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Harry Tuttle

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  • Robert Fishman says Portugal's need for a bailout is the result of attack by speculators and credit rating agencies who have succeeded in bringing down the existing government and shackling the next one. These market forces are growing so powerful as to threaten the sovereignty of any government, even the U.S.  [View news story]
    The way to avoid falling prey of the "manipulators" is to avoid borrowing so much money. I'd like to see someone trying to manipulate Finland's CDS'

    Speculators are never the primary cause of anything.
    Apr 13 06:09 PM | Likes Like |Link to Comment
  • Robert Fishman says Portugal's need for a bailout is the result of attack by speculators and credit rating agencies who have succeeded in bringing down the existing government and shackling the next one. These market forces are growing so powerful as to threaten the sovereignty of any government, even the U.S.  [View news story]
    bla, bla, bla. They borrowed too much money in foreign currency. Nobody cared about how the money was used during the bubble years.
    Apr 13 04:19 PM | 4 Likes Like |Link to Comment
  • Already owning an outsized portion of Spain's sovereign debt market, China is considering a direct €9B injection of funds into the country's capital-starved savings banks. This would represent more than 50% of the total capital the lenders are expected to need.  [View news story]
    The "cajas" need at least 50 B. Believe it or not, Spain's real estate is still marked at par.

    In my opinion, the Chinese are trying to jawbone the market as they tried with Portugal not too long ago.
    Apr 13 11:40 AM | 2 Likes Like |Link to Comment
  • Richmond Fed President Jeffrey Lacker says big financial firms should be allowed to fail or they will continue to take excess risks that lead to crises. Actually allowing one to go down could cause short-term disruptions, he says, but in the long-run, such a step would be the "key to avoiding the type of financial instability we observed in 2008."  [View news story]
    Why should we care about what the "other" people at the Fed say?
    Apr 7 10:34 AM | 1 Like Like |Link to Comment
  • Whistling Past the Expanding Graveyard as Spain Goes 'On the Clock' [View article]
    "For some time now, the markets have been ‘whistling past the graveyard,’ impressively ignoring and/or shrugging off a fair pile of news that ought definitely to be negative for equities and probably somewhat negative for bonds as well..."

    The explanation is rather simple: Other people's money.

    The public doesn't stand a chance against the marketing machine.
    Apr 7 10:01 AM | Likes Like |Link to Comment
  • Why Greece Is Not Argentina [View article]
    What if the Greeksdecide not to accept the austerity attached to the bailouts (that is what eventually happened in Argentina)? The Portuguese seem to be going in that direction.

    What would you do if you found out that the bank is more concerned about your situation than you are?

    If that happens, the German government may decide to soften the terms of the bailout. However, they will then have to face the German public who are under the illusion that the bailouts come in exchange for the Germanization of Southern Europe.

    Greece will never be able to pay the debt under the current conditions. The question is when will the loss be recognized and who will write it off.
    Apr 1 02:31 PM | 2 Likes Like |Link to Comment
  • How to Structure an IRA or Retirement Account [View article]
    "The stock market will increase in value similar to what it did in the 80's and 90's."

    "There will be high inflation except in housing and wages, which will be muted by the current crisis. This inflation will be similar to the 1970's "
    Apr 1 01:56 PM | Likes Like |Link to Comment
  • To Recover, Japan Must Ignore the Economic Fallacies [View article]
    I agree, I was making a foolish case to illustrate a point.

    Like I said, the MOST probable case is that Japan will continue to run deficits and progressively exhaust the pool of cheap financing. At that point, I expect JGB rates to converge to Bund/US Treasury rates (about 3.5%) and which point their interest payments will be multiples of what they are today.
    Apr 1 01:39 PM | Likes Like |Link to Comment
  • Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy."  [View news story]
    In the 30s the bankers had to split their money machines and accept regulation. A few even went to jail. It took them until the 90s with Rubin-Greenspan to get back on their party feet.

    Now they have a banking lobbyist ("Large banks are essential to the economy") running the Treasury.

    The comparison between the two outcomes is so wide is not even funny. "Hey," some say, "... but we avoided the second depression..." or maybe we just postponed it for a couple of years. After all, Greenspan looked pretty good in 2006 (the year he published his book).
    Mar 30 06:27 PM | Likes Like |Link to Comment
  • Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy."  [View news story]
    Tack:

    Discussing FDR in 2011 is as relevant as discussing Andrew Jackson. However, since you brought it up, let me say that at least FDR ADMITTED that he was upsetting the price system and never deluded himself into thinking that he was not. His policies, as we now know did not work either and wasted a lot of time and resources.

    In any case, when you read the story of Wall Street in the 20s and 30s you walk away with the idea that those who took risk paid the price. Fortunes were lost, and a few bankers even ended up in jail.
    Compared this with more recent events. The SAME guys who made a LOT of money at AIG, Citi, Merrill and the others not only got to keep the money but are making a LOT of money again courtesy of the Federal Reserve and the US Treasury. The supervisors (Geithner and Bernanke) are even now running the show.

    How does a smart young person prosper in this environment? By getting a job creating obscure and useless financial transactions in Wall Street (those that take 3-5 years to blow up) or, better yet, one in DC lobbying the Federal government.

    Then we cry because the Chinese and the others are eating our lunch.

    Capitalism needs FAILURE. What we now have is a banana-republic system with socialized losses and private gains.

    As you can see, whether your portfolio or mine goes up or down is irrelevant to the argument.
    Mar 30 06:01 PM | 1 Like Like |Link to Comment
  • Bernanke is betting that surging prices for food and fuel won’t wind up breaking the cost of living for Americans. The historical record shows the odds are in his favor. But the debate over whether core inflation accurately predicts overall inflation rages on.  [View news story]
    According to the article, History begins in 1996.
    Mar 30 05:50 PM | 7 Likes Like |Link to Comment
  • Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy."  [View news story]
    Hubert,

    I have no expectations. I know that this country doesn't stand for capitalism anymore. I have no problem with every thief minding his loot. I object to the self-serving bs from DC and Wall Street, however.
    Mar 30 05:38 PM | 1 Like Like |Link to Comment
  • To Recover, Japan Must Ignore the Economic Fallacies [View article]
    Nothing is inevitable in the sense in the entropic sense. It is possible that Japan will begin growing tomorrow at such as speed that the tax revenues will greatly exceed current and future expenditures and, thus, pay all the government debt over time. However, what is the probability of such an outcome?

    1) They haven't run a surplus in a long time
    2) They neither increase taxes nor cut expenditures in the foreseeable future.
    3) Their interest rates are unlikely to go lower
    4) Their population is aging and has gone, in aggregate, from net saving to dissaving
    5) They do not accept immigration as a potential solution to (4) above

    In this context, I think the chances of the government debt in Yen being higher in the future overwhelm the opposite case (opinion, subject to future outcomes and probability distribution)

    Then, unless rates go lower (opinion, unlikely), their financing costs will increase. At some point interest payments will be higher than tax receipts (this will happen ceteris paribus even if they cut the deficit unless they go into surplus). Whether or not you want to call that Ponzi scheme is, in my opinion, irrelevant. The mathematical outcome, given the conditions I have describes which do not seem arbitrary to me, is the same.

    Thanks for the dialog, btw, not too many people here take the time.

    best regards.
    Mar 30 04:52 PM | Likes Like |Link to Comment
  • "Pretty scary" is how one industry insider describes the cost of rare earth metals in China after their YTD doubling in price. "(The) buyers are not our real downstream clients, but speculators who are hoarding the materials for profiteering purpose."  [View news story]
    Maybe the speculators will become sellers later on alleviating the problem.
    Mar 30 03:34 PM | 2 Likes Like |Link to Comment
  • Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy."  [View news story]
    bbro:

    Although I get your point, I think at many levels people either have forgotten or do not understand the example of Goebbels.

    For instance, people routinely say things like "The [US] Treasury [not the Fed] is in charge of dollar policy" without questioning whether the statement makes any sense (what policies does the Treasury have to target the value of the dollar as opposed to the Fed?). In this sense, the Goebbels reference is as valid today as it was in pre-War Germany.

    Wall Street created the problem and then convinced people like Paulson and Geithner that the ONLY acceptable solution was to bail THEM out.

    In my opinion, a LOT MORE than money has been lost in the process. Regardless of whether the Dow is up or down.
    Mar 30 02:20 PM | 2 Likes Like |Link to Comment
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