RiskAverseAlert

Dubai: Gauging the Impact

You note "secondary aftershocks would be entities similar to Dubai — other places in the world that have borrowed a lot in an attempt to grow rapidly." But what of entities like the U.S. Treasury that borrow a lot attempting to bailout hopelessly bankrupt enterprises?

Another Crisis Looms Right Around the Corner

There is one consideration missing from your rising taxes thesis: our crippled economy is an absolute nightmare, as you say. So, how are taxes to be raised? Seems impossible. Thus, a sovereign debt default dwarfing Dubai World must be looming, no?

Analyzing the Dubai Chaos

"... events may signal the beginning of a financial crisis among sovereign debt issuers."

Indeed, one wonders whether DW is a trial run for larger things yet to come aimed at destroying the broader power of sovereign nation states over private financial interests. Once again, the need for Secretary Gates (rather than our incompetent Treasury Secretary) to become the authoritative sounding board for the people of the United States in addressing matters precipitating what appear intentional drives venturing to bankrupt sovereigns (most emphatically including the U.S. Treasury) is resurfacing following the most glaring attack on sovereigns to date: namely, the bankrupting of AIG via operations conducted in the City of London...

25 Reasons We Will Not Have a Depression

You talk about things that nobody cares
You're bearing out things that nobody fears
You're naming old names but I gotta make clear
I can't say baby where they'll be in a year

When a Big Hog Daddy whose name I call Shemp
Said a bear's get up and go musta got up and went
Well I got bad news, Shemp's a real good liar
'Cause the CNBC boogie sets his mouth on fire

When I pulled into town in a bearskin car
Shemp Daddy said I took it just a little too far
You're telling me things but your Rupert he lied
You can't catch me 'cause the bull done died
Yes it did

You stand in the front just a shakin' your crass
I'll take you to the woodshed, you can look through my glass
I'll show you somethin' you can sure understand
'Cause the kill on the road you'll be eaten from my hand

Sweeeeeeeeeeeeeeet Commooooooooooootion

Why a Market Crash Doesn’t Matter

Buffett and Lynch might wish to ignore the general stock market, but Jesse Livermore never did. Per company-specific investing, well, how might one best view Buffett's proposed BNI buyout? To my way of thinking it makes a great deal of sense to view this as an attempted capital preservation play, rather than capital appreciation. Thus, what's this say about the outlook of an investor whose BRKA was clobbered by over 50% last year?

Likewise, what of pathetic dividend yields offered on stocks you mention? Why would not investors fast be moving to a point where competitive returns on equity are demanded at a time when liabilities higher up in the food chain are being expanded like so many circus balloons?

Options Trader Monday Outlook: Stuffing the Futures for Thanksgiving

Regarding CME-driven surges, I think what one must appreciate about these (and you more or less allude to this) is that the interest behind it is stuffed with inventory it wishes to unload. Probably the greater hope is a wider interest will develop among money managers, precipitating follow-through buying on increasing volume. That this is not occurring presents a risk that those who supported the market during the first three months of this year (as witnessed by a spike in the volume of shares exchanged) eventually will become the very element whose actions lead stocks to "fall of their own weight."

Chance of a Depression Now 5 Percent

Absent any effort to address a decades-long deficit in capital investment in physical economy the nation and the world are doomed to experience a severe dislocation whose odds are far greater than 5%. Different this time versus the 1930s will be the impact on physical goods prices, however. Rather than deflation, hyper-inflation caused by profound collapse in the supply of basic things stands to be the more likely outcome.

Yet per grossly leveraged financial assets it'll be the same old crushing deflation as before.

Some call this dynamic a breakdown crisis, and project an impact unlike anything since the Black Death. As hard as this might be to swallow, considering all things presently in place such dire outlook makes a great deal of sense to anyone with higher power of thinking than your typical Monetarist Monkey.

The Twenty Year Stock Bubble Is Still Inflated

Trust me! I won't be surprised at all. Anyone with their head screwed on straight (and this includes Mr. Buffett, and now Mr. Gross) in their own way sees how equity is doomed to be dead money.

Meredith Whitney: 'I Haven't Been This Bearish in a Year'

One ought not confuse a rising market and an operation to clear out weak-handed shorts. Much as was the case March-May, 2008 this rather appears the case right now.

It is plain equity is dead money. Were this not true would Buffett sink such a big stake into a hugely capital-intensive railroad? This capital preservation play screams loud and clear equity is grossly overvalued and soon might not buy much of anything possessing sure cash-generating value. That Buffett could not wait for the next shoe to fall speaks of fear his BRKA would not possess the same currency as now.

Something like Whitney, I have never been this bearish.

Banning Derivatives and Other Such Foolishness

And what of speculators working in the London office of AIG Financial Products whose operations cascaded into spectacular collapse of the company threatening to bury the global financial system? What good purpose did this group serve?

Do you deviate into a realm where those intimately knowledgeable of the history of nations might consider your generic defense of derivatives a case of giving aid and comfort to an enemy of the people of the United States of America? Might you too, then, be saying, "Do as I say, not as I do?"

Time for the U.S. Economy to Reindustrialize

Is the author saying we are to be saved by fascism? Public-Private partnerships, wherein private companies drive the availability of finance, which in turn drives the availability of infrastructure needed to sustain an advanced economy (in this case, electricity) is what Mr. Steinberg essentially is proposing via his call for the transformation of knowledge-based commerce into utilities. How is this any different than what Mussolini imposed upon Italy in his time?

A better approach is bankruptcy reorganization of our dead, overbearing, overreaching globalization junkies (at whose core finds the companies indicated here) and resurrection of national banking along lines Alexander Hamilton developed. Then, we can get on with the job of a massive build-out of 4th generation nuclear power facilities and a transformation from a hydro-carbon-based economy to a hydrogen-based economy, financing this at rates of interest the private sector simply cannot compete with.

Fed Maintains the Emergency Rate While Saying 'All is Well'

Your last two takeaways are interesting. Per understanding the other side of the trade I am curious to know when Buffett's BNI takeover is slated to close, for it is then an attack on equity as currency might more likely ensue.

Charlie Gasparino: Another Crash 'Has to Happen Again'

I agree. Equity appears well on the way to becoming dead money. Yet, even now, some would pump up its currency to gain control over economically vital physical assets. Right, Mr. Buffett?

Bank of America, Citigroup, JP Morgan and Wells Fargo Stocking Up on Liquidity

How can one not perceive a greater measure of bank balance sheet fakery when even the long-term solvency of the U.S. Treasury increasingly is being called into question? Indeed, this might be one reason why Treasury holdings among banks are so low. When the whole thing is set to blow, why not improve momentary appearances of solvency squeezing yield further out on the risk curve? It seems that, despite last year's near meltdown of the money market, those who chase yield even among what are widely perceived "safe instruments" (agencies) either have not learned a thing or the present moment is a ruse whose intention falls under "all things are not what they seem."

Gold Is Not in a Bull Market

Per Nadler's "four factors that truly make a gold bull market," only the fourth holds analytical sway supporting his "Gold is not in a bull market" thesis.

The question is what will gold do as the present economic breakdown crisis accelerates? Believing that the stock market has been tracing a counter-trend rally in a bear market with much, much further to go, what seems gold's likely fate in a capital-starved world is no different than its fate last year as the world rushed to plug gaping holes in the various three-letter securities marketplaces blown to bits with the collapse of Wall Street's structured finance. In other words there is considerable risk of a huge wave of gold selling precipitated by unstoppable, ongoing balance sheet de-leveraging.

What has come to pass thus far in the de-leveraging process is only the beginning. That said, though, gold still could rocket higher in this present period of transition into the next phase of financial collapse. But beware. That gold principally is being bid higher out of perception it represents a financial store of value strongly suggests it can just as easily be sold were the need to raise capital to sweep upon the scene (which eventuality, I believe, is a virtual certainty).