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Howard Marks' latest
h/t Deep Thunker
Thanks TD (and Deep Thunker).
Marks should be the Treasury Secretary - he is one of the few money managers out there that has a clue in general.
.pdf please? Well, if 67% of the corps don't pay taxes aren't we supporting big business as a nation?
I see all those tax cuts are working since they are laying people off. That helps because everyone can then buy those products and services right? But why hire Americans when labor overseas is so cheap. Kind of a slap in the face of the Americans that helped build those companies I would suspect. But I'm just an unemployed idiot.
But I digress. How about some more trickle down economics?
You sound like my namesake.
Well if I knew what purpose scribd served I would probably use it if there is a reason that benefits me otherwise that is why I use .pdf. I was able to read the article in the scribd format however.
But this dude wants the taxpayer bailouts, low interest rates and goverment spending to continue. He really offers no solutions (not sure if he is trying to) to fix the problems. All he offers is, inflation is coming. And then poses the question I wonder what America will look like in the future? Hmmmmm.
a lot poorer
Pull for big biz? Why should I, when they are hell-bent on out-sourcing, off-shoring and importing cheap foreign labor?
This is just another cheer for the failed trickle-down economic policies of Regan and Greenspan. Apparently some people haven't noticed that that approach has led to a disaster for the average person.
Who wants to be average?
Someone sub-average? Was that a trick question?
Pull for big business? Well yes and no. The definition of big business shouldn't also imply big subsidies. If they can't make it w/o taxpayer support why in the hell should they be given the "heads you win" "tails you win" option that small businesses can't get.
Howard is way off base there.
Has it occurred to anyone that this global trade inequilibrium is caused by the fact that the US currency is used as global currency. It would follow that all other countries will try to earn and maintain large USD reserves so that they can buy energy/food, etc. as these commodities are traded in dollars. Americans, outsourcing is not a flaw in the global trading system, it is a product feature. Just get used to it. The USD after all allows the US economy a free ride to be the Paris Hilton among world economies. A welfare state supported by the rest of the world...
The outsourcing/off-shoring nonsense can be stopped dead in the tracks if the USD voluntarily opts out of reserve currency status. Of course we will then have the same challenges of other countries -- trying to live within our means :)
very good pts you make...and no wonder other countries want to replace USd as reserve currency, even as there are benefits to it, with Treserve playing CB to the world at times. Back in the 1990s with the Asia crisis, those countries learned brutally that you cannot not have huge piles of dollars or you won't be able to buy what you need and you'll be chasing spot dollars up in price, against other countries in same lane...which reminds me, aren't we to see around Feb 12th the Fed halt the $300-$500bln currency swap deal with foreign CB's???...the announcement of that program's demise corresponded to the big USD spike late year 2009...have the European CB's got enough USD now??...in any case, and on another aspect of all this, when the US transcontinental railroad was finished, it set off a big recession that went on for years, as it was now possible to ship cost-effectively cheaper products from across the country to the major Eastern markets...globalization "pre-dux" as it were...rationalizing the disconnected economies of the US states, opening protected markets for over-priced local goods and leveling the playing field...we could be in merde for a while to come...
I am so sick of hearing corporate talking heads whine they "can't find workers with skills" they claim to need. Since when have these cheap-ass baffons bothered to invest (a function of business, I thought) in their workforce?
Or OMG! Hire and train? Companies still have training budgets right? Or, was that one of the first cost cuts?
I think they do invest in their best workers -- probably not so much their average / marginal worker.
Or one could take it upon themself to getting training that would make oneself more marketable / desirable to the evil corporation. I think some call that investing in yourself.
Wait -- business is so easy, just start your own and show them how to do it. Perfect.
Bingo. Big business does absolutely nothing to benefit anything other than big business.
Cry me a river to the pity party!
Fuck big business, fuck those that are sympathetic to them, and fuck those with misguided and mal-framed logic to support anything other than the demise of Main Street in favor of big business.
Get a clue America, anything that is for big business is AGAINST Americans!!
If all one sees is corporations doing well, then obviously something else is terribly broken. Look around fools.
Big business in trouble? BREAK THEM UP!!
Interesting concept, however anger won't solve the problem. I submit that the US has a unique opportunity at the present. It's an investment decision, do you invest in Wall Street or Main Street?
I for one nominate Main Street, irrespective of whether or not one is for or against big business -- all eyes and investment on Main Street.
I think that big business could do a tremendous amount of good for themselves if they focused locally within the US instead of globally.
Perhaps an investment exchange where ordinary Americans could place their bets/money into equities of companies that only do business in the USA.
You obviously voted for the guy in the White House.
I don't think corporations are for or against Americans. I think they are in the business of providing a return to shareholders (I think that is still legal and (yikes) even moral).
I presume you do not want to compete on a global basis -- which will require Americans to make less or produce more than foreigners. Sadly, our productivity advantage is eroding and most of the people of the world are very happy with making a fraction of what Americans make (but then they do not feel the same NEED to consume anywhere near as much as Americans -- those poor unenlightened rubes).
You seem sufficiently angry that you should seriously consider not working for a corporation or buying any of their products or services (because they are evil). Otherwise your rant doesn't make much sense.....
I think you are saying Americans really can not compete in the world market (because we are accustom to a higher standard of living than most of the rest of the world who are happy to not consume as much as us).
Agree it is a problem for the US, but it is not the corporation's fault you want to be paid so much more relative to the rest of the world. Capital will flee to where it is most productive and best appreciated -- increasingly not the US.
Sorry - not the answer you want to hear.
Sorry, I disagree with most of your points. You're basically advocating free trade over fair trade. The free trade myth is just a subsidy to the corporations, at the expense of the local country. It works great for the elites, but not the citizens. Change things to fair trade, and the whole game changes.
I wouldn't go betting your career on globalization. It's in it's end game now, which will be more apparent in the next 5 years, and just a fraction of what it is today in 10 years, after the current mania in financialization implodes. The cracks have already appeared and are growing.
How is "fair" trade defined?? Go ahead let's erect trade barriers so the US eats its own cooking -- no imports, no exports.
I think you are right - in about 5 years China and India will not need to export to the US for a full capacity economy. And they will tell us what to do with our "fair" trade. Free trade will work great for the citizens of most developing countries in the world -- like China and India.
Bottom line - the US worker has priced themselves out of the market. Others are more hungry than we are.
Oh, a pretty good definition of fair trade would be to have similar trade barriers. The only way that India and China can compete is apparently by erecting them.
If you think any of the exporting nations are going to be in good shape in 5 years, you have a very big surprise coming, unfortunately. They are going to be hit worse by credit crunches, when the current Ponzi scheme collapses. You need to think more of what happens during Capital destruction. It's not pretty.
And yes, the only solution is for the U.S. to start manufacturing again. This will start happening again, after there's been a huge destruction in both capital and credit. Neither China nor India are required by the U.S.. Don't confuse the financial elite with the U.S. as a whole. That's the fallacy of Goldman Sachs and its ilk.
Boycott big business, they are bad for America.
Protect big business at all costs, even if it means austerity for the people.
Small business is the dirver for jobs. Big business is the outsourcer and lobbiests of corruption. They're what's killing us.
While it may be true, I would like to see the employment numbers for big, medium, and small business. And maybe a pie chart on revenues created and employee salaries for each. Just curious.
Methinks that TPTB touting job creation through small businesses are just trying to let the big businesses off the hook. My BS-O-Meter starts to peg out when I hear talk like this.
Too big to fail and Too big to hire? Funny stuff.
its not that they employ more, its that they are the ones creating net new jobs. The big uys are more stable, although they employ more overall people
I dont care for big business. They have done everything possible to ship jobs overseas to people willing to work for wages that are way less than ours and no benefits or pensions either.
Walmart did not exist 20 years ago. Everything was downtown and everywhere. You had a travel a little bit and cover some ground but you were able to find whatever it is there is you wanted anywhere.
Now downtown are empty. Maybe a bit of craft shop, florist or some kind of coffee shop that only employs a few people and pays less in revenue to the town. Why? That big Walmart is sucking the life out.
Then again in my town a tiny family grocery store managed to hang on to thier few customers who are handicapped, too poor or otherwise unable to escape to the big nice super walmart 10 miles away. All wally has to do is build a big box in our town and everything else will close up.
Big business. Yea right. Two managers, with a headquarters checking on the managers. Everything and everyone else is expendable.
Hell, in some fast food joints, they are using call centers overseas to process your order and retransmit electronically back to your food joint the order that needs to be assembled. I mean, come on WTF? I dont want some Abdul in Calcutta india listening to my order for roast and fries with gravy. I will go home and make the damn meal myself.
And I do. Now that everything is collapsed and unemployment/layoffs are common.
Plenty of time to get that nice roast and taters. Just need to find a few dollars to make it happen.
*Big business. *Humph.
I share Howard's concern about the deteriorating finances of the municipalities.....especially CA and NY. And I continue to believe Stim 2 will be targeted toward this group, with Uncle Sugar moving money from the right government pocket to the left government pocket.
Job cuts in the public sector deserve to be massive and immediate. But that would mean the national unemployment rate gains by a couple clicks.
TBTF government style. CA = GM
Wasn't there a show called "Love American Style"? edit: Yes there was!
Anyway, your comment made me think of that show. I would love someone to create an intro to the "TBTF Government Style" with the funny intro they had on that show. I think that would be humorous. You know showing the criminals at large pairing up with their business "love interests" Heck you could throw in some lobbyists and then have the Wall Street dude bash in some TV's on You Tube.
Didn't we have double digit growth in Productivity with no rise in median wages the whole decade? That's a mighty gift.
Isn't the average EFFECTIVE corporate tax about 7% for the top 500 companies?
Also, if high taxes and regulations are so awful, how are BMW and Phillips and BASF and Nokia doing so well?
Also, if free trade leads to more exports, how come the top 2 exporters have very high tariffs on intercontinental products, whereas the country with almost no tariffs on pretty much all manufactured goods for more than 20 years has a godawful trade deficit?
"I'm sure we're much better off than we would have been without the government's help."
Not sensing any amount of sarcasm whatsoever, that is as far as I intend to read.
The USA and China are joined at the hip. Each one is completely dependent on the other. Together they force the other Asian export countries to buy the dollar and screw the EU. With globalization, its the parnership made in heaven or in hell depending on the daily events. Without it, there will be a depression.
its gonna happen either way. only way out is to print so much money that the reflation takes place at the same time as the destruction of capital is happening from all the deleveraging. and thats not really 'saving' anything at that point with runaway inflation that would result.
btw.. Sam's Club is hiring!!!! Yipeee..
Only they are hiring a newer outsourcing firm that will do the job at half the cost....
No Sam's club is laying of like 19,000 people.
Big business was never the problem.
Big government has been the problem.
Socialism fails everywhere it's been tried. I would include unions and NGO's in the ideological basket of epic fail.
China is thriving. Parts of the global economy are thriving where government is lesser involved.
Government AGAINST "big business" is COMMUNISM.
Sorry, comrades. The pancake only has two sides.
Thank you. So there is like three people on this site who don't think all corporations are beyond evil and who don't embrace the omnipotent, all-sufficient, efficient central planning, most benevolent government we have. Maybe we can get one more person to join our club this year.
China is lesser involved in their economy? Excuse me?
Um... reality check... Significant percentage of China is still a third world country in mindless destitute poverty... don't believe the hype..
Which is why they are going to clean our clocks. They are happy to work for much less than Americans and they are rapidly coming up the productivity / technology curve (which heretofore was a major US advantage which is now eroding). Americans are too lazy and spend way too much. Get ready folks to go backward in lifestyle.
I don't see people hating high incomes. I see people hating high incomes derived from fraud and looting the public treasury.
Howard Marks dances all around tons of symptoms but still doesn't "get it" when it comes to root causes here - excessive levels of debt. It's the debt, stupid! When growth in debt exceeds growth by the economy, year after year after year, you've got nothing but a damned Ponzi scheme going and Ponzis always collapse. The way out of this mess is to recognize bad debts instead of trying to endlessly paper them over and for large financial institutions that are insolvent to go bankrupt. They screwed up. In a capitalist economy they should be dead and buried, not coddled by the government.
Marks for Treasury Secretary? Hell, I'll keep incompetent Geithner over Marks.
But where does the debt come from? In other words, where do the dollars come from to be lent? When the Fed buys Treasuries, it just creates the money to do so. This is the root of the problem. And those that made loans to un-creditworthy borrowers (including the Fed!) should suffer the consequences of their decisions. There is no such thing as TBTF. Eventually, even the Treserve will find that out.
If the Treasury has been "robbed" (albeit legally) and the government is coddling those who should not be coddled, it seems this is PRIMARILY a government problem. Government is providing the means to the corporations you hate. I think if you fix the government's participation in this "fraud," it will be solved.
So, contact your elected official and let them know they will not be getting re-elected in November. Or you can continue to complain about corporations who frankly are just smarter than the government.
someone please explain to me why what's good for big Corp's is good for America? He talks about the government beginning to sound off on a populist note against be Corp's but it seems to me that most regulations help large companies keep other from competing, and if most of our big companies are geared towards a consumer economy and consumption falls somwhere near 60%, which appears like a more realistic number compared to 70%, How is their buinsess model good for the country?
Liesman on CNBC just now railing against GOP congressman questioning whether Geithner deserved to stay in his job: "Even if he was involved in the decision to keep this from the public, does he not deserve to be Treasury Secretary?"
Treasury/Fed's butt boy is back.
LOL, doesn't the former answer the latter? Douchebaggery!
Donkey-doo. GS, big banks aren't big business, they are simply parasitic, they provide relatively little benefit to the economy. Do we really need them are they really an engine for growth..ha ha. They are failed business models propped up with the capital of the citizens of the United States, well-fed, well-dressed corporate welfare queens posing as capitalists.
He also says "whats good for big business is good for America", there was time not so long ago that the big business mantra was "what's good for America is good for business" and that was a guiding principle that worked for America.
Where do they get this crap?
they probably get it from academia.
Love to know your definition of "benefit to the economy" and precisely how you personally are doing so (not compared to anyone else). Because, frankly, I am sorry to report I have not seen it and there are a bunch of us that have been wanting to talk to you about it....
Thankfully our founders were big believers in liberty, and as long as you are not breaking laws, you were free to do pretty much what you wanted -- whether it "benefited the economy" or not.
If you are not happy with the government support of any corporation, I would suggest you attack that from the government side of the problem (those folks in government supposively work for you).
Riiighttt, if we dont pull for Big Biz then unemployment will rise and standard of livings will fall. No big crisis but a slow grind downward. Imagine what it will be like after 20 years of stagnate family income. The only way to keep the current standard of living will be to go deep in debt. And you can only do that for so long.
Hey, wait a minute....
What's good for big business is good for America? This guy can suck my semi-erect chub.
Free markets are the key here. Not free Goldmans.
Sounds like you need a stimulus package to go with that semi-erect chub.
This is a truly pathetic letter.
I guess it was reproduced as a spoof
I thought it was sarcasm...but I think he is serious!
OK Howard, I volunteer. Chain me to an oar in the slave galley so I can row and support Goldman and the big businesses as they outsource and dodge taxes, with bailouts all the way.
If you're looking to ape someone's trades, there's not much there. If you learn from the thinking of others, much more accomplished, Haward has something to share.
What is clear is that almost no one has grasped the idea of US tax structure change....
Let's make this clearer....
What if I wanted to put money at work and I had two options....
1) I could hire a partner who literally did nothing....did not help in forming ideas or innovations that could later be sold.....did not help in marketing what was produced.....the partner just wanted a major portion of each $1 requirement.....as much as 50 cents on every dollar....and in return my partner extorts me in that if I do not pay 50 cents on the dollar....then to jail I go....
and just to keep this partner in check....legal costs have to be incurred.....
2) I do not have a partner and thus get to use 100 cents per $1 created in my business.....Clients that buy my products pay 15% of the price of the product to local State and Fed agencies in order to provide basic protections and safety for all people in general....All the employess keep 100 cents per $1 that they earn from the business....
Obvious #2 is what the US needs...It is a simple 15% consumption tax only.....applied to tangible items that are consumed....There are no corporate or individual taxes....
If #2 is implemented....then the US becomes flooded with businesses from all over the world...that want to be able to produce with 100 cents utilized per $1.....and turns hires millions of people to work in these businesses....
#2 is what the US direly needs in order to most quickly build back its production base.....also providing for a rapid recovery.....versus the certain Japan like 20 year stagnation and interest rate traps....or worse....
What is particularly interesting is that no analyst has accounted for possible US tax structure changeover....
And why not ?
The tax take from a simple 15% only consumption tax would dwarf that of the current system...
Less is more....
I'm with re-booting the system. Don't go loco... Go local!
Big business likes to dress up like cowboys and jawbone about free markets ('augh shucks, gee whiz we're just reglar american busnessmen' ) Bush & crew had this dimestore cowboy thing down pat. I think that THEY actually belived it. This is a deception that only a generation raised on Marlboro ads could actually swallow. Self deception is very difficult to overcome.
Excuse me for being somewhat jaded and cynical towards big business here, but I believe that American Corporations are run by short-sighted, inept, overpaid, and woefully unprepared for the future---if not corrupt to the core.
In tandem with the Politicians that they purchased, they have brought our country to economic ruin. It is a Country Club mentality! Go to the right school, meet the right people, and viola!!!--You are sooo "in"..It matters little that you could'nt find your ass with both hands---AND your ass.
Meanwhile, back at the ranch, the people whose hands, hearts, backsides and brains who built this country's buildings, industries, roadways and wealth are supposed to watch the increasing gaps between the haves and the have-nots--and root for GS, TBTF, Fraud Street and the politicians who throw losses onto the taxpayer's back?
Everything in the post makes sense--the logic is irrefutable. But how can a dismayed and distraught populace be expected to support a system that preys upon them in many ways?
When has trickle down economics ever worked? Are Rolls Royces bomb proof?
I believe the correct expression in the US is the "haves and the haves less." Our poor are among the richest in the world.
Understanding your intense desire to smooth economic outcomes (aka redistribute wealth) you must look at this on a global basis. The sugar you put in your coffee came from the brow of some poor worker in Brazil and they really do not like wathcing the gap between them and you.
So let's get the average American down to the average income and wealth level of the world. I will follow your lead.
Also would suggest you start your own business since you find existing ones so lacking. Presumably you should be able to easily compete and make good returns while doing what is right for all.
we'd better pull for big business - not against it
we'd better pull for big business - not against it
Why don't we try not pulling for anybody? Why don't we try to just let business run its course? But no, we want to subsidize this and punish that. Let's just declare neutrality on everything else except for the defense of our personal freedoms and a court system that only looks for the truth.
Core Libertarian Values
Anyone else REALLY sick of the Titanic analogies?
PS allowing big business to siphon tax payers dollars is not supporting big business.
He is dead on!
The only way for our society to grow is for large banks, like GS, to find bigger ways to extort the American taxpayer. So really, by being anti-GS we are being anti-American.
I get it now!
He makes some extremely valid points. He lost me once he mis-directs our anger about companies making money.
I find the standard analyses blind to US realities: The average US household didn't borrow too much to buy vacations or big-screen TVs. The average US household had its borrowing done for it by Congress, which borrowed to provide expensive medical innovations to people (poor or retired) who could not afford them. 52% of all medical bills are payed by the Federal government, which can only pay the physicians with borrowed money. In the so-called private borrowing world, enormous money was borrowed from global capital markets to fund housing which people (but for the Congressional guarantees & subsidies) could not afford, since these people had little savings to put into the house purchase. Fannie/Freddie were private shareholder-owned corps, but Congress "influenced" them? Now the taxpayer has been announced, by Congress and the Administration, as the "guarantor" of all Fannie and Freddie debt? Medical and Housing expense taken on by Congress without the ability to pay for it is 70% of the story. The rest of the story is cave-ins to public employee unions and constituencies, granting them pension and health care benefits the tax-base can never support. If you can find a politically achievable map to freedom from these debts, please publish it.
If "what's good for big business is good for America" does that mean that Americans should expect a backstop for all their future investment choices, or bailout for all their past failures? Is what's sauce for the goose sauce for the gander?
You don't have to answer that Howard.
Mr. Marks misses the key point. Americans didn't wake up one morning and decide to become populists. Americans are responding to the bailouts of the banks, who turn around and award themselves bonuses equal to 1 percent of GDP. These same banks fight any type of reform tooth and nail.
Americans are not anti-business, they are anti-Wall Street. This is an important distinction. Stop the looting behavior and the bailouts and attitudes might change. The arrogance of Wall Street professionals is amazing. There has never been a more sanctimonious and hypocritical lot of executives in any industry. The acrimony between JFK and US Steel is child's play compared to the current debacle on Wall Street.
Mr. Marks should use his analytical skills to determine whether or not any of the TBTF banks are actually insolvent. He can't tell since solvency is behind of vail of mark to fantasy accounting, off book structured vehicles and opaque credit derivatives. No one knows how long the American public is on the financial hook for these follies. Hence the populist sentiment.
"Stop the looting behavior"
If government is willingly providing capital to the "Wall Street" you hate, how can it be called "looting?"
Be mad at Wall Street if you want, but logic dictates you be 10x madder with government. There would be no "looting" if government stopped giving them money (and in certain cases presumably let them fail -- government has apparently decided you would be upset if they let them fail).
If you do not vote your elected representative out in November, not sure you really want to stop the "looting."
This is the biggest piece of propoganda that I have seen recently. The What If's assume that the current level of home sales, car sales, etc, is a good thing.
Yes Doctor, the patient is still alive (of course because the patient won't take his medicine, he's getting worse)
The idea that what doesn't kill us, makes us stronger doesn't work here.
Basically, without the government spending our tax dollars to prop up the economy, we are right back where we were when the sh-t hit the fan in the first place. Extend and Pretend is alive and well and this joker praises it!
But becasue the government is proping up things, things aren't as bad as they could be. No, they are worse and we have a burgening deficit to prove it.
Big Corporations are the problem.
Big Government is not the solution.
We need to return to the intent of the Constitution.
Whats the matter with this guy! Tool!!! I bet as a kid this guy rooted for the bully on the playground. Are people just supposed to forget that these big businesses/supposed would be saviors of our economy are the same ones that caused this mess and outright stole from the american taxpayers! I'm sure ol' Howard considers himself an ethical and just person but how is it he can over look the obvious and support the growth and development of an evil enterprise? Just leaves me thinking "what the hell is the matter with this guy... tool."
"Whats good for big biz is good for america" ???
Utter bullsh!t! Small biz is whats good for any society.
Split them all up- more than 10% market share is a monopoly !
Outlaw all lobbying, make elections publicly finananced- everyone
gets equal money and airtime and lets people choose on merit.
Make the reps responsible to "we the people" again in the
constitution- if more than 1 percent of the population the rep
represents sign a petition, the rep must show up for a hearing
before them. Hows that ?
Thats the only way to return sanity on a national level.
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