axelrod608

CIT Group's Bankruptcy Plan: Goodbye Common and Preferred Stock

The feds shout "hurrah, Taxpayers - look how much money we made you" as a handful of megabanks pay back TARP. But they don't specify how much !! Think about it - the few that pay back were charged no more than .025% interest, so the gains to the taxpayers is negligible. The $Billions lost to CIT far outweigh whatever was taken in on TARP repayments.

It's the same version of "accounting" as is being used to make Q3 numbers look so good. Yes, there are a FEW companies with robust business activity. Overall, the true result is NET LOSS for both public and private economic activity.

Making the middle class poorer will not lead to "recovery". And the underlying government policies are gutting the middle class.

Oil: Supply and Demand? Hardly!

>> "Globally, we are awash in oil." << Well, sort of...Other commenters above have noted that major oil fields are depleted and in decline. Others have also noted that new finds are more expensive and challenging to exploit.

>> "The cost of fuel is the corner stone" >> of civilization as we in the Western world know it. And while we are an amazingly adept species at problem solving, we sometimes don't address the right problem. yes we can find and exploit more fossil fuels. For a limited time, because the resources are finite. They will NOT last forever.

We would be wise to put out bucks behind converting to sustainable energy.Our children and their children would be thankful. But our corporate and political leaders ( ??there's a difference ??) seem to prefer to walk on the razor's edge of the supply/demand continuum.

When the dollar index drops into the 40's, where will the money come from to build green energy ??

Wall Street Breakfast: Must-Know News

More "misses" than a beauty pageant on expectations at historically low levels. And "earnings" are more bookeeping maneuvers than income. The risk premium driving this market upward is unbelievable. Unintelligible. Unsustainable.

How Washington's Policymakers Are Damaging the U.S. Economy

So much fuzzy thinking. So little discussion of the root cause. To understand the process the USA is in , one must understand the underlying assumptions for our debilitating policies.

We are run by two ruling parties who would like us to believe that they are different. But at their very core, not one of the current 535 "fools on the hill" - with the possible exception of Ron Paul -or any of this or any previous administration believe that we will EVER have to repay our national debt. The operative assumption is that somehow we can continue to borrow and spend with no need to repay it, EVER. Thus, the underlying assumption of ALL federal policy results in unsustainability.

Worse, the tactics that people believe can be used to "solve" the neverending debt accumulation problem are based on the kind of logic that would get one a failing grade in every Logic class. "We can grow our way out of the problem" - yes, TEMPORARILY. Not forever. Spending more that one's income eventually results in insolvency, bankruptcy.

"We can inflate our way out of it" no, not really. Inflating the currency changes its RELATIVE value - against other currencies. Make the dollar ten times cheaper than other currencies and they will buy us out. They're already doing it. Foreign ownership of productive US assets is ongoing. It will continue to accelerate as our currency fades.

Invalid assumptions result in unsustainable policies. The idea that we can forever spend more than our income by borrowing forever is ludicrous and illogical. What we are left with is a Washington bureaucracy that has only two things it can do - determine how fast and how far down the rabbit hole they will take us.

Wall Street Breakfast: Must-Know News

Get real. The "crackdown" is on GS and other megabank competition. With GS controlling the Fed, the Treasury and all the pResident's advisors, the real insiders will surely get a free ride.

Get real. ZIRP benefits megabanks. And megagovernment. Interest rates are going nowhere as long as GS can use free money for trading and the Gummint can use free money for, well, every stupid thing they can think of.

Pension Apprehension

What you have described here is the chicken. The egg was ZIRP - a federal zero interest rate policy. While ZIRP is manna from heaven to the few giant companies that can receive the free money, it drops the rate of return on every class of return-producing investments. The result has been reduced returns - usually less than taxes and inflation - on a wide variety of investments.

It also has pushed investors out onto the increased risk continuum, especially those nonprofessional investors who don't know or understand the risks. Bernie Madoff's scam was made possible by Alan Greenspan. He pushed us all out onto the risk continuum.

I remember reading 3 - 4 years ago about the "looming pension crisis". Then, Fortune 500 pension plans were underfunded by well over a $Trillion. But the financial assumptions were so insanely rosy that those in power just ASSumed we'd grow our way out of the problem. Duh.

With a jobless recovery well under way, I expect US economy to be very similar to the Japanese economy of the past decade or two. So the ultimate question is, if ZIRP is such a brilliant policy why does it result in ZEGR - zero economic growth rate? And yes, I realize it was extremely effective at inflating the bubble. But now that the bubble has popped, what will ZIRP do ? For a few megacompanies it will provide opportunities for obscenely high earnings. For the middle class, especially retirees, it will suck the life out of every class of retirement vehicle.

Wall Street Breakfast: Must-Know News

It's time to eliminate corporate taxes for manufacturing companies that produce their products in the USA. The economy will not improve until and unless we start making something more tangible than paper financial instruments and dollar bills, and paying Americans for doing the work.

Wall Street Breakfast: Must-Know News

>> ..."big drugmakers announced deals that give them rights to new flu vaccines, increasing their exposure to one of pharma's brightest, but riskiest, segments " >>

How can you call vaccines risky when Congress has already preemptively bailed the drugmakers out ? Big pharma no longer has ANY risk other than losing money if they don't sell. Under current law, any person killed, crippled or made sick by a vaccine can only sue for damages in "vaccine court" and if they win, the TAXPAYERS pay the damages.

Worse, because of shortages this year, vaccine peddlers are "extending" (diluting) vaccines to make them go farther. The adjuvitants used to dilute the vaccines are NOT tested for use in humans. Some of them are known carcinogens.

See Dr. Joseph Mercola's article for complete info at mercola.com.

Add to that the fact that two states have made vaccinations MANDATORY. If you refuse, they can force you into quarantine until the threat is over.

The land of the free and home of the brave is crumbling under massive government overregulation that favors big business over individual rights.

Wall Street Breakfast: Must-Know News

The housing data herein remind me of my favorite "little book" - How to Lie With Statistics. Up the road from me, in Port St. Lucie, FL, sales numbers are up 50%. Whoopee, right ? Wrong. Sales prices are down another 24%. Median sales price is down to a tad over $100,000. You can buy a new, never lived in, 3/2/2 pool home for $100,000 to $125,000 off foreclosure. With the federal first time buyer down payment, you can move in and owe less than $100k. VERY good news for first time home buyers.

Buy if you want to sell a home over $250,000, your chance of finding a buyer is only marginally better than your probability of getting hit by a snowball.

Cherry picking statistics does not lead to valid conclusions. Keep in mind that all reputable reports are documenting the mass of empty homes that are not in foreclosure or on the market - the part of the housing iceberg not visible.

The housing bubble continues to deflate in the areas it was most overblown.

Seven Points to Look For in October

C'mon, people. Put trailing stops on your longs, buy some puts and stay the course.

Taking the cash value out of life insurance only makes sense if you're holding enough cash to settle your estate. And most annuities have substantial penalties for cashing out. It makes little sense to lose money needlessly.

You can ride the upside as long as you buy protection. I don't, but I had a stroke a while back and complexity is difficult for me.

The sky is not falling.

10 Notes on Current Market Risks

Re "insider selling", the assumption is always that they know something that will take the price down. Which may be valid in normal times, but may be way off target today.

Let's face it, just about everybody lost a chunk in the past couple years. And over half of everybody is holding assets that are underwater. Where I live there has been a big increase in garage and yard sales, cars, trucks and motorcycles on the lawn with "for sale" signs. I would assume that some portion of those "insider sales" are nothing more than a way to raise liquidity to cover the effects of what occurred in the greater economy.

These are extraordinary times and the ordinary assumptions may not be valid now.

Wall Street Breakfast: Must-Know News

In reality, unfortunately, the Fed IS independent, a private entity, not part of the government as most folks seem to believe. Which, of course, is the very reason it should not exist at all.

All US money is created by the fed and lent - at interest - to our government and corporations. Nice job, but not one you'll find listed in the Constitution.

There will be no audit of the Fed while the bankers still run this country.

Wall Street Breakfast: Must-Know News

Checks and balances. When a sector of the economy runs amuck, those running the show get to make a choice - do nothing and suffer the consequences or jump in and regulate. In DC, where it is essential to LOOK good (ignore BE good or DO good), you heard every talking head say last year, "We can't do nothing".

So, the consequences aren't bankruptcy. They should have been. No, the consequence is that the fools on the hill (Congress) will tighten regulation. So, for the banking industry, the consequences will be uncle sam in their day-to-day operation. And we all know how competent they are. (Madoff comes to mind)

This is bad for banking, bad for the economy. Worse, the small fraction of bankers that created the mess get off scot free and many are still working on the street.

And there;s NO winners.

I agree with doubleguns - if any company runs itself into the ground let it fail. Use the Constitutional solution - Bankruptcy.

Capacity's Comeback Strongly Indicates Recession's End

Manufacturing is such a small part of the economy these days, it's improvement makes little difference . Not that a little is not good, it is. In the past, these improvements were significant when the manufacturing sector was larger. This measure gets less significant every year as our manufacturing base erodes.

But Cash Is Earning Zero

Timely article and generally great comments. I get a chuckle out of the SA poster that says evry day "this market just keeps going higher, no force on earth can stop it". Last time I checked, EVERY market over time goes up AND down.

Yes, we've had a great run. And it won't continue forever. I see signs of topping out and am over 95% in cash. I can more afford to pass up the last 5 or 10% of gains than I can afford to lose 5 or 10% of capital. I've locked in 20% gains for the year. Last year I was 50% up at mid year and ended up less than 1%. Live and learn.

After last year, my risk tolerance level changed greatly. I'm retired and can't afford to lose capital.