Consider_this's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/223675/comments http://seekingalpha.com/article/155423-gm-s-volt-could-earn-a-230-mpg-rating?source=feed#comment-625682 625682
1. Pure EV.
2. Electricity from non-petroleum sources, preferably solar/wind/ocean.
=
3. Drastically reduced oil demand. No more shipping billions of USD per day to oil producing countries.

If this really becomes mainstream (It's hard at 40K). USD/USA may become the strongest yet.

This car won't be for everyone, but look at the big picture:

1. 80% of commuters drive 40miles or less to work
2. Anyone of these 80% commuters drive a Volt, their *OIL* consumption drops to near zero.

This is enough to cause a staggering change in oil market's demand; dropping to zero for majority of commuting, and only use oil for occasional vacation/long distance is a huge deal. If anything, it'll cause over-supply of oil.

And people who scream about power sources, know your facts:

www.eia.doe.gov/cnea
f/electricity/epm/tabl...

1.
Liquid Petroleum as a source of electricity is barely 1.1% in the USA, partly due to the high prices now.

2. coal/coke/natural gas accounts for about 50% of electricity. In the USA, we're like the Saudi Arabia for Coal/NG. Recall I argued for energy independence, so keep that in mind.

3. Electricity plants are way more efficient at energy extraction than internal combustion engine. Electric motors are also more efficient, with a very smooth torque curve possible. Simply shifting to electric use gains efficiency and reduction in pollution if everything else is static.

4. Due to difference in net energy efficiency, economies of scale in a powerplant, each unit of kinetic energy (the only energy that matters) from an EV source is up to 10 times cheaper than ICE petroleum based kinetic energy, if you use today's electric prices. Even if you assume electricity will QUADRUPLE (you must be really mad to assume that), it will still be 2.5 times cheaper than petroleum standards today, this is assuming GAS prices don't go up!

5.About 25% and increasing (due to cap and trade) of the electricity sources will come from clean sources (incl Nuclear), and cap and trade have no/positive effect on energy costs from these sources.

6. This technology is also future proof. Anything can be converted into Electricity. If a cheap source of hydrogen can be found, it can be made into a fuel cell and directly power electricity to the EV.

7. Electricity is the most efficient way to transport energy, better than even transporting Oil.

8. If majority of the Volt owners recharge at night, then we're not really straining the electric grid, because it's using idle capacity that's going to waste anyway. This actually smooths out electric demand and makes it easier to plan and maintain.

9. Price is a big problem now, but remember, once you go into ELECTRIC world, Moore's law does play an effect, because its a lot easier to innovate electrically than mechanically. So I would expect prices to drop every 18 months like laptops / PCs.

10. People don't get the doomsday scenario I mentioned. If this is wildly successful, it truly can topple the middle eastern ruling parties and cause social programs to collapse. If Middle East descends into chaos and even more extremist than now, that would be a very bad thing for everyone. Many prophecies stated that the end of the world would originate from middle east. I hope Volt isn't the trigger for it. This is a REAL CON that I see from this product, if it takes off.

11. Inventing Volt is *NOT* taking away any gas engines! In fact, gas owners should rejoice as less people will now compete for limited supply of gas.]]> Tue, 11 Aug 2009 18:51:55 -0400
1. Pure EV.
2. Electricity from non-petroleum sources, preferably solar/wind/ocean.
=
3. Drastically reduced oil demand. No more shipping billions of USD per day to oil producing countries.

If this really becomes mainstream (It's hard at 40K). USD/USA may become the strongest yet.

This car won't be for everyone, but look at the big picture:

1. 80% of commuters drive 40miles or less to work
2. Anyone of these 80% commuters drive a Volt, their *OIL* consumption drops to near zero.

This is enough to cause a staggering change in oil market's demand; dropping to zero for majority of commuting, and only use oil for occasional vacation/long distance is a huge deal. If anything, it'll cause over-supply of oil.

And people who scream about power sources, know your facts:

www.eia.doe.gov/cnea
f/electricity/epm/tabl...

1.
Liquid Petroleum as a source of electricity is barely 1.1% in the USA, partly due to the high prices now.

2. coal/coke/natural gas accounts for about 50% of electricity. In the USA, we're like the Saudi Arabia for Coal/NG. Recall I argued for energy independence, so keep that in mind.

3. Electricity plants are way more efficient at energy extraction than internal combustion engine. Electric motors are also more efficient, with a very smooth torque curve possible. Simply shifting to electric use gains efficiency and reduction in pollution if everything else is static.

4. Due to difference in net energy efficiency, economies of scale in a powerplant, each unit of kinetic energy (the only energy that matters) from an EV source is up to 10 times cheaper than ICE petroleum based kinetic energy, if you use today's electric prices. Even if you assume electricity will QUADRUPLE (you must be really mad to assume that), it will still be 2.5 times cheaper than petroleum standards today, this is assuming GAS prices don't go up!

5.About 25% and increasing (due to cap and trade) of the electricity sources will come from clean sources (incl Nuclear), and cap and trade have no/positive effect on energy costs from these sources.

6. This technology is also future proof. Anything can be converted into Electricity. If a cheap source of hydrogen can be found, it can be made into a fuel cell and directly power electricity to the EV.

7. Electricity is the most efficient way to transport energy, better than even transporting Oil.

8. If majority of the Volt owners recharge at night, then we're not really straining the electric grid, because it's using idle capacity that's going to waste anyway. This actually smooths out electric demand and makes it easier to plan and maintain.

9. Price is a big problem now, but remember, once you go into ELECTRIC world, Moore's law does play an effect, because its a lot easier to innovate electrically than mechanically. So I would expect prices to drop every 18 months like laptops / PCs.

10. People don't get the doomsday scenario I mentioned. If this is wildly successful, it truly can topple the middle eastern ruling parties and cause social programs to collapse. If Middle East descends into chaos and even more extremist than now, that would be a very bad thing for everyone. Many prophecies stated that the end of the world would originate from middle east. I hope Volt isn't the trigger for it. This is a REAL CON that I see from this product, if it takes off.

11. Inventing Volt is *NOT* taking away any gas engines! In fact, gas owners should rejoice as less people will now compete for limited supply of gas.]]> http://seekingalpha.com/article/155233-china-s-bubbles-and-demographic-trends?source=feed#comment-625166 625166
If it's due to "concern" and kind advice for the investors, this quantity of unsolicited is giving me a lot of "warm and fuzzy". Wow, such caring words from so many people who want to look out for my interests! Words from people on Wall Street and financial companies! Ah... I must express gratitude at their graciousness and concern.

On the other hand, the cynical side of me can't shake the feeling that some fund managers and/or hedgies have missed the boat (and missing the market average, and they're due to be compared to the average soon, as Q3 closes), and are trying to "talk down" the market so they and their clients can get on.

Or it could be shorts with a bearish position, trying to talk down the market to alleviate existing losses or make new positions.

I don't doubt that viewpoints on "bubble or not" exists all the time, but when articles clamor endlessly and without solicitations to incite selling, esp in great quantities and with forceful assertions, I tend to disbelieve.

Call me a media skeptic.]]> Tue, 11 Aug 2009 13:11:36 -0400
If it's due to "concern" and kind advice for the investors, this quantity of unsolicited is giving me a lot of "warm and fuzzy". Wow, such caring words from so many people who want to look out for my interests! Words from people on Wall Street and financial companies! Ah... I must express gratitude at their graciousness and concern.

On the other hand, the cynical side of me can't shake the feeling that some fund managers and/or hedgies have missed the boat (and missing the market average, and they're due to be compared to the average soon, as Q3 closes), and are trying to "talk down" the market so they and their clients can get on.

Or it could be shorts with a bearish position, trying to talk down the market to alleviate existing losses or make new positions.

I don't doubt that viewpoints on "bubble or not" exists all the time, but when articles clamor endlessly and without solicitations to incite selling, esp in great quantities and with forceful assertions, I tend to disbelieve.

Call me a media skeptic.]]> http://seekingalpha.com/article/154939-china-s-growth-an-accounting-miracle?source=feed#comment-623071 623071
news.xinhuanet.com/eng...

" The slowing demand was mainly contributed by the industrial sector, according to CEC data. About 3.43 trillion kilowatt-hours of electricity was used by the industry last year, up 3.83 percent from a year earlier, slower than the overall social power consumption growth rate for the first time.

Electricity used by the service industry and the rural and urban residents continued rapid growth, as the group was less affected by the financial crisis. "

There. The switch from export oriented economy to an internally facing one boosts "Service" economy and shrinks the exporting factories. This will cause a dip in raw electricity demand, when in face, the service sector's electricity use is growing very rapidly.

The truth is probably somewhere in the middle of the two bias.

What happened to USA's switch from manufacturing to to service economy happened over decades, China is having to do it in a few years; hence electricity supply/demand didn't have a chance to adapt.

GDP can grow despite electricity decline, precisely because of the switch to internal demand; as well as infrastructure construction, which doesn't take as much electricity as factories. Check the demand in raw concrete, copper and steel to see the truer picture.

The recovery is not all fake.]]> Mon, 10 Aug 2009 09:25:50 -0400
news.xinhuanet.com/eng...

" The slowing demand was mainly contributed by the industrial sector, according to CEC data. About 3.43 trillion kilowatt-hours of electricity was used by the industry last year, up 3.83 percent from a year earlier, slower than the overall social power consumption growth rate for the first time.

Electricity used by the service industry and the rural and urban residents continued rapid growth, as the group was less affected by the financial crisis. "

There. The switch from export oriented economy to an internally facing one boosts "Service" economy and shrinks the exporting factories. This will cause a dip in raw electricity demand, when in face, the service sector's electricity use is growing very rapidly.

The truth is probably somewhere in the middle of the two bias.

What happened to USA's switch from manufacturing to to service economy happened over decades, China is having to do it in a few years; hence electricity supply/demand didn't have a chance to adapt.

GDP can grow despite electricity decline, precisely because of the switch to internal demand; as well as infrastructure construction, which doesn't take as much electricity as factories. Check the demand in raw concrete, copper and steel to see the truer picture.

The recovery is not all fake.]]> http://seekingalpha.com/article/154961-china-s-demand-makes-old-signposts-useless?source=feed#comment-623042 623042
USA's bubble scheme is the biggest in history and are orders of magnitude bigger than what China offers. If you think it's over, you have a few decade of surprises waiting for you going forward.

From a realistic point of view, if you're trading assets/monetary credits from a massively bubbled economy; to a somewhat bubbled economy; you're actually doing risk reduction. Thus, running away from USA/USD based assets to hard commodity and Chinese stocks makes sense.

For people who're warmongering, even fictitiously on this forum, know that China doesn't have to fight to end any war. Pending a crisis, just cover and blind eye and "release" a couple of billion of refugee a day to the world/USA, and everyone will have a humanitarian and economic crisis immediately.

What are the countries going to do? Bomb the refugee ships? Sure that would be acceptable to the democratic public. Also, even if 50% of them slips through, you still have a crisis in the country.

This is Sun Tzu's art of war. You have to think outside the military box.]]> Mon, 10 Aug 2009 09:09:58 -0400
USA's bubble scheme is the biggest in history and are orders of magnitude bigger than what China offers. If you think it's over, you have a few decade of surprises waiting for you going forward.

From a realistic point of view, if you're trading assets/monetary credits from a massively bubbled economy; to a somewhat bubbled economy; you're actually doing risk reduction. Thus, running away from USA/USD based assets to hard commodity and Chinese stocks makes sense.

For people who're warmongering, even fictitiously on this forum, know that China doesn't have to fight to end any war. Pending a crisis, just cover and blind eye and "release" a couple of billion of refugee a day to the world/USA, and everyone will have a humanitarian and economic crisis immediately.

What are the countries going to do? Bomb the refugee ships? Sure that would be acceptable to the democratic public. Also, even if 50% of them slips through, you still have a crisis in the country.

This is Sun Tzu's art of war. You have to think outside the military box.]]> http://seekingalpha.com/article/154238-how-you-know-the-chinese-market-is-in-trouble?source=feed#comment-617823 617823
As a contrarian, without people screaming "China stock will fail" and "the great china stock crash is coming" and "how the china govt will trigger the crash", *I* would be concerned and sell my holdings.

I did exactly that in 2007 and early 2008; when everyone and his mother no longer feared China and everyone wanted to ask me how to switch 401K to increase China exposure.

There's enough fear of China right now to trigger a healthy, strong "climb the wall of worry" rally. When the bears all turn greedy and jump onto the bandwagon, that's when it's time to get out.]]> Thu, 06 Aug 2009 09:52:52 -0400
As a contrarian, without people screaming "China stock will fail" and "the great china stock crash is coming" and "how the china govt will trigger the crash", *I* would be concerned and sell my holdings.

I did exactly that in 2007 and early 2008; when everyone and his mother no longer feared China and everyone wanted to ask me how to switch 401K to increase China exposure.

There's enough fear of China right now to trigger a healthy, strong "climb the wall of worry" rally. When the bears all turn greedy and jump onto the bandwagon, that's when it's time to get out.]]> http://seekingalpha.com/article/153584-goldman-s-china-portfolio-professional-investing-or-day-trading-rag?source=feed#comment-614696 614696
That is the key key mantra.

I do not doubt China is blowing a bubble; I also do not doubt that some of the stocks are overvalued. However, consider this with the big picture, and you tell me where to put your money:

USA is coming off the biggest bubble scheme in history. A never before seen perfect storm collision of: Credit, Housing, Debt bubble and even stock are bubbling orders of magnitude bigger than what China offers.

From a realistic point of view, if you're trading assets/monetary credits from a massively bubbled economy; to a somewhat bubbled economy; you're actually doing risk reduction.

Due to global savings glut, there's really no "non-bubbled" places of the 1980's kind left in the world anymore, this even includes Oil and Glod.

Thus, you have to view our current market in perspective. GS is more right than wrong, that China's stock bubble is going to take a while to run to exhaustion -- far longer than how other bubbles is going to unwind.

The big bubble you should worry about is UST and the real RE market that's currently being covered up through a series of Mark to Model, TARP, Not going to foreclosure, Not relisting REO, Not recognizing security paper losses problem.

China's tiny stock market pales in comparision. ]]> Tue, 04 Aug 2009 11:27:26 -0400
That is the key key mantra.

I do not doubt China is blowing a bubble; I also do not doubt that some of the stocks are overvalued. However, consider this with the big picture, and you tell me where to put your money:

USA is coming off the biggest bubble scheme in history. A never before seen perfect storm collision of: Credit, Housing, Debt bubble and even stock are bubbling orders of magnitude bigger than what China offers.

From a realistic point of view, if you're trading assets/monetary credits from a massively bubbled economy; to a somewhat bubbled economy; you're actually doing risk reduction.

Due to global savings glut, there's really no "non-bubbled" places of the 1980's kind left in the world anymore, this even includes Oil and Glod.

Thus, you have to view our current market in perspective. GS is more right than wrong, that China's stock bubble is going to take a while to run to exhaustion -- far longer than how other bubbles is going to unwind.

The big bubble you should worry about is UST and the real RE market that's currently being covered up through a series of Mark to Model, TARP, Not going to foreclosure, Not relisting REO, Not recognizing security paper losses problem.

China's tiny stock market pales in comparision. ]]> http://seekingalpha.com/article/153519-the-china-stock-bubble-is-back?source=feed#comment-614677 614677
That is the key key mantra.

I do not doubt China is blowing a bubble; I also do not doubt that some of the stocks are overvalued. However, consider this with the big picture, and you tell me where to put your money:

USA is coming off the biggest bubble scheme in history. A never before seen perfect storm collision of: Credit, Housing, Debt bubble and even stock are bubbling orders of magnitude bigger than what China offers.

From a realistic point of view, if you're trading assets/monetary credits from a massively bubbled economy; to a somewhat bubbled economy; you're actually doing risk reduction.

Due to global savings glut, there's really no "non-bubbled" places of the 1980's kind left in the world anymore, this even includes Oil and Glod.

Thus, you have to view our current market in perspective. GS is more right than wrong, that China's stock bubble is going to take a while to run to exhaustion -- far longer than how other bubbles is going to unwind.

The big bubble you should worry about is UST and the real RE market that's currently being covered up through a series of Mark to Model, TARP, Not going to foreclosure, Not relisting REO, Not recognizing security paper losses problem.

China's tiny stock market pales in comparision.]]> Tue, 04 Aug 2009 11:24:51 -0400
That is the key key mantra.

I do not doubt China is blowing a bubble; I also do not doubt that some of the stocks are overvalued. However, consider this with the big picture, and you tell me where to put your money:

USA is coming off the biggest bubble scheme in history. A never before seen perfect storm collision of: Credit, Housing, Debt bubble and even stock are bubbling orders of magnitude bigger than what China offers.

From a realistic point of view, if you're trading assets/monetary credits from a massively bubbled economy; to a somewhat bubbled economy; you're actually doing risk reduction.

Due to global savings glut, there's really no "non-bubbled" places of the 1980's kind left in the world anymore, this even includes Oil and Glod.

Thus, you have to view our current market in perspective. GS is more right than wrong, that China's stock bubble is going to take a while to run to exhaustion -- far longer than how other bubbles is going to unwind.

The big bubble you should worry about is UST and the real RE market that's currently being covered up through a series of Mark to Model, TARP, Not going to foreclosure, Not relisting REO, Not recognizing security paper losses problem.

China's tiny stock market pales in comparision.]]> http://seekingalpha.com/article/133212-stocks-and-sectors-that-could-catch-swine-flu-symptoms?source=feed#comment-479201 479201
SARS was absolutely terrifying and destructive on the economies it hit. Go back and read up on what happened to the local economies, even advanced ones like Hong Kong, Singapore, etc. See pictures of what happened to people's lives.

And it didn't just go away, it returned in a year.

Our best bet is hoping that this not as deadly as SARS -- which dissolved the lungs and organs of the affected people and had an abnormally high death rate. Even post recovery, the loss in lung function is permanently carried by the people it affected.

On Apr 27 02:36 AM HaavBline wrote:

> Like SARS, worst case this will be resolved in a matter of months.
> So if any sector responds sharply to this flu, it would be a good
> opportunity to take the opposite position.]]> Mon, 27 Apr 2009 11:31:24 -0400
SARS was absolutely terrifying and destructive on the economies it hit. Go back and read up on what happened to the local economies, even advanced ones like Hong Kong, Singapore, etc. See pictures of what happened to people's lives.

And it didn't just go away, it returned in a year.

Our best bet is hoping that this not as deadly as SARS -- which dissolved the lungs and organs of the affected people and had an abnormally high death rate. Even post recovery, the loss in lung function is permanently carried by the people it affected.

On Apr 27 02:36 AM HaavBline wrote:

> Like SARS, worst case this will be resolved in a matter of months.
> So if any sector responds sharply to this flu, it would be a good
> opportunity to take the opposite position.]]> http://seekingalpha.com/article/133212-stocks-and-sectors-that-could-catch-swine-flu-symptoms?source=feed#comment-479185 479185
1. Retail
2. Restaurant
3. Entertainment, esp those with a gathering of people, like theme parks, beaches and theatres.
4. Public transportation
5. Hotel

Basically, anything that cannot be done in isolation and away from groups of people.

I hope it doesn't spread very wide, and I hope it's not deadly like SARS.]]> Mon, 27 Apr 2009 11:27:37 -0400
1. Retail
2. Restaurant
3. Entertainment, esp those with a gathering of people, like theme parks, beaches and theatres.
4. Public transportation
5. Hotel

Basically, anything that cannot be done in isolation and away from groups of people.

I hope it doesn't spread very wide, and I hope it's not deadly like SARS.]]> http://seekingalpha.com/article/133211-swine-flu-why-you-can-ignore-the-hype?source=feed#comment-479166 479166
We won't know until a few months later, when either actual reports of diseased people come in, or when WHO makes an actual judgment on the virulence and death rate of the virus.]]> Mon, 27 Apr 2009 11:17:29 -0400
We won't know until a few months later, when either actual reports of diseased people come in, or when WHO makes an actual judgment on the virulence and death rate of the virus.]]> http://seekingalpha.com/article/133211-swine-flu-why-you-can-ignore-the-hype?source=feed#comment-479156 479156
If swine flu is anything close to that, or command a fear factor close to that, we're doomed.

Most likely the hype is overblown (I hope!!!), but anytime a flu crosses a species boundary, it usually has unlimited growth potential in the new species (in this case, human); because there's no built in immunity to that virus. So the danger is real.]]> Mon, 27 Apr 2009 11:12:33 -0400
If swine flu is anything close to that, or command a fear factor close to that, we're doomed.

Most likely the hype is overblown (I hope!!!), but anytime a flu crosses a species boundary, it usually has unlimited growth potential in the new species (in this case, human); because there's no built in immunity to that virus. So the danger is real.]]> http://seekingalpha.com/article/129932-u-s-banking-system-is-effectively-insolvent-soros?source=feed#comment-455213 455213
Think about it, this whole thing is stuck exactly because of CDSs. No CDS, then individual entities failing doesn't do the system any harm -- merely ripples in the pond and only hurting the companies in direct dealings with the failed entity.

Not sure why Tim and Ben don't want to deal with the CDS issues. The CDSs are like webs spun by the banks to tie their company's existence with the whole system. It's their weapon of mass destruction used to threaten the US govt. Take those away, and they're powerless.

Force CDS to be surrendered to a single govt clearinghouse by a certain date, or be rendered null and void. Create a moratorium on the creation of new CDSs. *THEN* let any insolvent banks die. The remaining system will clean itself up.]]> Tue, 07 Apr 2009 14:50:03 -0400
Think about it, this whole thing is stuck exactly because of CDSs. No CDS, then individual entities failing doesn't do the system any harm -- merely ripples in the pond and only hurting the companies in direct dealings with the failed entity.

Not sure why Tim and Ben don't want to deal with the CDS issues. The CDSs are like webs spun by the banks to tie their company's existence with the whole system. It's their weapon of mass destruction used to threaten the US govt. Take those away, and they're powerless.

Force CDS to be surrendered to a single govt clearinghouse by a certain date, or be rendered null and void. Create a moratorium on the creation of new CDSs. *THEN* let any insolvent banks die. The remaining system will clean itself up.]]> http://seekingalpha.com/news/market_currents/post/21400?source=feed#comment-455014 455014 Repression or optimism...
Prosperity or bad accounting...

They're all both sides of the same coin!

It's easy to call our last decade the Great Repression *AFTER THE FACT* -- remember this same period was called the great Goldilocks economy just 18 months ago. And it's the *SAME* ECONOMIC PERIOD! I can cite plenty of economics, law and Phd professors who swears by Goldilocks in 2007; or "new economy" in 2000!! Hindsight is 20-20!

I don't need a law professor to tell me that:

When we're in a descent, things look grim and we give the environment grim names; when we're in an ascend, things look bright and we give them bright names.

Taking it to the extremes, suppose the next 10 years we see some as yet unforeseen technological and economic miracle, then this current time -- 2009 -- may yet be labeled as the great investment opportunity! Or the reverse, suppose the next 10 years, things collapse down to end of human civilization level, then this current time -- 2009 -- may be labeled as the last days of a great civilization.

Isn't economics fun?! All outcomes are possible!!!

What we need is the ability to accurately tell the future.

But that's an impossible task.

You have to understand that markets are reflexive in nature; and attempts to project it also alters it (because you can use the projection to invest or change your investment behavior, which then changes the future market.)

As human beings, we're sometimes running around in circles because of this limitation. Similar to how a moth will fly in circles around a light bulb; because it is limited in what and how far it can see / think.

The only difference is that some professor will write an esoteric article and sound like the wise man in an ivory tower. Some other man on the street will simply confess "I don't know the future".]]> Tue, 07 Apr 2009 12:38:00 -0400 Repression or optimism...
Prosperity or bad accounting...

They're all both sides of the same coin!

It's easy to call our last decade the Great Repression *AFTER THE FACT* -- remember this same period was called the great Goldilocks economy just 18 months ago. And it's the *SAME* ECONOMIC PERIOD! I can cite plenty of economics, law and Phd professors who swears by Goldilocks in 2007; or "new economy" in 2000!! Hindsight is 20-20!

I don't need a law professor to tell me that:

When we're in a descent, things look grim and we give the environment grim names; when we're in an ascend, things look bright and we give them bright names.

Taking it to the extremes, suppose the next 10 years we see some as yet unforeseen technological and economic miracle, then this current time -- 2009 -- may yet be labeled as the great investment opportunity! Or the reverse, suppose the next 10 years, things collapse down to end of human civilization level, then this current time -- 2009 -- may be labeled as the last days of a great civilization.

Isn't economics fun?! All outcomes are possible!!!

What we need is the ability to accurately tell the future.

But that's an impossible task.

You have to understand that markets are reflexive in nature; and attempts to project it also alters it (because you can use the projection to invest or change your investment behavior, which then changes the future market.)

As human beings, we're sometimes running around in circles because of this limitation. Similar to how a moth will fly in circles around a light bulb; because it is limited in what and how far it can see / think.

The only difference is that some professor will write an esoteric article and sound like the wise man in an ivory tower. Some other man on the street will simply confess "I don't know the future".]]> http://seekingalpha.com/article/129300-the-mark-to-market-myth?source=feed#comment-451235 451235
With the new FASB mark to fantasy ruling, the following changes to key statistics is under way:

1. Banks capital ratio is now fantasy ratio, and will allow them to lend.
2. Banks can now hold onto REOs, indefinitely. There’s no incentive to sell at market. By holding REOs, banks can rate that REO asset at 2007 level. Sure they’ll have to put taxes and maintenance, but that’s going to be like a cost of business to keep 2007-model alive.
3. Similarly, Banks can now DRAGGG ON the NOD and foreclosure process. Expect things like allowing people to stay, semi-permantly (as in for months and years at a time), rent free; without any foreclosure NODs or auctions or what not. Next few months you’ll see a sharp decline in new foreclosures as the banks adapt.
4. Commercial RE (CRE) was going to be a bomb in 2009, because all those commercial loans are due and the market valuation means no bank will refi them. Well no more, we’re not using market valuation anymore, so those model all says these CREs are awesome profits, so there’ll be increased refi of CREs and the crisis averted.
5. With the new model, HELOCs may even be a viable source of credit for consumers now; Those on the margin may find banks offering HELOC now, the home ATM is now open!
6. Ditto to Credit Card ABSs, the model says much better profitability; In fact, there’ll be more solicitations for people to own more cards; coz the model says it’s such good business, plus the customer can use one card to pay off another — further enhancing default rate for their model!
7. The obvious is that all the bank’s financial releases for the rest of 2009 will beat expectation now. So now permabulls have ammunition to say recession is over.

Bears are fighting a losing cause with the deck to heavily stacked against them.

Are these going to be a permanent solution, or actually save us from impending doom? Heck no. It’s the same playbook from Japan that pretty much sealed their fate to the 20 year economic decline. *BUT* it’ll drag everything into SLOW MOTION decline.

Kinda like treating an acute disease that *MAY* kill you, by taking a poison that kills the bacteria and the short term disease problem, but guarantees you will die SLOWLY. We just did that.

I thought I could time the market and buy a house in 2010 or 2011; I can see my folly now. The govt will make it a money losing proposition to own a house for 20 years. The govt will stretch it out so long, so maximum number of people are bearing the housing decline and nobody can “time” and get “out” — in the end you need a place to stay, and that is their trump card.

I think I’m so depressed I’ll go jump off a bridge somewhere now.]]> Fri, 03 Apr 2009 16:31:33 -0400
With the new FASB mark to fantasy ruling, the following changes to key statistics is under way:

1. Banks capital ratio is now fantasy ratio, and will allow them to lend.
2. Banks can now hold onto REOs, indefinitely. There’s no incentive to sell at market. By holding REOs, banks can rate that REO asset at 2007 level. Sure they’ll have to put taxes and maintenance, but that’s going to be like a cost of business to keep 2007-model alive.
3. Similarly, Banks can now DRAGGG ON the NOD and foreclosure process. Expect things like allowing people to stay, semi-permantly (as in for months and years at a time), rent free; without any foreclosure NODs or auctions or what not. Next few months you’ll see a sharp decline in new foreclosures as the banks adapt.
4. Commercial RE (CRE) was going to be a bomb in 2009, because all those commercial loans are due and the market valuation means no bank will refi them. Well no more, we’re not using market valuation anymore, so those model all says these CREs are awesome profits, so there’ll be increased refi of CREs and the crisis averted.
5. With the new model, HELOCs may even be a viable source of credit for consumers now; Those on the margin may find banks offering HELOC now, the home ATM is now open!
6. Ditto to Credit Card ABSs, the model says much better profitability; In fact, there’ll be more solicitations for people to own more cards; coz the model says it’s such good business, plus the customer can use one card to pay off another — further enhancing default rate for their model!
7. The obvious is that all the bank’s financial releases for the rest of 2009 will beat expectation now. So now permabulls have ammunition to say recession is over.

Bears are fighting a losing cause with the deck to heavily stacked against them.

Are these going to be a permanent solution, or actually save us from impending doom? Heck no. It’s the same playbook from Japan that pretty much sealed their fate to the 20 year economic decline. *BUT* it’ll drag everything into SLOW MOTION decline.

Kinda like treating an acute disease that *MAY* kill you, by taking a poison that kills the bacteria and the short term disease problem, but guarantees you will die SLOWLY. We just did that.

I thought I could time the market and buy a house in 2010 or 2011; I can see my folly now. The govt will make it a money losing proposition to own a house for 20 years. The govt will stretch it out so long, so maximum number of people are bearing the housing decline and nobody can “time” and get “out” — in the end you need a place to stay, and that is their trump card.

I think I’m so depressed I’ll go jump off a bridge somewhere now.]]> http://seekingalpha.com/article/129170-the-big-banking-emperors-new-clothes?source=feed#comment-451234 451234
With the new FASB mark to fantasy ruling, the following changes to key statistics is under way:

1. Banks capital ratio is now fantasy ratio, and will allow them to lend.
2. Banks can now hold onto REOs, indefinitely. There’s no incentive to sell at market. By holding REOs, banks can rate that REO asset at 2007 level. Sure they’ll have to put taxes and maintenance, but that’s going to be like a cost of business to keep 2007-model alive.
3. Similarly, Banks can now DRAGGG ON the NOD and foreclosure process. Expect things like allowing people to stay, semi-permantly (as in for months and years at a time), rent free; without any foreclosure NODs or auctions or what not. Next few months you’ll see a sharp decline in new foreclosures as the banks adapt.
4. Commercial RE (CRE) was going to be a bomb in 2009, because all those commercial loans are due and the market valuation means no bank will refi them. Well no more, we’re not using market valuation anymore, so those model all says these CREs are awesome profits, so there’ll be increased refi of CREs and the crisis averted.
5. With the new model, HELOCs may even be a viable source of credit for consumers now; Those on the margin may find banks offering HELOC now, the home ATM is now open!
6. Ditto to Credit Card ABSs, the model says much better profitability; In fact, there’ll be more solicitations for people to own more cards; coz the model says it’s such good business, plus the customer can use one card to pay off another — further enhancing default rate for their model!
7. The obvious is that all the bank’s financial releases for the rest of 2009 will beat expectation now. So now permabulls have ammunition to say recession is over.

Bears are fighting a losing cause with the deck to heavily stacked against them.

Are these going to be a permanent solution, or actually save us from impending doom? Heck no. It’s the same playbook from Japan that pretty much sealed their fate to the 20 year economic decline. *BUT* it’ll drag everything into SLOW MOTION decline.

Kinda like treating an acute disease that *MAY* kill you, by taking a poison that kills the bacteria and the short term disease problem, but guarantees you will die SLOWLY. We just did that.

I thought I could time the market and buy a house in 2010 or 2011; I can see my folly now. The govt will make it a money losing proposition to own a house for 20 years. The govt will stretch it out so long, so maximum number of people are bearing the housing decline and nobody can “time” and get “out” — in the end you need a place to stay, and that is their trump card.

I think I’m so depressed I’ll go jump off a bridge somewhere now.]]> Fri, 03 Apr 2009 16:29:38 -0400
With the new FASB mark to fantasy ruling, the following changes to key statistics is under way:

1. Banks capital ratio is now fantasy ratio, and will allow them to lend.
2. Banks can now hold onto REOs, indefinitely. There’s no incentive to sell at market. By holding REOs, banks can rate that REO asset at 2007 level. Sure they’ll have to put taxes and maintenance, but that’s going to be like a cost of business to keep 2007-model alive.
3. Similarly, Banks can now DRAGGG ON the NOD and foreclosure process. Expect things like allowing people to stay, semi-permantly (as in for months and years at a time), rent free; without any foreclosure NODs or auctions or what not. Next few months you’ll see a sharp decline in new foreclosures as the banks adapt.
4. Commercial RE (CRE) was going to be a bomb in 2009, because all those commercial loans are due and the market valuation means no bank will refi them. Well no more, we’re not using market valuation anymore, so those model all says these CREs are awesome profits, so there’ll be increased refi of CREs and the crisis averted.
5. With the new model, HELOCs may even be a viable source of credit for consumers now; Those on the margin may find banks offering HELOC now, the home ATM is now open!
6. Ditto to Credit Card ABSs, the model says much better profitability; In fact, there’ll be more solicitations for people to own more cards; coz the model says it’s such good business, plus the customer can use one card to pay off another — further enhancing default rate for their model!
7. The obvious is that all the bank’s financial releases for the rest of 2009 will beat expectation now. So now permabulls have ammunition to say recession is over.

Bears are fighting a losing cause with the deck to heavily stacked against them.

Are these going to be a permanent solution, or actually save us from impending doom? Heck no. It’s the same playbook from Japan that pretty much sealed their fate to the 20 year economic decline. *BUT* it’ll drag everything into SLOW MOTION decline.

Kinda like treating an acute disease that *MAY* kill you, by taking a poison that kills the bacteria and the short term disease problem, but guarantees you will die SLOWLY. We just did that.

I thought I could time the market and buy a house in 2010 or 2011; I can see my folly now. The govt will make it a money losing proposition to own a house for 20 years. The govt will stretch it out so long, so maximum number of people are bearing the housing decline and nobody can “time” and get “out” — in the end you need a place to stay, and that is their trump card.

I think I’m so depressed I’ll go jump off a bridge somewhere now.]]> http://seekingalpha.com/news/market_currents/post/20722?source=feed#comment-441476 441476
The means to devalue or default is negotiable: Massive "stimulus" govt spending, collective Quantitative Easing, collective buying on more UST even as US govt goes drunk with trillions, outright defaulting on national debts, etc.

All roads that leads to the same destination: debts not repaid.

Perhaps more accurately, the debts were already bad the day they were made; we're now only realizing it and "catching up" on this reality.]]> Thu, 26 Mar 2009 16:06:15 -0400
The means to devalue or default is negotiable: Massive "stimulus" govt spending, collective Quantitative Easing, collective buying on more UST even as US govt goes drunk with trillions, outright defaulting on national debts, etc.

All roads that leads to the same destination: debts not repaid.

Perhaps more accurately, the debts were already bad the day they were made; we're now only realizing it and "catching up" on this reality.]]> http://seekingalpha.com/article/125262-fresh-oil-supply-data-and-potential-market-impact?source=feed#comment-421749 421749
Problem is... even if demand recovers, I don't foresee and a "strong" recovery because of the structural and widespread weakness. Demand may simply not have the buying power left to significantly lift prices.

Imagine the oil production limit as some kind of ceiling on world industrial production. What is happening now is that this ceiling is being lowered and it's very slow and hard to re-raise this production limit.


So what this reduction in supply essentially means, is that it will put a cap on any recovery.

When the economy sputters back even slightly, then oil will raise in price which then will drag the recovery right back down or significantly slow down the recovery.

There won't be enough oil production left to "allow" for a full swing in recovery -- U shaped recovery is going to look more and more remote, esp as we lose oil capacity.

This is the "nail in the coffin" and traders don't even realize it.]]> Wed, 11 Mar 2009 10:28:26 -0400
Problem is... even if demand recovers, I don't foresee and a "strong" recovery because of the structural and widespread weakness. Demand may simply not have the buying power left to significantly lift prices.

Imagine the oil production limit as some kind of ceiling on world industrial production. What is happening now is that this ceiling is being lowered and it's very slow and hard to re-raise this production limit.


So what this reduction in supply essentially means, is that it will put a cap on any recovery.

When the economy sputters back even slightly, then oil will raise in price which then will drag the recovery right back down or significantly slow down the recovery.

There won't be enough oil production left to "allow" for a full swing in recovery -- U shaped recovery is going to look more and more remote, esp as we lose oil capacity.

This is the "nail in the coffin" and traders don't even realize it.]]> http://seekingalpha.com/article/123834-rethinking-subsidized-finance?source=feed#comment-411183 411183
I agree. Banks exist to serve the bankers primarily, and the society second (and only the surrounding environment serves to further bonus of the bankers themselves). As for investors of banks, they must possess balls of steel and be willing to play a known bubble blower industry and risk being the last great fool in their investment scheme.

This absurd behavior would never be acceptable for any other industry: Imagine if the medical industry somehow sells "medical credits" that represents a unit of doctor work; and create a crisis that ultimately crashes the medical credit system -- and then turn around and refuse medical work because of credit shortage or needing bailout. Or that the electricity industry setup kilowatt banking and it crashed; which threaten to shutdown our entire electric grid?

In any of the two cases, the govt will nationalize the "grid" if any catastrophe of the like blows up and harms lives, almost without a thought. Why won't we do the same to banking industry?

I want to emphasize that we're back to 1997 DOW people!!! And still going back! Talk about time travel backwards economically, sheesh!

With such destruction (more than a decade of destruction in the USA; more than TWO decades of financial wasteland in Japan) wrought, why do we still want to do the same thing?

I agree with the author that banking seems to be a net, capital, money and sanity losing proposition for the whole economic system.

I disagree that the way to manage it is to keep banking alive, esp to keep it alive in the private world.

Fire Fighters, Police, Schools and Public Water are some examples of net money losing ventures; that doesn't work well in a private setting; but can exist under govt controlled settings.

BASIC banking should be almost fully govt controlled. It should be risk minimized and heavily regulated. It should also be completely govt backed and insured.

The maverick and risk financial sector should be completely unregulated and completely NOT INSURED by the govt. It must also be periodically disassembled to prevent "too big to fail" syndrome; something akin to our anti-monopoly regulations; but this will apply to anti accumulation of market cap and size.

Only by doing that will we remove the threat and choke hold that bankers have over our economies.

Note that what I described is NOT nationalizing the banks; it is instead recognizing the author's point that society is already subsidizing; and using that fact to SPLIT THE INDUSTRY INTO 2 -- low risk, subsidized and high risk, unsubsidized, vegas style.]]> Tue, 03 Mar 2009 11:32:27 -0500
I agree. Banks exist to serve the bankers primarily, and the society second (and only the surrounding environment serves to further bonus of the bankers themselves). As for investors of banks, they must possess balls of steel and be willing to play a known bubble blower industry and risk being the last great fool in their investment scheme.

This absurd behavior would never be acceptable for any other industry: Imagine if the medical industry somehow sells "medical credits" that represents a unit of doctor work; and create a crisis that ultimately crashes the medical credit system -- and then turn around and refuse medical work because of credit shortage or needing bailout. Or that the electricity industry setup kilowatt banking and it crashed; which threaten to shutdown our entire electric grid?

In any of the two cases, the govt will nationalize the "grid" if any catastrophe of the like blows up and harms lives, almost without a thought. Why won't we do the same to banking industry?

I want to emphasize that we're back to 1997 DOW people!!! And still going back! Talk about time travel backwards economically, sheesh!

With such destruction (more than a decade of destruction in the USA; more than TWO decades of financial wasteland in Japan) wrought, why do we still want to do the same thing?

I agree with the author that banking seems to be a net, capital, money and sanity losing proposition for the whole economic system.

I disagree that the way to manage it is to keep banking alive, esp to keep it alive in the private world.

Fire Fighters, Police, Schools and Public Water are some examples of net money losing ventures; that doesn't work well in a private setting; but can exist under govt controlled settings.

BASIC banking should be almost fully govt controlled. It should be risk minimized and heavily regulated. It should also be completely govt backed and insured.

The maverick and risk financial sector should be completely unregulated and completely NOT INSURED by the govt. It must also be periodically disassembled to prevent "too big to fail" syndrome; something akin to our anti-monopoly regulations; but this will apply to anti accumulation of market cap and size.

Only by doing that will we remove the threat and choke hold that bankers have over our economies.

Note that what I described is NOT nationalizing the banks; it is instead recognizing the author's point that society is already subsidizing; and using that fact to SPLIT THE INDUSTRY INTO 2 -- low risk, subsidized and high risk, unsubsidized, vegas style.]]> http://seekingalpha.com/article/122941-hedge-fund-overcrowding-bad-for-returns-undercrowding-will-be-good?source=feed#comment-404922 404922
The *ONLY* way to beat average, is to be not part of the majority.

For the definition of average, leverages the whole majority to get that number.

Not hard to see why, I cannot have everyone beat the average, because if everyone's result raises, than the average raises -- so you're not beating the average.

This is probably why the stories about that lucky investor or fund that got WAY HIGHER results compared to average is GOING TO STAY AS A MINORITY REPORT.

Pretty obvious to me, but it baffles me why everyone don't see it. When something becomes the popular trade of the masses, then it has NO HOPE of beating average.

In fact, it could precipitate a crash that creates losses if the masses's attention switches to something else, causing a mass exodus.

I call this the popular trade effect fallacy.

That's why chasing "popular" trades in order to beat average is a fools errand. But many people do it anyway. I can immediately think of some "popular" trades of 2008 and 2007 -- Houses / MBS (depending on which side you are), Oil, Finance Industry, Emerging Markets (decoupling theory), Treasuries bonds.

I leave it to the readers to ponder what is the top popular trade in 2009 that is currently in the midst of this "popular trade effect". Hint, the subscribers are not hard to find and it gets pretty adamantly defended by a big MASS of people.]]> Thu, 26 Feb 2009 15:46:28 -0500
The *ONLY* way to beat average, is to be not part of the majority.

For the definition of average, leverages the whole majority to get that number.

Not hard to see why, I cannot have everyone beat the average, because if everyone's result raises, than the average raises -- so you're not beating the average.

This is probably why the stories about that lucky investor or fund that got WAY HIGHER results compared to average is GOING TO STAY AS A MINORITY REPORT.

Pretty obvious to me, but it baffles me why everyone don't see it. When something becomes the popular trade of the masses, then it has NO HOPE of beating average.

In fact, it could precipitate a crash that creates losses if the masses's attention switches to something else, causing a mass exodus.

I call this the popular trade effect fallacy.

That's why chasing "popular" trades in order to beat average is a fools errand. But many people do it anyway. I can immediately think of some "popular" trades of 2008 and 2007 -- Houses / MBS (depending on which side you are), Oil, Finance Industry, Emerging Markets (decoupling theory), Treasuries bonds.

I leave it to the readers to ponder what is the top popular trade in 2009 that is currently in the midst of this "popular trade effect". Hint, the subscribers are not hard to find and it gets pretty adamantly defended by a big MASS of people.]]> http://seekingalpha.com/article/122930-sallie-mae-subsidy-cuts-hurt-but-why-so-bad?source=feed#comment-404907 404907
Not hard to see that the lenders, because they have to borrow from the Fed ultimately, can't make this equation work.

But I don't see why we have to FORCE private lending to work or even exist. Since the equation obviously doesn't work, then move on and let private lending to education end. Why subsidy?

Maintaining a facade or charade just so that it seems that there's a slew of "choice" on the marketplace, when the choice is a false choice, is silly. (i.e. Lend direct from govt; or lend from private, which gets subsidy, which behind the scenes really borrow from govt anyway)

That's not free market; that's silly market.]]> Thu, 26 Feb 2009 15:35:15 -0500
Not hard to see that the lenders, because they have to borrow from the Fed ultimately, can't make this equation work.

But I don't see why we have to FORCE private lending to work or even exist. Since the equation obviously doesn't work, then move on and let private lending to education end. Why subsidy?

Maintaining a facade or charade just so that it seems that there's a slew of "choice" on the marketplace, when the choice is a false choice, is silly. (i.e. Lend direct from govt; or lend from private, which gets subsidy, which behind the scenes really borrow from govt anyway)

That's not free market; that's silly market.]]> http://seekingalpha.com/article/122925-recovery-rates-fall-for-leveraged-loans?source=feed#comment-404873 404873
We're all subprime now.

Even our most senior debt is now pretty much equal to junk debt.

Subprime nation.

I should be expecting things like that by now, but I don't know why reading them still affects me. Maybe I'm just desperately looking for the silver lining in all of these.]]> Thu, 26 Feb 2009 15:02:39 -0500
We're all subprime now.

Even our most senior debt is now pretty much equal to junk debt.

Subprime nation.

I should be expecting things like that by now, but I don't know why reading them still affects me. Maybe I'm just desperately looking for the silver lining in all of these.]]> http://seekingalpha.com/article/122875-inflation-in-2020-if-we-re-lucky?source=feed#comment-404732 404732
Considering that Japan's deflation is 24 years and counting...

I think the author is saying that USA will escape the deflation at least 45% faster than Japan. (24-13)/24

From that perspective...

That's quite an optimist and a big complement to USA Govt!]]> Thu, 26 Feb 2009 13:10:14 -0500
Considering that Japan's deflation is 24 years and counting...

I think the author is saying that USA will escape the deflation at least 45% faster than Japan. (24-13)/24

From that perspective...

That's quite an optimist and a big complement to USA Govt!]]> http://seekingalpha.com/article/122878-desperately-seeking-equilibrium?source=feed#comment-404711 404711
Wow. Very good sentence that pretty captured all the essence of today's dilemma.

Question is:

What if both the medicine and the disease kills you?

What do you do then?]]> Thu, 26 Feb 2009 13:00:26 -0500
Wow. Very good sentence that pretty captured all the essence of today's dilemma.

Question is:

What if both the medicine and the disease kills you?

What do you do then?]]> http://seekingalpha.com/article/122892-japan-s-government-mulls-buying-up-to-205-billion-in-stock-etfs?source=feed#comment-404697 404697
Now it's not even a hidden group anymore.

Plunge Protection Team gets officially introduced in Japan!!

Not long before everyone follows suit, including USA. This is not good for the world.

The Stock Market has just become another govt vehicles to manipulate the masses's wealth and set agenda (I don't like you, I can let my PPT not rescue your stock.)]]> Thu, 26 Feb 2009 12:53:13 -0500
Now it's not even a hidden group anymore.

Plunge Protection Team gets officially introduced in Japan!!

Not long before everyone follows suit, including USA. This is not good for the world.

The Stock Market has just become another govt vehicles to manipulate the masses's wealth and set agenda (I don't like you, I can let my PPT not rescue your stock.)]]> http://seekingalpha.com/article/122894-the-unintended-consequences-of-levying-a-25-stock-transaction-tax?source=feed#comment-404690 404690
I remember that Buffet said that he's fine if Wall Street is open only 1 day a year to do trades, as an illustration of how he don't believe in trading.

I wonder if this Bill is actually originated by WB.

Personally, reduction in liquidity would be a problem, and a large B/A is definitely problematic -- but similarly I hate shows like CNBC that tries to make people trade every second, etc.

I don't know, there much be a balance. We're *way too* stock centric and short term focused. It's like people don't want to work hard and accumulate weath slowly, but want to all time and jump. We need to put our focus back on Working and Producing, not speculating.

However, even with that viewpoint, I think this bill doesn't sound like a good way to do that. It's too lopsided, because over time, eventually the whole stock market's wealth will be swallowed up by the govt. That's way too much.]]> Thu, 26 Feb 2009 12:48:59 -0500
I remember that Buffet said that he's fine if Wall Street is open only 1 day a year to do trades, as an illustration of how he don't believe in trading.

I wonder if this Bill is actually originated by WB.

Personally, reduction in liquidity would be a problem, and a large B/A is definitely problematic -- but similarly I hate shows like CNBC that tries to make people trade every second, etc.

I don't know, there much be a balance. We're *way too* stock centric and short term focused. It's like people don't want to work hard and accumulate weath slowly, but want to all time and jump. We need to put our focus back on Working and Producing, not speculating.

However, even with that viewpoint, I think this bill doesn't sound like a good way to do that. It's too lopsided, because over time, eventually the whole stock market's wealth will be swallowed up by the govt. That's way too much.]]> http://seekingalpha.com/article/122462-u-s-debt-watch-paths-to-repudiation?source=feed#comment-403006 403006
China should spend more, heck a LOT more, if it has the reserves to do so. Ditto to any country that still have capacity to do so on the balance sheets.

Anyone with excess resource, companies included, should buy and acquire resources, other companies, assets.

Not blindly, but buy if the need is there and the affordability is justified. Trying to time the bottom is NOT the way out of this. The bottom will form when there's enough buyers, not when there's enough waiters.

We need to FORM the bottom, not TIME the bottom.]]> Wed, 25 Feb 2009 10:59:28 -0500
China should spend more, heck a LOT more, if it has the reserves to do so. Ditto to any country that still have capacity to do so on the balance sheets.

Anyone with excess resource, companies included, should buy and acquire resources, other companies, assets.

Not blindly, but buy if the need is there and the affordability is justified. Trying to time the bottom is NOT the way out of this. The bottom will form when there's enough buyers, not when there's enough waiters.

We need to FORM the bottom, not TIME the bottom.]]> http://seekingalpha.com/article/122462-u-s-debt-watch-paths-to-repudiation?source=feed#comment-402987 402987
"The process is already underway."

What makes you think that repudiation, either the process of, or the threat of, either gradual, or sudden, isn't the reason for the crisis we're witnessing? I on the one hand, believe it is one of the key reason for the behavior we see in the market.

Everyone knows repudiation is coming, and is trying to do trades to "escape" it -- whether by shorting, or by buying gold, or by stuffing money in mattress or by NOT LENDING or by not employing, by not spending, etc. These actions exacerbate the situation and is creates a self fulfilling prophecy in some ways.

So the key question is whether repudiation will actually solve the problem, or actually be the straw that breaks the camel back and crashes the system?

How can anyone be so sure that this is the "right" action to do?

I implore everything to think deeply about this. For if this is right, then the correct means to solve the jam is to fight the perception.

Remember, USA was on the brink of collapse in 1930's, and a true leadership call by the President to NOT withdraw money from the bank; and trust the recovery is one of the key actions that helped restore stability. People queued up to deposit money, and it really helped to unjam banks.

Perception is everything in an economy. In some ways, if everyone decides to hoard, no system can survive, not even gold, not even *RICE BASED* economies (Ancient China, trades rice as a currency.). It's a deadly spiral that punishes people who's NOT hoarding, so it seems to justify hoarding, which worsens the situation.

It's akin to society competing with each other to see who can starve the most. If I can starve more than you and you die, I laugh at the ones who died and feel morally justified to do so?!

I have savings, heck I'm one of the biggest savers in everyone I know in my circle, but I also realize this is not a crisis that can be averted by saving or being miser, or being "prudent" or being thrifty. For someone can always out thrift me, outlast me, and if this is the criteria and the trend, even my formidable savings will be exhausted one day.

Despite everything I disagree with Keynesian economics, one thing is true. Price is sticky on the way down (witness houses, salaries, pensions, benefits), which means trusting supply and demand curve to self adjust is a fallacy (you'll have to wait a LONG LONG time for prices to adjust, possibly longer than what you can survive through or what the system can survive through); for it can turn into a self fulfilling prophecy that wrecks the whole system.

Unfortunately, improvement in technology is making this worse: panic happen much faster, and more importantly: Employment and costs can be reduced ad nauseum, esp on the way down in terms of capacity. (Automating everything, don't even need to upgrade systems as output is down. You'll be surprised how little workforce you need to keep things running.) Computers and robots *can* do majority of work, esp if you reduce the need to upgrade and stay ahead.

Recognizing this is half the battle. I'm not trying to preach reckless spending and wild gifting; but we need to recognize the miser craziness going the other way too.

I want everyone to realize that we all play a part in making this WORSE, with every bit of action we do. If you postponed buying something you need and can afford today, it may cascade in a way that you may not be able to afford that thing you need soon.

The key is to draw a line in the sand, and spend anyway -- not recklessly, but also not give in to thinking you can save on a need and get yourself out of the crisis. It makes it worse.]]> Wed, 25 Feb 2009 10:50:20 -0500
"The process is already underway."

What makes you think that repudiation, either the process of, or the threat of, either gradual, or sudden, isn't the reason for the crisis we're witnessing? I on the one hand, believe it is one of the key reason for the behavior we see in the market.

Everyone knows repudiation is coming, and is trying to do trades to "escape" it -- whether by shorting, or by buying gold, or by stuffing money in mattress or by NOT LENDING or by not employing, by not spending, etc. These actions exacerbate the situation and is creates a self fulfilling prophecy in some ways.

So the key question is whether repudiation will actually solve the problem, or actually be the straw that breaks the camel back and crashes the system?

How can anyone be so sure that this is the "right" action to do?

I implore everything to think deeply about this. For if this is right, then the correct means to solve the jam is to fight the perception.

Remember, USA was on the brink of collapse in 1930's, and a true leadership call by the President to NOT withdraw money from the bank; and trust the recovery is one of the key actions that helped restore stability. People queued up to deposit money, and it really helped to unjam banks.

Perception is everything in an economy. In some ways, if everyone decides to hoard, no system can survive, not even gold, not even *RICE BASED* economies (Ancient China, trades rice as a currency.). It's a deadly spiral that punishes people who's NOT hoarding, so it seems to justify hoarding, which worsens the situation.

It's akin to society competing with each other to see who can starve the most. If I can starve more than you and you die, I laugh at the ones who died and feel morally justified to do so?!

I have savings, heck I'm one of the biggest savers in everyone I know in my circle, but I also realize this is not a crisis that can be averted by saving or being miser, or being "prudent" or being thrifty. For someone can always out thrift me, outlast me, and if this is the criteria and the trend, even my formidable savings will be exhausted one day.

Despite everything I disagree with Keynesian economics, one thing is true. Price is sticky on the way down (witness houses, salaries, pensions, benefits), which means trusting supply and demand curve to self adjust is a fallacy (you'll have to wait a LONG LONG time for prices to adjust, possibly longer than what you can survive through or what the system can survive through); for it can turn into a self fulfilling prophecy that wrecks the whole system.

Unfortunately, improvement in technology is making this worse: panic happen much faster, and more importantly: Employment and costs can be reduced ad nauseum, esp on the way down in terms of capacity. (Automating everything, don't even need to upgrade systems as output is down. You'll be surprised how little workforce you need to keep things running.) Computers and robots *can* do majority of work, esp if you reduce the need to upgrade and stay ahead.

Recognizing this is half the battle. I'm not trying to preach reckless spending and wild gifting; but we need to recognize the miser craziness going the other way too.

I want everyone to realize that we all play a part in making this WORSE, with every bit of action we do. If you postponed buying something you need and can afford today, it may cascade in a way that you may not be able to afford that thing you need soon.

The key is to draw a line in the sand, and spend anyway -- not recklessly, but also not give in to thinking you can save on a need and get yourself out of the crisis. It makes it worse.]]> http://seekingalpha.com/article/122319-how-to-survive-your-best-guess?source=feed#comment-401595 401595
Do your best guess and place your bets! The roulette is rolling soon.

What a casino this whole investment scene has become. With volatility and chaos the way it is, plus the total poor visibility into future climate to do any kind of serious analysis, I seriously question whether gambling and being in the market is the same thing in 2009.

I think I'll take my money and buy lottery, at least that gives me a chance to shoot the moon.]]> Tue, 24 Feb 2009 12:17:34 -0500
Do your best guess and place your bets! The roulette is rolling soon.

What a casino this whole investment scene has become. With volatility and chaos the way it is, plus the total poor visibility into future climate to do any kind of serious analysis, I seriously question whether gambling and being in the market is the same thing in 2009.

I think I'll take my money and buy lottery, at least that gives me a chance to shoot the moon.]]> http://seekingalpha.com/article/122134-the-money-supply-and-the-stock-market?source=feed#comment-400834 400834
As for the US govt saying they'll embrace inflation? I'll believe it when the govt stops saying that a strong USD is what they seek. The fastest way to "embrace inflation" is to let USD fall. For the record,

Bernake hasn't really taken this stand yet. His helicopter move in Q4 2008 was called out as a bluff by the market. see www.telegraph.co.uk/fi...

Ther bond market knows we have a paper tiger Fed. There's no real power to cause inflation. This is in effect the same as Japanese central banks in the 1990s.

From where I'm standing, we're EXACTLY in the same playbook, in the same play, in pretty much the same theater -- just a lot larger spectacle and much larger numeric digits.

On Feb 23 05:39 PM BS Detector wrote:

> consider this wrote: "Japan pretty much followed our playbook. (Actually,
> more appropriate to say we followed Japan's playbook.)"
>
> Not at all. First off, Japan's fiscal stimulus was never even as
> large as our watered-down one. But more importantly, the BOJ was
> horribly behind the curve on monetary policy. It wasn't until, what,
> 2003 that the BOJ affirmatively embraced inflation as a strategy?
> This is what ended the deflationary period, and this is what Bernanke
> has clearly indicated he would do if needed.]]> Mon, 23 Feb 2009 22:20:58 -0500
As for the US govt saying they'll embrace inflation? I'll believe it when the govt stops saying that a strong USD is what they seek. The fastest way to "embrace inflation" is to let USD fall. For the record,

Bernake hasn't really taken this stand yet. His helicopter move in Q4 2008 was called out as a bluff by the market. see www.telegraph.co.uk/fi...

Ther bond market knows we have a paper tiger Fed. There's no real power to cause inflation. This is in effect the same as Japanese central banks in the 1990s.

From where I'm standing, we're EXACTLY in the same playbook, in the same play, in pretty much the same theater -- just a lot larger spectacle and much larger numeric digits.

On Feb 23 05:39 PM BS Detector wrote:

> consider this wrote: "Japan pretty much followed our playbook. (Actually,
> more appropriate to say we followed Japan's playbook.)"
>
> Not at all. First off, Japan's fiscal stimulus was never even as
> large as our watered-down one. But more importantly, the BOJ was
> horribly behind the curve on monetary policy. It wasn't until, what,
> 2003 that the BOJ affirmatively embraced inflation as a strategy?
> This is what ended the deflationary period, and this is what Bernanke
> has clearly indicated he would do if needed.]]> http://seekingalpha.com/article/122135-lessons-for-the-u-s-banking-authorities?source=feed#comment-400575 400575
One man's debt is another man's asset!

That old grandma's life savings parked in a CD somewhere is the same thing you're trying to wipe away.

That cash sitting in a bank account for a small business, waiting to be accumulated for machinery or capital expansion next year is the same thing being wiped away.

People seem to have no qualms beating the crap out of banks and making them lose money -- but they forget that those money are OUR money. It's a very bizzare cognitive disassociation way of thinking.

If China, USA wanted to wipe away savings; then you can empty everyone's account. For assets where you've financed and own less than 50% of it (rest of it is technically owned by the bank's -- whose assets need to be canceled out remember?); Perhaps the bank will take it back, liquidate it and only talk to you if there's any leftover.

Goodbye cars, homes, malls, factories, companies, pretty much anything heavily leveraged. (Read: pretty much everything in the USA, even govt) Oh, and goodbye pension, SS and 401Ks -- those are "claims" on debt aren't they? We're talking about forgiveness here... no claims allowed.

Careful what you wish for. We may get there yet.

It's not that rosy picture everything think when they imagine debt forgiveness. What everyone wants isn't debt forgiveness -- it's asset gifting. (i.e. I only own less than 1% of my home, but gift it to me anyway and don't collect on the rest. Ditto to my car, credit card purchased items, etc)

If that gifting is what gets executed in the end. I'll borrow and buy all the available land in the USA; then dispose of the debt. Surely you see how ridiculous it is?

On Feb 23 05:24 PM CJJ wrote:

> Sweden had like 5 banks. Let's not just say copy Sweden and call
> it a day.
>
> Outside of wiping away the debt all "solutions" are a crapshoot.
> In a perfect world the US, China, Japan, Europe, etc would get together
> and just wipe away the debt. Learn the lessons..Apply them and move
> on. It would be a win for all parties involved, period.
> ]]> Mon, 23 Feb 2009 17:37:08 -0500
One man's debt is another man's asset!

That old grandma's life savings parked in a CD somewhere is the same thing you're trying to wipe away.

That cash sitting in a bank account for a small business, waiting to be accumulated for machinery or capital expansion next year is the same thing being wiped away.

People seem to have no qualms beating the crap out of banks and making them lose money -- but they forget that those money are OUR money. It's a very bizzare cognitive disassociation way of thinking.

If China, USA wanted to wipe away savings; then you can empty everyone's account. For assets where you've financed and own less than 50% of it (rest of it is technically owned by the bank's -- whose assets need to be canceled out remember?); Perhaps the bank will take it back, liquidate it and only talk to you if there's any leftover.

Goodbye cars, homes, malls, factories, companies, pretty much anything heavily leveraged. (Read: pretty much everything in the USA, even govt) Oh, and goodbye pension, SS and 401Ks -- those are "claims" on debt aren't they? We're talking about forgiveness here... no claims allowed.

Careful what you wish for. We may get there yet.

It's not that rosy picture everything think when they imagine debt forgiveness. What everyone wants isn't debt forgiveness -- it's asset gifting. (i.e. I only own less than 1% of my home, but gift it to me anyway and don't collect on the rest. Ditto to my car, credit card purchased items, etc)

If that gifting is what gets executed in the end. I'll borrow and buy all the available land in the USA; then dispose of the debt. Surely you see how ridiculous it is?

On Feb 23 05:24 PM CJJ wrote:

> Sweden had like 5 banks. Let's not just say copy Sweden and call
> it a day.
>
> Outside of wiping away the debt all "solutions" are a crapshoot.
> In a perfect world the US, China, Japan, Europe, etc would get together
> and just wipe away the debt. Learn the lessons..Apply them and move
> on. It would be a win for all parties involved, period.
> ]]>