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  • On The Road To The Endgame: The Farcical Cliff [View article]
    A strong economy is based on a strong consumer, not a pile of money in a cave. What this country is working towards is a better sense of balance and I don't think it involves a bigger government, but a more efficient government that allows economic activity.

    Yes we will always have the wealthy and it is good to be there, but that doesn't mean we pile the bill on the country as the supply side argument does. Also we need to get stable Fed policy and get rid of supply side enablers like Greenspan and Bernanke who provide funny money to keep the game going. It is time to clean house on these stupid ideas that started in the 80's.

    .
    Dec 5, 2012. 09:28 AM | 1 Like Like |Link to Comment
  • On The Road To The Endgame: The Farcical Cliff [View article]
    Here is my take on the cliff this morning.

    The Core Issue - The Supply Side Trickle Down Myth

    Some ask me why I think there is a bigger than even chance that we all go over the fiscal cliff. For me it the core reason that I quit being a Republican ten years ago. It is simply that the current Republican Party, not the one of Eisenhower, Goldwater, and Nixon, but the current one that is wrapped in myth and folly, has a belief in a model that creates deficits and moves the wealth to the upper class. It was great for them for a while, they squirrelled away a lot of money and either sent the money offshore or tried to privatize public services and get the rest of the country to pay fees and tolls to them forever. What few talk about in this debate is that the issue is more than taxation of income, it is the also the growing pile of cash that the top oversees.

    In essence, for the Republicans to negotiate would be for them to give up their religion and die.

    It is a fact that growing deficits will increase economic activity in the medium term, look at the 1980 to 1994 increase in GNP and Deficits (see the POLITICAL TALK 2008 section Tab on the left side of our Home Page). The problem is that the Deficits accumulate and at some point our U.S. T-Bonds are going to drop in value, and guess what, that is the asset area where pension fund advisers and the public is being drawn.

    The Republicans say that Entitlements are the problem, Social Security and Medicare. The Simpson-Bowles plan lays out how a way to address those issues . The simple fact is that Social Security is not part of the federal budget, it only has become an issue because the federal government has borrowed money from it all these years to finance it’s follies and only given IOU’s in return. Medicare was and is a cost but ObamaCare has introduced efficiency directives on buying services and in fact everywhere that those directives have been applied, costs have gone down. What needs to happen now is to apply those directives as a model to all areas of health service buying and management.

    And one final piece to the argument. This country has the premise of Commonwealth at its core. Think on what that term means.

    As to the markets, yesterday the S&P rallied into the 1424 sweet spot and backed off.
    Dec 5, 2012. 01:22 AM | 2 Likes Like |Link to Comment
  • On The Road To The Endgame: The Farcical Cliff [View article]
    Some ask me why I think there is a bigger than even chance that we all go over the fiscal cliff. For me it the core reason that I quit being a Republican ten years ago. It is simply that the current Republican Party, not the one of Eisenhower, Goldwater, and Nixon, but the current one that is wrapped in myth and folly, has a belief in a model that creates deficits and moves the wealth to the upper class. It was great for them for a while, they squirrelled away a lot of money and either sent the money offshore or tried to privatize public services and get the rest of the country to pay fees and tolls to them forever. What few talk about in this debate is that the issue is more than taxation of income, it is the also the growing pile of cash that the top oversees.

    In essence, for the Republicans to negotiate would be for them to give up their religion and die.

    It is a fact that growing deficits will increase economic activity in the medium term, look at the 1980 to 1994 increase in GNP and Deficits. The problem is that the Deficits accumulate and at some point our U.S. T-Bonds are going to drop in value, and guess what, that is the asset area where pension fund advisers and the public is being drawn.

    The Republicans say that Entitlements are the problem, Social Security and Medicare. The Simpson-Bowles plan lays out how a way to address those issues . The simple fact is that Social Security is not part of the federal budget, it only has become an issue because the federal government has borrowed money from it all these years to finance it’s follies and only given IOU’s in return. Medicare was and is a cost but ObamaCare has introduced efficiency directives on buying services and in fact everywhere that those directives have been applied, costs have gone down. What needs to happen now is to apply those directives as a model to all areas of health service buying and management.

    And one final piece to the argument. This country has the premise of Commonwealth at its core. Think on what that term means.
    Dec 4, 2012. 02:32 PM | Likes Like |Link to Comment
  • The Treasury market is pricing in an Obama victory, says Janney's Guy LeBas, as southward-heading yields suggest no imminent change to monetary policy. Left unexplained by LeBas is how a Romney victory would change monetary policy. Besides, many suspect the Fed runs the President, not the other way around. [View news story]
    In my opinion Guy has it backward.

    First, weighing in on the FED, everyone knows they are not really independent.

    As to who wins in ten days after OHIO is counted, the market is tilting toward a Romney-Ryan victory and austerity which will lead towards higher interest rates. The double top in June-July for the long bond is the warning sign.
    Nov 5, 2012. 12:17 PM | Likes Like |Link to Comment
  • Market Is Short-Term Bullish, Long-Term Cautious [View article]
    On another note, here is what I had to say today on my blog:
    eureka-perpectives.com

    The early markets have everyone’s attention this morning, lots of excitement on CNBC. For us it will probably be a day to watch, maybe reread what we said in the Inflation/Deflation 9/30/12 post on the Main Site. The risk for the market is that the S&P closes under the 1419 level today, i.e., the market got trapped in the 1419 to 1489 S&P trap and will now be put in quarantine.

    A lot of factors are involved here, maybe listing a few will provide perspective:

    1) The market always needs a short-term factor to talk about, and that is probably earnings today.

    2) For me the real factor is the election unfolding and the appearance that Romney will be the winner. I have said it, what seems like a million times on this site, and the supply-siders will never get it, trickle down economics has to by definition increase deficits and scare the hell of of world t-bond buyers, thereby increasing interest rates and eventually creating a real Great Depression, nothing like the Great Recession we saw a couple of years ago.

    3) So the middle class is voting for their execution, pretty dumb. On the other hand, tools exist for individuals to handle the situation by positioning their assets for what could entail, even including hedging the value of one’s house in an asset/commodity market like copper or lumber.
    Oct 23, 2012. 10:35 AM | Likes Like |Link to Comment
  • The secular bear market in equities from 2000 continues, says Felix Zulauf, who expects countries (at least the ones that can - sorry, EU) to continue bailing like crazy to alter this. Savers will be punished and gold will continue to benefit.  [View news story]
    Is Europes solution inflationary? Many newsletter writers think so, but one has to keep in mind that what worked for 10 years for a different reason may not work now. In any case the next few days will be a test of whether the austerity that will increase in Europe will offset the inflationary reasoning that has become so entrenched in every crisis and was a big factor when bailout money was directed to speculative areas in the US in QE1 and QE2. I Think Europe’s bailout has a different direction. So we will see how this plays out.
    Oct 25, 2011. 10:18 AM | Likes Like |Link to Comment
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