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Don't Let Bulk Shippers Sink Your Portfolio... For Now
Oil Industry: Farewell, Good Old Days
it is a rising dollar that has caused falling oil prices. The world's need for oil will not diminish until a satisfactory replacement is functional.
In fact, prices will reverse eventually as drilling/production is temporarily
curtailed due to lack of credit financing for those enterprises. It may also follow that exploration/drilling activity will move over to cash- rich large cap integrated companies for the time being.
The U.S. Banking System is Effectively Insolvent
Real estate value is not a moment in time but decades of time. To drive our mortgage institutions to insolvency by this valuation method is self perpetuating and self defeating. Real property needs to be valuated based on something like a ten year average. Doing so will not only prevent premature insolvency but it will stop banks from giving out unsafe equity loans based on the highest value as well.
The criteria used for assigning real property valuation needs to be
reconsidered. The current method is fundamentally flawed, but
it is carried forward in an effort to provide transparency and honesty.
However, it is a fundamentally flawed concept to apply it as the primary
criterion for institutional health. American society allows its regulators to move from one extreme to the other -- from making decisions based
on non disclosure to making them based on full disclosure as though
financial markets can survive the transition following the same set of valuation rules. At the very least, we can say a home is not really valued until it is sold.
Nose Cut Off, Face Spited, Now What?
Real estate value is not a moment in time but decades of time. To drive our mortgage institutions to insolvency by this valuation method is self perpetuating and self defeating. Real property needs to be valuated based on something like a ten year average. Doing so will not only prevent premature insolvency but it will stop banks from giving out unsafe equity loans based on the highest value as well.
The criteria used for assigning real property valuation needs to be
reconsidered. The current method is fundamentally flawed, but
it is carried forward in an effort to provide transparency and honesty.
However, it is a fundamentally flawed concept to apply it as the primary
criterion for institutional health. American society allows its regulators to move from one extreme to the other -- from making decisions based
on non disclosure to making them based on full disclosure as though
financial markets can survive the transition following the same set of valuation rules. At the very least, we can say a home is not really valued until it is sold.
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Why This Bailout Can't Work - And What Will
Real estate value is not a moment in time but decades of time. To drive our mortgage institutions to insolvency by this valuation method is self perpetuating and self defeating. Real property needs to be valuated based on something like a ten year average. Doing so will not only prevent premature insolvency but it will stop banks from giving out unsafe equity loans based on the highest value as well.
The criteria used for assigning real property valuation needs to be
reconsidered. The current method is fundamentally flawed, but
it is carried forward in an effort to provide transparency and honesty.
However, it is a fundamentally flawed concept to apply it as the primary
criterion for institutional health. American society allows its regulators to move from one extreme to the other -- from making decisions based
on non disclosure to making them based on full disclosure as though
financial markets can survive the transition following the same set of valuation rules. At the very least, we can say a home is not really valued until it is sold.
Why This Bailout Can't Work - And What Will
"It is no more realistic to valuate real property at zero [or nearly zero] worth because of a frozen market than it is to assign it value at its historicaly highest price, [whether] estimated or actual. A more realistic and practical measure of worth could be obtained by figuring an average over ten years or assigning a mean figure for that term. Value of almost any asset cannot be measured solely by one moment in time.
The FASB directive to mark to market at the latest and (in this case) the lowest price should be modified. Putting accountants in charge of the economy is just as dangerous as putting attorneys in charge of medical practice.
A program to help resolve the financial crisis by allowing federal acquisition of distressed assets at premium prices in order to inject liquidity into the banking credit system is a tacit admission of the inadequacy of the traditional FASB ruling. As excess inventory in the housing market is worked off in the next few years valuations will eventually return to normal and will climb higher than the premium prices paid by the federal program for those assets. That occurence will then validate the recommended change in FASB directives for real estate.
Don't Be Fooled - Short Selling Restrictions Do Work
The question is to whom do they sell? Only the market makers? How much inventory can market makers absorb? My question is what prudent fund manager would invest in finance equities if he cannot hedge his position by protective puts? A spread of long financials and short the Dow or something like that will not meet the protection requirement standards of many mutual funds, pension managers and conservative investors of a large scale. Consequently, it seems to me that suspension of short sales removes .buyers from the market, creates considerable slippage in volume, and in the long run leads to lower capitalization. In so doing it also contributes to more rather than less volatility in the finance sector. I have big gaps in my Economics and Markets 101 education, so maybe I am entirely off base on this, but if so I would like to be corrected by those who kjnow better.
Read It and Weep for the USA
The Only Chart True Investors Need to See
tip) at a major hotel restaurant in New York City (evidenced by my
parents' scrap book).
Is Amazon.com Really Worth Over $70 a Share?
content sources, and if the device, itself, is constantly improved
and upgraded with bluetooth interface to various smart phones
without morphing into yet another laptop there would be every
reason for ever higher valuation on AMZN. The outcome rests on the shoulders of AMZN management.