ain't no fortunate son

Why This Rally Will Continue

Bulls make money, bears make money, pigs go to slaughter.

If it were me, I'd be grateful for the free cash the past few months and looking for a fast trip out of Dodge before this "sluggish recovery" turns into a death spiral under the foreclosure tsunami (great numbers in July, eh, and they haven't even really started with the Option Arm and Alt A resets/recasts), CRE meltdown ("extend and pretend" those loans guys while the the tenants in your properties disappear into the night), and unemployment nightmare that is still unfolding (one may wish to consider that continuing claims is less relevant here than claims that have run out - those people who ran out of benefits still exist, capiche?).

Just because you sprinkle a little pixie dust around and click your heels three times, doesn't mean that trees grow endlessly to the skies. Stocks are priced for perfection here... and until the banks clear a couple or three trillion in utter and intentionally mis-priced crap off their books, perfection is a long ways off.

The Coming Economic Collapse, Part 2

My misery index rises every time I come to one of your idiotic revisionist history rants.

Bush gave us 6 years of growth. HOGWASH. He gave us 6 years (and counting) of a stupid, senseless, MASSIVELY EXPENSIVE war (in oh so many ways besides dollar cost), massive budget and trade deficits beyond anything we have ever experienced before (and which we will be paying off for decades to come), a regulatory structure that ignored and by its favoritism of the "corporatocracy" actually contributed mightily to the impending doom we have now experienced in out financial markets, our economy, our personal wealth (as well as the future incomes and wealth of our children, grandchildren, great grandchildren), a collapsed dollar that went from over 1.20 to under .80 during his reign, an absolute and perhaps permanent destruction of the wealth and financial security of the middle class (while his favored few rich friends got stinking rich by the tax breaks he showered on them), massive increases in oil prices, growing, persistent imbedded inflation in food and energy prices, a destruction of the capitalist structure that had supported our economy for two centuries (and the outright adoption of socialism as his nationalization of the financials last year demonstrated).

I won't even get into his administration's maltreatment of U.S. citizens's rights under the Constitution, or the arrogance and hubris he demonstrated to a world which had as recently as 9/12/2001 looked to the U.S. as the beacon of hope, economic might, and freedom for its citizens.

Yeah, 6 years of growth. GIVE ME A BREAK!

On Jun 08 10:08 AM Prudent Man CFA wrote:

> Bush had to deal with 9/11 and Clinton's recession yet gave us six
> years of growth. Whose fault is it they the people over spent and
> over borrowed. Individual responsibility please!
>
> All federal spending programs must be introduced by the House of
> Representative.s (H.S. Civics). If you want to blame anyone for
> the debt we have grown since Coolidge blame Congress and work to
> enact Congressional Term Limits and return the country to its taxpayers.
>
>
> TARP is not a stimulus plan and Obama doubled the stimulus plan that
> HE signed and, being the ultimate lying politicians, said he "inherited",
> like, and maybe this is true, he didn't kno wwhat was going on as
> an absentee Senator. Did Obama ever vote against a spending bill
> as a senator or vetor one as president? Not!
>
> Watch the misery index.

Oh, So Now There Are No Green Shoots?

" ...Letting manic commentary in the media influence your thinking can precipitate panic trading. Think about the last few years from a very big picture. How bad is this really? And how much has changed in the last three months? This has been pretty bad, though not Armageddon..."

It has been damn close to Armageddon if one truly understands that we stood on the precipice last September 18, and again in early October. And many people took monstrous, unnecessary losses by holding onto stocks last year when Cheerleader Central proclaimed there would be no recession, that people were talking themselves into negativity, that the Bush "stimulus" would have the economy roaring out of its temporary weakness by Fall '08.

I still kept the volume on CNBC (most of the time) in those days, it was to me a great contrarianwarning indicator to what I had been seeing develop over the past year in the credit markets, and I remember clearly the Spring '08 comments by shills at CNBC such as Kudlow, Kneal, Bartiromo, Cramer, Burnett and most of their peers who proclaimed that Goldilocks was "alive and well" (She was D.O.A.), that "we are not in recession" (Oh yes we ARE), that "there will be no recession" (Oh yes there WILL), and then looked into the camera and actually scolded their viewers for being negative and bringing on the economic weakness themselves. The Dow was in the upper 12,000's then, rallying off the Bear Sterns weakness, and these cretins were accusing their viewers of being the cause of the problems.

So, many people evidently took a gut check and decided to stick it out after their scolding. And less than 6 months later their equity portfolios were down 50% from the post Bear rally level, and over 60% from the Oct '07 lows. Presently, even with this latest bear market rally, they are still down 41% from the highs and facing rough economic times ahead that could cause further erosion in equity prices.

I keep CNBC on mute 90% of the time now, as Nesto and the rest of the sugarplum fairies rant on about green shoots, and am thankful that my cynicism and open mindedness about what was really happening last year saved my bacon, but many people listened to the pied piper and got their heads handed to them.

And I will go to my grave believing that we were intentionally mislead by a bunch of jerks who knew EXACTLY how bad things were going to get, and sacrificed us to the Street anyway.

The moral of the story, if there is one, is do your own due diligence, be very suspicious and wary of everything the main stream media and particularly the shills at CNBC tell you (as Mike said, they're selling ads, not wisdom), and for God's sake listen to that inner voice when it starts gnawing at you, because on Wall Street if it looks like crap, smells like crap, and tastes like crap, the Street's gonna be having a one day sale on it just for YOU.

The Next Major Financial Crisis

And yet the day after Buffett's morose comments the DJIA rose 170 points, spun up on less than great news, and the band played on, and the buy programs from the JPM and GS trading desks came rolling in, just as they have for nearly 2 months now.

The government's chin deep in the markets via their two proxies who know where all the bodies are buried, because THEY buried them, and until that changes news, good, bad or ugly, won't matter a whit.

This Chart Can Kill Any Bull

Markets can remain rational OR irrational much longer than a "reasonable" person would expect, depending on that so-called reasonable person's perspective and resulting "bets" on market direction and velocity.

There are massive pools of competing capital that can move the markets in either direction, as we have seen quite clearly over the past 18 months, and the rationale behind those movements can not always be easily perceived, subject as it is to the whims and spins and machinations of the largest investors in the world, both government, public and private.

What I CAN perceive, and be rational about, however, is what is happening all around me. And it is not pretty.

Yesterday I ran into a workout friend who was until yesterday an investment advisor to customers at a credit union here in a rural New England area. He lost his job. His wife doesn't work. He has a few young kids. He was (I'm taking an educated guess) making close to $100K. He was distraught, never saw it coming, has no backup plan and said he will most certainly have to put his house up for sale.

Six weeks ago a friend of mine making $200K + as an architect in a Boston architectural firm lost his job, in a firm-wide layoff. No problem, his wife still had HER $125-150K job at another architectural firm in Boston, so they could get by for awhile. She lost HER job two weeks ago.

So I don't know where the market is going anymore than the next jamoke. But I do know that what this "recession" (I will be polite) is doing is continuing to tear the heart and soul and lifeblood out of the middle class American consumer without any sign of letup, green shoots be damned. Those 3 persons alone represented well over $400K in consumer "spending" and one more house about to go on the market that just got sucked out of the system. These weren't $40K/year blue collar jobs, altho there are plenty of them as well no doubt, and I do not wish to demean the losses of any member of our society by suggesting that their pain is any less or greater than another's.

So take your charts and your opinions and your propaganda and your spin machine s and your program trading desks at GS and everything else and throw them out the window. Just look at what's going on around you, and WHO its happening to.

This is an unmitigated disaster of terrible proportions, its tearing the fabric of the American middle class apart, a middle class that has heretofore been the engine that drove all US (and much international) growth for the past century, and we have much more pain ahead before we will see any meaningful recovery.

... and miles to go before I sleep.

Roubini on Unemployment: 'The Worst Is Yet to Come'

Screw jobs... real estate is on a tear!!!!

I live in St Augustine, FL half the year, out at the beach. Its in north FL, about 40 miles south of Jacksonville, so its quite a way from "ground zero" of the housing meltdown which was at least originally in south and central FL.

To reach my bank, I have to drive through a nice middle class residential neighborhood, which is about 1/2 mile long on the part of 16th St that is between A1A Beach Blvd and Florida A1A. Just your typical middle class ranch style homes, mostly fair to well maintained, 25 or 30 years old, maybe 2500 sq ft on average, 1/4 acre lots, middle class working stiffs and retirees mostly, not the small rundown stuff you see out along the beach... in fact, you wouldn't know there was a beach within 100 miles. I used to rent a condo at the beach end of the street, that's how I know the road so well.

So, there are 31 houses on the street. I counted them Saturday. And there were 7 houses with "for sale" signs out front. I'll leave it at that even though I'm sure there were others in trouble, or some bank holding someone's paper isn't ready to foreclose and take the balance sheet hit yet, or the bank owned the place but wasn't selling it now, but we'll say nearly 1 in 4 of the houses on this typical stretch of Main Street USA were for sale. Since its named 16th St., you would be correct to assume that its one of about 20 or so other streets in that part of town, all laid out cookie cutter style, all nearly identical. And on all the other streets out that way I I've been driving around seeing the same thing. The condos are as bad, if not worse.

I'm gonna go out on a limb and state that none of these sellers was doing so in order to trade up for a bigger piece of the American dream.

Yah, housing's stabilizing, just like commercial real estate, foreclosures, unemployment are all stabilizing, they're all just lagging indicators you fools. Yah, we're through the recession and everything is swell, Obama and Bernanke both said so. The fact that they're still desperately looking for ways to stimulate the economy, still trying to bail out the banks because a couple trillion wasn't enough, still planning to keep US interest rates at 0 for a couple more years because everything is humming along so great, still destroying the US dollar in order to turn the US into the world's street corner whore, well, none of that means squat. We have our dollar carry trade and the world's markets are exploding, so everything's fine.

I would submit that hysterically buying stocks, commodities and every other THING on the planet simply because your currency is collapsing is not always a savvy investment. The folks on 16th St. in St Augustine may have a similar opinion on that, altho I don't have the cojones to ask them. Some of them looked a little pissed off as I drove by staring at their dreams for sale.

7 houses for sale (that we know of) on a street of 31 houses, but everything's swell, and even if it weren't, who really gives a damn about the middle class taxpayer anymore, really, because if it means destroying the dollar and what's left of the American middle class to keep the TBTF's safe and sound, so THEIR brand of "state sponsored capitalism" can thrive, then screw Joe Q, his house, his job, his DREAM if he can't step up and be a man and take one for the team.

Falling Dollar: Finally Front-Page News

User 353732 thinks along the same lines as I do, and I would add that we are rapidly reaching a point of no return with regard to the US dollar and the precarious position our complacency, myopic short-term focus on profits, and greed, not to mention arrogance, have delivered us to. Now, with the blessing of Obama and Rasputin (uh, excuse me, I meant Summers) Bernanke does everything in his considerable power to destroy the US dollar, and by so doing destroy our international creditors' investments in our Treasuries and our other massive debts, while he singlehandedly destroys the purchasing power of the middle class and in this very act of destruction ironically sows the seeds for delivering our economic future to the Chinese.

And even more egregiously, through this very same dollar destruction, Bernanke hands tens, perhaps ultimately hundreds of billions of dollars of unholy profits to the US major banking cartel that this administration has thrown its full support behind due to a couple of pocketfuls of gold in the form of campaign contributions by Goldman Sachs and the like.

Make no mistake about it, Bernanke is doing everything he can possibly do to destroy the US dollar and "inflate" us out of the mess his co-conspirators in the banks created, and he's doing it by creating the exact same credit bubble that got us here in the first place. This is nothing short of monstrous, and it is a crime against the American people.

One Big Problem with Private Health Insurance

I concur 100% notsosmart. I was a large account commercial property/casualty underwriter in the 1970's and understood such basic insurance principles as "the law of large numbers", spread of risk, insurable risk, underwriting/pricing risk, the role competition has in the marketplace for fairly pricing risk.

Now its just a whole different animal... these guys can take in your premiums for 8 or 10 years and then just cut you off at the knees when you have a claim.

We used to have actuaries to help us PRICE risk properly. Now they use actuaries to eliminate ALL risk whatsoever... they're all just banks now, and I don't mean that in a nice way.

What They Say / What It Means: New Market Reality Edition

Cetin's been spending his $$ from the ad hits on iamamoron.com to do some pre-school shopping, so by the time he gets home, does his paper route and jerks off it'll be early evening before he logs on.


On Aug 05 04:42 PM Swashbuckler wrote:

> Twenty-seven comments with 99 thumbs up and 0 thumbs down. Tells
> you two things--(1) comment stream is primo, mainly because it is
> hilarious (2) Cetin hasn't shown up yet to throw up on the board

Why GDP Stats Are Still Ugly

"when will we see something approaching balance and honest reporting from the so-called media outlets?"

Never... it goes against their business model. Government, industry, MSM need us spending - they DESPERATELY need us spending - it is the only thing we are any longer good at doing.

We're a "feel good" society of profligate, irresponsible spenders, its our "high". We're the addicts. They're the pushers. We've lived that way, we'll die that way, just like any drunk or junkie in denial.

This is Not a Bull Market: Stocks Are Not Up, and They’re Headed Even Lower

"Who do we listen to?"

Listen to your inner voice. Look around you, talk to the people in your life - your family, your neighbors, your fellow workers (if you are fortunate enough to still have co-workers) - and then decide in your own heart of hearts whether you think things are getting better or not, or whether you or the most important people in your life see things getting better anytime soon.

The financial and political media, the government, the brokers, the banks, the people of power, the spinmeisters all have their own agendas, their talking points, their motivations, their OPINIONS, because they are all incentivized politically, financially and philosophically to convince you that THEIR contrived reality is the correct reality, that THEY know better than you how things in your life really are and will be in the future.

The US dollar index has collapsed from 120 to 80 since 2001 - are YOUR dollars buying more or less food for your family today, who do you know is obtaining jobs today, or losing jobs, going on unemployment, running out of unemployment, starting a business, shutting down a business... who do you know is buying a house, losing a house, trying unsuccessfully to sell a house.. buying a car, building an addition? What is the topic of conversation at the local coffee shop, the gym, the supermarket line? What do your children ask you about at the dinner table - are they happy, well adjusted, optimistic, thriving, or are they acting out, having trouble at school, trouble sleeping, asking you uncomfortable questions that suggest an underlying fear they had never exhibited before?

This financial catastrophe we are all living through is a heinous thing, a fearsome attack on most of the things we as a People have heretofore held to be true and inviolable, it is transforming our malleable national soul, our optimism, our hope for our collective future, but more and more it is also a terribly PERSONAL event that will forever mold our individual consciousness and our outlook on what we expect from our leaders, our economy, our community, and it will affect how we value our family, our friends, the people we interact with every day for the rest of our lives.

There are a hundred articles we can read every day that will gladly overwhelm us with charts and facts and numbers and learned quotes and OPINIONS.

But at the end of the day we must all look inwardly, and in the cold harsh light of reality decide for ourselves what is the right thing to do for our investments, the important people in our lives, and our conscience.


On May 24 09:18 AM beach7 wrote:

> One day I read that Stocks are heading up, the next day I read that
> we are still in a Bear Market. Worse yet, from two separate writers
> of the same Publication, 2 totally different ideas. No matter if
> it is Seeking Alpha or the Wall Street Journal. After listening to
> the Media for the past 30 years, I've come to the conclusion that
> they are right 50% of the time just like all of us. The Political
> Media has an agenda and is seldom right. I have seen that when the
> Financial Media writes Good Positive Stories the Market Goes up.
> When they write negative stories the Market goes down. Who do we
> listen too?

The Fed Backed Itself into a Corner

I believe it is time for the FED to side with the American people now, voluntarily, or it may be forced to, at great pain for the nation, involuntarily.

I agree with the tone of the author's discussion; however, I disagree with one statement he made:

"The last I checked, this was still a democracy."

I'm afraid not, Tim. We were, once upon a time, but our government has been hijacked by the financial elite, the oligarchic big business leaders, their lobbyists who bribe both sides of the congressional aisle to do their bidding, the regulators (SEC, etal) and the "independent FED" (tell that to Jamie Dimon or Lloyd Blankfein and watch them fall over laughing).

99% of the American public are serfs Tim, nothing more. Serfs who are finally waking up to their status and the big LIE that they have been fed by their government for far too long, namely that America is a land of equal opportunity, equal rights, equal hope. In truth, America is a charade.

People will endure great hardship, as has been proven during the times of our "righteous" wars such as WW1 and WW2, if they have hope for better days ahead for themselves, and more especially for their children.

But take away a person's job, their home, their credit sources, their financial anchor to their community, reduce them to a life of constant fear and loss and financial terror, and you take away their hope. And without hope, I would submit that the normal constraints by which civilized societies maintain their "equilibrium" are no longer operable.

Mr. Bernanke, the banksters, the "regulators", the politicians and their keepers seem not to understand this message. YET.

I hope for every American's sake that the oligarchs open up their eyes and ears soon, for there is change in the wind, and "revolution in the air".

Who Thinks This Recession Is Over?

Steve, another well written, well researched article that provides a comprehensive and sobering look at where we stand in this Greatest Recession. I appreciate your work.

I wish I had seen your question last night. I spent the evening at some friends' house here in the ski areas of central Vermont. We ate burgers and watched ultimate fighting (reminds me of the final days of the roman empire in more ways than one). It was fun getting together with them before I head south to rent a condo in north FL to keep my uninsured knees warm and relatively comfortable this winter.

There were 4 of us there. Two were employed, two were unemployed. Of the two "employed", one was a low life stinkin day trader (that would be me) who doesn't work for anybody else who would have voted that we are still in the recession. The other is a nurse with a pretty stable job. Knowing her, I would say she would have voted we are still in recession.

Of the two unemployed, one was an electrician who hadn't worked for 3 or 4 months and doesn't see many prospects until the Spring when hopefully some stimulus money shows up... hopefully. The other was a supervisor for a builder - he got let go last week because his boss had a choice of losing one person with a relatively higher salary, or two guys with lower salaries. This 2nd guy's daughter also got let go from HER job in an unrelated field last week. I think they would have voted that we're still in the recession.

Nevertheless, I should have taken the poll last night just to make it official, but damn, those two unemployed guys are bigger than me, and they are mighty freaking pissed off these days.

Goldman Sachs: Thoughts on the Developing Stolen Trade Secrets Scandal

Zero Hedge has been all over this thing too, and I'd expect more from the Reuters reporter who broke the story originally.

Incredible stupidity for GS to allow the world to know that the code is basically a manipulation machine wired directly into the NYSE computers right in the back rooms of the Exchange, giving them a millisecond advantage to front-run the market. Evidently, the issue is "fairness"... if GS manipulates markets with the "tool", it is FAIR. If others manipulate the markets with GS's tool, it is UNFAIR.

There is a related and important story here as well - Goldman has entered into an unholy alliance with the NYSE to be its SLP (Supplemental Liquidity Provider) - virtually a monopoly the way GS and the NYSE excluded other liquidity providers such as NASDAQ from participating in the program. Not a surprise of course. Its just business, GS style.

Evidently GS liquidity is GOOD, but everybody else's liquidity is BAD.

zerohedge.blogspot.com...

Goldman is the most powerful "publicly owned" financial institution on the planet. That in itself would be OK, since that is supposedly what US capitalism is all about, or at least what it was about at some point in our recent past. But the manner and extent to which Goldman has infiltrated all of the key governmental, regulatory and institutional infrastructure of this country's financial affairs IS NOT OK, and the degree to which it controls this infrastructure invites manipulation, lack of transparency, restriction of liquidity, and it imperils the security of our "free and open" markets. Goldman is joined at the hip to the NYSE in such an incestuous manner that it prevents competition. It owns large pieces of Treasury, the Federal Reserve, and many other critical economic organs of government. It does its damndest to stomp out competition in any market it enters, and it has enough people in places of power to grease the process.

Goldman as it sits today in its position of power and influence, remaining totally beyond the reach of regulation, oversight or common sense, is a danger to free markets everywhere.

Paul Volcker: The Voice in the Wilderness

In the early '80's the United States was coming off a decade long exponential ramp up in inflation caused, among other things, by the huge rise in oil prices (OPEC), and the term stagflation had become firmly embedded in the public psyche. Long term interest rates were in the mid to upper TEEN's, with the prime rate around 16% and higher and the economy was understandably weak.

Paul Volcker was FED chairman, arguably the last strong leader in the FED and a man who ignored political expediency, and he had singlehandedly taken on the battle against inflation and was wringing nearly every drop of it out of the system. It was a grinding, terribly painful process, and those high rates were viewed as HIS high rates, and the pain for anyone needing to finance a business investment, or home, etc. was viewed as pain caused by HIM.

Volcker won his battle, and inflation was beaten down,and interest rates finally started coming down hard, and the U.S. embarked on a solid 20 year economic expansion that saw low inflation, increasing corporate profits, increasing asset prices and a much more economically powerful middle class. And lower rates led to higher capital investment in a booming technology sector that in turn fed even higher growth.

But Volcker won the battle and lost the war, and to this day our corporatocracy remembers the necessary pain he had laid on the landscape back then, and elephants have great memories. So there is still I'm sure a large segment of Washington and Wall Street that would prefer that Mr. Volcker keep himself and his strong views in the background.

You see, he wasn't one to be led around with a ring in his nose.

It seems the corporatocracy in Washington and Wall Street don't like strong leaders in the FED and Treasury... wonder why?