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Paulo Santos
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I am a Portuguese independent trader, analyst and algorithmic trading expert, having worked for both sell side (brokerage) and buy side (fund management) institutions. I've been trading professionally for about 16 years and also launched www.thinkfn.com in 2004. Thinkfn (Think Finance) carries... More
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Arquiconsult
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  • The Terrorists Have Already Won

    Back in the jungles of Manhattan, a struggle has evolved. This was the struggle of a rag-tag team of well-dressed Marxist guerrillas hell bent on bringing their ideology to power. This happened in the very heart of the capitalist system.

    The Marxist ideology carried by these well-dressed terrorists was plain to see. Each carried their own red book, where it read:

    "Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but [also] at confidence in the equity of the existing distribution of wealth."

    So this was the mission they devoted themselves to. To debauch the currency. To ensure that the printed money would lose value over time (at least at a 2%/per year clip). But to do so in a way which would favor their own constituency over everyone else.

    To just print and give money to the masses would not work, as it wouldn't favor anyone - though it would still debauch the currency. The whole idea of these Marxist terrorists was to debauch the currency, yes, but to favor some over others while doing so.

    For, as Lenin is said (by Keynes) to have said, debauching the currency does not just confiscate arbitrarily, but it also calls into question the equity of the existing distribution of wealth.

    For, therein lies a problem for the Marxist guerrillas in their struggle. Capitalism, it its pure state, is rather fair. You raise a potato, you earn a potato. You pay someone ½ a potato to raise a potato, you earn yourself ½ a potato and your worker earns the other half, voluntarily. The distribution of wealth from such a system is intrinsically fair, even if sometimes lopsided. This, the Marxist guerrillas would not have.

    The Marxist guerrillas wanted to change this system to suit their own objectives. Those objectives, of course, couldn't be stated plainly. These Marxist guerrillas couldn't go around saying "it's for the good of the 1%!". So instead, and as always in any collectivist system, the objective was stated as "it's for the common good".

    But it wasn't. If printing money was for the "common good", then these Marxist guerrillas would simply print and distribute smaller amounts of money. It would look weird, for sure, but it would be a lot fairer than printing money for the purpose of inflating the assets held by the 1%.

    It didn't stop there, either. In the economy, when an enterprise goes broke its shareholders, creditholders and employees suffer. It's hard, but fair, that such should happen upon failure. But it's only fair if it happens to anyone facing failure. If others fail and are not exposed to the same consequences, it ceases being fair.

    Yet, that's just what happened due to the Marxist insurgency. When banks failed, at times shareholders were spared, creditholders were for the most part entirely spared, and employees, including management, were spared as well. While there was, again, a "common good" motive bandied about -- such as saving depositors and confidence in the system - this is again false. Depositors and confidence could have been saved while imposing the same set of consequences for shareholders, creditholders and employees as those faced by any other failing enterprise.

    Such consequences should have been imposed as a matter of fairness, even if the outcomes for those exposed to them turned out to be much better than they'd have otherwise been. The consequences should have been imposed, because if they weren't, then those actually suffering that set of harsh consequences knew for a fact that they didn't suffer those consequences because of failing. They suffered the consequences because they weren't arbitrarily protected by the system, the way the banking stakeholders were.

    The terrorists have already won

    So this is why I say that the Marxist terrorists have already won. They've taken a system which was intrinsically fair, and turned it into an arbitrary mess where winning or losing is dictated by the well-dressed rag-tag team of Marxist guerrillas.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

    Tags: economy
    Jul 09 3:14 PM | Link | 4 Comments
  • Public Alert, "Paulo Santos", "Binary Options"

    There is a fake "Paulo Santos" on Google+ (and God knows where else) that's peddling a "Binary options" service though a video.

    This is a fake "Paulo Santos", it is not me.

    Here's an example of the fake Paulo Santos:

    plus.google.com/102809924508478495976/po...

    Jul 02 8:16 AM | Link | 4 Comments
  • Possible EBay/PayPal Security Breach

    This is still tentative, but Engadget has noticed that Ebay (EBAY) posted a message asking all users to change their passwords.

    While this might be some kind of snafu by Ebay staff, it might also mean that a security breach took place and Ebay will be reporting it soon. If such were the case, for a business handling money like PayPal it would be a tremendous negative.

    This would echo what happened to Target (TGT), but would actually be more relevant due to the nature of PayPal's business.

    PayPal relevance

    In the latest quarter, PayPal represented 43.3% of Ebay's revenue.

    Conclusion

    For those holding long Ebay positions, it might make sense to take a more defensive posture until this clears up.

    I have taken a small short position on EBAY in the pre-market session due to this development.

    Disclosure: I am short EBAY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Tags: EBAY, short-ideas
    May 21 8:02 AM | Link | 9 Comments
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