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Carlos Lam  

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  • Municipal Debt: Got Local Knowledge? [View article]
    The author makes an excellent point: not all municipalities are the same. In Indiana, for example, the vast majority of municipalities have no pension benefit liability; the state has a retirement plan that covers nearly every public employee. California is different: localities are responsible for pension benefits, funded or unfunded.
    Dec 22, 2010. 06:39 AM | 1 Like Like |Link to Comment
  • PIMCO Joins Goldman in Raising GDP Forecasts for 2011 [View article]
    "What if the economy starts growning on its own and the FED slowly starts to take out the stimulus?"

    With household debt at 100% of GDP, we simply will not see the type of growth that's necessary to bring down unemployment from the current high levels. Simply put, we've got A LOT of debt to work off.

    As for the Fed easing off: it won't happen with the current Chairman. Chmn. Bernanke is deathly afraid of deflation--which is what the nation needs, BTW--and will do whatever is necessary to ensure that it doesn't happen. To be sure, his next step is to monetize (directly or indirectly) municipal debt, as our cities, towns, and counties are overburdened with liabilities and unable to extract more taxes from their citizenry.
    Dec 14, 2010. 02:55 PM | 1 Like Like |Link to Comment
  • Bernanke Tries to Play Politics, Loses [View article]
    Good Captain, during Chmn. Bernanke's [in]famous November 21, 2002 "helicopter" speech, he specifically mentions that "the Fed has the authority to buy foreign government debt, as well as domestic government debt." Note that the term "domestic government debt" includes federal, state, and municipal securities. I'm more than certain that the Bernanke Fed will indeed monetize municipal debt; it is uber-frightened at the possibility that public employee pensioners will have to take a haircut.

    As an aside, I've been warning my fellow public employees for at least a year to save for retirement on their own because underfunded public pensions simply will NOT be made whole by state legislators.
    Dec 11, 2010. 08:22 PM | 1 Like Like |Link to Comment
  • WSJ Gets It Wrong on Unemployment Insurance [View article]
    Rorty, you haven't mentioned the ideological problem with the FUTA: It forces employers, employees, and -- in the end -- consumers to pay for unemployment insurance even if they do not want to do so. I'd favor changing the UI program to make it voluntary, much like short-term disability policies are voluntary (like the ones pitched by that annoying yet effective AFLAC duck).
    Dec 11, 2010. 08:11 PM | Likes Like |Link to Comment
  • JP Morgan and the Massive Silver Short: The Greatest Story Ever Told [View article]
    Thanks for the reply. I see what you mean about the price increases making the longs LESS likely to accept delivery. Whatever the outcome, I'm long physical silver because I just don't trust the Fed, the Treasury, or the ETFs. I don't like counterparty risk, so I'd rather have the metal in my hand.
    Dec 10, 2010. 12:30 PM | 5 Likes Like |Link to Comment
  • Has Bernanke Failed? [View article]
    "However, given the alternatives, dealing with inflation down the road is a lesser evil than dealing with a deflationary cycle now."

    I respectfully disagree. It's better to amputate the gangrenous limb now than to have to deal with sepsis later.
    Dec 10, 2010. 12:25 PM | 4 Likes Like |Link to Comment
  • Reid Looking Forward to the 2011 Debt Ceiling Fight [View article]
    Rorty, you're to the left of me (by far), but your analysis is sound. I believe Boehner will get VERY large cuts--even in defense--in exchange for delivering votes to raise the debt ceiling. As you know, the House Leadership typically has much more control of its caucus than does the Senate Leadership. There are going to be 80 GOP House freshmen, which means that the House Leadership should have 75+ votes "locked in" for any such vote. Boehner will be able to deliver the vote to raise the debt limit as long as he can go back to his caucus with a laundry list of cuts in spending that he can point to. Pres. Obama, likewise, will be able to point to the cuts and burnish his spending-chopping credentials.

    This means that Reid will have to get his caucus to vote for raising the debt limit and stomach the cuts. That puts people like Jon Tester (D-MT), Ben Nelson (D-NE), and Claire McCaskill (D-MO) in a tough spot: they'll either be hammered for adding more debt or for cutting popular spending. Not well-played. I would've just raised the debt limit in the lame-duck session had I been Reid & Pelosi.
    Dec 10, 2010. 12:19 PM | 2 Likes Like |Link to Comment
  • JP Morgan and the Massive Silver Short: The Greatest Story Ever Told [View article]
    "In other words, it's the longs that determine physical delivery - not the shorts."

    Kid, isn't that exactly what MK is trying to get rolling, though? If more of the gen'l public buys physical silver, then the longs may be more inclined to take physical delivery to either (a) provide that silver to the gen'l public or (b) replenish sold physical product.

    BTW, I like MK for his anti-Fed views, though he's way too much of a statist for my liking.
    Dec 10, 2010. 12:02 PM | 5 Likes Like |Link to Comment
  • Bernanke (Once Again) Explains Why QE2 Is Not Money Printing [View article]
    No, without the Fed the recessionary stages would be sharp but short-lived. During the free banking era (roughly 1830-1860) recessions were relatively shorter and created less nationwide problems. Citizens on the "wilderness" that was the midwest at the time, of course, would've been less affected, as they were more interested in survival than economic progress. Nevertheless, company failures, bankruptcies, and liquidations made it such that a truly systemic problem was very difficult to occur.
    Dec 7, 2010. 05:25 AM | Likes Like |Link to Comment
  • Bernanke (Once Again) Explains Why QE2 Is Not Money Printing [View article]
    I respectfully disagree. People go bankrupt, assets are liquidated, and we rebuild. The prudent are rewarded for their good decisions; the feckless are punished with liquidation. There's nothing wrong with this process, which has served man far longer than have central banks.

    The monied interests, of course, hate panics and hate liquidation even more because they often get wiped out. Their hatred of punishment for insufficient due diligence is no reason for the rest of us to have to put up with a currency that can be debased or with interest rates that have no connection to the real economy.
    Dec 6, 2010. 12:35 PM | 8 Likes Like |Link to Comment
  • Forget $2000 an Ounce; Gold Set to Plummet [View article]
    Not to mention the fact that--in the event of a seizure of gold--bankers would be deputized as U.S. Treasury agents and ordered to seize any gold that one may have in a safe deposit box.
    Dec 6, 2010. 12:23 PM | 1 Like Like |Link to Comment
  • Bernanke (Once Again) Explains Why QE2 Is Not Money Printing [View article]
    Several people warned that the bubble in real estate could have very negative consequences: Peter Schiff, Jim Rogers, Bill Fleckenstein, Ron Paul. Take your pick.

    You are correct that none of the above would be fit to run the Federal Reserve; they all believe that the Federal Reserve as an institution should be either severely reformed or done away with precisely because central banking cannot possibly work.
    Dec 6, 2010. 12:21 PM | 4 Likes Like |Link to Comment
  • Bernanke (Once Again) Explains Why QE2 Is Not Money Printing [View article]
    In March 2007, Dr. Bernanke told us that the problems in subprime were "contained." In October 2007, he told us that "It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions." In July 2008, he said that Fannie and Freddie were "in no danger of failing." Given how blatantly incorrect his statements have proven to be, I simply do not believe anything that comes out of Chmn. Bernanke's mouth.
    Dec 6, 2010. 06:20 AM | 17 Likes Like |Link to Comment
  • With Mass Exodus of Manufacturing Jobs, American Labor Market Hitching Wagon to Service Economy [View article]
    Mark, you are correct. It is only through production that we can rebalance the economy AND provide employment for displaced workers. However, my point was that declining employment in a given sector of the economy in and of itself does not cause trade imbalances, as the agricultural example shows.
    Dec 3, 2010. 03:38 PM | Likes Like |Link to Comment
  • Build America Bonds Are a California Subsidy [View article]
    Even if CA does pay more in federal taxes than it receives in remittances, that's no reason to extend the BAB program. Given the horrific fiscal state of many of CA's municipalities, an incentive to take on more debt is the absolute LAST thing they need.
    Dec 2, 2010. 03:56 PM | Likes Like |Link to Comment