Comments on Chester Sing's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/chester-sing/articles http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-430130 430130 Wed, 18 Mar 2009 00:56:31 -0400 Do you all know that Jim TRIPLED his assets in the last 18 months on his bank shorts. He also broke even on commodities and they are goign back up they wre only down because the investors who bought commodities on 98% margin had margin calls and increased margin requirements, forcing them to take profits, That is over now.
JIm Rogers is a world champion athlete, an investing legend, a travel pioneer and multiple world record holder for independent travel by motorcycle and car. Jim Rogers has lived in every country in the world and every state in America for A MONTH EACH minimum. That's a very close approximation to FACT. Think about that. How many states or countries have you lived in for a month each. He knows what's up and he's trying to help you people. Listen to him and do as he does.]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-421259 421259 Tue, 10 Mar 2009 22:07:33 -0400
I'd like to invite you to check out these links -

www.ft.com/cms/s/0/774....

ftalphaville.ft.com/bl.../

I suggested that there is no strong proof that Japan's decade long stagnation was caused by its government's fiscal and monetary actions. By saying that, I acknowledged that Japan's economy did underperform.

I found two well-respected economist who took my argument to another level. According to them, Japan's measures in the early 90s, on the contrary, was a relative success. If it had any faults, it is in that they did not do more.

Regards,]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-416814 416814 Fri, 06 Mar 2009 20:58:49 -0500
I am reposting my reply to Roscat. I forgot to enclose his remarks in quotation marks.
----------------------
Roscat,

I will try address each of the remarks you made on your second comment.

“All those gains are only on paper! They rely on assets that should have never been valued at that price. They are off-balance sheet. They cannot be compared with assets on the balance sheet.”

I apologize but I do not understand what you are trying to get at.

Let me explain myself, once again. If you are pertaining to the £12.3 trillion mentioned in the following link (ftalphaville.ft.com/bl...), this amount is estimated the nominal value of “financial instruments” in the trading books of EU banks. If I am not mistaken, this is the estimated value of outstanding derivative contracts.

The point that I was trying to make is that if banks start to fail, god knows what will happen to these instruments that are interlinked in a complicated web. Personally, I am not confident that there will be takers for a large portion of these instruments if governments start reigning in on their “rescue” attempt. If buyers are cautious now (I think the yields in US Treasuries speak for itself), can you imagine how they would behave then?

You brought up accounting so I will touch on the matter a little. I’m sure you know how written contracts are recorded in the balance sheets. These liabilities are usually recorded based on estimated loss – not on maximum loss. And we all already know that, generally, companies lean towards optimism when making their estimates.

Now, let’s hypothetically assume that Citibank’s derivative liabilities are recorded at $100 billion, can you even start to imagine the real size of that liability?

It’s not only banks that will take it on the chin if these instruments start to dissolve. Remember, many businesses rely on these contracts as insurance for movement in the foreign exchange market, etc.

“Here is some proof. Housing in the CA, FL, NV, AZ markets was allowed to fail. Guess what happened? Assets were purchased at fire-sale prices, with cash money on hand. Extrapolate that.”

I apologize, once again, but it is not clear to me what this proves. Would you care to elaborate?

“Pretty sure, just like many economists before you and I.”

I am trying to get someone who is in a better position to comment on this particular issue. I will try to get back to you on this matter.

“Actually Economics is a hard science and extrapolation can be achieved using the right examples. If you need help with that, please let me know. See example above, and many other economies before this time.”

To be perfectly honest with you, I am surprised at this comment. I’ll let Dr. Nassim Nicholas Taleb speak on my behalf on this matter.

“Yes, but your timeframe if insufficient. If they were allowed to continue failing, the market was going to adjust itself. They were eventually bailed-out.”

Earlier, I wrote a reply to Austrian. Would you care to reply to that?

“Here's enlightenment for you. The aforementioned foreclosures, and the Sweden example. It is very similar.”

I will try to read on Sweden’s case. I will also try to get a third party to comment on it.

“Here's how you envision this: take the profits now, but take the losses in 10-30 years. How is that for pain? Because in the end, you will still follow that curve giving you 3-5% growth. Yes, it's demographics plus advances in productivity. Baring that, you cannot get to the numbers showed recently.”

Please see my reply to Austrian.

Regards,
]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-416803 416803 Fri, 06 Mar 2009 20:47:13 -0500
I will try address each of the remarks you made on your second comment.

All those gains are only on paper! They rely on assets that should have never been valued at that price. They are off-balance sheet. They cannot be compared with assets on the balance sheet.

I apologize but I do not understand what you are trying to get at.

Let me explain myself, once again. If you are pertaining to the £12.3 trillion mentioned in the following link (ftalphaville.ft.com/bl...), this amount is estimated the nominal value of “financial instruments” in the trading books of EU banks. If I am not mistaken, this is the estimated value of outstanding derivative contracts.

The point that I was trying to make is that if banks start to fail, god knows what will happen to these instruments that are interlinked in a complicated web. Personally, I am not confident that there will be takers for a large portion of these instruments if governments start reigning in on their “rescue” attempt. If buyers are cautious now (I think the yields in US Treasuries speak for itself), can you imagine how they would behave then?

You brought up accounting so I will touch on the matter a little. I’m sure you know how written contracts are recorded in the balance sheets. These liabilities are usually recorded based on estimated loss – not on maximum loss. And we all already know that, generally, companies lean towards optimism when making their estimates.

Now, let’s hypothetically assume that Citibank’s derivative liabilities are recorded at $100 billion, can you even start to imagine the real size of that liability?

It’s not only banks that will take it on the chin if these instruments start to dissolve. Remember, many businesses rely on these contracts as insurance for movement in the foreign exchange market, etc.

Here is some proof. Housing in the CA, FL, NV, AZ markets was allowed to fail. Guess what happened? Assets were purchased at fire-sale prices, with cash money on hand. Extrapolate that.

I apologize, once again, but it is not clear to me what this proves. Would you care to elaborate?

Pretty sure, just like many economists before you and I.

I am trying to get someone who is in a better position to comment on this particular issue. I will try to get back to you on this matter.

Actually Economics is a hard science and extrapolation can be achieved using the right examples. If you need help with that, please let me know. See example above, and many other economies before this time.

To be perfectly honest with you, I am surprised at this comment. I’ll let Dr. Nassim Nicholas Taleb speak on my behalf on this matter.

Yes, but your timeframe if insufficient. If they were allowed to continue failing, the market was going to adjust itself. They were eventually bailed-out.

Earlier, I wrote a reply to Austrian. Would you care to reply to that?

Here's enlightenment for you. The aforementioned foreclosures, and the Sweden example. It is very similar.

I will try to read on Sweden’s case. I will also try to get a third party to comment on it.

Here's how you envision this: take the profits now, but take the losses in 10-30 years. How is that for pain? Because in the end, you will still follow that curve giving you 3-5% growth. Yes, it's demographics plus advances in productivity. Baring that, you cannot get to the numbers showed recently.

Please see my reply to Austrian.

Regards,
]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-416730 416730 Fri, 06 Mar 2009 19:21:35 -0500
Thank you for your comment.

In this link - www.huppi.com/kangaroo... - you will find a fairly detailed account of the Great Depression.

Please allow me to correct myself for the statement, “On the contrary, President Hoover, probably did the opposite.” You and Roscat are right - it is an exaggeration to say that he did. But it is undeniable that the two differed greatly in the way each addressed or is addressing their respective crisis at the onset.

If the account in the link is accurate, then it is to be believed the President Hoover only started aggressively acting on the crisis then in 1931. It was early in that year that the Reconstruction Finance Corporation was formed. President Hoover, at first, tried to withhold from drastic interventions for a significant number of months. Unemployment breached 15% already by the time he started with heavier measures.

By no means does the rise in unemployment to over 15% by the end of 1930 disprove your opinion that the Great Depression could have been less painful and protracted if the US government kept its hands off. To see the effectiveness of the economy’s ability to recover independent of aid, it should have been left longer.

Now, if your view – that the economy should just have been left to itself - is correct, then GNP and unemployment improvements should have been faster than its improvements as it really transpired. Do you agree?

Below is the progression of the US economy after measures have been taken according the same link:

1932 – GNP falls to 13.4% and unemployment rises to 23.6%.
1933 – GNP falls 2.1% and unemployment rises to 24.9%.
1934 – GNP gains 7.7% and unemployment falls to 21.7%.
1935 – GNP gains 8.1% and unemployment falls to 20.1%.
1936 – GNP gains 14.1% and unemployment falls to 16.9%.

I will stop here because I speculate that as years move toward the beginning of the Second World War, the figures start to get murkier. The nearer to the war the years get, the harder it is to segregate the effect of economic measures from the effect of the demand increase caused by an upcoming war.

My question is if the economy was left to itself, would the progress in GNP and unemployment have been faster? Is your answer is yes, would you care to elaborate your reasons?

Regards,]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-416274 416274 Ladies and Gentlemen, > > First of all, I would like to thank those who took time to comment > – particularly to those who did so with courtesy which is to be expected > of civilized people. > > Before I proceed, I would like to make it known that I adhere to > a great many of libertarianism’s principles – that governments generally > should keep their noses off economic/business directing for instance. > But I am also a utilitarian. If making an exception to my libertarian > belief could result to less pain overall, then I am willing to make > compromises. > > Now, let’s get to the point. > > “The Commission estimates that so-called financial instruments in > the ‘trading book’ total £12.3 trillion (13.7 trillion euros), equivalent > to about 33pc of EU bank balance sheets.” > *Source (http://ftalphaville.ft.com/blog/2009/03/05/53238/absolute-suicide-watch/) > > > How big is £12.3 trillion or $17.3 trillion? According to this (http://flagcounter.com/factbook/us) > source, the latest GDP of the US is $13.8 trillion. And this is just > the exposure of banks in the EU. > > A portion of this amount will probably get purchased and honored > if a fire sale is held. How much? I do not know. One thing I know, > however, is that a fraction of this amount is big enough to wipe > out many. > > Therefore, the argument that the unemployment increase will be marginal > if financial institutions are allowed to fail, to me, is not believable. > > > A number of you seem to be absolutely sure that the outcome in the > event that financial institutions are allowed to fail would be better. > But I have yet to see any strong proof. > > Is Japan’s decade-long stagnation really attributable to the rescue > made to its financial institutions after the crash of the late 80s? > Are you absolutely sure that is not because of other factors? > > Economics is not a hard science. Controlled experiments are unheard > of in macroeconomics. Please try to keep this in mind. > > Now, a commentator suggested that the Great Depression could have > been shortened if banks were allowed to fail. I have news – they > were allowed to fail. > > “In the first six months of 1929, 346 US banks collapsed, and that > was just the beginning of a series of bank runs.” > *Source – (http://www.independent.co.uk/news/business/analysis-and-features/history-lessons-galbraiths-the-great-crash-1929-is-still-essential-reading-today-956710.html) > > > It is a misconception that President Hoover acted exactly the way > President Obama is acting now. On the contrary, President Hoover, > probably did the opposite. > > Is there proof that the Great Depression could have been shortened > if a Jim Rogers-like approach was taken? I am not aware of any so > pray enlighten me. > > I also have yet to hear a case wherein an economy recovered as a > direct cause of allowing failed financial institutions. Once again, > I would like to be enlightened. > > A rational human being submits to logic. Trust that I will submit > if sufficient evidence is presented. > > I have the utmost respect for Jim Rogers which I thought should have > been apparent by reading the first paragraph of my article. Please > do not get me wrong. I am merely criticizing his position on the > crisis. > > Regards,]]> Fri, 06 Mar 2009 13:47:00 -0500
For example, the RFC (Reconstruction Finance Corporation) was active throughout the 1930's in propping up insolvent businesses and was started by Hoover. You are correct that many banks did fail as ALL banks are insolvent due to fractional reserve banking. Here is a short list of the similarities of the Great Depression and now:

A 5 to 6 year inflationary boom preceded the bust fed by (1) interest rates maintained at artificially low levels by the FED, (2) lowering of lending standards, (3) increased debt levels because debt was so cheap and easy to get. Also, FOMC operations that increased bank reserves and added to the inflationary bank credit expansion of the period

An unsustainable rise in real estate and equity prices (this is where most of the inflation, price increases, created by the Fed's increase in the money supply migrated to during the boom).

Misallocation of labor and capital to projects that were not really profitable but appeared to be due to massive injections of new money (growth in the money supply).

Popping of the equity and real estate inflation bubble that started, margin calls, loan calls, etc. Decreases in collateral (real estate) values due to the real estate inflation bubble popping.

Fear by banks of loan defaults (loans that were secured by overpriced real estate and equities) due to the unsustainability of artificial asset price increases drivien by low interest rate easy credit. Credit dried up (fractional reserve banking system became scared) and prices collapsed.

Credit dried up therefore business expansion and employment "growth" driven by debt also dried up.

Hoover intervened massively to prop up failing businesses and banks with dozens of programs and almost doubled federal spending during his term.

I am sure there are more similarities but it is quite sobering to see the truth of George Santayana's quote from the "Life of Reason, Volume 1," "Those who cannot remember the past are condemned to repeat it."



On Mar 05 06:55 PM Chester Sing wrote:

> Ladies and Gentlemen,
>
> First of all, I would like to thank those who took time to comment
> – particularly to those who did so with courtesy which is to be expected
> of civilized people.
>
> Before I proceed, I would like to make it known that I adhere to
> a great many of libertarianism’s principles – that governments generally
> should keep their noses off economic/business directing for instance.
> But I am also a utilitarian. If making an exception to my libertarian
> belief could result to less pain overall, then I am willing to make
> compromises.
>
> Now, let’s get to the point.
>
> “The Commission estimates that so-called financial instruments in
> the ‘trading book’ total £12.3 trillion (13.7 trillion euros), equivalent
> to about 33pc of EU bank balance sheets.”
> *Source (ftalphaville.ft.com/bl.../)
>
>
> How big is £12.3 trillion or $17.3 trillion? According to this (flagcounter.com/factbo...)
> source, the latest GDP of the US is $13.8 trillion. And this is just
> the exposure of banks in the EU.
>
> A portion of this amount will probably get purchased and honored
> if a fire sale is held. How much? I do not know. One thing I know,
> however, is that a fraction of this amount is big enough to wipe
> out many.
>
> Therefore, the argument that the unemployment increase will be marginal
> if financial institutions are allowed to fail, to me, is not believable.
>
>
> A number of you seem to be absolutely sure that the outcome in the
> event that financial institutions are allowed to fail would be better.
> But I have yet to see any strong proof.
>
> Is Japan’s decade-long stagnation really attributable to the rescue
> made to its financial institutions after the crash of the late 80s?
> Are you absolutely sure that is not because of other factors?
>
> Economics is not a hard science. Controlled experiments are unheard
> of in macroeconomics. Please try to keep this in mind.
>
> Now, a commentator suggested that the Great Depression could have
> been shortened if banks were allowed to fail. I have news – they
> were allowed to fail.
>
> “In the first six months of 1929, 346 US banks collapsed, and that
> was just the beginning of a series of bank runs.”
> *Source – (www.independent.co.uk/...)
>
>
> It is a misconception that President Hoover acted exactly the way
> President Obama is acting now. On the contrary, President Hoover,
> probably did the opposite.
>
> Is there proof that the Great Depression could have been shortened
> if a Jim Rogers-like approach was taken? I am not aware of any so
> pray enlighten me.
>
> I also have yet to hear a case wherein an economy recovered as a
> direct cause of allowing failed financial institutions. Once again,
> I would like to be enlightened.
>
> A rational human being submits to logic. Trust that I will submit
> if sufficient evidence is presented.
>
> I have the utmost respect for Jim Rogers which I thought should have
> been apparent by reading the first paragraph of my article. Please
> do not get me wrong. I am merely criticizing his position on the
> crisis.
>
> Regards,]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-415733 415733 > How big is £12.3 trillion or $17.3 trillion? According to this (http://flagcounter.com/factbook/us) > source, the latest GDP of the US is $13.8 trillion. And this is just > the exposure of banks in the EU. > > A portion of this amount will probably get purchased and honored > if a fire sale is held. How much? I do not know. One thing I know, > however, is that a fraction of this amount is big enough to wipe > out many. All those gains are only on paper! They rely on assets that should have never been valued at that price. They are off-balance sheet. They cannot be compared with assets on the balance sheet. > Therefore, the argument that the unemployment increase will be marginal > if financial institutions are allowed to fail, to me, is not believable. > Believe you me, it is not only about employment. It is about fixed costs of employment. These are two inter-related items. > A number of you seem to be absolutely sure that the outcome in the > event that financial institutions are allowed to fail would be better. > But I have yet to see any strong proof. Here is some proof. Housing in the CA, FL, NV, AZ markets was allowed to fail. Guess what happened? Assets were purchased at fire-sale prices, with cash money on hand. Extrapolate that. > Is Japan’s decade-long stagnation really attributable to the rescue > made to its financial institutions after the crash of the late 80s? > Are you absolutely sure that is not because of other factors? Pretty sure, just like many economists before you and I. > Economics is not a hard science. Controlled experiments are unheard > of in macroeconomics. Please try to keep this in mind. Actually Economics is a hard science and extrapolation can be achieved using the right examples. If you need help with that, please let me know. See example above, and many other economies before this time. > Now, a commentator suggested that the Great Depression could have > been shortened if banks were allowed to fail. I have news – they > were allowed to fail. > > “In the first six months of 1929, 346 US banks collapsed, and that > was just the beginning of a series of bank runs.” > *Source – (http://www.independent.co.uk/news/business/analysis-and-features/history-lessons-galbraiths-the-great-crash-1929-is-still-essential-reading-today-956710.html) Yes, but your timeframe if insufficient. If they were allowed to continue failing, the market was going to adjust itself. They were eventually bailed-out. > It is a misconception that President Hoover acted exactly the way > President Obama is acting now. On the contrary, President Hoover, > probably did the opposite. Probably? Not. > Is there proof that the Great Depression could have been shortened > if a Jim Rogers-like approach was taken? I am not aware of any so > pray enlighten me. Here's enlightenment for you. The aforementioned foreclosures, and the Sweden example. It is very similar. > I also have yet to hear a case wherein an economy recovered as a > direct cause of allowing failed financial institutions. Once again, > I would like to be enlightened. Here's how you envision this: take the profits now, but take the losses in 10-30 years. How is that for pain? Because in the end, you will still follow that curve giving you 3-5% growth. Yes, it's demographics plus advances in productivity. Baring that, you cannot get to the numbers showed recently. > A rational human being submits to logic. Trust that I will submit > if sufficient evidence is presented. > > I have the utmost respect for Jim Rogers which I thought should have > been apparent by reading the first paragraph of my article. Please > do not get me wrong. I am merely criticizing his position on the > crisis. Yes, but barely. If you read more about him, you would understand his position better. Regards.]]> Fri, 06 Mar 2009 09:07:55 -0500
Here's why:

On Mar 05 06:55 PM Chester Sing wrote:

>
> How big is £12.3 trillion or $17.3 trillion? According to this (flagcounter.com/factbo...)
> source, the latest GDP of the US is $13.8 trillion. And this is just
> the exposure of banks in the EU.
>
> A portion of this amount will probably get purchased and honored
> if a fire sale is held. How much? I do not know. One thing I know,
> however, is that a fraction of this amount is big enough to wipe
> out many.

All those gains are only on paper! They rely on assets that should have never been valued at that price. They are off-balance sheet. They cannot be compared with assets on the balance sheet.


> Therefore, the argument that the unemployment increase will be marginal
> if financial institutions are allowed to fail, to me, is not believable.
>
Believe you me, it is not only about employment. It is about fixed costs of employment. These are two inter-related items.


> A number of you seem to be absolutely sure that the outcome in the
> event that financial institutions are allowed to fail would be better.
> But I have yet to see any strong proof.

Here is some proof. Housing in the CA, FL, NV, AZ markets was allowed to fail. Guess what happened? Assets were purchased at fire-sale prices, with cash money on hand. Extrapolate that.

> Is Japan’s decade-long stagnation really attributable to the rescue
> made to its financial institutions after the crash of the late 80s?
> Are you absolutely sure that is not because of other factors?

Pretty sure, just like many economists before you and I.

> Economics is not a hard science. Controlled experiments are unheard
> of in macroeconomics. Please try to keep this in mind.

Actually Economics is a hard science and extrapolation can be achieved using the right examples. If you need help with that, please let me know. See example above, and many other economies before this time.


> Now, a commentator suggested that the Great Depression could have
> been shortened if banks were allowed to fail. I have news – they
> were allowed to fail.
>
> “In the first six months of 1929, 346 US banks collapsed, and that
> was just the beginning of a series of bank runs.”
> *Source – (www.independent.co.uk/...)

Yes, but your timeframe if insufficient. If they were allowed to continue failing, the market was going to adjust itself. They were eventually bailed-out.

> It is a misconception that President Hoover acted exactly the way
> President Obama is acting now. On the contrary, President Hoover,
> probably did the opposite.

Probably? Not.

> Is there proof that the Great Depression could have been shortened
> if a Jim Rogers-like approach was taken? I am not aware of any so
> pray enlighten me.

Here's enlightenment for you. The aforementioned foreclosures, and the Sweden example. It is very similar.


> I also have yet to hear a case wherein an economy recovered as a
> direct cause of allowing failed financial institutions. Once again,
> I would like to be enlightened.

Here's how you envision this: take the profits now, but take the losses in 10-30 years. How is that for pain? Because in the end, you will still follow that curve giving you 3-5% growth. Yes, it's demographics plus advances in productivity. Baring that, you cannot get to the numbers showed recently.


> A rational human being submits to logic. Trust that I will submit
> if sufficient evidence is presented.
>
> I have the utmost respect for Jim Rogers which I thought should have
> been apparent by reading the first paragraph of my article. Please
> do not get me wrong. I am merely criticizing his position on the
> crisis.

Yes, but barely. If you read more about him, you would understand his position better.


Regards.]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-415386 415386 No Tony, > > The left wing media in this country has unintentionally destroyed > the left wing party and hung us all out to dry. > > The startling fact is that it was the Democrats in congress who overwhelmingly > voted against oversight of Fannie and Freddie in 2003. Remember the > Trillion dollar start of this mess!!! > > It was also Democrats who voted gainst expensing of options in congress > (California Silicon valley money in action). This allowed executives > to make ridiculous fortunes........100s of millions, via the options > then pump and dump route. Meanwhile executives have done little to > improve US business. > > On Mar 05 09:02 AM Tony Daltorio wrote:]]> Fri, 06 Mar 2009 00:52:17 -0500

On Mar 06 12:39 AM Hmm?! wrote:

> No Tony,
>
> The left wing media in this country has unintentionally destroyed
> the left wing party and hung us all out to dry.
>
> The startling fact is that it was the Democrats in congress who overwhelmingly
> voted against oversight of Fannie and Freddie in 2003. Remember the
> Trillion dollar start of this mess!!!
>
> It was also Democrats who voted gainst expensing of options in congress
> (California Silicon valley money in action). This allowed executives
> to make ridiculous fortunes........100s of millions, via the options
> then pump and dump route. Meanwhile executives have done little to
> improve US business.
>
> On Mar 05 09:02 AM Tony Daltorio wrote:]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-415383 415383 Fri, 06 Mar 2009 00:50:01 -0500
I am a simple man with basic skills. I can add, subtract, multiply, and divide. I even know something about compounding interest. With these basic skills I could tell that something was not right in the housing market.

The banks, insurance companies, fed, etc. have MBAs. They have an army of MBAs. They employ teams of financial Einsteins to monitor every aspect of our economy. They have access to Googlebytes of economic data lighting up screens in control rooms which make Nasa’s mission control look like an elementary school computer lab. The computational power these systems possess is awesome. They have the WOPR. They play financial war games all day running scenario after scenario in less time than it takes to blink an eye.

Am I really supposed to believe that the leaders of banks, insurance companies, and government did not see something serious like the housing bubble coming?

I am one of those homeowners who lived a very modest life in a very modest home. I watched the economy. I studied. I planned and saved. I played by the rules as an honest, hard working, tax paying citizen. I waited patiently for the day that the bubble would burst so that I could pick up the pieces. Meanwhile, I personally know several people who lived large on credit, had a good time, and owned huge houses with huge mortgages. They laughed that I lived so conservatively. They sneered as though they were somehow better than me because of all the material possessions they had amassed (on credit).

Now they are underwater and I AM BAILING THEM OUT AGAINST MY WILL! They are keeping their houses (which are much more luxurious than mine) and so they still laugh at me. To add insult to injury, it is us tax payers who bail out banks and insurance companies whose management walk away from all this with staggering amounts of cash still in their pockets.

The moral hazard here is that responsible, good natured people will begin to realize that crime really does pay and will start looking for ways to game our corrupt system.

It is no longer about losing confidence. It is about losing hope in the legitimacy of our system.

I do not believe we can just let everything fail outright. But we do need a controlled demolition of our insolvent institutions and those responsible must be made to pay.
]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-415381 415381 Save the losers are fine, but please not at the expense of the winners. > Keeping the resources (capital, hardware, human resource) with the > losers will not create more jobs. Let the winners take over, and > then we can talk about "recovery" or "growth".]]> Fri, 06 Mar 2009 00:48:37 -0500

On Mar 05 09:08 PM APM wrote:

> Save the losers are fine, but please not at the expense of the winners.
> Keeping the resources (capital, hardware, human resource) with the
> losers will not create more jobs. Let the winners take over, and
> then we can talk about "recovery" or "growth".]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-415368 415368 The reason that the US is in such bad shape is because Wall Street > perverted capitalism. It's now capitalism if we win(gains), but socialism > if we lose(losses).]]> Fri, 06 Mar 2009 00:39:23 -0500
The left wing media in this country has unintentionally destroyed the left wing party and hung us all out to dry.

The startling fact is that it was the Democrats in congress who overwhelmingly voted against oversight of Fannie and Freddie in 2003. Remember the Trillion dollar start of this mess!!!

It was also Democrats who voted gainst expensing of options in congress (California Silicon valley money in action). This allowed executives to make ridiculous fortunes........100s of millions, via the options then pump and dump route. Meanwhile executives have done little to improve US business.

On Mar 05 09:02 AM Tony Daltorio wrote:

> The reason that the US is in such bad shape is because Wall Street
> perverted capitalism. It's now capitalism if we win(gains), but socialism
> if we lose(losses).]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-415321 415321 Thu, 05 Mar 2009 23:52:44 -0500
and, each of them is human. Rogers is getting older, and is clearly furstrated by the conditions that have landed in all our laps.

he knows, Bernanke knows, Geither knows, Roubini knows, Obama knows that we're all screwed based on how the previous system was abused. the problem we face is that if we rip the roof off the house all at once, the walls will fall in and the kids will get wet when it rains, and we can't let that happen.

this is a high-stakes dance with the devil to see if we can keep the roof on while we try to build a new structure in and around the destruction. this is what delays capitulation, nationalization, removing mark-to-market and many other necessary steps that somehow, someway will get us to the next era.]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-415267 415267 Thu, 05 Mar 2009 22:49:07 -0500
"I do not understand why it is so hard to see that the half who does not deserve to suffer will get punished too if the other half is allowed to die."


You can extract a bad tooth slowly, trying to manage the pain, but it will take much longer. While you are in the dentist's chair, nothing else will get done.

Or you can give it a yank and get it done with. Hurts more, maybe, but then it is done with, and the recovery begins.

There is no way out of this for "the half that does not deserve to suffer".

That is the point Rogers is making. Why make everyone suffer for possibly a decade or more with high unemployment, zombie banks and artificially propped up home prices ? Rogers wants to take the pain now and let the country get back up and running faster. Delaying the pain, while protecting the very people who are most responsible for this, has already cost us trillions. And we apparently are just getting started.

There is a price to pay for extreme economic malpractice. We can pay now. Or we can pay later. But we are definitely going to pay.






]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-415183 415183 Thu, 05 Mar 2009 21:08:54 -0500 ]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-415066 415066 Thu, 05 Mar 2009 18:55:45 -0500
First of all, I would like to thank those who took time to comment – particularly to those who did so with courtesy which is to be expected of civilized people.

Before I proceed, I would like to make it known that I adhere to a great many of libertarianism’s principles – that governments generally should keep their noses off economic/business directing for instance. But I am also a utilitarian. If making an exception to my libertarian belief could result to less pain overall, then I am willing to make compromises.

Now, let’s get to the point.

“The Commission estimates that so-called financial instruments in the ‘trading book’ total £12.3 trillion (13.7 trillion euros), equivalent to about 33pc of EU bank balance sheets.”
*Source (ftalphaville.ft.com/bl.../)

How big is £12.3 trillion or $17.3 trillion? According to this (flagcounter.com/factbo...) source, the latest GDP of the US is $13.8 trillion. And this is just the exposure of banks in the EU.

A portion of this amount will probably get purchased and honored if a fire sale is held. How much? I do not know. One thing I know, however, is that a fraction of this amount is big enough to wipe out many.

Therefore, the argument that the unemployment increase will be marginal if financial institutions are allowed to fail, to me, is not believable.

A number of you seem to be absolutely sure that the outcome in the event that financial institutions are allowed to fail would be better. But I have yet to see any strong proof.

Is Japan’s decade-long stagnation really attributable to the rescue made to its financial institutions after the crash of the late 80s? Are you absolutely sure that is not because of other factors?

Economics is not a hard science. Controlled experiments are unheard of in macroeconomics. Please try to keep this in mind.

Now, a commentator suggested that the Great Depression could have been shortened if banks were allowed to fail. I have news – they were allowed to fail.

“In the first six months of 1929, 346 US banks collapsed, and that was just the beginning of a series of bank runs.”
*Source – (www.independent.co.uk/...)

It is a misconception that President Hoover acted exactly the way President Obama is acting now. On the contrary, President Hoover, probably did the opposite.

Is there proof that the Great Depression could have been shortened if a Jim Rogers-like approach was taken? I am not aware of any so pray enlighten me.

I also have yet to hear a case wherein an economy recovered as a direct cause of allowing failed financial institutions. Once again, I would like to be enlightened.

A rational human being submits to logic. Trust that I will submit if sufficient evidence is presented.

I have the utmost respect for Jim Rogers which I thought should have been apparent by reading the first paragraph of my article. Please do not get me wrong. I am merely criticizing his position on the crisis.

Regards,
]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-414896 414896 Thu, 05 Mar 2009 16:38:04 -0500
Rogers point is that there will be suffering both for the failed businesses and individuals and the businesses and individuals who did the rught thing however, these interventions will increase the level of suffering not decrease them. He sees this because it's happened before. He also knows that those who do not know history are doomed to repeat it.]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-414828 414828 Thu, 05 Mar 2009 16:00:38 -0500
In Obama's new society, I believe the "new" elite will be the political class and government employees. Most (or at least the smart) wealthy will flee the U.S. for more favorable tax regimes- like Sir John Templeton who left for the Bahamas many years ago. All the rest of use will be at the bottom when the middle class is blurred into the low income mass.

Obama is "using" the crisis to remake the nation and all of society into his own image of a European welfare state.

Obama is not concerned about the cost/deficit, because in the end he will impose a VAT (value added tax, like Europe) and we will all be paying a lot more for manufactured goods, which might also drive even more manufacturers offshore.

It is the end of America as we have known it- economically and politically.]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-414517 414517 Thu, 05 Mar 2009 13:03:46 -0500 ]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-414513 414513 plumstupid - I don't see anything in Venus Pool's comments or the > Mises quote that say anything about bailing out banksters. > > Jim Rogers and a few other precocious financial advisors are right > far more often than wrong because they're grounded in sound Austrian > economics (thanks, Venus Pool, for the Mises quote) and moral values. > This can not be said of ANY of those who advocate bailouts and stimulus > packages backed by coercive taxes, government counterfeiting of currency, > and borrowing trillions that their children and grandchildren will > be saddled with, in the name of preventing short-term pain to a few. > All must suffer except the elite -- that's the real agenda of the > type of fascist socialism that they embrace.]]> Thu, 05 Mar 2009 13:02:11 -0500
Your last sentence is great!


On Mar 05 12:51 PM Glen L. wrote:

> plumstupid - I don't see anything in Venus Pool's comments or the
> Mises quote that say anything about bailing out banksters.
>
> Jim Rogers and a few other precocious financial advisors are right
> far more often than wrong because they're grounded in sound Austrian
> economics (thanks, Venus Pool, for the Mises quote) and moral values.
> This can not be said of ANY of those who advocate bailouts and stimulus
> packages backed by coercive taxes, government counterfeiting of currency,
> and borrowing trillions that their children and grandchildren will
> be saddled with, in the name of preventing short-term pain to a few.
> All must suffer except the elite -- that's the real agenda of the
> type of fascist socialism that they embrace.]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-414483 414483 Thu, 05 Mar 2009 12:53:16 -0500
"Buy commodities or sell commodities."

And,

"Bankruptcy solves all capitalism's problems."

He makes himself out to be a simple guy with straightforward answers, but bankruptcy is extremely messy and often solves absolutely nothing. Rather than free capital up, it can actually tie massive amounts of capital down for years as a single judge or creditor panel tries to sort through enormous volumes of contracts and obligations. Sometimes this goes on for many years. The only ones who win are the lawyers.]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-414478 414478 Thu, 05 Mar 2009 12:51:33 -0500
Jim Rogers and a few other precocious financial advisors are right far more often than wrong because they're grounded in sound Austrian economics (thanks, Venus Pool, for the Mises quote) and moral values. This can not be said of ANY of those who advocate bailouts and stimulus packages backed by coercive taxes, government counterfeiting of currency, and borrowing trillions that their children and grandchildren will be saddled with, in the name of preventing short-term pain to a few. All must suffer except the elite -- that's the real agenda of the type of fascist socialism that they embrace.]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-414464 414464 Thu, 05 Mar 2009 12:45:48 -0500
What is happening now is the forestalling of the inevitable.

We are using all of our resources to maintain the "Altitude".

Unfortunately, this means that we will have none left once the bottom is reached and thus the length of time spent near there will be great.

The suffering will be greater because of shortsighted policies.]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-414421 414421 Rodgers is exactly on track with his emphasis on agriculture. The > capture and sequestration of carbon dioxide to combat climate change > (formerly global warming) is in reality an evil plan to reduce world > population by limiting production of food crops and starving people. > If the plan moves forward, food crop prices, crop land prices, etc. > will escalate astronomically > > Professional Politicians Have Destroyed The American Way of Life > > > Advocates for one world government, including the Clinton and both > Bush administrations, have exported our jobs under the guise of global > free trade. A natural consequence of this globalization is an equalization > of living standards. That is, the living standard of Americans is > being permanently reduced while living standards in China and India > soar. Most jobs, once exported, will never return to the United > States. > > The Federal Reserve has allowed our currency to depreciate by more > than 95% in its futile attempt to maintain full employment instead > of preserving the purchasing value of the U.S. Dollar. The U.S. > is now bankrupt with no possible way to repay our debts. These same > professional politicians are now destroying what is left of American > Citizen’s lifetime savings in a futile attempt to inflate away the > debts of the fiscally imprudent. After they decimate what is left > of our fiat currency, decades of depression will follow if they do > not reverse course now. > > Any bankrupt, including the United States, should terminate all unnecessary > spending, reduce necessary spending to an absolute minimum and do > everything possible to increase income. Our entrenched professional > politicians are doing the opposite via their standard approach of > throwing an ever depreciating currency at the problem. After almost > eight trillion dollars, they continue their futility. Since they > have bankrupted the nation, they now take money from fiscally prudent > that can still provide jobs and income and give it to the fiscally > imprudent that cannot provide jobs and income. > > Unless our Federal Government immediately recognizes the fallacy > of its present course of action and adopts the above steps to emerge > from bankruptcy, America is doomed. Why are so many economists, > financial experts, news reporters etc. not recognizing this is what > the advocates of one world government want, being a bankrupt and > demoralized citizenry.]]> Thu, 05 Mar 2009 12:22:10 -0500
The people who ruined America are the ones who allow these Banksters and corporatists to walk free.


On Mar 05 11:45 AM TXDESERTFOX wrote:

> Rodgers is exactly on track with his emphasis on agriculture. The
> capture and sequestration of carbon dioxide to combat climate change
> (formerly global warming) is in reality an evil plan to reduce world
> population by limiting production of food crops and starving people.
> If the plan moves forward, food crop prices, crop land prices, etc.
> will escalate astronomically
>
> Professional Politicians Have Destroyed The American Way of Life
>
>
> Advocates for one world government, including the Clinton and both
> Bush administrations, have exported our jobs under the guise of global
> free trade. A natural consequence of this globalization is an equalization
> of living standards. That is, the living standard of Americans is
> being permanently reduced while living standards in China and India
> soar. Most jobs, once exported, will never return to the United
> States.
>
> The Federal Reserve has allowed our currency to depreciate by more
> than 95% in its futile attempt to maintain full employment instead
> of preserving the purchasing value of the U.S. Dollar. The U.S.
> is now bankrupt with no possible way to repay our debts. These same
> professional politicians are now destroying what is left of American
> Citizen’s lifetime savings in a futile attempt to inflate away the
> debts of the fiscally imprudent. After they decimate what is left
> of our fiat currency, decades of depression will follow if they do
> not reverse course now.
>
> Any bankrupt, including the United States, should terminate all unnecessary
> spending, reduce necessary spending to an absolute minimum and do
> everything possible to increase income. Our entrenched professional
> politicians are doing the opposite via their standard approach of
> throwing an ever depreciating currency at the problem. After almost
> eight trillion dollars, they continue their futility. Since they
> have bankrupted the nation, they now take money from fiscally prudent
> that can still provide jobs and income and give it to the fiscally
> imprudent that cannot provide jobs and income.
>
> Unless our Federal Government immediately recognizes the fallacy
> of its present course of action and adopts the above steps to emerge
> from bankruptcy, America is doomed. Why are so many economists,
> financial experts, news reporters etc. not recognizing this is what
> the advocates of one world government want, being a bankrupt and
> demoralized citizenry.]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-414357 414357 Thu, 05 Mar 2009 11:45:14 -0500
Professional Politicians Have Destroyed The American Way of Life

Advocates for one world government, including the Clinton and both Bush administrations, have exported our jobs under the guise of global free trade. A natural consequence of this globalization is an equalization of living standards. That is, the living standard of Americans is being permanently reduced while living standards in China and India soar. Most jobs, once exported, will never return to the United States.

The Federal Reserve has allowed our currency to depreciate by more than 95% in its futile attempt to maintain full employment instead of preserving the purchasing value of the U.S. Dollar. The U.S. is now bankrupt with no possible way to repay our debts. These same professional politicians are now destroying what is left of American Citizen’s lifetime savings in a futile attempt to inflate away the debts of the fiscally imprudent. After they decimate what is left of our fiat currency, decades of depression will follow if they do not reverse course now.

Any bankrupt, including the United States, should terminate all unnecessary spending, reduce necessary spending to an absolute minimum and do everything possible to increase income. Our entrenched professional politicians are doing the opposite via their standard approach of throwing an ever depreciating currency at the problem. After almost eight trillion dollars, they continue their futility. Since they have bankrupted the nation, they now take money from fiscally prudent that can still provide jobs and income and give it to the fiscally imprudent that cannot provide jobs and income.

Unless our Federal Government immediately recognizes the fallacy of its present course of action and adopts the above steps to emerge from bankruptcy, America is doomed. Why are so many economists, financial experts, news reporters etc. not recognizing this is what the advocates of one world government want, being a bankrupt and demoralized citizenry. ]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-414331 414331 Thu, 05 Mar 2009 11:33:31 -0500
Goldman Sachs and their $600K per head payroll does not need billions siphoned off the taxpayer through the AIG hose. Until no contention to the contrary sees print we are a lost nation afloat a lost economy.]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-414266 414266 Rewarding bad behavior and penalizing good behavior will be our demise. > Many smart and hardworking people and businesses have seen this coming > for years and as Jim has said "kept their powder dry". What a slap > in the face to be told to stand back and let the screwup maintain > his lifestyle as if nothing happened at a responsible persons expense. > What message are we sending here? Capitalism is about risk and reward. > Ludwig Von Mises said it best, "recession due to a credit contraction > must run its course, any attempts to manipulate and throw resources > at the problem will only make it worse, prolong the recovery and > waste good resources. Let`s not give the alchoholic more to drink > to avoid the DT`s - this is a natural road to recovery. Lets not > hold back the frugal, responsible and intelligent ones that are ready > to assume a leadership role and and ply their entrepreneuial spirit. > ]]> Thu, 05 Mar 2009 11:06:45 -0500

On Mar 05 10:57 AM Venus Pool wrote:

> Rewarding bad behavior and penalizing good behavior will be our demise.
> Many smart and hardworking people and businesses have seen this coming
> for years and as Jim has said "kept their powder dry". What a slap
> in the face to be told to stand back and let the screwup maintain
> his lifestyle as if nothing happened at a responsible persons expense.
> What message are we sending here? Capitalism is about risk and reward.
> Ludwig Von Mises said it best, "recession due to a credit contraction
> must run its course, any attempts to manipulate and throw resources
> at the problem will only make it worse, prolong the recovery and
> waste good resources. Let`s not give the alchoholic more to drink
> to avoid the DT`s - this is a natural road to recovery. Lets not
> hold back the frugal, responsible and intelligent ones that are ready
> to assume a leadership role and and ply their entrepreneuial spirit.
> ]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-414238 414238 Thu, 05 Mar 2009 10:57:57 -0500 ]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-414075 414075 Thu, 05 Mar 2009 09:46:28 -0500
The analogy actually is with military doctrine. You hit as hard and as fast as possible and keep the pressure on relentlessly because that shortens the campaign and reduces casualties. Going slow and focusing on daily casualties prolongs the campaign and increases the totals.
]]> http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-413944 413944 Thu, 05 Mar 2009 09:02:26 -0500 http://seekingalpha.com/article/124211-on-jim-rogers-and-false-statements?source=feed#comment-413888 413888 Thu, 05 Mar 2009 08:32:24 -0500
Read Schiff.

It is not a question of who will suffer.

Certainly some deserve to , and some may who dont deserve it.

It is a question of -

What the hel are we doing?

This is not a "quicker solution".

It is a quick fix which , as with a drug addict's "quick fix" , will wear off uselessly , except for a hugely increased debt as a result.

You cant pump air into the economy as a fix.

One sharp pin and you're worse off than before.

You have to just let it play out (with gov. providing basic emergency assistance) ,

And "start over again from the rubble" if you want to build a meaningful recovery.

We're not going to save failed businesses and institutions with more debt and dilution as the "cure" ,

Or by giving the Forestry Dept. two $bil. to hire more people -

What do you do when that money's used up?

They dont regenerate their salaries through productivity , so you either have to fire them or beg the government for EVEN MO' MONEY to

"continue the recovery". Ya really gotta think things through and not just go along with the flow mindlessly.

]]>