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Amadon

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  • Baltimore County Executive Kevin Kamenetz hopes to borrow $255M to help with the county's underfunded pension system. His plan is to borrow the money for 30 years at 4.25-4.5% and put the money in investments that earn more. Question: If there is an investment guaranteed to earn more than 4.5%, wouldn't the pension bond buyers put their money in it instead? [View news story]
    You may be right Andrew. My concern is that with so many munis and states all facing pension woes and looking to invest in entities who are even closer to default than they are it sounds like a death spiral. Have a look at this article for an explanation of what might be going on here.
    http://bit.ly/QjuXbY
    Sep 12 11:36 AM | Likes Like |Link to Comment
  • Baltimore County Executive Kevin Kamenetz hopes to borrow $255M to help with the county's underfunded pension system. His plan is to borrow the money for 30 years at 4.25-4.5% and put the money in investments that earn more. Question: If there is an investment guaranteed to earn more than 4.5%, wouldn't the pension bond buyers put their money in it instead? [View news story]
    Baltimore County Executive Kevin Kamenetz is obviously a genius. The average American home owner who is under water on his mortgage can borrow @ 3,25%. He is apparently considering buying some Greek bonds or maybe going up the road a few miles to Atlantic City to make some fast money.
    Sep 12 11:16 AM | Likes Like |Link to Comment
  • Moody's expects to lower its U.S. credit rating to Aa1 from Aaa in 2013 unless budget negotiations "produce a stabilization and then downward trend" in the government's debt/GDP ratio. [View news story]
    As George Soros noted in his recent essay there is no longer any reason for any government with a printing press to default on debt. I would like to go Mr. Soros one better. Any government who has a printing press and has debt that has become uncomfortable would be better off to print up money in the creditors own currency instead of their own. That way they can pay their debt in full and in like kind without inflating their own currency. I expect this will soon become the preferred method of repayment for many nations.
    Sep 11 05:43 PM | 1 Like Like |Link to Comment
  • Moody's expects to lower its U.S. credit rating to Aa1 from Aaa in 2013 unless budget negotiations "produce a stabilization and then downward trend" in the government's debt/GDP ratio. [View news story]
    I noticed in the last FOMC minutes someone suggested that they quit referring to specific dates, such as 2014 or 2015, as the target dates to hold the near zero interest policy to allow for more flexibility and to avoid credibility problems, I suspect that shortly after QE3 someone will probably suggest that they quit numbering the QE events also as history has shown that these numbers can grow quite large in a very short period of time and could confuse investors as they try to remember just which QE event this is.
    Sep 11 04:43 PM | 1 Like Like |Link to Comment
  • Moody's expects to lower its U.S. credit rating to Aa1 from Aaa in 2013 unless budget negotiations "produce a stabilization and then downward trend" in the government's debt/GDP ratio. [View news story]
    What we have here is a failure to communicate. The bears just don't understand what the central banks have been trying to communicate.
    Debt and credit ratings don't matter any more.
    Sep 11 03:56 PM | Likes Like |Link to Comment
  • Moody's expects to lower its U.S. credit rating to Aa1 from Aaa in 2013 unless budget negotiations "produce a stabilization and then downward trend" in the government's debt/GDP ratio. [View news story]
    The German High Court is going to take all the bears out behind the wood shed tomorrow and then while they are down and dazed, Ben is going to deliver the Coup de Grace and finish them off and all will be right with the world forever and ever, Amen.
    Sep 11 03:32 PM | Likes Like |Link to Comment
  • The most interesting part of a George Soros treatise on the EU crisis is its brief preamble in which the author says the world has changed since he penned the essay. Merkel's siding with Draghi over the Bundesbank's Weidmann on the subject of bond purchases was a "game-changing event," writes Soros. Taking full advantage, Draghi has "promised unlimited purchases" of troubled nations' sovereign debt. "The continued survival of the euro is assured." [View news story]
    10:45 PM Food stamp cuts are bad for business, warns incoming Kraft (KFT) CEO Tony Vernon, who says a minimum one-sixth of company revenue comes from program usage. Proposals floating around Congress would cut funding for food stamps as health advocates point out the program is a corporate subsidy to the nation's processed food giants.

    Need I say more?
    Sep 9 10:53 PM | Likes Like |Link to Comment
  • The most interesting part of a George Soros treatise on the EU crisis is its brief preamble in which the author says the world has changed since he penned the essay. Merkel's siding with Draghi over the Bundesbank's Weidmann on the subject of bond purchases was a "game-changing event," writes Soros. Taking full advantage, Draghi has "promised unlimited purchases" of troubled nations' sovereign debt. "The continued survival of the euro is assured." [View news story]
    What bothers me most about this is that our central bank,with thousands of Phd's on staff, keep using all these 'weasel' words to describe what they are doing like 'quantitative easing' and 'unconventional monetary measures' to describe a con game that has been going on since the early Roman Empire.

    It is a fraud and if practised be anyone other than the central bank would be prosecuted as such. It is counterfeit money printed up to avoid paying legal debts by dead beat debtors who can not face up to the fact that they are broke and either can't or won't do the honourable thing and pay 'in like kind' or file for Chapter 11 bankruptcy protection from their creditors and submit to court appointed regulators to restructure and supervise their affairs until the are once more solvent.

    We have corporations in the U.S. who have access to U.S. markets, legal system, military protection but who ship all the jobs to other countries, hide their profits and assets from taxation in off shore accounts and demand subsidies and other favourable treatment from U.S. taxpayers. We should restructure our tax laws and tell these corporations and wealthy individuals to bring it home and pay your fair share for services provided or find another home base.

    The worst of it is that they always have the same solution. Inflation! Have you no honour. Have you no shame. Inflation hits the middle-class and the poor with higher prices for the basic necessities of shelter, food and energy from which they can not escape.

    It is often said that 1% of the population controls 95% of the wealth of this country and 95% of the rest of the population must make do with with the 5% left over. That's a recipe for the Arab Spring coming to the EU and the U.S. next as the world degenerates to a 'Mad Max' scenario.

    Do we really expect China and the rest of the world to stand by and watch in helpless fear as we inflate away what we owe them? What would we do? Threaten to pay them off and never borrow from them again?

    Geez! When did we lose our way?
    Sep 9 10:40 PM | Likes Like |Link to Comment
  • The most interesting part of a George Soros treatise on the EU crisis is its brief preamble in which the author says the world has changed since he penned the essay. Merkel's siding with Draghi over the Bundesbank's Weidmann on the subject of bond purchases was a "game-changing event," writes Soros. Taking full advantage, Draghi has "promised unlimited purchases" of troubled nations' sovereign debt. "The continued survival of the euro is assured." [View news story]
    Here is my plan. Watch the 10 YR Spanish http://bit.ly/PUJQkx and Italian http://bit.ly/udlWnr bond yields leading up to the German Supreme Court decision on 12 September 2012. You can see what a profound effect last weeks statement by the ECB had on it. In fact, that was the whole point of the statement and it worked. It is called 'communication strategy' by the central banks. Like all talk, it is cheap. If there is a leak on what the decision is going to be you will see the yields move back up toward 7% if the court is going to rule it unconstitutional, which it is. The yields will move to under 5% if they are going to allow it. The S&P will follow suit.
    Sep 9 06:23 PM | 1 Like Like |Link to Comment
  • The most interesting part of a George Soros treatise on the EU crisis is its brief preamble in which the author says the world has changed since he penned the essay. Merkel's siding with Draghi over the Bundesbank's Weidmann on the subject of bond purchases was a "game-changing event," writes Soros. Taking full advantage, Draghi has "promised unlimited purchases" of troubled nations' sovereign debt. "The continued survival of the euro is assured." [View news story]
    George Soros is making the case for inflation to solve the problems of the EU and the Developed Markets.

    "To make matters worse the Bundesbank remains committed to an outmoded monetary doctrine that is deeply rooted in German history. Following World War I, Germany had a traumatic experience with inflation; consequently it recognizes only inflation as a threat to stability and ignores deflation, which is the real threat today."

    He goes on to say:

    "That is, when too many heavily indebted governments are reducing their budget deficits at the same time, their economies shrink so that the debt burden as a percentage of GDP actually increases. Monetary authorities worldwide recognize the danger. Federal Reserve Chairman Ben Bernanke, Bank of England Governor Mervyn King, and even Bank of Japan Governor Masaaki Shirakawa have all engaged in unconventional monetary measures to avoid a deflationary debt trap."

    How does the whole world inflating their currency at the same time help anyone? Inflation primarily hurts the middle class and the poor with increased prices for necessities like food and gas which are excluded from cost of living increases and trail by years. This simply takes more money from the consumer who drives the economy and continues the downward spiral. It increases the obligations of government to provide a safety net for increasing masses of unemployed with decreasing revenues.

    Unless a solution is found that will give consumers jobs and money to spend we will continue on this death spiral. People who have no money or jobs do not pay taxes now, inflation will only create more of them who are dependent on government for survival.
    Sep 9 05:19 PM | 3 Likes Like |Link to Comment
  • August Nonfarm Payrolls: +96K vs. consensus +125K, prior +141K (revised from 163K). Unemployment rate 8.1% vs. consensus 8.3%, 8.3% previous. [View news story]
    WMARKW; "Now the real question is what "Masters" benefit from the levelling of the world wage rates?"

    That's an easy question answered by Grover Glenn Norquist: "I'm not in favour of abolishing the government. I just want to shrink it down to the size where we can drown it in the bathtub."

    Business has made no secret of their hatred of government, especially, democratic government which cost a fortune to buy the politicians and finance election campaigns. That's what this transition is all about to replace the present form of government to something like the command economy of China which is so admired due to the high growth rates and a subjugated population that is easily controlled. China is on track to be become the number one economy in the world and our system is thought to be anachronistic and broken to the point where it no longer works.

    The goal for the U.S. and Europe is to emulate China and divide the global economy between them. Think about how you would accomplish that and take a look at what is happening around you.

    You and I think in terms of today. Governments have super computers which can run game theory programs and predict and model various strategies. I suspect this is the theory that keeps winning.
    Sep 7 05:00 PM | Likes Like |Link to Comment
  • August Nonfarm Payrolls: +96K vs. consensus +125K, prior +141K (revised from 163K). Unemployment rate 8.1% vs. consensus 8.3%, 8.3% previous. [View news story]
    WMARKW; Your numbers are correct and have been well known for at least since 2000. This is the result of a transformation of the world economy which is well under way. To understand the process you must first realize that the richest 1 percent controls as much financial wealth as the bottom combined 95 percent. Developed Markets are on track to lose GDP share to Emerging & Growth Markets of 160% by 2050 as can be seen by this graph produced by Goldman Sacks in 2000. http://bit.ly/LZVYyw

    The primary reason for this loss of market share is the relative cost of labor. The only way to stop this loss is to reduce the wages and living standards of the Developed Markets labor force to compete with the Emerging Market labor force.

    A huge unemployed work force holds down labor demands for wage increases and higher minimum wage legislation. The minimum wage has lost value for nearly 45 years. Think about that sobering fact for a second. Even by raising the minimum wage to $10 per hour, it would still remain below the minimum wage (in today’s dollars) in 1968. Candidate Obama in 2008 promised to push for a $9.50 federal minimum wage by 2011. Have you heard anything mentioned about minimum wage during the election campaign? Even from the unions? No, because it is feared that raising the issue now even if the legislation introduced by Jesse Jackson Jr. was passed it would cause unemployment to increase. The truth is productivity gains by business allows them to get by with fewer workers. The only jobs I have seen advertised on television here where I live are invitations to apply for jobs in homeless shelters and food banks, which is apparently the new growth industry here.

    My guess is that this is well understood by our masters who are arranging for us to compete on the world market with the Emerging Markets. Good Luck everybody who may be thinking of asking for a raise.
    Sep 7 04:10 PM | 2 Likes Like |Link to Comment
  • Set Long Positions Now Ahead Of ECB And FOMC Actions [View article]
    So far everything is what central banks refer to as communication strategy (BS to the laymen) to move markets. Those harsh conditions (austerity) will indeed lead to a death spiral to Club Med nations. Even before these extra-ordinary events of the past several years all of the developed world markets were and still are caught up in a downward mega-trend in competition with emerging and growth economies. Take a gander at this graph by no other than Goldman Sacks and try to imagine how these Club Med nations can grow their way out of this.
    http://bit.ly/LZVYyw
    Sep 7 03:03 PM | 2 Likes Like |Link to Comment
  • Set Long Positions Now Ahead Of ECB And FOMC Actions [View article]
    But Hey! Look at the bright side. The rich northern EU nations will be able to import cheap labor from the poor southern nations with the added benefit of being Catholic as opposed to Muslims.
    Jobless Greeks Clean Toilets in Sweden for Work
    http://buswk.co/NQCbrD
    Sep 7 11:54 AM | 3 Likes Like |Link to Comment
  • Set Long Positions Now Ahead Of ECB And FOMC Actions [View article]
    Yes filipo; If you translate the 'Goldman Sacks' speak. what Draghi is saying is: I will take member states deposits which are earning near zero interest rates, then I will lock these deposits up as collateral to secure some very high risk bets I am willing to make an unlimited number of times. If the bets I am making with other peoples money pay off then the bank will make a handsome profit. If I lose the bets then the only way I can cover the loss of depositors cash is to use my printing press to pay them back in devalued Euros, which will have the effect of socializing my losses to everyone who is holding Euro denominated assets.

    There is not a gambler in the world who would not offer to do the same thing. Its the same shell game Wall Street has been playing for years. You have to follow the risk to see through it which most people do not.
    Sep 7 11:25 AM | 3 Likes Like |Link to Comment
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