Buffettique Discussion Threads

[worlds lrgest undies] 11/4/2007 14:26

Which major gold producer will benefit most from a big upswing in the AU price.

TIA

(Don't trust me scuzzy CDN stockbroker!)

[energyi] 14/4/2006 07:25

MORE THAN A GOOD STOCKPICKER...

That's what this book argues:

"The Real Warren Buffett is the first book to uncover the truth about how Buffett has consistently delivered his astonishing performance at Berkshire Hathaway not as a stock picker but as a CEO, leading people and managing capital.

At a time when Warren Buffett has again emerged as the defining sage and darling of Wall Street, this fascinating book explodes the myths that surround the man from Omaha and brings new insights into his remarkable successes - as a corporate leader, a capital manager, and as the second richest man in America.
Many best-selling books have tried to unlock Buffett's secrets by analyzing his genius as an investor. But they missed the real point! Zeroing in on his original management style and leadership approach, The Real Warren Buffett stands apart with its powerful and practical lessons in strategy, leadership and corporate governance.

A blend of biographical, business and psychological analysis, The Real Warren Buffett offers an original study of Warren Buffett's leadership and the art of acting like an owner. In a work of immense scope and range in which every principle is richly illustrated with quotes from Buffett himself, it is a unique look at Warren Buffett: a manager and leader who is recognized worldwide as a modern-day "man for all seasons".

...MORE:

[energyi] 29/1/2006 08:09

MUNGER SPEAKS - Excerpt

Is finding bargains difficult in today's market?
We wouldn't have $45 billion lying around if you could always find things to do in any volume you wanted. Being rational in the investment world at a time when other people are losing their minds -- usually all it does is keep you out of something that causes a lot of trouble for other people. If you stayed away from the mania in the high-tech stocks at its peak, you were saved from disaster later, but you didn't make any money.

Should people be investing more abroad, particularly in emerging markets?
Different foreign cultures have very different friendliness to the passive shareholder from abroad. Some would be as reliable as the United States to invest in, and others would be way less reliable. Because it's hard to quantify which ones are reliable and why, most people don't think about it at all. That's crazy. It's a very important subject. Assuming China grows like crazy, how much of the proceeds of that growth are going to flow through to the passive foreign owners of Chinese stock? That is a very intelligent question that practically nobody asks.

What do you think of the U.S. trade and budget deficits -- and their impact on the dollar, which Berkshire is still betting against?
It's not at all clear exactly from some objective bunch of economic data just where the dollar ought to trade compared to the Euro. Who in the hell knows? It's clear that you can't run twin deficits on the scale that the U.S. has forever. As [economist] Herb Stein said, "If something can't go on forever, it will eventually stop." But knowing just when it's going to stop is a very difficult matter

Is there a bubble in the real estate?
When I see people going to some old flea-bitten old condo and the list price is $1.8 million, and they decide to put it on the market for $2.2 million, and five people start bidding for it, and they sell it for $2.7 million, I say that's a bubble. So there are some bubbly places in the economy. I am amazed at the price of real estate in Manhattan.

So there is some bubble in the game. Is it going to go back to really cheap houses in good neighborhoods in good cities? I don't think so. So I think there will be huge collapses in some places, but, on average, I think that good houses in good places are going to be plenty expensive in future years.

Is there a bubble in energy stocks?
When it gets into these spikes, with shortages and uproar and so forth, people go bananas, but that's capitalism. If the price of automobiles were going up 40% a year, you'd have a boom in auto stocks. But if you stop to think about it, of the companies that you could have bought in, say, 1911, to hold for a long time, one of the very best stocks would have been Rockefeller's Standard Oil Trust. It became almost all of today's integrated oil companies.

How do you feel most corporate citizens behave in the U.S.?
Well, I disapprove of the way most executive compensation is arranged in America. I think it goes to gross excess. And I certainly don't like phony accounting that takes part of the real cost of running the business and doesn't run it through the income account as a charge against the reported earnings. I don't like dishonorable, lying accounting.

Do you think the stock market will return its long-term annualized 10% in the next decade?
A good figure for rational expectation would be no higher than 6%. I think it's unreasonable to assume that the world is going to try to arrange itself so that the inactive, asset-owning class is going to get a much higher share of the GDP than it normally gets. When you start thinking that way, you get into these modest figures. The reason the return has been so good in the past is that the price-earnings ratio went way up.

Ibbotson finds 10% average returns back to 1926, and Jeremy Siegel has found roughly the same back to 1802.
Jeremy Siegel's numbers are total balderdash. When you go back that long ago, you've got a different bunch of companies. You've got a bunch of railroads. It's a different world. I think it's like extrapolating human development by looking at the evolution of life from the worm on up. He's a nut case. There wasn't enough common stock investment for the ordinary person in 1880 to put in your eye.

What do you see for bonds?
The bond market has fewer opportunities now. The short-term rates are the same as the long-term rates, and the premium interest rate you get for taking risk is lower than it ought to be, given the risk. By definition, that's a world in which bond investment is much tougher to do with great advantage.

What do you expect in terms of returns for Berkshire Hathaway?
We have solemnly promised our shareholders that our future returns will be considerably below our previous returns.

@:

[energyi] 08/5/2004 09:20

WHAT IS GOING ON... ?
There's No Longer a Reality to Go Back To

I had a long chat this afternoon with two fund managers that run a $500Mn Hedge Fund. We talked about how the flood of liquidity from last year PUSHED ALL markets higher. Essentially, money was borrowed at very low rates (maybe as cheap as 1.25-1.50% in short term markets for strong borrowers) and invested almost anywhere that looked as if it would return more than that cost. This pushed up stocks and bonds, and all types of low quality assets, like junk bonds, emerging market debt, over geared property, low cap speculative stocks etc.

All this cheap money financing higher yielding assets can be called the "carry trade". The carry trade is now being unwound, which means that all sorts of assets are getting sold to repay debt, before debt costs push back up. Higher debt costs, maybe much higher debt costs are looking increasingly likely. So fund managers want to reduce their gearing.

Now if this continues, PROPERTY IS GOING TO GET SLAUGHTERED, along with some other assets. The ultimate geared asset is property, and Buy-to-Let investment properties, financed by lower cost short or medium term debt is a variation on the Carry Trade that has been entered by inexperienced new investors, supported by highly aggressive banks.

Here's a Property index: I-shares: C&S Realty Majors


At risk is not only property... but all sorts of debt and yielding assets, and even some assets without yields that got caught up in the speculative orgy. Hedge funds may disgorge assets, as their value falls, to reduce their debt obligations

Here's a Hedge Fund Index: S&P Hedge Fund Index


Property is key though, because a fair percentage of the property debt went into consumption, and that part is gone for good. And that spending helped prop of the economy. We spent more than we earned, adding debt, and borrowing spending from future years, when that Debt will get repaid.

NOW this is all set to unwind.
We saw 4 years of spending in 3 years, and now that may be followed by 3 years of spending in 4 years, which would mean a BIG DROP in the economy as spending slows and those debts get repaid.

There's no longer a reality to go back to.
Why do I say that? Almost 3 years ago prior to 9/11 when interest rates were above the level of inflation, the US had some $25 Trillion of debt. Now after those three short years of extremely accomodative monetary printing, the US has about $35 Trillion of debt, about 40% higher. That "reality" of rates at a stable 1% over inflation will not rest in the same place. If it can be found, it will need to be found somewhere else, perhaps AFTER a bout of inflation, a cycle of rising rates, and alot of painful debt restructuring and defaults.

The world will be a different place by the time we get there.

[energyi] 08/5/2004 08:52

A must read, Scrip's Pilgrimmage to Omaha:

[energyi] 02/11/2003 16:23

From The Sunday Times:

"Our country has been behaving like an extraordinarily rich family that possesses an immense farm. In order to consume 4% more than we produce - that's the trade deficit - we have, day-by-day, been both selling pieces of the farm and increasing the mortgage on what we stil have. We have entered the world of negative compounding - goodbye pleasure, hello pain."

(Warren Buffett)

[dylan] 28/10/2003 12:24

From ...

Buffett bets on weaker dollar

Buffett: Deficit concern led him to put his money where his mouth was
Warren Buffett, the billionaire investment guru, has predicted the dollar will continue to weaken and said he has for the first time been buying foreign currencies.

"Through the spring of 2002, I had lived nearly 72 years without purchasing a foreign currency," he was quoted by Fortune magazine as saying.

Since then, his investment group Berkshire Hathaway has made "significant investments" in, and still holds, several currencies, he said.

"To hold other currencies is to believe that the dollar will decline."

Mr Buffett, who in the 1990s famously preferred investing in "bricks-and-mortar" companies to the booming dot.coms, said he was hedging against the dollar because he was worried about the size of the US trade deficit.

He said the deficit had "greatly worsened, to the point that our country's 'net worth' so to speak, is now being transferred abroad at an alarming rate".

If this continued it would lead to "major trouble", Mr Buffett said.

He did not say which foreign currencies he now held.

In recent months, Mr Buffett has criticised the Bush administration's tax cuts as a gift to the rich and agreed to join the team of California governor-elect Arnold Schwarzenegger as economic adviser.

[paulismyname] 27/10/2003 21:48

An interesting read through and thanks to all the posters who have contributed. The only thing I really disagree with is a "attributed" statement from Warren Buffet saying he would hold onto a share if it fell 50%......unless all general markets fell alongside that type of fall I have to say like many people here I have learned my lesson on that one and would have applied a stop loss at some point (if possible) well before that type of fall

[goatbreath] 27/10/2003 16:42

Here's a link to his article in Fortune:

[jl202] 11/2/2003 22:09

Well, he got this part wrong,,


jl202 - 22 Oct'02 - 11:23 - 1594 of 2844


October 22, 2002

Sterling example of a sound economy
Economic View by Anatole Kaletsky



THE global stock markets appear to have hit bottom, removing one of the two main sources of economic uncertainty for the year ahead; the other being the possibility of a serious war in the Middle East. As investors and businessmen lift their eyes beyond immediate worries, an unexpected reality may come into focus.
Britain has been doing rather well for more than a decade, is likely to continue doing well in the years ahead and should now be due for a substantial rerating in relation to other key economies.

This once and for all upward adjustment has already occurred in the foreign exchanges, where the pound has been the world's strongest currency during the past five years. In the bond market, too, British assets have done exceptionally well - so much so that, the British Government, which was still struggling to finance mind-boggling budget deficits as recently as 1993, now borrows at lower long-term interest rates than the Governments of Germany and France and the same rate as the US.

In the stock market, by contrast, British companies still mostly trade at discounts to their continental and American counterparts. Equity investors, who are supposed to look further ahead than currency traders or bond investors, have consistently underestimated the British economy's resilience. As the charts illustrate, British shares now trade well below their long-run average in relation to GDP and have lost all their relative gains since 1985. In Germany and America, by contrast, shares are still rated as highly as they were in 1996. Moreover, investment institutions have been pushing money into the supposedly safe "international" sectors of the London Stock Exchange, which have the least connection to domestic economic growth. Pharmaceuticals, oil, telecoms and finance, between them now account for more than 60 per cent of the FTSE 100 index, even though they represent less than 20 per cent of Britain's GDP.

British investors are especially reluctant to put their money into cyclical industries such as retailing, construction, manufacturing and transport, since these are considered most vulnerable to an economic downturn. By the same token, British industrial managers have been slow to invest in new capacity, despite the excellent performance of the British domestic economy in the past ten years.

The contrast between the scepticism of equity investors and industrialists and the optimism of international holders of sterling, raises an obvious question: which group will be proved right? The reasons for Britain's rerating by international investors appear well founded. First, there were the Thatcherite trade union and market reforms of the 1980s, which became a permanent fixture of Britain's economic structure. The long-term credibility of these structural changes was enormously enhanced by the election of a Labour Government committed to maintaining the essential features of economic Thatcherism. Hence the tremendous rerating of sterling in the foreign exchanges after 1997.

Secondly, there was the policy of proactive demand management successful implemented by Norman Lamont's Treasury after Black Wednesday and then transferred to the Bank of England after 1997.

Britain's superiority in macroeconomic policymaking has been reinforced by the decision to stay out of the euro, which has underlined the advantages of using an active, domestically focused monetary policy to stabilise demand, as against the passive laissez-faire monetarism of the European Central Bank.

Thirdly, there has been Britain's comparative advantage in fast-growing industries such as business services, finance, media and higher education, rather than mass-production manufacturing industries subject to intense global competition. This comparative advantage, partly because of the growing dominance of the English language and partly the emphasis on individualism over rigour in Britain's education system, has become particularly valuable as a result of the integration of the European single market, which has led to growing industrial specialisation and consolidation of all Europe's financial and business activities in London.

If these advantages, reinforced by Britain's decision to stay out of the euro, were not persuasive enough to justify an upward rerating of sterling assets, consider the evidence of the past decade: for the ten consecutive years since the pound's expulsion from the European exchange-rate mechanism, Britain has enjoyed a strong and steady economic expansion. Never before in history has Britain experienced such an uninterrupted period of crisis-free prosperity. And even more remarkable has been Britain's performance in relation to economies which have traditionally been more successful. In the decade to 2002, Britain enjoyed stronger real economic growth than any other G7 country apart from the US and it beat even America's record in terms of per capita GDP. More surprisingly still, Britain has managed to combine all this growth with a world-beating inflation performance and the world's strongest currency.

Average inflation in the past decade has been lower in Britain than in America and in the rest of Europe. The pound has risen not only against the euro and former mark, but also (albeit marginally) against the dollar and the yen since the end of 1992. The stronger pound may have been unwelcome to manufacturers and exporters, but it has allowed the British to overtake the Italians, French and this year probably the Germans, in terms of international purchasing power. This is a level of relative prosperity that the British people have not enjoyed since the 1940s and it virtually rules out the possibility that they would vote to join the euro anytime in the next few years.

Why, then, are British assets outside the favoured finance, oil, pharmaceuticals and telecom industries, still so disdained? Partly, perhaps, because nearly all British businessmen and economists have been preaching doom and gloom throughout this remarkable ten-year period, and they still are today. The prophecies of doom in the past few months have focused on four possible disasters: a "double-dip" recession leading to Japanese-style deflation; an explosion of government borrowing, producing a crisis in government finances; a bust in the housing market; and finally, that hardy perennial of the 1960s, a balance of payments and sterling crisis.

Luckily, such disaster scenarios look even less plausible in the next few years than they were in the past decade. Take deflation. With interest rates at a 40-year low, soaring public spending and economic activity accelerating throughout 2002, after a sluggish quarter or two in the aftermath of September 11, the chances of recession or deflation next year are as low as they have been throughout the past decade.

Government finances may seem slightly more problematic, given the Treasury's propensity for throwing money at public services with no clear idea of how they should be managed. But the contradictions between Treasury control and entrepreneurial independence, between the egalitarianism of tax-based financing and the individualism of consumer choice are unlikely to produce any serious fiscal pressures until the next Parliament, from 2005 onwards.

Neither does a bust in the housing market seem very threatening in the year ahead. Annual inflation of 20 per cent in house prices cannot, of course, continue. But the fact that the rate of increase is unsustainable says nothing about the absolute level of house prices. Much of the 50 per cent gain in house prices during the past four years could be explained as a belated process of catching-up with the growth of personal incomes and a structural down-shift in Britain's interest rates and inflation. While the house price to earnings ratio is now about 15 per cent above its long-term average, the total cost of home ownership is near a 30-year low. This suggests that a bust in housing is unlikely unless another big surge in prices occurs first. The real threat to the British economy in the next few years is much more likely to be overheating and inflation than recession and deflation.

What about the final prophecy of doom - that manufacturing industry will collapse as a result of the persistently overvalued pound? This seems the least plausible danger of all. As explained above, Britain's focus on service industries is a natural consequence of growing specialisation in Europe and a source of comparative advantage. In any case, there is no evidence that the pound is "overvalued". Sterling has remained steady at around its present level for more than five years now. Britain's labour costs are 40 per below Germany's, 10 per cent lower than the EU average, and identical to costs in France. The current account deficit is very moderate 2.5 per cent of GDP and shows no sign of expanding to an unsustainable level. Given the fact that Britain is in the middle of a consumer boom while its European trading partners are in recession, this modest deficit confirms my main conclusion: Britain's economic fundamentals remain about as healthy as they have been for a century past. In the weeks ahead, the stock market may power ahead or it may fall further; but in the long-run, optimism about Britain will probably be proved right.

[ashtongray] 04/12/2002 21:03

Yes indeed, we bow bfore him, we are not worthy!

[ashtongray] 04/12/2002 19:43

We aren't exactly lacking in self esteem are we??

A journo single handedly manipulating the Nikkei....hmmmmm.

[jl202] 04/12/2002 10:16

The man is making a habit of this (causing market routs) be it the euro or Nikkei, and he recently called the bottom on the ftse...

December 03, 2002

Economic View by Anatole Kaletsky

Why 'my' Japanese crash may be pivotal






LAST month I had the strange experience of causing a one-man stock market crash. The world's biggest bank by assets, Mizuho Holdings, lost 15 per cent of its value in a single hour and the Nikkei average fell 5 per cent to its lowest level in two decades, in response to an article which I wrote in that morning's Times.
Although this curious event happened two weeks ago and the falls in the Tokyo stock market have now been completely reversed, some surprising conclusions may possibly be drawn from it about the state of the world's second biggest economy and financial market - and prospects in the year ahead.

The article in question reported an interview with Hiroshi Okuda, the chairman of Toyota and of the Keidanren, the Japanese industrialists' association. Mr Okuda, speaking to five British journalists armed with radio recorders and a TV camera, unexpectedly decided to think aloud about the probability that one of Japan's biggest banks would be nationalised. This comment seemed to contradict the widespread view in Tokyo that the four major banks were "too big to fail" and investors dumped the shares of two "fragile" banks, generally agreed to be Mizuho and UFJ.

Although the Times story seemed to have the greatest market impact in Tokyo, an almost identical account appeared in The Guardian and the interview was recorded by the BBC World Service and Channel 4 News.

The Keidanren quickly issued a denial, stating that Mr Okuda had never spoken "a word on nationalisation of the four major banks" and adding that his comments had been misreported and misunderstood. Let me therefore report precisely what Mr Okuda said.

He started by answering a question about the banking reforms recently introduced by Hazeo Takenaka, the Financial Services Minister. Were foreign investors justified in thinking that genuine reforms would require the failure of one of the major banks? "I myself believe that these four major banks will survive," Mr Okuda answered. "But are you asking whether they would be privately owned or nationalised?" He then explained, without further prompting, that two of these big four banks were "very solid", but the other two were "fragile". He added: "As we see the progression of the Takenaka reform scheme in December, the possible consequence that you alluded to may be seen."

Asked whether this meant major banks would be nationalised, he answered: "Some banks may not be able to meet international standards for capital adequacy by the end of this year. Perhaps in the next few months or so it will become clear which banks are not able to meet the 8 per cent capital level. The Government will then have to put in capital and the banks will be nationalised."

Finally, pressed on the reason why these dramatic events could occur as soon as the year-end, he took the trouble to spell out a detailed scenario, involving "symbolic" bankruptcies of some of the "so-called precarious companies" on "the list of 30 companies or the list of 51 companies being circulated" around Japan. Such bankruptcies would lead to "a very difficult situation for the management of the big banks" by the end of the year.

What conclusions can be drawn from this strange dialogue? The first and most surprising one is that the Japanese stock market may finally have hit a solid bottom last month.

When panic selling of the kind seen last month can be triggered by a newspaper story reporting nothing more than the comments of a private individual, however senior, the chances are that the market is near a selling climax. Investors in Japan may finally have reached the capitulation point that marks the end of nearly every bear market.

The only other time that I was personally involved in a similar situation was almost exactly two years ago, when Wim Duisenberg, the President of the European Central Bank, unaccountably reflected out loud, in an interview which he himself insisted should be "on the record", about the futility of efforts to support the euro through intervention.

The euro fell almost 3 per cent in a few hours after this story was published. Some of the world's biggest currency traders told me later that they had decided to liquidate their longstanding euro positions that morning.

The next day, the euro fell another 2 per cent to 82.50 - and that turned out to be the currency's record low. It seems quite possible that something similar may have happened to Japanese equities - including even Japanese bank shares - last month.

My second conclusion was that Mr Okuda, along with other Japanese industrialists who who have hinted at similar impatience with the banks' reforms, may not have been entirely surprised by the market reaction. Japan is in a state of civil war over the fate of the Takenaka financial reform plan and all the contending parties in this struggle are willing to deploy whatever weapons may come to hand.

Maybe some of Japan's top industrialists are finally losing patience with the way that a small group of banks and insolvent "zombie" companies have hijacked the Japanese political system and sabotaged the economy.

Dividing lines are certainly clearer than ever before between all the "opposing forces" involved in Japan's endlessly complex struggle: reformers versus reactionaries; Bank of Japan (BoJ) versus Ministry of Finance; industrialists versus bankers; small businesses versus big ones; successful cash-rich companies (such as Toyota) versus borrowers sinking ever deeper into debt.

While it is impossible to understand, much less to predict, how all these forces will interact, several practical conclusions can be made after a visit to Japan:


Every intelligent observer in Tokyo now agrees that Japan's crisis must be treated with a properly balanced combination of macroeconomic and structural policies.
The BoJ would seriously consider a massive further monetary expansion and a huge increase in its government bond purchases if the Ministry of Finance would agree to cut taxes and nationalise one or more of the major banks. That is the good news. The bad news is that most of the actors who must co-ordinate their actions - the BoJ, the politicians, the private bankers and the feuding departments of the Ministry of Finance - seem hardly to be on speaking terms.

Since each institution's actions depend on decisions made by the others, paralysis ensues. Even if we knew how or when the reform process might be triggered, it would be impossible to describe the exact denouement, any more than one can predict the deployment of pieces at the end of a chess game by observing the first few moves.


The Takenaka financial reform plan is by no means dead, as many Western analysts suggest, but neither is it likely to be as revolutionary as originally hoped.
Mr Takenaka, and maybe even Mr Okuda, may genuinely want to liquidate problem borrowers and nationalise some of the banks, but the Japanese establishment has not yet accepted that this must happen.

What mainly constrains the reform process is not the power of the banks but the fear of bringing down small companies, small retailers and construction and distribution companies, which provide the bedrock political support to the Liberal Democratic Party.

Everybody, including even the radical reformers in the financial services agency and the BoJ, seems to have accepted that small companies will have to continue enjoying protection and subsidised lending for many years to come.


Whatever happens in the financial markets and banking system, Japan's real economy is now enjoying a decent cyclical recovery and this will probably continue for the next year or two.
This was confirmed by the strong GDP figures published last month. Most large Japanese companies, (as long as they do not belong in the four ugly sectors of retailing, distribution, property and construction) are solvent and have no problems raising finance. Their inventories are low and many have enjoyed surprisingly strong domestic demand.

Japanese growth is now led by consumption, not exports and there is every reason to expect this pattern to continue. Consumers have long since given up on the stock market and are showing an increasing propensity to spend. There is no reason why bank reform should make them panic, especially if small firms, which are the really big employers, continue to enjoy government support.

What does all this imply for the Japanese economy and financial markets? This is where rational analysis breaks down. Even if the real economy continues to grow, as it probably will, the stock market could still collapse in the event of some big financial failures.

In the long term, the balance of risks and rewards in Japan is definitely biased to the upside.

But in the long run, we're all dead - and investors in Japan know this better than anyone else.

[jl202] 01/10/2002 09:15

the liquid money is in the hands of seasoned investors, not the majority of the public who can't switch portfolio allocation from equity to bonds to property to cash at will and in a short time frame. The vast majority of property is just following what joe bloggs is doing which is spending debt finance on big tickets having cashed in his peps and isas long ago. He's also refinancing his house to pay off these credit purchases and spending a little of that money as well. Once house prices slow down, which they will as a matter of arithmatic certainty, its only a question of when, then his spending ability will be curtailed and national consumption, till now the chancellor's boon, will shrink. This, coupled with resumed worry about wage expectations as unemployment increases begin to bite into the increases in state hiring, will further jepordise the strength of the UK consumer. Since business is not forthcoming to take up the reigns in the wake of ever present over investment through the 98-00 boom/bubble now bust and generalised over supply in western markets this will put pressure on the national accounts. Oh, and last but not least Brown chose this as the moment to try some good old fashioned tax and spend policy with the increase in NI and NHS - all based on boom time expectations; as was, for arguements sake, his tax on pension divis.

It is only too clear to see that the chancellor has made a complete balls up and will need to address public finances urgently come November, before we get a 90s style property crash on the back of surges in unemployment.

It is a fact of political egotism that I doubt he will have the guts to remedy the impending employment cuts business will make in this country if business and investment do not begin to pick up, with a brief Christmas lead boomlet on the consumer side before said pauper finally rolls over to die amongst his credit bills.

On the one hand US predictions of 4th quarter economic growth look fragile against hopes of 4% annualised. On the other the chancellor is funding "Keynesian" style spending via a tax on employment! These are boom policies following a boom he never saw which will lead us into the bust he never expected.

Disasterous!

jl202 (attempting not to sound too logical or pessimistic,,)

[jl202] 30/9/2002 13:07

Comment from this morning's Hoodless Brennan:

"The employers of Great Britain appear on the verge of revolt, as 6-months after the budget announcement in April of the governments intention of increasing employer and employee National Insurance contributions, it is becoming clearer that the extra costs will not be absorbed in higher growth, or the gathering recovery, outlined by the Chancellor of the Exchequer Gordon Brown.
The economy is slowing, not growing, and the Chancellor's forecasts of economic growth rising to between 3% & 3.5% this year, are going to be missed by a wide margin. In fact a rise in the NIC could put an even stronger brake on recovery than was initially feared. The Great British employer now has to come to terms with the fact that the NIC increases are likely to be more costly and damaging than initially thought.
Last week, the Engineering Employers Federation issued stark warnings to the Government saying, that as a result of the increases, more than half of the country's manufacturing companies will reduce employment levels and went on to say that more than a third intend to move costs abroad."

[locket] 28/9/2002 00:41

excellent thread
I have been reading A.K. for many years - very bright

[mitzis] 27/9/2002 21:36

dont know what he must have said but the Dows down 300 points at close.. anyone have an update...