Alex_G

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  • GMAC, the Fed, and Moral Hazard
    "Since GMAC now has access to Fed liquidity, there might be some way in which it can start buying up those bonds and cancelling them. But even that would consitute a rescue of holdouts who don't sell at these levels and just hold on to their bonds."

    That's exactly what Morgan Stanley did, adding $2.5bln in capital by buying 12bln of their bonds back, using funds obtained by issuing FDIC backed bonds.

    If GMAC can buy back their bonds at 50 cents on the dollar in the open market, management has a responsibility to do it. Every dollar of par value they buy back would add 50 cents to regulatory capital.

    The more GMAC can buy back, the better chance they have at surviving, which helps everyone involved.

    Why would this be a bailout of the people who don't sell their bonds at distressed levels? They have a choice to hold or to sell.
    Dec 30 16:13 pm |Rating: +1 0 |Link to Comment |View article
  • Investing in Deflationary Times
    LilBob,

    Have you thought about buying Ford debt? Longer, high coupon senior unsecured can be bought around 20 cents on the dollar. If for survives 2.5 years, you've made your money back, the rest is pure profit. If they do reorg, you will own the stock anyway.
    Dec 24 00:55 am |Rating: +1 0 |Link to Comment |View article
  • Greg Mankiw: Swap the Payroll Tax for a Gas Tax
    Great idea, wrong target. The more workable is to initiate a large gas tax, then increase the dollar amount in each tax bracket. This gives the tax back instantly to every tax payer, who can then decide to save the tax break by using less fuel, or spend it on the more expensive gas.

    We have seen gas usage go up since the price has come crashing down.

    Raising the price and giving 90% of the tax back would keep the money in the US, providing a GDP multiplier, and would reduce world demand, which would keep the base price of the input low. Use the other 10% to fund alt energy research.
    Dec 14 21:55 pm |Rating: +1 0 |Link to Comment |View article
  • Inflation? Don't Hold Your Breath
    Yes, CNN, NYT and WSJ are "questionable sources."


    On Dec 04 01:46 PM anarchist wrote:

    > How can this drivel get into Seeking Alpha? Two paragraphs making
    > a prediction of enormous consequences based on a couple of articles
    > found in three questionable sources.
    Dec 04 18:36 pm |Rating: 0 0 |Link to Comment |View article
  • Four Ways to Invest in Bottom-Basement Gold
    Jeff,

    Can you please explain your statement below, using the following statistics:

    1) Source of funds added to money supply

    2) Actual money supply growth, including M1 to M3

    3) Compare the current banking crisis to Norway and Finland's.

    Thx,

    Alex


    On Nov 17 10:37 AM Jeffrey Nichols wrote:

    > The following is from my November 12th post on NicholsOnGold.com:
    >
    >
    > The United States Treasury and the Federal Reserve are throwing a
    > trillion dollars, more or less, into the banking system. And, there’s
    > surely much more to come.
    >
    > It’s not only the U.S. monetary authorities pumping up the money
    > supply. Their counterparts in every major economy - including the
    > United Kingdom and the Euro zone, China, Russia, Japan and on and
    > on - are doing likewise.
    >
    > We have never - in the history of money - seen such an expansion
    > in its supply without, after a period of time, a rapid deterioration
    > in its value, in other words, without a rapid increase in the overall
    > price level. More than any other factor influencing the gold market,
    > it is the inevitable rise in price inflation that will propel gold
    > skyward in the next few years.
    >
    Nov 17 19:18 pm |Rating: 0 0 |Link to Comment |View article
  • Commodities Dropping to 52-Year Low
    Old Trader,

    Producers buy the commodity. Buying less of the end product reduces the price of the input.

    High gas prices increased the price of corn (in theory), which increased the price of a subsitute, wheat.
    Nov 03 19:55 pm |Rating: +1 0 |Link to Comment |View article
  • Relief Is on the Way
    Jack,

    Your average household savings look to by high by at least 2X, and prob more like 4X. can you please post your sources on the #s?
    Oct 30 18:19 pm |Rating: 0 0 |Link to Comment |View article
  • Ignore the Hype - Gold as Currency is Dead
    SW,

    Then you were around for '29. Way to live so long. USA was an emerging market when we were on the gold standard.

    Pro market doesn't mean you have to be reckless. Balanced mix of growth stocks (to be lightened at high valuations) and Muni's, never use leverage, and you'll be fine.

    I've read a few of your other posts. Must be miserable to be that negative.
    Oct 28 20:42 pm |Rating: 0 0 |Link to Comment |View article
  • Ignore the Hype - Gold as Currency is Dead
    Pro gold=pessimist

    pro market=optimist

    I know many wealthy people that are optimists, only a few that are pessimists, and they were optimists when they made their money.
    Oct 28 18:36 pm |Rating: 0 0 |Link to Comment |View article
  • Cheap Crude: A Flash in the (Oil) Pan
    I hate to say it, and people will jump on me for it, but the obvious solution is to raise Federal gas and diesel taxes. A lot. This does 2 very important things:

    1) Provides much needed money for mass transit and infrastucture projects and

    2) Helps keep demand down in the US, which uses 25% of the worlds oil output, mostly for transportation, which will keep oil prices much lower than they would be otherwise.

    I would much rather have the money flowing to the Treasury in the form of fuel taxes than to the middle east in the form of higher fuel prices.

    Because this would be such a regressive tax, maybe we could use the extra tax money to stretch out the 15 and 25% tax rates.
    Oct 26 21:15 pm |Rating: 0 0 |Link to Comment |View article
  • 14 Beaten-Up Financials That Now Offer Real Value
    All of these banks have their call reports avail on the FDIC.GOV site. Page 15 will tell you what they have in single fam construction and land loans. Then go and find out what housing and land prices have done in their footprint in the last 2 years. Do the math and see if they will make it or not.
    Oct 26 11:40 am |Rating: 0 0 |Link to Comment |View article
  • Is This the Last Great Bubble?
    Mark,

    M3 has been contracting at a very rapid rate. The fed has not been "printing money", as you say. They are issuing low cost debt to buy potentially high return assets. They are expanding the balance sheet, not issuing debt and spending it.

    Also, using your logic, Japan would be now where you predict the US will be. their country debt is 170% of GDP, up from almost 0 in the late '80s, are projected to lose 2/3rds (yes, 2/3rds !!) of their population by the end of the century. With foreign reserves at less than 1/7th of national debt, they are much less likely to be able to pay back the debt. Their 30 yr bond is at a 2.25%.

    Alex
    Oct 25 06:38 am |Rating: +1 0 |Link to Comment |View article
  • Is This the Last Great Bubble?
    Nick,

    Can you tell us why the long TSY bubble will burst?

    thx,

    Alex
    Oct 24 16:36 pm |Rating: 0 0 |Link to Comment |View article
  • Fear Strikes Out: The Fractured State of the Corporate Bond Market
    John,

    I can't find any info on the National Rural Utilities bond deal, do you have any other info on the deal, cusip, etc?

    thx,
    Alex
    Oct 23 20:48 pm |Rating: 0 0 |Link to Comment |View article
  • Why Gold Will Rocket
    Gold is a store of value, nothing more, nothing less. It is a hard asset when your currency is in trouble. Investments provide growth in the intrinsic asset, a growing business, dividends, interest payments, etc.

    If you believe gold will go up from here absent an inflationary environment, you should sell your house, stocks, bonds, everything that an economic nuclear winter would touch, buy guns and ammo, and build a defensible fortification in the mountains, because life as you know it is coming to an end.
    Oct 23 19:00 pm |Rating: 0 0 |Link to Comment |View article

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