huskerbob

Exclusive: Big Banks' Recent Profitability Due to AIG Scam?

Was this all a scam from the start? Certainly GS and friends weren't dumb enough to think that AIG had enough assets to cover all the protection they were selling, or would be able to honor a fraction of it without going under. So where did they expect the money to come from?

Don't Bet on 'Recovery' Unless You're Willing to Redefine It

"the Obama philosophy of limiting volatility and downside risk for the middle/working class even if it means minimizing upside opportunities for the executive/investing upper class"
Those are empty words. Look at the actions of the administration: you have got it completely backwards.
We are limiting the downside risk for Goldman Sachs and friends, and minimizing upside opportunities for the middle/working class.
Actions speak louder than words.
Cetin, please give us some successful examples of trickle-down economics. It hasn't seemed to work here. The rich accumulate more as the middle class shrinks. We need fewer obstacles to small business, not more goodies for the rich.

The Geithner Plan FAQ

Thanks for selling this idea Brad! The only way this plan won't work is because " we are then in a world in which the only things that have value are bottled water, sewing needles, and ammunition."
Run and tell Geithner quick, so he can hedge with a trillion dollar water, needle, and ammo fund. Taxpayer's can only win!
Thank goodness you are here to set the record straight. I'm glad the government is buying these assets before other savvy buyers snap them up! My only regret is that I can't get in on the action, "Because they stand to make a fortune when markets recover or when the acquired toxic assets are held to maturity".
Some fools are trying to convince people that this is just a way to leave taxpayers holding the bag. Who could be so stupid?

Santelli's Rant: A Watershed Moment?

This episode will hopefully wake up a few more people to the realization that what happens in Washington has little to do with the opinions of the hoi polloi. Washington, like every other government with a central bank and a printing press, is locked on a course and will not be swayed.
It's a little late for us little people to start making a fuss. People are only now waking up to what the ruling class has done, and we're already in the handbasket halfway to hell. To expect the fine public servants we have placed in Washington to come up with a sensible course of action, completely disregards everything that has been happening for the last, say, 20 years! I guess it takes a lot to make Americans upset.
The only course is to try to ride out the storm.

The Curious Problem of Gold and Silver Coins as Legal U.S. Tender

Even though the original case was interesting and highly unusual, and the incredible result was 0 convictions on 160 charges, dealing with a $114 million enterprise, news of the case was carried by exactly 1 newspaper (the local paper) in the entire United States! Complete blackout by all other major news entities.

Don't Bet on 'Recovery' Unless You're Willing to Redefine It

Cetin - your comment shows extreme ignorance. Credit is not wealth! Neither are big screens purchased on credit. The middle class has used credit to maintain a standard of living, and now everyone will pay. Health care is already suffering as well. Building an economy on credit will fail in the long run. We need wealth and savings.

The End of Gold

Ding! I found a better deflation play. Sorry, but the fact that dollar denominated investments are imploding doesn't actually make dollars more valuable. Yes, there is a temporary demand for dollars to settle dollar denominated debts. This drives the dollar up, just as the need for cash spurred equity selling which drove the prices of even sound equities down.
When the dust settles, the dollar's problem remains. Every dollar represents a dollar of debt, and we have to service that debt, from tax revenues or just plain printing money.
What will happen to our tax base during a sustained deflationary period? If you need a clue, look at California.
And don't look now, but we have a few more retirees expecting their welfare, er, social security checks in the mail. Medicare, anyone?
The only way to save the dollar is to pay down debt. If you think that will happen, then yes! Short gold!
But if you think people will become wary of loaning our government money, you may want to go the other way.
America needs the world's savings to keep us afloat, and those savings will not be coming here for much longer.
Maybe you should go back to your barber for some sound financial advice.

Is Marc Faber Right About the U.S. Dollar?

The answer is easy. The Fed has destroyed 96% of the dollar's value. Why would they change their policy now? Their stated goal is to destroy 2% of the dollar's remaining value every year.
Unfortunately, dollar destruction will accelerate to the point where it becomes a regular topic of conversation among the hoi polloi.
Will the world continue to send us their savings?
Will the ruling class do what needs to be done to strengthen the dollar?
No and no, emphatically. The dollar will continue to slide in the coming years, with an occasional gain here and there.

How the Treasury Bubble Will Burst and Why

satur9nine - maybe you spent too much time reading "The Road". Our currency has collapsed 95% since we left the gold standard, yet you still live outside your bunker (I hope). Gold is simply a good store of value for people who are worried about investing in a stock market which seems to be plagued with con men and is distorted by the flailings of our political master's attempts to "do something".
Society won't completely collapse, it will just get more dreary for a while. In the meantime, you can exchange gold and silver for ever-increasing handfulls of paper money.
Get out of the bunker and get some sunshine. Smell the flowers! Things won't be as apocalyptic as you think.

Jim Rogers Believes World Is Heading for Depression

Sigh. It seems to be common sense, yet the amount of comments on this site supporting "quantitative easing" is disheartening. I suppose Mr. Rogers will have more and more listeners as time goes on.

The Toxic Assets Plan - Yes, It's a Subsidy

Lots of excellent articles popping up everywhere, Yves Smith included.
However, more often than "subsidy", words such as "looting", "criminal", and "money-laundering" are being bandied about.
The problem with Mr. Allen's plan above is the assumption that the government cares one whit about saving taxpayers from any undue burden. Why jump through a lot of hoops when Paulson Sachs and friends can just take whatever they want? It's not about saving the taxpayers or main street or even the economy. It's about getting bankers getting paid.
BTW, while members of congress urge AIGer's to commit seppuku, don't ever expect to hear a peep of outrage in the MSM about any bonuses paid at GS, even though they might be the top beneficiary of taxpayer money.

Real Estate: Rentals and Sales Prices Out of Sync

Not a chart to make a realtor happy. The SF Federal Reserve looked at this divergence in 04 and assumed the lines would continue on their seperate and merry ways. They also assumed any correction to this price distortion would come from "slower house price appreciation". Maybe today they would change that to "faster house price depreciation". The NY Fed refused to see any evidence of a house price bubble in this same chart.
There is a compelling reason for the indices to move back into sync, as home prices and rent were affected by largely the same factors and will be again now that it takes more than a social security # to get a mortgage. I was going to write pulse instead of SS# but that probably wasn't required on all loans.

Punishing the Savers in a Savings Poor Country

You need to read the writings of Bernanke and Greenspan. Savers are poor misguided fools who must be prodded by inflation to spend what money they have. If they persist, they must be punished with a negative return on savings, as we have had for several years now (savings interest - inflation),
The Orwellian vision of the Fed: not a boot stomping on a face forever, but a charge card swiped, again and again, for all time.

In a mammoth piece for NY Times Magazine, Paul Krugman wonders how economists got it so wrong.

Hmmm..., I didn't read any mention of Austrian economics in the entire article. Can someone really be a valid scholar while completely ignoring an opposing school of thought which, especially recently, seems to have a lot of valid ideas (as well as success in predicting our current predicament)? Krugman and his diehard Keynesian cohorts come across as economic lysenkoists. They refuse to be discredited by the fact of their failure! To paraphrase the old Communist saw, "Keynesianism is the perfect system, it's just that no one is doing it right".

Thoughts on the Current Restructuring of Global Oil Demand

Wonderful article!
Jasper, the people who are moving up to a Tata are probably much safer than they were on a scooter.
Also, would the safety aspect of the switch to low consumption vehicles factor in lower consumption?
Less weight = less steel = less dependence on oil prices, lower cost of ownership, more discretionary income, more money = longer life.
Poverty is the #1 factor for reduced lifespan.