Comments on: Are U.S. Investors Still in Denial? http://www.nakedcapitalism.com/2007/11/are-us-investors-still-in-denial.html Sun, 22 Nov 2009 07:56:24 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Independent Accountant http://www.nakedcapitalism.com/2007/11/are-us-investors-still-in-denial.html#comment-1875 Independent Accountant Sun, 25 Nov 2007 08:00:00 +0000 http://www.nakedcapitalism.com/2007/11/are-us-investors-still-in-denial/#comment-1875 I am not bearish on US equities. Why? With over $3 trillion in soverign wealth funds (SWF), there is plenty of money to go somewhere. The SWF holders will "diversify" out of US Treasury paper into something else. What? Gold and US equities. What else can they do with the money? China keeps buying things like Blackstone and wanted to buy a US oil company. To foreigners, US equities look like a better alternative than US $ denominated bonds. I am not bearish on US equities. Why? With over $3 trillion in soverign wealth funds (SWF), there is plenty of money to go somewhere. The SWF holders will “diversify” out of US Treasury paper into something else. What? Gold and US equities. What else can they do with the money? China keeps buying things like Blackstone and wanted to buy a US oil company. To foreigners, US equities look like a better alternative than US $ denominated bonds.

]]> By: Anonymous http://www.nakedcapitalism.com/2007/11/are-us-investors-still-in-denial.html#comment-1872 Anonymous Sun, 25 Nov 2007 00:19:00 +0000 http://www.nakedcapitalism.com/2007/11/are-us-investors-still-in-denial/#comment-1872 Maybe U.S. equity investors are on a Prozac high, but it seems worth at least considering the possibility that the market may be telling us something that makes at least a little bit of sense.<br/><br/>Between the fall in stock prices and the decline in the dollar, U.S. equities look pretty cheap, especially from a non-dollar investor's point of view -- that is, IF you assume the U.S. economy isn't going into a deep recession. And even if it is, U.S. equities may look better than the competition, especially if you're worried about the stagflation boogie man. I mean, with the two-year yield closing in on 3%, the Treasury lifeboat is starting to get pretty crowded. There's still an Olympic-sized swimming pool of dollar liquidity sloshing around the system, and it's gotta go somewhere.<br/><br/>Not saying the "bargain hunters" are right, just that they might not be crazy. Maybe U.S. equity investors are on a Prozac high, but it seems worth at least considering the possibility that the market may be telling us something that makes at least a little bit of sense.

Between the fall in stock prices and the decline in the dollar, U.S. equities look pretty cheap, especially from a non-dollar investor’s point of view — that is, IF you assume the U.S. economy isn’t going into a deep recession. And even if it is, U.S. equities may look better than the competition, especially if you’re worried about the stagflation boogie man. I mean, with the two-year yield closing in on 3%, the Treasury lifeboat is starting to get pretty crowded. There’s still an Olympic-sized swimming pool of dollar liquidity sloshing around the system, and it’s gotta go somewhere.

Not saying the “bargain hunters” are right, just that they might not be crazy.

]]> By: Anonymous http://www.nakedcapitalism.com/2007/11/are-us-investors-still-in-denial.html#comment-1863 Anonymous Sat, 24 Nov 2007 12:49:00 +0000 http://www.nakedcapitalism.com/2007/11/are-us-investors-still-in-denial/#comment-1863 Introspection, prudence, watchfulness, restraint are all natural human tendencies. Normal brain processes act as a governor to rashness and impulsiveness. We would have already consumed the world had Prozac and its equivalents been available a century ago.<br/> <br/>A well known Wall Street executive once told me several years ago that there was no place at the senior level of major U.S. corporations for managers who advise a non hell-bent on growth approach to business. There must always be aggressive initiatives on the drawing board and those ready to be put into action at all times. Anyone without this agenda is out.<br/><br/>Consumers are on the same Prozac jag and it’s the cause of their impulsiveness, insatiable need to shop and personal electronic gadgetry only amplifys the feedback mechanism. Besides we’re told it’s patriotic to shop, even as we outsource our labor and buy for the good of China and our own slick middlemen. In short antidepressants attack normalcy and brings on collective madness in my opinion. Look around. What else explains the changes in our country’s character? I don’t need an expert to explain this to me. Introspection, prudence, watchfulness, restraint are all natural human tendencies. Normal brain processes act as a governor to rashness and impulsiveness. We would have already consumed the world had Prozac and its equivalents been available a century ago.

A well known Wall Street executive once told me several years ago that there was no place at the senior level of major U.S. corporations for managers who advise a non hell-bent on growth approach to business. There must always be aggressive initiatives on the drawing board and those ready to be put into action at all times. Anyone without this agenda is out.

Consumers are on the same Prozac jag and it’s the cause of their impulsiveness, insatiable need to shop and personal electronic gadgetry only amplifys the feedback mechanism. Besides we’re told it’s patriotic to shop, even as we outsource our labor and buy for the good of China and our own slick middlemen. In short antidepressants attack normalcy and brings on collective madness in my opinion. Look around. What else explains the changes in our country’s character? I don’t need an expert to explain this to me.

]]> By: Rangachari http://www.nakedcapitalism.com/2007/11/are-us-investors-still-in-denial.html#comment-1862 Rangachari Sat, 24 Nov 2007 11:07:00 +0000 http://www.nakedcapitalism.com/2007/11/are-us-investors-still-in-denial/#comment-1862 Nice post. This is exactly why, of all financial publications, I have not canceled my subscription to the FT. Nice post. This is exactly why, of all financial publications, I have not canceled my subscription to the FT.

]]> By: Jojo http://www.nakedcapitalism.com/2007/11/are-us-investors-still-in-denial.html#comment-1860 Jojo Sat, 24 Nov 2007 10:00:00 +0000 http://www.nakedcapitalism.com/2007/11/are-us-investors-still-in-denial/#comment-1860 What is reporting? In the USA, as you mention , it is this pervasive belief that they must explore every side, every nuance, no matter how insignificant. So in one paragraph, they say that the world is falling apart. In the next, they say, OTOH, things COULD be better if just x & y would happen. However, the probability of x & y happening is next to nil. But this gives everyone something to hang their hats on, so to speak. <br/><br/>People reading this mish mash lose sight of the big picture, instead focusing on what resonates with them. We know from many studies that the majority of people are optimistic to one degree or another. This is why relatively few people bet on the "Don't Pass" line in Craps, even though 7 has the best odds of coming up.<br/><br/>Perhaps this homogenization of news reporting is what has caused newspapers to lost readers, since we can now go to the web and choose from a huge number of blogs to get real opinions.<br/><br/>In writing this, I now recollect that my local paper used to do what were called "news analysis" pieces. These were usually pieces where they would analyse the facts of a story and draw conclusions based on the preponderance of evidence. However, even though I read the paper daily, I don't recall seeing many (any?) of these types of articles in the past year or so.<br/><br/>As for all the predictions for the economic future that we see ad infinitum on CNBC, from the government and the FED, all of it is worthless because there is no penalty for being wrong. This tracks well with our society and the elimination of personal responsibility. It would be nice if the so-called pundits had to post a bond to make a prediction. If they were wrong, then the bond would be forfeited to charity. What is reporting? In the USA, as you mention , it is this pervasive belief that they must explore every side, every nuance, no matter how insignificant. So in one paragraph, they say that the world is falling apart. In the next, they say, OTOH, things COULD be better if just x & y would happen. However, the probability of x & y happening is next to nil. But this gives everyone something to hang their hats on, so to speak.

People reading this mish mash lose sight of the big picture, instead focusing on what resonates with them. We know from many studies that the majority of people are optimistic to one degree or another. This is why relatively few people bet on the “Don’t Pass” line in Craps, even though 7 has the best odds of coming up.

Perhaps this homogenization of news reporting is what has caused newspapers to lost readers, since we can now go to the web and choose from a huge number of blogs to get real opinions.

In writing this, I now recollect that my local paper used to do what were called “news analysis” pieces. These were usually pieces where they would analyse the facts of a story and draw conclusions based on the preponderance of evidence. However, even though I read the paper daily, I don’t recall seeing many (any?) of these types of articles in the past year or so.

As for all the predictions for the economic future that we see ad infinitum on CNBC, from the government and the FED, all of it is worthless because there is no penalty for being wrong. This tracks well with our society and the elimination of personal responsibility. It would be nice if the so-called pundits had to post a bond to make a prediction. If they were wrong, then the bond would be forfeited to charity.

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