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  • Monday Market Measurements: How Great Are Things? [View article]
    The question is were you thinking the same way in May 2008? At least then 200-day moving averages on major indexes like the S&P 500 were falling, while the indexes themselves were persistently printing below it. Although I quite understand your perspective and likewise suspect your view very well could be proven correct over the next few years upcoming, still, if a 30-40% setback develops in the interim (which is no small likelihood), will you remain unshaken in your view?
    Sep 11, 2012. 02:26 PM | Likes Like |Link to Comment
  • Will China Dump U.S. Debt? [View article]
    I am aware that, about a year or so ago, China assigned a certain portion of its dollar reserves to capitalize a joint venture with Russia venturing to develop Siberian resource extraction, processing and transportation to an eastern Russia port. Along these lines, the safest security in the world (U.S. Treasuries) seems a very suitable means for backing large-scale projects, like this China-Russia joint venture.

    By no means, however, do I believe "the U.S. consumes too much." This is not the source of America's savings shortfall. Rather, industrial disinvestment collapsing tangible, physical wealth produced per capita is at the root of our savings shortfall.

    Tangible, physical wealth is not to be confused with financial wealth whose open market value presently finds increasing risk of being decimated, this to no small degree on account of imbalances your article duly notes (and likewise are well-known). Yet, inasmuch as the above cited China-Russia joint venture presents an opportunity for China to put its dollar reserves to productive use, the same could be established in US-China joint ventures in large-scale projects whose investment aims would serve to increase US capacity for creating tangible, physical wealth. These obviously would need to favorably cater to China's needs, as well, yet would also serve to elevate the United States' position in a manner alleviating its present imbalance with China.
    Aug 1, 2011. 06:19 PM | 1 Like Like |Link to Comment
  • Why the Market Was Terrified Yesterday [View article]
    But nothing to do with an insolvent European banking system weighing down an unworkable EMU tied to the hip of wildly levered investment banks with assets marked to fantasy whose rating agency tools are on a dangerous mission to raid the U.S. Treasury before its receipts collapse into oblivion as the physical economy continues its relentless contraction on account of a hyperinflationary "bailout" whose most enduring effect but accelerates demise of capacity that, an incompetent Fed chairman calls "excess?"
    Jul 29, 2011. 01:55 PM | Likes Like |Link to Comment
  • Who's Right on Gold: Buffett or Dalio? [View article]
    Gold is much more a measuring stick of the still-evolving collapse in private-label structured securities than "an influx of cheap labor from Asia."

    Money recklessly created by lenders of last resort in a desperate attempt to sustain debt securities created in the build-out of a structured securities Ponzi scheme (this in the age of Greenspan) naturally will migrate somewhere. Obviously, no small measure of it is reaching the gold market.

    Here's the problem, though: lenders of last resort in pushing on a string have reached a point where debt securities created in the build-out of Adam Smith's Leveraged Ponzi Scheme invariably will collapse no matter how much liquidity is shoved into the system. Competent study of 1923 Weimar Germany strongly suggests this outcome is at hand.

    Amidst the chaotic scramble about to unfold not even gold will be able to keep up with physical costs of living whose increase will be much more largely driven by shutdown of productive capacity than by monetary inflation itself. If you wrap your brain around 1923 Weimar Germany's hyperinflationary collapse, you discover this physical shutdown component is the biggest risk to the underlying value of both physical and financial assets. It is this dynamic that is set to drive debt's collapse. Likewise, everything else under the sun (equities, gold, real estate -- everything) simply will be increasingly sold in order to keep up with soaring costs everywhere.

    Now, gold might rise in nominal terms at certain times in the midst of this fast approaching hyperinflationary condition, but in no way will it keep up. Furthermore, once Americans come to their senses and remove fascist obscenities calling themselves political "leadership" these days, gold's fate will be utter collapse.

    Thus, in both stable times as well is in times of extraordinary instability, I am with Buffett on the matter of gold investment. Gold is an unproductive asset, and only those many Americans tragically lacking understanding of Alexander Hamilton are prone to believing otherwise.
    Jul 26, 2011. 01:36 PM | Likes Like |Link to Comment
  • Sell Your mREITs Immediately [View article]
    " back when our political leadership has resolved the debt ceiling issue?"

    The interest rate risk you cite is not isolated to "the debt ceiling issue." A Great Debt Unwind is at hand, and this Washington's actions guarantee with policy sure to accelerate hyperinflationary breakdown of both the physical and casino economy.
    Jul 26, 2011. 12:58 PM | Likes Like |Link to Comment
  • The U.S. government can push back a default a month or more after the Aug. 2 deadline set by the Treasury Department, Wells Fargo chief economist John Silvia says. The Fed and Treasury can work together to generate enough cash "probably for the next two or three months," adding credence to reports that the U.S. is telling big banks a default won't happen. (earlier: I, II)  [View news story]
    Damn straight a default won't happen! Any pol even using the word should be censured. Ridiculous! NOT ONE WORD DOES ANYONE DARE UTTER ABOUT THE TENS OF TRILLIONS OF TREASURY OBLIGATIONS BACKING THE HOPELESSLY INSOLVENT PONZI SCHEME THAT IS THE U.S. BANKING SYSTEM. Gutless cowards.
    Jul 25, 2011. 07:18 PM | 3 Likes Like |Link to Comment
  • Behind the Curtain, U.S. Downgrade on the Way [View article]
    U.S. deficits plainly are fueled by an insolvent financial system. That spending is no longer backed sufficiently by economic growth stands as testament to this. Cutting entitlements will not correct this. Rather, it will only deepen the financial system's fundamental, underlying bankruptcy.

    What's needed is a Great Restructuring clearing the banking system of "assets" marked to fantasy. In other words, Glass-Steagall is the only way out. There is absolutely no shot of the U.S. growing its way out of this predicament. Not when every effort to jump start the securities-based Ponzi scheme that the U.S. economy became in the age of Greenspan (and now Bernanke) has miserably failed to restore confidence in a manner allowing lenders of last resort to exit their prop.

    We are hopelessly bankrupt. Looking back, most apparent is that, the minute lenders of last resort were forced to pony up was like the proverbial "bell sounding" the death knell of risk assets of all sorts. So as this conclusion might not be misinterpreted, many times over the past twenty years we have seen securities of bankrupt enterprises trading as though their underlying value remained intact. Eventually, reality sets in. The same will hold true per the post-Bretton Woods arrangement's inescapable insolvency.
    Jul 25, 2011. 12:55 PM | 1 Like Like |Link to Comment
  • Soros Is 75% in Cash [View article]
    Oh, I don't know. Given the autumn 2008 swindle of U.S. taxpayers to bail out a fraud-rife OTC derivatives market and seeing no subsequent prosecution for misdeeds that led to this extraordinary circumstance, it seems the mafia correlation is spot on.
    Jul 25, 2011. 12:25 PM | 2 Likes Like |Link to Comment
  • Robert Reich responds to a column by the New York Times on the great consumer bust by pointing out it's flat wages - and not slow spending - at the root of the problem. The solution? He says a long economic trend needs to reverse, and the income of the vast middle class needs to increase with production and investment.
       [View news story]
    Nothing useful will happen until, first, illegitimate debt is written off in a major, systemic bankruptcy reorganization (Glass-Steagall). The Congress was given power to legislate bankruptcy laws precisely for a moment like this: a moment when a mountain of illegitimate debt manufactured on Wall Street and the City of London feeding the greatest Ponzi scheme the world has ever seen (RMBS) no longer can be sustained and, therefore, is doomed to collapse. This issue FIRST must be dealt with, then whatever Robert Reich might have to say about wages can be discussed.
    Jul 18, 2011. 08:15 PM | 1 Like Like |Link to Comment
  • Treasury Should Sell Gold Reserves to Pay Down Deficit [View article]
    GREAT ARTICLE! However, as restoration of Glass-Steagall invariably sweeps through Congress, this as Adam Smith's Leveraged Ponzi Scheme (a.k.a. RMBS) unwinds in a spectacular crash (and in so doing lays bare the FARCE today called a "sovereign debt crisis"), the "value" gold would offer then is not to be underestimated (thus making yours, in fact, bad advice).

    You can see with your own eyes reading comments here, there are no shortage of people willing to part with their savings for the sake of owning "the world's most unproductive asset." Think of capital that could be raised to form equity capital in a reconstituted Bank of the United States dedicated to financing at rates of 0.5% - 2.0% the transformation of the U.S. economy from one that is hydro-carbon-based to one hydrogen-based. Thus would an "unproductive asset" become productive (yet not more so to buyers of Treasury's gold, as their gold's value by no means would be assured to appreciate under such an arrangement -- more likely would its open market value scarcely appreciate, if not in fact depreciate, this because renewed abundance in productive investment opportunities would make gold a less attractive alternative).

    So, to summarize my disagreement with your idea, I believe you err to assume the greater portion of the U.S. Treasury's debt is not slated to be retired, this as Congress decides to no longer back the Wall Street - City of London leveraged Ponzi scheme whose burden simply cannot be overcome with Treasury's backing. Indeed, this Ponzi scheme can only serve to destroy the U.S. Treasury. Thus, the Ponzi scheme will be left to collapse and our world will go on. This, then, is to say that, much of the debt you say we could pay down selling Treasury's gold stock is, in fact, illegitimate.

    So few people understand this amidst the sea of intellectual pollution spewed by that sorry bunch of imperialist monetarists running the Fed and hijacking the U.S. Treasury. Theirs is thinking much more in line with fascism than it is American. Ron Paul? Generally misguided in remedial policy (to put it kindly), yet SPOT ON in fingering certain vexing problems.

    All that said, GREAT ARTICLE. Don't be dissuaded by the derision you have received in comments. It is to be expected.
    Jul 18, 2011. 06:38 PM | Likes Like |Link to Comment
  • Felix Salmon's take on "the most important chart in the world right now": It wasn’t greed and speculation that sparked the financial crisis, but "an excess of overcaution" marked by a surge in demand for AAA-rated bonds - dangerous "precisely because they’re considered risk-free. They breed complacency and regulatory arbitrage" which lead to excessive leverage, "the cause of all big crises."  [View news story]
    Lots of good points. Myself, I'm looking forward to the fast approaching, RMBS investor rush for the exits, as the reality of there being no physical mortgage backing these securities is gaining recognition in the courts.
    Jul 15, 2011. 08:51 PM | 1 Like Like |Link to Comment
  • Felix Salmon's take on "the most important chart in the world right now": It wasn’t greed and speculation that sparked the financial crisis, but "an excess of overcaution" marked by a surge in demand for AAA-rated bonds - dangerous "precisely because they’re considered risk-free. They breed complacency and regulatory arbitrage" which lead to excessive leverage, "the cause of all big crises."  [View news story]
    Naked Capitalism today published a credit market-related story you might find interesting:

    The one thing [unspoken] per your comments that raises my ire involves AAA securities and those rating agencies responsible for these assignments. The magnitude of fraud unpunished these agencies engaged in the RMBS bubble makes their role presently in the Treasury drama particularly offensive.
    Jul 15, 2011. 08:47 PM | 2 Likes Like |Link to Comment
  • Felix Salmon's take on "the most important chart in the world right now": It wasn’t greed and speculation that sparked the financial crisis, but "an excess of overcaution" marked by a surge in demand for AAA-rated bonds - dangerous "precisely because they’re considered risk-free. They breed complacency and regulatory arbitrage" which lead to excessive leverage, "the cause of all big crises."  [View news story]
    Dave Goldman?
    Jul 15, 2011. 08:36 PM | Likes Like |Link to Comment
  • AAA - "risk free" - debt issuance never went away after the GFC, it just moved from ABS to government debt. With bank regulation pushing investors into holding government paper, plus central bank buying, there has been plenty of demand for it. It's another reason why the sovereign debt crisis is both painful and potentially far more damaging. Fascinating stuff.  [View news story]
    BOTTOM LINE: Adam Smith's Leveraged Ponzi Scheme always, always, always operated on this fundamental principle (which, in fact, is no different than any Ponzi scheme before): Inflate or Die.

    Now per Treasury debt inflation, I doubt this has anything to do with ABS collapse. Treasury debt inflation would have proceeded at this rate had confidence not been shattered in '07-'08. Truth is Adam Smith's Leveraged Ponzi Scheme all along needed to inflate Treasury debt, that useful hedging vehicles would exist to offset risk building up in the ABS scam (particularly RMBS).

    At present, inflated Treasury debt is all that remains between the Ponzi scheme's former shadow and a spectacular collapse. As you can see, too (via vulnerabilities building throughout the trans-Atlantic financial system and via trauma in government finances), the U.S. Treasury is no match: Treasury can only be dragged down by the still-imploding Ponzi scheme. Indeed, the U.S. Treasury risks being destroyed as RMBS markets in particular invariably collapse.

    This is why there is little time remaining for Congress to reinstate Glass-Steagall. A mountain of illegitimate debt is about to come down. Yet the subsequent chaos could be averted were Glass-Steagall restored immediately, that good debt from bad debt at last be separated so the economy can grow once again. (Thus we understand why the U.S. Constitution gives Congress explicit power to legislate bankruptcy law).

    At this crucial moment, every effort should be made to stop Congress from raising the U.S. Treasury's debt ceiling. The game is nothing more than a backdoor bailout of the Ponzi scheme whose collapse is inevitable and still another stickup of taxpayers. Nancy Reagan coined the phrase, "Just say no!" I'm a Democrat, and I say: Obama MUST GO.

    Glass-Steagall NOW!

    (Now tweet this bad boy, if you will, please.)
    Jul 15, 2011. 08:33 PM | 3 Likes Like |Link to Comment
  • Geithner says "we're running out of time" to raise the debt ceiling. Bernanke says failure would be "calamitous." Pres. Obama says seniors might not get Social Security checks without a deal. But, Kurt Brouwer asks, isn't this the same gang who said TARP, the stimulus, Obamacare, QE1 and QE2 would fix things? Is it any wonder that Americans "just do not trust our leadership anymore?"  [View news story]
    Geithner says, "We're running out of time," but who is "we?" Club Fraud at the Fed and the Swindling Marauders at Treasury? The game couldn't end soon enough!
    Jul 14, 2011. 07:33 PM | 6 Likes Like |Link to Comment