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Illusional Delusion

Illusional Delusion
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  • What role do America's lazy pupils and grossly underachieving school system play in shaping the economy? "They still find it hard to believe that all those Chinese students, beavering away at their books, will steal their children's jobs." (The Economist)  [View news story]
    I agree with you on the overview, but the government can only do so much frankly before it loses its effectiveness (not that there is a high level of effectiveness to begin with). If we are convinced that the government will always print more money for us to spend, on ourselves or our kids, everyone will get complacent. I rather want the government to do what they are supposed to do, stick to the constitution and break away from their current bailout stance. When you can change the rules of the game, no one will bother to play by your rules in the future. Banking, policies, education, whatever...

    On Jun 13 10:23 PM Windsun33 wrote:

    > It has nothing to do with losing jobs to other countries - it has
    Jun 14, 2009. 01:00 AM | 3 Likes Like |Link to Comment
  • With 30-year mortgage rates now above 5.5% - a level which many predict will petrify new loan apps - Mike Shedlock wonders what Bernanke has planned for an encore: "What now Big Ben? You've already blown over a third of your $1.25T commitment, and all you have to show for it is more garbage on your balance sheet and a locked up refi market."  [View news story]
    Profitability is definitely not an issue for the banks based on the spread so far, but the illiquid housing is not going to get better for sure. If attracting more liquidity for housing is the key at the inflated housing prices (not that it is not cheap but perhaps not that attractive given the oversupply versus price), then yeah, Ben's plan backfired obviously.
    Jun 11, 2009. 06:37 PM | Likes Like |Link to Comment
  • Treasury Budget: (.pdf) With two-thirds of the fiscal year down, the Treasury's cumulative deficit is nearly $1T after this month's $189.7B addition. Outlays were up 6% to $306.9B, while receipts fell 6% to $117.2B, bringing the eight-month total to $991.9B - more than triple the $319.4B deficit at the same time last year.  [View news story]
    Quadrillion...I can't believe we are going to use the word this soon...
    Jun 10, 2009. 08:56 PM | Likes Like |Link to Comment
  • The House passed the controversial cash-for-clunkers bill Tuesday, which would give car owners $3,500 to upgrade to a car getting 4 mpg more than their current car, and $4,500 if it's 10 mpg more efficient. And BoneYard wonders: Might this have something to do with the government's stake in two of the Big Three?  [View news story]
    i read this yesterday and i remember the fine print is the trade in should be 18 mpg or less and trucks only need to clear a insulting 1 mpg increase. While Japanese cars are still going to benefit, these are clearly geared towards the Detroit Three. And 2houndz, my thoughts exactly.
    Jun 10, 2009. 12:51 PM | Likes Like |Link to Comment
  • While neither the 200-day simple moving average nor its close cousin the 200-day EMA (exponential...) is the holy grail, the much-touted SMA breakthrough on June 1 failed to pierce the EMA - suggesting that, for the moment, caution is a virtue.  [View news story]
    Caution was never in WS' dictionary
    Jun 5, 2009. 02:15 PM | Likes Like |Link to Comment
  • The sudden renewed appetite for investing in high-frequency 'quant' hedge funds can only end badly, Roger Ehrenberg says.  [View news story]
    I need to erase my memory for the last 2 years to remind myself of that

    On Jun 05 01:41 PM herbert hoover wrote:

    > No way! The Wall Street financial firms only hire the best and the
    Jun 5, 2009. 02:11 PM | Likes Like |Link to Comment
  • Buiter: The wonderful world of negative nominal interest rates.  [View news story]
    One thing I don't understand about his argument is that while he argues from the point of economics and that reality have frictional costs, why doesn't he and others realise that it is precisely that natural inflationary circumstances in a normal economy that is what lead to the costs to provide the spreading of wealth (tax, levies, transaction costs, all for the sake of providing some form of service). If he argues that the zero bound is wrong, then wouldn't that make economics and need to create productive businesses wrong? So why work when you are expecting money from the sky?

    On Jun 05 12:31 PM Vuke wrote:

    > This is a apt description of just how powerfully the minutiae of
    Jun 5, 2009. 12:37 PM | 2 Likes Like |Link to Comment
  • PIMCO Finally Enters the ETF Arena with 1-3 Year Treasury Fund [View article]
    Thanks. I was checking the Google chart and its not showing up, but I saw them in the Yahoo one.
    Jun 4, 2009. 10:24 AM | Likes Like |Link to Comment
  • PIMCO Finally Enters the ETF Arena with 1-3 Year Treasury Fund [View article]
    I'm curious. Without dividend/coupons of any sort, how is SHY a profitable trade? I'm using that as a comparison, so...
    Jun 3, 2009. 11:27 PM | Likes Like |Link to Comment
  • A little-noticed addendum to the FHA's home-loan program will let first-time home buyers use their $8,000 tax credit for downpayments or closing costs, effectively reincarnating zero-down loans. Those critters, of course, were blamed for sparking this whole mess in the first place.  [View news story]
    Zero down as a 20% down? Unless all houses are only worth 40k, which means a lot of working professionals can buy them and live out their mortgage, it will just be another bandaid till China abruptly ends the concert.
    Jun 3, 2009. 10:51 PM | Likes Like |Link to Comment
  • Mean Street's Evan Newmark thinks TARP architect Hank Paulson is a national hero. Really.  [View news story]
    Another trillion will send the stocks to Pluto where they will freeze into the useless oblivion. I have come to ignore all talking heads since they offer no argumentative insight other than "follow the trend and ignore reality". When its down, they throw stones down the well, when its up, they cheer lead, so what's really new?

    On Jun 03 10:32 PM Danny Furman wrote:

    > isn't newmark on a lifetime reality show or soap opera? he
    Jun 3, 2009. 10:49 PM | Likes Like |Link to Comment
  • Any talk of a V-shaped recovery is poppycock, Bob Rodriguez of First Pacific Advisors says, warning the bulk of U.S. credit problems are still to come. By the close of 2011, Treasury debt outstanding will be $14.6-16.6T, and debt-to-GDP ratio will rise to between 97-110%, which leads him to wonder: "How do we finance all this debt?"  [View news story]
    Doesn't matter though, since we will get nuked if that happens. Which dollar holder wants to have his dollar made worthless because the printer decided to favor some other guy.

    The country will need to impoverish someone to save the other. The choice by Ben, Hank and Timmy is to impoverish everyone except their friends at the banks. Since it is significantly cheaper and politically more playable than a correction, that is the way they will continue to play.

    On Jun 03 10:40 PM Dr. Sami wrote:

    > Are you dumb? 300 million people x $1 million = $300
    Jun 3, 2009. 10:46 PM | 2 Likes Like |Link to Comment
  • Instead of fishing for the negative, markets should welcome the recent jump in government bond yields as a sign things are returning to normal, FT's Martin Wolf writes.  [View news story]
    Except that the "return to normal" was based off on the lower yields, are they not? Why are these people contradicting themselves?
    Jun 3, 2009. 11:33 AM | Likes Like |Link to Comment
  • May's uptick in auto sales doesn't seem like much in the broader scheme. Despite double the number of U.S. drivers since 1967, sales are in-line with four decades ago.  [View news story]
    Yes, but pent up demand does not mean that the people who want to buy cars are definitely going to buy them, especially if cars are going to be more expensive for reasons like hyperinflation and cap-and-trade.

    On Jun 02 06:30 PM Niner wrote:

    > I Was alive and well in 1964 and a car guy. I remember the the
    Jun 3, 2009. 12:22 AM | Likes Like |Link to Comment
  • Roger Nusbaum Talks About Buying Agriculture [View article]
    When you can't invest in companies that should be productive, the massive dollar printing makes the food coming to your table more valuable than money itself. My 2 cents at least.

    On Jun 02 03:06 PM Fighting Yoda wrote:

    > I think the rally in commodities has been far too strong, even for
    Jun 3, 2009. 12:19 AM | Likes Like |Link to Comment