Liqal

3 Energy MLPs for the Price of One

What about CEF
DHG ?

Commercial Mortgages and Mortgage Resets to Trigger Next U.S. Downleg

To Big to Fail or To Big to Succeed


There is much debate about banks etc being to Big To Fail. I think the debate is framed improperly. It really should be labeled To Big To Succeed.

And it’s not just Financial Institutions that are Too Big To Succeed, it is all industries ( think GM among others ).

What drives this phenomenon ?

In the U.S. we pride ourselves on backing free enterprise while other countries are quasi socialists. And the pundits have it right. Socialism in any form does mitigate growth and does curb the flexibility that is needed to have a vibrant society and economy. The point they miss is when you take the referees off the court you no longer have a basketball game, you have a hockey match. In other words power trumps economics.

Big institutions tend to dominate in the non regulated world. And what is wrong with that ? Shouldn’t they be more efficient ?

They should but they aren’t. Here is why and is the vital point.

Once a company becomes to big it no longer operates as a business it becomes a political entity. Ask the millions of entrepreneurs that left corporate America and they will almost without exception tell you that in the big corporate environment the best and the brightest were shunted aside as not to threaten the power seekers and players within the organization. This can only occur in a large organization where results can be modified, hidden and aborbed into a huge vat of data i.e. the spin doctors tend to win.

So we should not be surprised that GM bit the dust. Why did they ignore the obvious ? Because GM was run for management not for shareholders. Self dealing, pure and simple. And the efficiencies that larger companies bring ? Has anyone seen fees go down and yields go up at the biggest banks ? Even when record profits were rolling in this was not the case. Why with all their advantages are the biggest banks in financial trouble ? Where did that profit spread go ? Empire building by the myriad of executives within the organization.

Which brings us to the present. Although Obama is doing a lot of things right. Cancelling non essential fighter planes for example. The proposed tax changes will put a burden on the only part of society that is working. The small business owner. Many of whom I have met and admire. The degree of integrity in this class of society is leap years ahead of all others. That may sound strident but it must be said. The past, present and future of our country depends on this group of working class heroes who have done well.

The Fourth Branch of the U.S. Government: Goldman Sachs?

There's more
re: Martial Law being discussed in 2008
... check out RECRO site

Fed, Treasury Propose the Dissolution of Capitalism

I think many would be shocked that Congress met privately
re: Martial Law in 2008.

Why Economic Dogma Threatens Our Future Prosperity

"Government gets involved in business because business asks them to. That’s right — pop your eyes back in your head and read it again — it’s another undeniable truth. Businesses in the U.S. spend billions every year begging politicians to intervene on their behalf"


Every now and then someone hits it right out of the park.
Excellent !

Google's OS Model Borders on the Brilliant

Netbooks loaded with (GOOG) Chrome will boot up almost instantaneously & will store data on the 'net instead of a hard drive.

There's you Uh Oh from MSFT

'The Crash of 2008 and What It Means' by George Soros

Soros' theory on Reflexivity is spot on. Yet nothing is being done to rectify the effects of the irrational and non effecient market. The free enterprise disciples disregard any interference in the markets at all even tho one of the greatest investors of all times is declaring the unregulated markets flawed.

The answer is simple. Require lending be based on cash flow analyis. Have a non interested 3rd party determine annually if that cash flow is at risks ( unlike the pay for play ratings agencies MBIA etc ). It can be done re: Egan Jones.

The result. In good times bubbles would have trouble developing since lending would disipate as assets become overvalued ( opposite of present situation where as Reflexivity describes, higher prices, more lending ). In slowdowns lending becomes more attractive as valuations are low compared to cash flow.

You could still lend otherwise but it would have to be outside the protected umbrella. i.e. it would be labeled as speculative and yields and down payments would be correspondingly higher and it would need to be segregated from the rest of the financial system. No buying loan insurance. If the loan fails it fails alone.

The end result would be a much tamer business cycle and if successfully implemented the end to financial panics and crisis. If that sounds pollyanish, consider this ... before the 1930s depressions and panics were common. Then changes were made to make the system more stable such as Glass Steagall which seperated lending and investment houses and Mark to Market accounting. Both reinstated in recent years to disasterous results. We haven't had anything resembling a depression until now.

Some will argue that this is interference with the free markets. Does not a gardener interfere when he weeds his garden ? Does not the tomato still thrive and grow ? Not despite the gardeners efforts but because of it.

'The Crash of 2008 and What It Means' by George Soros

Soros' theory on Reflexivity is spot on. Yet nothing is being done to rectify the effects of the irrational and non effecient market. The free enterprise disciples disregard any interference in the markets at all even tho one of the greatest investors of all times is declaring the unregulated markets flaws.

The answer is simple. Require lending be base on cash flow analyis. Have a non interested 3rd party determine annually if that cash flow is at risks ( unlike the pay for play ratings agencies MBIA etc ).

The result. In good times bubbles have trouble developing send lending disipates as assets become overvalued ( opposite of present situation where as Reflexivity describes, higher prices, more lending ). In slowdowns lending becomes more attractive as valuations are low compared to cash flow.

You could still lend otherwise but it would have to be outside the protected umbrella. i.e. it would be labeled as speculative and yields and down payments would be correspondingly higher and it would need to be segregated from the rest of the financial system. No buying loan insurance. If the loan fails it fails alone.

Some will argue that this is interference with the free markets. Does not a gardener interfere when he weeds his garden ? Does not the tomato still thrive and grow ? Not despite the gardeners efforts but because of it.