David Roskoph

Real and Fake: A Tale of Two Economies

As I wrote to very happy clients -
You may think I’m deluded and this market rally is destined to fail. Certainly that is the popular belief. Remember that the market has two functions 1) to provide a mechanism to get money from savers to builders – the investors pledge their capital and the companies use it to expand; 2) to transfer wealth from speculators to professionals. It’s working as good as ever. What changes with time is the medium to shake good shares away from weak hands. As a herding beast, we comfort each other on a sinking ship as long as we all agree it’s sinking. When someone protests that the waterline is falling, they shoot him and settle in for their community swim. If you have a chance to read some of the comments from articles I published a few months ago, you’ll see this in action.

Getting ready for a swim Mudduckk?

Real and Fake: A Tale of Two Economies

Cynicus Maximus, the abject bankruptcy we now enjoy is virtually irrelevant as only Goldman Sachs could or would prosecute our failure. We remain Capitalism's Captain. Whatever the result of this reformation - higher deficits or income caps - we will still be the best living example of Capitalism on Earth.

We have survived the tearing of the veil exposing the lie that 1) we could afford our past lifestyle including retirement for 14 years and 2) that fancy financing equaled growth. Now what, start over? No. We are rebuilding the foundation stronger than it has been in 35 years; this is a recover and the start of a new Bull Market.

Believe it or don't, the desire to expand will hit with almost simultaneous effect and the unemployment ranks will be substantially reduced. It will be a blistering Christmas and the fact that the middle class has rejoined its mojo will drive the market higher. It's a matter of restored confidence.

All the haggling and dire statistics are financial theater, meant to shake the weak hands in or out - just like always.

Real and Fake: A Tale of Two Economies

Cynicus Maximus, the abject bankruptcy we now enjoy is virtually irrelevant as only Goldman Sachs could or would prosecute our failure. We remain Capitalism

The Truth About Unemployment Numbers

Steve,

Imagine how lovely the country if they only stayed receptionists; the lawyers I mean.

Prospects Remain Dim for Financial Services

Steve,

Stand back and look at this from another perspective. We've had a full decade of destrustion and now we are getting a decade or reconstuction; a depression and recovery in internet time. The carnage is obvious even through the time has been compressed. The present stimulus will function as a world war did 60 years ago. Only now the entire world is dancing to a capitalist tune. The value of the US franchise remains atop the world despite our mortgage-backed dalliances and bankrupt status. It's a recovery, there is no Great Pumpkin.

Debt Securities Bailout: Avoiding the Responsibility of Risk

Didn't we learn about the evils of forgiving the realistic pricing of privately held, thinly traded assets. Now securiities must be marked-to-market and be subject to stiff haircuts if they have no real market. This iliquidity describes the SIV's but they're too stupid to fail. Alt-a's are junk bonds without the risk premium and the Federal Reserve is the Drexel Burnam that is supporting them through the super conduit. The government is supporting the junk (by ignoring the pricing till the heat is off) so that the super conduit can eventually off them to the public.