Bureau of Weights and Measures

I’m glad you saved this for inflation-ex inflation day!
Congrats……..A picture is worth a thousand blogs!

And CPI was 5.6% in the fourth quarter, that means retail sales was about -0.2% in the fourth quarter

Faith-based accounting, again.

Belief in something is sufficient to achieve the desired outcome.

Debate is traitorous and defeatist.

Eddy Asked:

Could you or any knowledgable readers please explain the implications of foreign sovereign ownership of U.S. Banks?

reply: There are few, if any implications. If anything, the repatriation of US dollars from foreign sources will improve the balance of payments and strengthen the dollar. Think of it as ‘second chance’ money … a windfall of sorts that dumbass bank managers can be thankful for.

BTW, remember … for every loser there is a winner. The cash they lost didn’t evaporate. That Paulson character got a lot of it. The rest went somewhere else, yet to be explained. Big events like this are a zero sum game. The news media just emphasizes the losers. Thankfully, this creates investment opportunities for those who have available cash.

Hey! I still dont’ get what Volker is going on about.

His overall Thesis is that

keynesian economics Causes Stagflation….

Which is classic Austrian School Economics….. Learned the hard way…

http://www.pbs.org/wgbh/commandingheights/shared/minitextlo/int_paulvolcker.html#3

Is it just that the usual suspects are trying to spin it.

I may have to go get the new yorker…. Anyone have an opinion…??

Cinefoz – “If anything, the repatriation of US dollars from foreign sources will improve the balance of payments…”

My understanding is that the foreign investment would be accounted for as a capital account inflow. The “excess foreign savings” view of the current account deficit (put forth by Ben Bernanke, among others) asserts that by providing capital account inflows at low prices, these flows encourage and enable the matching current account outflows (deficit). Also, if and when the investments generate income and this income is paid out to the foreign shareholders, a negative current account flow will happen.

Returning to the original question, a big potential upside to these investments is that it may help smooth the way for the introduction of more sophisticated US banking methods to the investor home markets.

MS,

Does the apparent discrepency have anything to do with different times for fixing yesterday’s close? There was mucho fluctuating with the Intel news after the 4:00 close.

The close on QID (46.50) appears to be post-Intel. My screen shows the 4:00pm price as 45.53.

Just a thought.

Eric Davis,

I wondered that too, but QID was x-div on Dec 20th (per Reuters).

MS & Costa,

Yup, it’s a timing issue on yesterday’s close. FYI – here’s the Proshare explanation.

darn i was hoping it was an unexpected dividend add to that nice return. QLD was also different at the close yesterday too

Estragon,

Capital can be returned to the US by exports from the US, sales of US debt to foreigners, and foreign investment in the US. Profits on foreign investment are another means to transfer capital.

The Balance of Payments is defined as a summary of total international transactions. It is the sum of the Current Account, The Capital Account, and the Financial Account.

The Current Account involves goods and services. The Capital Account deals with fixed assets. The Financial Account describes foreign direct investment.

Go to Wikipedia for a good definition.

One is not ‘better’ than the other, unless you get Lou Dobbs talking about it. Then, the one that sets him off is the ‘bad’ one … not because of the economics, but because of the noise level from him it incited.

Apparently it has to do with the closing quote from AMEX and the difference between the close of the Q’s ( on the NAZ) and the close of it over the ETF…

Overall a pretty weak argument but what it does say is that the games continue without any regard.

In any case I am done with it….

Seems to me it’s just another way to manipulate a large exit of some sort.

Ciao
MS

I’m sure it is, schumacher, I’m sure it is…

cinefoz,

I’m not saying one type of flow is “better” than the other. Foreign investment brings with it the right of the investor to share in future profits though. Whether that’s “bad” depends on whether the investment results in higher profits than would have been the case had the foreign investment not been made.

In this case, the investment will very likely be positive overall. If only we could say the same for the run-up in house prices financed at least in part by the capital (or as you noted, financial) account surplus.

Dear Schuey,

The explanation for the divergence is that QID trades on AMEX and QQQQ trades on Nasdaq. For QID, the regular session ends at 4:15. For QQQQ, it ends at 4:00. Normally, that doesn’t pose a problem, but because Intel came out with their earnings right at 4:16, some of the QID trades that executed between 4:15 and 4:19 got counted as part of the regular session, which caused QID to officially close at 46.50, even though it actually closed at 45.28. Now, it is possible for these things to trade themselves out of equilibrium, but in order to spot when that happens, you’ll want to be sure to define your own closing prices.

Yours truly,
Dgov

The easiest way to compare the relationship between the two securities is to calculate the ratio between the net%chg of QID and the net%chg of QQQQ using, as your closing prices, the price that each was trading at as of 4:00pm ET. We would expect the ratio to be -2.00, on average. But there will be some fluctuations. Today, as of 3:54, the ratio is -2.1192. (I get that by taking, as the closing prices, 45.53 for QID, and 46.58 for QQQQ. My prices as of 3:54pm today are 46.40 for QID, and 46.16 for QQQQ.)