badScooter

Why Silver’s Breakout Could Bring It Out of Gold’s Shadow

Senate activity: Cap-n-tax, Obamacare. Major new energy consumption tax with a major new entitlement program. Odds that will be good for businesses?

Why a Market Crash Doesn’t Matter

Fear is a survival instinct, and not to be shunned. Kept in check, yes, but not ignored. There is so much political risk getting baked into the cake right now, as well as poor macro, that ignoring fear is a good way to go bust. Paralyzed by fear, now, that would be no good.

However, someone has to take the other end of the trades I'm making...

Employment: Neither Quality Nor Quantity

it kind of rhymes with the 4th century AD, as well.

Employment: Neither Quality Nor Quantity

Hi, A/M, I'd just add one thing. According to a WSJ article last week, unemployment benefits have been extended such that the maximum possible benefit extends to a staggering 99 weeks. I agree with you...I can't see myself in a situation where I was on the dole for almost two years, without doing *something* about it. That is enough time to do an awful lot of self improvement. Start a business. Move. Bite the bullet and take a subsistence level job. 10 weeks? 20 weeks? Even 30 weeks? Maybe so, in this sort of environment. 99 weeks, however, is either laziness or genuine inability to work. I only have empathy for the latter.

blog at strikeback2010.com

The Glide Path Option

I fear VAT mightily, as a small manufacturer. I've already got overworked employees because I cannot afford to hire more, and plenty of government paperwork already. Not to mention the lovely taxes we already pay in all their elegant simplicity (grin).

I fear VAT because I saw Nancy Pelosi discussing it on some talk show or other...and the way her eyes were glowing was unholy. Although I'd like to see a taxation system that is simpler, more robust and harder to willfully evade (which VAT *could* be), what is actually likely to happen is a situation where an incredibly complex new system is simply heaped atop the current 69,000 page tax code monstrosity...replete with a whole new set of loopholes, exemptions, and sweetheart deals for every company big enough to afford a lobbyist.

John, thanks for your work, this is a very cogent summary which I shall relate to my friends and acquaintances. Especially those who don't pay attention to the warning signs. Knowing is the first half of doing.

blog at strikeback2010.com

Employment: Neither Quality Nor Quantity

'social conscience' is code for 'others must have a RIGHT to my labor'. I am sick and tired of this fallacy, after listening to it for 12 hours running on c-span yesterday (health 'care' debate). I listened to people in Congress talk about health care as a 'right'. Really? Who provides that health care? It implies somebody's time and skill. So you're saying that others have a *right* to my time, my effort, and my resources? Sorry, no, I may choose to give, but keep the hands out of my wallet.

A fellow can be a capitalist / free market advocate / whatever, and have a conscience. This particular one, however, thinks that when the federal freaking government mandates it, it is unconscionable. JustMike, this is why Peter is so negative...because people like you have hijacked the country.

Even if we, as 'evil capitalists', are in the minority (and frankly, we might be), our system of government is *supposed* to protect the rights of the minority. Instead, we have a grabby-hands government which is on a path to abuse us mightily because of our ideas about personal responsibility.

To simplify it, our official government policy is one of "take from the Ant for the benefit of the Grasshoppers". And don't give me any crap about lack of 'social conscience'. I spent a night last week working (for free) in a homeless shelter and providing (for free) some much needed groceries. I am completely positive that I am not alone in this kind of behavior...because I see it.

blog at strikeback2010.com ...and yes, I support Peter for Congress.

Home Purchase Tax Credit Extended: Is This Wise?

Thank you, John, for your (as usual) thoughtful commentary. As an investor, so-called 'helicopter money' drives me nuts. Would I take some if it were dumped on me? I reckon I already do...anybody who takes the mortgage interest tax credit does. I surely would give it up in favor of a government that actually taxed fairly, and restrained itself to collecting taxes to pay for valid objectives rather than the simple and obvious redistribution of wealth in the name of social justice.

I know, I'm not adding anything substantive here, I just feel the need to rant briefly after listening to the health 'care' debate on c-span all day yesterday.

blog at strikeback2010.com

The Greatest Depression Is Coming

Housing crisis is yesterday's news? Really? With 'Prime' Alt-A / option ARM resets will be ramping up starting in 1Q10, with sustained and growing reset levels over 2-3 quarters, in the face of 17% U6 numbers? Let's not even talk about commercial real estate.

Point taken about stocks being leading indicator, but please consider the notion of wave 3 down...

American Austerity Is About to Begin

Hi, Mr. G,
I appreciate what you're saying about the prevailing pessimism (I can only hope it means a "bottom" is near, in political terms)...but really, how can you state that this is a failure of "free, unregulated markets", when they most certainly have been nothing of the sort, my entire adult life? "Crony Capitalism" might be a better description. Dodd, Franks, and others were and are joined at the hip with Wall St. interests, in ways that make me shake my head and mumble 'conflict of interest'. The democrats have no monopoly on this behavior, which is obvious with a cursory look at the Iraq conflict vis-a-vis no bid contracts.

I do believe Rahm Emanual when he states "never let a crisis go to waste". I guess I hold with Elliot Wave theory in the sense that our economy has not seen the full impact of our past malfeasance yet, and I shudder when I think what our current batch of progressives in power will do...using the exact claim that you just made as an excuse...that "capitalism had its chance and failed". Hogwash.

American Austerity Is About to Begin

Chap08, Yellow Hoard, great discussion all.

The take-home for me is to expect plenty of pain. Whether it be a faux-republic continuing the slow, steady evolution into totalitarianism (perhaps modern feudalism) by way of progressive socialism, or a violent collapse with 50% unemployment leading to civic revolt of some stripe or another. My two bits, I'd rather "clean house" and take my chances with the Republic surviving a major wave three down. Got some thoughts at strikeback.biz (a blog-aiming mainly for massive incumbent replacement with people who demonstrate an Austrian understanding of our dilemma)...YH, I'd like to invite you in particular.

You Can Spend Your Way Out of a Recession

MBKelley, as individual investors none of us can change what the government is doing, that is true. I'd add, though, that our government is not a monarchy. Follow the trend to make the money, but I for one am becoming convinced of the necessity of political involvement at the local level!

You Can Spend Your Way Out of a Recession

Actually, Keynsesian is a dirty word. It is incomprehensible to me that we should drug our economy out of its recession with doses of productivity borrowed from the future...and further that this money should flow through the intrinsically inefficient mechanism of government. I said 'borrowed', not 'stolen', because one way or another, we shall all at some point pay.

The Problem with Free Markets? Look in the Mirror

Fascinating discussion, thanks all.

David Van-, I think the original genius of our system was the recognition that some specific yet widely applicable rules were necessary, but that they should be held to the absolute minimum both in number and in scope.

Wasn't it Rand that said "Free markets are a great idea...too bad nobody has tried them"?

Tony, us cavepersons have made it this far, but absolutely nothing guarantees us the right to continue to make it, as a country, an economic system, or even as a species. One of those "long term blind spots" the author is referring to, I think. I like to imagine what a smart dinosaur would have thought, living through the K-T event...something like, "Hey! No fair!".

Deflation Looms

Thanks, Mr. Lounsbury, for the concise and educational presentation of this position. I tend to consider inflation a more likely endgame, but then, I don't know much...

It's been mentioned a couple of times in the comment thread. In engineering generally, they call it a "positive feedback loop". In nuclear physics, it is known as "prompt critical". Airplane pilots know it as "PIO", or 'Pilot-Induced Oscillation'. Anyone who has driven in ice with rear-wheel drive (as Bling states) has experienced it. It shows up endlessly in the natural world, the notion that tinkering with complex systems can create exponentially changing results. My business partner mentioned to me the other day, "you know, I believe there is such a thing as Economic Physics". Yup. And I'm not so sure that anyone really understands it all, although folks like Dr. Talib seem to be on the right track. I'm not even that confident in Geitner or Bernanke.

5 Reasons to Avoid the Gold Rush

I consider PMs to be a stability hedge more than an inflation hedge. I also would suggest it is a sure form of "voting with your wallet". I'd consider any of the three above reasons to be valid for having gold in a portfolio. Reasons #1 and #3 are why I personally won't touch a bloody TIPS with someone else's 10-foot pole. I don't think much of that instrument vis-a-vis rationale #2 either, also known as "of course the government wouldn't lie about something as important as CPI". Sheesh.

A fourth possible reason would be China, of course...although I'm not inclined to make investment decisions based on what a communist country may or may not decide to do. Contrary to some thinking I've observed, I do not consider China a bromide to our economic state.

Yup, it very well could be in a bubble. Guess we'll find out, soon enough.