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  • Has Paul Krugman Gone Too Far This Time? [View article]
    The right way to get the economy going is to do what has always worked .... productivity, innovation, scale, invention, efficiency, reducing costs and overhead, etc.

    Plenty the government can do to accomplish that, other than more wasted and nonproductive so-called stimulus spending. If government was just made say 30% less costly and more productive, then that alone would be the stimulus the economy needs.

    1) tax reform
    2) healthcare reform
    3) regulatory reform
    4) military reform
    5) immigration reform

    If most private businesses or private individuals were even as remotely inefficient as governments, then we all would have an equivalent standard of living to say Greece or Nigeria.

    Nothing wrong with expecting government to do a much better job of what they do. Obviously some countries do already. Unfortunately the US is just not one of them.
    Nov 13 12:47 AM | 37 Likes Like |Link to Comment
  • Here's a Third Way to Determine When You Have Enough to Retire [View article]
    A great theory, but reports show that the vast majority of Americans have not even saved $25K for retirement, much less $2-3 million. In fact, the vast majority of Americans do not even earn $2-3 million in their lifetime, let alone save anything remotely close to that for retirement.
    Dec 1 08:02 PM | 32 Likes Like |Link to Comment
  • Hiding Bank Losses [View article]
    Good summary, agree with conclusions. Has a client that was looking for a solar home loan. Client offered 600+% collateral, had good credit, and good stable income. Would have been impossilble for bank to lose even one penny on the loan. Client was turned down by five different banks for what was a pretty modest fully secured loan. The simple fact is the banks are insolvent and do not and will not loan money, except to perhaps the government or AAA corporations. Consumers and small business simply cannot get a loan under almost any circumstances even with very good credit and very good collateral and very good income.
    Aug 13 06:20 PM | 29 Likes Like |Link to Comment
  • Economic Timing Forecast for August [View article]
    So your bullish on the markets and think there is big money looking for any entry point? Really??

    Have you been following the markets at all for the last 18 months?
    1) Prop traders, HFT'ers, algo trader's, etc have accounted for about 70-80% of daily market volume for many many months now. They are simply using Fed ZIRP and Fed and world central banks unlimited liquidity and implict instructions to keep the markets propped up for as long as they can. That is how you get repeated "stick saves" on multiple days, including last Friday, to prevent market sell-offs. Note the up volume is always very low which is what enables them to to push the market back up (ie no buyers except themselves), whereas the down volume is always much heavier (ie real investors taking their money out of the market).
    2) Have you ever asked yourself how it is that GS, MS, BAC, C, and the big prop traders have 100% successful profitable trading days for entire quarters? GS, MS, and the boys reported 100% successful trading days in Q1. In other words they made billions in trading profits and were profitable EVERY SINGLE DAY in Q1. A statistical and mathematical impossibility that has never happened in the over 100 year history of the US stock markets. BAC just reported on Q2 trading and they had about a 90% successful day trading quarter this time. You might ask yourself how is that possible, when the most successful and richest traders in market history have never come even remotely close to those types of numbers before. Not even back in the 1920's and 1930's when the biggest and richest market players routinely manipulated the trades, used inside information, spread false rumors, and dominated the markets did they ever have 80, 90, 100% winning trade records.
    3) Retail investors have been moving tens of billions per month out of stock mutual funds and into bond funds for at least the last 12+ months, month after month after month.
    4) Most hedge funds have indicated they have been reducing their US equity exposures for months now.
    5) Most large US pension funds are widely diversified in multiple asset classes and have reduced US equity exposures for several years now.
    6) Pimpco, the world largest asset manager, at well over $1 trillion has announced they have scaled up US bond purchases from 30% now up to 50% based on their deflationary outlook.
    7) Sovereign Wealth Funds have indicated a desire to diversify away from the US dollar, including China, OPEC, Russia, and others. Meaning they will be buying less US bonds and less US equities and more other worldwide assets.

    So exactly who is it that you think is buying all these US equities and propping the markets up? And who is it that you think is going to keep buying them and driving the prices even higher?

    Just curious as to who you think this big money waiting for an entry point is? When all the big money sources we know are exiting and reducing exposure. The ony big source we can identify is the Fed/Treasury/central banks providing prop trading desks and HFT'ers with likely implicit and probably illegal direction and funding to keep markets from collapsing.

    So if you know who this big money waiting for an enty point is, please let the rest of us know, because noboby we know can identify any major groups waiting to enter the markets at these types of levels and in this declining economic environment.
    Aug 7 09:33 PM | 28 Likes Like |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]
    Corzine and MF Global not the result of fraud but rather weak controls and chaos ??????????????? Sounds like the regulators and judicial officialdom have entered into the realm of fraud themselves. It is theft of taxpayer's money to have incompetent regulators and judicial officials who cannot even prosecute clear misappropriation of client segregated monies.
    Aug 16 07:51 AM | 25 Likes Like |Link to Comment
  • Book Review: 'The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America - and Spawned a Global Crisis' [View article]
    Yes you are 100% correct in that many Americans are financially illiterate and yes financially stupid people are everywhere. But it's just not that simple.

    As a society we don't condone the weak, sick, and mentally challenged being taken advantage of and being exploited. We don't condone children being exploited and taken advantage of. We don't condone criminal acts such as fraud, extortion, theft, gross misrepresentation, and ad infinitum.

    Your review downplays far far too much the culpability of the biggest and most powerful players in the US today. Whether they be politicans, regulators, big public corporations, wall street bankers, or merely smart but crooked individuals who figured out how to game and exploit the system.

    The point being that making hugh amounts of money is not inherently bad. But that is only true if the methods used result in a benefit and better standards of living for most of the citizens of the country. Using corruption, deception, falisfaction, dishonesty, abuse of influence and power, payoffs of politicans, etc are not valid or socially acceptable methods of enriching that tiny segment of society who happens to be smart enough and morally corrupt enough to exploit it.

    Our view is that a National Fraud Commission with wide ranging powers based on Rico Laws (imprisonment and asset consfication-similar to drug prosecutions) and operating totally on a private sector continency fee type model would go a long ways towards reducing the endemic levels of fraud and corruption so pervasive in the US today.

    However, we do agree with you that not much is likely to change anytime soon, and thus you are correct in the premise that all citizens just need to become much better financially educated. Just not sure how it is even possible to accomplish that goal.
    Nov 21 03:57 PM | 24 Likes Like |Link to Comment
  • Fiscal Cliff: Let's Call Their Bluff [View article]
    Some of these ideas actually have some merit. Such as state banks or even buying up all student loans and cutting their interest rates to ultra low loan rates.
    Dec 19 11:03 PM | 23 Likes Like |Link to Comment
  • U.S. Stock Market Complacency On Verge Of Collapse [View article]
    So far, 94 of the companies in the Standard & Poor's 500-stock index (SPX) have made negative earnings announcements for the second quarter. That compares with 26 positive announcements, according to Thomson Reuters data as of June 29.
    The above if from a news feed provided by our broker. Already the EU and China weakening is feeding into US equities for Q2/12. Earnings season is almost certainly going to be a major disappointment. Can't see how US markets don't have a significant sell-off over the coming months.
    Jul 6 06:47 PM | 23 Likes Like |Link to Comment
  • What’s Really Behind QE2? [View article]
    Then if QE and funding the deficit and debt is so helpful, why not just print $15-20 trillion of new money, then buy up all the outstanding US debt, make the US a debt free grovernment, pay zero interest, and just let all the trillions in US debt sit on the Fed balance sheet. Then the Fed could take all that artifical interest and pay a hugh dividend to the US Treasury each year as the debt matures and they just cancel each treasury as it matures.

    If they want to "sterilize" the $15-20 trillion just force the banks to keep it all as reserves at the Fed, and pay them 1/10 of 1% interest on the reserves. Better than paying them 1-4% on the treasuries.
    Nov 20 09:47 AM | 23 Likes Like |Link to Comment
  • Individuals are earning at record levels and moving into a more stable financial foundation. Corporate cash positions are high, with little risk of sharp resource reductions. U.S. states and EU nations are reducing budget gaps. Just a few of the reasons to take comfort that 2010 is not 2008.  [View news story]
    LOL, you need to be on Wall Street or Washington DC to see those richer friends. If your anywhere else it doesn't count. The rest of the US is just an afterthought.
    Jul 6 07:01 PM | 23 Likes Like |Link to Comment
  • Rising Inequality And The Economic Crisis [View article]
    So exactly how is the union worker, using bargaining, any different than say:
    1) corporate executives - who stack boards and hire compensation consultants to grossly inflate their compensation,
    2) professionals - doctors, dentists, nurses, architects, etc - who use professional associations to limit supply and training and thereby drive up fees and prices.
    3) dairy farmers or ethanol "farmers" - who lobby politicians for subsidies and artificial price supports.

    and countless other special interest groups that attempt to use any and every means to increase their share of the economic pie.
    Dec 3 08:37 PM | 22 Likes Like |Link to Comment
  • A Huge Rally for Equities Coming in 2011 [View article]
    Hmmm, the only support you see is Fed POMO operations at $25 billion month and Fed QE at $75 billion month. And some prop desks, HFT'ers, and algo traders using the Fed money to trade about 70% of the market volumes according to Banana Ben's instuructions. And a hugh dollar short trade rapidly devaluing the dollar to support the equity ramps. Has nothing to do with technicals and support or reistance, or fundamentals, or virtually anything else except Fed intervention on a massive scale.

    What is unanswerable is a multitude of factors such as: will all other countries band together to begin currency wars, currency controls, tariffs, etc. to fight off Banana Ben and keep hot money and spiriling local inflation from killing their economies. Or will american consumers affected by rapidly rising commodity and consumer costs and taxes and deleveraging needs finally throw in the towel and just quit spending at all except for necessities. Or will gridlock in Washington finally result in much less government spending in additon to the know looming cutbacks at state and local levels.

    So the real question is can or will many negative issues ever be able to overcome the massive Fed intervention and collusion with big traders to attempt to keep moving asset prices up. Who knows. But it almost certainly has nothing to do with technicals, fundamentals, or any other rational metric for that matter. It's just a crapshoot in the most manipulated casino ever seen. Will the Fed and their cohorts win? Maybe and maybe not. But it is a certaintly that less and less and less investors are willing to play the game anymore.
    Nov 5 10:24 PM | 22 Likes Like |Link to Comment
  • Perspectives On Friday's Sell Off [View article]
    The serious pain will come, but the question is when... is this the start of it or just another excuse for central banks to keep trying to prop up markets for yet another year or two.
    Jan 24 08:44 PM | 20 Likes Like |Link to Comment
  • Tim Tebow, Social Mood And The Future Of U.S. Stocks [View article]
    Interesting conjecture, but doubtful that Americans will forgo self-interest and gaming the system for personal benefit anytime soon. It is just too entrenched to "believe" such will happen soon. Perhaps if we start to see US public company executives return to something like 1970/80 levels of relative compensation (ie. like 40x average employees compensation), then maybe one could buy into that thesis. But personally, we think hell just might freeze over before that ever happens.
    Dec 19 03:10 AM | 20 Likes Like |Link to Comment
  • What’s Really Behind QE2? [View article]
    Now why would the Chinese want to come here and spend money in our stores when they can make their own for 10 cents on the dollar and keep most of the production, employment, profits, etc in their own economy?

    By way of an example, think it was a Bloomberg article, that illustrated the manufacture of men's socks. Negotiations were underway with a Chinese export men's sock manufacturer with a US wholesaler. The Chinese manufacturer could make a pair of socks for $0.25/pair and still make a profit. The socks retail for $2.99 in the US after the export,wholesaler, retailer chain process. Surely any Chinese retailer could sell the exact same thing in China for say $1/pair and still make mega profits. What Chinese would ever come to the US and spend 3x the money to buy the same product in the US? Answer=zero.

    The issue is that you cannot make a non-competitive economy, ie the US, competitive simply by printing money and issuing treasury debt.

    Perhaps you can explain to all of us dumb americans why Jamie Diamond or Lloyd Blankenfein or many like them deserve to earn say $50-$150 million year in bonuses, options, etc for very marginal performance. Given that they manage banks that barely are in the top 10 largest banks in the world. Yet Chinese banks which have several banks in the top 10 largest in the world have executive pay at the $250K/year level. Is Jamie Diamond or Lloyd Blankenfein 200-600x better than Chinese bank CEO's? Argueably they are in fact worse performers and should be earning less than their Chinese counterparts.
    Nov 20 11:13 AM | 19 Likes Like |Link to Comment