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Smarty_Pants

Smarty_Pants
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  • The Next Crisis Is on the Horizon [View article]
    "The Treasury can also change tax laws to favor lending over the holding of Treasury securities."

    Not quite. Last time I checked Congress wrote the tax laws. The Treasury is part of the Executive Branch and writes no laws.

    As for the other suggestions they are true enough taken at face value. If we are to accept as a given that the money supply is increasing "too fast" and we hope to 'fix' our problems via some other approach then the means you suggest is the only 'market' choice left.

    What is left out of any discussion of these alternate choices is the fact that the 'rules' for success/failure will now be driven by the FED/USTreasury instead of the marketplace.

    Success via "Regulation" is simply another way of saying that the governement will be choosing winners and losers in the economy. This has been proven to be a sub-optimal approach to eliminating economic ills.

    The most effective way to restore the economy to a sound footing is to let unprofitable firms fail so others can acquire their assets at distressed prices and proceed in a profitable manner.

    Rewarding incompetence with bailout money is only prolonging the problem and will bring greater failure in the future. Dictating economic activity via regulation can just as easily reward bad activity or prohibit good activity as it can do the opposite.
    Nov 3 11:37 AM | 1 Like Like |Link to Comment
  • Worst U.S. Economic Month in Decades; Signs of Upward Trend [View article]
    "Upward Trend" may be a bit on the optimistic side. 'Tradeable bounce' would be more appropriate.
    Nov 3 10:10 AM | Likes Like |Link to Comment
  • 3 Scenarios for This Market: The Good, the Bad and the Ugly [View article]
    Very good analysis. I like the "you are here" approach with the historical graphs.

    constructe also noted another instructive model in Japan. It has been 18 years since the Japanese market peaked, and they are now very close to hitting new lows for the entire period at -87% from the all time high.

    A similar decline in the Dow would put us around 3400 in the 2025 timeframe.
    Nov 3 10:05 AM | Likes Like |Link to Comment
  • Why Are Perma-Bears Coming Out of Hibernation and Recommending We Buy? [View article]
    Yes. We have a solid foundation upon which to build a prospering economy.

    1) Banks have avoided bankruptcy thanks only to massive transfers of public monies against the will of the majority of the people.
    2) Insurance companies are in over their heads with bad derivative products and have yet to recognize the massive losses they represent.
    3) Manufacturing concerns are also struggling to stay afloat.
    4) 1 in 5 homeowners are upside down on their mortgage.
    5) Unemployment is increasing.
    6) Government revenues at all levels are decreasing.
    7) US debt is already at unthinkable levels, will never be repaid, and is growing faster than ever before.

    I don't think conditions for economic growth have ever been more promising.

    NOT.
    Nov 3 09:48 AM | Likes Like |Link to Comment
  • Carry Trade Volatility [View article]
    "Invariably the systems created too much money, speculation became rampant, inflation distorted and destroyed economic relationships, confidence that the banks could meet their convertibility obligations eroded, “runs” on the banks caused mass banking failures"

    flow: This IS the "unseen hand".

    When fractional reserve banking permits money creation beyond the natural level of savings, investments of that money are made in less economically productive ventures. When the fractional reserve credit bubble collapses (ie. as the "unseen hand", culls the economic herd) those borderline ventures fail.

    The "hand" simply takes longer to achieve the eventual result as the continual creation of credit based money forestalls the inevitable. The continual evasion of the hand's final condition only builds the level of malinvestment and makes the eventual collapse that much worse.

    You can fool the hand, but you can't escape its eventual judgement. The longer you try to fool the hand, the harder it slaps your face in the end.
    Nov 3 09:36 AM | Likes Like |Link to Comment
  • Personal Income and Spending: Saving is the New Trend (Again) [View article]
    0.2% and -0.3% aggregate measures provided by a gub'mint organization are probably meaningless in the context of the real world. Might as well both be zero.
    Oct 31 03:15 PM | Likes Like |Link to Comment
  • Coming to Terms with Economic Realities [View article]
    (Eyes closed, fingers in ears)

    It's NOT a recessioin. It's NOT a recession. It's NOT a recession.
    Oct 31 11:59 AM | Likes Like |Link to Comment
  • Is the Government's Fannie/Freddie Conservatorship Failing? [View article]
    "Is the Government's Fannie/Freddie Conservatorship Failing?"

    Was there ever any doubt that it would? It's the gub'mint after all. The only thing they do well is lie, steal, and fail.
    Oct 31 11:37 AM | Likes Like |Link to Comment
  • The 50bp Lower Bound on Interest Rates [View article]
    Felix; Any comments on the recent surge in Treasury settlement failures and their possible impacts?

    www.321gold.com/editor...

    Oct 31 11:33 AM | Likes Like |Link to Comment
  • Is It Finally Time to Buy? [View article]
    "Everybody's selling? Then BUY! What? Everybody's buying? Then SELL!"

    Al Czervik (Rodney Dangerfield's character in Caddyshack)


    No bottom in sight yet. Enter the market for trading positions only, preferably on the short side.
    Oct 31 11:29 AM | Likes Like |Link to Comment
  • The Shallowest Generation [View article]
    The first step in addressing a problem is to acknowledge it.

    This article is an outstanding first step. The next is to understand that the problem won't be "fixed" by those at the top, but rather by each person individually living in a manner that reverses the poor lifestyle choices of the past.

    America must rebuild the solid financial standing of a bulk of its citizens before things will get materially better.
    Oct 31 11:15 AM | 6 Likes Like |Link to Comment
  • Regulations and Markets: Making a Bad Situation Worse [View article]
    "truly competitive markets depend on regulation - else the logical conclusion of competitive markets without regulation would be monopolies" - akapital

    I disagree. First off, we don't have truly unregulated markets. Ever hear of OSHA, ADA, and a host of other alphabet agency restrictions? That's regulation. It limits the range of choices available to businesses and makes it more expensive to get started or continue operating.

    The only way to maintain a so-called monopoly in a truly free market is to provide the absolute best possible service and pricing of any other company to the extent that every consumer voluntarily chooses to do business with you. The moment you try to raise prices, or cut quality, another business will take advantage and provide 'better' products/service and take away market share by providing what you don't.

    Nearly every Wal-Mart, K-mart, Penny's, Target, etc. have jewelry counters, yet there are still local jewelers in the same towns. Why?

    Because the big box stores can't provide "full service" in that line. If you buy a ring at one of these places and a stone falls out just try to get them to repair it. If you're lucky they will replace the whole ring for you, but if not, then you'll have to go find a real jeweler instead of a salesperson at a counter. You will find several jewelers to chose from as well. Some are discount priced with minimal services, some are full priced with complete services. They all manage to stay in business because customer's wants are diverse.

    The market is varied to fill customer's wants and needs at a profit. Those that can't do so at a profit go under for want of customers.

    The same should happen in the financial markets. The banks, insurers, funds, etc. that took huge risks and failed should go bankrupt. That will be the best way to ensure it probably won't happen again.

    A prime expample or two will work a whole lot better than some new "rules and regulations" formulated and enforced by a bureaucrat in Washington, DC for the primary purpose of collecting money and only the secondary goal of ensuring a 'better' market.

    Want to get a bureaucrat off your back? Send them the check they seek. Once they have your money they don't really care about dotting the i's and crossing the t's. I know, I help run a restaurant. I see it all the time.
    Oct 30 10:04 PM | Likes Like |Link to Comment
  • Economic and Financial Bad News [View article]
    Smarty wasn't quite sure he could see,
    Whether moonbat had published a spree,
    Or if thoughts in his head,
    Caused his screen font to spread,
    Yielding limerick repeated times three.
    Oct 30 09:45 PM | Likes Like |Link to Comment
  • Chart of the Day: The Russia-Brazil Spread [View article]
    Interesting point.

    Even though the Russians have bunches of foreign reserves from oil sales, they do have a recent history of bond defaults. Perhaps that has some bearing on the widening spread. They have also recently closed their stock exchange and had several other publicized issues stemming from the credit bubble popping which may hold sway.

    If Brazil has those problems they haven't been as widely noted, perhaps the low profile and Russia's recent default have made income traders a bit more nervous over Russian debt than Brazilian.

    Just a guess, this isn't my forte. If anyone can explain it I'd like to hear a sensible possibility.

    Naturally I have a well-meaning limerick to add as well:

    Good Felix shares charts of some squiggles,
    Showing changes in credit-spread wiggles,
    The opaque-ness of stocks,
    Less than bonds; Paradox!
    Don't complain or he'll think that you niggle.

    (Don't feel bad, I had to look up 'niggle' too.)
    Oct 30 09:20 PM | Likes Like |Link to Comment
  • Economic and Financial Bad News [View article]
    moonbat he hey-diddle-diddled,
    That the FED didn't help as they fiddled,
    The G-men saw red,
    So they shot moonbat dead,
    Coated lead through his body they riddled.
    Oct 30 05:10 PM | Likes Like |Link to Comment
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