Monday, January 18, 2010

Points to Ponder

Points to Ponder

#1. While my wife and I have continued to interview realtors, a common theme has come out. Let's price this home to sell while there is a tax credit. My wife and I questioned whether the real estate market was going to get better or worse in the next two years, again the the chorus echoed that things were probably going to get temporarily better... then turn worse.

TC: "So what would make things get worse I asked?"

Realtor "To start with, there is a gigantic wave of ARMS that are coming due this year. Many of these people bought at the top of the bubble, and now are stuck in homes they cannot afford. Secondly, many of these folks belong to the legions of unemployed who have been living off savings and have depleted those savings and 401 K accounts."

TC: "Doesn't this mean that the government will be forced to keep interest rates low, and extend home-buyer programs to sop up all the extra inventor?"

Realtor: "Not necesarily. Congress had a difficult time pusing through the last credit and now it is more than likely that the Federal government will start addressing the national debt."

Okay, I get the point. If only one realtor told me this it is a pressure sales tactic. However, this seemed to be a common theme so now I am likely to believe them all... even if instinct tells me something different.

#2. Maybe it is appropriate to think of a Civil Rights slogan on Martin Luther King Day. "No Justice. No Peace." Congress seems poised to consider place some regualtion on the books that would not allow banks to get too big. (See Glass-Stegall Take Two Yet, don't think Jimmy Dimon and friends who probably have the most effective D.C. lobbying group are going to roll over on this one. According to Dimon, they need big banks that offer many different vehicles which can compete against other big banks. (See Dimon) Afterall, a Wall Street banker would argue that the natural selection did take place, and that the surviving banks should not be made to pay for the sins of banks like Lehaman, Merrill, and Bears Sterns which do not exist any more. If is my belief that lots of talk, and little action will be the end result of this game.

Please note that when the public backlash against bankster pay came up, Dimon just walked away... Even Dimon would turn a little red in embarassment as the Wall Street Journal reported that Wall Street pay is up 18% from last year. Maybe this is why some many firms have tripped over themselves to pay back TARP funds... no obligations to the pbulic means no government regulations right?

#3. The esteemed Professor from Michigan has a few interesting points to ponder regarding Obama, Healtcare, and the Senate race in Massachussetts. A Republican senator from MA...come'on!
Stock Watch

NEOP move to $1.54 doubling my original investment amount. While I am inclined to take profits, I may well hold out on this one to see if the firm is bought out by a competitor. If big business cannot think of a way to build their business, they always have the option of buying someone else's "good ideas."

CLWR I bought 1/12.50s and will look for this to be a winner if technology and global infrastructre continue to be a theme.

SLV lost a little this week, however it appears that this is only a breather... as long as interest rates stay low, and China continues to use silver in industrial applications there will be a part two to this story.





4 comments:

AX said...

TC, what are the cash totals for Neoprobe and Clearwire relative to debt? $1.54 fits my criteria, but only if they are a debt free company. SLV will make a run, missed a good entry at 16.50.

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