Lessons On Shareholder Activism

Carl Icahn shares his thoughts on shareholder activism in this Times article.

Noteworthy Articles of the Day

- Running to US treasuries for safety? This article reiterates what Warren Buffett highlighted in his most recent letter to Berkshire Hathaway shareholders. In two words - think again.
- Do banks have more to write-off? The table in this article suggests that the answer is yes.

The Inevitability of Bubbles

How predictable is human behavior? Read this and you'll see that the answer is "very".

The Case For Fiscal Expansion

This article takes a good look at Japan's case.

A Chart Speaks A Thousand Words

This chart is courtesy of a Doug Short.

Stopping Foreclosures

One of the most recent plans of the US is to stem foreclosures by lowering homeowners' liabilities to banks and, in effect, hopefully, increasing their incentives to meet their debt obligations. Here are some of the issues related to this measure.

Companies that grew inspite of contraction

And Another One

I never thought that an economic crisis could originate and popularize so many new acronyms - TARP, TALF, CDS. The funniest one yet is EBITDO which I happened upon here.

This Just In

This guy cracks me up!

This Just In

This guy cracks me up!

Debates

I'm somewhat pleased to say that my latest article in Seeking Alpha is causing a stir. I might just learn something from it.

Cover Up?

Could there really be forces that aim to restrain the media? Reading about protectionism in the US and this censorship issue makes me think that the West is starting to look more and more like the East.

Losses Today For A Chance At Tomorrow?

This interesting article in Bloomberg suggests that writing off loans could help stop the defaults.

eBay's MOAT - Seeking Alpha

A Little Bit Of Remorse?

During the campaign season, the left-leaning Times was clearly for Obama. McCain can't seem to do anything right then. Imagine my surprise when I read this article that gives some merit to John McCain. (FYI - I was a John McCain supporter up until the drafting of the Soccer Mom to the team. Like him, I believe that more often than not - but not absolutely always - governments should keep their noses off industry/business development.)

Don't get me wrong, I always thought that President Obama (knock on wood) would probably prove to be, at least, a decent leader. But I knew from the very beginning that he wasn't perfect. If you managed to get over his immediate appeal, you'd have realize that he had questionable positions on some matters - protectionism for instance.

On Jim Rogers and False Statements

Jim Rogers most likely is a capable investment manager. He is extremely lucky to have gotten all the way to the top and to have stayed there for a long time if he is not without skills. Obviously, he has made a lot of right calls.

It doesn't necessarily follow that he is always right though. Insisting that he is always right is like saying, "well, Annie was correct when she said that it will rain today. Therefore, she can never make a mistake when predicting weather."

Many seem to be arguing on the same lines for Jim Rogers' questionable position on the current US crisis without thinking about the issues thoroughly and objectively.

Yes, he made some good points. Rescuing failed institutions comes with consequences - people who deserve to suffer might get away with their irresponsibile actions. His call to buy commodities will also probably be proven right down the road.

But his statement below is simplistic in my opinion:

What would I like to see happen? I'd like to see them let these people go
bankrupt, let the bankrupt go bankrupt, stop bailing them out. There are
plenty of banks in America that saw this coming, that kept their powder dry
and have been waiting for the opportunity to go in and take over the assets
of the incompetent. Likewise, many, many homeowners didn't go out and buy
five homes with no income. Many homeowners have been waiting for this, and
now all of a sudden the government is saying: "Well, too bad for you. We
don't care if you did it right or not, we're going to bail out the 100,000
or 200,000 who did it wrong." I mean, this is outrageous economics, and it's
terrible morality.

I do not understand why it is so hard to see that the half who do not deserve to suffer will get punished too if the other half is allowed to die. Faulty financial institutions, on their way to hell, will surely drag an unquantifiable many.

Counter-parties of these inferno-bound institutons will get hit hard. They will bleed cash as their creditors and other counter-parties start calling their positions. If these institutions even manage to survive, it will not be without massive layoffs. These side-swipe victims will add up to the unemployment count alongside those who have been cut from already defunct financial institutions.

And there's no question about it - the rise in unemployment will surely have an impact on other parts of the world economy.

This is the picture we're looking at if Jim Rogers had his way. He seems absolutely sure that this outcome, where the innocent is punished along with the guilty, will be better than the present actions of Pres. Obama, where he aims to save the innocent at the cost of letting the guilty off.

To me, on his stand on the current crisis, Jim Rogers is like a guy who, after being asked to compare the count of grass in his farm with the farm adjacent to his, says, "the count on my farm is surely higher - because I said so."

FIGHT!

Greg Mankiw and Paul Krugman, two of the world's most respected economists, clearly have issues to settle. On the issue they are arguing about - post recession growth tendencies, yet again, I'm agnostic.

On a side note, I like Greg Mankiw's 'put your money where your mouth is' attitude. And on another side note, I wonder who'll win in a fist fight.

Regulating Derivatives

Protect Counter Parties

Get Healthy Banks to Lend

The Goal Is Not Approval