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aa3

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About aa3

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    HPC Guru
  1. I'm not sure how much our elites want those talented aspiring people to stay. There is only so much room at the top, and its reserved for their kids. Its terrible but if you were an elite you would probably be glad to see a bunch of smart young men leave, and maybe get a bunch of underclass immigrants in their place.
  2. Its too radical right now. But eventually to come out of winter we will need this thinking. Alas winter usually lasts 25 years in the cycle. 25 years from now people will all agree this is the obvious answer and they knew it all along. Where I would critique him is about taxing the rich more. In most of Europe the rich are taxed hard, yet they are in the same or worse situation as America. Instead of arguing for hammering the most successful, nations should ease the burden on most people. In the US they are doing this to some level, there was a 25% cut in the social security tax, which was a stimulus of ~150 billion USD per year. There also is Obamacare which will provide subsidization of health insurance to a broader portion of the populus. This is where right wing political parties could one day win support. While the left of course will argue for complex new government spending programs with the new QE money, the right could argue for tax relief on the middle class. If Romney had offered a huge middle class tax cut, it would have given people a reason to vote for him. And if he doesn't support Obamacare, offer subsidization of their private health insurance plans. But they essentially ceded the field by offering nothing. The Tories actually came in and raised taxes on middle class people, eg.. the VAT increase. Anyway we know the answers but it could be a long time before people come around. They almost have to try all the old ideas several more times until they finally just give up or retire.
  3. Look at these numbers of global PC sales: http://en.wikipedia.org/wiki/Market_share_of_leading_PC_vendors 1996: 70mil 1997: 80mil 1998: 92mil 1999: 113mil 2000: 134mil (Intel & friends share price peaks) 2001: 128mil (tech wreck, people calling the top) 2002: 132mil 2003: 168mil 2004: 189mil 2005: 218mil (death of the pc called) 2006: 239mil 2007: 271mil 2008: 302mil (PC pronounced dead with rise of alternatives, global 'great recession') 2009: 305mil (depths of the recession, outlook bleak) 2010: 351mil 2011: 352mil 2012: 352mil (post mortems written on the PC industry, what went wrong, now replaced by the smaller devices)
  4. That might happen but compare the difference for the shareholders up until the present. Ford's stock is worth 50 billion right now.. actually higher than 10 years ago. GM shareholders lost everything. Granted the new GM is looking good, but that doesn't help the old shareholders.
  5. I have a contrarian view on computers.. I don't think desktops or laptops are going anywhere. I understand laptops in that they are portable.. but the smaller devices have limited screen size and you cannot easily type or use a mouse. Imo what will drive the desktop market is when gaming makes an eventual comeback to prominence, and you just need the power of a desktop to play the latest game.
  6. Public capitalism is gradually failing. Publicly owned companies are always going to be around, but year by year companies are going private. Dell wasted over 20 billion USD buying its own stock to appease short-sighted shareholders. As the stocks declined in value most of that money was lost. Imagine if instead they had invested in increased research and development. Dell spends less than 1 billion a year on R&D. Or simply built up retained earnings to be debt free, and maybe buy failed companies' technologies. But those are long term strategies. They pay off over many years of careful, consistent management. Not the quarterly gains speculators are looking for. The one reason I view Dell as salvageable is that through it all Michael Dell kept controlling interest. So as it started to fail he stepped back in. Its comparable to how GM and Chrysler went bankrupt, while the family controlled Ford survived.
  7. I think we should stop even referring to the particular stripes of the politicians, and just call them 'the party'. Dividing ourselves into support of one group just divides us. It wastes energy of people thinking that by supporting one or the other things will change.
  8. Not many people in the blogosphere understand that point. If the bankruptcy process had been allowed to play out, shareholders would lose everything, then depositors then the bondholders by order of seniority. The bankruptcy trustee would have auctioned off the loan book. If a hedge fund picked up a loan book for say 10% of the face value. They would call up the borrowers and say if you can come up with 20% of the face value the loan is forgiven. The borrower would then go to a new bank and come up with that lower amount. It wouldn't have been the paradise where dutiful savers are rewarded and borrowers punished. As someone who saves, I still was in favour of that whole process playing out. As now we have a zombie economy where you can't lose, but you can't win either.
  9. aa3

    The Sumo Japan Qe Thread

    From what I have read the road construction owners are very politically powerful. Sad that they don't do something like beautiful brick work on the river side.. it is labour intensive which makes it ideal. I think the problem has been the size of the various stimulus packages they have done. This one is said to be one of the bigger ones, it is just over $100 billion. A lot of money, yet only 2% of Japanese annual GDP. To give a comparison, look at the war spending during WWII, that lifted the US out of a deep economic depression. It was about 30% of gdp for five straight years - so overall stimulus 150% of gdp. Or even the recent Chinese stimulus when the great recession started, which amounted to 20% of Chinese annual gdp. In that light this recent Japanese stimulus plan is only 1/75th the size of the US world war 2, 'stimulus' plan. I think a factor on why Japan has been relatively cautious with the stimulus is that things just aren't bad enough yet. As long as things tick along the political will never builds to risk it all. For the USA in WW2 there was no one could stand against war spending politically. The growing chatter in Japan I believe is because a number of their great corporations, national champions are now going to the wall.. and they are feeling weak militarily. But I still don't see the will to risk it all.
  10. Ah hit by snow in winter again.. if it wasn't for snow in winter they would have hit the targets. So you can't blame the political leadership for this failure. Last year summer got us with hot summer days keeping people outside enjoying the weather, instead of shopping. I remember one of your threads.. the rains in fall kept people indoors and depressed what the numbers 'would' have been. If I remember excitement of the royal wedding kept people out of shops during Spring. Of course the real problem is what redcellar is saying, the economy has been in decline for a long time, noticeably falling after 2008. Its hard to imagine today but in the 70's an average man, in an average job could support a whole family, and still have money left over to save. One day, many years from now we'll know the economy is growing when they manage expectations with something like: Realize it was a mild winter so the numbers might overstate the growth.
  11. aa3

    The Sumo Japan Qe Thread

    Politically it is a lot harder than one would think to spend massively in stimulus. For example export companies are not eager to see the government begin pushing wages internally. They are quite happy with a state of high unemployment and depressed incomes. Local government is not eager to see the national government spend more and thus expands its power. Various ideologies such as fiscal conservatives and libertarians do not want to see expansion in the government which the funding will bring. Each society also has a carefull constructed hierarchy of incomes. The status/class system. So whenever additional funding is proposed, millions of people who feel their social status would be lessened relative to other people, feel threatened by it and work to oppose it. In communist China when they hit the wall in 2008, they simply ordered a $1.2 trillion dollar stimulus program. This when their economy was about the same size as Japan's.
  12. aa3

    The Sumo Japan Qe Thread

    $100 billion in stimulus is a good small start. It seems the new prime ministers words have been the main thing driving down the Yen so far. Basically all the prime minister has to do is get the ball rolling and then allow the private sector debt expansion to run. Japan isn't like the West where the private sector balance sheets are out of control with debt. The national debt is problematic in a shrinking economy, with a deflating currency. But once economic energy and vitality returns and the currency is gradually inflating.. then the debt fades away as a problem. Economies go through cycles that last about 60-80 years. From spring, to summer, to fall, to winter. The winter is the debt deflation, asset depreciation, general deflation period. Japan has been in winter for 23 years now, and soon will emerge into spring. The UK is just at the start of winter. Just as Japan showed us exactly what policies would be implemented at the start of our winter.. so too can we look forward to how Japan will emerge from winter, 20 years from now we can implement the same policies. I figured we would copy Japan as we went into our winter, yet when it arrived I got all scared second guessing the policy decisions that would be made, and didn't place bets on the same happening here. http://www.martinfrost.ws/htmlfiles/aug2008/kondratieff_cycle.html SPRING - Inflationary Growth Phase A common premise among business cycle economists supposes inflation as an inevitable part of growth. Government becomes a passive participant in the inflation cycle. Growth begins from a depressed economic base and expands in an ever-increasing spiral. The interaction of the participants within the economy causes wealth, as represented by savings, and the production of capital equipment to be accumulated for the future. The expansion of production and affluence causes prices to rise, and the increased volume of goods requires a higher velocity of money, thus creating a higher price structure. Historically, the growth phase requires 25 years to complete. During this time, unemployment falls, wages and productivity rise and prices remain relatively stable. The mood of the growth phase is one of accumulation and the desire for new product manufacture. Accompanying growth is a shift in social demands. As wealth is accumulated and new innovation introduced great upheavals and displacements take place. The process of social unrest builds with growth culminating in massive shifts in the way work is defined and the role of the participants in society.
  13. The government is already following this plan when it comes to water, electricity, land and oil. And it is working for their aims. If you want people to use less of something, raise the prices. Food is just the next logical area to start really increasing the prices. As long as they do it for green reasons, the people will widely support it.
  14. The Japanese plan of using QE to bailout banks and failing corporations seems very poor compared to bailing out households with something like lower taxes. They have £175 billion a year in free money to play with. At a minimum they could have dramatically reduced all tax on income and capital gains. Considering the total tax take of the national government is £500 billion, you get a picture of the scale of tax cutting that could have happened. Instead the Tories came in and raised taxes. The US took a bold move and reduced individual social security tax by 25%. That was an average tax cut of $2,000 for every family. To make work pay the Tories could have followed that example, plus dramatically raised the threshold before people pay income tax, plus increased the working tax credit.
  15. Don't get me wrong, I am glad to see people getting wiped out who made bets that turned out wrong, and were overextended. Modern Brits believe they should have the rewards of investment without the risks. Which is impossible, you can't have yin without yang. The key two words in your post are overextended and buying overpriced. Someone playing in the London market right now, where there is little relationship between rents and house prices, is playing a dangerous game. They could see wild appreciation or rapid falls, wiping out their capital. The North of England looks a better bet. Say a future rentier putting 35% down on a home rented to social housing people, where the rent covers all costs for the rentier. No cash flow, just a break even. As long as they have the deep pockets to just sit on it, it seems a strong that the rent will pay off the 65% loan to value loan over say 30 years. Remember also we are always talking on this forum about Henry George's point that all wealth of a city accumulates to the landowners. Well my specialist doctor with 40 properties is looking good if Henry George's point holds up. If it doesn't and the value of the home merely holds its real value in the face of inflation, the rents over time are a nice steady income on his capital. With the value of the capital increasing with inflation. It sure looks better than savings accounts when you are losing money from day one when inflation is factored in. And stock and bond markets look even shakier than real estate.
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