Daily Archives: October 3, 2015

Frustrated drill sergeant?

Geeze, they can't even make them wear uniforms anymore

Geeze, they can’t even make them wear uniforms anymore

He had sex with a donkey after his “privates got out of control”. 

If they’d just let sergeants impose corporal discipline again, these kind of tensions wouldn’t arise.

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Color me skeptical, but I’ve heard “this time is different” before

why_worry_01Morgan Stanley analyst insists that PE ratio,  and even the performance of the U.S. economy are irrelevant in valuing stock prices.

In a note to clients on Monday, Morgan Stanley chief equity strategist Adam Parker wrote that the world had changed and investors looking to old methods for valuing stocks would come up with bad answers.

Or no answers at all.

The basic outline of Parker’s argument is that companies like Amazon and Google are changing the way investors need to look at companies.

Whether you’re calling for corporate profits to revert to a long-term mean or looking at traditional price-to-earnings ratios, the companies that dominate today’s stock market don’t look like those that dominated 40 years ago.

“We have been publishing for years now about the apparent disconnect between the US economy and corporate earnings,” Parker writes. “The economy looks worse than earnings … but you shouldn’t argue that this disconnect between the economy and earnings won’t persist. Measurements like Okun’s Law, the Phillips Curve, the Taylor Rule, Shiller PE, and others are thrown out as ways to point out obvious disconnects between today’s world and historical economic or profit relationships.”

Parker adds: “People have been saying corporate margins are too high for years. Our judgment is that most of these metrics are irrelevant for making any market-based assessment in time frames less than a decade, if at all.”

And so this chart, which many have said must revert to something like the “norm,” can stay elevated despite what the textbook might say.

You can’t use 1975 logic to analyze the 2015 world. Over 20% of companies in the top 1500 by market capitalization in the US have zero inventory dollars. The largest, GOOGL, is forecasted to be a $70 billion revenue company with zero inventory. The ways to measure the economy and corporate results are clearly different today than they were 30 years ago, when only 5% of the biggest 1500 US equities had zero inventory dollars. So, in our view, healthcare, consumer, and technology can perform well while industrials and metals and mining perform poorly. That could last for a while and doesn’t have to mean revert because in 1975 it seemed logical in some textbooks. People thought Pluto was a planet back then also, and that the Red Sox and Patriots would never win championships. They were wrong.

Nothing in the principles of baseball or astronomy prevent a baseball team from winning or a “planet” from being discovered to be merely a “dwarf planet”. It’s possible that market principles allow for rising stock prices in a collapsing economy, as Parker says, but I wouldn’t bet the farm on it.

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Not that there was any doubt before

I am so very, very sorry; sorry and ashamed

I am so very, very sorry; sorry and ashamed

Obama attacks the United States of America in his speech to the UN.

NY Post editorial:

Once Obama’s new and improved ties to Cuba start to yield results, he said, “I’m confident” Congress will lift “an embargo that should not be in place anymore.” It was the most enthusiastically applauded line of his UN speech.

Perhaps Obama’s right. Now that’s he’s lifted all the restrictions he has the power to lift, maybe other branches of government will follow in his footsteps and end the more than half-century-old embargo, once and for all.

Fine. But for now, sanctions remain intact. And the world stage is not a place for an American leader to play out his domestic political agenda.

Castro told Obama “the pace of the normalization process will depend on lifting of the embargo,” according to Rodriguez. Therefore, he added, Cuba will present its annual America-bashing resolution at the General Assembly in a few weeks. “We’ll continue to present this resolution as long as the blockade persists,” he said. He even demanded compensation for Cuba’s suffering under the embargo.

Rodriguez referred to a resolution Cuba’s initiated at the Havana-friendly General Assembly every year since President John F. Kennedy established the embargo. In recent years, America found itself increasingly isolated, as all our allies, including Britain and the rest of Europe, joined Cuba in condemning us. Only Israel joined America last year in voting against that resolution.

But this year, our own amabassador reportedly might abstain from the vote. Senior American officials have so far declined to deny those reports, suggesting they may indeed be true.

No UN diplomats can remember a case in which a country voted against its own policies, or abstained on them.

Then again, few here can remember anyone using his UN speech to denounce his own countrymen or bash his domestic foes in front of other world leaders. These speeches, after all, are designed to present one’s country in the most favorable light.

Yet on Monday, that’s just what Obama did. Again.

Despite all the prosperity and peace his polices have led to, he said, some Americans still shamefully argue that “the only strength that matters for the United States is bellicose words and shows of military force.” And they’re guided by an absolute opposition to China, Russia, Iran or Islam.

He went on: Democracy in America is “imperfect. At times, it can even be dysfunctional.”

Indeed, this is hardly the first time Obama has belittled America’s “exceptionalism” or highlighted what he considers to be its shortcomings.

OK, on Cuba, Obama may be right that the embargo has outlived its usefulness. But again, it’s still the law of the land. Becoming the world’s first country to tacitly approve of a resolution that condemns its own policies is a strange way to force the hands of congressional opponents.

After escaping by threatening to shoot himself, Sheriff Bart goes to his office and says of the townfolk: “They are soooo dumb” for thinking he’d really shoot himself.

The trouble with Obama’s rhetorical self-attacks is: He means it.

Our president has spent the past 7 years apologizing to the world for our country’s sins, and vowing to correct the. Here are just 10 of his apology speeches, with dates and actual text.

Obama vowed to “transform America” in his image, and he’s done his best to achieve that goal. From firing a record number of generals and staff officers,  to setting the EPA to work taking over the economy and transforming it into a government-controlled oligarchy of huge corporations and government dictators, to infecting our educational system, to denouncing and condemning the country he claims to represent, he’s squandered our military might, allowing rogue nations and terrorists to fill the now-vacant space, turned our children into right-thinking automatons and overseen the decline of the work force to the lowest participation rate since 1967.

What was once seen as incompetence by the more naive of us (myself included) is now obvious: the man hates America, and has the support of a base that joins him in his antipathy.

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