31October

The Fed's Ponzi Scheme Has Run Out

Laying around unemployed, like 7 million Americans.


On Oct 01 09:33 AM sethmcs wrote:
> Gloom and doom can't last forever. It's morning in America. Where
> is Ronald Reagan?

Bank Bailouts - Tell Me Again What the Point Was?

Yes, the government should have done something:

My plan: Sieze the irresponsibly run banks, fire the bozos, and liquidate them (the banks, not the bozos) in open-market sales to responsible, safe banks.
Cost to taxpayers: a million in Fed overtime pay.

Chosen plan: $12 Trillion direct bailout, $250 Trillion in guarantees (and yes, I do understand why that is actually a good idea; but it was totally over-the-top), 50% depreciation of the dollar just to cover debts, eventual refusal of anybody with a brain to buy Treasuries, loss of international trust (ask Geither what Chinese students think of us now), rewarding stupid, risky behavior with the tax dollars of working people + removal of accountability from the executive management who did it, attempting reinstatement of housing speculation, subjecting the Fed to political whims, and creation of more overlapping regulatory offices that still will not understand what they are regulating.
Brilliant! How could this be wrong???

In fact, just standing by and letting it go to blazes would have allowed better, safer banks to buy the good remnants for pennies on the dollar. No toxic assets need to have been absorbed by the working guy; they would have been part of the sale.

But if you think that buying toxic assets is a good idea, then I have a bunch to sell you.


On Jul 28 04:36 PM Ferdinand E. Banks wrote:

> Trane 250 posted the comment that I was going to post. The idea that the government should simply stand by and let the financial sector go to blazes is dumber than stupid.

Bank Bailouts - Tell Me Again What the Point Was?

Re:
On Jul 28 05:40 AM mattm wrote:
> You're a right wing idiot.

Mattm,

Thank your for your illuminating analysis of the fractional banking system and its flow of virtual funds. Your metrics dispelling the constraints regarding debt servicing have clearly eliminated any perceptions of currency risk.

Your comparison of asset-based vs. fiat currencies through history solidly challenges the author's premise.

Thank you for alerting us to the author's deficiencies relative to your obvious genius. Your thoughtful analysis is quite sufficient to be considered for a finance.yahoo message board.

I wish you well on your future position in Congress.

Surprise, Surprise, Surprise: Positive Economic News Everywhere

You can cherry-pick companies that are doing well. Some of those that did well, do not bode well, because they fired and outsourced large numbers of people.

And to include financials as a good sign? All they did was change their books. GS made a short-term profit front-loading daily markets. You can do that with FAZ, so how does that mean that employment is high?

Until employment sees sustained positive growth (and not just drops off the roles)...
Until Treasury debt drops below $250 trillion in unfunded liabilities...
Until Treasury debt drops below $12 trillion...
Until we have a positive current account in trade...
...then the stock market is just blowing bubbles. You can blow bubble gum if you want; I want meat in my belly.

"Meat" means manufacturing jobs, less unionization, less regulation, lower taxation, and FAR LESS government spending. If you think the future is bullish because of the opposite, read the history of Rome and Weimar. Europe, the UK, and the USA are re-runs of the worst episodes of economic decisions.

The fake, paper profits of the finance sector will increase liquidity. Liquidity could boost business financing. Sounds good, but with all that debt, without a trade surplus (and that will never happen), then we run into inflation. So your happy financial numbers climb and climb, while your buying power falls.

But as long as the numbers are a pretty green, who cares about $8 milk?

Market rallies without sustainable fundamentals are like Jonas Brothers: Bubble gum pop.

I know that next week, next month, and next year, that I will look like a fool, and you will be able to throw the long market rally in my face. But the longer the market climbs, the uglier the collapse will be.

A house without a foundation can be built a dozen stories high, but it will collapse.

Good hunting, and good hedging.

8 Charts for Trading Financials

No, Washington, DC is the puppet.

GS is the master.

Disclosure - up 40% on financials just by knowing who was paying Barney Frank's salary. I feel dirty.


On May 10 04:41 PM Erik78 wrote:

> Who know's what puppet master (washington dc) is going to do next..... ...

Stress Test Leaks: Endgame Emerging

On May 05 10:13 AM Freya wrote ...
"... without Obama's stooges tripping over each other to keep socialism alive."

Socialism? This looks more like fascism run by criminals.

Wall Street Breakfast: Must-Know News

When you say "cleansing of top management," are you referring to corporate bank executives or Congressional leadership?

I can't really see a difference, except that Bear Stearns might be less dirty.


On Mar 20 10:45 AM notsosmart wrote:
could anybody do worse than these people? retain them?a wholesale cleansing of top management is needed.fix the problems,then collect a reasonable bonus.

FAS 157: Let the Tweaking Begin

crankyinnyc is CORRECT. The rule was instated for reasons.

And what idiot trusts professional judgement? Bear Stearns CEO James Cayne is a good example of what happens when professionals arre allowed to judge the value of their assets.

With MTM, assets had to be valued based on their intent. We are headed back to saying things are worth whatever they need to be to get my @#^%$ bonus.

The reason the MTM rule is being changed is because the Treasury cannot print money fast enough to support the Fed to support the banks.

Google the "scariest chart ever" to see why banks want to cover ["tweak"] what they have done - as assisted by the Fed, as mandated by Congress.

The Road to Economic Hell

Thank you for reminding us of what rationd health care means.
I spent a few years transporting many chronic patients for care. Had they been in Britian, they would have been cut off after one year. And the care in Europe is like a county health department.

But the point is moot:
Treasury will have bankrupted itself on bad banks before Congress has a chance to implement socialized care.


On Mar 06 04:34 PM PainfullyAware wrote:

....Another disconcerting fact is that when your health becomes an accounting entry to the government you become expendable.

The Road to Economic Hell

Plumstupid,

I too have lived in socialist countries.
71% tax rate, rationed health care, unemployment/welfare, apartments instead of houses (ever hear an addict staggering over your head?), VAT taxes, and rude service from protected workers. As for free education, I was in Paris when doctors (DOCTORS!) rioted for more money - I'm sure taxes went up to accomodate them. Americans get plum stupid sometimes, but normally have to go to work instead of rioting [Detroit being the exception that proves the rule].

If there is any place that shows what a sense of entitlement leads to, go to socialist Europe. I left the USA in disgust - I came back loving freedom and opportunity that did not exist in the countries I toured.

So what if some over-extended Californian spend-addicts lose their 5,000 sq ft houses? Few in Europe or Japan would have ever had a house to begin with.

The American financial/political system (same difference) is unfixable. But a USA plummetting downward still lives better than 99% of the rest of the world.


On Mar 05 11:03 AM plumstupid wrote:
> Patio:
> I've lived in socialist countries. Everyone seemed to be doing quite
> well. Good jobs, nice homes or apartments, good free health care,
> good free education thru PhD if ability and interest was there, clean
> streets, well maintained infrastructure, one month paid vacation
> every year.....
>
> Looked pretty good to me!

Avoid Single Digit Midgets, Consider Gold

Why should the "government" (i.e. your taxes) "fund" (by stealing other people's [your children's money]) ANYTHING?

On Feb 19 03:53 PM yellowhoard wrote:

> Meredith Whitney has it right. The government should fund the strong
> regional banks and let them offer liquidity to American borrowers.

Slow Down Mr. Roubini

@ kelm:
Amen! These boards rip someone a new one every time facts are selected over truthiness.

And, although the author of the piece does not consider it so, I do consider a 40% stake in Citi to be partial nationalization. In fact, the feds are now obligated to throw other people's non-existent money at it to infinity, or be wiped out like any "common" stockholder.

Turning Japanese: The Audacity of Reality (Part 3 of 3)

Regarding GS, the facts that Mr. Quinn showed about their potential insolvency are moot.

Goldman is the safest investment around, because GS owns the United States Treasury.

Turning Japanese: The Audacity of Reality (Part 3 of 3)

Re: BS Detector’s counter claims:

31October wrote: "The FED should not give a flying... care... about politics or job creation. …
BS Detector wrote: Well, that's interesting, but the Fed's duties are:…
- BSD, I simply concede. I should have googled them or stuck with “should.”

BS Detector wrote: Really. Then how do you explain the growth of the U.S. economy since, oh, 1976? GDP has grown more than twice as fast as manufacturing output during that time. (EROP table B-12)
--That one is easy:
1. Tremendously increased per-capita efficiency from mass computerization followed by continual software improvements.
2. Increased, but eventually unsustainable, growth by decoupling the dollar from gold, allowing economic manipulation by the FED and Congress & controlled but unsustainable devaluation against foreign currencies.
3. Implementation of project management methodologies, earned value tracking procedures, and implementation of PMOs and PMP certifications. Combined with JIT inventory, these efficiency improvements in my young lifetime are shocking.
4. The International Organization for Migration said there were 45.1 million legal immigrants plus 12-20 million illegals. Economists seem to agree that the benefits of 1-5 million extra immigrants per year outweigh the costs. Those immigrants contribute to the USA economy. Contrary to belief, they will not steal your job: they already did.
5. Historically low unemployment combined with an explosion in the service industries. Since those are wealth transfer fields, however, the paper numbers do not account for lack of sustainable economic growth.

Your next disputes with my stance actually support me. Tell your grandkids thanks for the stimulus check!

BS Detector wrote: Really? Nothing else?
- Yes, more hyperbole. But the exodus of manufacturing to China goes on, and government spending will not bring it back. Your government wants you to accrue more debt to buy more Chinese goods. President Bush said it, and President Obama is pushing it through.
BS Detector wrote: Where's the analysis that shows the author is correct, end of debate?
- The author has packed more information from decades of history than a dumb guy like me can type fast enough to repeat.
- I am not eloquent, so just read what happened to Rome when they went to a service industry, outsourced manufacturing, then spent & taxed & borrowed. The borrowing and printing of money worked pretty well the same for the Weimar Republic.

31October wrote: "THE AUTHOR IS CORRECT. End of debate."
BS Detector wrote: Which I still find amusing, as if the oracle had spoken.
- Okay, BSD, that was hyperbole. I gave you a plus for at least laughing about it.

Turning Japanese: The Audacity of Reality (Part 3 of 3)

Ugh, I do not have time for a dispute, but I have something to add. The FED should not give a flying... care... about politics or job creation. Its commission is to be a central bank while protecting the currency.

I quit my job as a state government accounting manager in part from rage. I will give you a quote from a high-ranking public state official. She saw my boss leave the auditorium but missed me off to the side.

She turned to the vender and said, "Now that C. is gone, just tell us what you need. Money is no object."

Since we were in the hole, I waited till she dug even deeper before calling her out. It went public, and my boss was damaged politically, NOT the crazy official who wanted to spend other people's non-existent money on frivolous crap!

I was taught Keynesian economics (AB, BS, pMBAf), and the professors were consistently in theory-land. If a student pointed out history such as the Weimar Republic, then the question was simply dimissed for not fitting the model. This BS Detector debate is going the same way.

There is only one thing that can stimulate an economy: Manufacturing. You take slop that has no value and you create value by turning it into a "resource." The resource is converted into a product. The value added is spread among labor during conversion.

The government is "helping" by stealing other people's non-existent money! That theft [sorry, borrowing] means that the wealth of the working people who created all the wealth that office people like me live off have their savings become worthless. Banks produce nothing, and the increased number of dollars dilute existing wealth. Additional government waste [sorry, budget allocations] will not spark activity. The banks will leave it in the FED to collect interest or maintain their debt ratios. If banks did loan anything, it would just go to financiers to create holding corps (I own one) to make products in China.

THE AUTHOR IS CORRECT.

End of debate.