me3tv

Fannie and Freddie: Not Worthless Yet

gebby must have missed the fact that the top leadership of most of the financial structure involved here are supporting Democrats. Frank, Dodd, Pelosi, and even Obama were feeding at the the lobby trough to be sure these institutions had free reign to move worthless mortgages and then package products that allowed them to profit anyway - regardless of the value.
Damaged as they are - F&F need every possible encouragement in a free market to recover. More government interplay just seems to delay the recovery and opens more doors for political corruption.


On Oct 21 12:00 PM gebby wrote:

> republicans and their banker backers targeted
> mortgage business and then destroyed it.

30 Emerging Market ETFs - Risk vs. Reward

So ... as things are now so iffy regarding more immediate upside potential, why not just wait a bit and then sink some teeth into some of these ETFs. IT seems a big drop is due .. though admittedly I have been saying that for a month and the thing keeps going up. I know - as soon as I buy one of these -- that will be when the pin pricks this current bubble.

Tuesday Outlook: Commodities, Global Markets

While the president can be a big factor in the economic direction and policies - I think it is the dynamic between the president and mix of party loyalties in congress that is the prime determinant of policy or economic success. Bush had a weak R margin much of his term (ending with a totally lost margin) and was a poor communicator of the fiscal or social philosophies of his party either to his party or to the opposition. Massive increases in tax revenue because of tax cuts were never credited to Bush as they should have been. Obama (the harbinger of tax increases - who is losing tax revenue to the government at a rapid rate) on the other hand is -- when talking to his base -- a superb communicator --- but only to his base. The uncertainty in the markets seems to reflect lack of trust from the fiscally conservative public who are not comforted by Obama's message and euphoria from those who who see him as "the answer". I think the euphoria is wearing off a little and the recent runup in the markets is on a fragile ledge. I am thinking cash or treasuries is the place to be for a month or more. These charts are a great help.

Tax Shock Will Create a W-Shaped 'Recovery'

For now, the government spending is an inefficient means of pumping dollars into the economy. It was supposed to be the infrastructure but that seems to have fallen by the boards. These jobs and more lax lending for homes was to pump construction jobs and feed the consumer economy. All this is slow in coming because of the inefficiency of collecting and then paying out the revenue under bureaucratic rules. A tax DECREASE would allow (would have allowed) direct investment in the economy and produce an overall tax REVENUE increase that comes with private enterprise and labor turnover of dollars at a more rapid rate. The knowledge of coming tax INCREASES locks up investment in future growth except in specific industries that "might" partake of the government's choice of investments - some of which are too economically unsound to survive without continued government subsidy. The cycle of government support will repeat and repeat - slowing the rate of real recovery as it starves the private sector of investment opportunity.

Has the Housing Market Hit Bottom?

Superb article and thoughtful responses, both of which provide plenty of meat to chew on as I try to bail out of the NE and get repatriated and retired to the SE. Boomers shifting to smaller homes in retirement regions while taking a hit on their last "move up" home in the "corporate regions". My plan? Suck up the loss and go. Alas - the corporate region job loss has thinned out the new "suckers". I tend to think there remains PLENTY of downward pressure on home prices for some time.

Tuesday Outlook: Commodities, Global Markets

I judge when to buy and sell on CNBC by the percentage of white teeth shown per minute of stock discussion. The more smiles (more teeth) the more excited - the more bullish is CNBC and the more cautious our even bearish you should be. Peak teeth is an obvious bear signal. Least teeth cycle -- become bullish.

The Economic Trifecta: Inflation, Devaluation, High Interest

sarge 907 is right. All the economic moves currently in play or planned by the Obama regime run counter to the proposed outcome to benefit the poor. Inflation (a hidden means of taxation across all socioeconomic strata) will devastate those to whom income is being transferred (whatever they gain - they will lose) .

Carbon taxation and many of the "green initiatives" have a deleterious effect on productivity that grows the GDP.(read- job losses for the poor and middle class). Private investment is increasingly punished in favor of taxpayer funded jobs (read- reduced federal revenue from the true base of government funds). Political payback to unions by handing over entire companies while divesting capitial investors (read - strangle the confidence of future investors in any corporation that has a government contract).

So - in the end - these polices are driving the poor and middle class to greater despondence .. and greater dependence on the government which will print more money to solve that issue and the cycle continues. Inflation will soon be endemic.

These kinds of taxes, however, remove the government from primary contact with the "taxpayer" consumer. The average poor and middle class consumer will react to higher prices AS IF they are coming from greedy capitalists who are trying to profiteer off the consumers. And these people will vote for more of the same. The poor will suffer the most. The higher level politically connected people with government contracts will do quite well however. These are the nastiest taxes of all. And they do not even call them taxes.

A Sad Day for Newspapers

Readership of newspapers in the under 60 demographic is shrinking. It is already gone in the under 30 demographic. Advertising impact is not there anymore except for the older demographic. This comes from my own surveys of college classrooms over the past 10 years.

Newspapers should mass mail postcards every day with key story headlines and numbers assigned to topics at the corresponding website which would have the ads there to support it. Each postcard would have one small sponsor area to pay that bill.

Add to that the need for more interactive (like this) features with the writers and readers in a dialogue - and maybe they can survive? Who knows. Magazines are close behind. Television news is 10 years from dead. Strangely the internet has helped to create a nation of ignorant voters - each tied to a narrow beam of thought. It is indeed a new paradigm -- and I am not sure my suggested approach will work either.

The point here is it is not JUST the liberal bias of the large newspapers. It is a demographic shift in news preference and even small town conservative newspapers are flat lining. Weeklies are holding out but probably not for long as newsprint media.

Texas Governor: 5k Credit for Plug-In Hybrids to Mollify 'Overzealous' EPA

Great Policy making! Now lets get some coal fired electric plants built in a hurry to provide the juice to these new electric cars! And while we are at it - let's subsidize half the cost of building a windmill generator for every 10 cars. Now let me see --- where is Gore investing HIS Nobel prize money? Follow the money !! NO NO - let's not build nuclear - somebody might get a dose of radiation equal to a day in the sun at the beach.

Fed Pushes Housing into Stronger Hands

a BANN on building has merit, but the downside is a HUGE explosion in unemployed contractors for that period. The "infrastructure" investment by the feds (taxpayers) is supposed to mitigate the already sucking home builder market. Some homes in some markets will still need to be constructed but the low profit in competition with existing homes will keep the new construction suppressed anyway.

Tuesday Outlook: Commodities, Emerging Markets

I like your charts and analysis. I've been tracking several as indicators overall. EWZ for instance tells me a bit about how Vanguard's emerging market fund might perform - so I chew on that information as I look for an entry point on the Vanguard. Obviously there is a big demand destruction all around. How can China perk up if Chucky is home watching his Plasma Tv that was made in China four months ago? I think your charts are helpful as I try to judge when all the air is out. Sure looks close but my guess is it might have another 10 - 15% to go. Is there a fund or ETF with "Obama" winners - like infrastructure and education?.

The Random Nature of James River Coal

Everything was oversold three days ago. Energy was especially way way oversold. Look at your chart there.. way way under the trend lines. James River was a rocket last summer and took a nosedive with oil and all energy. Obviously they dove way under ...too deep. You were wise to pick it up when you did and probably wise to take the money now. In two years energy will again be a darling but probably erratic for awhile. imho.

Bush's Peculiar Wall Street Speech

Bush bashing is in STILL and will continue at least 4 more years to clear the way for Obama's mistakes. He was not the WORST president (hello Carter) ever and actually had few profound successes given he had a hamstrung Republican thin-majority congress for 6 years followed by 2 years of a super-wealthy-finance-... congress.

The speech was an attempt to boost confidence for investors. Lots of platitudes. Bush has never been a great communicator - perhaps his biggest fault along with his unrelenting staff loyalty (also Nixon's undoing). In most cases when Bush appears to talk in recent times - the market goes DOWN. It is interesting his talk helped it go UP this day.

Free market capitalism took near fatal blow in Sept 2001 because that event turned even die-hard conservative adam-smith worshipers into Keynesian dietary dependents to help resolve the worldwide financial disaster. It opened the gates wider for free money out of Frannie with NO oversight thanks to and even more Keynesian dependent Democrat leadership. The current mess then is merely the final wave of the 2001 attack aftershocks.

Bush - who cannot successfully talk his way out of a paper bag - was an easy target for eight years of Democrat abuse. Any blame due to Democrats was easily deflected to Bush. Now - the very people who refused oversight of their financial domain of Frannies are in charge of the cure. American politics is so funny it should be syndicated.

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

What strikes me as interesting is that the great majority of high finance executives at AIG, FRE and FNM (and other big investment banks) are (were) Democrats and support the bailouts where they benefit other Democrat strongholds (such as unions). I don't know why they are mostly democrats but it must be something to do with the way the money from government is distributed so that it is a benefit to them. Or wait ... wait .. maybe it is because they are ethical and have a social conscious?


On Nov 10 09:14 AM Herbert Hoover wrote:

> Just out of curiosity - How much per hour do the guys at AIG make?
> Oh, I forgot, AIG is a friend of Paulson's, so that's OK.

3 Things America Needs to Do to Get the Economy Back on Track

Hello - Here's one take: Sugar Money followed attacks of 2001 to put a Keynesian cure on a world of a mess in the financial markets. It was a "typical Democrat solution" but it was R's that implemented it. Frankly there was not a choice. Had to be done. When the banks started to get risky based on earlier deregulations and and trading rules going back to the Clinton era. Add to that policy rules that prompted banks to put out high risk loans to people with little ability to pay - as well as to speculators busy flipping the housing market, and voila ! BUBBLE. Warning flags and legislation to dial back the spicket came from the Bush Admin and McCain among others. Dems turned a blind eye. Bubble had no restraints. In reality there are low percentages of actual bad loans but given the "mark to market" accounting - the whole group of assets became tainted. So much of this is the cause of government tinkering but I see little way out except to tinker some more. I think the modified Paulson plan has a good shot at unclogging the credit pipes .. and reviving the economy - though the DOMESTIC markets may not follow so soon since the dollar gets damaged in the process. Oil is certainly a factor here but if our markets begin to respond - more oil and gold money will begin flowing back to the US equity pie.