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What the "smartest man in Europe" thinks...
Old 07-12-2011, 10:00 PM   #1
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What the "smartest man in Europe" thinks...

Byron Wien, a.k.a. Mr. Positive on Stocks, relates his conversation with the "smartest man in Europe" and it ain't pretty. The whole commentary is worth your while:

Its very hard to make money in stocks. Earnings growth is the key to equity market performance and with the heavy debt burdens of the developed economies of the United States and Europe, growth is likely to be slow. I know earnings are going to be good this year but profit margins are high and it will be hard for earnings to exceed the nominal growth rate of the economy on a sustained basis."

http://www.blackstone.com/cps/rde/xchg/bxcom/hs/firm_commentary_6873.htm
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Old 07-13-2011, 04:15 AM   #2
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I am happy I do not own stocks... Will stay the course.
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Old 07-13-2011, 05:55 AM   #3
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Not much new from what I could see (if you have been following the whole deficit/debt issue closely and the linkage to the macro economy.

One comment that I noticed... and that I am aware of.

Quote:
“The United States is destroying its currency. You cannot keep borrowing from abroad at the rate you are doing it and expect the dollar to maintain its value. America has been living beyond its means for a long time. Most people think that means that consumers have been spending too much and borrowing to do it, but that’s not what bothers me. The government has been spending seriously beyond its means. It has 150 military bases around the world and is involved in three wars. How does that make sense when you are running a deficit of $1.5 trillion?
I agree with his observation. Why are we paying to protect countries that have the money to protect themselves?

Hopefully we accelerate out exit from Iraq and Afghanistan... Sustained war appears to be bad for our economy.
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Old 07-13-2011, 04:10 PM   #4
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Byron Wien is not the first to make those observations about the absolute unsustainability of US spending. It's so obvious to so many.




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Old 07-13-2011, 10:55 PM   #5
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There has never been a good war or a bad peace. Benjamin Franklin.
No country has ever benefited from a prolonged war paraphrased from the art of war.

We are dead broke and fighting 3 wars. Some one help me figure that one out
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Old 07-14-2011, 12:19 PM   #6
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There has never been a good war or a bad peace. Benjamin Franklin.
No country has ever benefited from a prolonged war paraphrased from the art of war.

We are dead broke and fighting 3 wars. Some one help me figure that one out
Unfortunately IMHO the US is no longer involved in a war in Iraq and Afghanistan. Instead, we've moved onto nation-building exercises. And that is an exercise that is far more costly, and success more ellusive, than a war.
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Old 07-14-2011, 01:08 PM   #7
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Unfortunately IMHO the US is no longer involved in a war in Iraq and Afghanistan. Instead, we've moved onto nation-building exercises. And that is an exercise that is far more costly, and success more ellusive, than a war.
The U.S. may be enaging in "nation rebuilding" in a way similar to Europe and Japan after WWII, with a nice little ancillary benefit of opening lucrative new markets for U.S. manufacturers and service providers.

Step 1 - defeat current regime and install regime friendly to U.S.
Step 2 - give out rebuilding contracts to U.S. contractors, rather than local contractors, thereby establishing a dependency
Step 3 - PROFIT
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Old 07-14-2011, 01:23 PM   #8
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Why are we paying to protect countries that have the money to protect themselves?
Because there is profit to be had.
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Old 07-14-2011, 08:02 PM   #9
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The U.S. may be enaging in "nation rebuilding" in a way similar to Europe and Japan after WWII, with a nice little ancillary benefit of opening lucrative new markets for U.S. manufacturers and service providers.

Step 1 - defeat current regime and install regime friendly to U.S.
Step 2 - give out rebuilding contracts to U.S. contractors, rather than local contractors, thereby establishing a dependency
Step 3 - PROFIT
Good luck with the ROI on money spent in Afghanstan and Iraq. Only way these wars pay for themselves is if the US confiscates Iraqi oil and we won't.
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Old 07-16-2011, 04:50 PM   #10
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Good luck with the ROI on money spent in Afghanstan and Iraq. Only way these wars pay for themselves is if the US confiscates Iraqi oil and we won't.
I think the ROI on Iraq maybe ok (about the same as money markets ). We were spending a few billion a year patrolling the no fly zone, and billions more and spending political capital with the bases in Saudi Arabia, Kuwait. Plus god know how much training for exercises what if "Saddam invades XYZ. Given the nature of his sons I didn't see that changing for a generation. Realistically, I doubt we turn a "profit" (i.e. the cost of the war exceed the costs of containment" in a generation or two.

In the case of Afghanistan, it is the definition of a money pit. Even before the war started there; this armchair general, looked at the terrain, the war-like culture, and the logistically challenges and thought, "Afghanistan has to be the worse place in the world for the US to fight a war". A decade latter it is even worse than I imagined.
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Old 07-16-2011, 05:21 PM   #11
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I think the ROI on Iraq maybe ok (about the same as money markets ). We were spending a few billion a year patrolling the no fly zone, and billions more and spending political capital with the bases in Saudi Arabia, Kuwait. Plus god know how much training for exercises what if "Saddam invades XYZ. Given the nature of his sons I didn't see that changing for a generation. Realistically, I doubt we turn a "profit" (i.e. the cost of the war exceed the costs of containment" in a generation or two.

In the case of Afghanistan, it is the definition of a money pit. Even before the war started there; this armchair general, looked at the terrain, the war-like culture, and the logistically challenges and thought, "Afghanistan has to be the worse place in the world for the US to fight a war". A decade latter it is even worse than I imagined.
You sound like Alexander the Great. From Wikipedia:

It had taken Alexander only six months to conquer Persia (Iran), but it took him nearly three years (from about 330 BC327 BC) to subdue Afghanistan. Moving eastward from Persia, the Macedonian leader encountered fierce resistance from the local tribes of Aria (satrapy), Drangiana (now part of Afghanistan, Pakistan and Eastern Iran), Arachosia (South and Central Afghanistan) and Bactria (North and Central Afghanistan).

Or if you like, from Rambo III:

Mousa: This is Afghanistan ... Alexander the Great try to conquer this country ... then Genghis Khan, then the British. Now Russia. But Afghan people fight hard, they never be defeated. Ancient enemy make prayer about these people ... you wish to hear?
Rambo:
Um-hum.
Mousa:
Very good. It says, 'May God deliver us from the venom of the Cobra, teeth of the tiger, and the vengeance of the Afghan.' Understand what this means?
Rambo:
That you guys don't take any ****?
Mousa:
Yes ... something like this.
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Old 07-16-2011, 05:24 PM   #12
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I think the ROI on Iraq maybe ok (about the same as money markets ). We were spending a few billion a year patrolling the no fly zone, and billions more and spending political capital with the bases in Saudi Arabia, Kuwait. Plus god know how much training for exercises what if "Saddam invades XYZ. Given the nature of his sons I didn't see that changing for a generation. Realistically, I doubt we turn a "profit" (i.e. the cost of the war exceed the costs of containment" in a generation or two.

In the case of Afghanistan, it is the definition of a money pit. Even before the war started there; this armchair general, looked at the terrain, the war-like culture, and the logistically challenges and thought, "Afghanistan has to be the worse place in the world for the US to fight a war". A decade latter it is even worse than I imagined.
And on top of all that there's the human cost...
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Old 07-16-2011, 05:33 PM   #13
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There has never been a good war or a bad peace. Benjamin Franklin.
I like Ben, but this could have just as easily been spoken by Neville Chamberlain.

I prefer this Franklin quote: "Beer is proof that God loves us and wants us to be happy." Now you're talking, Ben.
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Old 07-16-2011, 05:50 PM   #14
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And on top of all that there's the human cost...

Yes, but lets not pretend that people in Iraq and Afghanistan weren't dying by the tens of thousands a year, under their current leaders. If you think that Assad is being brutal to the protestors in Syria, Saddam would have many times worse.

Ok I should probably stop least porky be summoned.
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Old 07-16-2011, 07:04 PM   #15
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Yes, but lets not pretend that people in Iraq and Afghanistan weren't dying by the tens of thousands a year, under their current leaders. If you think that Assad is being brutal to the protestors in Syria, Saddam would have many times worse.

Ok I should probably stop least porky be summoned.
But the deaths weren't US service men and women. But like you say... porky.
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