gksmar

When Goldman Might Have Failed

You wouldn't be surprised when these fed official favoring AIG bailout retire from their govt job will be board members of GS.

No Exit for Bernanke

The best unbiased comment I have read.


On Jul 28 01:55 PM John Galt wrote:

> The inflation camp believes that what the Fed is doing is inflationary
> (true). The deflation camp believes that the credit bubble we lived
> through has very deflationary forces ( also true).
>
> Peter Schiff (inflation camp) would point out the increased money
> supply, while somebody in the deflation camp would point out the
> lack of credit, the slower velocity of money, the reduction in the
> money multiplier in a fractional reserve banking world... a fall
> in asset prices, declinging or stagnant at best wages, high unemployment...
> that's a classic deflationary cycle.
>
> I see near term Deflation, but yes, eventually there will be inflation....
> Once banks start lending, wages go up, and people borrow and spend
> money. I don't see that in a meaningful way anytime soon.
>
> You say that low interest rates is inflationary? Sure, but why has
> Japan had a lost decade? Where was their massive inflation? They
> did tack on a huge percebtage of debt to GDP ( and we will too),
> but not inflation.... Because Japan had a HUGE credit bubble ...
> just like we did in the "roaring 20's, and just like we had now.
> You could try and manipulate away the pain, but the thing with economics
> is that there is always round 2!
>
> Ludwig Von Mises, the famous Austrian economist said there is nothing
> we can do to stop the after effects of a credit bubble. Nothing!
> NA-THING! You could choose inflation ( German Weinmar republic)
> or you could choose a lost Decade or a Great Depression, but you
> WILL suffer pain one way or another. That's a law of nature.
>
> Bernake was a student of the Great Depression and he is trying to
> take tremendous steps to slow down the pain, no doubt. But he also
> would rather "take away the punch bowl" late rather than early.
> In 1937 the fed raised reserve requirements because they were scared
> of the on coming inflation... That hit us with another recession
> within the Great Depression when banks were once again forced to
> hoard more money (legally)... If anything, Bernake ( or whoever follows)
> will be LATE to pull the plug and we should have inflation, but I
> don't see that any time soon. This is a freaking mess and even the
> biggest Bulls see slow growth in the future when things start to
> get better.
>
>
> The thing that REALLY bothers me is who made Ben Bernake Economic
> Czar? It can be argued that the President of the Fed is the most
> powerful man in the world... even more so than the President of the
> United States. Government set interest rates? Interest rates effect
> the prices (current and future) of everything in our economy. They
> have the ability to distort reality... It's like having a compass
> that doesn't point North and going hiking in the woods. You call
> that free market? What's the point of the Fed, to make sure this
> stuff doesn't happen, to try and manipulate the business cycle?
> They have done a horrible horrible job at it. It's a shame of all
> the pain and suffering for so many people and those people have no
> idea even why ( just blame the easy target of George Bush if you
> are a Democrat or Bill Clinton/Congress if you are a Republican).
> A lot of economists don't even understand the Great Depression (
> or what's going on now), nevermind the American Idol watching public.
>
>
> I hope Peter Schiff reads this because I feel like it all goes to
> deaf ears when I or any of the other peons say something. Peter,
> you have power... At least I and many other people believe so. PLEASE
> raise the question to the media as to why on earth we give so much
> POWER to one man at the Fed!
>
> What happens if we had somebody even worse than Bernake? What happens
> if we had a President with no formal economic training... say a community
> organizer or a lawyer who gave orders to Bernake?
>
> They asked Jim Rogers what he would do if they made him President
> of the Fed. He responded, " I'd fire everybody, and then I'd quit"!

This Rally Smells Fishy to Me

If you cannot market to mark because there is no market, then the value of the asset is zero because there is no market for it.
That is what free markets are my friend.


On Jun 12 01:13 AM sethmcs wrote:

> The premise of your article is the "bad assets" have not been cleaned
> up and banks are still insolvent. I disagree. All derivatives are
> not losers, especially if they are hedged and CBO are not worthless.
> If they are give them all to me. lol. What has happened is the mark
> to market rule made all these instruments appear to be worthless
> because you can't mark to market without a market. What is going
> to happen now is these assets will be wrote up and the interest rate
> spread will allow the banks to start making some serious money.
> I bet most banks will beat earning expectations which are already
> low. If you feel that I am wrong go ahead and short the financials.
> I am accumulating regional banks now and avoiding the majors. If
> I am wrong the juicy yields will allow me to be patient.

Short India Is a Perfect Emerging Market Trade

I agree with the last comment from dkp. There is a huge organic growth within India. This down turn in the commodity prices may be a boon to India to reduce its costs for infrastructure building and prop up the employment and economy. Also oil is is down which was a huge burden to the indian economy.

My Proposal for Improving Lending Between Banks

I totally agree with you. I like the point where you say "If your constituents took aggressive loans based on the ability to make a quick buck and they were left holding the bag, taxpayers should not be forced to bail them out" .
Because even certain people are to be blamed for taking aggressive mortgages which are beyond their means.

Starbucks Gets Re-Caffeinated - Barron's

This company is still making a lot of money. Its expanding overseas, the growth is much bigger in the emerging markets for decades to come (unless there are no stupid wars) . People are talking like the world is coming to an end. Markets will always recover and people will always spend.

Tyson Foods: Picked To the Bone

But why do they have 3 Billion debt paying an interes of about 230k ? This is eating up nearly half the net income .

It's Only the End of the Beginning

I think any bailout, be it banks or helping home owners at the expense of tax payers is bad. Law abiding responsible citizens are always left out.
People taking mortgages beyond their mean trying to make a quick buck getting bailout ? What does this teach to responsible citizens ? Become irresponsible ?
I even here people who can very well pay their mortgages wanting to walk away from their homes because their values are lower than they paid. Even home owners very well knew the risks involved while taking a loan.
We are not even in a recession leave alone depression. I think this way too soon for any bailout.
I think Paulson is only trying to help wall street come out of this mess (I work for a wall street firm) by banning short selling, bailout what not.
And dumb politicians both Republicans and democrats are opportunist, all they are thinking is about the coming elections. Voting against any of these bailout bills will back fire in this elections.
I am just rambling my thoughts ...

Preserving U.S. Economy Over Free Markets (Short Sellers)

If the companies think that short sellers are valuing the companies lesser than its true value why cant they go and buy their own stock. Credit crunch ? With all their PhD mathematicians creating sophisticated models could'nt they predict that over leveraging could bring down their companies when markets correct.

Preserving U.S. Economy Over Free Markets (Short Sellers)

I thought america leads , not follow. Dont give me this bullshit reasoning. Bringing the true market prices are by short sellers.
btw I have never short sold anything.

Wall Street Breakfast: Must-Know News

Very good overview. Thanks very much.

ICICI Bank: Unwarranted Beating, Proven Growth Prospects

Good story and analysis. But the author does not write about the competition that the bank may face. There are a lot of disgruntled customers who are moving out their deposits. Businesses do not like banking with icici. Valuation at 21 pe is a bit too much indian bank.

Starbucks on Sale (Part I)

Comparing mcd coffee to sbux coffee is insane. dunkin dougnut and mcd coffee is like drinking hot water. SB coffee is rich and tastes like coffee.
When you compare sbux and dunkin, compare the size of the cups, amount of coffee powder they use to make each cup, etc.
SBUX is a much better coffee. mcd only the cup looks good, same crap inside it.

ETFs: Implications of Goldman Sachs Predictions

To catch up with the US economy by any of the bric nation is a dream. There are lot more factors that contribute to the nation's economic development, like corruption, poverty, political stability, law enforcement, ease of doing business, clamping to terrorism, etc. The list goes on.
Goldman may have Phd dudes in economic, so did those guys who came up with CDOs and exotic derivatives and lost billions of dollars.