occdude

Bill Gross: Buy Early What the Government Buys Later

Mr Gross is emblematic on the state of affairs at present in the US economy. No longer do we seek value added, we're just in it for the opportunistic "quick buck". The best this "titan of capitalism" can come up with is a cheap arbitrage between municipal bonds and treasuries which don't have the yield and which obviously aren't as highly rated as treasuries because they aren't as credit worthy, but given the current thinking of the "nanny state" and its implicit guarrantee to bail out EVERYONE it's a good play. Mr Gross's advice speaks volumns on the lack of business standards currently which resembles a bunch of suited vultures enteriing through the rectum of the carrion because they're too lazy to take the "hard route" through the belly.


There is no value added with his strategy, it takes advantage of a country that can ill afford to be foolish with its remaining capital and graphically demonstrates the opportunism mindset. Hey Mr. Gross how about GM bonds? They're too big to fail too and the spreads between treasuries you could drive a truck through (just not a GM truck because it's made so crapilly it wouldn't survive the trip.)

I hope I live to see the day, when the government reverses their course and goes after these jackles with confiscitory tax schemes and relegates them to the dark corners where vermin belong.

Don't Be Scammed by Madoff Investor Sob Stories

You know as I look into the loving, trusting faces of my children this Christmas season, I can't help but think what financial burdens we're putting on their backs vis a vi all these bailouts we seem to want to do for EVERYONE!

I am not rich, but I advocated for a laisse faire economic system because it made sense. Come to find out, that laisse faire only applies when things are going good, when things go bad everyone runs under Uncle Sams SKIRT! There shouldn't be a SIPC, it should be a privately run institution collecting premiums comeasurate with the amount of risk they assume, with the companies they underwrite subject to the terms, conditions and audits of the covering insurer. This would be a lot more expensive with the result of people determining if they A.: want the coverage and willing to pay for it in which case who cares what happens? Or B: They don't want the coverage in which case who cares what happens? Either way I don't want this debt falling on cherubic heads of my offspring.

Now tell me what is the difference between a sub-prime borrower who borrows more than his affordabiilty ratio can support and a so-called sophisticated investor who doesn't have the acumen to make sure his account doesn't exceed the SIPC maximum so as to make sure his account is COVERED!

These "investors" earned an above market return based on a false ponzi scheme and if they were covered by SIPC will be made whole if not they will transfer their wealth to someone else who is more astute, its strong hands to weak and hopefully everyone LEARNS somethining.

This incident really pulls the cover off of all these so called "masters of the financial universe types" and reveals how lazy, inept,incompetent and greedy these guys really are. After the dust settles on WS you can bet that these guys are going to have to WORK and hustle for a living again instead of walking around with their well coiffed nose hairs blocking the lights acting like shuffling money from point A to point B is the Lords work and should be compensated as such.

Madoff Scandal: 'Biggest Story of the Year'

I smell a rat. This guy is too smart to confess without an exit plan. He's got money stashed all over the place probably through his conspiring sons. The Feds wont even check out his sons because they were the ones who turned him in, meanwhile he's set up a nice little legacy built on bilking.

I think Wall Street for some time is going to go back to being that "little backwater where rich peoples money go to die". No more John Q Public putting widows and orphans money in the pockets of egregious shysters like this guy.

Dividends will come back in a big way (they're already higher than treasury rates). And stock appreciation via the greater fool theory will abate for a while, at least until I become a buy and hold investor again.

China ETFs: Crisis and Opportunity

Ditto on the dangers of Chinese investing. You have to remember these guys are still communists and of the totalitarian mindset. Besides that, with our enormous trade deficit that expands monthly we run the the very real risk of defaulting either via debasement of money supply (most likely) or flat out default (Argentina style). At that point what are the Chinese going to do? Seize American capital? I think thats at least a small possibility and one that should be considered. It would kill foreign investment, but the scenario outlined would be in a climate of economic stress and I dont think people would have the same warm and fuzzy feeling about globalization as they do even now, I think that would be a "going to the matresses" option.

Surprising Call for Return to the Gold Standard

Gold is the BEST medium for use as money. It is time honored and tested. Look at a historical chart of oil. Its no coincincidence that as soon as we went off the gold standard the price of oil (as well as everything else) rocketed up.

Fractional reserve banking is outright FRAUD. Full reserve banking is the only way to limit credit (and bubble) expansion. Credit via franctional reserve lending AND an "un-tethered" money supply are a recipe for DISASTER!

We now classify an economic expansion as one where irrational asset prices fueled by cheap money creat economic "bubbles". Where as the steam engine, electrical machines, the airplane, the automobile are true expressions of economic expansion, we now have the internet, I-phone and I-pod as "productive" entities . Credit distorts true value, making price information opaque and impacting society at large creating a "Caligula" mentality via pain free consumption.

Iam certain that the same affliction that affects us today has been the undoing of all civilizations since time immemorable and that is the ultimate economic acronym of TINSTAAFL (there is no such thing as a free lunch) and gold as well as limiting credit to on hand monetary reserves are the only way to enforce the acronym.

Iceland: What It's Like to Live in a World Without Money

I read the complete article. This whole affair makes me so angry. When did the g-7 (and Iceland) get so silly? I mean, don't we realize we have to pay this money back? To put it in simple terms, we need to send China approximatly 2 trillion dollars MORE than they send us at SOME point.

Now Iceland is having a hard time. Have they actually done an assessment of what they produce for all the goods the world gives them? They have Cod and geothermal steam (we can use the former but not the latter) and thats it! Couple that with derivative financing and they produce SQUAT!! They like the rest of G7 (esp. US) are a bunch of unproductive, slovenly, amoral, relativistic, snobby, self-absorbed and silly people that need a DIVINE rear end paddling.

Meanwhile in China they have brown plumes of toxic gas that they have to deal with because we want our Starbucks cups and are too lazy to produce them ourselves which would spread the pollution around making it less toxic or possibly making them prohibitive to make in the first place. But we and our "fiat carrot" are pulling off the swindle of the century convincing the Chinese to kill themselves for a promise to give them equal goods in kind at a latter date, it would be amusing if it weren't so tragic.

Iceland is just the prelude to a G7 financial meltdown that is gonna put an exclamation mark on my previous statements. All these "activities" we call productive work are just narcissistic reinforcements for a lifestyle that avoids the "dirty work" others are doing to prop up this delusional economy. The G7 is going to be the next Iceland so keep your eyes on them because that is our future.

A Buy & Hold Forever Dividend Stock Portfolio

I like dividend paying stocks. I think that any portfolio needs to have the flexibility to drop and to pick up stocks within the portfolio however and even the dow and S and P replaces stocks that fail in market cap so I would have a bit more flexibility in that regard unless I used ETF or index fund.

Next I would put in asset allocations that actually reflect your expected expenditures to retain purchasing power. The dividends would be reinvested untill the portfolio actually needed to be tapped. This would place a higher allocation into REITS due to the fact that you'll spend more on real estate than say technology in your "real life". If REITs were to fall in price or yield, the price of real estate presumably would follow, same thing with the other allocations.

Using this methodology your allocations might look something like this.
20% REITS
10-15% energy/transports
10% healthcare/drugs
10% food
10% tech/telecom
10% retail
15% cash
15% hard assets
Once again dividends should be reinvested (preferably in a tax defered account). And idexing is recommended for both diversification and low management fees.

Another Perma-Bear Converts To Bullish-ism - Barron's

As GM goes so does the country, remember that?

Well GM is going in the cra@pper, so how does that bode for the USA?

I think we're in a powerful deflationary cycle that is just the culmination of a sustained secular bear market. This last episode in Oct. gave a pretty good look at what the future holds and that means EVERYTHING goes down in deflation

Bullion Shortage and Spot Prices Tell Two Different Gold Stories

Come on. Something smells very fishy. At the announcement that all the Central banks of the world were going to inflate their currencies gold went down? I mean any gold bug worth his salt would NEVER sell gold with info like that. This was all the hell in the hand box crowd feeling comfy dumping their positions. Silver did kick up, but everyone watching this thing knows that gold is the real truth sayer when it comes to value preservation, silver sometimes marches to a different tune due its industrial use.

I think gold is goin up and I'am looking for a good, hard, downturn to go double dog long. I think oil might lead the way. This imposter of a bail out plan is going to be dis-robed by good old oil and gold.

Seeking the Fix That Will Finally Work

This is ridiculous. Has anybody read a good economics book (one without pictures) to figure out what is really going wrong here? Does everyone think this is a matter of confidence, that there isn't fundamental flaws with our general economy? That "alls we have to do folks, is lend out that money...."?

I got news, and it aint good. Whats happening is exactly what should be happening and is a very rational event based on solid fundamentals. The irrational thing to do is a "global intervention" where the entire freaking world debases their currencies collectively and we end up tacking EVERYONE down. You want to see GLOBAL hyperinflation and depression? Keep messing around.

Everyone needs to put down the damn remote, and PAY ATTENTION! This isn't going away and squandering what precious capital that remains on propping up unproductive assets is economic suicide!

So please, I implore you, enough with the "liquidity bromides" and start thinking outside the damn box, because inside the box is where the problems start and end.

A World Without Shorts

Let me tell you something. This is all a ruse. Theres not enough paper in all the forests of the world to buy all this cr@p! This is end game folks. I wonder what the Chinese are thinking, after the hangover of the initial euphoria. Maybe they forget they hold 2T$ that are being debased as we speak and the fireworks are going off.

Tip to foriegn central bankers: If you don't recognize the sucker at the table, chances are its you.

Bank of America / Merrill: Shotgun Marriage

First off, BAC doesn't have the "cash" to buy Merrill, they plan on 100 percent stock deal which is about 1/3 of BAC market cap. This should dilute the current shareholders equity position and be a negative for the share price in the long term. But off course BAC will be able to access the Fed discount window for "short term liquidity" and exchange any toxic financial instruments in Merrills portfolio for T-bills.

This deal stinks. Wall street is on fire and the tax payer is going to pick up the dry cleaning tab for all these "wing tipped", "hand in their pocket", do nothing Hampton residents.

FDIC Insurance Fund - It Doesn't Actually Exist

I think I like hardballs analysis better than the authors. FDIC insurance rate premiums like all risk analysis of late has not been properly priced due to the ready availability of credit and assumed governmental backstopping. Its time to pay up lads. Iam not sure what price should be paid for insurance against a fractional reserve systemic meltdown, but as soon as you put the word "Federal" in front of it you know its going to be under priced, since prices are politically derived instead of the market.