Kunst

Obama's Economic Failure

The current fiscal year started in October 2008. This is still Bush's mess.

July Will Be a Turning Point for FAZ

"These factors ensure higher volatility, which is an important factor to prevent exponential decay in FAZ's price."

Actually, exponential decay is increased by higher volatility. If you remember your high school algebra,

(1 + x) (1 - x) = 1 - x^2

A 10% rise followed (or preceded) by a 10% decline, leaves you down 1%. At 20%, you are down 4%. By the time you compound even a 5-10% daily rise/fall, which is common, FAZ (and FAS) has nowhere to go but down.

What's the Opposite of Eureka?

The opposite of "Eureka!' is "Duh!"

The Economy Now: A 5-Point Summary

"I honestly believe the second amendment gives the american people the right to overthrow a government of tyranny that does not represent their interests."

So if you don't like the results of the election, take up guns against the government. What's to keep someone with an opinion opposite to yours from trying to overthrow the government you do like? The most basic concept of democracy is that we all accept the will of the majority even if we don't agree.

Russia, China Gang Up on the Dollar

"The U.S. shouldn’t be complacent about China continuing to buy Treasuries. Don’t think that there is no alternative to your bills and bonds. The euro is an alternative. And there are lots of raw materials we can buy."

So when they buy Euros or raw materials, what happens to the dollars? They don't disappear. They go to whoever sold China the Euros or raw materials. Sooner or later, those dollars are only good here in the US. The real danger is when China and others buy huge chunks of America's productive assets. We have been trading our land and factories for toys.

We're Due for a Serious Pullback

I'm up 14.6% since 10/9/2007, 24.1% 2009 YTD. I don't measure from market bottoms.


On Jun 05 10:35 AM YoYoMama wrote:

> If I'm "Dumb Money" (yes, I'm an AAII member), how come my portfolio
> is up over 60% from market bottoms? Isn't that beating the market?
>
>
> How's your portfolio doing? Care to share?
>
> On Jun 04 09:30 AM Jason Tillberg wrote:

The Next Wave of Foreclosures

America's Vietnam fiasco began in 1946, not 1964, when President Truman decided to support a return of French colonialism to Indochina instead supporting of those countries' desire for independence. This is more fundamental than it might first seem. After World War II, America was viewed worldwide as the champion of freedom, but in case after case (Central and South America, Iran, southeast Asia, the Middle East), we supported authoritarian oligarchies that suppressed their populations but benefited US corporate interests. By betraying our ideals, we undermined our standing in the world and our long-term economic success.


On May 23 08:10 AM Mpyre... wrote:

> read your Gibbon...the empire is rotting from within which is historical
> par...this administration is simply throwing accelerant on a fire
> that started around 1964 with the Vietnam fiasco and the so-called
> Great Society Programs...big government has always been the main
> problem, and remains so.

Not Your Grandpa's Deflation

How about we put the blame for this situation where it belongs, on George W. Bush running our national debt from $5 trillion to $11 trillion during a time of relative economic prosperity. He turned a budget surplus into a half-trillion deficit before the recession even hit hard. No matter who was president, we would be looking at trillion-dollar deficits for years to come. Obama may do a good or bad job of cleaning up the mess, but there's no question who created the it.

California's Crisis Omen of the Nation's Future Reality

The California bond measures were largely pointless. Only the one to borrow future revenues from the lottery did anything meaningful to plug the current hole, and that only by pushing the problem into the future. The propositions only purported to "fix" 5-6 billion of a 20+ billion deficit, again nearly all of it by borrowing from future lottery revenues. Prop 1A (the "rainy day" fund) would have extended the recent sales tax increase another two years (2011 & 2012, I believe). Again, no help this year or next. A couple other propositions were to undo voter-approved specific funding for education and mental health, which would give the legislature some more flexibility, but do nothing to reduce the deficit.

California has borrowed so much money via bond issues over the years, all approved by the voters, that its credit rating is now the worst in the nation. There is no good solution at this point. The rainy day fund should have been filled when times were good. Now, only draconian cuts to public services remain. And yes, that is a portent for the country as a whole.

Is the U.S. Dollar Headed for a Mighty Crash? Part I

Anybody else think that spending a trillion (current) dollars a year for the last six decades might have something to do with our debt problem?


On May 21 08:02 PM nmelendez wrote:

> BTW since the world has evolved to the same level as the US, where's
> other countries stealth technology? i mean China's stealth bomber/fighter.

Friday's Volume Down Significantly

Don't waste your time arguing with Cetin.


On May 03 12:24 PM Northstar10000 wrote:

> Cetin
> You continue to amaze. Friday volume was a disaster and no one except
> the big traders know it. Do you even know what day it was?

Credit Card Catastrophe: Congress Can't Help

Credit cards are financial heroin, and banks are pushers.

The banks know their product hurts most of their customers. They don't care, because that's how they make their money. No different than the tobacco industry. Through credit cards, banks intentionally lend money to people who can't afford it. They make exorbitant profit on obscene interest rates, while many people's balances climb and climb, until they reach the breaking point and they go bankrupt. The banks don't care, because they charge such high interest that it covers the default rate.

Credit cards as an instrument of financial torture are not in the country's interest. Limit the interest rate so something reasonable, say twice the prime rate. But this will cut off many people from credit, the banks will say. Yes, it will. That's the point. Banks lend to people who can't handle it, let them get in deeper and deeper. Only the high interest rates make that possible. At 10-12%, the banks will have to limit credit to those who can actually afford and handle it. The simple fact is that most people should not have credit cards. They are poison and of no benefit to the average person. At best, they make people feel better temporarily (like heroin) at the cost of long-term destruction.

While we're at it, let's legislate an automatic write-off of 50% of credit card debt for anyone who goes bankrupt. Again, that will make the banks lend more responsibly, i.e., to people who are good credit risks.

My Oil Outlook

This is an ideal time to implement a gradually rising gas tax. I know this raises hackles, but we have got to reduce our oil imports, and this is a good way to start. It will encourage conservation and energy-efficiency. A few months ago, I would have said it could be made revenue-neutral by lowering other taxes by an equal amount, but with the debt bomb going nuclear, it might be better to let it be a revenue source instead.


On May 03 09:12 AM The Greatest Rip Off of our Time wrote:

> The best part about oil's plunge into the $40 and $50 barrel in about
> six months?
>
> A de-facto tax cut for American motorists. Each $1 per barrel drop
> in oil increases U.S. GDP by $100 billion per year and every 1 cent
> decline in gasoline increases U.S. consumer disposable income by
> $600 million per year.
> The last 20 years have been characterized by rising U.S. oil consumption,
> but now the U.S. Energy Information Agency. incorporating the most-recent
> changes in U.S. consumer behavior, says there will be no appreciable
> growth in U.S. oil consumption between now and 2030, with biofuels
> accounting for all of the growth in liquid fuels.

More on White House's Strong-Arming of Chrysler Hedge Fund Hold Outs

When people resort to name-calling, I figure it means they don't have any rational argument to make.


On May 02 10:22 PM bricki wrote:

> Fascist has been used as a pejorative term applied to so many people
> and organizations over the years that it has no longer has any real
> meaning or definition. Pick some other word.
>
> From Wikipedia:
>
> The word ‘Fascism’ is almost entirely meaningless. In conversation,
> of course, it is used even more wildly than in print. I have heard
> it applied to farmers, shopkeepers, Social Credit, corporal punishment,
> fox-hunting, bull-fighting, the 1922 Committee, the 1941 Committee,
> Kipling, Gandhi, Chiang Kai-Shek, homosexuality, Priestley's broadcasts,
> Youth Hostels, astrology, women, dogs and I do not know what else...
> almost any English person would accept ‘bully’ as a synonym for ‘Fascist’.
> – George Orwell, What is Fascism?. 1944.
>
> Richard Griffiths argued in 2005 that the term fascism is the "most
> misused, and over-used word of our times".
>
> On May 02 02:57 PM yellowhoard wrote:

Is a Manufacturing Rebound in the Works?

This recession is coming to an end. Unfortunately, the next one is right on its heels.