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julius

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Everything posted by julius

  1. julius

    GOLD

    Yes, I am very skeptical of all the hullabaloo about the gold apple watches. The math doesn't add up. Either there's not going to be much gold, or you have to be convinced that $10k watches that will be obsolete in 2-3 years will sell like hotcakes. Speaking of King World News, are they still doing their podcasts? The RSS feed went dead. I see at least they've revamped the website.
  2. Thanks, I wish I had seen this a few days ago. I'll look out for this when it's trading.
  3. I would think a few times before hosting 100kwh of batteries in my basement, particularly of an untested technology. That aside, obvious this is a rather prospective area for research and batteries could be hosted more centrally as well.
  4. Yes, and many of the pictures you have posted are beautiful. One unfortunate thing is that these communities frequentely bring along the HOA baggage and can make gardening annoying and having animals impossible.
  5. I'd like to see a greater diversity of housing types in general - currently, it's a herculean effort to build something not envisioned by the local zoning codes. I would point out that many folks do like to live in less dense communities and the major thing that would change their minds is going to be the cost of such an option. Higher gasoline prices will definitely be a factor there, but increased telecommuting could counterbalance that.
  6. julius

    MAJOR DERIVATIVE MELTDOWN ALERT

    Argentina's economy is very cyclical, both due to the dependence on commodities and the completely idiotic government. (Though those of us in more "developed" countries probably shouldn't feel too superior on the latter front.) But neither of those things is really a major negative for visitors, particularly if your destination is outside of BA. Casey and Bonner weren't starting a bank, but rather a resort, and if the Argentine government wants to destroy the financial system and make things even cheaper for people with currencies other than the peso, that's not good for the citizens of Argentina but it's probably a wash for people interested in vacationing there. That would all be more comforting if I thought the governments of the West were more ethical than the Argentine one, as opposed to slightly less brazen or less desperate. We may yet see nationalization in some form of privately held retirement portfolios in at least the US.
  7. julius

    MAJOR DERIVATIVE MELTDOWN ALERT

    Estancia de Cafayate I've been to the area. It is extremely remote, pretty, and thinly populated. Nothing like Buenos Aires.
  8. julius

    MAJOR DERIVATIVE MELTDOWN ALERT

    The macro structure of the USSR economy was far more damaged. There is still a lot of room for free enterprise in the US, even now, and still some productive activity. If permitted by the various governments that can mitigate things considerably. If not (price controls, etc) things could get quite exciting.
  9. I think that $188 billion is an average over the week, not per day, though the wording is confusing. http://www.usatoday.com/money/economy/2008...k-lending_N.htm
  10. julius

    Prepare for Deflation

    Could you clarify what you mean by this? Debt implies that someone owes someone else something, and since modern currencies are not redeemable, I do not understand "debt" in this context.
  11. Well, all of this is highly regulated, and regulated markets are in general inefficient. I don't personally know if there is skulduggery beyond the regulation. In the US, you can opt out by using a cash account, though I believe that also means you can't trade stock options. The argument for shorting is that is helps the price of the shares reach equilibrium sooner, and that seems plausible to me. Note that ordinary shorting has very substantial risks such that if you are not good at it, you are going to go broke. And if you are good at it, that would imply your negative opinions of companies at certain prices were correct. As for the brokers - the ones I referred to specialized in small-cap stocks, mostly resource. They have also heard all the excuses incompetent management can give for the poor performance of the stock prices of their companies.
  12. julius

    Prepare for Deflation

    I am not sure I completely understand what you are saying here, but let me try approaching this slightly differently. Central bank rates are one step removed from the actual operations central banks do, in that they set a policy rate and then buy and sell some kind of bond - generally government bonds - to maintain that rate. To the degree that the market is already where they wish it to be, they do nothing. If rates are above, then they buy bonds, which increase their prices and lowers the rate, until the desired effect is achieved. If below, they do the opposite - sell bonds until the rate is high enough. There are two interesting things here: first, any money they spend in this process they create, and any received is destroyed. Second, these processes are asymmetric in that there is no limit to how much money may be created, but any given central bank has only so many assets to sell. (Bernanke made this point in his speech on deflation on November 21, 2002.) This is not the only way to create money, but the money thus created is "high-powered" money and may be pyramided on many times through fractional-reserve banking. (Central banks do have tools to control that such as reserve ratios and other regulatory powers.) Now, those of us who are not a fan of fiat currencies are generally concerned about them for some set of the following reasons: 1) The history of fiat currencies indicates that they are bad as a store of value. 2) The attempt to manage the business cycle is either unhelpful in moving towards the goal of eliminating the business cycle, or is the cause of our current severe business cycles. (See Austrian business cycle theory for one view on this.) 3) The ability of the central bank to inflate indefinitely, in concert with its lender of last resort powers, has has created significant moral hazard and postponed the reckoning for various bad practices of today's citizens and governments. 4) The temptation of inflating away the liabilities of governments and citizens will only grow greater as the situation deteriorates. The reason many then turn to gold is that it cannot be created by governments, it is reasonably scarce, portable, and so forth. Depending on how one holds it, one may not also depend on a corporation, government, or other entity honoring its promises. (Though of course governments can and have banned it.) Now, countering some of the prior facts is the potentially deflationary effect of debt destruction, recession, and perhaps a depression. The question is whether we will have general deflation in the money supply, or inflation. Partly this depends on which monetary aggregate you examine, and partly on what you think the governments will do if confronted with deflation. Many people that I respect have taken the view that we will have deflation. I tend to believe we will have inflation - but we could both be right if we first have deflation which is then countered with sufficient money printing. We'll have to see how it goes.
  13. When you short a share, your broker is supposed to borrow that share from someone who owns it, and then sell it for you to someone who has placed a buy order. In the US, shares may only be borrowed from margin accounts, not cash accounts - I do not know the situation in the UK. It is deemed that you have consented to having your shares borrowed by holding them in a margin account. If you "naked" short a share, the share that you are selling is never borrowed. It is replaced by an indicator of ownership - the end buyer (since you are the seller, there must be a buyer) thinks they own the shares, but they don't. Both of these acts obviously increase the supply of shares, and therefore will have some impact on the price, but the latter has no limit, unlike the former, where there are only so many shares in margin accounts to borrow. (And those who invest in penny stocks would be very unwise to use margin.) For what it's worth, while Puplava & co. definitely believe this is a big issue, the brokers I have spoken to are unconvinced.
  14. It's a great book, and your posting of those review has reminded me that I really should read it again. It's sort of proto-New Urbanist, as it was published in 1977. It crystallized a few things about house design and got me thinking about the different levels of structure in human communities. (Though I don't always agree with all the patterns, the smaller ones in particular make a lot of sense. The larger ones I am more dubious about, but I'm not coming at it from a New Urbanist perspective.) I haven't read (and don't have yet) any of his really recent stuff. I need to go to a bookstore and flip through a copy.
  15. Yes, there will be fewer "rich" people, but there will still be relative differences in what people can afford. I think one's viewpoint here depends on exactly how bad things will get. If you read the Oil Drum website, many folks there are essentially calling for something close to the end of modern civilization. I'm not that pessimistic at this point, though I think it's possible. (Note that modern civilization doesn't mean any particular government or nation.) A lot of why I am not quite that pessimistic is I think some of the doomsayers underestimate the adaptability of humans. But maybe that discussion belongs in a different thread. I think a lot of people choose suburbs because the cities have one or more of expensive housing, high crime, high taxes, and horrible schools. At least the last three aren't inextricably linked with the concept of cities, but in the US they usually are. Many also don't like the density, but the combination of all these factors tips them over the edge. And then once you need a car to get to a job, the city becomes either very inconvenient or very expensive, or both. It may be worth pointing out that the flexibility of workplace granted by automobile transportation is a significant benefit for anyone with specialized skills. HOA regulations almost always have things to say about what color you paint your front door, but in my area they also require, for example, permission for gardens, and forbid them entirely in front of the house. (Since one is also generally only permitted to cut down a tree per year, the lack of sun sometimes renders the garden problem irrelevant anyway.) In the condo I used to live in, one was not permitted to store bicycles or dry laundry on the porch to maintain a certain "atmosphere". All of this tends to drive me nuts, though that's mostly a matter of personal taste.
  16. DrBubb, have you read Christopher Alexander's A Pattern Language? If you are interested in the New Urbanist movement, it may be worth your while to check out.
  17. julius

    GOLD

    Faber's strength is his grasp of market history and willingness to call out people who are being stupid, I think. I subscribe to his GBD report, and while I don't necessarily get a lot of interesting actionable trades out of it I do like his overall analysis and the guest articles. His book (Tomorrow's Gold) is cheaper and definitely worth a read.
  18. julius

    Peak Oil - Bull or Bear?

    Malco, To your comment on the fall of the Roman Empire, I just read The Fall of Rome: And the End of Civilization by Ward-Perkins, and he would disagree with your assessment of no fall in living standards, based on the architectural evidence. It's an interesting and short read. A quote from an interviewwith him:
  19. I find the idea of Kondratieff cycles interesting, but I'm a bit skeptical - what's the best reference on this? I recently read The Coming Generational Storm by Kotlioff and Burns, and while it is focuses on the fiscal issues that will specifically hit the US due to demographic change, it touches on the general aging trend through the developed world. It seems to me that Europe is more vulnerable since if you don't feel like paying German taxes, you can leave, but it's not that easy for the US. (As an aside, the book really drove home why government-financed retirement provision is pernicious and socially destructive - at least in my opinion.)
  20. julius

    Uranium: Price is booming

    The UUU news today was quite interesting, and it's also interesting that as UUU went down, Denison went up.
  21. Buses can be electrified if desired. I don't know the capital cost of constructing the overhead infrastructure for it, but I'd still suspect it would be less than laying rail. (I think they are called trolleybuses if electrified. Unusual in the US these days, but common in a lot of the rest of the world.) I think $250/bbl oil, which seems quite possible to me within three to five years, would be painful but wouldn't end the suburbs as we know it. There is considerable room for people to economize on energy for transportation (less driving, more ridesharing, more hybrids & diesels - I still see lots of people driving vehicles that are probably sub-25 mpg) and HVAC. What it will do, though, is force less wealthy people who have decided to live 50 miles from work in order to afford a house with a yard to make some very difficult decisions. I would expect, therefore, that cheap housing in the middle of nowhere will get even cheaper. I'm not sure the expensive housing will suffer to the same degree, as many people interested in such things can probably afford higher energy prices. All this would lead me to believe that high-density, closer-in, decent housing may be much in demand in the mid- to long-term future. Perhaps some of those condo towers have a future after all... Generally, I believe people respond to incentives. Incentives over the last decade or two have been for more driving, bigger, less-fuel efficient vehicles, and housing out in the middle of nowhere. (The now-unwinding credit bubble had a lot to do with that - many folks were forced out of the close-in 'burbs by the ridiculous prices prevailing.) Now, the incentives are moving in the other direction, but I don't think we're even 20% down that path yet. As for the New Urbanists, I may be painting them all a bit too broadly. But things like this don't make me think they are open to market solutions: Smart Code On your two principles: 1) "Cars come last": No objection, but folks should be able to choose this if they want. The mobility granted by ubiquitous car use has been a great thing for many across the world, and cars will have their place for a long time to come. 2) "Mixed-use": Undoubtedly, but this is really a zoning problem, even more than #1. Zoning made it illegal to replicate Manhattan, Boston, San Francisco, or any place like it in most of the US, on nearly any scale. As discussed, this will eventually change. Let people decide what they want to build - it certainly won't be any worse than what governments pick. Note that working close to where you live isn't going to be helped much for specialized professionals with families by mixed-use development, though - your local shopping center isn't probably going to have all the varieties of jobs now spread across a major metropolitan area. p.s. For those of the NU faith open to voluntary choices, one challenge is to make dense housing appealing for families. Many people are fine with city living prior to marriage and kids, but they find the suburbs safer, more convenient, cheaper, etc. once they have a family. p.p.s. I personally find some of the NU design extremely attractive, but I have to admit I personally chafe under the typical HOA regulations that come with it. If you have a condo or apartment, it doesn't matter as much. (Though I have received nastygrams for the sin of keeping my bike on the balcony, back when I was living in a condo.)
  22. I think the focus on rail is misplaced, though it can make sense for some areas with particularly dense rail networks. The problem for other places is twofold: 1) The capital cost of building rail lines is simply ridiculous, particularly in a metropolitan area. Buses are both cheaper and more flexible - and can run on our rather comprehensive existing highway network. 2) In the US, few metropolitan areas are structured appropriately for rail. Rail works wonderfully to get folks to and from Manhattan from their homes in Long Island, New Jersey, or wherever. But it doesn't work nearly as well in cities where the employment centers are widely dispersed and not as dense as NYC. One may argue that the current way cities are structured now isn't the way they are going to be structured in the future, and that's undoubtedly true, one way or another. But it seems unlikely we will return to the same technology used in the 19th and early 20th century and use it in the same way. One important issue is how expensive oil is going to get. Are you thinking $500/barrel? $1000? Higher? p.s. I think the New Urbanists have some good ideas, but in the end they want to implement them the same way the system works now - by compulsory zoning. I would argue we should abolish zoning and let people build what they want where they want. Then we'd see some much-needed innovation.
  23. It does imply there is lots of cash on the sidelines. And of course, there's only so much they can sell... This is only tangential, but it may be worth noting that some of the real old-timers I have seen speak, and whom I have personally spoken too, really don't have too much of an opinion about the future for commodities prices. This is what they do, and the sun is shining at the moment, so they are making hay. That viewpoint may not leave them with much stomach to stay fully invested.
  24. I live on the east coast of the US, near DC, and I am rather pessimistic that this election cycle will make any difference. Ron Paul is the only one making any sense, and he's not going to win. All the rest are confused about economics, and rather bad on foreign policy as well. I think right now the mainstream American voter is not prepared for change - only for "we can make it good again". And they can't. The only thing that can do that is a change in behavior for Americans towards saving and away from consumption - and everyone other than Ron Paul is saying that's not necessary. Having said that, I am not as pessimistic about the suburbs in particular as some are, primarily because: 1) I think that suburban energy usage can be reduced considerably without destroying the essence of what suburbs are, but so far energy prices haven't come up to the point where people feel compelled to economize. (Well, some economization has been occurring - the 400,000 Priuses in the US is testimony to that - but that's just a start.) Repealing the anti-jitney laws could help a lot. 2) There is an enormous stock of single-family housing out there, and while some of it, particularly that constructed within the last couple of years, has no or negative value, the rest of it may still have much value, though perhaps not as single-family housing. If we truly see oil prices of several hundred dollars a barrel keeping the current zoning regulations may look a lot less important to many Americans, and things like HOA regulations against gardens may be overtaken by events. (The ability to grow food is potentially a very big advantage to living in the suburbs, though few have the incentive to make use of it at the moment.) 3) There are reasons that suburbs became and have stayed popular, and those haven't changed. Even Western Europe, with higher gas costs and frequently more burdensome planning regulation, has seen suburbanization as a strong trend of the last few decades. That's not to say that trend can't reverse, only that there will be many willing to sacrifice to keep the suburban dream alive. 4) The concept of the suburbs encompasses a rather wide span of living conditions - for example, you could say a 1500 sq ft house on a 50' by 100' lot in Arlington, VA, five miles from DC, is in the "suburbs". You could also say a house in Manassas, VA, 25 miles from DC, on 3 acres is in the "suburbs". However, the house in Arlington is probably half the size, and it's likely that someone living in Arlington doesn't drive 20-30 miles one way to work, so they aren't going to be as impacted by a doubling or tripling of oil costs. Generalization here may be more of a hindrance to analysis than a help. Of course, this is all very dependent on the rate of increase of energy costs. Most of this is quite questionable if we see $500 oil this year, but as far as I can tell, that's unlikely.
  25. One anecdotal datapoint I can add I picked up late last year from a fellow I met who lives in Vancouver and is in the business of investing in and promoting juniors. His comment on this topic was that in Vancouver all the old timers are expecting the bottom to fall out of the commodities any time now, because they are trained to expect that to happen after five years, and they don't want to be waiting tables in their retirements.
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