pharma

A Look at the Respective Rallies in Tech, Housing and Oil

The tech bubble was just a pure speculation. There was no real substance under it.

The present housing bubble was a child of excessive greed and a big fraud on a part of the Wall Street and securities rating agencies. The government and the Congress also made a major contribution to the problem.

Now, we come to a commodities "bubble". Well, the Feds and the Treasury are printing money as crazy trying to solve financial and housing problems through inflation. However, the commodities are the real stuff. Their is no way it can be "printed".

Consequently, the is no commodity bubble now yet. The commodities prices just reflect the present inflation adjusted prices. Please note the commodities prices are much more inflated in US$ and than in euros.

Bernanke Urges Action to Slow Foreclosures

Excellent article.

Why will anybody in a sound mind pay their mortgages? There are absolutely no reason for it!

PS
People do not understand the meaning of communism. Stalin stated: Everyone MUST contribute to the society accordingly to their abilities and everybody must be paid compensated accordingly their contribution.

This is perfect and I agree with it.
But there was one BIG problem: it were the Communist Party bureaucrats who developed and implemented the standards for required contributions and compensations. If someone did not meed the required contribution requirements, he and his family were sent directly to an extermination camp!

Unintended Socialization of the Housing Market and Its Consequences

The problem with any socialism/communism is it does not work for long.

Very fast people learn how to avoid working and maximize stealing.

Then, people start to resent each other.

Then, hate each other.

Then, welcome to a "paradise" with no personal freedoms but with concentration camps for "enemies of people"...

Remember that "any road to hell was paved with good intentions".

In Russia, people say: "Wanted to do better and ended as always in deep shit".

Are Treasuries Safer than Cash?

As I see, the major problem facing US economy is associated with artificially-inflated real estate. This problem was multiplied by totally irresponsible lending practices, uncontrolled leveraging and by outright fraud.

Feds are incompetent, dishonest and panicky. Fed's approach is to flood financial markets by printing US$. This is a futile attempt to save corrupt and politically super-powerful investment banks by scarifying the main-street economy.

There is no way Fed can re-inflate real-estate prices.

Just early last year, I was driving along Singer Island cost-line in Florida. My back-of-envelop calculations of a few miles real estate coastal real estate value gave ~$500B. Note that the entire worldwide pharmaceutical industry is valued less than $500B
Does it make any sense? No.

The real estate must come down. The financial institutions and iBanks must purge it selves. There are no any other way around.

The Inflation-Fighting Fed?

It is the incredible how incompetent, "honest", and panicky this Fed is.

Will Further Fed Cuts Exacerbate the Problem?

Professor Ben lives in a fantasy land serving his Washington political masters.

Wall Street is in a complete control of the American political life.

Consequently, Feds policies only exacerbate terrible financial and economic situation leading to an economic catastrophe.

Some Fascinating Facts About Fed Injections

In 1933, the Home Owners Loan Corporation did not help ending the depression. It just extended and deepened it.

Integrity of banking system must be protected. But bailing out losers and speculators is not a good idea.

"The Spending Society" is over. It is time for savings and hard work. Printing additional money will kill the US economy.

Freefall Fed Policies?

The fact are quite simple and speaking for themselves:
- The present financial situation is out of control. So far, actions undertaking by the Feds and the Treasury have failed to even address the present situation and, to a large degree, were outright counterproductive;
- The Federal Reserve, Treasury, FDIC, and the Comptroller non-action and/or misguided actions have allowed the abuses of excess leverage and exotica in lending;
- The people directly responsible for the present financial and economic catastrophe [specifically sr. executives of major banks, investment and lending institutions, and security rating agencies are all allowed to keep their loot at the time when the entire country is suffering.

Conclusion
- The most serious issue is not a credit liquidity problem. Contrary to this notion, it was uncontrolled liquidity that was/is responsible for the present situation. The lending process that brought us to the present situation was nothing more than another financial pyramid. Consequently, just pouring more liquidity [gasoline] will ignite an inferno.

The major issues responsible for the present terrible crisis are the trust and integrity of the entire financial system!

PS
Unfortunately, the present political situation in the USA does not offer any hope for properly & honestly addressing and solving the runaway catastrophe.

Some repliers to this article went so far as to suggest a censorship of views and/or ideas they do not like or agree with. It is outright disgusting!

Can the Fed Really Afford to Cut Another 50-75 Points?

Unfortunately, we can not expect much [sound decisions] from the Feds since they are too incompetent to regain control of the present runaway monetary & highly inflationary situation.

The election year politics removes any Feds credibility and integrity. The White House and the Congress will do everything to prevent any bad news appearances.

Inflation, Growth and Fed Failures

Bla-bla-bla and no substance.