carey_jim

NBCU Deal: Should Comcast Become a Major Content Provider?

No.
But who listens to me?

3 Experts on How to Invest in Markets Now

The money made in the US stock market since March, 2009 was not "easy money" it was a gambling windfall based on nothing but smoke and mirrors.

On average, financial "experts" don't outperform well-informed Joe Investor. In fact, only 3% of the experts were bullish in March, 2009. But the financial industry doesn't advertise the fact.

I wonder why not?

"Easy money?" Keep dreaming and listening to Merrill Lynch brokers, while the company is still solvent that is.

The Future of Banking

Banks are always on the edge of insolvency by their very nature.
It was the bank panic of 1907 that eventually led to the creation of the Federal Reserve Bank during World War I.
And it was the bank panics of the early 1930's that led to such concepts as bank "insurance."
But everyone knows that if the fire is big enough and the earthquake destroys enough property, the insurance companies and ultimately the governments that stand behind them, will collapse.
The ultimate guarantor of banks is the health and solvency of the underlying economy.
The underlying American economy was a house of cards and still is.
A house of cards can't be insured. It has to be rebuilt.

Fallen Giant, by Ron Shelp: The Uneven History of AIG

Business is still the business of America and the best and brightest among the economically privileged still become businessmen.

The only other serious game in town is science and technology. The less economically favored become scientists and technologists.

The rest become bean counters and bureaucrats.

Success in both science and business depends on the mysterious quality of talent wedded to energy which is sometimes called ambition.

Talent and energy are mostly inborn and to that extent mysterious to those without either or both. All that is needed an opportunity to succeed.

Biographies are all too often filled with rancorous envy, hero worship or simple fantasy and to that extent, useless. Autobiographies or even good, "honest" fiction are usually more useful.

There are many exceptions to the rule, of course, but a book reviewer needs to make us believe that he has just read one of them.

The Economic Recovery That Isn't

America is an advertising culture, something that, oddly enough, most economists don't factor into their equations.
As a people, we are constantly exhorted to buy to the point that we have accepted continuous intrusion into our mental lives of voices that tell us to call, to log in or just to come on down and buy with nothing down and no risk ....

We can flatten our buns, clear up our skin and/or develop superman muscles if we'll just try out the product with complete satisfaction guaranteed, or all of our money will be returned with no obligations or questions.

In the recent historical past we were also constantly exhorted, in the same way, to stop drinking, fornicating and smoking by accepting Jesus Christ as our personal savior

Before that it was the first and second Great Awakening and then, in the late 19th century, the religious fervor that developed around woman's suffrage, the Woman's Christian Temperance Union to end drinking, and the movement to end slavery.

After Americans had their brief fling with consumerism in the 1920's, the stock market plunged and religion and moral exhortation made a comeback during the Roosevelt administration.

After World War II, religion went to bed with Mammon once more and consumerism took off its clothes and once more began to dance its ass off.

Even though all of us are too young to have experienced this "other" America of our grand parents and great grandparents, its red hot coals still smolder underneath the floors on which we are still dancing our asses off.

Crazy as it sounds to most rational Americans, a new religious movement might be in our future exhorting us to Christlike material abstinence.

Economists, and especially those of the Austrian School, are exhorting us, even if their version of hell and brimstone is completely secular, But no one is listening. They also promise heaven on earth again, after a sufficient period of savings purgatory and spending abstinence.

It sounds a lot like the message Aimee Semple McPherson preached in the 1930's. A lot more people listened to her than listened to Joseph Schumpeter.

Maybe another Aimee is in our future.

'End the Fed' Author Ron Paul's NY Victory Lap

"Libertarian" is just a polite word for "anarchist."
Noam Chomsky calls himself a socialist anarchist and is hated by the average man.
Ron Paul calls himself a Republican libertarian (anarchist) and he is loved by Joe Six Pack.

Whatever name you give it, anarchism is about tearing things down and replacing them with the "wisdom" of the mob and its "invisible hand."

The advocates of the (almost always violent) overthrow of everything, are usually the most mild manner people like Ron Paul.

In the video, Ron Paul, accompanied by a mob chanting "End the Fed" is almost drowned out by deafening dubbed over rock music. Ron Paul steps up to a guard at the Federal Reserve Board, carrying a book which advocates destroying the Federal Reserve Bank and says, "Hello, let me introduce myself. I'm Congressman Ron Paul. We're leaving. We just want to get a picture."

Yeah, Sure.

The guard at the Federal Reserve Bank says, "no, problem, no problem. Have a nice one."

Have a nice What?

While he was storming the Kremlin and murdering the Royal family and all of its allies, Lenin said that the Government would finally wither away under communism.

Yeah sure. Have a nice country.

Get Ready for the Next Round of Bailouts

At the present time, the United States seems to me to be like an alcoholic who has just been dried out, again for the fifth or sixth time, after the doctor has warned him that he will die if he doesn't stop drinking.

But habit and the prospect of a long life without alcohol are too much for him and he is back drinking again.

It's an old story in life of people and civilizations.

King Louis XV (or Madame Pompadour) is reported to have said: "Après moi, le déluge," and Marie Antoinette, "Let them eat cake."

Most historians dispute the veracity of both reports but most of us get the idea.

When will the drinking stop?

Battery Investing for Beginners, Part 3

The journey from technological discovery to practical invention is a bumpy one: www.earlyamericanautom...

Very few people got rich buying and holding Ford, Chrysler and GM stock.

They bought Duesenberg, National, Apperson, Jewett .... instead.

Hindsight is golden and "all that glisters is not gold."

Get Ready for the Next Round of Bailouts

I have used the same reasoning from the beginning but I haven't been able to see any inflation fire (proof), only a huge amount of inflation smoke (evidence.)

The only other current inflationary pressure I can see, other than the massive spending and printing of money, is the rise in the stock market and a stirring of the still red hot coals of housing prices.

If stock markets turn deeply negative again, unemployment continues to rise or stay very high, commercial real estate begins falling sharply, housing prices start to fall again and the GDP shrinks or even stays flat then we could have strong deflationary pressure.

Think of it this way: on an island economy with 100 people, if I double the amount of money, ceteris paribus, prices will double. However, if economic activity simultaneously contracts by sixty percent then prices will fall because the velocity and number of economic transactions will more than outweigh the increase in the money supply.

The American consumer is on the ropes and is being pummeled by home foreclosures, credit card default, lack of savings, unemployment and general pessimism.

Advertising pumps consumers into hyperdrive just as caffeine and cocaine do. But once these drugs are withdrawn, a period of less activity follows until normal patterns are reestablished.

Depression and deflation are words that describe both economies and people, for the same basic reasons.

CIT's Failure Could Threaten Financial Sector's Overall Recovery

This market is too crazy for rational analysis. If an atomic bomb dropped in Manhattan the stock market would probably go up, with real estate and finance stocks leading the way. (Think of all that construction.)

On a more sober note, only about 3% of advisers were bullish in March, 2009. Now about 95% are bullish. What does that tell you? Their advice sounds like the screams coming from roller coaster riders to me.

U.S. Recession: More Unemployment, Sinking Dollar

books.google.com/books...


On Sep 29 10:19 PM pater_tenebrarum wrote:

> It absolutely does matter which economic theory one employs. Economic
> laws are not subject to whim, they are laws; either one's economic
> premises are correct, or they are not.
> Among the economic theories J. Carey has enumerated, the Austrian
> school is the only one that offers a rich enough theory of capital
> , money and credit to actually be able to cogently explain what has
> happened (and continues to happen).
> However, the Austrian theory is detrimental to the job prospects
> of economists - since it eschews all forms of intervention and central
> planning, but instead argues that the free market can not possibly
> be improved upon (a premise that is both theoretically and empirically
> sound).
> If economists are not called upon to formulate and implement grandiose
> plans, they naturally feel 'underused'.
> Also, they have found out that as soon as one provides a 'scientific
> fig leaf' for statist intervention as Lord Keynes has done, one immediately
> is showered with tax payer financed grants and jobs, and gets to
> advise the political class.
> It is therefore in the self-interest of most economists to argue
> for interventionism.
> The Federal Reserve employs a veritable horde of economists (i encourage
> everyone to randomly pick a few papers from the Fed's economic research
> department and read them - if afterwards you feel that there are
> apparently many people in the world with nothing of value to do,
> you got the right idea), the main job of whom is to produce nice
> papers completely removed from the real world that serve to absolve
> the Federal Reserve of all responsibility for inflation and the boom/bust
> cycle - in spite of the fact that this institution is the root cause
> of both.
> These people naturally, will always defend the interventionist doctrines
> that keep their jobs secure (it is quite different with other people's
> jobs, as we can see now that the inevitable bust is here).
> As a result, we are showered with economic propaganda while sound
> economic theory ends up roundly ignored in the mainstream.
> Mr. Jackson performs a valuable service by bringing such sound theory
> to a wide readership. Economics is too important a topic to be left
> solely to professional economists.

Are We Poised for Another Great Bull Market?

Charts indicate clearly where we've been but not where we are going. They are useful for keeping clear about what happened and help to prevent us from believing things that aren't true.

However, there are other more fundamental reasons that point to the truth of your conclusion. They are economic, social, political and historical reasons.

One of the funny lessons of history is that Columbus would never have set sail for America without the primitive compass that he took with him; but his compass worked so badly that he sailed hundreds of miles off course and when he finally landed in Cuba he thought he was in Japan. He was looking for a passage to the Orient and so he thought the natives might also be Indians. They've been called Indians ever since.

U.S. Recession: More Unemployment, Sinking Dollar

Whether you see these things from an Austrian, Marxist, Monetarist, Keynesian, neo-Keynesian or Groucho Marxist point of view doesn't really matter because all of these economic theories shine a light on only part of the economic landscape.

There are many theories of what "caused" the Great Depression and the monetarist (Bernanke's partial choice) is only one of them. But the debate rages on and has raged since the G.D. began.

From Wikipedia:

In a speech on Milton Friedman's ninetieth birthday (November 8, 2002), Bernanke said, "Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna [Schwartz, Friedman's coauthor]: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again." Anna Schwartz however is highly critical of Bernanke and wrote an opinion piece on New York Times to advise President Obama against his reappointment to Chair of Federal Reserve. [21] Bernanke focused less on the role of the federal reserve, and more on the role of private banks and financial institutions[22]. Bernanke found that the financial disruptions of 1930-33 reduced the efficiency of the credit allocation process; and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand, identifying an effect he called the financial accelerator. When faced with a mild downturn, banks are likely to significantly cut back lending and other risky ventures. This further hurts the economy, creating a vicious cycle and potentially turning a mild recession into a major depression.[23]

This same Wikipedia article states that Bernanke “was also an All-State saxophonist, playing in the school’s marching band.”

We know that Alan Greenspan played saxophone in a band with Stan Getz.

If anything is clear, to avoid bubbles and recessions we should prevent Jewish saxophone players from becoming head of the Federal Reserve.

Housing Prices: How Much More Downside?

Agreed but habits die slowly. It is said that the shadow of the Buddha remained on the wall of the cave where he meditated, for a thousand years after he died. Let's hope the real estate bubble doesn't last as long ;)


On Sep 29 11:09 AM LilBob wrote:

> I would expect housing prices to eventually fall below the rate of
> inflation. The real problem with the real estate boom was that people
> came to believe that a finished home was worth far more than the
> cost of construction. There was a seperation from reality where
> homebuyers forgot a basic rule of economics: when the attributed
> value of an asset exceeds the production cost of said asset, people
> will rush to produce more of that salable good. We are oversupplied
> with homes and given that many younger Americans no longer have access
> to the same kind of career opportunities that the Baby Boomers had
> we can expect that when the Baby Boomers do start retiring and moving
> to warmer climes or downsizing to smaller properties we will see
> another crash in suburban real estate that will take the index to
> (potentially) well below the rate of inflation.
>
> You can still make money in real estate but only if you take a dollar/sf
> approach and specialize in very small modestly priced properties.

Welcome to the New Normal

The problem of misleading unemployment data (U1-U6) is bad enough but when you try to compare past unemployment rates with present rates it's virtually impossible if unemployment rates were calculated differently during different years. (U6 in 1980 and U3 in 2009 for example.)

Also, a lot of interesting and important data isn't reported (or at least discussed and analyzed) such as wages as a percentage of total income (stocks, bonds, real estate, capital gains, etc.)

And no one seems to be interested in various things such as the percentage of unemployed or employed illegal immigrants.

The problem of exactly WHO is counted as unemployed is rarely reported or discussed either: Prisoners, early retirees, partially handicapped, soldiers, housewives and house husbands, people over 14, 16 or 18 ....

We clearly need better and more consistent data with more variables if we are going to have more success predicting the future.