Gold isn’t in Backwardation, the USD is in Contango

A lot of confusion on gold going into backwardation. I wrote about this in October in this blog where a commentator got confused. Recent articles by Professor Fekete have spawned more confused comments, see Brad Zigler’s article for an example (and also my comments to it).

People get all confused about it because they . . . → Read More: Gold isn’t in Backwardation, the USD is in Contango

The Coming Real Estate Recovery — By The Numbers

I have been analyzing real estate and construction since 1991. I can’t even say that our current real estate collapse is unprecedented, because to me it’s not – I went through the Asian Financial Crisis, and this is like that. As a matter of fact, the Hongkong real estate slump of 1994-95 was pretty . . . → Read More: The Coming Real Estate Recovery — By The Numbers

Recession With a Silver Lining

In standard consumer lingo, a recession is never good. By economic definition, it means a slowdown in spending, which leads to a slowdown in production, which leads to unemployment and so forth.

The United States has seen its share of recessions since its inception over two hundred years ago. A quick review of Wikipedia’s . . . → Read More: Recession With a Silver Lining

Reintroducing the Enron Rule

I am bringing back an old thought that first occurred to me in 2001 after the collapse of Enron. Businesses exist to create real value for real people. Any business should be able to explain how the are adding value and for whom. Ideally, this should be a simple process; a sentence or at . . . → Read More: Reintroducing the Enron Rule

Book Review – Talent Is Overrated

Good insights backed up by extensive research . . . → Read More: Book Review – Talent Is Overrated

Free Lunch

There is no such thing as a free lunch, even when it is packaged as a stimulus plan . . . → Read More: Free Lunch

Why are Banks Still Foreclosing?

Can anyone think of a more value destroying transaction than foreclosing a home in a dead real estate market. There are more than 700 houses in Detroit listed for less than $3000. And there not selling. In this climate banks can’t possibly expect to recover much of anything from a foreclosed. Considering legal costs, . . . → Read More: Why are Banks Still Foreclosing?

Does Tit-For-Tat Prioritize the Gains of Others Over Those of the Self?

The essential feature of a tit-for-tat strategy is reciprocity – rewarding cooperation and punishing defection. In his book, “Born to be Good”, Dacher Keltner claims that “tit-for-tat instantiates the principle of cost-benefit reversal”. He argues that a set of mechanisms that reverse the cost-benefit analysis of giving is built into the human organism. He . . . → Read More: Does Tit-For-Tat Prioritize the Gains of Others Over Those of the Self?

Deep Thinking on Banking

Forbes has a fascinating article by Laurence J. Kotlikoff and Edward Leamer, with fundamental thinking about banks.

They trace the problems of banks to the fundamental contradictions of having a highly leveraged financial firm, with assured returns and full liquidity for depositors, and opaque + illiquid assets. I agree with this gloomy prognosis. A . . . → Read More: Deep Thinking on Banking

Potash Corporation

On 24 April 2009 I was a guest judge on Canada’s national business channel Business News Network’s show Stars & Dogs with host Andrew Bell and Boyd Erman and the exchange is available.  The company under discussion was Potash Corporation and I realize some may be wondering what potash is.

Potassium carbonate, or potash, has . . . → Read More: Potash Corporation