alajac's Comments

Wall Street: Dumb as It Ever Was

Wed, 11 Nov 2009 17:55:42 -0500

ALL human activity (including "investing") involves speculation. Determining what is a "probabliity" entails ruling out many other "possibilities" (like that "the world might end tomorrow, so why am I saving my money anyway?")

The ongoing Industrial/Cybernetic Revolution is going to keep replacing (world-wide) human labor with automation, increasingly faster than human labor-required tasks can be produced. Thus we need either a revolution in "economic resource distribution" or else there will need to be a lot less people. If you don't help me with the former, the latter will be the result.

Let me know asap: time grows short.

The Intrinsic Value of Nothing, Part 1

Fri, 30 Oct 2009 08:49:36 -0400

Both the Austrian and Hamiltonian systems are based on lies. See my previous post for argumentation.

On Oct 29 12:45 PM RiskAverseAlert wrote:

> Still, sir, I have said this before in this forum and I should say
> it again: the Austrian school is one whose principles best suit a
> fascist social arrangement, whereas a Hamiltonian credit system best
> suits a nation whose foundational principle seeks to form a more
> perfect Union, establish Justice, insure domestic Tranquility, provide
> for the common defence, promote the general Welfare and secure the
> Blessings of Liberty to ourselves and our Posterity.

The Intrinsic Value of Nothing, Part 1

Fri, 30 Oct 2009 08:10:51 -0400

John Lounsbury,
You make a good and very important point, even if you are not arguing it as elegantly as my anal mind requires.

"Intrinsic value" is not the same as "utility value": yes, things like air and food have a UTILITARIAN value for beings with bodies that need such things in order to continue surviving, but that is NOT the same thing as intrinsic value in and of itself regardless of whether humans exist or not (which is what Paco said in the 2nd paragraph of his "Good Theory": "I want you to try to imagine a universe in which no sentient creatures exist. How much would a “car” be worth?").

Which points put the whole problem with Austrian economics (which is also your main point) : it only works in a world where people aren't made of flesh and bone that must be fed and clothed. In our REAL world, whoever is the furthest economically from destitution ALWAYS has the better bargaining position and can ALWAYS hold out for a better deal, and thus there is NEVER an exchange with both parties "willing participants": one is always MORE extorted BY LIFE to strike a bad deal than the other. "The other" is often a corporation, as corporations are actually NON corporeal (kind of a misnomer there), and thus do not need to consume anything but the lives of their employees.

And that is why "Austrian economics" and "physics" should NEVER be mentioned together in the same sentence except to point out that "with one, you can do stuff" (like annihilate innocent Japanese civilians and American POWs in Hiroshima and Nagasaki), and "with the other one, you can't".

That said, try this for size: nobody (especially including "the Austrians") has come up with a commonsense definition of government that is infinitely scaleable, such as

Government: "One or more persons who claim natural resources, are willing and able to defend their claim on those resources, and make and enforce decisions regarding the allocation of those resources."

Per that definition, EVERY government is the "de facto" owner of everything (including EVERYONE) within its domain (governments subsequently create "de jure" ownership in order to get resources into the hands they believe will be most productive and thus most conducive to the government's prosperity and longevity), and thus no government EVER needs to borrow to fund its operations and to facilitate commerce (except for foreign exchange, a topic we will address at a later date); all it needs to do is to "monetize" the wealth it already owns. Our government's creation of "a monopoly over money" and its relinquishment (to the Federal Reserve central bank in 1913) of the creation of money were due to the fact that the banking industry assumed ownership of the U.S. Federal Government after "We, the People" lost the SECOND American Revolution (usually referred to as "Shays' Rebellion") and have used the U.S. Federal Government ever since to enrich themselves at the expense of everyone else (major corporations and media being "virtual subsidiaries" of the banking industry due to their need for financing to fund their operations), mainly by means of loaning us our own money "at interest", a process which has resulted in the transfer of 95% of the value of the 1913 dollar into the pockets of U.S. Treasury bondholders.

Several things need to happen to address the situation in which we currently find ourselves:

1. Take the printing press back from the U.S. central bank (the Fed), and legalize a "free market" in banking and money while removing all of the government support and protections the banks currently enjoy. The new money will be mainly electronic ("e-bucks", credited to a debit account for every economic entity, as needed), with maybe some 1's (with Tom Paine's picture on them) in circulation.

2. Existing Federal Reserve dollars are to be taken in and credited in the new e-bucks and then used to retire the U.S. National Debt. In order to address the wealth disparity that has resulted from the last 200 years of "banking ownership of everyone else", we may want to limit the amount of Fed dollars we credit from any one particular economic entity (like "Goldman Sachs" or "China"); those enties could either hold on to their Fed dollars or else trade them in via their depositors, shareholders, or citizens by distributing their excess Fed dollars in equal amounts to those entities.

3. Implement a version of Tom Paine's "Agrarian Justice" plan (modified to incorporate the above "commonsense definition of government") by sending every legal resident at least $1000 per month as compensation for their government's impairment of their "right to free access to land". (Minus such a right, a "right to life" is nothing but an empty phrase and a free ticket to "the land of wage slavery".) This compensation should and must replace ALL other forms of corporate and personal welfare and subsidies.

4. Head off inflation by charging an "infrastructure maintenance fee" of up to 1% (but probably much less) on every electronic debit transaction (whatever is required to remove as much money as is being added each month). Eliminate ALL income-based federal taxation (and the IRS as well).

On Oct 27 10:58 AM John Lounsbury wrote:

> Paco - - -
>
> Good article, but I have a philosophical bone to pick.
>
> You wrote:
>
> "Nothing in this universe has intrinsic value; every single thing
> you possess, want to possess, use, can use, have used, can offer,
> have offered, or will offer is valuable only if someone else finds
> it valuable."
>
> You have defined value in terms of exchange. I would argue that is
> too narrow a definition. There are things with intrinsic value independent
> of any medium of exchange. Exchange is merely one way, but not the
> only way, to define value.
>
> I maintain that anything necessary for my existence has intrinsic
> value. Air to breathe, water to drink and food to eat have intrinsic
> value. The value has a binary measurement: either I have these things
> and exist or one is missing and I don't exist.
>
> Most economists make their definitions based on commerce. The basics
> of existence don't come into the equation, except for a few fringe
> operatives who play with things like "happiness indexes".
>
> Ultimately, all of the "commercial" definitions of value are secondary
> to the "existence" definition of value. We lose sight of that and
> many externalities result, which repetitively blow apart the best
> of economic theories. Throughout history societies and civilizations
> have failed because of resource exhaustion. They thrived on commerce
> and decayed on the basis of not sufficiently supporting existence.
>
>
> There absolutely are things with a real intrinsic value.
>
> I know this is outside the scope you intended to address, but I just
> had to have my rant.

Yahoo Gains Respect, Credibility as News Outlet

Thu, 29 Oct 2009 11:06:33 -0400

Just another military-industrial-CIA mouthpiece like EVERY other MSM outlet.

Grantham: Overvalued Markets Due for an Adjustment

Thu, 29 Oct 2009 10:51:14 -0400

You're getting ripped off: milk in Detroit is $1.75 a gallon. And the only ones carrying bags around here are living on the street.

On Oct 28 04:29 PM rennert wrote:

> But here is the latest: People in the Malls are carrying shopping
> bags again. Not 3and 4 bags but 1-3bags.Everyone on my street here
> in Florida is working. No houses for sale on my street either. Milk
> going for $8.50 a gallon. Fed needs to raise at least 1%. That will
> not derail the economy. I can not find a handyman or tree trimmer
> they are all too busy, they have work stacked up for weeks. Fed needs
> to raise Now. Silent Inflation is upon us.

The Greatest Depression Is Coming

Wed, 21 Oct 2009 01:00:29 -0400

Tom Paine came up with the only ACTUALLY decent solution (see "Agrarian Justice" on Wiki) in 1797: compensate everyone equally for the government's impairment of their "right to free access to all land" (That's a slight embellishment, but Paine didn't have the last 200 years of wage slavery to look back on - nor debit cards which can be easily used to avoid having to put the onus of government de facto ownership onto the de jure "private" owners: the principle is identical.)

On Oct 17 09:01 AM logicalthought wrote:

> >>The reason we are in a recession is because... people believed
> that their wealth was increasing and loaded up on debt.<<
>
> Yeah, no kidding. Where your comment gets a little scary is when
> you talk about "social phenomenom that increase consumer capital".
> I don't know what kind of "social phenomenom" you're talking about,
> but the only decent long-term solution to "too much debt" is "spend
> less while you pay it off" or "declare bankruptcy". Either choice
> among consumers will solve the problem, and any OTHER choice will
> just create NEW problems. And as for the banks, instead of creating
> Japanese-style zombies (which is exactly what the Wall Street cronies
> in the Treasury department have done to our banking system), we should
> have crammed all of those banks' debtholders down to common, and
> presto: the balance sheets would have been fixed and the banks would
> be able to lend to creditworthy customers. This is what our disgusting
> Treasury department should have done instead of its Band-Aid bailouts.
>

Smart Guys on Wall Street: The Trillin Theory

Wed, 14 Oct 2009 22:09:31 -0400

Old IT proverb:

"To err is human, but,
to REALLY screw things up,
you need a computer."

A Radical Solution for Healthcare: Kill the Hybrid

Wed, 14 Oct 2009 21:36:02 -0400

You can't pretend to even begin to have a free market in healthcare as long as the AMA, et.al. are constraining the supply of healthcare professionals. So, until you DO have things in place to have an actual free market, the only intelligent thing to do is to treat the entire US population as one big group so we can at least get a decent group rate; in other words, de facto single payer. Just because something CAN be quasi-privatized does not mean that it SHOULD be quasi-privatized. They only care about things getting "socialist" when it is their ox that is getting gored: when the Feds are handing out trillions to the rich people that own banks, they call it "unavoidable". I call it "socialist welfare b.s.". See my recent SA comments for a plan that will fix everything.

Expect a Short-Lived Dollar Rebound

Fri, 09 Oct 2009 13:32:29 -0400

Couldn't you just use a limit order?

Recession Is Over; Depression Has Just Begun

Sun, 04 Oct 2009 11:55:51 -0400

Due to the fact that there will never again be enough jobs to use them as the basis for distributing economic resources (thanks to the ongoing Industrial/Cybernetic Revolution), continual and significant (at least $1000/mo) stimulus directly into accounts established for every legal resident is EXACTLY what EVERY government will have to do from now on. And not just 10+ years but for as long as we want to keep the show going.

On Oct 04 11:08 AM bluesky123 wrote:

> "Koo replies: Until the private sector is finished repairing its
> balance sheets, if the government tries to cut its spending, we’re
> going to fall into the same trap Franklin Roosevelt fell into in
> 1937 (a crushing bear market)."
>
> What does it mean "until the private sector is finished repairing
> its balance sheets"? Where is the line in the sand? Bloomberg said
> recently US household debt dropped from 132% of household income
> to 127%. When are we "finished" repairing our balance sheets - when
> US household debt is 100%, 80%, 60%, no debt at all? The answer to
> this question indicates if deleveraging will take years or decades.
> The government can't keep stimulus going for another 10+ years.

Recession Is Over; Depression Has Just Begun

Sun, 04 Oct 2009 10:18:26 -0400

Sweetie Pie, The banks took over this country in 1789 and gave us a virtual monarchy for a government (even though the faces change and the words all spound good, the result is that the govenment - just like a king - can do whatever it likes to and with its subjects: like make them pay taxes or fight in a war they find unjustified, just like a king can do) and a "Constitution" that would only be interpreted by people who had been appointed by bank stooges (that is, by the bank-funded political parties, figureheaded by the President) to say whatever the banks wanted it to say (like "corporations have the same rights as people" and "the commerce clause lets the government regulate EVERYTHING" and "the general welfare clause lets the government do ANYTHING it wants") and above all to get their hands on a monopoly on our money (which finally would be only created by the creation of a loan on which the banks would charge us interest FOREVER), etc.

THE ACTUAL TRUTH IS: governments are the de facto owner of everything within their domain (all other ownership is "de jure": that is, created by the actual owner, the government) and never need to borrow anything to create money (though they may need to get rid of some in order to keep prices somewhat stable).

THE ACTUAL TRUTH IS: the jobs have been being destroyed for the last 200 years by the destructive technology of the Industrial Revolution, and the Cybernetic Revolution has just about ended the need for amounts of human labor large enough to use "jobs" as the basis of economic resource distribution. The Greatest Depression will continue until a new scheme is implemented (or until the swine/bird/human flu the bastards glommed together in their labs wipes outr enough of the population to get wages up to where the real disease can be hidden again).

THE ACTUAL TRUTH IS: that the real disease is that governments create private property and take away everyone's right to free access to the land without paying compensation for that impairment, a malady that Tom Paine diagnosed in 1797 (see "Agrarian Justice" on Wiki). Today we have the technology to easily pay everyone such compensation and, by so doing, complete the Revolution started in 1776, and end the Greatest Depression at the same time. Until such a plan is implemented, the direction is down.

See my other comments on SA or the profile page of "alan jacquemotte" on classmates.com for details.

On Oct 03 01:27 PM ebworthen wrote:

> Excellent analysis and article - thank you.
>
> It is ironic how we now seem dependent upon government debt spending
> to prevent complete collapse; since the government has indebted future
> generations to address the abuses of private entities and individuals.
> Ouroboros - the snake eating it's own tail.
>
> The pendulum has swung from socialism of the new deal and new society,
> to immoral capitalism of 30-1 leverage on the backs of responsible
> citizens.
>
> Both of these ends of the pendulum have depended upon punishing the
> responsible, either via overtaxation or utilizing the capital of
> individuals for privitized gains and socialized losses - or both.
>
>
> In the past 100 years we have moved from an agrarian society of savers
> to a consumption society of debtors.
>
> At the same time our retirement model from one of land, savings,
> and pensions to one of no land, no savings, bankrupt or exorbitant
> pensions and 401K's subject to the cream skimming and manipulations
> and whims of financial oligarchs and politicians.
>
> On a societal level, in the U.S. and golbally, it will be very difficult
> for us to navigate the immorality of our market and economic conditions
> without armed conflict on a large scale.
>
> The saddest realization from your article is that neither political
> side has gotten it right, and that both have addressed problems with
> solutions that are immoral and unethical band-aids that punish the
> responible and reward the irresponsible for the sake of expediency.

Recession Is Over; Depression Has Just Begun

Sun, 04 Oct 2009 09:25:54 -0400

Since drops work through quicker than rallies, I think your time frame on the nightside is too drawn out.

I have plan that will "get us through the night" as soon as it is implemented. See my other comments or the profile page of "alan jacquemotte" on classmates.com for details..

On Oct 02 02:09 PM Michael Clark wrote:

> You are right, Donald. The global beast will be turning up its roaring
> quite a few notches at this point. In my system of describing this
> phenomena, the point of absolute expansion was 2001. This is where
> contraction BEGAN. It was High Noon, when the world system reached
> its moment of perfection...and popped. The Spirit of Deflation (if
> I can speak of it this way) was tiny, a little seed, overwhelmed
> by the Spirit of Inflation. But from this point Deflation began to
> grow and Inflation began to get weaker. Greenspan-Bernanke represent
> this Spirit of Inflation....but they have been losing strength ever
> since.
>
> Noon is 2001. Dusk is 2010. At Dusk the Spirit of Inflation and the
> Spirit of Deflation will be at equal strength (as the light and the
> shadow are of equal strength at Dusk, the days and nights are of
> equal strength, the Night is rising, the Light is falling)....but
> 2010 indicates the triumph of the Spirit of Deflation. The Darkness
> rises and is in power and will remain in power from 2010 through
> 2028, until the Dawn returns. But the real power of Deflation will
> run from 2010 to 2019. 2019 will be the apex of the Forces of Deflation
> in the same way that 2001 was the apex of the Forces of Expansion.
> The Spirit of Inflation will appear as a seed in 2019 and will begin
> climbing the mountain again, weak at first, but gaining strength
> until 2028, when the Dawn will return, and the future will again
> become light and hopeful.
>
> Spring is the Golden Age, during which time everything seems to work.
>
>
> The credit expansion (1983-2001; 2019-2038) represents a 'filling
> up'; the debt contraction (1965-1983; 2001-2019) represents an 'emptying
> out'.
>
> The darkest period will be 2010-2019.

Recession Is Over; Depression Has Just Begun

Sun, 04 Oct 2009 09:19:56 -0400

Why Gold, If Deflation Is the Threat?

Sun, 04 Oct 2009 08:43:01 -0400

"THINK OF WHAT YOU'RE SAYING,
YOU CAN GET IT WRONG
AND STILL YOU THINK THAT IT'S ALRIGHT..."

The move in gold has been entirely due to dollar weakness, in euros gold has done squat. In a deflationary period (note: in the Detroit area we are getting bigtime deflation in grocery prices, but then we actually have grocery store competition in this region), the value of the dollar will go up, hence, gold will go down. Period. At some point the trends will reverse, but gold could be a lot lower by that time and never get back to these gold prices. In any event, I would not buy gold (or miners) until it at least is making new all-time highs (or is selling for less than $400/oz).

In 2006 I was sending out warnings which compared the current Nasdaq to the Dow of the later 1930's, now I see that analysis all over the place. Upon further cogitation, I have concluded that the 1938 comparison only goes so far (even though the percentage changes of the drop and the snapback rally have been almost identical to the Dow of 1938): the rest of the story is that the market is ALSO going to act like the market of 1930, where the snapback rally was followed by a drop of another 80% from the new "lower high"; the analogy I've been using is that of a rollercoaster, where after the first dip the cars get towed up a big hill to the top of the REALLY BIG DROP!

Now the real fun begins.

Is It Time to Recognize Reality?

Wed, 30 Sep 2009 19:44:11 -0400

While I agree that massive unemployment will be the iceberg that takes this ship down, I believe that instead of a bunch of new rights that government can pretend to maintain while it actually continues to serve the banking industry, what is required is an institution of equal-dollar compensation payments (of at least $1000/month paid in new U.S. non-debt money that must replace the Federal Reserve dollars) to every legal resident; thereafter, housing, healthcare, etc. can be taken care of out-of-pocket.

On Sep 29 12:36 PM John Ryskamp wrote:

> It's the same old analysis, over and over again. What new is there
> to be said? One thing:
>
> He rants about the political system failing to change and continuing
> to turn a blind eye. Why is this happening? Simple. The underemployment
> rate among the politically relevant population--those with a Bachelor's
> degree or higher--is only 10%. These are the people who matter politically,
> and frankly, it isn't that bad for them yet. Just ask them.
>
> Yeah, they're not happy with their stock portfolios or the decline
> in the value of their houses--or a lot of other things. But as long
> as the job is there, the house is there, and the TV is there, you
> will not see THEM get politically active and move for any kind of
> change.
>
> Maybe it's too bad, but then, maybe it won't happen either. Unemployment
> in this class never reached a level high enough during the Depression
> to produce any important policy change--and the country was STILL
> in the depression when the war began.
>
> So if this guy wants to see change, all he has to do is sit around
> and wait until underemployment among the educated class reachs 40%.
> NOTHING will happen at 39.99999999999%.
>
> 40%.
>
> By the way, we are moving from the West Coast Hotel v. Parrish "scrutiny"
> regime--which allowed this catastrophe by denying individually enforceable
> rights and gave the political system nearly all power over the facts
> (blame people themselves for this)--and toward the "maintenance"
> regime I discuss in my book The Eminent Domain Revolt.
>
> You will never see economic activity increase again--NEVER--until
> the scrutiny regime is booted out of power, the maintenance regime
> is put in power, and the New Bill of Rights is enforced.
>
> Enforce it or starve. It's up to you clowns.

Ten Reasons for an Imminent Stock Market Crash

Wed, 30 Sep 2009 18:41:43 -0400

A Black Swan doesn't have to be something you didn't know about: it can be something you are vaguely aware of but to which you are not attaching enough signifigance. To wit, the obsolescence of the need for human labor by the ongoing Cybernetic/Industrial Revolution. The job pool is shrinking like a pond of water in the savannah during the dry season; the animals will soon turn on each other unless we come up with a new way to distribute economic resources. Tom Paine suggested compensating everyone equally for the impairment of their right to free access to all land; sounds good to me (if the bailout money given to the banks had first gone in the form of equal-dollar distributions to every legal U.S. resident, it would have been many years before we would be having this conversation), and there really is no other GOOD choice. What Paine missed was that governments are the de facto owners of all the people and property and wealth within their domain (as long as it IS their domain), establishing de jure ownership as suits their liking, and that the compensation should come from the government rather than from the de jure owners as he suggested. He also missed that governments, being owners of all, never need to borrow anything to meet their obligations; the only reason they borrow is to funnel money into the pockets of those they serve, in the U.S. case (since the counter-revolution of 1789), that is obviously the banking industry; as recent events have exposed, the U.S. Federal government is "of, by , and for the banks". The only way we can get the government to serve OUR needs (and become, for the first time, a government "of , by, and for The People") is to take over the House of Representatives with candidates pledged to replace the Fed dollar with our own money and to institute equi-dollar compensation to every legal resident.

Read more on the classmates dot com profile page of "alan jacquemotte". also on "alajac" on the u4prez dot com website.

Obama's Financial Reform - A Distraction from the Real Issues

Wed, 16 Sep 2009 17:34:13 -0400

The worse this gets, the better my plan looks.

The "Gordian Knot" Solution:

It's a take-off on Tom Paine's "Agrarian Justice", and you can find a more detailed outline of the plan on the "alan jacquemotte" profile page on classmates.com, as well as - under "alajac" - on u4prez.com and among my other comments here on seekingalpha.com.

HOW TO FIX THE ECONOMY (abridged version):

First, a commonsense definition of "government":
Government: "One or more persons who claim natural resources, are willing and able to defend their claim on those resources, and make and enforce decisions regarding the allocation of those resources."

1. Every government is the "de facto" owner of everything (including EVERYONE) within its domain; governments create "de jure" ownership in order to get resources into the hands they believe will be most productive and thus most conducive to the government's prosperity and longevity. Ever since the invention of the guillotine, government administrators have stopped claiming ownership of everyone and everything within the government's domain, but continue to act as if the ownership is a fact concerning which, like "Santa's secret identity", every mature adult is (or certainly should be) aware.

2. Regardless of who administers a government, the actual government (and, consequently, the actual owners of everything within the government's domain) is whomever the administrators SERVE (in the current instance, "a bunch of rich guys that own a bunch of banks and stuff").

3. In order to obtain ownership of the government (and thus, of ourselves) we need to get the government to serve our needs, first and foremost. And the first thing we will need to do towards that end (after we have taken over the administration of the government) is to replace Federal Reserve money with our own, backed by all the wealth within the government's domain (of which the government is the de facto owner).

4. Our first and pretty much only need (once the inequities created by the bankster regime are redressed) is for suitable compensation for government's impairment of everyone's right to free access to all land (see Paine's "Agrarian Justice" plan for cogent argumentation). All other forms of corporate and personal welfare and subsidies and free market interference need to be ended or phased out. No FDA or other corporate protection schemes, no Minimum Wage laws, etc.

[Before the "Cybernetic Revolution" began destroying most of the rest of the need for human labor that the Industrial Revolution missed, the "job system" of economic resource distribution (along with some Lockian BS) was adequate to mask the inequity of governments taking away everyone's right to free access to all land (an impairment that ALWAYS puts the capital-poorer at a bargaining disadvantage: due to the physical needs of human bodies, whoever has more capital is always further from homelessness and starvation, and thus always has a bargaining advantage over someone closer to homelessness or starvation who MUST, at some point, accept inadequate wages or else lose their home or starve to death), but now, like a runner who had a bad heart all along that didn't stop him until the final mile of the marathon, we find ourselves the possessors of a "bad economic resource distribution system". If we replace that inadequate economic resource distribution system with one that pumps out the same amount of economic resource "blood" to every "cell" (legal resident) and then lets those cells work and save or slack and waste as they will (in other words "pursue happiness" in whatever way they choose), we can create a totally stable economic system with no more "booms and busts", much less poverty and crime, no more "homeless vets", MUCH less excuse for government in general, etc.. The plan suggests impairment compensation of at least $1000 per month per legal resident (compensation for minors to be placed "in trust"); since everyone gets the same compensation there is no "redistribution" involved. Just to make sure we are clear: people will be free to work as hard as they like and make as much money as they like and spend it any way they like.]

5. All federal income-based taxation is to be replaced (ending the IRS's reign of terror) by a small, flat "infrastructure maintenance fee" on all electronic debit transactions, whatever is necessary (certainly less than one percent) to keep prices stable (keeping gold at a fixed price could be used as a measure). If you take out of a system (in a given time period) as much as you put in, there can be no inflation. The "infrastructure maintenance fee" (being charged as funds are spent) is directly related to "benefits already received", unlike the highly regressive federal income tax which charges kids just out of school a greater percentage of their accumulated wealth than many of the seriously rich and certainly all of the biggest corporations.

6. There should be one set of laws that applies to everyone equally: everybody gets the same, everybody pays the same, no special treatment for anyone.

Economic Donkeys

Wed, 16 Sep 2009 12:23:11 -0400

"Regulation" is how the spider gets the fly to sit down and get comfortable. The problem is the system rewards greed, avarice, and short-term risk-taking. If EVERY stock market transaction had a half-percent "infrastructure maintenance fee" automatically deducted (like the old brokerage fees were) in place of capital gains taxation, how many nano-second long trades would be put on?

HOW TO FIX THE ECONOMY (abridged version):

First, a commonsense definition of "government":
Government: "One or more persons who claim natural resources, are willing and able to defend their claim on those resources, and make and enforce decisions regarding the allocation of those resources."

1. Every government is the "de facto" owner of everything (including EVERYONE) within its domain; governments create "de jure" ownership in order to get resources into the hands they believe will be most productive and thus most conducive to the government's prosperity and longevity. Ever since the invention of the guillotine, government administrators have stopped claiming ownership of everyone and everything within the government's domain, but continue to act as if the ownership is a fact concerning which, like "Santa's secret identity", every mature adult is (or certainly should be) aware.

2. Regardless of who administers a government, the actual government (and, consequently, the actual owners of everything within the government's domain) is whomever the administrators SERVE (in the current instance, "a bunch of rich guys that own a bunch of banks and stuff").

3. In order to obtain ownership of the government (and thus, of ourselves) we need to get the government to serve our needs, first and foremost. And the first thing we will need to do towards that end (after we have taken over the administration of the government) is to replace Federal Reserve money with our own, backed by all the wealth within the government's domain (of which the government is the de facto owner).

4. Our first and pretty much only need (once the inequities created by the bankster regime are redressed) is for suitable compensation for government's impairment of everyone's right to free access to all land (see Paine's "Agrarian Justice" plan for cogent argumentation). All other forms of corporate and personal welfare and subsidies and free market interference need to be ended or phased out. No FDA or other corporate protection schemes, no Minimum Wage laws, etc.

[Before the "Cybernetic Revolution" began destroying most of the rest of the need for human labor that the Industrial Revolution missed, the "job system" of economic resource distribution (along with some Lockian BS) was adequate to mask the inequity of governments taking away everyone's right to free access to all land (an impairment that ALWAYS puts the capital-poorer at a bargaining disadvantage: due to the physical needs of human bodies, whoever has more capital is always further from homelessness and starvation, and thus always has a bargaining advantage over someone closer to homelessness or starvation who MUST, at some point, accept inadequate wages or else lose their home or starve to death), but now, like a runner who had a bad heart all along that didn't stop him until the final mile of the marathon, we find ourselves the possessors of a "bad economic resource distribution system". If we replace that inadequate economic resource distribution system with one that pumps out the same amount of economic resource "blood" to every "cell" (legal resident) and then lets those cells work and save or slack and waste as they will (in other words "pursue happiness" in whatever way they choose), we can create a totally stable economic system with no more "booms and busts", much less poverty and crime, no more "homeless vets", MUCH less excuse for government in general, etc.. The plan suggests impairment compensation of at least $1000 per month per legal resident (compensation for minors to be placed "in trust"); since everyone gets the same compensation there is no "redistribution" involved. Just to make sure we are clear: people will be free to work as hard as they like and make as much money as they like and spend it any way they like.]

5. All federal income-based taxation is to be replaced (ending the IRS's reign of terror) by a small, flat "infrastructure maintenance fee" on all electronic debit transactions, whatever is necessary (certainly less than one percent) to keep prices stable (keeping gold at a fixed price could be used as a measure). If you take out of a system (in a given time period) as much as you put in, there can be no inflation. The "infrastructure maintenance fee" (being charged as funds are spent) is directly related to "benefits already received", unlike the highly regressive federal income tax which charges kids just out of school a greater percentage of their accumulated wealth than many of the seriously rich and certainly all of the biggest corporations.

6. There should be one set of laws that applies to everyone equally: everybody gets the same, everybody pays the same, no special treatment for anyone.

Jobless Recovery Can Be Avoided

Tue, 15 Sep 2009 10:49:05 -0400

I don't understand why so many smart people can't see the forest for the trees. The jobs are going away permanently because a destructive technology is devouring them. You can either fight other countries for the scraps or you can figure out that the current economic resource distribution system has actually been broken for hundreds of years and that we now have the technology in place to replace it with something sustainable and fair.

Whoever owns the money owns the government and that is not "We, the People" since at least 1913. If we take back ownership of the money and the government, and start putting all new money into circulation via equal-dollar distributions to every legal resident, the coming Depression will be forestalled for many years.

If we ALSO compensate everyone (at least $1000/month) for the government's impairment of their right to free access to all land (similar to Tom Paine's suggestion in his "Agrarian Justice" plan), replace all income-based taxation with a small, flat "infrastructure maintenance fee" on all electronic debit transactions, and get government to get it's nose out of everything else it currently has its nose in (ending or phasing out ANY AND ALL other corporate and personal subsidies and regulation), we will start the next 200 year upswing (with no more manic booms and busts), reduce poverty, crime and market speculation, creating a totally stable economic regime based on liberty and personal responsibility.

Monoline Mania: MBIA and Ambac Included in the Dash to Trash

Fri, 28 Aug 2009 15:02:21 -0400

Hope you sold the open, Tom (though by option exp I think we'll be higher). I think we are (next) going to work down for a retest of some moving averages and then get one last big rally starting September option expirations week, pretty much just like in 1938. That should pretty much be "it" for the major upside for the next few years.

What Can Stop This Market Rally?

Fri, 28 Aug 2009 14:24:22 -0400

Oh, and the debt that went to special interests? That's called "odious" (look it up on Wiki) and it will be owed by the regime that loaned it out and the special interests to whom it went; it will not be owed by us. Well, at least not if I'M President.

What Can Stop This Market Rally?

Fri, 28 Aug 2009 14:16:19 -0400

Kids, this recovery still looks EXACTLY like the one that occurred in 1938. Wake me up when something new happens.

Economic History Doesn't Always Repeat Itself, But Sometimes It Rhymes

Tue, 25 Aug 2009 07:32:16 -0400

If a caged canary in your mineshaft keels over do you say "It doesn't matter"? I would say it matters a great deal.

Regarding Kahn's comment that "a traditional measuring of a target for a completed double top would yield a negative number", if he knew ANYTHING about what he's talking about (technical analysis, in this case), he'd know to use LOGARITHMIC SCALING and that the result of that would be a target a little below 400. (That's not MY target, just what the "completed double top" TA would seem to indicate. My target would be a lot closer to the negative he says is impossible. The reason I believe that to be the case is that we are not yet treating the actual disease (which would be the ongoing Cybernetic/Industrial Revolution - destroying the need for human labor in most industries - running into our archaic economic resource distribution system) and we won't even START to get actaully better until (as on the TV show "House") the actual cause of the symptoms is discovered and agreed upon and effectively treated. We are WAY not even close to that point yet.

ps. I called the crash on 6-3-2008, and the tops on oil and gold on 7-24-08; documentation available. See my other comments for the correct diagnosis and the cure.

On Mar 04 07:34 AM basehitz wrote:

> Barron's Michael Kahn in his article "Of Mice and Bears" offered
> this comment:
>
> "Much has been said about a potential double top in the S&P 500
> using the March 2000 and October 2007 peaks. A double top is a pattern
> with twin peaks and a discernable low in between. Technical theory
> says that a move below that interim low -- the 2002 low, in this
> case -- completes the pattern and confirms a change in trend from
> bull to bear. With the index now below the 2002 low, a very long-term
> trend has officially changed for the worse.
> Let's assume for a moment that this is true. Traditional measuring
> techniques tell us to measure the distance between the low and the
> twin highs and then project that down from the breakdown point. In
> this case, the result would be a negative number. Obviously, that
> is impossible."
>
> His concluding remarks are:
> "If our assumptions about the market are no longer valid then we
> cannot craft a strategy until we find some new assumptions. We certainly
> cannot take action on the basis of a single price level being violated
> or a chart pattern forming.
> There is no shame in simply sitting it out and preserving capital
> until such time as normalcy, whatever that is, returns."
>
> I respect Louise Yamada's analysis, as well as Michael Kahn and Carter
> Worth, who last night (same show) maintained his view for a bottoming
> process.
>
> I am taking a cautious approach. My largest holdings are in energy
> and cash, but have started to add stocks. So far, WFT CSCO FWLT and
> ENER. Looking at historical valuations and exceptional balance sheets,
> it seems risk/reward heavily favors going long here with the caveat
> therre could be some really volatile periods ahead. I am hoping Obama
> and company get this right though I have concerns on some policy
> details as to unintended consequences (like WFT moving off shore
> because of expected tax policy changes). And he and Bernanke have
> made it clear they do whatever it takes to right the ship, mostly
> by printing money. Why investors keep buying Treasuries and the USD
> is unclear, but it doesn't matter. They are. And the wad of cash
> remaining is for leveraged ETFs if we have another major woosh downside.
>
>
> Trader Mark, really enjoy your work. Thank you,

Markets Aren't as Benign as They Look

Mon, 24 Aug 2009 09:06:37 -0400

Yep, I'm arguing for Great Depression 2.

On 6-3-08 I called "go to cash, here comes the crash" (and got laughed at), and called the tops on oil "$20 before $200" and gold on 7-24-08 (see my SA comments from that date) and was told that $20 oil would require a big depression: "duh!")

Q1 2009 was the first little dip on the rollercoaster that gets the cars to the motorized "thing" (help me here) that takes them way up to the top of the rollercoaster track to position the riders for the BIG DROP. The Cybernetic Revolution phase of the still-ongoing Industrial Revolution is rapidly eliminating the need for most human labor and our "economic resource distribution system" is consequently obsolete and requiring drastic change. The credit/housing crisis is just a symptom of an underlying malady that "throwing money at banks" won't do squat to fix.

On Aug 21 11:05 PM Deepv wrote:

> I think Q1 was trough earnings. To argue otherwise is to argue for
> the great depression II. I think anyone with brain can see we printing
> and borrowing our way to avoid that pretty nicely. I think we may
> have great inflation II. for that I would rather have stocks than
> hold dead president or fixed income dead pres's. Stocks are interest
> in real biz that can respond to inflation. gold is a rock.

Coming Soon: Banking Crisis of Historic Proportions

Sun, 16 Aug 2009 12:21:15 -0400

The "majority" didn't want to have private currency outlawed by a constitution that was written by a bunch of bankers and their buddies (See "Creating the U.S. Dollar Currency Union, 1748-1811: A Quest for Monetary Stability or a Usurpation of State Sovereignty for Personal Gain?" - start on page 15 with "RHETORIC VERSUS REALITY AT THE CONSTITUTIONAL CONVENTION" - at
eh.net/XIIICongress/cd...), but they got it anyway.

The Constitution has no authority and never did (see "The Constitution of No Authority" by Lysander Spooner at www.fourmilab.ch/etext...); what DOES have authority is "government guns" and a government's willingness to use those guns.

What's happening to day has happened over and over in U.S. and world history: the bankers let out credit until the system breaks, and then they roll in the collateral for the start of the next cycle.

It doesn't have to be like this, but there are certain lies (equivalent to the one about Santa) that underpin the system and keep putting the fruits of everyone's else's labor into the pockets of the bankers; the biggest one is that there is ever an ACTUAL owner of property other than the government, thus there is never any need for a government to borrow money (except to buy things owned by another government).

Government: A "government" is one or more persons who claim natural resources, are willing and able to defend their claim on those resources, and make and enforce decisions regarding the allocation of those resources; in other words, he, she, or they "govern" THEIR OWN property. Once claimed, natural resources are thereafter recognized as "property"; therefore all property comes into existence solely and only after being claimed by a government.

Governments are the DE FACTO (actual) owners of ALL the property within their dominion (i.e., the extent of the claims on natural resources/property that they are able and willing to defend); they set up "DE JURE" (legal) ownership however they like in an attempt to ensure and enhance their own survival and maximize profits for whoever controls the government (in our case, that is obviously a group that we can unpejoratively call "bankers", as it has been since the American counter-revolution of 1789).

The most notable thing that governments do is to "privatize" property, impairing everyone's right to free access to all land, a right required in order to give reality to any "right to life" there can ever be (see Tom Paine's "Agraian Justice" plan at www.thomaspaine.org/Ar...)

We just need to:
1. take control of the U.S. Federal government from the Republican and Democrat banking parties,

2. replace Fed debt-dollars with U.S. dollars backed by the $340 trillion of U.S. wealth (rather than debt)

3. Compensate everyone on a monthly basis for the government's impairment of their right to free access to all land, and

4. Get government the hell out of every form of wealth redistribution.

A more complete outline of the plan can be found on the classmates.com profile page of "Alan Jacquemotte".

On Aug 16 08:36 AM hooligan wrote:

> From a trading perspective I can see that it is appropriate to get
> in ahead of a Government that is subsidising bad performance and
> punishing good performance. The failure of the democratic process
> to allow the will of the majority to hold sway over the vested interests
> who continue to "game" the system is disappointing to say the least.
> There is a "truth" that is avoided by all the intervention that the
> Fed, the politicians and the gamesters (who are transferring tax
> payers dollars directly to their own pockets) because it is either
> too easy to avoid the truth, or because they dont understand what
> the truth is. The truth is that if intervention created jobs and
> unemplyment we would have been doing it for decades. It doesn't work
> and never has. Intervention is a communist ideal. The subsidy of
> a favoured cabal that has not only transferred wealth from the economy
> to the cabal by charging exhorbitant fees and transaction costs,
> but can't even preserve the very wealth it transferred. The banking
> model has not failed, what has failed is the willingness to prosecute
> because of fear and lack of ability to see crime. Intervention by
> subidising bad banking practise and exploitation will lead to failure,
> as it always has and always will. Intervention to prosecute those
> who have profited from malpracise in the past and a culture of of
> fair play is the way forward. Anyone who thinks that win/lose for
> a zero sum game is the way forward does not believe in the evolution
> of our civilisation and democratic process. Win/win for an overall
> increase in economic rent is also the way forward.

Rational Exuberance?

Sun, 16 Aug 2009 10:38:05 -0400

"By all accounts, recovery has arrived or is imminent."

Since "all accounts" didn't see the crash coming in the first place, I put NO stock in "general opinion" on anything, ever.

Credit is imploding, print as much as you like, we are going down BIG, in a combination that will "rhyme" (as Mark Twain put it) with both 1929 (where the drop after the initial relief rally was MANY times as deep as the original drop, and 1938 with its sharp rally (does "3 weeks almost straight up" sound familiar?) off of a retest of support followed by about 3 weeks of mostly sideways action (again, sound familiar?) that put in a top that was to last for the next 7 years, the next four of which were successively lower. The top should be put in by next Monday. (There are too many expiring puts for it to start going down much this week.)

Five Reasons the Market Could Crash This Fall

Wed, 05 Aug 2009 13:44:05 -0400

I know what America DOESN'T make: many people that can spell many moderately difficult words, much less use them correctly.

FYI: I "called the crash" specifically on June 3rd, 2008 (after sending out warnings of its imminence for over a year); in July, 2008 I also called tops on oil ("will hit $20 before $200" when it was over $140; oil should hit the $20 target in November, 2012) and gold (to $399, I haven't bothered to estimate a date).

Personally I don't understand why the exchanges are continuing to pay for order flow since the game has become "make a lot of trades in order to get as much order flow payment as possible", so I can definitely see a day when they stop doing that, in which case the HFPT might slow down quite a bit.

Either way, cybernetics has changed the game forever: every recovery will be more JOBLESS than the last, the "financial resource distribution" system is broken for good, and everything everyone "knows" about government and economics is of the same veracity as "Santa leaves the presents under the tree on Christmas Eve".

The plan to fix it all is on my classmates.com profile page under "alan jacquemotte".

Why Is Deflation Scary?

Mon, 03 Aug 2009 10:14:04 -0400

It only doesn't add up if you listen to our bank-owned Federal government's words rather than watch its deeds, just like the American public listened to FDR's words ("He kept us out of war!") and missed that he had fired the admiral that refused to park his Pacific fleet within Japan's attack range (at Pearl Harbor), after cutting off Japan's oil supply (a blatant act of war) and refusing to bargain with Japan's representative's in good faith. The whole point of the exercise is to run up as much debt as possible whenever posssible on any and every excuse, and transfer as much wealth as possible to the bankers and their "virtual subsidiary" corporations. Everybody involved (especially including Main Stream Media) knows what side of the bread the butter goes on. The economic resouce distribution system is broken, they know it, and they are "getting theirs" while the getting is good; everything else is "blowing smoke" just where the American public likes it blown. When prices go up (inflation), the banks are sellers (of money and other assets, making a little interest on every transaction; when prices go down (deflation), the become buyers by "reeling in" the collateral on which they had loaned money. Then they (used to) get to do the whole cycle over again. This time will (actually) be different.

Forget the 1930s; We're Reliving 1975 (Part II)

Tue, 28 Jul 2009 13:10:23 -0400

1975 is about the time the cybernetic revolution (an incredibly deflationary "creative destruction" force) really kicked in. that's why no prior time period (when we look back at this) will be found to have been "corresponsive". The economic resource distribution system that worked before (get a job, work, make money so you can eat, etc.) is not going to get the job done going forward. Companies can "hire computers and robotic machinery" and, after few years, have almost no labor costs, almost no health costs, almost no pension costs, no labor turnover costs, almost no training costs, etc. Us "useless eaters" are left with "flippin' burgers, changing bedpans, and stocking shelves", I know MANY bright, attractive college grads who are doing EXACTLY those kinds of jobs today and are glad to have them. The COMING DEPRESSION will not end until this problem is addressed and permanently handled. The solution is easy and can be found in many of my previous SA comments and also on my classmates.com profile and messages page (look up "alan jacquemotte")

Margin Debt Catharsis?

Mon, 27 Jul 2009 06:50:34 -0400

I'm curious how the chartmaker drew the last leg of that BEV chart: How do they know that -20% from the last top of Margin Debt isn't the actual top of this leg?