U.S. Economy Shrinks in 4th Qtr

[Ben Kenobi]

Well, sorry to burst your bubble, but there is no dispute on the 112 and 14,009 prices, and I got inflationary data off of Bureau of Labor Statistics, which tracks and publishes that data, so no dispute there.

Already provided a source, fwiw. You might want to try to keep up rather than pulling numbers outta your ass.

[MichaeltheGreat]

You misquote and distort other people's statements.

You shift arguments, e.g. a discussion of the inadequacy of an average measure of inflation gets twisted to a purported statement that the economy is fine because the computer industry is supposedly represented as doing well (when its performance isn't even discussed - the discussion was the effects of certain technologies and costs propagated throughout the economy).

So, long story short, nobody takes you seriously, and you don't provide anything worthy of anyone's "best" since the best conclusion is you simply don't understand and the worst is that you're playing games and trolling.

[MichaeltheGreat]

Already provided a source, fwiw. You might want to try to keep up rather than pulling numbers outta your ass.

Operative phrase being "fwiw"

I can find "sources" to prove the moon landings were fake, as is the ISS, and 9/11 was an inside job.

Do you dispute the current close at 14,009? Do you dispute the Jan 2, 1942 close at 112? Do you dispute the cumulative inflation number based on 70 years of year over year data from BLS?

[Ben Kenobi]

You shift arguments, e.g. a discussion of the inadequacy of an average measure of inflation gets twisted to a purported statement that the economy is fine because the computer industry is supposedly represented as doing well (when its performance isn't even discussed - the discussion was the effects of certain technologies and costs propagated throughout the economy).

Yes, and my argument is that the bulk of the economic growth associated with computerization occurred pre 2000, not post 2000, a claim you entirely dismissed. Probably because the evidence is pretty strong for this.

So, long story short, nobody takes you seriously, and you don't provide anything worthy of anyone's "best" since the best conclusion is you simply don't understand and the worst is that you're playing games and trolling.

What's your yearly rate of return, MtG? I wish I had sucker clients who didn't take inflation into account. That's like free money, every year.

[Ben Kenobi]

I can find "sources" to prove the moon landings were fake, as is the ISS, and 9/11 was an inside job.

Well, then. I don't see what's wrong with my source.

Do you dispute the current close at 14,009? Do you dispute the Jan 2, 1942 close at 112? Do you dispute the cumulative inflation number based on 70 years of year over year data from BLS?

Again, I've already provided reliable numbers pricing the DOW at constant dollars from 1913 onwards.

[Ben Kenobi]

Question, how does someone end up managing 25 million dollar accounts without an economics degree?

[MichaeltheGreat]

That doesn't exactly make me feel more confident, fwiw.

It's not worth much, because I don't give a flying **** about your confidence unless you magically become an executive with one of my clients who has say-so with whether my check gets cut.

It does mean I deal with the field at a little higher level than a Sunday school teacher.

You should show this to your clients.

I absolutely share my views on the value of economists and consultant with my consulting clients. They tend to agree. The people I work with on the financing side of things aren't engaging me as a consultant, they're dealing with me across the table.

So, what actual value are you providing to your clients? If you don't believe that there's any way to successfully grow the economy then what exactly are you doing?

I make them money hand over fist. And once again, you're completely making up statements which I never made. I'm getting rather disinterested in it.

Really? I am. That's the whole point of this thread.

Then you should have stuck to that point, because you segued into some collateral comparison of inflation to DJIA values over two arbitrary periods.

Your oppositional thesis is "no one knows how the economy works." Straight out of margaritaville.

My thesis is that the economy is a complex system which evolves over time, and provides plenty of opportunity for people to see what they want to see and get paid for seeing what their clients want them to see.

I don't give a ****, I'm in the money making business.

Then economics doesn't care.

Ignorance of emerging technology isn't an argument for relevance.

Again, inflation is very relevant to investment. Very relevant.

Maybe for your 401k or passbook savings account. There's a whole world out there beyond your grasp, Columbo.

So, tell me, what's the age that people spend the most?

I don't deal with consumer marketing, so I frankly don't give a ****.

So, what's your rate of return? Does it compensate for your take?

Not my rate of return, but the client's thresholds for go/no-go decisions on acquisition of rights (greenfield) or hard assets:
Unleveraged pre-tax terminal IRR in the 15+% range for greenfield development. For buy and flip acquisitions, leveraged after-tax IRR in the high teens to low twenties with a five to seven year max exit window. For non-tax advantaged buy and hold acquisitions, 15% annual cash on cash. All of which are way in excess of rate of inflation. And those are just the thresholds to warrant investment committee review. Those numbers are all predicated on the revenue side being long-term contracted with rated entities, and cost side meeting minimum confidence and risk assessment levels.

If inflation doubles, those numbers won't move a bit, unless competitive opportunity or risk moves. Same thing if inflation stays as it is but competitive opportunity costs and/or risk increases or decreases.

My take is in the form of hourly fees and commissions that are built into the acquisition costs.

You're the only one working at a job that he's said provides exactly zero value.

I don't get paid to provide value. I get paid to make my clients money. If they associate that with value, nice for them as long as my check clears the bank.

[MichaeltheGreat]

Question, how does someone end up managing 25 million dollar accounts without an economics degree?

I don't manage accounts. I target wholesale energy assets for development or acquisition, then develop the financial and technical justifications for the acquisition. The weenies who manage the accounts are on the other side of the table a couple of levels down from the people I deal with.

Although I am working with one potential investor (in this case, I'm on the current asset owner side of the table) who wants to retain me as asset manager over either two or three plants they want to buy to entree into the California renewable energy market. One of the three plants is sort of a red-headed stepchild the current owners wanted to package with the other two to try to move it, but the people who want me as their ongoing asset manager after acquisition aren't really enamored of the third plant. However, they're in competition with two other groups who may want the third plant, but haven't talked to me about the asset management because they do that themselves.

[Ben Kenobi]

want to buy to entree into the California renewable energy market

Why on earth would they want to do that? Solar's not ready yet. Wind is terrible. I've been going over the solar numbers and it's not ready for prime time. The Cali government isn't going to be in any position to forge ahead. What on earth do they see in this market that they would make any money?

[DinoDoc]

Why on earth would they want to do that?

Subsidies from the government.

[Ben Kenobi]

It's not worth much, because I don't give a flying **** about your confidence unless you magically become an executive with one of my clients who has say-so with whether my check gets cut.

It does mean I deal with the field at a little higher level than a Sunday school teacher.

Hey, fair game there. It doesn't matter what I think. What matters are your actual clients. If it's working for them, then I can't really say much, can I? You can only play against your table.

I absolutely share my views on the value of economists and consultant with my consulting clients. They tend to agree. The people I work with on the financing side of things aren't engaging me as a consultant, they're dealing with me across the table.

To be fair, I think the same about most of them. Where we disagree isn't that we think the prevailing school of thought is wrong. Where we disagree is over where the answers are located. I like the Austrians because I see the data as supportive of their economic theory giving nations a competitive advantage over other nations. In fact, I see it as beneficial the more people convert away from the Austrians. So, the more disrespect I get from people here, is certainly fine by me. I'm not playing to make you rich.

Then you should have stuck to that point, because you segued into some collateral comparison of inflation to DJIA values over two arbitrary periods.

In an effort to gage real economic growth over the economy in a measurable, empirical fashion. We're lagging right now - the question is simple as gribbler asked "should we be shooting for a strong economy" or whether it matters at all. 1913 isn't arbitrary - it's where I had good data as a start point. Neither is 2000, as that was the peak value.

My thesis is that the economy is a complex system which evolves over time, and provides plenty of opportunity for people to see what they want to see and get paid for seeing what their clients want them to see.

Wouldn't it be better to come up with a way of measuring this that was independent of individual opinion?

Ignorance of emerging technology isn't an argument for relevance.

That there exists no demand for it, is. If there's no intended demand, than it's economic significance is nil.

Maybe for your 401k or passbook savings account. There's a whole world out there beyond your grasp, Columbo.

That world doesn't seem to be doing very well, FWIW. That to me suggests (and is reinforced here), that they don't know what they are doing.

I don't deal with consumer marketing, so I frankly don't give a ****.

You should, as that drives a lot of other things. Including tax revenues which I believe is relevant to you and your clients.

Not my rate of return, but the client's thresholds for go/no-go decisions on acquisition of rights (greenfield) or hard assets:
Unleveraged pre-tax terminal IRR in the 15+% range for greenfield development. For buy and flip acquisitions, leveraged after-tax IRR in the high teens to low twenties with a five to seven year max exit window. For non-tax advantaged buy and hold acquisitions, 15% annual cash on cash. All of which are way in excess of rate of inflation. And those are just the thresholds to warrant investment committee review. Those numbers are all predicated on the revenue side being long-term contracted with rated entities, and cost side meeting minimum confidence and risk assessment levels.

15 percent yearly? Or over 5 years? 18 percent with 7 percent return is under the market. Inflation is relevant to you. Your bosses should be taking this into consideration.

They could make more money investing what they have in stocks and bonds than in 18 percent gain after the flip in 7. Assuming you get that. You shouldn't go under 15 in 5, even for the flip, or 21 in 7. Both are subpar returns, given the risk of a short sale.

If inflation doubles, those numbers won't move a bit, unless competitive opportunity or risk moves. Same thing if inflation stays as it is but competitive opportunity costs and/or risk increases or decreases

If you risk increases then your numbers should change to reflect risk assessments. If it doesn't, you're losing money.

If they associate that with value, nice for them as long as my check clears the bank.

Most do associate value with earning money.

I find it interesting and illuminating that my little actuarial table gives me almost precisely the same returns as you say here. Except, for the fact that I make money after inflation, and you lose money to inflation. This is bad.

[MichaeltheGreat]

Why on earth would they want to do that? Solar's not ready yet. Wind is terrible. I've been going over the solar numbers and it's not ready for prime time. The Cali government isn't going to be in any position to forge ahead. What on earth do they see in this market that they would make any money?

Subsidies from the government.

Your collective naivety and kneejerk reflexive responses are amusing.

What you know about solar and wind power can be written on the inside of a matchbook with a sharpie. Solar works well from a technical perspective if you have fixed arrays. Single axis pivot isn't bad either. Multi-axis pivot does not work well. Wind is technically feasible with approriate reserves.

That said, I don't do wind or solar. That's not the limit of renewables.

The California government has nothing to do with these assets. Private money, private ownership, private entity off-taker. California government isn't in the power buying business, except for state-owned facilities.

What the investor sees that makes money is existing off-take agreements with 17 years of remaining life at a price for power that makes money hand over fist.

And no government subsidies. In fact, the depreciation rates suck and are the same as for coal plants, etc., unless we do a CHP conversion, which I'm going to be paid to evaluate after acquisition.

Any more kneejerk comments?

[Ben Kenobi]

Subsidies from the government.

Ahh. I see. So all part of the taxpayer's gravy train.

[MichaeltheGreat]

I like the Austrians because I see the data as supportive of their economic theory giving nations a competitive advantage over other nations. In fact, I see it as beneficial the more people convert away from the Austrians. So, the more disrespect I get from people here, is certainly fine by me. I'm not playing to make you rich.

Austrian advocates cherry pick like everyone else.

In an effort to gage real economic growth over the economy in a measurable, empirical fashion. We're lagging right now - the question is simple as gribbler asked "should we be shooting for a strong economy" or whether it matters at all. 1913 isn't arbitrary - it's where I had good data as a start point. Neither is 2000, as that was the peak value.

I was talking your selection 1942 as a start point for the DJIA vs inflation argument.

Wouldn't it be better to come up with a way of measuring this that was independent of individual opinion?

It would be for rational objectivists, but it isn't possible. Complex systems have to be reduced to be modeled and predicted. The question is what do you select and leave out, and the more subtle version is how do you weight the inclusions and rationalizations. The current mess works very nicely for the majority who simply want to justify their pre-formed world view.

That there exists no demand for it, is. If there's no intended demand, than it's economic significance is nil.

There can't be demand for what is still in the patent process - and very well hidden as to its ownership. I also work for a client which is primarily engaged by some very big clients to do emerging technology review and development of patentable emerging technologies. These are things that will be in huge demand, years from now - but mostly at a B2B level, not on the street.

That world doesn't seem to be doing very well, FWIW. That to me suggests (and is reinforced here), that they don't know what they are doing.

It's doing quite nicely. It's just a bit under the radar.

You should, as that drives a lot of other things. Including tax revenues which I believe is relevant to you and your clients.

Tax laws are relevant. Not the material wallowing of the peasantry.

15 percent yearly? Or over 5 years? 18 percent with 7 percent return is under the market. Inflation is relevant to you. Your bosses should be taking this into consideration.

IRR is a measure of annual performance from start point to point of measurement. I didn't say anything about 7 percent - I said 7 year exit max, for a flip strategy, e.g. you resell the asset by no later than 7 years after acquisition. Inflation is not relevant, only risk profile vis a vis competitive opportunity. In a 15+% per year world as a threshold level (i.e. minimum to even consider) , who really gives a **** if inflation is 2% or 3% For that matter, if it's 10% but you outperform the best equal-risk competitive opportunity, then you're still golden. It's only if similar risk competitive opportunity value shifts that your threshold rate of return shifts.

They could make more money investing what they have in stocks and bonds than in 18 percent gain after the flip in 7. Assuming you get that. You shouldn't go under 15 in 5, even for the flip, or 21 in 7. Both are subpar returns, given the risk of a short sale.

What the **** are you even talking about? There is no assurance whatsover of any future double digit annual gan in equity or debt markets over a five or seven year window. It's not 18% after 7 years, it's an effective annual rate of return every year in that time frame. And short sale of what? The exit price is already fully predictable.

If you risk increases then your numbers should change to reflect risk assessments. If it doesn't, you're losing money.

My assets' risk level is pretty low and static and easily quantifiable. Even better, insurable in all respects except default by the power off-taker, but given they are investment grade rated, nobody is too worried.

It's the risk associated with competive opportunity at X rate of return. If similar risk investments are available at 20% (they're not), then the threshold rate of return changes, regardless of what inflation does. Conversely, if the similar risk competitive opportunities are well under 15%, then the threshold drops, but the assets I'm representing are well over the threshold rates.

Most do associate value with earning money.

I just care about the money in my account part, not what other people associate.

I find it interesting and illuminating that my little actuarial table gives me almost precisely the same returns as you say here. Except, for the fact that I make money after inflation, and you lose money to inflation. This is bad.[/QUOTE]

And I think you've grossly misread something.

[MichaeltheGreat]

Ahh. I see. So all part of the taxpayer's gravy train.

Apparently you don't, since you posted your kneejerk one liner nearly half an hour after I stated no governement involvement and no subsidies.

Maybe you should go door to door and collect for Project Literacy. I see they still have some work to do.