Buzz Bits: Dow, Nadsdaq Close In The Green
Your daily Buzz & Banter highlights...
Mini-Minyan Mailbag- Vitaliy Katsenelson- 1:45 PM
Add to your description of the airline industry a very unionized, overpaid, difficult-to-lay-off labor force and the deep cyclicality of the industry and you have a recipe for disaster. That's a fair description of the airline industry.
Chinese labor is arguably not as grossly over-compensated as United Airline's flight attendants or pilots, but laying off workers in China is a politically sensitive process (according to FT), thus creating another layer of fixed costs.
Professor, what makes you believe that what you do is in reality not grossly overpaid? It is the outright arrogance of folks such as yourself that believes sitting on your behind trying to think your way to livelihood is any better or worse than someone who for any various number of reasons goes to work each and every day supporting his/her family in a different fashion than you do. Now that my friend is a fair description of your profession.
My comments have nothing to do with my profession being better than others, it is not. Pilots and flight attendants work very hard. You are making an excellent point: what determines if I am overpaid or not? The answer is the free market. You may attempt to argue that I am (or my profession is) overpaid, but the the free market sets my wages. The wages of flight attendants and pilots of unionized airlines are set by unions - not an economic force. Unions hold companies hostage and force them to pay uneconomic (i.e. wages are not set by the free market), in turn placing companies in a competitive disadvantage.
Is Tom Cruise worth $20 million a movie? You can argue all you want that he is overpaid, but the free market sets his wage. A unionized airline (for the most part) has little choice: either pay workers what the union says it has to pay or not be in business. Most companies choose to do both - they pay workers what the union says they should which consequently puts them out of business.
Another Sign of the Bear in Bonds and a Trout Update- Bennet Sedacca- 1:10 PM
Click here to enlarge.
The trend line is clearly broken and this confirms the global reach of the bar market in bonds underway.
So it keeps me on the defensive, but Ginnie Mae's still seem relatively cheap to me and are out performing (losing less) and corporates are an accident waiting to happen as I mentioned in my quarterly review earlier.
And for those of you (surprisingly a bunch!) have asked for a trout update, here you go. A couple of cool pix from the Swan River last night of my wife landing a nice native 18-inch rainbow trout around 8:30 PM Mountain Time. NICE!
Position in Ginnie Mae's
Winds of Change? - Lance Lewis - 10:04 AM
Note that the HUI is "breaking out" above its June 244 peak despite both gold and the S&P's being down on the day. In other words, something is "different" in the gold complex, and it's bullish...
Click here to enlarge.
Position in gold
On The Radar - Jeffrey Cooper - 9:43 AM
Position in RVBD
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