Granville

Policy Lessons from the Great Depression

In his P.S., Mr. McTeer advises that this is a great book and a worthwhile read. It most certainly is. Run down to your local library and check it out asap.
In his review, Mr. McTeer does not refer to the enormous influence that the Soviet Union and its economic model had on the cadre that made up the advisers to FDR. It was that disastrous influence which deepened and prolonged the suffering of the depression. Accordingly, beware of the present Marxist influences.
I read the book when it was released, and I have been appalled that the pattern is being repeated with very little time translation.
The idea that capitalism failed and that it requires more regulation is testimony to the power of denial. The most regulated entities have failed us the most. Who are the villains, the banks or the hedge funds? Of course, when they are upholding the rule of law and the bankruptcy laws of this country, the hedge funds are demonized and threatened by the government. Congrats, UAW! With government guns, you win and we lose!
It is government, not capitalism, which has created this mess. Capitalism is not government coercion, largesse to bank, corporate and special-interests, phony government accounting (audit the Fed, anyone?), enormous deficits and misrepresentation of same.

Readers Pick the Top 20 5-Year Horizon Stocks

Please revisit this in one year to measure the effectiveness of this survey.

A Long Look at Lithium: Chile's SQM Poised for Growth

On the weekly chart of SQM, MACD and RSI are rolling over. Price has been flat since mid-May, is still short of the May '08 highs and momentum is weakening. All this against a backdrop of unanimous sentiment against the dollar. Break out of this narrow range and hold 40, and you have a new game. Until then, it is better to watch this and keep your powder dry. A rebound in the dollar, and this could revisit 30. 30 or so, down about 20% from here, would not violate the uptrend, and would be a much better entry point.
None of this is to say that this wasn't a well-researched, well-presented article.

Street Fighters: The Last 72 Hours of Bear Stearns, by Kate Kelly

Jeff, I would recommend Nicholas Dunbar's 'Inventing Money', the erudite story of the LTCM crisis, for anyone seriously interested in understanding 'Street Fighters'.
LTCM held 10-year CDS in excess of $1 trillion in notional value. These swaps don't get unwound, but they go to maturity, and the losses are reported at maturity. Let's see, 10-years plus 1997 equals...oops! 2007! Ergo, the banks then had to expand the CDS market in order to diminish the losses they would experience, hence the current problem.
Read more at:
www.safehaven.ca/artic...

The extent of all the relationship between the 1997-8 and 2007-8 events has not been detailed yet. It goes beyond Bear. Lichtenstein and their royals were very involved in LTCM and its aftermath in 1998. Fast forward to 2007, and you have the US Treasury authorities raiding Lichtenstein banks for alleged tax fraud.
Hmmm. Makes events in 2007-8 seem like Act II to the opening Act I in 1997-8.
Or, maybe it is all just a coincidence.

The Chile Fund: A Play on a Nascent Global Economic Recovery

A technical note: the Chile Fund (CH) on the daily chart has risen above the 50DMA, and is approaching the declining 200DMA.
On the weekly chart, it is rising to meet the declining 50MA, which is below the 200MA.
CH also has a gap around the 10.75 level which may need to be filled before a recovery in price.

Why Did Nortel Fail?

Northern Telecom/Nortel PBX market share was the same as the AT&T/Lucent/Avaya product over the years, at about 21% each. Both were fine PBX products. Now, the entire telephony paradigm has shifted.
Each of the baby Bells used the DMS-100 as central office switches, and the Meridian 1 and the CS-1000 are bulletproof.
In what way was the Nortel product inferior?
Product quality is not an issue in the PBX market. Abundance is the problem; there are too many fine products for the market to support, just as there are too many car makers.
Fujitsu simply walked away from the business about 9 years ago. Siemens would like to do the same thing. The competition in that business is ferocious.


On Jan 15 10:45 AM Roger Hornsby wrote:

> You should ask their customers. They always know. Their telecom
> products have always been self serving and inferior to their competitors.
> In a boom market like we have had in the past, you can survive or
> even prosper without doing a great job. But when the environment
> gets difficult....

Why Did Nortel Fail?

A technological revolution contributed to Nortel's downfall.
After the reverse splits are taken into account, Nortel is worth less than 1/1000 of its market cap in 1999. Around that time, IP-based telephone systems began to emerge. IP-telephony spelled the end of legacy TDM PBX types.
Now, legacy PBXs can last a long time. Many companies have gone through Windows 98, Windows 2000, WinXP and now have Vista, replacing desktops and servers regularly, and all during that time they haven't replaced their PBX, and may not have even maintained software upgrades.
During that time period, IP-telephony grew.
Open-source IP telephony, specifically the Asterisk-based telephone systems, heighten the problem for all providers of telephone equipment. Now that it has achieved the required QoS, reliability and scalability, and due to the current re-examination of IT budgets, Asterisk-based telephony will also overtake the IP-PBX offerings that are still using the legacy-TDM licensing model (think overpriced Cisco and Avaya).

Are We Killing the Planet With Google Searches?

The Times' article was not only a shameless product-placement for a site that makes money, but also a shot at Google the newspaper-killer.
I long for the time not far in the future when the Times of London, and other 19th-century-legacy news organizations which have completely lost their way, become oxygen-neutral.

The Last Thing the Newspaper Industry Needs

The end of the MSM is to be desired.

Was 'Peak Oil' a Multi-Billion Dollar Hoax?

Jack, a lot of folks agree with you...
peakoildebunked.blogsp.../

Real Estate Industry: Looking For Another Bailout

Crazy? No! What a great idea!
I am going to write to Barney Frank and Chris Dodd, and ask them to please stop counting their political contributions long enough to pass a massive bailout for their good friends.
Barney Frank, while in the midst of this credit crisis, has already killed legislation that would stop 'seller-financed down payment', which is a realtor/builder ponzi-scheme strategy. So even a credit crisis can't keep him from toxic legislation.
But why stop at eliminating the first-time-buyer tax credit/loan? It is a lot of messy paperwork, and when that doesn't work, Barney and Chris will have to fashion another bailout. Rather, Frank and Dodd should just pass a law that it is every American's right to own a big home with Cathedral ceilings, and that the American taxpayer should be fleeced to subsidize this. Home buyers would only have to fill out a short form with the address of the new home and a check box: I Want This House!
How do we pay for this? Taxpayers can just remit their entire gross income, and subsist on the food stamps. The Obama presidency will be glad to have everyone on the dole and dependent on government.
See how easy this is?

From Subprime to Meltdown: Is Peak Oil Responsible?

Some disagree...
peakoildebunked.blogsp.../

From Subprime to Meltdown: Is Peak Oil Responsible?

Some disagree...

peakoildebunked.blogsp.../

Gold Prices Keep Getting Fishier

Check the monthly statement of the U.S. Mint, found here:
www.fms.treas.gov/gold...
This hasn't changed at all - not one line item has changed - since March 2006.
Why would sales be suspended? In order to keep inventory out of individual hands?

Jim Rogers Speaks Out - Where Is He Putting His Money?

Singapore flash GDP estimate confirms that Singapore is officially in a recession. This trade-dependent nation is now loosening monetary policy, in a beggar-thy-neighbor currency move.
Jim Rogers strikes again. The tigers ought to make him move to where he can't hurt anything, like Cambodia. NIMBY!