johngaltfla

WSJ Weighs in on Peter Schiff

So an MBA is all it takes? How do you explain Hank Paulson then? Because based on having an MBA, CFA, and CAIA we should not be in the mess we are in. Perhaps listening and reading what the man says and not acting like Mish's offended little brother would be a better path for you to follow.


On Jan 31 12:00 AM FETZ wrote:

> Peter Schiff is a nobody. No MBA from a prestigious school. No CFA.
> No CAIA. No CPA. He is a stockbroker and everyone that works for
> Euro Pacific Capital is too. I wonder how he came up with such a
> sophisticated name. he doesn't have any credentials for me to even
> bother to listen to him.

WSJ Weighs in on Peter Schiff

Peter made some incorrect short term bets on a long term problem. If anyone who is involved in the investing world at some point in their life did not make such a mistake, then they are lying. Mish's problem is that he does not get 'face time' so he lashed out in an attempt to generate publicity for his drastically incorrect deflation theory that he's been peddling in the face of the greatest increase in our money supply than at any point in history. Not to mention that in 3000 years of human history, no debtor nation with a fiat currency has EVER experienced a fatal deflation so his theories do not hold much water in my book unless of course someone drugs me and turns me into a raving lunatic Keynesian. Peter will be proven right and the dollar along with the US financial system will turn into a leper colony. Peter's timing was wrong and to absorb more than 5% loss on any investment is foolishness and poor management in my opinion.

It's Time to Stop the Economic Gloom and Doom

On Jan 02 03:51 AM Vienna wrote:

> Interesting to hear two people of my country Austria being quoted
> (Schumpeter and Hayek).
>
> Since I live in a country where we tend to find a way between capitalism
> and communism, I fully agree with the article, it has a good spread.
> Our histroy has proven that you need to find a middle way between
> two extremes.
>
> Due to the system we have here we are not panicking so much, since
> the 5-10 % which will get unemployed, will be caught by the rest.
> This is not in the sense of US capitalism, but currently nodody knows
> who is going to be laid of, so it is a win-win situation. You spend
> it for the army, we for the unemployed, so lets discuss which system
> makes more sense.
>
> Against all opponents - unemployment is nothing that you just do
> for fun and have a good time, it supplies you with only the basic
> needs, and surely everybody want to get out of it ASAP.
>
> We are very fond of Obama, and we think the investments he will be
> doing for society is not wasted money. Schools, roads, infrastructure
> and further investment are for the general benefit, and should have
> been done way back.
>
> Vienna is very close to the former cummunist states, and for one
> thing I can tell you, these people may not have as much as you, but
> they are nice, kind and modest people. I have been to the states
> often, and here is something for corporate US,
>
> GREED KILLS

Perhaps you should take a road trip to Albania. Ask them how the Soviet economic model worked for them.

You'll find that freedom and Keynesian idealism along with government central economic planning are antithetical.

It's Time to Stop the Economic Gloom and Doom

"That is where the government comes in. It serves two roles here, one is to provide the funding (and also, by offering wages, giving people the incentive to do the work instead of watching sports), but it is also important for the government to coordinate activity as well, to bring people together to work on the highest value projects in the community in whatever sector - public or private- those projects might be in."

This says it all.

Comrades, government's role in society is to regulate trade and insure the national defense.

The minute you intermingle Marxist idealism with Keynesian fantasies you end up with the disaster which we are on the precipice of now. If you enjoy the Chinese Communist economic model you will continue to support Keynesian idiocy. The facts are that by allowing the government to manage, influence or own capital creation via proxy (TARP anyone?) you have diluted competition and any reason for private capital to expand in the future. Depressions and recessions serve useful purposes to let the dying die and the weak be either acquired or put up against the wall. These companies need to go away but the level of interference thus far along with the prospects of massive socialist inspired government programs will only extend the downturn and keep any return to sustained growth delayed by years.

When deleveraging is allowed to occur within a normal free market system, the pain is sharp but the duration short. Unfortunately there is this "mommy mommy I scraped my knee please kiss it and make it better" mentality in this country where losing is no longer an acceptable option. There are winners and losers in real capitalist economies and since we are no longer willing to accept losers, we are well on our way to following the ChiCom-Soviet hybrid model which will mire this nation in mediocrity and guarantee that the Fed and Treasury along with the new administration will introduce a GOSPLAN to satisfy all parties instead of letting markets do what they do best.

Unemployment's Surprisingly Large Drop

This posting is a perfect illustration of the dishonesty the permabulls have been promoting for over two years now and the nonsense that has been propagated by not just the financial industry itself, but the MSM and our government agencies. When one uses data to illustrate a viable point it helps to have some realism for the basis but the original post fails to point out that the data presented was effectively for two business days. The two days of filings basically were for 12/22 and 12/23. Very little activity is undertaken by the civilian workforce on 12/24 and 12/26 and much to the shock of the cheerleaders trying to convince the sheeple to "stay long" or "buy and hold" all government offices are closed on 12/25. The 24th and 26th are usually travel days and even the newly unemployed use that time to spend it with family as they know they can file after the first of the year and still receive benefits due to them.

This quote:

"It's time again to remember that when it come to macro economic condition analysis, "the majority is always wrong."

highlights the insanity that has passed for economics, financial advice and "reporting" in our society today. The truth is that majority is not always wrong, usually in our new society it's the data that is suspect. In the case of the original poster it is an illustration of the foolishness we have seen exhibited by the financial community to promote false hope. The first two full weeks of January 2009 will hammer the case home that the unemployment situation is not moderating and that once again the "good news" is the usual lipstick on a pig approach to presenting information to a gullible public.

The original posting is a dishonest disservice to the blogging world which focuses on current events and economics. If you think that presenting "good news" without highlighting the facts behind the data is such a great idea, ask Charlie Gasparino how it worked out for Bear Stearns. He should know. During February of 2008 he reported a takeover rumor for the firm several times during the month precisely between 2:15 p.m. and 2:45 p.m. on major down days for the S&P helping to "save the day" as it was called. In the end, the markets functioned somewhat efficiently by marking down falsely valued corporations to zero or to levels reflecting their true new worth, despite the government's best efforts to mask the problem.

Keep on playing the role of cheerleader and the rest of us will short the dog snot out of your "good news" and profit accordingly.

Unemployment's Surprisingly Large Drop

You have got to be kidding me, right? The numbers were essentially for two days worth of data, Monday and Tuesday the 22nd and 23rd. December the 24th is notoriously a light day for applications for unemployment benefits as it is a holiday and travel day for most Americans. The 25th, FYI, is a holiday and on the 26th that is considered a trap day as very few people apply for benefits the day after Christmas. When the numbers come out in the first two weeks of January 2009, then and only then will you start to see the true picture of what is happening. Data and market activity the last two weeks of the year is suspect at best, irrelevant to anyone with more than two functioning brain cells. I'm amazed that the MSM and OP are still grasping at desperate straws to promote a reason to fulfill their bullish case. This is the kind of dishonest insanity that created the problem in the first place. Manipulating the headlines never changes the end results. If you don't believe me, ask Charlie Gasparino about the numerous takeovers of Bear Stearns he reported in February of 2008.

It Is Still a Bear Market

Until you hear the word "bottom" eliminated from the Bubblevisionistas vocabulary, we are not even close to one.

Also until money is moved from short term Treasuries which are at terrifyingly low yields that indicate a huge problem is still overhanging the markets, the sidelines will continue to remain a very crowded place to sit. The range is still intact and the volume less than inspiring.

The Deflation Debate Continues

The devil's advocacy point of view is interesting but short-sighted. The consumer will start spending again because the government stimulus about to hit will take the lower echelon of our economy and dump an almost endless stream of checks, credit and benefits that they are "entitled" to to free up and use for those necessities of life like plasma televisions, Wiis, MP3 players, iPhones and smokes.

And the car industry is counting on a lower class tax break for auto-financing before all is said and done to re-stimulate their circus. The money is coming. It just takes time to filter into the system. The average transit time from initial reserve growth to market is still 6 to 9 months and next spring another wave hits our food supply. That is when inflation will be noticed again.

As Jobs Decline

Mish, once again you have nailed this. The BLS is continuing to post these numbers along with the inflation data in an insane effort to postpone any consequences until after the election. The ability to distort the facts in the name of maintaining confidence will have a huge, it not lethal, boomerang effect when the worldwide investing community pushes back from the roulette table and realizes that any investment based on the U.S. Government's economic data and the lack of honest corporate reporting is impossible. Perhaps the BLS should create a "Tier 3 Data Site" so they can post this nonsense.

What Kind of Government Support Will Fannie and Freddie Get?

"They are not in the business of rescuing feckless financiers from bankruptcy."

Really? SO what was Bear Stearns and CFC? A belch in the night? A mysterious black hand? The Mafia investing in "America's Future?" Your thesis is so flawed, so hollow and so easy to shoot full of holes, it is not even funny. Your assumptions are based on dated and inane predictive formulas that assume that real estate can not experience a 40% plus decline in the current economy. Get for real.

So if the government elects to bail out Fannie and Freddie with an endless taxpayer commitment far beyond that of oh, say Indymac, does this mean all of the hedge funds who played with matches and gasoline get a guarantee of rescue also? Do we bail out everyone who took out the deadliest CDS to save a bankster or Congresscritter's friend in the near future also? Perhaps the monolines need just one more visit before you assume that the property taxes will be paid BY BANKRUPT PEOPLE and that everything will go Mayberry, RFD again in your world.

Even though most of the hedge funds are managed in the offices of the same investment banks that helped exacerbate the problem to date, and the hedgies are quite nicely located in convenient PO Boxes in the Caymans, are we going to get honest about the amount of agency paper and Treasury paper they purchased to bolster and prevent realistic yields for that garbage to finally occur? Or are you going to insist that we continue to bail out anything and everything with reproductive capacity that happens to have the ability to pay taxes to the US Government?

At some point, something has to go to ZERO and die. Perhaps you should analyze your portfolio or better yet, post it up for independent evaluation (grin) and lets us see if a government bailout is justifiable in your future.

In the mean time, share what you are smoking. TO even hint that our government officials, quasi-government officials, regulators or politicians are doing are doing a good job is like complementing the Polish Calvary in 1939 for doing such a good job to "stem the tide."