TraderMark

10 Reasons to Believe That We're in a Depression

Good post Marvin. People like their lists so a "top 10" list is appropriate as we distract the Roman masses with games :)

Mervyn King: Break Up the Big Banks

I like Peabody but how did a coal stock get mentioned in this thread? Did I miss something? lol.


On Oct 21 03:51 PM bassmaster17 wrote:

> Peabody is doing great...nice we both got it cheap!!! It may selloff,
> but I have longer term plans for that position. Just a question
> about Dick Bove. I know he's CNBC's show pony, but didn't he get
> the whole credit crisis wrong and told people to buy Citi at $20?
> Just checking to see if there's any legitimacy to his call on Wells
> given his track record.

Mervyn King: Break Up the Big Banks

I am not saying the securtization problems were only in the US, UK

the compensation and "don't you dare regulate us or we'll move operations to London, or NYC" shouts are in these 2 countries.

You don't hear that yelling in French, German, Canadian, Australian banks.


On Oct 21 03:48 PM a fat panda wrote:

> "The UK and US are peas in a pod. We don't see this extreme anywhere
> else on the globe. There must be a reason."
>
> I largely agree with you up to the last point. Banks all over Europe
> have been hit with this financial crisis. And I think the reason
> that you didn't see the ripple go further was the US taxpayer back-stopped
> the US banks and the GSEs.

All of Tim Geithner's (Wall Street) Men

we have ants in our pants. unfortunately these ants control the majority of wealth in the country and won't give up their nest easily. They will dole out small presents to the non ants to keep them content... along with NFL football and dancing with the stars.


On Oct 16 09:19 AM swsprime wrote:

> A friend of mine, working in his yard this summer, placed his sandled
> foot on a nest of fire ants. In explaining the revulsion he felt
> regarding what happened next with these strange and nasty creatures,
> he sounded just like you Mark.
>
> He subsequently eliminated the nest he found, but I'm not sure what
> we can do with yours...

All of Tim Geithner's (Wall Street) Men

The French shut down all public services and rally in the Streets if the government dare take away 1 day of 6 weeks of vacation.

In the US we've just pushed generations of debt into the hands of our banks and we are too busy watching the boob tube.

See Ukraine 3-4 years ago, see Iran (unsuccessful but they at least were heard the world over) As long as we have our wireless gadgets and NFL football, its no matter to us.

Perhaps there was a master plan to not having financial literacy classes in our high schools all these years. People armed with economics 101 might be dangerous.


On Oct 15 05:12 PM enigmaman wrote:

> Whats main street supposed to do, we see, we know it, we believe
> it but we cant do anything about it, same as if it was the bosses
> kid.

America: A Bona Fide Plutonomy

Those were good comments and things I've touched on in various pieces. Which is why the fact those in power want to increase inflation and have passed on the brainwashing that inflation and the loss of purchasing power is a "good thing" is beyond me.

I posted in a deflation piece about a month ago that the British Empire dominated for a good 100 year with many 2-3 periods of inflation, then deflation, than inflation, then deflation.

The reason I think that would be a good situation here is due to the pressure on wages for many in the lower and middle tranches of society. If the powers that be were not insistent on pushing up the costs of everything because "inflation is good" you could do ok on a flattish wage. But those powers want prices to go up, and hence cost of living ever increases, while wages have been pressured.

Hence many have turned to borrowing.

And now here we are, repeating it all over again - but instead of borrowing the government is now giving direct handouts via stimulus, cash for clunkers, housing programs because many people simply cannot keep up on their own.

As long as foreign creditors allow this game can continue - but it will end badly.


On Sep 09 06:14 AM H. T. Love wrote:

> Two good notesrelate to the topic at hand.
>
> seekingalpha.com/autho...;br/>
>
> seekingalpha.com/artic...
>
>
> HardToLove

America: A Bona Fide Plutonomy

Look... anyone can have a bad decade ;) ahem.


On Sep 09 12:19 AM untrusting investor wrote:

> For example, look at our titans of public companies that have paid themselves hundreds of billions in compensation, bonuses, stock options, etc over the past decade. And they attempt to justify if based on performance. What performance --- negative returns over the past decade.

America: A Bona Fide Plutonomy

I agree with that comment whole heartedly. Much of the system has become "heads we win, tails we win" - at least in our public corporations and the feeding troughs they have become to a select few is a very big issue which apparently is going to be ignored now that the market is going in the "right direction"


On Sep 09 12:19 AM untrusting investor wrote:

> Most Americans do not begrudge the wealthy their wealth if in fact they EARNED it legitimately such as by innovation, hard work, creativitivity, special performance, etc.

America: A Bona Fide Plutonomy

That is a debatable subject. The general throwaway line is the middle class is better off or has the highest quality standard of living because of the most toys.

One could make many arguments against it -
is a situation where getting sick at the wrong time (no insurance) or with too little insurance, a good standard? i.e. your entire life savings can be wiped out by one stay in the hospital? is that a better situation than other countries?

is a situation where to maintain the place in society as middle class, both parents have to work rather than the old standard where only the male had to (say 1950s, 1960s) "better"? Yes more toys now but what has it done for family and society?

the previous example compared "today" to 50 years ago. What about versus 10 years ago? Do you honestly believe if you talk to the average Joe he feels he is better off than 10 years ago?

Now let's be clear many average Joes got themselves in a serious pickle by spending far more than they have. But many others are just struggling to get by even by following the rules.

I hang out in the middle class and maybe I'm on the wrong side of the tracks or live in the wrong state but many believe their kids won't have a chance to repeat the standard of living they did. And those are coming from people who are working 2-3 jobs to provide as much as their parents did with 1 job.

Argument is not that the middle class deserve to be rich - the larger question that needs to be asked is what % of the population is going backwards or having to do 2-3x as much as in the past simply to stay in the same place. While a small sliver prosper no matter what.


On Sep 08 05:23 PM Angry Banker wrote:

> So what if the rich get richer? America's middle class has one of
> the highest quality standards of living in the world. Just because
> the middle class is not "rich," (or that the rich are not becoming
> poorer), does not mean the American middle class is suffering.

America: A Bona Fide Plutonomy

Matt, all true on the taxes

The reality is there is not enough left to tax to pay for spending. There is only so much income earned each year in the country and we're going to approach the point where it's going to get stifling. With a median income of $36K, I don't see what more you can squeeze out of the "bottom half" (making $22, 25, 28, 32K). I mean if you raise their tax rates up 5% whats it going to generate in the big scheme of things? The cost of a few more figher jets?

Carter years were before my time as an adult but I think I read when Reagan came in the top level taxes were well in excess of 50%, but I think income distribution was flatter back then.

Anyhow no easy answers - I think the issue with America is not as much income distribution as wealth concentration. Wealth concentration is the buildup of annualized income distribution. One could argue as one goes to the grave one should keep all their toys for multiple generations but I am not sure what benefit having Paris Hilton prosper off the work of her parents and grandparents is, inside a society. Warren Buffet (based on what he plans to give to his kids) seems to think otherwise.

The problem is, any taxation on estates will simply go back into the government coffers at which point it will be wasted yet again. Maybe we need profit seeking competitive businesses that spend accumulated wealth upon death over some amount - say over $500 million. I assume $500 million is a good level for a spouse and kids to live off on for a generation or two. ;)

Ah but if one cannot leave more than $500 million to heirs no one will be motivated to work. Nevermind ;)


On Sep 08 12:46 PM Matt Blackman wrote:

> Interesting point but Michael Moore has yet again done his best to
> suck the public into his truth-distorted sensationalist mockumentary
> world. Those who take him seriously do so at their financial and
> intellectual peril.
>
> But the Citigroup findings do bring up an interesting point. Although
> the top10% income group earned 43% of the total income, in the same
> year (2006) the top 10% paid 70.22% of total taxes in the US and
> this proportion has been steadily rising according to the National
> Taxpayers Union.
>
> Translation? While the percentage income earned by the top brackets
> has been rising, the amount the government claws back through higher
> taxes is rising even faster.
>
> But if the conclusion that the wealthy have done better through this
> meltdown versus the Great Depression is true, it means that all the
> stimulus money has had a proportionately greater benefit to the wealthy
> - most certainly an unintended consequence of the Obama plan that
> is designed to take more from the rich. But it would seem that the
> rich are better at catching the money being thrown out of Fed Reserve
> and government helicopters....

America: A Bona Fide Plutonomy

AB,

Which is why the title of the piece is not "Super Secret Citigroup memo Uncovered!"

This is a public document and as I wrote in the piece I remember reading about this at the time but didn't give it as much thought back then. My quote about an internal memo was from the UK paper which was reviewing the Moore movie. I assume the Moore movie referenced an internal piece. Maybe that was hyperbole on his part (wouldn't be the first time?) or it could of been another piece of research. I have no idea. Doesn't have much to do with the conclusions in the piece.


On Sep 08 06:17 AM Angry Banker wrote:

> The document you have provided in this article is not an "internal"
> Citigroup memo. It was an Analyst's Report available to any subscriber
> to Citigroup's Equity Strategy research group; therefore, publicly
> available. I recommend trying not to confuse analyst reports (which
> are often full of speculation, assumptions and hyperbole anyway)
> with reality.

While Citigroup Jumps on John Paulson's Investment, AIG Jumps on Anything

This was the same thinking in 1999 NASDAQ
Those who left the Titantic at the right time and did not buy back in on the repeated invitations given in 2000 prospered
Mos of us (hand raised) were happy to get the invite at 20-30% lower in 2000 and were punished taking away many if not all of our gains from 1999.

But the government was not backstopping NASDAQ in 2000 so we'll see how this episode turns out. There is no precedent


On Aug 28 11:20 AM mikebrah wrote:

> But even if they are government backed, that doesn't make them a
> good investment. It just means they won't go to zero, right? It
> does NOT make them any more profitable so the buying spree still
> doesn't make sense.
>
> I've said this before, but simply NOT going bankrupt doesn't make
> these stocks a good investment. At some point people will realize
> they are paying virtually infinity PEs for these "zombies" and the
> silliness will stop. OK, so BAC is not going bankrupt. Fine. That
> fact alone doesn't make it worth $156B which is the current market
> price.
>
> Most "bull" arguments I read essentially come down to this: yeah,
> I know its all BS, but I don't want to miss it and I'll just get
> out before it gets bad!
>
> Not exactly what I would call sound.
>
> MM

Three of America's Best Boards

err, Eric = Erik


On Jul 07 05:34 PM TraderMark wrote:

> Erik, No CHK? ;)

Three of America's Best Boards

Erik, No CHK? ;)

Banks, Oligopolies and Ever-Rising Fees

I had that same comment on my blog. As a credit union user of 20 years I've never understood why people stick in hostage situations with the big banks but it must be the $50 to open a new account or whatnot. People get that giddy $50 and then don't realize it will be sucked away by fees over the coming years.


On May 31 03:28 PM notsosmart wrote:

> just go & support your local small bank. i left the big banks
> years ago.i have had free checking,free overdraft protection,im known
> personally & can do phone transactions(dont trust net banking)
> & am very happy with the financial soundness.