Letters to the Editor
schmeebitz
Published Letters: 8 Editor's Choice: 1
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What did Paulsen accomplish in China?
[Read the article: Barbarians in Beijing]
[Read more letters about this article: Here]I would love to read some news regarding what Paulsen was able to accomplish in China on his most recent trip. I understand that he is a very sharp guy and probably a shrewd negotiator, so I hoped that he might persuade the Chinese to make some economic concessions. From what little I have heard about this trip, it sounds like he came away with the ususal vague promises about doing something for us in the distant future.
I think that the Chinese realize that they have us by the short hairs and the Bush administration will change nothing of consequence on international trade. Therefore, there is no reason for them to change what has worked so well for them in recent years.
Andrew - What are your thoughts on this?
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Which Econo-Blogs are worth reading?
[Read the article: Does the econo-blogosphere matter?]
[Read more letters about this article: Here]It sounds like Andrew has found a few Econo-Blog sites that he finds useful. I wish that he would share this information in a future post, since I don't have the time to surf this topic effectively.
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Credit crunch is bad?
[Read the article: The Bush economy: Strong and stronger]
[Read more letters about this article: Here]Normally I would agree that a credit crunch is bad for companies, since it tends to raise the cost of doing business. Lately, however, companies have been not been borrowing funds to expand their businesses. It seems that if a company has any spare cash or borrowing power, they are using it to buy back stock. They are not investing in the business, but are instead playing with their stock price.
Another benefit to tougher credit is the demise of this buyout craze. This latest fad appears to be financially shaky for all concerned. There is one guarantee in these buyouts - that there will be massive layoffs and the acquired company will be reduced to a fraction of its original size. This seems to happen regardless of how well run the company was before the takeover.
The stockmarket will suffer from the tougher credit because the bubble caused by the private equity mania will be deflated. It appears to me that much of the rise in stock prices since February was based on the anticipation of private equity buyouts. Once that euphoria is eliminated, the market prices will again be based on company performance and macro trends, not on the odds of a buyout next week. This adjustment will be painful.
In the end, I believe that the credit crunch will aggrevate the housing market problem, will hurt stock prices, but the overall impact on Main Street America is hard to call at this point.
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Americans hate small cars
[Read the article: The Smart car is coming]
[Read more letters about this article: Here]Americans may talk a good game about buying small, fuel efficient vehicles, but the sales of small vehicles comprise a tiny fraction of the market. As a people, we still don't care that much about fuel mileage. We may move to a small SUV from a large one, or buy a mid-size car, but the vast majority of Americans would not consider the Smart Car for a second.
I love small cars, but this tiny car scares me. I sat in one at an auto show and it feels like a golf cart. Who wants to mix it up on the freeway with the 18 wheelers and 6,000 pound SUVs in a golf cart? I don't care how many airbags are on the vehicle. They only go off once, which does not help with the 2nd or 3rd impact as your Smart Car pinballs down the freeway after an accident.
I predict that after the initial rush of early-adopter buyers, the sales will settle down at about 25% of the level of the current Minis from BMW. Penske is a very sharp businessman, but he probably will not make a dime on these little clown cars.
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McCain will be crushed soon enough.
[Read the article: Bush's missing bin Laden plan]
[Read more letters about this article: Here]McCain is in a position similar to Rudy Guliani in the early days of the primary process. He has high name recognition and is generally liked. However, the more people learn about him, the less they will like him. Once the Democrats start going after McCain, it will be like shooting fish in a barrel. He voted for 99% of Bush's requests, so he will not be able to escape from the shadow of Bush's disasterous presidency.
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Returning to Traditional Republican Values Won't Work
[Read the article: Are congressional Republicans doomed?]
[Read more letters about this article: Here]I doubt that returning to traditional Republican values will help the incumbants. They voted lock-step for every big government program and international adventure that the Bushies proposed. They voted with Bush EVERY time. Now they are going to run on the idea that they have learned their lesson and won't act like Bush in the future? How stupid do they think we are?
To win in the fall the Democrats need to remind America of all of the terrible things that went on during the first 6 years of the Bush administration. Just dig into that barrel of a thousand attrocities for the amunition we need to bury the Republicons.
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Month to Month Trends are Deceiving
[Read the article: Home prices: Worst drop ever, or a sign of hope?]
[Read more letters about this article: Here]When looking at trends, you have to look at year over year changes if there is a seasonal element to the trend. The housing market is very seasonal. As an earlier writer mentioned, the summer months are seasonally the strongest, so the month to month comparisons will be positive. Heading into the weaker months, the month to month comparisons will almost always be negative.
The solution is to look at year to year comparisons and see how those comparisons are trending. If the losses are shrinking, then the market is getting stronger. If the losses are growing, then the market is still weakening.
Just keep in mind - any smart analyst that talks about month to month comparisons in a seasonal market is trying to deceive you. Don't fall for their line of bull.