D. McHattie's Comments

Where Else Could Kashkari Have Gone?

Tue, 08 Dec 2009 09:26:44 -0500

Anyone who is surprised has been living under a rock for, oh, about the last century or so.

The Midas Touch? Paulson's Enormous Gold Stockpile

Mon, 07 Dec 2009 10:20:45 -0500

I get the sense Paulson's not too concerned about unwinding the position anytime soon.

I'd say that as long as there are central banks, fiat currency, fractional reserve banking and debt monetization, Paulson won't need to worry about liquidating this investment.

"None of them would have survived a situation in which we had let that fire try to burn itself out,” says Treasury Secretary Geithner about Goldman Sachs' (GS) claims that it didn't really need government help. Geithner calls last fall's events "a classic bank run" and criticizes record bonuses, saying pay needs to be restrained even at banks that have repaid aid.

Fri, 04 Dec 2009 16:28:26 -0500

We need to fine-tune the legislation which gave birth to corporations in the first place.

Governments are the parents of corporations - it is time they imposed a little discipline.

The Lords of Finance: No Noblesse Oblige

Fri, 04 Dec 2009 13:39:06 -0500

Higher taxes on the rich is not the answer because the rich will just use their power to make more money.

Corporations only exist because we passed laws that made them legal entities.

We should not be reluctant to fine-tune legislation in order to reduce corporate power and smooth out inequalities of wealth and income.

The Lords of Finance: No Noblesse Oblige

Fri, 04 Dec 2009 13:38:50 -0500

Ben Bernanke Pleads for His Job; My Response to Bernanke

Wed, 02 Dec 2009 08:05:30 -0500

Bernanke needs to be outed as the smug, self-serving incompetent that he is. Mish cuts to the heart of the matter once again.

Perhaps we can bury Bernanke in the same hole that we dig for Larry Summers and Tim Geithner.

Krugman Forgets How Long the Dollar's Been Declining

Tue, 01 Dec 2009 20:59:37 -0500

Geez, I wonder if the Nobel committee has a liberal bias?

How Larry Summers Lost Harvard $1.8 Billion

Mon, 30 Nov 2009 20:03:17 -0500

Incompetent is as incompetent does.

I don't care how detailed, complex and sophisticated is Larry Summers' analysis - his judgement is horrible.

Why anyone would choose to work with a man of such unrestrained arrogance and outright incompetence defies explanation.

UAE's central bank says it will stand behind Dubai World's lenders, announcing an open-ended credit facility to help them overcome liquidity issues resulting from Dubai's sudden $59B debt freeze. The bank did not comment, however, on how - or if - its aid would extend to Dubai itself.

Sun, 29 Nov 2009 18:58:25 -0500

A bailout - what a surprise.

Who ever would have thought that a company could speculate recklessly on real estate and then get bailed out by a government or central bank?

Central banks create the money for free so it's nothing to them to bail someone out.

And not one person in a million understands the effect on their own personal standard of living so who's going to complain?

Lithium Ion Batteries and GEVs: False Gods for the New Millennium

Sun, 29 Nov 2009 08:43:49 -0500

Another great article, John.

I believe it was Winston Churchill who said: "America can always be counted on to do the right thing, after it has exhausted all other possibilities."

We'll throw billions in taxpayer subsidies toward electric vehicles only to turn around and realize they aren't really what we want.

Douche Bag Of The Year Award

Sat, 28 Nov 2009 09:38:13 -0500

I realize I already nominated someone but I would like to give a 'dishonorable mention' to whoever the douchebag is that went through here and gave every single comment a thumbs-down.

Who does that? A real douchebag, that's who.

Dubai World: A Great Precedent

Fri, 27 Nov 2009 14:36:12 -0500

"Would that Treasury will follow suit when it comes to the creditors of state-owned companies like AIG."

And Fannie and Freddie.

And GM.

And Goldman Sachs.

Yen, Gold and the Perfect Desert Storm

Fri, 27 Nov 2009 14:19:54 -0500

It's an interesting characterization: failure.

You use the word a few times even though gold is just shy of its nominal all-time highs even against currencies that are rising.

If you hold gold and bought it prior to this past week you're still in pretty good shape despite a significant drop today.

How to Live with a Financially Illiterate Population

Fri, 27 Nov 2009 11:27:36 -0500

derryl, I couldn't agree more.

Those at the top of the corporate ladder are, for the most part, our best and brightest. And I believe that it is right and good for the system that they receive more wealth and income than those of us lower down in the chain.

But there has to be a limit to the disparities of wealth and income produced by this arrangement.

The 'corporation' is a creature of statute. We should not be afraid to fine-tune statute to minimize this unequitable, unjust and infinitely growing disparity between the lucky and smart on one hand and the unlucky and not-so-smart on the other.

Looking at $5 Trillion in Losses and Zombie Debt in Residential Mortgages

Fri, 27 Nov 2009 10:37:36 -0500

1) As a culture, we lack the courage to face this reality.

2) We also, mistakenly, tend to not think of government money and obligations as being connected directly to our own personal savings and income.

The result is that we throw our own money, future, children into the bottomless pit, thinking it's someone else's money, future, children we're sacrificing.

Such a pitiful race we have become.

Case-Shiller Still Predicts Massive 45% Fall from Today’s Values

Thu, 26 Nov 2009 10:02:34 -0500

Good article. It's a shame that some of the other readers here refuse to see the inescapable truth: residential real estate is still significantly overpriced, even after such significant declines.

3.5% FHA mortgages and the first-time homebuyer tax rebate have dramatically improved the ability of low income, young, inexperienced and naive people to purchase a house or condo.

The government should be ashamed of inducing these people to make the worst decision of their lives.

Obama will rise and fall with the dollar: The electorate is only as happy as the value of the greenbacks in their pockets.

Thu, 26 Nov 2009 09:49:45 -0500

B-b-b-but what about hope? Don't you guys believe in change? C'mon, we elected a black man, aren't we just so damned enlightened now?

Mort Zuckerman backs the Fed as systemic-risk regulator, saying there's "no other institution - certainly not Congress - with the sophisticated understanding and detailed knowledge to monitor the financial health of the banking firms." Should Congress undermine the Fed, he says, we could face a world-wide collapse of confidence in the dollar.

Wed, 25 Nov 2009 11:17:49 -0500

If you want the Fed to regulate then you must create the proper incentive for them to regulate.

Greenspan enjoyed 2 decades being hailed as 'the maestro' precisely because he did not regulate.

Douche Bag Of The Year Award

Wed, 25 Nov 2009 09:32:27 -0500

I nominate Larry Summers because he is the 'brains' behind our current administration's brainless economic policy.

Make no mistake, Geithner doesn't go to the bathroom without approval from Larry Summers.

When Paul Volcker tries to inject some sense into the discussion, it is Larry Summers who shoots him down with withering economic sophistry.

BO has trusted Summers completely and the result is a jobless, Wall Street-only recovery fashioned out of the debts of our grandchildren.

I submit that it is Larry Summers who rightfully deserves to be this year's Douche Bag of the Year.

Thank you for your support.

Eliot Spitzer on How Geithner Was Fleeced by Wall Street

Tue, 24 Nov 2009 13:59:29 -0500

I don't see how Geithner and Summers still have jobs.

They are miserable failures.

Home Sales at Highest Level Since February 2007

Tue, 24 Nov 2009 09:26:54 -0500

"[T]he worst is definitely behind us." This is an absurd statement.

With 3.5% down payment mortgages, FHA has become the new subprime. These mortgages will perform just as well as subprime mortgages did.

Foreclosures are far from over and there will be no lasting housing recovery until foreclosures subside.

Existing Home Sales on a Sugar High

Tue, 24 Nov 2009 09:08:37 -0500

Bear in mind that 'owning' a home and then going through foreclosure makes life a whole hell of a lot worse.

On Nov 24 05:09 AM prairiedog555 wrote:

> When is the best time to get into the stock market? To get married?
>
> To switch jobs?
> Life is uncertain. One of the things that makes life better is owning
> a home.
> Find one you like, make an informed choice, make the best deal you
> can, don't get screwed on mortgage, pay off ASAP, live happily ever
> after.
> I have two homes Free and Clear, and it feels pretty good.

FHA Shenanigans Continue:When Will We Ever Learn?

Mon, 23 Nov 2009 09:21:28 -0500

One thing I learned in business school is that people's willingness to change is highest at the peak of a crisis.

I think it's going to take a real crisis before we change, something even bigger than the failure of Lehman.

Got gold?

Artificial Economy? Yes. Artificial Inflation? No

Mon, 23 Nov 2009 09:11:28 -0500

Good article, Paco. Thanks.

But I'm still not sure how/when this price inflation moves to consumer goods.

Like your example of student loans and real estate, prices rise when you make more money or credit available to purchase that good, service or asset.

So since the banks have been given so much money I see that the prices of things that banks buy will rise. And these banks buy investments so their prices are rising: equities, fixed income (for now), precious metals.

But the question is when do consumers get their hands on this money? Because, it seems to me, that's what's necessary in order for consumer prices to rise.

Goldman Sachs' Latest Initiative: Business Plan or Charitable Donation?

Fri, 20 Nov 2009 11:11:27 -0500

There is a 4th reason why Goldman has done this:

They want to avoid public pressure on elected representatives to reduce their parasitic position within the American economy.

There is NO WAY that Goldman adds the billions worth of real, tangible value to the economy that they take out.

Goldman Sachs is a hidden tax on the US economy.

On U.S. Housing and Debased Lending Standards

Fri, 20 Nov 2009 07:40:31 -0500

Good point, ED. None of the quantitative easing, MBS purchasing or homebuyer rebate programs will have had any success by spring - all will be extended.

The Fed, Congress and White House are insane and thus will keep doing what they're doing and getting what they're getting.

I see the end game as a collapse or near collapse of the USD (and other currencies, perhaps) relative to real things (precious metals, oil, agriculture, NOT real estate).

U.S. Economy: The Punch Bowl Stays Till the Party Gets Out of Hand

Thu, 19 Nov 2009 21:53:19 -0500

Fred, the problem is that the punch bowl is only available to those on Wall Street. Those on Main Street are indeed dying of thirst.

This is why we're only seeing inflation in the things that Wall streeters buy but not in consumer prices.

Yes, this will continue, because our Federal Reserve doesn't know how to do anything else.

A Short Lesson in Finance and Banking for Paul La Monica

Thu, 19 Nov 2009 19:53:34 -0500

Well said, Adam. Blankfein's 'apology' is but one among a slew of public relations stunts we'll see in the coming weeks.

Another stunt is their new $500M fund they set up to lend to small businesses, educational institutions and community development groups - it sounds like a lot but it's a drop in the bucket for Goldman.

The $500M was borrowed from the government interest-free and will be loaned out to the above groups at interest - how is that a charitable act?

Is the American public really that stupid. Sure, Paul LaMonica is, but I hope the rest of us are not.

Toll Brothers (TOL) says the FHA has created a potential "train wreck" by insuring home purchases made with down-payments as small as 3.5%. FHA loans accounted for about 8% of the mortgages Toll closed last quarter. While the FHA's insurance reserve ratio has fallen to an all-time low, a senior government official denied that the FHA is the next subprime mortgage crisis.

Thu, 19 Nov 2009 09:10:32 -0500

Consider that first-time buyers also get $8k back.

So any house or condo costing less than $228k can be bought at a net of less than $0.

Given the recency of the subprime disaster you would think they would have learned something. Evidently they have not.

Gold Closing In on 20% Above 200-Day Moving Average

Wed, 18 Nov 2009 16:19:33 -0500

Gold is not at an 'all-time high' when adjusted for inflation. That's not an 'argument', that's a fact.

And you are living proof that it is not the case that 'nobody thinks it can go down'.

Gold could go down from here but a bubble it is not.

On Nov 18 04:04 PM woollyB wrote:

> Gold looks like tech in 1999 and real estate in 2005. Nobody thinks
> it can go down. If you think gold can only go up from here, its all-time
> high, you should explain why "this time is different." And if the
> explanation has to do with inflation, the Fed, etc., well, there
> are always compelling arguments at the top. That's why it's a top.