carey_jim

Bearish on Banks - Why Now Is the Time to Sell

Martin Weiss has just pointed out that Congressional Budget Office itself issued a report that included this information:

1. Last year, banks provided new credit at the annual pace of $472.4 billion in the first quarter and $86.7 billion in the second. This year, they're not providing ANY new credit — they're actually LIQUIDATING loans at the rate of $857.2 billion in the first quarter and $931.3 billion in the second. So if you're running a business, you may want to think twice before asking your bank for more money. Instead, they may decide to TAKE BACK the money they've already loaned you!

2. Ditto for mortgages. Last year, mortgages were being created at the annual clip of $522.5 billion and $124 billion in the first and second quarters, respectively. This year, on a net basis, mortgages haven't been created at all. Quite the contrary, the Fed reports that, on a net basis, they've been liquidated at an annual pace of $39.3 billion in the first quarter and $239.5 billion in the second.

3. The U.S. is deep in debt to the rest of the world, and on page 48, it provides the evidence: total liabilities to foreigners of $7,898,435 million (nearly $7.9 trillion)!

4. This isn't a new record. It was actually slightly more last year. But the fact is NOTHING has been done to reduce our debt to foreigners. Quite the contrary, it is the deliberate policy of our government to pile up more — to sell foreign investors and central banks on the idea that they must continue to lend us money.

www.moneyandmarkets.co...

Wall Street Breakfast: Must-Know News

Unemployment reaches 60 year high in the United States.

The Case for Shorting Bank of America

Patel, you're just one more smart, reasonable guy trying to make sense out of the nonsensical.

I thought BofA should have gone bankrupt a generation ago when its stock got almost as low as it did recently.

But then I came to my senses and realized that Americans would never allow Bank of America go bankrupt simply because of its name. Most Americans think Bank of America is an American national treasure even though you and I know it is a very poorly run private cash generating machine for its top executives and should have been allowed to die a natural death with all those other financial institutions. (Whatever happened to SKF?)

After BofA bought another moribund entity, Merrill Lynch, I thought it was certainly finished .... for about five minutes.

Shorting Bank of America is just one more crap shoot.

Preview from Europe: Stocks Continue to Defy Gravity...and Logic

I wonder if today's rally is the beginning of another whipsaw where shills and professionals are going to start the process of transferring money from the optimists' pockets to their own pockets, after recently transferring it from the pessimists' pockets.

Now that the news has been so much better than absolutely horrible for several months and the optimists have been flushed out into the open and are celebrating their gains, and patting themselves on the back for their great intelligence and foresight, the market manipulators might believe it is time to point the rocket downwards.

But no one manipulates markets or financial news either so the above scenario is impossible.

Un-American Government Intervention

Peter Schiff, broker who specializes in foreign investments:

"The fear of having contracts abrogated or property rights violated when doing so serves some contrived greater good will substantially raise our cost of capital and further reduce our competitiveness."

Friedrich Hayek, from The Road to Surfdom:

Economic security is often represented as an indispensable condition of real liberty. In a sense this is both true and important.

Independence of mind or strength of character is rarely found among those who cannot be confident that they will make their way by their own effort.

But there are two kinds of security:

1) the certainty of a given minimum of sustenance for all and

2) the security of a given standard of life, of the relative position which one person or group enjoys compared with others.

There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health.

Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.

It is planning for security of the second kind which has such an insidious effect on liberty.

It is planning designed to protect individuals or groups against the diminutions of their incomes."

The medical, dental, legal, financial and political professions are all closed shop union based professions.

Well?

Un-American Government Intervention

The South got the Dred Scott decision from the Supreme Court in 1857 and then, three years later the South got the American Civil War.

Rules change.


On Jun 14 09:56 AM ebschor wrote:

> "Without absolute faith that deals will be honored, it will be extremely
> difficult for U.S. companies to borrow money."
>
> We know that for a marketplace, economy, environment, institution,
> etc. to function properly the "rules of the game" must be clearly
> stated at the beginning and those rules cannot be arbitrarily changed
> once the market mechanism is set into motion.
>
> Our current administration is changing the rules of the game as they
> see fit. Just like your statement above, without full faith that
> the rules of the game will be followed and protected "players" will
> no longer want to participate.

Banks Try to Block Regulation, Saying It Will Hamper Innovation

This is normal corporate behavior.

It doesn't look as if the Obama administration has the will or capacity to change it.

Ralph Nader has dedicated his life to the problems of excessive corporate power and its abuses, and has only made minor, if vital and important changes.

Not cynicism talking just political realism.

America: The Land of the Fleece Scam

The sad part about it is that we Americans, from the beginning in 1620, have felt ourselves to be an exception and exempt from the normal rules of history.

John Winthrop, our first founding father, called us a 'City on a Hill' and a beacon of hope for the rest of the world. He thought we had a unique chance to begin again, free from the tyrannies of European kings.

This original hope has developed into what is called American Exceptionalism and it prevents us from seeing that we are subject to the same rules of history and human nature as everyone else.

It is one of the reasons that Americans are ready to believe any snake oil salesman who comes along preaching riches and prosperity for all if we will only purchase his snake oil.

Housing's Big Picture Isn't Pretty

Deflation is the 800 pound gorilla in the room that everyone wants to ignore.

But 1) if real estate values (including commercial real estate) continue to fall if, 2) stock prices resume their fall, if 3) wages (unemployment) continue to shrink and if 4) commodities continue to fall, the 800 gorilla just might stand up and sing Dixie.

Sure the Fed has done everything it can to inflate the economy but sometimes (yes Virginia) GOVERNMENT ACTION IS INEFFECTIVE,

Sorry to yell but sometimes people don't seem to want to face the moment of truth when the puntilla is being raised and the bull is about to die.


On May 24 01:43 PM ThePhoenix wrote:

> Not quite. That is the issue of deflation. It is not only possible
> but quite common that a price of a good falls below the cost to make
> the good.
>
> With manufactured goods it is one of the most common occurances of
> failure... the manufacturer starts to wrap a dollar bill around
> every product they ship. Happens all the time.
>
> I am not sure where you have gotten your 30-50k per lot cost, that
> varies widely by location and I would argue that the current deflation
> in home prices is in direct relation to the price losses in land.
> You are right, the cost to build a house is pretty much what it is.
> If a home has gone down in value from 400k to 200k, that loss is
> in the land. If the house costs you more than 200k to build, any
> builder who builds is dumb, they are wrapping a dollar around each
> product they sell.
>
> The common term used to describe the current housing situation is
> economic obsolescence. Economically it makes no sense to build.
>
>
> Overall, this is a pretty factually written article. I think the
> biggest glaring problem we have is that we are actually borrowing
> 50 cents of every dollar we spend today in our government. Arguably,
> we would have to double all forms of taxes today to be balanced.
> Can we really do that??? If not, how are we going to make it?<br/>

Housing's Big Picture Isn't Pretty

And where is the humor on this site?

(I know, humor and money are like apples and oranges ;)

Housing's Big Picture Isn't Pretty

America is still a land of immigrants.

A least a hundred million Chinese would buy homes in America if the Chinese Yuan rose to parity with the dollar.

Using an Indian term ironically, (Karma) it might be that there is so much negative Karma from stealing America from the Native Americans that Lord Shiva will extract a heavier economic price than we Americans expect by sending their racial cousins, the Chinese, to our shores to wreak revenge by buying up most of our real estate.

If the price of computer chips drops far enough we Americans might end up selling chips and Apples on the corner instead of pencils and apples like we did in the last depression.

ShiShi

Sell in May, Indeed

An interesting fact of capitalism is that it seems to need advertising to exist, just as socialism needs propaganda to exist.

It's never been clear to me why propaganda and advertising are any more effective than using body English to try to make a golf ball go straight, after it's hit, but they both are, obviously.

I think one of the best rules of smart investing is to find the truth underneath the advertising or propaganda and to invest accordingly. One of the biggest temptations is to give up with the truth and follow the crowd.

After all, if you were a Russian living in Soviet Union in 1958, it was a very unwise career move to look behind the propaganda and see the truth of communism. But after three generations of turning a blind eye to the truth, it probably seemed unwise to look at 'the truth' in 1988 also.

Wall Street Breakfast: Must-Know News

Read the biographies of Thomas Edison, Alexander Graham Bell, Henry Ford, Bill Gates, Steve Jobs and others ....
There is no formula.


On May 05 11:32 AM MICHAEL WILEY wrote:

> Please Post and Please send copy to President Obama.
> I'm an entrepreneur from Michigan and a 4-Time Gold Medal Winner
> on Inventions, and I received The First Place Gold Medal for The
> United States Of America at The World Genius Convention in Tokyo
> Japan. I Have some Patents issued on some of these Ideas, and I'm
> working on patents for the rest of them.
>
> #1. A new Invention that will Save Police Officers Lives, We loose
> a Police Officer every 47 hrs. here in the US.
>
> #2 A device that will help Prevent Multiple Vehicle Accidents, <br/>100
> car-200 car, 500 car pileups. This unit will save Lives.
>
> #3. An device that can help Prevent High Speed Police Chases.
> This will Save Lives Every Year.
>
> #4. An Invention that will Help Contain and Control Wild Fires,<br/>Like
> in California, So many people loose their Loved Ones, Homes and
> Property. This will also help save the lives of the Public and The
> Lives of Fire Fighters, This will save Billions of Dollars each year
> from these Tragic Wild Fires. ( This idea should also be addressed
> to Governor Arnold Schwarzenegger)
>
> #5. A new Semi Trailer that will Revolutionize the Trucking Industry.
> This Trailer will save Hundreds of Millions of Dollars
> with the transport company's.
>
> #6. A unit that will Protect Internet users from Internet Fraud and
> Identity Fraud. This will save approximately 10 Billion a year.<br/>
>
> #7. An Invention that will Prevent 95% of all Bank Robberies , <br/>The
> US had over 9000 Bank Robberies last year, that’s over 25 a day.
> We can Help Save Lives , Property, Cash, Reduce Hostage Situations,
> and Police Officers Lives. We can Have this Up &amp; Running with-in
> 6-9 Months
> Several more to list.
>
> I'm Opening a Research &amp; Development Company and I need to find
> a Company or an Investor that wants to share in a 50/50 Split on
> Royalties and income from this Facility.
>
> A market survey last year estimated that they were going to build
> and import approximately 24.5 Million vehicles this year. When we
> met with Officials In Washington DC, They advised us to meet with
> the National Highway Traffic Safety Administration, because all cars
> should have #2. and #3 Safety Devises Listed Above installed on every
> car Build or Sold in the US.
>
> The cost of the Product to be Installed is about $ 52.00.
> We are looking for $100.00 per unit in Royalties.
> Simple Math 24.5 Million Vehicles X $100.00 = 2.45 Billion a Year
> in Royalties. We want to Manufacture as many ideas as Possible here
> in the U.S.A. We know we have to adjust the number of vehicles now
> because of the Economy.
>
> My Question is-
> HOW DO I PROCEED AND MAKE THIS HAPPEND?.
> More Information on globalinventionsolutio...
> Click on Company Overview
> Michael Wiley
> [e-mail]

Why This Rally Is Unsustainable

Many people listen to Cetin, as his all time record negative ratings prove. If they didn't read his posts, they wouldn't rate them.

But when people protest too much about things like pornography and prostitution we often suspect them of being hypocrites and we remember all those preachers on their knees asking forgiveness.

SOMEBODY is buying this rally but not very many are admitting it.

Cetin is in up to his neck and doesn't mind admitting it.

On May 01 08:52 PM Donkey Kong wrote:

> Stop posting because no one is listening to you......

Wall Street Breakfast: Must-Know News

Someday contrary stock market and real estate effects, such as the ones we are witnessing in the present, will be called 'CETIN phenomena', after Cetin Hakimoglu, Seeking Alpha's eternal optimist.

You can't have 25 years of rocket stock and real estate markets without creating a generation of people who think stock markets and real estate markets only make temporary dips before heading for the stratosphere again.

Funds based on the CETIN phenomenon will be called Cetin Titanic Deck Chair Funds or CTDCF's for short.

CTDCF is harder to say than ETF but sexier.