rightcoastconservative

Derek Jeter has made hundreds of millions of dollars. The sanitation worker who picks up the garbage at Jeter's home makes a fraction of that amount. What accounts for that discrepancy? People are willing to pay high prices to watch Jeter play baseball and companies are willing to pay Jeter large amounts of money to speak favorably about their products. Is that wrong? Why is there a problem here? It is not as if Jeter is the king and his garbage man is his serf. If the garbage man had Jeter's baseball skills and vice versa, then their positions might be reversed. In fact, in future generations that may well happen. Such is life in a free market. Inequality of income and wealth by itself is of no signficance. It really does not matter. Poverty is a different story, but in the example above there is dramatic inequality of income but no poverty. These are different things and should not be confused. Jeter is not wealthy because he compelled someone to give him money. He...

If the Supreme Court tosses out Obamacare, the United States may have a unique opportunity to think about a framework for a rational health care industry. The framework should begin with the free market. The guiding principle should be that individuals pay for their own health care. Without that guiding principle, health care provision will always be too expensive, inadequate for many, and absurdly inefficient. Check out the health care programs in Europe. None of them are any good because they all have too much government involvement. Let us all admit that the free market isn't perfect. No question about it. The free market provision of health care will inevitably end up with situations that none of us like. No denying that. But all policy decisions are a question of choosing among alternatives. No solution is perfect and government solutions almost always tend to be the worst available. Should the government really be delivering the mail? We now have a completely absurd...

The mainstream political parties are losing their support in Greece, as one would expect, given the imposition of austerity. The communist party and neo-nazi parties are on the rise and threaten political chaos and civil unrest. Sound familiar? This was the Germany of 1922-23 as the German government faced a mountain of reparation payments from the aftermath of the Treaty of Versailles and an enforced austerity program. Now Germany is the enforcer and Greece may well become the new Germany. This is the predictable outcome of the Merkel-Sarcozy-IMF bailout scheme. There is no way that this solution will hold. It will come apart and Greece will become a different country, unrecognizable from the rest of Europe. Portugal, Spain, and Italy will eventually be on that path as well, unless the Merkel-Sarcozy-IMF plans are abandoned. Europe needs a reality test, not austerity. The sovereign debts in Europe are unsustainable and unpayable. This is a pretty harsh reality, but it is the ...

In general, banks define dormant account (sometimes referred as inactive) when an account does not have any transaction (deposit or withdrawal) for a continuous period of at least 12 months. When your account becomes dormant, the bank would send you a notice letter to the registered mailing address to remind you to activate your account. You may be required to withdrawal or deposit some money over the counter to re-activate your account. What are the charges? In addition, should your account balances be RM10 or less , the bank would also inform you of its intention to close the account. The bank will send you a 2nd reminder when it does not receive any response from you (i.e. for activation of account or objection to the closure) within 3 months after the 1st notice. If there is still no response after 2 notices, the bank may proceed to close the account and absorb the balances as service fee. For account with balances of more than RM10 , the account will usually be charged with a dor...

German bonds are beginning to sink. A national strike has been called in Portugal to shut down the economic life of the country to protest the government's austerity measures. Bond yields in Spain and Italy have resumed their upward march. There is a growing awareness that Greek reforms will never take place. No surprises here, unless your name is Merkel, Sarcozy, Bernanke or Geithner. The European debt explosion marches on to its inevitable conclusion. The forces that drive sovereign debt expansion in Europe, in Japan, in the US, are alive and well. Politicians can huff and puff all they want, but it won't matter. The unraveling process is well under way. Check out the trend in US bond yields. We're going the same route. In case you didn't see it, Ben Bernanke and Tim Geithner weighed in yesterday on how things are going in Europe. Bernanke (to a House Oversight Committee): "In the past few months, financial stresses in Europe have lessened, which has con...

The global economy grew at a more moderate pace in 2011 after the strong rebound in 2010. The growth momentum was weighed down by continued structural weaknesses and fiscal issues in the advanced economies, geopolitical developments in the Middle East and North Africa region and the disruptive impact of natural disasters on global manufacturing production. These developments reverberated onto international financial markets and contributed to heightened market volatility throughout the year. Despite the less favourable external environment, emerging economies continued to record firm domestic-driven economic growth. At the same time, emerging economies faced increasing challenges from volatile capital flows and rising inflationary pressures. Amidst this environment, the Malaysian economy continued to grow steadily underpinned by the expansion in domestic activity and firm regional demand. The Malaysian Economy in 2011 The Malaysian economy recorded a steady pace of growth of 5.1% in ...

Public Mutual today launched two new funds, namely Public Strategic SmallCap Fund (PSSCF) and Public Enterprises Bond Fund (PENTBF), and categorized as equity growth and bond fund respectively. Public Strategic SmallCap Fund seeks to achieve capital appreciation over the medium to long term period through investments primarily in companies with small market capitalization, by investing in stocks with market capitalization of up to RM1.25bn at the point of purchase. The fund may also invest in companies which at the point of purchase form the bottom 15% of the cumulative market capitalization of the market which the stock is listed on, although the fund will focus its investments in the domestic market. Funds' key data were shown at the end of this post... To achieve increased diversification, the fund may invest up to 30% of its NAV in selected foreign markets if the returns are assessed to be promising. The fund generally maintains equity exposures within a range of 70% to 98%...