iubica

Where Are We on the Roadmap?

Where are we on the recovery? But who said we're on the recovery? We're free falling further into the abyss. Bank of America and Citi have made poisonous acquisitions, all under the guidance of the government - and have caught the disease themselves. It can't get much worse than that.

Contemplating the Demise of Bank of America, Citi and JPMorgan

"The future of Bank of America, J.P. Morgan & Citigroup is unquestionably tied to the rise of the unemployment rate in the United States. Should it peak at 8%, the current valuations on these companies make them the buy of a lifetime. "

I disagree. Your point is well taken that high unemployment in the economy will hurt the banks. But just as well will it hurt the economy at large, due to weak consumer spending.

C and BAC would be already bankrupt, were it not for Uncle Sam chipping in.

As Food Costs Rise, Is Government Being Straight about Inflation?

If food prices went up 6.6% in 2008, that does not necessarily mean that inflation is here. Up until September gas prices were high, so agriculture costs went up in the summer and early fall. The reduction in oil and commodity prices will take some time to work out into food prices.

Treasuries' True Risk

I'm no economist either. Inflation is understood as a general rise in prices of goods and services. At least that's what the wiki page claims.

en.wikipedia.org/wiki/...

So I'm not sure I buy what is said in the article:
"... I will make the argument that inflation only exists when a government prints money."

The wiki page is much more nuanced on this. It agrees that over long term, inflation is almost always caused by money supply. But over short term, inflation can be influenced by demand, supply, also by the psychology of the masses.

The following fragment explains what's behind some people's desire to return to the gold standard:

"If gold were our currency [...], rising prices would be strictly a product of supply and demand. "Inflation" would cease to exist -- for all intents and purposes -- because there would be no way to increase the supply of money."

Really what they are trying to do is to prevent the government from increasing or reducing the money supply. But that is a recipe for disaster. The situation is bleak as it is, but if the Treasury was not pumping money at this point in the economy, we'd be looking at soup lines right now.

Nation's Debt: It's Not Being Rescued, It's Being Moved Around

The whole Reagan-Bush mantra was to get in office to destroy government, to corner it between heavy debt, expensive wars and low taxes until it breaks.

That's what they set out to do, and guess what? That's exactly what they did.

The Calm Before the Storm?

Here is my thinking, fwiw: if I was to sell stocks today, what would I have done with the proceeds?
- Keeping cash around, in the long term, is not good because of inflation.
- I already have 5% of the portfolio in commodities; buying more commodities would be too risky as they could tank if the market rallies.
- Already have 40% of portfolio in foreign stock funds or ETFs; if depression kicks in it's pretty clear foreign markets be dragged down, they will not be completely decoupled.

My point is, I don't see a reason yet to sell, as all investment alternatives are equally risky.

Why It's Time for Muni Bonds

Muni bonds are not federally taxed, however they may be taxable under AMT. If you are in the AMT bracket, keep that in mind.

Can Hank Paulson Lead?

Forget about checks and balances... that's not what he's asking for, Paulson just wants the checks.