Thoughts On Today's Job Numbers: Rahm, the Economy Is Not a Giant Investment Bank 30 comments
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- Pretty clear the stimulus signed at the start of the Obama administration is not making its way into the economy. The bill was almost entirely social policy or pork and as a result we've irresponsibly increased the deficit without doing anything to help the economy. It's a bit of an alarming pattern where Rahm Emanuel only seems to care about "victory" and "getting something done" without regard to whether it actually solved any problem.
- Hey Rahm, the economy is not one big giant investment bank and you are trying to "get your deal done". I respect execution oriented people but you actually have to have policies that have to do with fixing real systemic problems, not just bribing your caucus with pork. Just issuing debt to pay for legislation that does nothing just creates more problems and we might as well have no bill at all. If you had spent the entire amount on an energy grid this country would now be more competitively positioned against China and actual construction jobs would have been created.
- This pattern of "getting something passed" rather than focusing on policy that will address system problems in our country is holding true in energy and health care. The energy plan does very little to actually resolve American energy dependence and the health care plan, despite its watered down nature, doesn't look like it will change much either.
- I think technology and emerging markets will probably continue to outperform and retail will continue to underperform over the long term as the United States works to reduce debt load. The odd thing about that forecast, if I go to a Best Buy (BBY) or a Costco (COST) in California--it might as well be 2006 with the stores packed. Prices and margins are definitely lower however.
- On commodities--for late cycle industrial plays it's best to stay clear while early stage commodity plays are better longs as Asian economies buy and stockpile. Very vulnerable however to any disruption in the Chinese economy that could occur for multiple reasons.
- Still short treasuries. While the forecast is very bleak today, some time during the next quarter as a greater sense of stability coupled with increased government borrowing should allow a nice slow but steady increase here.
- I think banks will show numbers this quarter that are better longer term than short term. i.e. I don't think the current quarter will look that good compared to the prior one, but long term earnings power should be vastly improved. Banks may actually move down on current quarter results and many will be good buys based on that. On the M&A side, continue to like smaller investment banks rather than the likes of Morgan Stanley (MS). Goldman (GS) is still in a category of its own given its proprietary trading makes it a hedge fund still.
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This article has 30 comments:
Problem is no one can afford the higher prices except investment bankers.
I appreciate those who through ingenuity, industry and values make money. Drug dealers make money for heavens sake and they are down there with lawyers and investment bankers. What "value added" to the economy does a Treasury Bond trader, who is making millions of dollars skimming his clients, provide? That is how industry has been making most of its money by "front running", thereby increasing costs, their own clients. They, like the Hedge Funds, insult our intelligence by claiming they make the markets liquid. What is "liquid" about being on both sides of a trade and "painting the tape"?
If the SEC didn't do anything about Madoff, as he had to turn himself in, they certainly won't do anything to the "smartest guys in the room", the investment statists and elites. These parasites are a cost of doing business to the rest of us like a grocery stores petty theft or "shrinkage".
On Jul 02 03:09 PM bricki wrote:
> Is Rahm Emanuel really the policy maker?
More so than BHO. He is one of the controllers who pulls the strings of the robot. Check his statements regarding political power and his past history in the Clinton Administration.
I voted for the man, but after a certain amount of time you can't avoid the truth. Wall street bought and paid for what they are getting. It was not going to work in the first place, we have a policy of unlimited never ending funding to banks that is like pissing down the drain instead of helping the real economy or mainstream folks.
You do not solve a debt crisis by creating more debt. Can't be done, the more you try the more money gets wasted and the larger the bonus pool gets to be for wall street.
Hope fuly the american people are going to start to realize how this government has fucked them and will start to protest for some of what they deserve.
On Jul 02 04:42 PM dcb wrote:
> No people are sick of the way the markets and our government are
> being manipulated in a deliberate policy designed to help banks but
> leave the working man with even less than he/she has
>
> What are knowns: bank interst rates suck which kills americans who
> have savings, the will be future inflation (this is great for the
> working stiff who's bonus isn't always going to be higher than the
> rate of inflation, the dollar will go down (that really helps the
> guy on mainstreet). How is his reduced purchasing power going to
> help mainstreet. the government solution is not to reduce you debt
> (which you can't already pay, but to take on more cheap debt to get
> by leaving you worse off in the end.
>
> Strong dollar, equals less for commodities equals less inflation,
> equals more free spending power. the currenct plan is just smoke
> and mirros doing nothing. It is spin given out by a man who the press
> is giving a holiday to because "yes we can". Let me tell you, with
> him in office selling off the country to wall stree, no we can't.
>
>
> I don't quite recall the real estimates of what is being spent to
> bail out the banks (i think a few trillion). Boy, I wonder what that
> could really do if it was put to something production instead of
> to people who just push money around and do nothing except suck out
> the money others have either made or are spending. Yeah, like middle
> men really are productive memebers of society. Esp when the make
> money pushing what they know is crap to you (seekingalpha.com/symbo...)
> and are at the same time buying insurance on it because they know
> what shit you have bougt. That way they get to make money selling
> and when it goes in the crapper. These are people society really
> needs (Right) :-)
>
> Hey I have an even better idea. Lets take the very people who caused
> this crisis and reward them with billion/trillions for their hard
> labor while I have to get my meals at a soup kitchen.
On Jul 02 04:28 PM dcb wrote:
> Hope fuly the american people are going to start to realize how this
> government has fucked them and will start to protest for some of
> what they deserve.
As long as people depend on the government and the Fed to be responsible for saving our economy we will remain hopeless. Do people realize when they do that they are asking for government to control the economy and subsequently their well being.
It is people acting freely and independent which makes an economy flexible and resillent to downturns. It is people who are infinitely more efficient with their money than government. Although government spending stimulus on infrastructure would be better in the long run it will not prevent a recession. Stimulus, even keynsian stimulus only works to bring us up out of a trough not to preventa trough from happening or lessening the fall.
We are indeed blowing our money for nothing. Whether you can blame Obama for it all is another matter. It seems after Bush Jr. any party in power and any politician can't keep their hands out of our pockets. The equasion for government spending is much simpler than you would think in Washington. It's not about recession. Its about giving away money to friends and then trying to find a justification for it.
Did Rahm also run a trillion dollar war ? Did you protest over that pork? How about the 1.7 trillion dollar tax cut (really a loan from future generations?) Where was the budget balance mantra then?
The fact is when it is tax cuts for the super well off or defense spending to be in a perpetual state of war, all tongues are silent in the business world.
When it is any type of social policy designed to help those who actually fight these (and lose their lives and limbs nt he process), it is pork.
Now we find the independents are all breaking "against the Obama policies".. really, and what are the alternatives? One more big super duper tax cut for Madoff's investors?
How long can 15% increases in health care be sustained? And what proof is there that the stimulus is all pork? - Only about ten percent of the money has even been spent for goodness sakes.
On Jul 03 12:28 AM derryl wrote:
> Rahm and the rest of the administration are just pitchmen for the
> kleptocrats who are in the process of stealing the USA. Obama never
> had a chance.
I hope you don't want to live where people dump trash wherever, drive on dirt paths or toll roads, put out fires with their own hoses or pay for fire services on-demand, form their own vigilante committees instead of police (an don't need judges), have a well or private-sourced water, etc., etc. Imagine 300 million people without sewage treatment, or that which is privately supplied (by Goldman Sachs or some hedge fund who has cleverly bought and collateralized it, 'insured' the CDO through other devious devices and sold it around the world). There are services, oh did I forget the military and homeland security, that "socialist" government enterprises can do more effectively than "private enterprise".
Incidentally, in my working career, I paid roughly $100,000 in Social Security taxes. This is my fifth year as a recipient and I have collected nearly all of that back. In another 5 years I will receive back all of my employers' contributions. My normal life expectancy is around 20 years from now. Do the math! The payback given average life expectancy will be pretty good. Sorry, but this is another "socialist" program that works, even if it does need some adjustments going forward.
My comment: whenever I think about the BHO adminstration, the song "Handlebars" by Flobots goes through my head as well...
and if left unchanged, the 'gubmint' will continue to move leftwards and grow ever larger, and more controlling of all our lives too. How do we, who care about freedoms and choices, stop this encroachment? I personally believe that the battle was lost when we let the NEA setup shop in all public schools decades ago and serve up leftist idealogy, and revisionist history to suit their agenda, to the future parents, workers, (and now) leaders of our country.
I think the recent hype about commodities is unwarranted. Why? Just look at the latest job loss numbers - ~470,000. There won't be much hurry to buy commodities as there won't be a robust and sustaining V-shape bounce in manufacturing.
On Jul 02 02:53 PM dw57 wrote:
> commodities is just a Goldman Sachs play to entice investors. to
> be speculators. as we have seen that decoupling myth has been proven
> to be just that. a myth
God you are a cynical mutha tho, guess thats what looking behind the words is all about. Oh, and its more like BLEEDING down the drain...
and they insert the catheter deeper as we speak.
Did you happen to catch John Thomas' (mad hedgefund trader) report on the double talk coming out of the SF fed reserve bank? Something like 'thanks to all of the money weve spent while the economy is tanking, there will only be 2% inflation for the next several years...' faaaaahck, are you kidding me??
Blind Reason, hella good commentary, thanks. If so many people know this crap is wrong, how can it keep going this way?
On Jul 02 04:28 PM dcb wrote:
> The sad thing is that it appears that many of you still believe Obama
> wanted to actually do something. He picked a group of advisors who
> are insiders and hey stand to make a killing when leaving office,
> Volker (the only one of them who can't be bought) was marginalized.
>
>
> I voted for the man, but after a certain amount of time you can't
> avoid the truth. Wall street bought and paid for what they are getting.
> It was not going to work in the first place, we have a policy of
> unlimited never ending funding to banks that is like pissing down
> the drain instead of helping the real economy or mainstream folks.
>
>
> You do not solve a debt crisis by creating more debt. Can't be done,
> the more you try the more money gets wasted and the larger the bonus
> pool gets to be for wall street.
>
> Hope fuly the american people are going to start to realize how this
> government has fucked them and will start to protest for some of
> what they deserve.
In order to spraed the word could I ask people to lok here
market-ticker.denninge...
and
uniteddiversity.com/mo.../
a document well written in French
www.bankster.tv/docs/M...
Let's all get to know what they've done, and how they have done it.
(There is in fact more manipulation than this)
www.silverbearcafe.com...
www.silverbearcafe.com...
Please read and take note.
Security taxes.... Do the math!"
You might take some of your winnings and go back to school for refresher course in math. You forgot to factor in time value of money. Doh!
The deal has changed since you started work. I started work in 1983. If you apply the history market return of 6% to my contributions, I have contributed just over 2.5 million dollars to the system. If I live that long, I will get about 30K a year. If I don't live that long I get nothing.
On Jul 03 10:38 AM frosty wrote:
> Dear Socialism Cannot Compete: You wrote, "Your distaste for some
> bankers is justified. But you need to realize that the far greater
> pillaging that has been done for decades is in the form of ongoing
> socialist government. Why not add the bankers to the rolls? Social
> (in)Security already pilfers 7% of my pay. Throw in Medicare for
> another 1.5%. Sales taxes. Property taxes. Fees to use the local
> dump. Burn permits. This permit. That permit. Fees and more fees.
> The working man is not only now being pillaged to give to the banks.
> He's being pillaged to give to the non-working man. And to other
> nations. It's sickening, and it has to end. Our federal government
> needs DRASTIC downsizing. It should only be performing a few functions
> anyway -- it is SO far from what was Constitutionally designated
> to it."
>
> I hope you don't want to live where people dump trash wherever, drive
> on dirt paths or toll roads, put out fires with their own hoses or
> pay for fire services on-demand, form their own vigilante committees
> instead of police (an don't need judges), have a well or private-sourced
> water, etc., etc. Imagine 300 million people without sewage treatment,
> or that which is privately supplied (by Goldman Sachs or some hedge
> fund who has cleverly bought and collateralized it, 'insured' the
> CDO through other devious devices and sold it around the world).
> There are services, oh did I forget the military and homeland security,
> that "socialist" government enterprises can do more effectively than
> "private enterprise".
>
> Incidentally, in my working career, I paid roughly $100,000 in Social
> Security taxes. This is my fifth year as a recipient and I have collected
> nearly all of that back. In another 5 years I will receive back all
> of my employers' contributions. My normal life expectancy is around
> 20 years from now. Do the math! The payback given average life expectancy
> will be pretty good. Sorry, but this is another "socialist" program
> that works, even if it does need some adjustments going forward.
What I find really annoying is that the banking system is a "con" because the debt just cannot be re-paid.
Look at poor Latvia.
www.istockanalyst.com/...
The more debt that a nation takes the more acute the problem becomes (it's mathematics at work here - not a politician's words).
Sadly paying down the debt when too much debt has been issued can make things more difficult.
See here
www.debtdeflation.com/...
and read on page 2.
What I am saying is that it is going to need real changes to pull back from the situation where banks in the last 20 years issued a lot of debt *that they never should have issued*
I am sorry if people may find what I write offensive in some way. I am really trying to help by getting any and all people to understand *why* we are in the situation we are all in. I mean USA, Uk, France< Australia and other countries.
"The greatest amplifier of the debt burden during a Depression, however, is deflation."
I am always looking for things that almost anybody can understand. Tonight I believe I found another brilliant example.
Go here
circ2.home.mindspring....
and download a pdf
circ2.home.mindspring....
Read what it says and look at the year.
Brilliant. It saves me trying to write a whole piece trying to write the mathematics.
Cheers Mr Greco !
Aside from the poor writing, the author never establishes the administration's stated purpose for policy formulation, which is a prerequisite for any critique.
Flabby writing, lazy thinking--I stopped reading after the first couple bullet points.
Anyway, I guess this piece typifies Seeking Alpha, which is why I seldom come here.
On Jul 03 08:35 AM What the wrote:
> The stimulus is all "PORK"...right out of the Fox news talking points.
>
>
> Did Rahm also run a trillion dollar war ? Did you protest over that
> pork? How about the 1.7 trillion dollar tax cut (really a loan from
> future generations?) Where was the budget balance mantra then?<br/>
>
> The fact is when it is tax cuts for the super well off or defense
> spending to be in a perpetual state of war, all tongues are silent
> in the business world.
>
> When it is any type of social policy designed to help those who actually
> fight these (and lose their lives and limbs nt he process), it is
> pork.
>
> Now we find the independents are all breaking "against the Obama
> policies".. really, and what are the alternatives? One more big super
> duper tax cut for Madoff's investors?
>
> How long can 15% increases in health care be sustained? And what
> proof is there that the stimulus is all pork? - Only about ten percent
> of the money has even been spent for goodness sakes.