Tuesday, March 30, 2010

$1 trillion gap for states . . . ouch

States face a $1 trillion gap between assets in public pension plans and their obligations to retirees, a Feb. 18 study by the Washington-based Pew Center on the States said. Illinois borrowed $3.5 billion in January to finance its pension contribution, which led Moody’s and S&P to cut their ratings to the second-lowest of any state.

Friday, March 26, 2010

Uh oh for banks!

In a report published this month, Moody's Investors Service Inc. said that private mortgage insurers had rejected 20% to 25% of claims in recent quarters, compared with a long-term average of about 7%.

What this means is that loans that lenders have on their books which have defaulted and have not been written down because the lenders feels secure in the value because they have purchased mortgage insurance from an insurer like MGIC are really not properly valued. If the rejections are upheld, the lenders are going to have to write down more loans.

the state of the world of investing today

"a cynic knows the price of everything and the value of nothing" anonymous

Wednesday, March 24, 2010

Tuesday, March 09, 2010

Investing Advice from a real pro

"The world is a lot different now. Nobody with any brains buys an asset based on what it's done. All intelligent investors buy for the future." Bill Fleckenstein

Monday, March 08, 2010

Never plan to be on time

Always plan to be early. Late folks tend to have an aversion to waiting. They try to time their arrivals to the minute. If the drive to work takes 20 minutes and it’s 22 minutes before 9:00, the late person, rather than leaving the house, will continue reading the paper or cleaning the breakfast dishes until exactly 8:40. Of course, this kind of split-second time management rarely works.

The end of ignorance is coming

During a recent interview with Charlie Rose, Intel CEO Paul Otellini had some amazing comments on the future of computing. He also said that within 5 years everything is going to be on every device; you'll be able to access it all from your car, your phone, your personal computer, your TV. To which Rose asked, "What's going to become obsolete?" Otellini responded, "Ignorance."

Saturday, March 06, 2010

The problem with Greece, Germany and California

It's all about fertility and we have a developing problem too. The United States has a fertility rate of around 2.1, or just over two kids per couple (our politicians have done a really good job of mortgaging our kids future for them).

Greece has a fertility rate of about 1.3: 10 grandparents have six kids have four grandkids - i.e., the family tree is upside down. Demographers call 1.3 "lowest-low" fertility - the point from which no society has ever recovered. And compared to Spain and Italy, Greece has the least worst fertility rate in Mediterranean Europe.

read the whole story here

Tuesday, March 02, 2010

What were the real losses at Madoff??

By the end of his multi-decade fraudulent run, the final account statements (November 30 2008) issued to all his “clients” totaled the sum of $73.1 billion dollars. The people conned by Madoff believed they were worth a collective $65 billion dollars more than their accounts were worth. The initial amount of cash put up was $20 billion dollars, beginning in the early 1960s and continuously from there forward.

The bankruptcy court in this case has made the basic determination that the losses were ONLY the cash that was initially given to Madoff & Co. The extra $45 billion was a fictitious part of Madoff’s fraud. Therefore, it represents funds that were not actual investment losses, and are not covered by SIPIC insurance. So there . . .

Monday, March 01, 2010

The largest Tsunami ever . . .

Where was the largest tsunami in history recorded?

a. India

b. Philippines

c. Chile

d. Japan

In 1971 a wall of water 278 feet (84.7 meters) high surged past Ishigaki Island, Japan. It moved a 750-block of coral 1.5 miles (2.4 kilometers) closer to shore but did little other damage.

Sunday, February 28, 2010

a comment from Buffet

“At 86 and 79, Charlie and I remain lucky beyond our dreams. We were born in America; had terrific parents who saw that we got good educations; have enjoyed wonderful families and great health; and came equipped with a “business” gene that allows us to prosper in a manner hugely disproportionate to that experienced by many people who contribute as much or more to our society’s well-being. Moreover, we have long had jobs that we love, in which we are helped in countless ways by talented and cheerful associates. Indeed, over the years, our work has become ever more fascinating; no wonder we tap-dance to work. If pushed, we would gladly pay substantial sums to have our jobs (but don’t tell the Comp Committee).”

Friday, February 26, 2010

Even auto repair businesses are getting hammered

an anecdotal story from a blog I read . . . . . "My 16 year old daughter recently decided to see how fast she can drive on ice in her brand new car and learned a life long lesson. I took the vehicle to a local automotive repair facility that is professionally run and a very large facility. I spoke with the owner at length and she told me business was down 33% over the last 12 months. She thought her business was recession proof but that is not the case with this latest recession. She has been in business for over a decade and has never had a down year. The trend is for people to take the insurance money and not repair their cars. She told me to look around and notice how many dinged up cars are on the road these days. She also noticed a major trend towards $1000 deductibles versus $500 in order to save premiums. She really hoped things would turn around because her margins were down to 9% and asked what I thought. I didn't have the heart to tell her what I thought. Good news is someone backed into my car last night so I'll be giving her more business."

Sunday, February 21, 2010

Are the Greeks losing it?

"Greek opposition lawmakers said on Thursday that Germans should pay reparations for their World War Two occupation of Greece before criticizing the country over its yawning fiscal deficits.

"How does Germany have the cheek to denounce us over our finances when it has still not paid compensation for Greece's war victims?" Margaritis Tzimas, of the main opposition New Democracy party, told parliament."

This was during a debate in the Greek parliament on how to handle the Greek debt. And it was echoed by both the left and right political parties. Somehow they forgot about the German government paying 115 million deutschmarks in 1960, not a small sum back then. It seems that many Greek politicians are still in the denial stage of dealing with this crisis.

Saturday, February 20, 2010

The important quote from Tiger . . .

“I felt that I had worked hard my entire life and deserved to enjoy all the temptations around me. I felt I was entitled. Thanks to money and fame, I didn’t have to go far to find them.”

Friday, February 19, 2010

Actions speak louder than words

“I cannot hear what you are saying because what you are doing is speaking so loudly.”

Ralph Waldo Emerson

Thursday, February 18, 2010

Driving Safely???

The Highway Loss Data Institute data released in January is a study collected before-and- after crash rates in California, Connecticut, New York, and the District of Columbia, all of which ban the use of cell phones while driving. It also compared crash rates in nearby states without such bans. The data showed no significant changes after the bans were in effect, and no significant changes in states without the bans.
There are several possible explanations for these results, besides the obvious possibility that there is no connection between talking on a phone and driver attentiveness to driving. First, the bans may not be enforced very well, or at all. Second, there may be a ramp-up period before the word gets around that you can be penalized for using a phone while driving. But the study does raise concerns about the broader issue of driver distractions—and more of those are on the way.
Far more likely to cause accidents is texting while driving, given that most people need to look at their device while doing so. Nineteen states plus the District of Columbia and Guam now ban texting while driving—but those bans may show equally little effect if it turns out that enforcement is so difficult or spotty as to have practically no impact (as may well be he case for the cell phone use study).
Beyond texting is the growing proliferation of in-car devices to further distract drivers from keeping their cars in safe operation. Bill Snyder, in Computerworld (Jan. 25th) reported from the Consumer Electronics Show about “a new generation of devices that bring email, the Internet, and digital entertainment into our cars.” There were 380 exhibitors showing items such as mobile TV and high-speed Internet access for cars, some pitched to eager car manufacturers and others aimed at individuals, as after-market add-ons to their cars. In his article, “Dear Silicon Valley: Stay Out of My Car,” Snyder quotes University of Utah psychology professor David Strayer, as follows: “Listening to a short text message is probably okay. But trying to pay attention to a complex email is a bad idea; it overloads the driver.” Strayer’s research has found that only 2.5% of us are the kind of “super-taskers” who can carry out multiple complex tasks at the same time.

Gold

Today, IMF made a splash by announcing plans to sell the remaining 191 tons (about $7 billion' worth) of its gold.

Monday, February 15, 2010

Grubonics - Uppatacious

Uppatacious is a word Bill uses to describe someone who is way too found of himself and doesn't deserve to be that conceited. The person also does things to try to impress others for the sake of it and the behavior is obnoxious.

Thursday, February 11, 2010

Is The FDIC Killing Short Sales?

Unbelievable true story about what the FDIC is doing with foreclosures and why it's costing us a fortune and enabling others to make fortunes. Click here