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Whitehawk

Whitehawk
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  • Chinese Are Likely to Halt Purchases of U.S. Treasury Debt [View article]
    I posted this on the WSJ site as a comment but it may be appropriate here as well:

    ""We have lent a huge amount of money to the U.S., so of course we are concerned about the safety of our assets. I do in fact have some worries," Mr. Wen said in response to a question. He called on the U.S. to "maintain its credibility, honor its commitments and guarantee the safety of Chinese assets.""

    Translation: we reserve the right to reduce our exposure, in fact it is likely we will do so.

    "He said that while China's first priority is to protect its own interests, it will "at the same time also take international financial stability into consideration, because the two are inter-related.""

    Translation: There are other opptys out there other than the U.S. and we will start to consider them in a serious way.

    ""No country can pressure us to appreciate or depreciate" the currency, he said."

    Translation: Don't tread on me.

    Bottom line: I respect China and they have a great oppty to not make the same horrible mistakes that we have over the last 46 years, but to adopt the policies that have worked (like all the pro-growth policies, such as friendly business tax policies).

    Mar 13 11:33 AM | 20 Likes Like |Link to Comment
  • Collapse of 2008 Was Really a Coup D'Etat [View article]
    I suggest the author read "The Creature From Jekyll Island," original ed. written in the mid-90s and updated periodically. This will describe in detail many of the game plays and "self-preservation tactics" that we have seen from the Fed, Treasury and banking cartel, particularly in response to the latest credit crisis (2008). The Fed exists to serve special interests, and to minimize private lending markets. It gambles with our currency and our hard-earned wealth. ZIRP itself has slowed the rebound in the business cycle, equating to a bank tax to prop up zombie banks loaded with non-performing "assets" (liabilities). Large bond holders and naked counterparties lobbied the Fed and Treasury hard to intervene in 2008 - the Bernanke-Geithner-Paulson triad responded and rather than allow the system to clean out the weak we are left with quite a few burdens that will require ongoing sustenance and that have sucked/will suck the life out of new businesses that might have prospered. As Nassim Taleb (author of "Fooled By Randomness") stated in an interview this last week, the Fed's actions have been largely amoral, a massive gamble. When (and how) will it all end ?
    Dec 6 12:11 AM | 16 Likes Like |Link to Comment
  • Who's Blowing This Bubble - And When Will It Pop? [View article]
    Nice article, but on the Wessel recommendation, if you want the true story read the classics, including Friedman's Monetary History 1867-1960 as a basis. Do your own research on recent years and draw your own conclusions. Wessel is a liberal who writes for the WSJ and hasn't contributed anything useful to the debate over the Fed.

    We are in a reflation of a bubble, pure and simple. Trade it if you will, but use lots of hedges. While I trade, I am also a spectator of what will be as entertaining as watching an action flick, only the pain inflicted will be on real people who got caught because of unfortunate circumstance and/or because they have their heads buried in the sand. The only way to change that is education. And the only way to change that........(the problem is horrendously recursive)
    Aug 7 06:14 PM | 15 Likes Like |Link to Comment
  • Government Action: Mission Not Accomplished [View article]
    Peter doesn't make this point enough:

    The Savers and Investors in this country are continually short-shrifted (read: stolen from) by Federal Reserve policies that promote cheap money and a steep yield curve. The Fed needs to be stripped of its control over short-term interest rates. Once that happens, Savers (read: responsible people who understand fiscal discipline) will get a greater return for lending (investing) their money. Investment will be based on Savings, not bubble manias promoted by cheap money and credit.

    (Peter Schiff for President)
    Dec 15 02:36 PM | 14 Likes Like |Link to Comment
  • Helicopter Ben Turns into Ballistic Missile [View article]
    Another long-term tragedy for free market capitalism. (We have capitalism but it ain't free market!)

    I don't have a mortgage (paid it off at the top of the market in 2005) and I didn't invest in toxic assets, but I do have lots of cash. Time to seriously look for some inflation hedges.

    Oh - and I am very serious about this - until I die I will fight for the Fed to be abolished.

    Mar 18 04:04 PM | 14 Likes Like |Link to Comment
  • Warren Buffett in His Own Words: 23 Timeless Quotes on Investing [View article]
    Though I respect Buffett for his investing prowess, one has to realize just how much he has benefited from the bailouts, particularly those that went to prop up WFC, and his investments in the credit rating agencies. His defense of the latter lacked basis. It is hard to believe that he didn't know what was going on during the housing/credit bubble then crisis, and is quite lucky to avoid having his naked picture taken during the 'tides of 2008.'
    Dec 3 02:33 PM | 13 Likes Like |Link to Comment
  • Why A Stock Market Bubble Is Forming Right Now [View article]
    The flight to safety into the US markets has/is already happening, inflating market assets. This is accompanied by relative dollar strengthening. Sound familiar? It should, it happened at the end of the 90s when commodities were much lower in relative price than they are now. We do not have a deflation problem - we have an asset price inflation problem as a result of these flows and of the growth/expected growth in the AMB. Any "deflation" is really dis-inflation. Despite what others claim below, there is absolutely no proof that the QTM-based monetary policies affect dynamics such as employment, with consistent and strong correlation. Corporations that can issue cheap debt are benefiting, but where is that money going? The subprime auto loan markets are certainly heating up. Finally, the real problem is artificially low rates, which are unsustainable. No, I cannot predict when rates will rise and how, but neither can anyone here. What is a possibility is a sharp uncontrolled rise or discontinuity. That will have some very nasty effects given how levered the system is to rates and spreads.
    May 3 05:41 PM | 12 Likes Like |Link to Comment
  • Will the Dollar Remain the World's Reserve Currency? [View article]
    The dollar has serious structural problems that cannot be fixed short-term, and commodity pricing and buying will logically migrate to other currencies as global economies grow at higher rates than the U.S.

    I get negative marks every time I say this, but one possible and likely outcome is that of a currency basket standard, i.e., that the world starts to adopt such a standard in the future.

    I believe the best outcome is a commodity-based standard that maintains relative stability, and like others will push for such a standard, but I am also realistic that it may not happen in my lifetime.

    (For those looking for a few decent reads, see Murray Rothbard's "What has gov't done to our money" at mises.org/books/whatha... and Henry Hazlitt's "The inflation crisis and how to resolve it" at mises.org/books/inflat....)
    Mar 27 10:44 AM | 11 Likes Like |Link to Comment
  • It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors [View article]
    Rational comment on what is likely intended as another sensational puff piece by the author. First she argues for unlimited money printing; now she yells fire! on the depositor money held by banks.

    FDIC/GSE institutional insurance for depositors is far from ideal, but in the larger bank failures over the last few years it has worked. I would rather not have a GSE do this job, preferring an industry consolidated capital buffer fund, but then the issue becomes who will represent a resolution authority when failures do happen (and they will, until the end of time). Of the larger cases in the last three years, Corus Bank and Lydian Private Bank (over $1B in holdings I believe), all depositors were made whole and the resolution process rather smooth. The failures happened predominantly due to commercial loan failures in FL and elsewhere. The problem I had with the process is that one could not easily find a detailed public record of the resolutions/resolution transactions. Ironically, Lydian was sold to a Spanish bank, Banco Sabadell.
    Mar 28 12:43 PM | 10 Likes Like |Link to Comment
  • Goldman's Facebook Coup [View article]
    A great setup for "pump and dump" and investment banking fees. Harvesting this baked turkey indeed. Facebook is the most over-rated entity this side of the tech bubble (keeping in mind that social networking isn't really a technology). Actual revenue and margins?
    Jan 3 04:46 PM | 10 Likes Like |Link to Comment
  • Why This Rally Is Unsustainable [View article]
    Banks are making money off of the yield curve. You fail to mention that. But I agree that accounting tricks have helped their Q1 reports.

    I don't buy arguments that claim program trading and quant funds are responsible for this rally. No one has really proved the recent short squeeze theory to my satisfaction yet. Which means authors writing about this need to strengthen their arguments.

    While fundamentals are poor, the rate of decline has slowed and there is momentum in the market (which is more than program trading and quant funds). I expected the market to sell of before now, but it hasn't. Which indicates to me that the momentum sentiment is strong.

    The author might consider trading some options to hedge his bearish positions!
    May 1 03:50 PM | 10 Likes Like |Link to Comment
  • Don't Watch CNBC [View article]
    "There's also a market for cocaine and hookers!"

    Geez, when did Jon Stewart become such a moralist?! What BS...

    The fact is, we all like the casino, just make it so everyone knows the rules (IMHO).
    Mar 13 11:40 AM | 10 Likes Like |Link to Comment
  • Possible Black Swan Events Developing In China [View article]
    I believe it is being (aptly) called the Bronze Swan.

    Information transparency from China is probably the major issue here. When there are losses, the tendency is to hide them for as long as possible, until they simply cannot be cloaked any further.
    Jun 26 04:06 PM | 9 Likes Like |Link to Comment
  • Big Ben made a big mistake in the way he announced the Fed's plan to end QE yesterday, laments CNBC's Larry Kudlow. When it comes to ending the bond-buying program, the training wheels needed to come off slowly. But, while investors were still pondering exactly when a tapering of the program might begin, Mr. Bernanke laid out a plan to completely end QE in roughly one year or less. The abrupt policy shift immediately has sparked a rout on Wall Street, and it's going to shake up confidence even more, Kudlow says, perhaps even slowing the already anemic recovery. [View news story]
    Central planning doesn't work well, Larry.
    Jun 20 08:28 PM | 9 Likes Like |Link to Comment
  • This Gold Slam Is A Massive Wealth Transfer From Our Pockets To The Banks [View article]
    Naked short == fails to deliver ... a key "failure" in the 2008 crash. SEC claimed there was no problem. So there probably won't be a problem again. Fairly useless waste of taxpayer money, that SEC. The casino exchanges and trading houses make up the rules and anything goes...heads the bailed out win, tails everyone else loses!
    Apr 15 11:15 PM | 9 Likes Like |Link to Comment
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