My favorite quote of the day about Wall Street’s complaints about financial reform comes from German finance minister Wolfgang Schaube.
“If you want to drain a swamp, you don’t ask the frogs for an objective assessment of the situation,” he told a press conference in Berlin.
And so closes another chapter in the German government’s deft handling of the euro debt crisis.
STL,
Thanks for the info! That definitely makes AOD less attractive, although I will continue to follow it.
adammadamek…
Unlike Ed, I chose to hold onto AOD and plan on adding to my position!
Ed, did you see where AOD approved the same monthly distribution but just for one month (June) rather than three months due to heightened concerns about global market volatility??
rolfer1,
Of course. I like the fundamental idea behind AOD, so I will be bargain hunting it.
As for downward pressure, I’m counting on it. 😉
Ed,
Come on, don’t be shy — you know you’re waiting for that price premium over NAV to buy back into AOD 🙂
Nice bounce late last week, BUT look for more downward pressure this week. BTW – US job gains are faltering badly and, as for the builders’ housing start numbers, well, they always build more than market projections support.
When people speak of the problems of an unregulated market, they tend to use short term blips like the most recent big drop in a day. But if you were not putting in stop losses, you were probably unaffected. If you are buying because of an underlying value, there is no problem (as the stock price returns after the panic is over). The people who will get burned are those riding the bubble. They should ask themselves whether they are buying because of some fundamental value, or if they are following the herd and riding the wave.
A couple of years ago, I put in a trade order for DNA at about 20% under the current price. It sat for months and the price went up. One day out of the blue, the stock hit and I bought at 40% discount. This never showed up on the stock screen as a drop. I guess someone used my order to fill a much larger one and the few shares I bought helped them make the deal. Is there a problem with that? Not to me.
In the long term, an unregulated market will sort itself out. If people cannot be confident that there is some underlying value, or that certain rules are not followed, they will take their money elsewhere. There are plenty of places to put money these days, and ever more on the horizon.
adamadamek,
I’m out of AOD at the moment. I’m waiting for the equity markets to calm down before I buy back in.
Remember, AOD is a fund that holds equities, so when the market dives, it will go down with it.
yx,
Sorry I didn’t respond. I took Friday off.
For the record, my portfolio had one of it’s best days ever on Thursday, and then I gave back almost half of it on Friday. I can live with that. 😉
EdMcGon,
Do you still feel strong about AOD? Price has dropped quite a bit recently, but they are still paying a dividend…thoughts?
Off topic.
Flying to your favored emerging power house India? Or flying on an Indian airplane? Caution: you are on your own.
http://www.reuters.com/article/idUSTRE64M0FA20100523
Frogs in swampland . . . oh, someone just kiss them all for me!
Despite certain lax activities the US created more wealth in the world than anyone. China would be nothing today if it wer not for custommers like Wal Mart Costco.
Stop knocking this country, we will correct and remap to become the envy of the world. How many Chinese and Mexicans strive to come here while their own economies are up. The social leftist experiment of the PIIG countries has failed due to EU asleep and quiet like we were with banks. USA all the way!
What have the French to do with this anyway?
andate:
I often found you posting very interesting stuff.
Kowloon
The Ming Dynasty merchants, Adam Smith (a European), etc. would certainly disagree that the US has a monopoly on financial theory and regulation. Banks throughout the world (including Hong Kong) use the same financial instruments (derivitives, CDS, MBS, etc.) as American banks use and continue to use them. The European banks are currently in deep trouble because they are highly leveraged and holding debt that may be restructured. Excessive greed and “manipulation”/corruption are human weaknesses found in all cultures and populations of humans (think of the Triads). I don’t think anyone has come up with a perfect infallible system yet. The PRC didn’t tinker with the financial system left by the British in Hong Kong, so they must have known not to change a system that is working well as it is.
The IMD World Competitveness Yearbook lists Hong Kong as #2 in the world economies with mainland China as #18 and most major EU economies trailing this.
http://images.businessweek.com/ss/10/05/0519_most_competitive_countries_2010/index.htm?campaign_id=msnbc
So Kau Lung, if you bet on the wrong model you end up in Sung Wong Toi.
ha ha ha… The world economies are being led by the Germans and the French. This reminds me of an old joke about the perfect world – “the Fench cook the food, the Italians design the clothes, the Germans run the train….”
On the other hand, hell is “the Italians run the trains, the Germans are the police and the English cook ….”
Obama must succeed so American continues to lead the free world.
Kowloon,
I don’t know much about European or Chinese market to agree or not agree with you, but I agree with you about the Wall Street. Looking back a decade and I don’t see efficiency. I just see lots of corruption from greed. I can’t imagine that being a solid or efficient foundation for economic growth.
That’s a good quote & I think Schaube’s right on the money. Before the Great Recession, the U.S. had an effective monopoly on financial theory & regulation (actually deregulation). If anyone questioned our practices, so-called American experts tended to shout them down with arguments that markets are perfectly efficient & should not be interfered with. Now that American banks & theories have been exposed as dangerous, it’s natural that the rest of the world will pay less attention to us. In fact, I don’t blame other countries if they completely disregard anything that our greedy, manipulative banks say. If we Americans were smart, we would take a clue from Schauble & do the same. It remains to be seen which system of financial regulation is best for the average investor. Right now, I would bet on the Chinese or European model rather than the American one.
The only transaction I did today is selling MRVL. I am glad to get rid of it. It was never really great since I bought it. No loss, no gain.
I think today’s market does show some sense of “floor”. If it repeats itself, we may be get some relief.
Jim’s “dark age” comment today is really scary. Although we know that debt problems are not going to be solved soon, I’d like Jim to explain more. We are in long term bear, but there should be short term bulls within.
At least the Germans know they are in swamp land.
Just curious, what is our regular and widely followed Ed up to today. May be he is busy cashing out his chips.
I am by no mean disrespectful of Ed. In fact I often found his posts are very intriguing.The only imperfection is that we don’t how his portfolio does.
SO what does this mean? S&P up 16 points with almost 7 billion in volume. Basic materials and financials with the biggest move. A lot of the buying at the end of the day. Looks like we bounced off the february low. Now a weekend to let it settle in. What next???? I would love to buy into Brazil. When?
Okay, German finance minister Wolfgang Schaube, Europe’s financial situation li like unto the poor guy who gets off of his horse and jumps in the quicksand. Realizing the terrible plight, he looks over at his well trained horse (with rope attached to saddle) and invites the horse to join him…and does!
Germany and their amazing “braintrust” has the nerve to insult our frogs?
Thanks. We need quote like this on days like today.
Indeed.
I would say “Don’t ask the allegators.”
Frogs are just too too cute.