RiskAverseAlert

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).

Cramer Does It Again with CIT Call

The trouble with Shemp is he believes the Fed is not bankrupt and that the credibility of the institution remains intact. This, however, is a serious flaw at the foundation of Cramer's contemporary macro analysis. Though he recognizes credit expansion is a necessary element for cultivating a bull market in stocks, it is the collapse in confidence in the quality of credit and in the credit market's capacity to infinitely expand in a manageable way that he fails to acknowledge. Big mistake. However, I don't imagine it'll be all too terribly a costly one. He may be a macro idiot, but he does know how to trade.

The Intrinsic Value of Nothing, Part 1

First, I believe a dollar has "value" not because "the government" says so, but rather because organized government representing the will of a sovereign people makes it so. Indeed, constitutionally, the U.S. government is charged with the means for doing so: this via extension of credit whose practical worth is backed by robust physical processes serving human needs whose very being, itself, was affected by the same, organized application of national credit. Government neither "says" nor "decrees" anything lending value to currency. Rather it is through action affecting the uplifting of human creative potential that brings a currency its intrinsic value.

That said, I agree the "elaborate fiasco called quantitative easing" is doomed to fail. Yet that we have among us the blind leading the blind into a ditch is not necessarily a bad thing. How else might wiser minds gain the path of least resistance in rising to the top?

Still, sir, I have said this before in this forum and I should say it again: the Austrian school is one whose principles best suit a fascist social arrangement, whereas a Hamiltonian credit system best suits a nation whose foundational principle seeks to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare and secure the Blessings of Liberty to ourselves and our Posterity.

Economic Crisis 2008-9: Ignore Friedman's Lessons at Your Peril

Monetarism is the tool of a dying imperialist current whose living adherents apparently would rather perish in the rage of its desperate victims than consider the error of their worldview in the framework of the simple, single-sentence preamble to the U.S. Constitution whose stated principles have been persistently ill-served by fantasy-filled formulations separating financial processes from physical processes, such as the Chicago School has become quite adept at developing. Y'all might better call yourselves "Greenspan" because although you might talk brilliantly, deep down your sense of history is as dull (and wrong) as Bernanke...

Ten Stocks for the Next Ten Years

So long as the process of de-leveraging continues threatening the global financial system, most (if not all) equity will remain dead money over the next several years. Processes beyond any given company's ability to control will continue burdening equity valuations until such time as the global financial system is reorganized in bankruptcy and financial claims presently destroying growth prospects are written off. Presently, we are at the precipice of what might prove the worst financial/economic/social nightmare the world has ever experienced. This is no time to be accumulating risk, no matter how attractive it might seem by traditional measures.

Cramer's Mad Money - When the Facts Change...(10/23/09)

Good advice, Shemp! Now take it, because the fact a massive short squeeze (see unbalanced RSI surge in both March and July) largely has brought stocks to present levels is evidence you fail to account for in your bullish stand. And speaking of facts, diminishing volume shows this rally climbing a wall of complacency, and since when is this bullish? This same condition wasn't bullish last March-May, 2008 (while you, on the other hand, were bullish) and it continues not being bullish now.

How Apple's Market Share Will Propel Stock to $500, Part 1

A more accurate headline would read: "Inflated AAPL Shares Could Be a Prime Target of a Capital Starved Financial System."

Rolling Stone's Taibbi on Naked Short Sales: Close but No Cigar

Very cogent expose` revealing how power to game the system and effectively elevate volatility of select securities likewise elevates such systemic risk as could collapse whole markets. Such, too, is the work of financial industry "talent?" Hmmm.

Three Asset Classes that Can Actually Outpace Coming Inflationary Price Increases

Any worse than double-digit inflation to come is likely only in a process of breakdown of the global physical economy. Financial assets surely will deflate; the hyper-inflation of monetary aggregates in response to the "credit crisis" virtually assures this. View the wall of money as a war chest. No Fed tightening will change the outcome this wall portends. Financial asset deflation was begun when the sub-prime mortgage market imploded, and it will not stop until cooler minds are given opportunity to act on the fact that, the present financial system is bankrupt, must be put through reorganization, and reestablished in an environment whose sound structural framework already has historic precedent (think the Bank of the United States).

Until policy drastically changes and calls a bankrupt duck "fupped duck," increasing segments of physical production will cease to exist because finance to support physical economic processes will not be forthcoming in those measures needed to sustain present capacity. We already see this effect in so many places you would have to be practically blind, deaf and dumb not to acknowledge what, really, is going on.

Thus, given our present direction, it is by scarcity that hyperinflation will be felt by most.

How to Reform the Credit Rating Agencies

Before any rating agency reform might hope to succeed it seems an economic environment conducive to a widening list of corporations whose bonds are AAA rated -- precisely the opposite trend of the past half century -- is prerequisite. In other words, a return to simpler forms of financial claims against physical assets, as well as a focus on the fundamental physical realities that support the value of all financial claims in circulation (thereby resulting in their trading in more stable, predictable ranges) is a far more pressing priority. That accomplished, then rating agency regulation might naturally fall into place.

The Trend Is Your Friend Until It Ends

National hegemony is not as long term as it used to be? Is this to say the nearer trend will sooner bring a rising demonstration of hegemony among various sovereign nations?

Is It Time to Recognize Reality?

There's little doubt the monetarist global financial system is collapsing. Fortunately, history suggests a Hamiltonian credit system operating in the self- and common-interests of those nations participating can easily return financial stability, this once desperately needed investments in physical economy begin taking root and provide a foundation upon which a new world becomes open to orders of magnitude greater investment in productivity-enhancing human endeavoring both on earth and in space.

First, however, comes cancellation of debts that never will be repaid: bankruptcy reorganization. With so much on the line, though, is it any wonder there is resistance? Is it any wonder benefactors of recent decades' unsustainable fantasy built on a credit bubble behave as though their system, right now, were not already dead?

Yet are these benefactors really persisting in fantasy, or are some using a likely, last-gasp moment of calm to batten down the hatches?