Fighting Yoda

The Good News About Bernanke

Size of war has actually increased, troops are just being shifted from Iraq to Afganistan. Afganistan war is being lost despite all the buildup and cost.
Fiscal responsibility - the F-22 program was cut - just propaganda points. Pentagon budget actaully increased by 4%. Total decrease by 0.4% with F-22 but overall net increase of 4%.

Obama was voted to end the wars quickly - not a ten year plan of withdrawal - even Bush may have done that. It is the exact same foreign and economic policy.


On Aug 25 01:24 PM Smrt1 wrote:

> Did you ever stop to consider that maybe just MAYBE some of Bush's
> appointments weren't terrible. Look at Robert Gates he has called
> for slow return of troops from Iraq and has made broad calls for
> fiscal accountability and oversight in defense spending. He has called
> for the scrapping of stupid programs ie better fighter planes (what,
> because we cant bomb them efficiently enough as it is?) to the expansion
> of programs that will actually help our national defense such as
> intelligence. Who cares what his politics are or who originally appointed
> him, if he does a good job, arent results what matter?

Reappointing Bernanke: The Bad, The Good

"free to tighten monetary policy " - highly unlikely - Fed has made long term commitemnets MBSs worth $650B. Fed is just running a Bubble/Ponzi scheme - only way it can continue is by simply continuing it.

The Good News About Bernanke

Yes Obama is just Bush Term 3. The election were fought on 2 important issues - Iraq war and the economy - the entire Bush team has been reappointed and some even promoted- Robert Gates - Defense Secy, Timmy G, Ben B. Is this the change we can believe in?

Bernanke's reappointment was a foregone conclusion he is implementing the bailout, bubble, Ponzi scheme policies of the administration. Of course no moral hazard - these things never exist in public policy, that concept has actually died even in academia (BB from academia). Maybe Depression 2.0 has been avoided - but 3.0 highly unlikely.

Bernanke's Reappointment: Surprised, But Relieved

Not at all surprised and very worried. BB reappointment was a foregone conclusion - he is the part of the bubble, bailout, no moral hazard team - aggressively following the administration policies.

Worried of course - next bubble is already at hand, no moral hazard ever - take your grab bag and go to DC.

Death of the Consumer

The consumer has to delever - pay down debt and save for retirement - how will he spend? I think the much vaunted US consumer has to be be renamed - frugal/saver/... It would be a new behaviour but our Govt and the Fed and of course the Wall Street do not want it that way - they want the party to continue into the late night - more debt more consumption - just one more bubble a few more Ponzi schemes. One big giant Ponzi scheme - that is what is the US economy - the changes would be slow and small - bad habits die real hard.

No, This Is Not a Recovery

Fed and the Govt are playing the confidence game - read it as the 'confidence trickster' game. They are trying to fool people into buying cars and home - that they can not afford (all over again)- Ponzi scheme cover once blown is blown forever. People, at least some, have wizened up - and are not falling for it in large numbers- to incurr more debt. Of course home and auto sales will once again plummet after these programs end. But these programs can of course get extended - a very likely scenario. But none of that will solve the economies problem - they are structural – too much debt, too little production, and no drivers for job growth. Consumer confidence will re-plummet with unabated foreclosures and job losses.

An 'X' Shaped Recovery

Very true V shaped recovery is the greatest myth. Auto manufactureres are once again on their foolish ways - boosting production - clunkers ends today - end of car sales. Even future car purchases wre brought forward with the program - a massive dip is certain. Similar with homes - 8K program is boosting sales - even that program will end by Nov 30. But likely new programs will be created as these earlier programs wre 'so successful'. With the present administration and the Fed everything is possible. But like every Ponzi scheme it will end - and will end very badly. X, downward staircase, corrugated sheet - all kinds of possiblities.

Roubini's Case for a Double Dip Recession: Pretty Underwhelming

Consumer delevraging will kill any hope of recovery. Job losses and foreclosures will keep the consumer sentiment very low. All the Govt propaganda and Trillions of dollar in stimulus can only go so far. Clunkers and home rebate programs will end soon - the sales will continue dipping. The consumer is totally shaken, very very unlikely they will be back anytime.

Forget 'Cash for Clunkers': Try 'Dough for Dumps'

Latest in Stimulus: 'Cash for Refrigerators' - It is here and it is real:
news.yahoo.com/s/bw/20...
"Beginning late this fall, the program authorizes rebates of $50 to $200 for purchases of high-efficiency household appliances. The money is part of the broader economic stimulus bill passed earlier this year. Program details will vary by state, and the Energy Dept. has set a deadline of Oct. 15 for states to file formal applications."

Earlier manufacturers went bakrupt giving these cash rebates and 0% APRs - now the Govt and taken up the onus - where will the Govt end up?

S&P 500 Valuation and Earnings Analysis

$ 73.05 S&P estimates are for bottoms up operatings earnings not reported. Reported earnings top down estimates for 2010 are much lower only $37.26, top down estimates even for reported earnings also are only $46.

So there are plenty of numbers out there to look at, user discretion adviced. Can $73.05 be achived unlikely - M2M plays an important role - anything can be reported. One way or other S&P is highly over valued for a bear market.

Forget 'Cash for Clunkers': Try 'Dough for Dumps'

Peter is right the "possibilities are endless". Yes these programs are strictly meant to create a sugar high - you can sell more cars and homes and celebrate – who in America has not fallen for the SALE or the FREE sign. Also provides more fodder to PPT and green shoot propaganda. But what is the net result - more debt for consumers and the Govt. Both of them are already reeling under tremendous debt - they need to save and cut debt. But the prescription from our Govt and economists is - inflate/print/borrow/c... - take the party from happy hour to late night to afterhours - we all know how it ends.

Yes it will end - the outcome would be lot worse with all these dumb policies – huge tax rises and inflation down the line – children and grand children will be under permanent debt. But as long as we are current America that very strictly believes only in borrowing and consuming - that is the chosen path – dough from dumps.

Rethinking the Baltic Dry Index

I don't pay much credence to BDI - it only represents bulk cargo shipping rates - simply demand/supply of bulk cargo ships on a day today basis, rather than a trend in economic activity. These ships have their own supply pattern new ships come on line - based on ships ordered long time ago, and lot of current ships coming in and out of service (based on owner strategy).

When BDI went up it was simply a rebound from extreme panic lows, and of course buoyed by China commodity stock piling. I think those patterns are over - new trends would be lower; the index is down 30% from recent highs.

If Asset Prices Are Dropping, Why Are Bank Stocks Rising?

Hype springs eternal - it is America after all. PPT team is hard at work, Fed and Treasury have the spigots open - PPIP, TALF, clunkers, 8K home credit, M2M,... Foolish investors never learn they always follow the piper - once again we hear the same stories- China, commodities - and people are going for it. Likely to see cash for appliance, cash for clothes, furniture - the possiblities are endless.

Yes banks will be hit even more in the next round with CMBSs, Fed is rapidly buying all the toxic stuff last count $666B, they will keep buying PPIP, TALF, and rest of the alphabet soup.
You of course can sell more homes and cars with cash rebates – earlier the manufacturers did it themselves - went bankrupt. Now Govt. is decided to get into the game – where will the Govt end up – of course in the very same place bankruptcy. Lot of states are already there- biggest California.

Not only these stimulus programs world over will end sometime soon, after that you have to pay for them- higher taxes, lower entitlements - we will see the other side of all this pretty soon.

BHO who was promising to balance the budget in 4 years is now guaranteeing quadrupling the deficit in 8 years. 1 Trillion stimulus 'unemployment will be kept under 8%', changes to 2 Trillion to keep the unemployment under 10% - so it goes.

Should Banks Extend and Pretend?

Fed has gobbled up 666 B of mortgage securties (as per ysdys Fed report), mor ewould be picked up by PPIP at even inflated prices now with al this green shoot hype. So who knows where we go form here.

U.S. Recession: More Pain to Come

Lot of services that were taken for granted will have to go - schools, hospitals, parks, police, ... We simply can't afford them - most local areas are already heavily taxed can't raise taxes any more.

California reduced its budget recently by another $19 Billion, and lot more still to come- lot of amenities being cut. People all over have to reconcile with a lower standard of living - no more freebies. This Great Recession is steadily turning into the Great Depression - safety nets (food stamps, FDIC, unemployment benefits) - are preventing the corner soup kitchen - but we are getting there.