LariAnn

From Crunch to Catatonia

Too bad the bank bailouts didn't come with the kind of scrutiny and preconditions that the auto bailouts did. If they had, maybe some lending would be going on. However, living more within your means is always a good idea and perhaps it's time for people to cut back on credit purchases. Just because the government thinks deficit spending is a good idea doesn't mean we as individuals should do the same!

Wall Street Breakfast: Must-Know News

The more I observe and see what kinds of strange decisions are being made by the government about the economy, the more I wonder if those who are making those decisions know something about the future that we don't. I mean, why steer the country towards certain economic disaster unless . . . they know reasons why it won't matter after all. Think about it. We could all just be a bunch of mushrooms, kept in the dark and fed BS . . .

The U.S. Banking System's Terrifying Balance Sheet

Allow me to interject a sinister note to this whole thing. Assume that the bank leadership as well as the government leadership actually understand where things are at financially and globally, and that they knew where it was headed when they did the derivatives thing and put in place the deregulation that allowed it to occur. Might they know something important about the near future, something that would make it "not matter anyhow" if the global financial system goes belly-up?

Think about it this way: if you knew beyond a shadow of a doubt that you were going to be dead in two years, and you had large credit lines available to you now, wouldn't you realize your fantasies on credit before the end? Something to think about. . .

AIG Bonuses: The Tipping Point Toward Decisive Action?

The whole idea of "too big to fail" needs a serious rework. It should be "too big", period. Companies should never be allowed to become so big that, if they fail, they topple the U.S. economy. Talk about a danger to national security! Where is the Department of Homeland Security when you need them? A company that is "too big to fail" is TOO BIG, period. Smash them to bits for the security of the nation!

Could the Dow Sink Another 50% by 2012?

IMHO, all it will take is a fairly major natural disaster (catastrophic hurricane in oil-producing zone like the Gulf of Mexico) or political action (nuke test by Iran) and the markets will be thoroughly roiled. The world economy is not stable by any means. Momentary euphoria aside, all it takes is one good reality check, and like the results of a 2 x 4 smack to the head, people will wake up and smell the burnt coffee. At that time, hope you have reduced or eliminate your debts and have hard assets or goods of lasting value that you can fall back on. . .

AIG Bonuses Are Just the Tip of the Iceberg

It is clear to me that if Merrill had that much money laying around to hand out in bonuses or retention or whatever buzzword is used to describe it, they were charging their customers WAY too much for the services rendered! Instead, they should have given it to investors who lost money on deals made by these so-called brokers, instead of giving the money to the brokers.

Deflation: The Beast Is Here

My biggest concern would not be deflation, but runaway inflation. This is because so much money, created from nothing, has been poured into the banks so far, and more to come, that it is inevitable that it will dilute the value of dollars already in circulation. If this financial flooding continues, the inflation that results will be catastrophic and we will see interest rates rise rapidly to the double digits as the Fed tries to swing the runaway economic boat away from the inflationary rocks looming ahead. Unfortunately for all, I think it will be too little, too late. Keep your powder dry!

Buffett mentor Benjamin Graham would still find most U.S. stocks expensive, even after the S&P plunged 56% in 17 months. Graham weighed stocks against a decade of profits, a method that shows the S&P 500 trading at 13.2x earnings - 27% higher than previous deep recessions.

With all the money sitting on the sidelines and investors really wanting something good to invest in, all it takes is a good solid company with a "killer app" to come out and the investors will jump in. Most stocks out there don't inspire that idle money to move, but something will come along and then it will move.

Market Summary: Good Riddance to the Worst February on Record

Farmland, food and ammo - some of the best investments you can make now if you know how to farm and have the right weapons!

Even an 11% shot-in-the-arm to Citigroup (C) couldn't juice stocks, which find themselves deep in the hole with only one day down in what could be a long week. DJIA -3.4% to 7,115.42. S&P -3.47% to 743.33. Nasdaq -3.71% to 1,387.72. March crude -4.8% to $38.12. Gold -0.8% to $994.50.

More and more, investors seem to be responding to the writing on the wall. The fact is, increasing government debt/obligations is not going to relieve what is essentially a problem of not allowing the free market to recognize real losses. Loss is painful, but what is happening now is an effort that will only prolong the pain. Better to recognize the losses now and let the chips fall where they may, then move on, than to keep alive the fiction that, somehow, the losses aren't real losses. Until these losses are recognized and absorbed into the market, no real recovery has any chance of occurring. Anything with real intrinsic value will remain, albeit at a lower price. Inflated or propped-up value must be allowed to evaporate.

Market Currents Poll: Should the U.S. give automakers the extra aid they're asking for or push for bankruptcy? Speak up in comments.

It's time to pull the plug; a mercy killing, as it were. The administration of strong and distasteful medicine (bankruptcy) for a disease that has lingered on way too long is the final and only solution.

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

IMHO, the incentive is actually a gift to the dealers/auto companies, not the auto buyers. Why? Because, as we all know, the value of a new car drops precipitously once the car leaves the showroom floor. This loss hit is taken by the auto buyer, not the dealer. Also, if the auto was financed, the buyer is now paying interest on this loss as well. The dealer doesn't take a loss at all. So the dealer/auto companies got the $3500 or $4500 per clunker; and all the auto buyer got was $3500 or $4500 of debt as a part of the total cost/indebtedness incurred from the vehicle purchase.

Rick Wagoner Can't Get No Respect - Or, Great Moments in Copyediting History

BTW, is it supposed to be "Waggoner" or "Wagoner"? If "Wagoner", then the last name in the editorial is misspelled as well.

Wall Street Breakfast: Must-Know News

"A day late and a dollar short . . ." R. I. P., auto companies!

The Coming Depression: See It Clearly Through Historical Eyes

Investfarm,

So, what are "the principles of physical economic practice"? Inquiring minds want to know. . .

BTW, the understanding of the nature of the infinitesimal, or should I say, the lack thereof, is one reason why we have an "energy problem" and why there are "haves" and "have-nots" in society, IMHO.

See: fractalicawakening.com...