noteworthy that in 24 of the 38 years preceding 1987, the market sold at lower than the current P/E at some point during the year So far the low for the current bear market was 741 on November 21 when the P/E ratio would have been 11.2. That is close enough to the long-term average of 10.4 at bottoms to raise the possibility that it could have been the final low. However there is still a real risk that the eventual P/E ratio could drop as low as 8 times smoothed 2009 earnings of about $70, resulting in an S&P 500 index of about 560. Since that constitutes another 33% decline from current levels, it is not a risk that can be easily dismissed. We also note that our assumption of $70 in trendline earnings is a generous number since S&P now estimates 2009 reported earnings at only $49. All in all, although we think there is some possibility that the market has already bottomed, it is more likely that the market decline still has quite a bit further to go." - Comstock Partners, Inc.
Comstock Partners, Inc. analyzes economic and financial conditions from a long-term macro-economic perspective and makes adjustments based on cyclical and shorter-term considerations. In pursuit of its goals, the firm invests in various asset classes including domestic and foreign stocks, bonds, currencies and derivatives including indices and options.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30821] Need Area: Money > Invest
"[The optimistic] Pollyanna is silenced and [the pessimistic] Cassandra is doing all the talking. [now we have gone from booming growth to recessionary bust.]" - Walter Lippmann
(1889 - 1974), influential American award-winning writer, journalist, and political commentator. Quote from a magazine article he wrote in 1935 during the Great Depression in America.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30828] Need Area: Money > Invest
"Whenever you hear of 'official unemployment' numbers remember this statistic is the narrowest measure of unemployment possible and does not include those who are underemployed [in casual contract or self-employment] or those who have given up searching for work. Real unemployment can be twice as high as the 'official' measure, which obviously effects economic spending and growth." - Seymour@imagi-natives.com

Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30833] Need Area: Money > Invest
"The 'Santa Claus Rally' normally occurs during the last five trading days of a year and the ensuing first two trading sessions of the new year. During this seven-day period [U.S.] stocks historically tended to advance (by 1.5% on average since 1950), but when recording a loss, they frequently traded much lower in the new year." - Jeffrey Hirsch
Stock Trader’s Almanac
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30834] Need Area: Money > Invest
"And here, for the benefit of new readers, we offer a simple schema of the machinery of the [Credit] Bubble Epoch [and in the process explain trade surplus and foreign currency reserves]: Americans bought stuff from the Chinese [trade surplus so exports greater than imports]. The Chinese printed up Yuan to buy dollars from Chinese merchants [so these merchants could spend the money in the Chinese economy]. Then, the nice Chinese financial authorities lent the [foreign currency reserves] money back to America [by buying Freddie Mac Fannie May bonds, for example]. What else could they do with it? [They could have bought gold or invested it through their sovereign wealth funds but vendor financing their U.S. customers made more sense economically as they profitted by the profit margin on the goods sold and then the interest rate on the loans of this profit as it was used to buy more goods that had profit margins, ad infinitum.] So, you see, everyone had plenty of money. And the more Americans bought...the more money they had to spend. And the more they spent, the more the Chinese had to lend! Of course, it didn't take a genius to see that a system that depended on people buying things they didn't need [and which wouldn't appreciate for ever, if at all] with money they didn't really have [debt] couldn't last long. In the event, it lasted longer than we expected. But still, not forever. [And so we got the credit crisis in 2007/9 when China and others stopped lending the U.S. money to finance more debt for the already over-indebted U.S. consumer whose collateral, in the form of houses and securitized mortgages turned out not to be worth what was originally thought by the owners, banks and rating agencies.]" - Bill Bonner
Founder of the financial newsletter, 'The Daily Reckoning'. Quoted from the Australian version, 31st December, 2008.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30835] Need Area: Money > Invest
"Here at The Daily Reckoning, we turn to Shakespeare for a more poetic view of the financial collapse [in 2008]: 'Let Rome in Tiber melt, and the wide arch of the ranged empire fall!' So said Marc Antony as he drew the Queen of the Nile into his embrace. This is another way to look at the crisis of '08. You begin by noticing that it is centred in just two countries - Britain and America. Not coincidentally, those two countries are the twin capitals of the world's only surviving empire, an empire built on a foundation of industry, technology and trade... but lately richly redecorated in an elaborate rococo style of modern debt and finance. Beginning in the 19th century, factories in England and New England transformed the value of a working man. Instead of being equal to his counterpart in China or India - as he had been for a thousand years - he suddenly was superior; he could produce more [through advances in technology and capital]. By the 21st century, the average day labourer in Britain and America earned 10 to 20 times more than his confrere in Asia. Of course, the English speakers had rivals. They were challenged by other Europeans...and the Japanese. All learned that the same machines that produced wealth could destroy it even faster. The Germans were particularly tenacious competitors. By 1910, their factory output was greater than that of the UK. By 1940, they were trying to blow up England's factories. But England and America ganged up against them. In a couple costly wars in the first half of the 20th century, the Teuton threat was finally crushed. By 1945, The Anglo-American empire had only one challenger still standing - the Union of Soviet Socialist Republics. Militarily, the USSR was a real menace. But commercially, it was no more than a comic footnote in economic history. At first, the weakness in the Soviet's [communist/socialist centrally planned, rather than capitalist free market, economic] system was not obvious... especially not to economists. The figures - put out by the USSR - showed rapid growth. But nobody flew to Moscow to buy the latest fashions nor bragged about his Soviet auto. Nor did people hasten to open accounts in Russian banks or seek heart transplants in Soviet hospitals. The Soviets had managed to create a rare thing - a value-subtracting economy. They took valuable raw materials out of the ground and turned them into worthless finished products. If he had a choice, no one would buy soviet-made goods. Every sale made the seller poorer. And the longer this went on, the poorer the Russians got. Finally, the whole system caved in - in 1989, leaving the Anglo-Americans masters of earth, sky and the seven seas. This next era, 1989-2007, was remarkably pleasing to almost everyone. Even former enemies rushed to stock the empire's shelves and lend it money. Overstretched, over-indebted and over-there... it had military bases all over the world. No swallow could fall nowhere in the world without it being captured and interrogated by the Pentagon or its proxies. Back in the homeland, the imperial race went a little mad. People spent too much money...distracted themselves with bread and circuses... and flattered themselves with delusions of mediocrity. It seemed perfectly normal to them that they consumed while the foreigners produced... and that they spent what the foreigners saved. Central banks encouraged the plebes to consume; the more they consumed, the poorer they got, but as long as they had someone else's money to spend, they didn't complain. The imperial youth studied gender sensitivity at school; rivals studied engineering. And as for the foreigners themselves, like gigolos complimenting an aging heiress, they barely suppressed a snicker: 'Your hair is beautiful', they remarked. 'Have another drink of sherry.' And while the poor woman admired herself in the mirror, they rewrote her will. Soon, competitors had more modern factories, more savings, better-trained workers - as well as lower costs. Then, the empire turned to a colossal conceit; that it could make its way in the world by financing things, rather than making them. Gradually, the Anglo Americans developed a value-subtracting society too - financing, derivatizing, borrowing, flipping, consuming - all at the expense of real production. Russians recognized the symptoms: the leadership was largely delusional, industrial capacity was largely archaic and dysfunctional, and the working class was largely broke. The old Bolsheviks recognized the rot too. What the Romans called 'consuetude fraudium' became business as usual...in the Soviet Union...and then in England and America. By 2006, practically every transaction was tainted with swindle. Banks sold each other packages of scammy debt, composed of mortgage contracts on houses sold to people who couldn't afford them, fraudulently rated Triple A by the rating agencies, based on quack formulae invented by Nobel-prizing winning economists. This took place in a party atmosphere created by central bankers, who had put something in the water; they spiked the entire economy by under-pricing credit and then urged consumers to drink up, by buying SUVs (Fed Governor Tier, 2002) and using sub-prime loans (Fed Chairman Greenspan, 2005). The Russians would recognize the next stage too. After the collapse, the ruins are liquidated, picked over, and parcelled out to the politically well-connected. 'Kingdoms are of clay,' said Antony, before killing himself." - Bill Bonner
founder and editor of The Daily Reckoning. He is also the author, with Addison Wiggin, of the national best sellers 'Financial Reckoning Day: Surviving the Soft Depression of the 21st Century', 'Empire of Debt: The Rise of an Epic Financial Crisis' and 'Mobs, Messiahs and Markets: Surviving the Public Spectacle in Finance and Politics', written with co-author Lila Rajiva. Quoted from 'The Daily Reckoning Australia', 31st December, 2008.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30839] Need Area: Money > Invest
"The capitalist free market economist, Adam Smith, spent 80 pages of his famous book, 'The Wealth of Nations' (1776; pp.260 - 340, especially pp.339 - 340) warning about the dangers of allowing banks to lower lending standards, including loan to value and income ratios, when making loans to projectors, imprudent risk takers and prodigals (These categories of borrower are equivalent to the speculators and rentiers responsible for creating the housing bubble of the mid-to-late 1920's and 2002-5 and the stock market bubble and eventual crash of the late 1920's and 2007). Smith made it clear that such categories of borrower will waste and destroy the loans generated from the savings of the bank's depositors. Therefore central banks should aim at maintaining low rates of interest while simultaneously restricting loans to these three categories of speculative borrower, because their collateral - the assets they buy - easily become overvalued and prone to collapse the easier it becomes for them to borrow in order to fund more and more of these speculative investments." - Seymour@imagi-natives.com

Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30850] Need Area: Money > Invest
"The Dow/Gold ratio has fluctuated over time between 1 and almost 45. When the Dow/Gold ratio was under five, gold was expensive and equities were cheap. Conversely, when the Dow/Gold ratio was over 20, stocks were expensive and gold relatively cheap." - Dr. Marc Faber
Famed investment advisor
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30865] Need Area: Money > Invest
"The most complete and satisfactory interpretation we have linking booms and busts is the Austrian theory of the business cycle, originated by Ludwig von Mises and developed by F. A. Hayek, Murray Rothbard, and others. (Mises was the only major economist who actually predicted the Great Depression.) In 'America's Great Depression', Rothbard sets forth in detail how the Federal Reserve acted to stimulate economic growth in the 1920s. Through the artificial creation of bank credit — i.e., credit not based on real savings — the Fed distorted market signals such as interest rates. That induced businessmen to go on an investment spree that could not be indefinitely sustained. Finally and inevitably, the bubble burst." - Ralph Raico
From 'FDR - The Man, the Leader, the Legacy', Part 7, June 1999.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30883] Need Area: Money > Invest
"When you have a real crisis, there tends to be a flight to quality and the one sector that will do extremely well in such a market will be Treasury bonds. [Demand for them will drive up their prices while driving their effective yields down.]" - Ned Notzon
chairman of the asset allocation committee at T. Rowe Price
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30884] Need Area: Money > Invest
"Economic predictions are about as useful as picking Tattslotto numbers." - Chris Tate
Share trader, trainer and author.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30892] Need Area: Money > Invest
"The January Effect: The tendency of the stock market to rise between December 31 and the end of the first week in January. The January Effect occurs because many investors choose to sell some of their stock right before the end of the year in order to claim a capital loss for tax purposes. Once the tax calendar rolls over to a new year on January 1st these same investors quickly reinvest their money in the market, causing stock prices to rise. Although the January Effect has been observed numerous times throughout history, it is difficult for investors to profit from it since the market as a whole expects it to happen and therefore adjusts its prices accordingly." - www.investorwords.com

Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30893] Need Area: Money > Invest
"There are two kinds of economists – those who don't know and those who don't know they don't know." - Anatole Kaletsky
economics editor of the influential 'London Times'.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30894] Need Area: Money > Invest
"The first sign of a recovery [when a bust consolidates before the next boom] is when bad economic news does not trigger an immediate fall in share prices. [as this bad news is already factored into the share price] " - Roger Montgomery
chairman of Clime Investment Management
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30903] Need Area: Money > Invest
"[Remember this when people tell you real estate cannot fall in price:] History tells us there is some precedent for a protracted, weak housing market. After the last housing boom in the United States peaked in 1989, it took a typical city five years to hit bottom. [i.e. house prices fell for five years!] This time [2008 in the U.S.], prices have only been going down for two years. We might look with caution to Japan, where urban land prices fell for 15 consecutive years, from 1991 to 2006. [Therefore be very careful about ever allowing yourself to have a high loan to value ratio regardless of what your bank offers you when times are good, because they won't be that friendly when times are bad, and if the house value falls in a recession you may find you owe more than your house can be sold for, should you lose your job or otherwise need to sell.]" - Robert Shiller
Yale University economist and author of the 2008 book, 'The Subprime Solution'.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30908] Need Area: Money > Invest
"This morning, one of my co-workers asked me, 'What turns around first - the economy or the job market?' My answer: 'The economy usually turns first. Employment is a lagging indicator [of the health of the economy], because companies need to see an increase in demand for their products before they see the need to start increasing their payrolls.' The stock market tends to lead the economy [It is a leading indicator/predictor of the health of the economy in the next few quarters]. It heads lower before the economy does, and it tends to start heading higher before the economy recovers [usually between six to nine months earlier]. So if you have your investment portfolio on the sidelines, you shouldn't wait for the economy to turn higher before you start investing. [But be wary of buying before all the bad news is factored into share market prices or you will be caught in a 'value trap', where shares look like they are good value but then fall a lot further as the future of the economy continues to deteriorate.]" - Rick Pendergraft

Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30910] Need Area: Money > Invest
"Bull Trap [value trap or 'suckers' rally']: A false signal indicating that a declining trend in a stock or index has reversed and is heading upwards when, in fact, the security will continue to decline." - Bennet Sedacca
Financial advisor with Atlantic Advisors.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30921] Need Area: Money > Invest
"It's not a bad idea to stay away from trading until the [share] market stabilises, and a firm trend re-establishes itself. There's no harm in watching from the sidelines until your systems tell you to jump in again. This is a strategy that isn't utilised enough by traders. They tend to trade when they shouldn't, and stay out of the market when a trend is gathering momentum. Exactly the opposite of what professional traders do. One strategy that I've had to implement personally, which I've barely ever used in the past is to pay attention to my 'stop trading' switch that I use in my trading plan. As a quick summary of this method... here are my rules: -If the All-Ords [Australia's share market index] is trending above it's 30-week Exponential Moving Average (EMA), then I enter long positions. -If the All-Ords is trending below it's 30-week EMA, then I enter short positions. -If the All-Ords is showing 7% or greater volatility, then I don't enter any new positions. This final rule is essentially a cut-off switch that says market conditions are just too volatile to play with [as this volatility triggers my stop-loss buy/sell orders]. I measure it by using the ATR indicator, dividing it by the share price (or in this case, the Index points), and looking at the percentage. The percentage volatility is around 9% at the moment. This means that on a week per week basis, the All-Ords could go up or down 9%... For me, this is just too volatile for long or short positions, so I'm standing clear." - Louise Bedford
Australian share trader and author. Quoted in early 2009.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30927] Need Area: Money > Invest
"One of the greatest dangers to share prices in a recession, besides earnings reductions, is asset revaluations, including intangibles and goodwill. According to U.S. accounting standards, goodwill must be tested for impairment at least once a year and more often if there has been material change due to events or circumstances. While that doesn't have to be done in the last quarter of the calendar year, it often is, which means these write downs are announced in January. The write downs can be significant as auditors can become extremely conservative in recessions given the economic deterioration and uncertainty." - Seymour@imagi-natives.com

Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30934] Need Area: Money > Invest
"[What's the key to your investment philosophy?] We put so much weight on the idea that assets will revert to their historical mean valuation. We've looked at the price history of every asset class - stocks, bonds, currencies, commodities - and we have not found any that didn't revert.... The length of time to revert usually takes about seven years. So we make all of our predictions for that time period." - Jeremy Grantham
Investment strategist and co-founder of Boston-based money-management firm Grantham, Mayo, Van Otterloo (GMO). He has an excellent track record, as an institutional money manager since 1977, and now manages more than $23 billion.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30939] Need Area: Money > Invest
"[Share markets go down quickly by the elevator and up slowly by the escalator because after a loss of share market wealth due to a recession for example]... There will be a considerable period before the 'animal spirits' [of optimism] return - rabbits come out of holes much more slowly than they jump into them." - TJ Marta
of the Royal Bank of Canada
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30940] Need Area: Money > Invest
"The share market, which is a leading economic indicator, historically starts to improve between five and nine months before unemployment, which is a lagging economic indicator, stops rising. Unemployment then usually plateaus for several months before falling. A better forward looking economic indicator is the increase in job ads which usually show the likely employment increase in about four to six months time as this is usually about how long it takes from advertising a vacancy till starting employment. The Australian Bureau of Statistics has a graph that shows this [The Labour Force 6202.0 : ANZ]." - Seymour@imagi-natives.com

Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30947] Need Area: Money > Invest
"[When considering the share market it is sometimes useful to step back and look at the big picture:] The [generation, called the 'Baby] Boomers are now becoming retirees. The latest census data counted 303,824,640 US citizens. We are experiencing an annual birth rate of 14.18 births per 1,000; it is estimated we need at least 24.50 births per thousand to sustain our population (can you say immigration?). More importantly, we are only experiencing 8.27 deaths per 1,000, and the average life expectancy of an American male is 75.29 years, while the average expectancy for a female is 81.13 years ... and growing. (CIA.gov library). America is aging, and as a result we are experiencing a decline in the number of workers that provide tax revenues and, more importantly, consumption. The 'big bulge' known as the Baby Boomer generation has been the growth engine of this country for the past five decades. But something happened in the last fifteen years that was not present in the prior years: we stopped saving. The bull market from 1982 to 2000, along with the ever-increasing value of our homes, made our balance sheets appreciate. Why save when our 401(k)'s were up an average of 15% a year and we kept upgrading our homes? Americans became spenders. During the period from 1980 to 2007, our savings rate went from 7.4% of wages and salaries to 1.7%. More importantly, since 2003 our savings rate has averaged less than 2% per year, and these numbers include both the private and government labor force. (Bureau of Economic Analysis) Wages and salaries (both private and government) make up about 60% of personal income in the US. The remaining 40% is the combination of other labor income (benefits), proprietor's income (farm and non-farm), interest and dividend income, rental income, and transfer payments. Current annual income in the US is estimated at $12.1 trillion per year. As of 12/31/07, the average household income was $50,233 per year and the median was $67,609 per year. In addition, the current average savings rate in the US, as mentioned above, is currently at 1.7% of income per year [$4000 - $5000], and the average amount of debt as a percentage of income is 21.19% [$10,000 - $14,000]. Why bring all this up? If you've read this far, stay with me a little further. The American Consumer has been the engine of the last expansion. We have bought houses, cars, flat screens, beach condos, etc. and financed the purchases either by extracting the equity from our increasing home prices (home equity lines) or incurring additional debt through credit cards and other forms of consumer finance. In the average American's mind, as long as the bottom line of the balance sheet continued to increase (i.e., assets greater than liabilities) then all was well. But in 2008 something happened that had not happened to these Baby Boomers before: the value of all assets (stocks, houses, rental properties, etc.) declined. As a result the debt party began to unwind as the value of the assets declined while the debt (liabilities) remained, thereby shrinking the balance sheet. Americans are feeling poorer ... much poorer. If one considers that the average 401(k) is now a 201(k) [After 2008's 50% fall in the share market] and the average house (according to Case/Shiller) declined 26% from its peak value in 2006, then it's easy to understand why the Baby Boomer is feeling gut punched. The financial shock of watching the asset side of their balance sheets crumble while the debt side remained the same or actually grew has now forced the American consumer into a dilemma: How do I retire and live the same lifestyle that my parents enjoyed? Answer: I have to save money and reduce debt. The consequence to the economy is, in my opinion, going to be a protracted, painful recession. Why? Because this recession is driven by asset devaluation [deflation], and that is different than a cyclical downturn. There is a need for institutions and households alike to reduce debt and restore equity to the balance sheet. For the consumer/individual this will only happen with an increase in his/her saving rate to reduce debt and fund future retirement. For example, if the average consumer goes from a 1.7% savings rate to a 5% savings rate, then that equates to $400 billion a year in either debt reduction or retirement funding. From the contra angle, that means there will be $400 billion less of American consumption. I label this the 'Paradox of Thrift,' in that we can't restore our balance sheets without additional savings, and our stock markets cannot recover without consumer spending and corporate profitability." - Cliff W. Draughn
Managing Principal of Draughn Partners [wealth management]. Quoted 12th January, 2009.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30948] Need Area: Money > Invest
"Keynes Was Wrong About the Evils of Thrift: The federal government has urged Australians to spend up in an effort to ward off an economic downturn [following the 50% drop in the Australian share market since August 2007 some 17 months ago]. This follows the government’s $10.4 billion economic security package, which was deliberately targeted at those deemed most likely to open their wallets in the lead-up to Christmas [2008]: pensioners and families. The injunction to spend is based on an old-fashioned Keynesian notion, the so-called 'paradox of thrift'. The paradox holds that while increased saving might be virtuous for the individual, at the collective level it might be ruinous. If everyone saves rather than spends, incomes will be reduced, employment will fall, leading to further reductions in spending creating a self-reinforcing downturn. John Maynard Keynes [the economist, who developed the Keynesian School of economic theory which is favoured by governments that desire to intervene in capitalist free market economies especially during recessions] thought that saving was problematic because the advanced economies were at risk of exhausting the investment opportunities available to them. These economies would then become permanently stuck below full employment, as the marginal efficiency of capital was driven to zero. Keynes’s General Theory thus looked forward to 'the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity-value of capital'. Far from providing a rationale for short-term fiscal stimulus, this view mandated permanent government intervention to maintain full employment as a counterweight to what Keynes saw as a tendency towards stagnation. This 'secular stagnation' hypothesis became enormously influential from the mid-1930s until well into the 1960s, even against the backdrop of a rapid post-war economic expansion that provided abundant empirical refutation for the idea. As economist W.H. Hutt argued, 'The building up of physical productive power has no greater tendency to force interest towards zero than has the growth of population a tendency to reduce the value of labour to zero.' The paradox of thrift is based on the idea that saving is a 'leakage' from the flow of income in the economy. But the circumstances in which this might occur are quite limited, even in a Keynesian framework. The hoarding of cash under mattresses might result in the removal of saving from the financial system, which would then be unavailable to fund increased investment spending. This might occur in a deflationary environment where consumer prices are falling and hoarded cash increases in purchasing power, providing a positive rate of return that might not be available from other non-cash assets in a severely recessed economy. However, a deflationary environment is a problem for monetary policy [i.e. interest rates and money supply], not an argument against increased saving. Far from putting cash under the mattress, the most likely destinations for household saving in the current environment are paying down debt, increased bank deposits, or the acquisition of other forms of financial assets. The latest [Australian] national accounts data imply that the increase in household disposable income due to the July 1, 2008 tax cuts and growth in the economy has been saved rather than spent. The household saving ratio rose from 1.3 per cent in the June quarter to 3.9 per cent in the September quarter of last year, well above the negative household saving ratio recorded just a few years ago. This suggests that households have been paying down debt in response to the uncertainties associated with the global financial crisis. But this does not mean that these funds are lost to the economy. Rather than being a 'leakage' from the flow of income, such saving becomes part of the lifeblood of the economy, increasing the capacity of banks and other financial institutions to lend. [so long as they lend, which they sometimes don't with highly restrictive lending standards [i.e loan to value and disposable income ratios], in a severe credit crisis, when they are trying to build up their capital adequacy ratios in anticipation of major mortgage defaults and write-offs.] By reducing their borrowing from financial institutions, households increase the capacity of financial institutions to lend for a given level of capital. Increased saving via bank deposits has provided a much-needed boost to the ability of banks and financial institutions to continue lending in the context of the credit crisis, lowering the cost of funds to these institutions and their borrowers. Households also strengthen their own balance sheets through increased saving. A lower household debt burden adds to disposable income and consumption. By increasing the availability of capital, an increase in saving by households supports aggregate spending and the investment opportunities that Keynesians wrongly believed to have been all but exhausted by the 1930s. It is hardly surprising that consumers and businesses should moderate their spending in the context of an economic downturn. But recessions are not made worse via increased saving, so long as the financial system continues to put that saving to work. By making capital more abundant and lowering the cost of funds, increased saving is one of the mechanisms by which economic growth is sustained. The 'paradox of thrift' is thus no paradox at all. What is individually virtuous is also socially virtuous. As the great 19th century French economic journalist Frederic Bastiat said, 'To save is to spend.” [or 'One person's savings are another person's borrowings and spending!'] But there is one sense in which governments do need to be wary of increased household saving. If households anticipate a higher future tax burden as a result of unfunded fiscal stimulus measures, then households will have every incentive to increase their saving to offset reductions in their future disposable income. Public sector [spending] dissaving [sic] would then be offset by increased private sector saving, leaving national saving unchanged. The irony is that fiscal stimulus measures may unintentionally promote private saving rather than spending, but with no benefit to overall national saving. This is why fiscal policy is generally ineffective as a demand management tool ['pushing on a string' as it were and having no effect] and there are very few historical examples of successful fiscal stimulus. [The other method to stimulate the economy is monetary policy, driving down interest rates to make borrowings - past and future - more affordable and increase disposable income to enable increased spending. But again in periods of severe economic slowdowns/recessions, with high employment uncertainty, people will often choose to hold off from any major purchases and reduce debt until the future is clearer.]" - Dr. Stephen Kirchner
A research fellow at the Centre for Independent Studies in Australia. Previously he was an economist with Action Economics LLC and Standard & Poor’s Institutional Market Services. He has lectured in economics in Australia at the University of New South Wales, Macquarie University and the University of Technology, Sydney. This article first appeared in the highly prestigious 'Australian Financial Review' on 13th January, 2009.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30958] Need Area: Money > Invest
"...You can be a successful long-term [value] investor irrespective of the short-term direction of the broader market by understanding and then employing some robust strategies for identifying good-quality businesses and establishing an estimate of their true worth or value. Indeed, you should be able to beat the market by simply owning a portfolio that excludes the worst-quality companies. Unfortunately, as I have so painfully experienced, even with the very best approach and tools, you can become unstuck if a company is not timely with the release of information about its financial condition or performance. What may look externally like a wonderful company the day you buy it, could turn out to be a few hours from announcing something horrible. For this reason, despite all of the evidence that suggests a concentrated portfolio will do best, you need to diversify. Don’t put your eggs in too many baskets but be very, very certain before you put more than 5 per cent of your portfolio into any single company. This article contains the recipe to ... assist in identifying great businesses, help you avoid the riskiest ones and generally navigate all market conditions with confidence... Your first job as an investor is to separate yourself from the market noise and develop the fortitude to ignore it. So turn off the television, the market reports on the radio and all of the daily updates and commentary about why the market went up or down today. Nobody really knows whether 'bargain hunters came into the market today' or not. This information is not very useful to you as a long-term investor in businesses. And that’s the key. You can either treat the sharemarket like a casino, focus on the prices of everything and speculate about whether the little pieces of paper will go up or down in the next minute, hour, day or week; or you can become an investor by treating the sharemarket as a place where you have the opportunity to buy a piece of some of Australia’s most impressive, fastest-growing businesses or those driving change in the competitive landscape of a sector. You will need only a few pieces of information and most of it can be gleaned from a company’s annual report. I know those last two words can be deflating. 'Annual Report' – that tome companies release every year about their business can be obfuscating and disempowering. But collecting five or 10 years’ worth for each company (you can do this online) will contain just about everything you need to determine whether the business is one in which the keys to long-term financial security can be found or not. -Read those executive letters:- Step one is to read in chronological order the letters from the key individuals at the beginning of the annual report the chairman and/or the chief executive. Read them in one sitting, like a book. What do the letters say? Are they written by the same person or has there been a revolving door at the top? If a revolving door, what do you think the staff at the business might make of constantly having to report to someone new or explain the business and maybe justify their roles over and over again? Do the letters trumpet the delivery of the promises that were made in the previous year’s letter or are they full of apologies and reasons why the promises were not met? You will learn a great deal about the company from conducting this simple exercise. I sometimes even create a little table and jot down in bullet points what the promises were and whether they were delivered, explained away or simply forgotten. CEOs have plenty of wriggle room. They can pull plenty of excuses out of the hat, such as blaming the competition, market conditions, the weather or something else, and some have a funny habit of shooting their arrows and then hastily painting a target around where they land. -Do some simple arithmetic:- Step two involves a little arithmetic. The first part is to calculate the cash flow and the second is to measure the company’s performance. There are a variety of ways to calculate what Benjamin Graham referred to in 1946 as a company’s 'showing'. The simplest is to look at the change in the cash and adjust it for capital transactions (both equity and debt). For example, if a company’s cash balance increased by $1 million from the start of the year to the end, where did the money come from? If the company borrowed $500,000 during the year and raised $500,000 from shareholders, both these changes would have raised cash. So the company really didn’t make a profit. Perhaps the company also paid $750,000 in dividends and bought a warehouse for $250,000. These are cash outflows and, depending on the nature of the business, the company appears to have made a million-dollar profit. An even simpler method is to subtract the balance sheet value at the beginning of the period from the end and adjust for capital transactions. For example, subtract capital raised, add back dividends paid etc, and for most entities you will get the actual earnings that were realised by the company over the period. A warning: this figure may be very different to the profit reported in the statement of financial performance! For some companies I avoided last year, the figure was a loss even though profits were reported under accepted accounting standards. -Look for a high return:- Profits are important, but profitability is even more so. Our first prize is a company whose cash profits grow, but it’s not so much the dollar of profit that we should be concerning ourselves with; rather the number of dollars required to be invested in the business to generate one dollar of profit. The measure I like to use [therefore] is Return On Equity. Quite simply, we want a business that can generate a very high return. Think of it this way: you can choose to put $100,000 into two bank accounts; one will deliver an annual return on your equity of 5 per cent or $5000, and the other will deliver 25 per cent or $25,000. Clearly, for the same investment amount, you would prefer the higher return on equity. As Mae West once said, too much of a good thing is wonderful! So a high current rate of return is desirable and we want a company with a demonstrated track record of strong profitability. But if history was the key to investing success, the names of historians would fill the rich lists of the world. As investors we are interested in likely future performance, and later I will touch on the questions to ask to determine what current rate of return is likely to be sustained... The third step involves an estimate of the company’s value. Here is a general rule of thumb that will set you on an educational journey that I am still on and enjoying immensely: If a company is likely to generate a cash return on equity of 15 per cent per year and you, as an investor, demand a return from your sharemarket investments of 15 per cent, or can achieve 15 per cent elsewhere, then you would pay no more than $1 for every dollar of equity in the balance sheet. In 2007, [The Australian supermarket chain] Coles had $4.3 billion of equity in its balance sheet and generated 27 per cent return. If you could buy Coles and believed that it would always generate 27 per cent, although you were happy with a return of half that (13.5 per cent), then you could pay double the equity on the balance sheet to achieve your desired return or $8.6 billion. So Wesfarmers must have been optimistic on Coles’ prospects [last year] to pay nearly $20 billion for the same thing you were only willing to pay $8.3 billion for. [or else it made a mistake and overpaid which will need to be written down later, possibly this year, reducing Wesfarmers' share price accordingly.] -Put it down in writing:- Step four requires you to make a few observations and write them down. For example, what is the equity on the balance sheet made up of? If the company has made acquisitions, it is likely to have recorded an item on its balance sheet called ‘goodwill’. The higher the price the company paid for another business, the higher will be ‘goodwill’. Odd that it is called goodwill, don’t you think? Perhaps ‘oops I paid too much’ or ‘hope’ might be better terms for this accounting entry. What about debt? If there is a lot, walk away. Or capital raising – does the business require management to constantly go back to shareholders and ask for more money? Has debt and new equity capital been rising what is the total borrowed and raised in the past five years? What is the incremental increase in profits from all this additional capital? As an example, airlines generally obtain a lower return on the additional money they raise and borrow than they could from simply depositing in the bank. Another thing to watch for is the payment of dividends. If the company pays an unfranked dividend in the same year that it raises capital, run a mile – management are either not acting in the interest of shareholders or are not aware of the unnecessary tax burden being produced. I could fill a book with other examples and may do just that, but for now I have you at least thinking about analysing a business and the cash that goes in and comes out. With many investors just looking at price-earnings (P/E) ratios and dividend yields, I would argue you are already way in front. -What are the company's prospects? - The final step in picking strong companies is probably the most daunting because there are no documents or forms or calculations. You need to think in a very unstructured way about the prospects for the business. Typically, as a company retains some of its profits, its equity grows, and as the amount of capital in the balance sheet rises, it becomes more challenging for a high rate of return on equity to be maintained. It’s the law of large numbers. You can’t keep growing at a high rate forever lest the company becomes the world. Ask the following questions at the beginning of the inquiry process. Will profits and cash flow grow? How big can the company be? Is the target market (the customer) growing or declining? Are there competitors and are they a threat to the company’s plans for growth? Who will dominate the market for the service or product in five or 10 years, and how and why? [Does the company have a secure competitive advantage or does it merely compete on price, which is less desirable]. It’s challenging to think about these things and for me sometimes even more challenging to have to ask CEOs their thoughts on the matter. But it is important because what we are trying to determine is what is the long-term sustainable rate of profitability? Ultimately this is what Warren Buffett is referring to when he says that he does or doesn’t understand a business. What will the competitive landscape look like for the business in the future? If you cannot answer this question or you don’t understand how the business makes its money, or you can’t understand the annual report, then sometimes the best action is no action. It’s hard to walk away from an investment when you have put so much work into it, but if you avoid a permanent loss of capital by not investing, the work has been worthwhile. A substantial fortune can be made in the sharemarket over a long period of time if you behave in a rational way. By avoiding the train wrecks and identifying sound companies trading at discounts ['a margin of safety'] to a conservative estimate of their intrinsic value, using the approach I have outlined, and with a healthy dose of the right temperament, any investor has the capacity to substantially improve their financial position." - Roger Montgomery
Chairman of Clime Capital and the managing director of the Australian fund management company, Clime Asset Management. Quoted from an article published on the Australian Stock Exchange website, January 2009.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30960] Need Area: Money > Invest
"The problem [the excessive real estate and share market boom and then massive crash], says [the highly regarded economist and share market forecaster] Gary Shilling, is the Fed[eral Reserve] has forgotten what it was created to do. He illustrated this by cranking the time machine back to the tenure of Martin, Fed chair from 1951 through 1970. In perhaps his most famous quote, Martin said that the job of the Fed is to 'take away the punchbowl [of low interest rates] just as the party [economy] gets going.' One would be hard pressed to find examples of punch-bowl taking in the most recent market run-up that fueled this current implosion. If anything, it spiked the punch, driven by political pressure. One example, Shilling notes, is that the Fed and other government regulators did little to staunch the endless flow of loans to people with bad credit. 'They were pretty much allowed to continue to do whatever they wanted with no regulatory oversight [especially regarding lending standards, eventually using loan to value and income ratios that were irresponsibly high],' he says. Marc Lowlicht, president of the wealth management division of Further Lane Asset Management, added that lenders felt free to engage in these risky practices because it was so easy to repackage this risk and sell it to the next sucker. Liz Ann Sonders, chief investment strategist for Charles Schwab & Co., said that even if the Fed was late to its own party there are at least signs that things are turning around for the better [now]. For example, Chairman Ben Bernanke has recanted the view, first expressed by former Fed head Alan Greenspan, that nothing can be done about bubbles in advance. One factor that could lead to better detective work, Sonders says, is if the Fed can take a step back from its sometimes myopic fixation on inflation. A more independent, less politically driven Fed? Martin would approve. For most of Martin's career, the Fed was known for its independence. One signal issue he championed was the removal of fixed price supports for Treasuries. Martin's career was going along swimmingly through the 1960s when it ran against the financially activist presidencies of John Kennedy and Lyndon Johnson. Johnson, in particular, broke Martin's will by making the conservative central banker finance his expenditures in Vietnam [war] with excess money, causing steep inflation by the end of the decade. [and major disruptions in commodity prices, share markets, interest rates, unemployment and GDP.]" - David Serchuk
Journalist with Forbes Magazine. Published in an article on the Forbes' website on 13th January, 2009.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30966] Need Area: Money > Invest
"The fact that the [Great] Depression dragged on for years convinced generations of economists and policy-makers that [free market] capitalism could not be trusted to recover from depressions and that significant government intervention [as prescribed by the pro interventionist big government Keynesian school of economic thought] was required to achieve good outcomes. Ironically, our work shows that the recovery would have been very rapid had the government not intervened. [with its New Deal, anti-capitalistic free market policies, which prolonged the depression by seven years. In particular, terrible economic damage was done by the government's efforts to fix prices and wages, increasing the power of monopolies - by reducing competion especially in pricing products and services, and increasing the power of unions to bargain collectively which resulted in uneconomic wages and therefore higher than necessary unemployment. Cole and Ohanian aren't alone in their conclusions. A 1995 survey of economists and historians published in the 'Journal of Economic History' found 'half of the economists and a third of historians agreed, in whole or in part, that the New Deal prolonged the Great Depression.]" - Harold L. Cole and Lee E. Ohanian
Both UCLA economists. In research published in 2004 by the Federal Reserve Bank of Minneapolis' Research Department, entitled 'New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis' To read the article go to [http://www.minneapolisfed.org/research/wp/wp597.pdf]
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30968] Need Area: Money > Invest
"'Atlas Shrugged': From Fiction to Fact in 52 Years: Some years ago when I worked at the libertarian Cato Institute, we used to label any new hire who had not yet read 'Atlas Shrugged' a 'virgin'. Being conversant in Ayn Rand's classic novel about the economic carnage caused by big government run amok was practically a job requirement. If only 'Atlas' were required reading for every member of Congress and political appointee in the Obama administration [to counteract the Keynesian economic theories that glorify and justify government interventions into capitalist free markets, and thereby the politicians that implement them, especially in recessions and depressions, even though there have been many studies, by reputable economists, that found they did much more harm than good]. I'm confident that we'd get out of the current financial mess a lot faster. Many of us who know Rand's work have noticed that with each passing week, and with each successive bailout plan and economic-stimulus scheme out of Washington, our current politicians are committing the very acts of economic lunacy that 'Atlas Shrugged' parodied in 1957, when this 1,000-page novel was first published and became an instant hit. Rand, who had come to America from Soviet Russia with striking insights into totalitarianism and the destructiveness of socialism, was already a celebrity. The left, naturally, hated her. But as recently as 1991, a survey by the Library of Congress and the Book of the Month Club found that readers rated 'Atlas' as the second-most influential book in their lives, behind only the Bible. For the uninitiated, the moral of the story is simply this: Politicians invariably respond to crises - that in most cases they themselves created - by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs ... and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism. In the book, these relentless wealth redistributionists and their programs are disparaged as 'the looters and their laws'. Every new act of government futility and stupidity carries with it a benevolent-sounding title. These include the 'Anti-Greed Act' to redistribute income (sounds like Charlie Rangel's promises soak-the-rich tax bill) and the 'Equalization of Opportunity Act' to prevent people from starting more than one business (to give other people a chance). My personal favorite, the 'Anti Dog-Eat-Dog Act', aims to restrict cut-throat competition between firms and thus slow the wave of business bankruptcies. Why didn't Hank Paulson think of that? These acts and edicts sound farcical, yes, but no more so than the actual events in Washington, circa 2008. We already have been served up the $700 billion 'Emergency Economic Stabilization Act' and the 'Auto Industry Financing and Restructuring Act'. Now that Barack Obama is in town, he will soon sign into law with great urgency the 'American Recovery and Reinvestment Plan'. This latest Hail Mary pass will increase the federal budget (which has already expanded by $1.5 trillion in eight years under George Bush) by an additional $1 trillion - in roughly his first 100 days in office. The current economic strategy is right out of 'Atlas Shrugged': The more incompetent you are in business, the more handouts the politicians will bestow on you [which is against capitalist free market theory which believes bad businesses and bad managers must be allowed to fail for the health of the remaining economy, just as gangrene must be cut out to save a patient's life]. That's the justification for the $2 trillion of subsidies doled out already to keep afloat distressed insurance companies, banks, Wall Street investment houses, and auto companies - while standing next in line for their share of the booty are real-estate developers, the steel industry, chemical companies, airlines, ethanol producers, construction firms and even catfish farmers. With each successive bailout to 'calm the markets', another trillion of national wealth is subsequently lost. Yet, as 'Atlas' grimly foretold, we now treat the incompetent who wreck their companies as victims, while those resourceful business owners who manage to make a profit are portrayed as recipients of illegitimate 'windfalls'. When Rand was writing in the 1950s, one of the pillars of American industrial might was the railroads. In her novel the railroad owner, Dagny Taggart, an enterprising industrialist, has a FedEx-like vision for expansion and first-rate service by rail. But she is continuously badgered, cajoled, taxed, ruled and regulated - always in the public interest - into bankruptcy. Sound far-fetched? On the day I sat down to write this ode to 'Atlas', a Wall Street Journal headline blared: 'Rail Shippers Ask Congress to Regulate Freight Prices'. In one chapter of the book, an entrepreneur invents a new miracle metal - stronger but lighter than steel. The government immediately appropriates the invention in 'the public good'. The politicians demand that the metal inventor come to Washington and sign over ownership of his invention or lose everything. The scene is eerily similar to an event late last year when six bank presidents were summoned by Treasury Secretary Hank Paulson to Washington, and then shuttled into a conference room and told, in effect, that they could not leave until they collectively signed a document handing over percentages of their future profits to the government. The Treasury folks insisted that this shakedown, too, was all in 'the public interest'. Ultimately, 'Atlas Shrugged' is a celebration of the entrepreneur, the risk taker and the cultivator of wealth through human intellect. Critics dismissed the novel as simple-minded, and even some of Rand's political admirers complained that she lacked compassion. Yet one pertinent warning resounds throughout the book: When profits and wealth and creativity are denigrated in society, they start to disappear - leaving everyone the poorer. One memorable moment in 'Atlas' occurs near the very end, when the economy has been rendered comatose by all the great economic minds in Washington. Finally, and out of desperation, the politicians come to the heroic businessman John Galt (who has resisted their assault on capitalism) and beg him to help them get the economy back on track. The discussion sounds much like what would happen today: Galt: 'You want me to be Economic Dictator?' Mr. Thompson: 'Yes!' [Galt:] 'And you'll obey any order I give?' [Mr. Thompson:] 'Implicitly!' [Galt:] 'Then start by abolishing all income taxes.' 'Oh no!' screamed Mr. Thompson, leaping to his feet. 'We couldn't do that ... How would we pay government employees?' [Galt:] 'Fire your government employees.' [Mr. Thompson:] 'Oh, no!' Abolishing the income tax. Now that really would be a genuine economic stimulus. But Mr. Obama and the Democrats in Washington want to do the opposite: to raise the income tax 'for purposes of fairness' as Barack Obama puts it. David Kelley, the president of the Atlas Society, which is dedicated to promoting Rand's ideas, explains that 'the older the book gets, the more timely its message.' He tells me that there are plans to make 'Atlas Shrugged' into a major motion picture - it is the only classic novel of recent decades that was never made into a movie. 'We don't need to make a movie out of the book,' Mr. Kelley jokes. 'We are living it right now.' " - Mr. Moore
Senior economics writer for 'The Wall Street Journal' editorial page. Published in the 'Wall Street Journal', January 9, 2009.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30969] Need Area: Money > Invest
"When investing in shares as a long-term investor rather than a short-term speculator, I cannot stress enough to also take the perspective of a business person. That means rather than just thinking about share price/earnings ratios and price charts, etc. to also think long and hard about the company's product/service demand and supply, units sold and profit margins, the value of assets and the cost of debt, etc." - Seymour@imagi-natives.com

Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30970] Need Area: Money > Invest
"The U.S. has been living in a situation of excesses for too long [before the current 2008-9 real estate, stock market crash and recession]. Consumers were out spending more than their income and the country was spending more than its income, running up large current-account deficits. Now we have to tighten our belts and save more [and therefore the current deleveraging - debt reduction and massive drop in consumer demand]. The trouble is that higher savings in the medium term are positive, but in the short run a consumer cutback on consumption makes the economic contraction more severe [threatening deflation]. That's the paradox of thrift. But [in keeping with Austrian economic theory] we need to save more as a country, and we have to channel more resources to parts of the economy that are more productive [rather than self-indulgent consumerism or speculation in real estate, shares, etc]. And when you have too many financial engineers and not as many computer engineers, you have a problem." - Nouriel Roubini
New York Economics Professor and consultant. Published January 7, 2009, in 'Business Week'.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30971] Need Area: Money > Invest
"Much like today [and the current stock market crash, credit crunch and deep recession], the Great Depression began with a stock-market crash and a melt-down of the financial system. Banks withdrew credit lines and the inter bank lending market froze-up. What turned this from a financial crisis into an economic disaster, however, was the compounding effect of [government interference in the capitalist free market with] terrible policy. The infamous Smoot-Hawley Tariff Act of 1930 was introduced by desperate US policymakers as a way of blocking imports to protect domestic jobs. Instead of helping workers, this worsened the situation by freezing world trade. At the same time policymakers were encouraging firms to collude to keep prices up and encouraging workers to unionize to protect wages, exacerbating the situation by strangling free markets." - Nicholas Bloom and Max Floetotto
Published RGE U.S. EconoMonitor, Jan 14, 2009.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

[Quote No.30972] Need Area: Money > Invest
"[Uncertainty in business and comsumers is not good for the share market or the economy. Why? Because] ... uncertainty makes firms cautious, leading them to pausing hiring and investment [and therefore employees and consumers, fearing layoffs, hold off making larger purchases]. This freeze in activity also reduces the reallocation of capital and labor across firms, leading to a large fall in productivity growth. Taken together, the freeze in the hiring and investment, and the drop in relocation, lead to a business cycle sized drop ... in output, investment and productivity growth after a rise in uncertainty. [which can be measured by increased volatility in the share market and low levels in measures of business and consumer confidence]" - Nicholas Bloom and Max Floetotto
Published RGE U.S. EconoMonitor, Jan 14, 2009.
Author's Info on Wikipedia  - Author on ebay  - Author on Amazon  - More Quotes by this Author
Start Searching Amazon for Gifts
Send as Free eCard with optional Google Image

Previous<<  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  
27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  42 43  44  45  46  47  48  49  50  51  
52  53  54  55  56  57  58  59  60  61  62  63  64  65  66  67  68  69  70  71  72  73  74  75  76  
77  78  79  80  81  Next Page>>

 
Imagi-Natives'
Self-Defence
& Fitness Training

because
Everyone deserves
to be
Healthy and Safe!
Ideal for Anyone's Personal Protection Needs
Simple, Fast, Effective!
Maximum Safety - Minimum Force
No Punches, Kicks, Chokes, Pressure Points or Weapons Used
Based on Shaolin Chin-Na Seize and Control Methods
Comprehensively Covers Over 130 Types of Attack
Lavishly Illustrated With Over 1300 illustrations
Accredited Training for Australian Security Qualifications
National Quality Council Approved