Morning Call [7:53am ET] Not even a snowstorm in DC can keep the mailman away. This morning at 10am ET, recently confirmed Fed chairman Ben Bernanke will announce his deleveraging plan, which apparently is the politically correct way to say that interest rates will soon be headed north.
http://dealbook.blogs.nytimes.com/2010/02/10/fed-to-reveal-its-strategy-...
That’s not a bad thing if its only short-term rates that get affected and loans to speculators are not entirely cut off. After all, the bottom line is that we all need for the private sector to regain control of the economy, which will never happen as long as an artificially low interest rate makes it not worth your time or mine to consider rationalizing uneconomic investment returns. We need to get back to normal where the private sector drives the mortgage market, where the income-oriented assets of the moms and pops in nursing homes can pay the bills, and where savings accounts at banks actually lead to savings. Maybe then, the banks will get back to the business of commercial banking, with less focus on their proprietary trading desks.
So, yes, I see deleveraging as a good thing.
But, deleveraging will also put pressure on both the equity and debt markets – at least until the economy actually does start to run on all cylinders with employment levels and government fiscal budgets returning to normal. So, anyway you cut it, there is likely to be short-term pain for long-term gain – just the way the private sector understands it should be. Yes, we know, money doesn’t grow on trees, which seems to be how the Fed’s balance sheet grew in the past few years. It’s time for tree pruning. The result, at some point, will be a stable capital market.
In the immediate term, it’s impossible to introduce any program as important as this one from the Fed on a down note and have people buy into it. Ergo, there is going to be a brief pull-back in the US Dollar rally, which will boost the Euro, and Crude Oil and Precious Metal prices foe a few days. But, make no mistake about this; it will be a good time (for the Bulls), but only for a short time. Within a week, I anticipate another slide in commodity and equity prices and another lift to the $USD. That will lead to more screaming from near-sighted investors and capital managers, and complaints from those who believe that conspiracies abound to steal the people’s gold.
Try not to get caught up in the fog of war. Keep focused on the data and not the stories. There is a continuum to market prices, and the process is a natural one. We need to see the completion of the Bull-Bear cycle before we can start anew. Its that simple.
Here, this morning, is where the Euro and Canadian Dollars are, followed by charts for spot Gold and Silver. Remember, the good time will be for a short time. Deleveraging is where the other guys go on the offense and we go on the defense. Lighten into rallies; protect your assets.
As the Euro and Loonie bounce a bit here, the spot Gold and Silver ought to lift to their down-trend lines, and then resume the sell-off.
Commentary from INO.com:
The March Euro was higher due to short covering overnight as it consolidates some of this winter's decline. Stochastics and the RSI are oversold and are turning bullish hinting that a low might be in or is near. Closes above the 20-day moving average crossing at 140.249 are needed to confirm that a short-term low has been posted. If March extends the decline off December's high, the 50% retracement level of the 2008-2009-rally crossing at 137.735 is the next downside target. First resistance is the 10-day moving average crossing at 138.232. Second resistance is the 20-day moving average crossing at 140.249. First support is last Friday's low crossing at 135.840. Second support is the 50% retracement level of the 2008-2009-rally crossing at 137.735.
The March Canadian Dollar was higher due to short covering overnight as it consolidates some of last Friday's decline. Stochastics and the RSI are oversold but are turning neutral to bullish hinting that a low might be in or is near. Closes above the 20-day moving average crossing at 94.68 are needed to confirm that a short-term low has been posted. If March extends the decline off January's high, November's low crossing at 92.17 is the next downside target. First resistance is the overnight high crossing at 94.10. Second resistance is the 20-day moving average crossing at 94.68. First support is last Friday's low crossing at 92.74. Second support is November's low crossing at 92.17.
Have a great day. No storm here in The Bahamas. The weather is scattered clouds and 74°. I’ll be swimming in the ocean today, thank goodness. With all the stuff that’s going on in the market; I need the break.
Photos from my "Coconut Grove" in Bahamas
This is one is looking west from my TV/reading chair.
Balcony looking west
Looking north-west
Looking north
Looking north-east
Not a snow flake to be seen.
But, I do live a simple life. Ten minutes to the airport, 3-bedroon, 2-bathroom, ocean-front in paradise, no taxes, for just $1800/month.
CTA Trading Desk Post-Close Report
A dull, inside day (i.e., higher low, lower high compared to the session yesterday), as investors digested remarks from Bernanke about the Fed’s Quantitative Easing “exit” strategy and mulled conflicting newswire reports about the probability of a bailout for Greece.
At the end of the day it was a whole lot of nothing, volume contracting as traders sat on the sidelines merely observing price action (S&P -0.22%).
Bonds (TLT -0.89%) were pummeled after auction results were released; apparently the only motivated buyer is the Fed, all other sophisticated investors realize that artificially low interest rates leave buyers of treasuries heavily exposed to a loss on their capital investment (i.e., principal risk).
Feels like the market has settled in a trading range here, with rallies encountering resistance up above at S&P 1100, and buyers ready to support the market down in the vicinity of the 4th quarter lows, let’s call that 1020.
Patience is a virtue, let prices come to you; if the set-up or trigger isn’t there, don’t force a trade just to do something. Your hard earned capital needs to be preserved until the proper risk/reward situation presents itself.
Have a great evening.
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Comments
Let the games continue
8:04:51 AM
(GR) Reportedly German official: Unlikely for concrete steps for Greece at summit; Debating aid will not solve issue
- No doubt about Greece's ability to pay
- No finance minister to attend EU Summit on Thursday
- No one has instructed a restructuring of Greek debt
- ECB and Greece do not agree on consolidating Greek debt.
Re: Let the games continue
And that is why, as Bill wrote yesterday, we use smaller positions and wider stops in this news-driven, topsy-turvy, whipsaw market. ;)
Today's Bernanke House
Today's Bernanke House hearing has been delayed but his testimony will still be released from embargo at 10:00ET
- The topic of the House hearing is "Unwinding Emergency Federal Reserve Liquidity Programs and Implications for Economic Recovery."
- The hearing has been postponed due to the snow storm on the east coast.
**In some of his most recent commentary from last month, Bernanke noted:
- Fed is confident it can control monetary and credit growth; Fed officials understand that the balance sheet needs to be normalized; Raising rates on reserves is one way to control balance sheet.
- Policy decisions must be forward looking; Policy decisions in early 2000 do not seem to be inappropriate; Not worried about confidence in US financial system.
- Economy only now beginning to recover from deep recession; Monetary policy may not be appropriate for dealing with bubbles; Appropriate response for dealing with housing bubbles is regulatory rather than monetary; Rate hikes are not the best tool to burst asset bubbles.
- Dollar remains the dominant reserve currency.
- If the regulatory system is not reformed to deal with future bubbles or if it is not able to keep risks in check, we must remain open to using monetary policy as a supplementary tool for addressing those risks.
STIGLITZ
ALOHA !!
STIGLITZ ...
An article written based on his interview with the headlines, "Stiglitz Says U.S., U.K. Default Is ‘Absurd’ Investor Notion".
Then a few sentences down he reverses the "absurd" headline with this statement ... "the likelihood of a default is so small, particularly in the U.S. because all we do is print money to pay it back," Hummmm ... so "absurd" is a "so small" chance after all. Mr. Stiglitz, Nobel Prize in Economics, "Print money" ... then why do we need income taxes or any taxes if we can just print money to pay for everything, sir?
Then his last statement about banks in the article says this ... "While banks are generating profits, "very little of it comes from lending, a lot of it comes from speculative arbitrage,” he said. “The prospects for a sound recovery of the banking system are very bleak."
So if banks don't recover in a "sound" manner then what? Does the US and UK government guarantee all deposits and nationalize banks? Very close to saying a "technical default". I mean what is "nationalizing" mean? But we can just keep printing debt to cover it all, so we're safe.
To me the very fact that Stiglitz has to PR and Poo-Poo a "default" speaks to my contrarian inside.
The bottom line is that interest rates and CPI and the drama behind those "tools" only exist to cover the real US FED agenda, which is to devalue the currency, which they have done an amazing successful job of over the past 95 years. When Volcker raised the Fed Funds Rate to 17% it created austerity within the populace, but the US Treasury was still piling debt on then, only at higher service costs. Nothing stops the debt because as Stiglitz correctly says, "because all we do is print money to pay it back." No harm in that, eh? Too much debt never hurt any one ...
Panda in the Living Room
Deleveraging
While this must happen eventually in some way, I expect this is simply stage one in the process and designed to give resuscitation to a faint stock 2010 market. So much of our policy is short term and ignores the national future.
Meanwhile, an insidious process has just begun and some of my friends think of it as a Godsend for our economy. I know how they feel because I saw this coming a few years ago and expressed my concern.
Panda in the Living Room
1. China has a huge supply of dollars.
2. The dollar is losing and will continue to lose value.
3. They will trade them in on tangible assets.
4. In the news today it was revealed China has been buying large chunks of US companies.
5. We know Congress caters to big business lobbyists.
Who do you think will have the largest influence on our legislature — American taxpayers or Chinese owners?
The Asians have always been known for their patience.
http://tiny.cc/8fMak
Re: STIGLITZ
He also suggested more stimulus couple days ago. I guess we have a pattern:
February 08, 2010 6:59:33 AM
(US) Economist Joseph Stiglitz: US needs a second round of stimulus measures;
But here is my favorite piece that for me takes the prize:
December 01, 2009 12:45:33 AM
Fannie Mae WSJ comments on a paper written in 2002 by economists Joseph Stigliz and Peter Orzag which noted the US GSEs had adequate capital
- Comments on a paper written in 2002 by economist Joseph Stiglitz and Peter Orzag (current White House budget director) which noted that on the basis of historical experience, the risk to the government from a potential default on GSE debt is effectively zero.
- The analysis by Stiglitz and Orzag was based on putting the US GSEs through millions of potential "severe" future scenarios"
- The economists also noted that the GSEs had been tested against economic and financial conditions of the Great Depression
- The economists concluded that Fannie and Freddie had ample capital levels.
- The paper is notable because it was a reflection of the views held by most about the GSEs at that time.
Re: Today's Bernanke House
ALOHA !!
According to the article link on Bernnake's "exit strategy" the discount rate will be the "ceiling" for rate hikes. Right now Primary Rates are at 0.50% and the Secondary Rates are at 1%. Now if the BOJ does not raise its rates which are tied with US FED rates now at 0.25%, then the multi-trillion carry trade will go back to the Yen and not the USD. So that means less interest in US debt issues at auction time. Is that what the US Treasury wants, especially since they will raise the debt ceiling $1.9TRIL? Or is a 0.25% raise so tiny that nobody will care? I think a .75% will for sure make many people rethink the carry trade. Or will those higher rates of return guaranteed by the US Treasury trump the carry trade when more financial crisis arises? Its too bad we all have to consider these multitude of monetary and market variables with these "free floating" currencies. It makes planning for retirement much harder when "short term" is King!
So the US FED is confident it can control monetary and credit growth. Then where were they the past ten years?
What about de-leveraging the derivative market that is unregulated?
Somebody explain the difference in these two statements ...
#1-- Economy only now beginning to recover from deep recession; Monetary policy may not be appropriate for dealing with bubbles; Appropriate response for dealing with housing bubbles is regulatory rather than monetary; Rate hikes are not the best tool to burst asset bubbles.
#2-- If the regulatory system is not reformed to deal with future bubbles or if it is not able to keep risks in check, we must remain open to using monetary policy as a supplementary tool for addressing those risks.
So monetary policy is not good for bubbles and regulations are, but if regulations don't work then monetary policy will! Okay ... I'm glad you were "hired" back Ben. Your astute Keynesian academia logic is powerful!
Re: Let the games continue
9:19:23 AM
(GR) Press speculation surfaces that German Gov't cannot aid Greece
***Reminder: Earlier today a German official commented that it was unlikely to see concrete steps for Greece at summit, and debating aid will not solve the issue
until we stop going to the mall...
and start protesting peacefully and boycott bad co's and bad laws, the crooks will find a way to serve us choc. chip pancakes covered in diphenhydramine covered up in maple syrup.
Snow on the ground. Pic from my patio.
My view this morning. The real snow hasn't even begun.
http://twitpic.com/12e8o0
Re: STIGLITZ
ALOHA !!
Vad ... It all comes down to "printing debt" to keep the system going. In order to pay for US Treasury redemptions the US Treasury has to "print more debt". Or did you guys think that nobody ever redeems US Treasuries? They do get redeemed every week according to the US Treasury statements.
As I reported a few days ago the US FED portfolio over at Maiden Lane I, II and III (Q3 2009 financials) consisting of derivatives based in MBS, RMBS, CMBS and CMO have been rated down to less than BB+, essentially 80% of their entire portfolio is rated junk. Practically all of Maiden Lane II assets are rated junk and reside as "agency funds", meaning FNM and FRE. Does that mean FNM and FRE are junk, BB+ or less?
Cara 100 Ratings Changes
Good morning from the arctic tundra.
ADBE - Upgraded to Outperform @ Credit Suisse. PT Raised from $35 to $39.50
ADBE - Upgraded at Jefferies from Hold to Buy. $40 price target. Concerns about the future of flash are overblown.
DELL - Upgraded at BofA/Merrill to Buy from Neutral. High short interest, valuation, and likely EPS revision should drive better share performance in 2010. Price target raised to $18 from $16.50. 2010 and 2011 EPS estimates set at $1.06 and $1.31, respectively.
DIS - estimates boosted at Barclays. DIS 2010 and 2011 EPS estimates increased to $2.00 and $2.30, respectively. Maintain Overweight rating and $36 price target.
DIS - estimates, target raised at Government Sachs. Shares of DIS now seen reaching $33. Estimates also increased, because of strong sales across the board. Neutral rating.
KO - estimates raised at UBS through 2011. Company is seeing strong sales in China and India. Neutral rating and $62 price target.
MCD - target, estimates higher at BofA/Merrill. MCD price target raised by a dollar to $71. 2010 and 2011 EPS estimates improved to $4.44 and $4.90, respectively. Maintain Buy rating.
Re: STIGLITZ
It's amusing how Stiglitz's critics seize on that 7-year old paper on FANNIE as a way to discredit his views.
Indeed, Stiglitz has been one of the severest critics of regulatory failures that lead to the financial crisis, particularly predatory lending practices and derivatives, and the bank bailouts that followed. Was he wrong about that?
But then again he argues his position as a progressive, a point of view that doesn't find favor with most of the participants in this forum. That's unfortunate.
Re: Let the games continue
(GR) ECB council is reportedly planning a conference call on Greece debt crisis at 12:30pmET
I guess I can stop posting those... otherwise I am not likely to get anything else done today, lol
Re: STIGLITZ
ALOHA !!
number2son ... In monetary terms what exactly is a "progressive"? Do you have a definition? Whatever the "label" ... I criticize anybody whose solutions to our debt problems are based on "printing" more debt! So far that is the only monetary policy I have ever seen come out of the US FED and the US Treasury.
And that fact has never been deterred by interest rates in any way!
Re: STIGLITZ
n2son,
his today's views on stimulus, spending etc sit no better with me than his 7 years old ones. He is obvious Keynesian, and I am not in that camp - why do you have a problem with this?
As for that 7 years old paper - it is valid argument against his view because that paper dealt with exactly the scenario that unfolded - i.e., in his own words he tested GSEs against worst case scenarios, Great Depression kind of development and concluded they were safe.
Please do not make it ideological (as your remark about his progressive views not favored here suggests). I don't care about his views on zillion social and political issues - we are discussing his financial ones.
Re: STIGLITZ
Isn't it entirely possible that the GSE's were actually adequately capitalized in 2002 but not in 2004/2005?
Re: STIGLITZ
Progressive...? Yeah, what is that? Anyway...go read Chuangtse's Prologomena from 2000 years ago...nothing's changed.
Re: STIGLITZ
I am sure they were. But the part that is troublesome in that paper is the one I went to pains to put in bold font... well, not much pains actually, lol.
From the Big Ben
10:00:15 AM
US Fed Chair Bernanke: Fed may opt to raise discount rate before long; change would not mean outlook on policy is shifting
- Reiterates low rates warranted for extended period; outlook has not changed from Jan meeting
- TAF and TALF will be phased out before long (scheduled to close June 30 for all loans); any change in discount rate would be modest
- may look to auction large blocks of term deposits
- higher reseve interest will increase all short term rates
- notes that shouldnt expect sale of securities in the short term (Note: Bullard recently noted that the Fed would sell assets in the 2H10)
10:00:53 AM
Euro vs US Dollar Dollar firms on initial Fed's Bernanke written remarks; tests 1.3710
Re: STIGLITZ
And you've never been wrong, eh Vad? ;) In fact, no one could have anticipated the events that unfolded since 2002. Did Ron Paul? He, in fact, was one of the supporters of Gramm-Leach, along with a host of people across our miserable two-party political spectrum. And that, as much as anything, was a primary cause of the excesses that lead to the collapse.
And we disagree about the value of stimulus spending. It is, in fact, a progressive view that sees stimulus spending as positive. And I agree with Stiglitz on this. As I agreed with him that the money used to bail out the banks could have been better put to use elsewhere.
When I disagree with you, Vad, it is always with the greatest respect.
Washington shut down
Estimates are Federal employees are salaried 100 million dollars a day.....that's 3.65 billion dollars per year. Who needs Federal employees? Will the US implode without the leaches and the new Chicago gang? Pile on top the fact Federal employee pensions contribute to the National debt at 100,000.00 every 29 seconds or roughly 288 million per day or 10.5 billion per year. Pay for performance comes to mind.
What's the true national debt? Not the 12 trillion that keeps being feed to the working people, it's more like 54 trillion when you add in all the federal obligations. Is Social Security and Medicare really a pozi scheme for the Fed?
http://www.usdebtclock.org/
Over-trading
Covered short in call options in GOOG yesterday before today's drop with a very light gain. Sold and shorted puts during amateur hour and covered since then, again at loss.
I'm going to my corner now.
Re: STIGLITZ
"And you've never been wrong, eh Vad?"
You are missing my point here. Anyone has right to be wrong and not be slammed for a mistake, that's not the problem with me. What IS the problem though: why do we continue listening to those whose views were proven wrong, especially since they continue the same line of thinking?
As for your views on stimulus spending different from mine - just fine with me, I abandoned the idea that the world must agree with me long ago.
Re: until we stop going to the mall...
NYUGrad,
That would help get the message across, but I think the retailers already see the picture.
What we need around here is a realization in the city council, the news media and others who as yet have lost nothing personally of just how bad things really are for so many.
We have an admitted 17+% unemployment rate in the metro area.
Illinois is among the worst unemployed.
However, in this morning's paper they are excited due to a pickup in productivity. I just doesn't occur to them companies are operating with a skeleton crew. The subhead said, "They will have to start hiring soon."
The fantasy continues at the top, but many people I talk to say they now longer expect the truth except in the obits.
Re: STIGLITZ
Fair enough, Vad. Let's change the subject to something on which we can agree ...
What do you make of today's early action? Looks like 1060 on the S&P is holding for now. But it's looking to me like we're going to head all the way back to 1050 before the day is over.
Unless, of course, we get yet another about face on the situation with Greece.
Save us from those who "know"!
I'm currently reading, "The New Dealers' War: FDR and the War Within World War II", by Thomas Fleming
Remarkable similarities to what is going on today both within the administration, the congress and the guys in the White House.
Secrecy —way beyond national security, but couched in those terms.
Politics took the lead over all.
Flat out lies from WH and media manipulation.
A month ago I read "At Dawn We Slept," which included extensive documentation from two military investigations and another by congress. Blame was placed on army and navy commanders (some deserved), but concluded FDR not trying to start the war.
Other (more recent) documentation in "The New Dealers' War," makes it clear he was willing to do anything to get the country behind the US entry.
There is ample evidence that we would have been involved sooner or later, but what bothers me is the duplicity and scheming by people who are so convinced they know best and to hell with We The People.
I expect the accounts of our present mess to laud the main characters in this fiasco as "Saviors of the Republic" a la CNBC.
Re: Washington shut down
The best thing I can think of is to simply pay all of these people to stay home.
Now we have Chicago in the White House. At least in the 1940 election all we had was Kelly, the Chicago kingpin, throwing the city to FDR. In return Chicago got a bundle of projects and jobs. (All of which Kelly collected his commission on.)
Re: STIGLITZ/topic change
"Unless, of course, we get yet another about face on the situation with Greece."
That sums up my view on today. Below are comments I made an hour ago:
[09:40] {Threei} today is the day of endless headlines
[09:40] Greece and Big Ben
[09:40] let's be very conservative, very picky and quick to get out
So far it worked for us with scalps on NTGR, VXX and TM. Technicals don't matter much when market gets bombarded with news; then it gets old and market stops taking each new headline seriously, reacting only on material ones. Normal flow of things (whatever normal is, lol) restores, and we can rely on some supports and resistances again. Not there yet, so staying with scalps for the time being.
Virgin snow: its coming down now
http://twitpic.com/12em3m
Logic
If Bernanke is correct (rare) and the problem is regulation, and not monetary policy shifts, then why exactly do we need the Fed and Professor Bernanke?
Re: Virgin snow: its coming down now
Don't see any ny snow angels?
Re: Let the games continue
OK, two more in a row, and notice, market practically stopped reacting:
11:25:40 AM
(GR) EU's Juncker hopeful can find a market satisfying solution on Greece situation
- Greece Prime Min notes that will do what is necessary on budget situation
11:28:36 AM
(GR) CNBC sources: EU officials unlikely to announce a Greece bailout bailout tommorow; strong statements from officials likely
It's getting old fast, and real reaction is likely to come now only on a serious and final decision.
Re: topic change
Sell the news.
How can the news on Greece be Euro positive? I don't see how Euro can draw favor from any solution concerning Greece. In addition if wee little greece is causing this much concern what is going to happen when Spain, Italy or the entire eastern block goes belly up?
Bob
the long view
From hedge fund guru John Thomas"
once the effects of record government spending wear off, we slip back into a deep recession, setting up a classic “W.” Unemployment never does stop climbing, reaching 15% by year end, and 25% when you throw in discouraged job seekers, jobless college graduates, and those with expired unemployment benefits. This afflicted Franklin D. Roosevelt in the thirties. So Congress passes another $2 trillion reflationary budget. Everybody gets wonderful new mass transit upgrades, alternative energy infrastructure, smart grids, and bridges to nowhere. But with $4 trillion in extra spending packed into two years, inflation really takes off. The bond market collapses, as China and Japan boycott the Treasury auctions. The dollar tanks big time, gold breaks $2,300, and silver explodes to $50. Ben Bernanke has no choice but to engineer an interest rate spike to dampen inflationary fires and rescue the dollar, taking the Fed funds rate up to a Volkeresque 18%. %. The stock market crashes, taking the S&P well below the 666 low we saw in March. Housing, having never recovered, drops by half again, wiping out more bank equity, and forcing the Treasury to launch TARP II. The bad news accelerates into the 2012 election year. Obama is burned in effigy; Sarah Palin is elected president, and immediately sets to undoing all of his work. Republicans, reinvigorated by new leadership, and energized by a failing economy, retake both houses of congress. National health care is shut down as a wasteful socialist mistake, boondoggle subsidies for alternative energy are eliminated, and the savings are used to justify huge tax cuts for high income earners. We invade Iran, and crude hits $500. If you’re over 50, and all of this sounds vaguely familiar, it’s because we’ve been through it all before. Remember Jimmy Carter? Remember the “misery index,” the unemployment rate plus the inflation rate, which hit 30, and catapulted Ronald Reagan into an eight year presidency? A replay is not exactly a low probability scenario. This is why credit default swaps live at lofty levels. It’s also why the investing public is gun shy, favoring bonds over stocks by a 15:1 margin. Are the equity markets pricing in these possibilities? Not a chance. The risk of economic Armageddon is still out there. Personally, I give it a 50:50 chance.
Photos posted in today's blog
Seeing all that snow, I could not resist.
Greece
Isn't the only reason Germany is considering bailing out Greece a way to prevent their undercapitalized banks from failing? This sounds just like the US situation of bailing out fanny, freddy, aig and gm to prevent banks from failing. So far that's been good for a massive rally, but the problems aren't solved in the US, and bailout of Greece won't be solved by bailout either.
It is frustrating to watch all the powers that be play pretend... Especially since the garbage can't be hidden forever.
Google to test ultra high-speed broadband networks
If they could put it into the central Exumas, that's where you'll soon find me.
http://online.wsj.com/article/SB100014240527487041...
Re: Photos posted in today's blog
thanks for the sunny pictures and positive view!
vb
Re: Photos posted in today's blog
Thanks for sharing. Great photos.
NLS
bought some more today at $2.37
At what point will the big money be forced to sell ?
The vast majority of the worlds population cannot be invested nor keep spending upward... Dow 10,000 has been a chart point for close to 10 years now.. Nothing but focused hype has moved this behemoth foward... How it relates to other indexes can be debated, but reality is closing in. Are we reaching the point where its just the same players moving the same money, day in, day out... basically, where no real fresh infusion of capital has, nor will be, infused, without the selling of some other market based asset ( ie China selling dollars/buying gold ETF's, etc.. ).. I am probably off base, but to me, it seems, the time around 1990 was the last real valuation based metric for equities... As the little old lady use to say.. " show me the beef " !
Re: Photos posted in today's blog
Ha! I would estimate that at LEAST 4.7% of your sky is cloud-ridden. :)
Light snow and minus 3 Celsius here in Waterloo, Ontario. And looking forward to a trip to the Dominican Republic like you would not believe.
As the attached file shows, it really has been pretty good relatively here this year. So far we've had the driest January since 1983 and sit at 20% of the snowfall level we had at this time last year.
Re: STIGLITZ
number2son -
In view of Greece's runaway spending and debt as progressive, by your definition, I'm sure Germany is overjoyed. Should the U.S. current progressive policies be enforced via default on China with aircraft carriers? If yes, this progressive thing is a bit hawkish for the peacenik crowd ...
Vad may be wrong, in your view, but he's lived the hyperinflation nightmare. I'm sure that influences his view from experience. ;@)
Re: Photos posted in today's blog
Washington, DC right now (early afternoon) about 3 miles from the White House and overlooking Connecticut Ave from 9 floors up. wooo...
http://tinyurl.com/yfxxk8d
Want to trade places Bill? :-)
Re: Photos posted in today's blog
Wow!!!!
I love working remote
http://twitpic.com/12f4hv
Re: I love working remote
Is that a straw sticking out of that bottle of syrup???????
Is the financial situation in Greece, significant ?
Reading Vad's statements and the BBC business news and other posters thoughts on the Euro.
Is this a start of a major crisis, or did the crisis start last year ?
We are all blaming the U.S. for the world financial crunch, and somehow it's not logical that one country can be the cause.
The U.S. has been the world's investor.
Greece, on the other hand has had financial problems for a very long time.
A few minutes ago the Euro markets were all up and N.A. markets down, very slightly.
I believe we are all back at looking for the "safe" currency, and right now gold looks like it.
Here in Mexico it's almost the same year round, except "CARNAVAL "
Further change to Cara 100
It may take a while to update the doc and the files, but this morning I decided to switch out SYT Syngenta for FCX Freeport-McMoRan. Syngenta is a fine company but we trade the FCX often and SYT hardly at all. Besides FCX has a better looking set of metrics, like ROE, and it's a company that our mining research team can dig into.
This company is also a major sponsor at PDAC every year. I intend to meet their team this year.
http://www.pdac.ca/pdac/conv/index.html
Closed out FAZ and other short positions
Mainy cuz JPM was leading up.
http://chart.ly/zvn62c
http://chart.ly/n4v5w9
http://chart.ly/a8tdhx
http://chart.ly/dpbx8k
Short term dir smells up.
Re: Is the financial situation in Greece, significant ?
I personally am on the side of the fence that its an aftershock as a result of the 2007-2009 crisis, not a start of another major crisis. I believe the markets have substantially reduced leverage to avoid a downward spiral. However, things can change quickly so I reserve the right to change my mind :)
Bought JPM Calls
Near the money.
Not advice.
EDIT: why i bought JPM position, http://chart.ly/4kzkyv.
also, converging upward moving avgs.
Have slowly
been investing in China agriculture ...
Re: STIGLITZ/hyperinflation
"Vad may be wrong, in your view, but he's lived the hyperinflation nightmare. I'm sure that influences his view from experience"
Believe you me guys - you don't want that experience, in any degree or form. Everything you think you know about inflation is nothing vs. that.
You wake up with your currency cut in half vs where it was when you went to sleep. And it's not one time shocking event - it's something that becomes almost expected, frequently and yet can not be incorporated in your action since happens at unknown points in time. If your business cycle involves currency conversion back and forth, getting caught mid-cycle in unfavorable devaluation means end of your whole business and very likely your means to survive by extension. Older generation sees money they put away over the course of a few decades turning into cost of the box of matches - literally, it's not an exaggeration. Care to imagine eyes of a WWII veteran standing in the store and looking at that box costing his salary for about 10 years?
As they joked in Odessa, let's talk about something jovial... what's new about cholera in Crimea?
AIG 26.29 up 13.88%
KAKOOOOOOOOLLLLLLLLL? Maybe AIG just found out they hold the insurance on Greece's BBB- bad debt..........
doubling up on
ag position... turning on
Re: Have slowly
which ones? CAGC has made a big move recently. CGA just announced solid earnings. FEED and SEED are quite speculative. YONG is another spec one...I guess they all are actually.
Hyperinflation
It's hard not to "feel" that hyperinflation is the end result of liquidity 'experiments'...with the Weimar Republic experience the paradigm. However, to give it the "Billy Beane" MONEYBALL spin, "if he's such a good hitter, then why doesn't he hit better?"
So, it seems as though monthly charts of SLV, GLD, DBA, etc. should show that. Not so much. Can't speak for anyone else, but I find this market incredibly frustrating, probably reflecting MY need for far more PATIENCE.
Re: Have slowly
Team, I e-mailed you... feel free to write back... Thanks, Baz
JPM Broke out this afternoon
JPM: Breakout or fake out?
http://chart.ly/cebd4g
Let's see how they close it.
Krugman: "Oh My God" to Obama now soft on bank bonuses
Interesting justifications about athletes earning more than Wall Street CEO's:
http://krugman.blogs.nytimes.com/2010/02/10/clueless/
Re: Have slowly
Baz - Emailed me where? Is there an email tool here?
BDI
Anyone looked at the Baltic Dry Index lately? It has taken quite a dip from November highs, down nearly 40%. A 40% move in this index isn't abnormal though. 1 year chart still shows an uptrend...It's currently at 2700. If it breaks 2180 then its safe to say the global recovery is threatened.
GROUND REPORT
ALOHA !!
Okay please ... All I ever hear is how deflation is rampant, yet every time I open a bill or a letter it is news that credit card rates are going up, health insurance is going up, farm insurance is going up, electric bills are going up, property tax is going up and now I get this one ...
PRICE INCREASE - "Please be advised that prices on the following flower boxes will increase 13% effective March 1, 2010."
The letter goes on to list all the flower boxes I use. Now cardboard is going up and it has every year no matter what happens to the stock market or house prices.
To you guys who never use cardboard boxes in your every day life you are saying to yourself ... "so what?" Yet, look at what gets shipped in boxes. Everything from your food to your new Apple laptop to your shoes and booze and cigarettes!
Add that to my fertilizer bill and gas bill which are up as well.
Regular gasoline here in Hawaii is $3.35 per gallon.
My day-to-day purchases reflect nothing but inflation. Deflation is non-existent in my cost of living! I wish it were, because I am getting tired of prices always going up. Not even real estate prices are going down much any more here in Hawaii. What is going down is everyone's 401k and the State and County government services.
Are there any other small business owners out there in CaraLand besides me that keep seeing higher prices?
Re: At what point will the big money be forced to sell ?
"I am probably off base, but to me, it seems, the time around 1990 was the last real valuation based metric for equities..."
I think you are right on.
In 1991 the push was on for NAFTA and only the low end jobs would be lost. The service economy would be more valuable than old economy manufacturing.
My long time strategy of buying blue chip stocks and holding until they were up 29% no longer worked.
Stocks with genuine earnings were out classed by stocks with no earnings which had "momentum" and triple digit PEs.
Insiders have by and large been net sellers. Huge daily moves take stocks nowhere week to week, month to month.
China orders retreat from risky assets
Bill has said this is a war between Obama - Volker and H.B. B. Now some one else is making a major move. California and other states could be pushed off the ledge as well as corporations who have bonds at near risk.
A Communist Party directive leaked to the Chinese-language edition of the Asia Times said dollar reserves should be limited to US Treasuries or agency mortgage debt such as Freddie Mac that enjoys Washington's implicit backing.
BNP Paribas said the move has major implications for global risk assets. "The message from Beijing is that we don't like this environment," said Hans Redeker, the bank's currency chief. http://tinyurl.com/yd39dzw
financial advisors: beware of which seniors you impoverish!
http://www.theworld.org/2010/02/09/german-pensione...
Re: STIGLITZ/hyperinflation - Brazil experience
Once in the 90s, a taxi driver in Rio relating inflation woes turned to me and said "you know what the cash I paid for this taxi would buy today?"
He held up a ball point pen !
Re: STIGLITZ/hyperinflation
"You wake up with your currency cut in half vs where it was when you went to sleep."
"you don't want that experience"
A recent example of shock currency devaluation, just this past December.
One day "devaluation of Pyongyang's nearly worthless currency from 100 to a single won has wiped out the savings of impoverished North Koreans and generated a scramble for dollars and Chinese yuan . . ."
http://tinyurl.com/yklnatk
Re: GROUND REPORT
I'm not a business owner, just a consumer. And because of higher prices, taxes, health care, credit ect in addition to a furlough or some other reduction in salary. I will be consuming less and less. Makes me wonder what will happen when "Real Inflation" hits.
Kamiu brings up a good point that I hope you are all aware of. I believe all credit card companies have raised rates on existing cards to beyond 14 %. Because I have always had good credit I have never paid higher than 5% which usually includes a year of interest free use. Both my WFC and Chase reward cards raised rates one to 14% one to 15%. I canceled them promptly. If you do not read your mail closely, you may get a rude slap in the face this month on your credit card statement. Strangely the same companies turned around and offered me cards for one year long 0% teaser rate. Is this the best way to do business?
Bob
AIG close out trade
in 2/4 at 23.70
out 2/10 at 27.03
14% gain.
Capitulation trade.
Do your own homework.
GL
Watch financials tomorrow
http://finviz.com/map.ashx?t=sec
flat boring,neutral/red day. but financials caught bids.
Re: GROUND REPORT
I don't know what would be the result today, but a couple of years back we got a late penalty from MasterCard. We always pay off monthly, but this time even though mailed in plenty of time they claimed they didn't get it until later.
My wife called and after a short discussion during which she said they could drop the charge or we would drop them — they relented.
We have NEVER paid for the use of a card — no fees, no interest — and they have periodically raised our limit and the perks we get that are usable for dinners, computer supplies, etc.
I like having a record of our expenditures at year end.
Follow up to snow pics
It's still coming down!
I cant even go out to clear off my car.
http://twitpic.com/12gj8p
http://twitpic.com/12gi4q (This is the view when i open my door.)
Re: GROUND REPORT
For a 'somewhat' better measure if inflation, try John Williams shadowstats.com. John measures inflation pre the Boskin commission hedonic adjustments and substitution farce.
As a consumer and a self proclaimed chili expert, I can give you the WalMart price for canned kidney beans over the last 5 years. 06=$0.48, 07=$0.54 08=.$064 09=.$078 today $.082. You will pay more at Kroger for a damned can of beans.
As a business operator, ALL costs have increased including but not limited to taxes, insurance, labour and materials from steel pipe to cattle feed. Hyper inflation is just a few years away in my opinion. Similar to what England experienced in the 60's and 70's I'm afraid. Even land prices are higher. In my part of North Texas, land sold for $3,500 an acre 6 years ago. Admittedly we are within commuting distance of Dallas but 10 plus acre tracts are selling for $10,000 an acre. Almost surreal.
I suppose the price of beans will rise even more since they are shipped in paperboard boxes.
Re: GROUND REPORT
My son owns a small business (video, audio, security cameras, projectors, theater systems) he is also an apple partner. He now is buying a lot of supplies out of state, having it sent to him directly because sales taxes have gone up so much in California. Workmen's compensation has gone up, along with other state fees. All copper wire is up. He goes to the trade shows and tries to find manufactures that will send the product directly to him to cut out the middle man. His employees had to have a raise just to keep living in California. His middle class clients have all but vanished, so a part of his business is now gone. Business cost go up and business goes down, a double whammy. The funny thing about this is the high end clients have gone up. He says that a lot of his riches clients have pictures on the wall of them shaking hands with Bill Clinton. It is nothing for a high end client to spend over a $100,000 on a total system. The people making money have a lot of it. He now is dealing with a few agents for Hollywood stars, they still have plenty of money. A lot of people in this business are now out of the business, a lot of his suppliers are having a difficult time and just barely hanging on, some are having to shut down outlets.
Not a pretty picture when costs go up and business is going down.
Re: Follow up to snow pics
NYUGrad,
You keep talking about your snow and I'll have to keep talking about paradise.
Anon sent me a short note about The Danguillecourt Project, which from maybe 8000 miles away reminded him of the magic of this place:
Hi Bill,
Since you mentioned the Exumas, I thought you might like to take a look at this new book (I bought), "Islands of the Sun: a tribute to the northern Exuma Cays, Bahamas". Its a joint effort produced by a professor at the University of Miami and a couple of Bahamas resident artists / students who are in their twenties. There are some book stores listed where you might be able to look at a copy: http://tropicbirds.org/
/Anon
Yes, the photography is spectacular. Almost none of the millions of people who visit here take the time to visit the Family Islands. My favorite happens to be the Exuma Cays, but there are many favorite other islands.
[inline:10]
This photo is from only about 90 miles from Nassau.
XLF Failed to close above 14.02 today AGAIN
NYUGrad.. Doesn't that tell you Financials are not able to go up and being met with a sell every time it reaches that target. I prefer to remain short on financials until I see a close above 14.02
One comment I made before, that Greece is not the first one to be bailed out, few more to come and investors don't like uncertainty. Besides the bailout of Euro nations by Germany and/or European Union would eventually weaken the Euro and that results in more up side move on the USD$ yet AGAIN. Specially now we hear that China Gov't asked their own banks to dump US assets and buy US Treasuries. We all know what the bailout in the US did to the USD$ in 2009, I see similar pattern here happening to the Euro as well.
I am looking at the big picture here. Tell me if you think otherwise..
http://stockcharts.com/h-sc/ui
Re: XLF Failed to close above 14.02 today AGAIN
Your link didnt work. it defaulted to the Dow.
But yes, longer term there is more overhead resistance than downside support levels. However the 200 day MA is underneath XLF = very powerful. We need more volume to go under it.
Moving avgs are good for bounces, both directions. especially the 200, in my experience.
I have a small spec position on JPM calls. their chart was my fav today among the wicked.
But here is XLF and its bouncing off the 200 day ma. I think financials will bounce very hard up and try to retest several overhead resistance levels. I am not sure how they react when they get there.
Note many financials are also under the 200 day. I think we might test and get rejected.
If XLF slice down through 200 day, its game over. I'll be looking for short entries with my eyes closed.
http://chart.ly/twb64c
As always, not advice. Just my observations.
US TREASURY SHUT DOWN
ALOHA !!
Apparently due to "global warming" the US Treasury has shut down!
Here is what it says on their website ...
"Due to the inclement weather in the Washington Metropolitan area on Wednesday, February 10, 2010, the Daily Treasury Statements for Tuesday, February 9, and Wednesday, February 10, 2010 will be published on Thursday, February 11, 2010. The Operating cash balance for Tuesday, February 9, 2010 was $70,954."
What I'd like to see is another Ice Age start somewhere around Al Gore's house then move to Washington DC!
Re: XLF Failed to close above 14.02 today AGAIN
JMO, the Feb 5 low for many ETFs and stocks is much more significant since the market reversed and closed up on the day. That action was a signal (to me) to look to get long with a sell stop under Friday's low. XLF options max pain is showing 15 so there appears to be upward pressure. We'll know in the fullness of time.
FD:long FAS
Re: XLF Failed to close above 14.02 today AGAIN
great post.
Re: XLF Failed to close above 14.02 today AGAIN
I look at the volume the XLF came down on versus so I would be looking to short at 14.27 with a stop at 14.63. My target would be looking at the 02/05 low of 13.51. Risk/reward ratio looks good to me and the volume at 14.27 is the key. JMO
TRENDY
ALOHA !!
Here's one for Dr. Cosa ...
The Paulson Gold Fund is down 10%. That means that Paulson himself has lost $25mil. Too bad he didn't have the foresight to start his Gold Fund when I started and everyone over at GATA started. Then his Fund would be up 400% today, even with the recent correction. Not even hedge fund guru's are gold experts.
No Gold Rush for Paulson’s Fund
February 10, 2010, 6:55 am
It seems that investors aren’t convinced that John Paulson has the Midas touch. The hedge fund manager has been having a hard time getting investors to pony up for his gold fund, The Wall Street Journal reported.
When news broke that Mr. Paulson’s firm, Paulson & Company, planned to start a fund to to capitalize on the gold rush, some gold traders were betting that Mr. Paulson would be able raise billions of dollars for the venture and that the fund might even push gold higher, The Journal said.
But after months of investor meetings, Mr. Paulson has raised just around $90 million for the gold fund, The Journal said, citing people close to the matter. The Journal noted that investors had been shying away despite Mr. Paulson’s having injected $250 million of his own money into the fund.
Further complicating fund-raising for the hedge fund manager is the fact that the fund has lost about 10 percent since it was started in January, the newspaper reported, citing investors.
nexusone (google) phone vrs iphone
One (helpful) review concluded google's was better integrated into google's apps, and iphone better integrated into apple's. So, choose by the apps you need.
THIS (best yet,IMO) review makes the larger point that iphone's interface is intuitive and quick-to-learn, whereas nexusone has its best features hidden in sub-menus:
http://www.slate.com/id/2244165/#B
I already have windows, which is vexing, and BB curve, which is like a "windows that work". The wait continues for a phone that's "apple-elegant" but "jail-broken" apps-wise, and also unshackled from AT&T network-wise.
Celebrity homes
Just love this: http://www.blippitt.com/8-amazing-celebrity-home-p...
google's fiber-to-the-home plans detailed
http://www.theregister.co.uk/2010/02/10/google_fib...
Google already operates fiber between its (est.) 36 data centers around the globe and into internet peering locations (where carriers tie to each other and to massive internet "backbone links").
The challenge with broadband has always been the "last mile" to the customer, and the cost of building these high-speed facilities.
Will Google really "dig up the streets" to lay fiber to the home? if so, will they concentrate on high-density, high-end housing enclaves for their tests? what will they test?
Will they dazzle us with creative ways to reach max homes with min cost, to then demonstrate mind-blowing applications like "be your own TV director" of HDTV live sportscasts, or super high-res google earth views, or MET Opera HDTV broadcasts on demand to the home.
With new must-have apps, maybe Google can shame the telcos and cable operators into getting the US back into the top tier of countries offering the highest bandwidth to their public.
Short article on Alexco (Silver Miner)
For those who went to CARA 2010.
http://digital.canadianminingjournal.com/xta-asp/p...
AGQ
Kangaroo tail reversal last Friday.
Buy limit 42.97 good for the day.
Cancelled SLV buy for this one.
Do your own homework.
both EUR/USD and ES is perculating overseas.
http://chart.ly/z7smsd
Re: TRENDY
kaimu... stats from Fleck tonight..." in the option market for GLD.. for the last year, from an option-premium standpoint, it cost more to buy calls than puts... during the recent decline ( gold ) demand for puts increased.. Hulbert Gold Stocks Index shows gold bulls have dropped to mid-teens "... one could be a contrarian, I suppose... ** Team, got gone around 3 pm., and did not get back to answer... sorry.
Pz- Ramblin' Man
http://www.youtube.com/watch?v=0WGVW7byRCA
Lord, I was born a ramblin' man
Tryin' to make a livin' and doin' the best I can
And when it's time for leavin'
I hope you'll understand
That I was born a ramblin' man
My Daddy was a gambler down in Georgia
He wound up on the wrong end of a gun
And I was born in the back seat of a Greyhound bus
Rollin' down highway 41
Pz- If you're going to trade right now, that's the only way. All of your positions are born in the back seat of a Greyhound bus. And when it's time to toss the baby out an hour later, we all understand.
Thanks for the kind words. Hope you're having a good time down on the bayou, and none of your positions wind up on the wrong end.
WFT is acting like a first date tease....
Just cannot figure out its intentions...
Re: Pz- Ramblin' Man
Sure miss Duane.... saw them in Charlotte in 1969... Wow... Thanks for the mem's..
Good for them!
New Mexico House Votes to Move It’s Money
Catherine and News & Commentary,February 10, 2010 at 2:02 pm
New Mexico’s House of Representatives voted Monday to pass a bill that allows the state to move $2 billion - $5 billion of state funds to credit unions and small banks.
The municipal funds bill was approved 65-0 (roll call - PDF), and is subject to a vote by New Mexico’s Senate. Governor Bill Richardson told the bill’s sponsor that he supports the legislation. Credit Union Times, spoke to one banker who believes that the bill got a boost from Huffington Post’s Move Your Money campaign:
The altered view of New Mexico lawmakers in favoring local control of state funds, officials said, follows national mention of the New Mexico effort in the “Move Your Money” campaign of New York pundit Arianna Huffington in her online Huffington Post columns.
“I think Huffington gave this bill a little traction,” said Juan Fernandez, vice president of government affairs for the Credit Union Association of New Mexico.
Continue reading New Mexico House Votes 65-0 To Move State’s Money To Credit Unions, Community Banks
While mom and pop sleep...
barring any unsightly disaster, I am watching/preparing for a green open tomorrow in NY. Not sure how long it will stay green though.
http://chart.ly/xz6asp
http://chart.ly/bck6cs
http://chart.ly/qh4x6f
Not advice.
Re: GROUND REPORT
mntinhi....if CA is like NY where I live, the first thing the state auditors do when they come in is look at all the bills you have paid. If you ordered supplies from out of state, they charge you the sales tax that should have been paid.
In NY the state workers are doing everything they can to collect as much money as possible.... i think so they can maintain their own jobs, benefits and pensions.
They are strip mining the general public for their own benefit. You can see it in increased parking enforcement, speeding tickets, fines for building violations etc.
Where I am sales tax enforcement officials have gone up and down the street closing businesses that owe. I have never seen this heavy-handed enforcement of fee collecting in my 20 years of business.
Fellow business people are getting letters for fees they did not pay 20 years ago and the state supposedly gave up trying to collect way in the past.
The government employees are doing everything now to collect anything they can…I think to save their own jobs, health care benefits and pensions.
$3000
Ok so it's tax time again and what's the deal with the fact that even if you lost your shirt last year, you can only carry forward $3k in losses to offset any gains. Does this make sense to anyone? Where did "they" come up with that static number? Unbelievably stupid and unfair, but not surprising...
KC
One of my Youtube favorites
Still blows me away every time i see it.
Time stamp at 8:00 marker, "The truth is that we are in so much debt the only way out is revolution." Smart guy
http://bit.ly/92uKYA
This is a rapper, who knows more than 99% of the American population. Wake up America!
Pt 2, http://bit.ly/c1Kswe
Pt 3, http://bit.ly/cSrrRx
Re: Good for them!
Good for me too...and my condo association. We were hit with some outrageous charges by National City Bank and it was yours truly who suggested a move to a local, strong credit union. This was just before NCB was taken under the fold of Pinnacle thanks to the TARP.
Think Global-Act Local!
Re: $3000
This is another one we can blame on Alan Greenspan. As I recall, he was against raising the limit because it might cause too much selling. The number has never even been adjusted for inflation. I have no idea when that figure went into tax law.
Re: $3000
It just doesn't make any sense. I mean, why a flat $3k? Makes as much sense as a flat income tax of $X. Between this and the "pattern day trader" crap it's almost enough for me to just throw in the towel and get a job waiting tables in the Bahamas,
KC
Re: GROUND REPORT
Gademsky, Thanks for the warning, I will relay the message. Right now we have one of the smartest accountants in the business, he is the accountant of the stars. He did say this year is going to have a lot more audits and tax returns are going to be looked at a lot harder . It seems the government, especially here in Calif. is spending a lot more than they are taking in. There is going to be a big effort to rectify this through the tax system. For the people out there, the word this year from this accountant is be extra careful! There are less big revenue players this year (real estate), less people paying and more people receiving tax refunds. Whatever state you live in caution is the word.
The cops here are now revenue generators, fees, fines and licenses are up, but the tickets have tripled. Parking meters are now .25 for 15 minutes and that now includes Saturdays and the time has gone from 6Pm to 8Pm. Side note, his bonding company doubled is premium and it is based on your credit rating, his is good. He called to find out why, they based the rate on his secretary's credit rating instead of his, the president of the company, he got it reduced. There is only one bonding company in Calif.
This post is not related to trading (sorry) but I think it is very important to know just how cut throat the government can and will get.
Adam Hewison video compares today's Dow to 1929
http://bit.ly/9X6Xyp
Surprising to see him elude to the possibility of. Some of us here have been comparing now to the past tops of history for a while here.
Re: GROUND REPORT
State and local governments are as big as whores as your Federal government.
They are all on a power trip. Tax and spend.
Worse, borrow and spend. The death knell for the common man.
I expect there will be an increasing tax on 'wealth' in the coming years. To some, wealth is the big money paid to the masters of Wall Street but there will be a stealth 'wealth tax' on savers. I already feel it.
My money market return is one tenth of one percent. My government encourages me to SAVE! WHY! To my mind we need to change the old saw from save, to borrow and default...It is the only thing that makes sense. But I guess I'm not BIG enough to bail out. Default is only for guys that pay themselves $10 mil a year.
Screw saving. Screw investing. Screw government at every level. Our only salvation is a constitutional convention or to run like hell.
Get your money OUT of the U.S BEFORE there are exchange controls! They are coming... Guaranteeeeed. Next time it won't be an interest equalization tax (circa 60's) it will be prohibited.
Dying behemoths lash out at all around them. Stay far away from their claws of death.
European exposure to PIIGs economies.
UK has 16% GDP exposure to these countries. Switzerland, 21%. bummer. Contagion abounds in this affair.
http://blogs.telegraph.co.uk/finance/edmundconway/...
The following is an interesting look at the complexities and weakness of European handling of all matters. As one can read of Obama's visit, there are overlapping and most certainly redundant positions of authority that lend itself to sorting out rituals of protocol, as opposed to getting anything done. So Brussels either tightens up its authority to improve economic affairs and the union in the future, or it all falls apart to return to the nationalist past. I'd be betting on the second possibility.
http://www.spiegel.de/international/europe/0,1518,...
Re: European exposure to PIIGs economies.
ALOHA !!
I would like to hear from some of the German readers here. My German friends would like to have the Mark back and get out of the Euro. They say they took quite a hit on the value of the Mark when Germany transitioned to the Euro and the EU. Is that true? How did that transition occur? Any first hand experience in this realm?
I would find it disconcerting to wake up one morning and find that my bank account was cut in half. Perhaps that is where NAFTA is headed and a North American Union. Essentially us American citizens have no say in Washington DC as was demonstrated with TARP. No representation exists so our politicians act like a monopoly would. Where is Obama on this issue of NAFTA?
Thanks ...
Re: TRENDY
So what, he had the same problem raising capital and convincing investors for his credit fond which made him billions.
If Not for Ben
http://ronsen.blogspot.com/2010/02/if-not-for-ben....
My mother used to call it "unmitigated gall." That was kind.