frosty

Daniel Indiviglio: Increased antitrust enforcement is good for competition (and competition is good for capitalism), so what's The Wall Street Journal's problem with it?

Antitrust deals with monopolies (bad for consumers), collusive behavior among "competitors" (price fixing), and anti-competitive actions (bad for other businesses). Competition is good, criminally rigged business activities are bad.

The Wall Street Journal has lost its standing as business' voice of reason. It has become just another conservative political newspaper (witness Carl Rove and Peggy Noonan as primary and frequent editorialists who write entirely about politics and nothing about business). I used to respect the WSJ viewpoint as a reasoned spokesman of the business community. Whether I agreed their opinion or not, the opinion deserved consideration. However since Rupert Murdoch took over, WSJ has become a conservative republican propaganda rag pushing an ideology. I'm waiting for Rush Limbaugh to begin a weekly column on the editorial page. Fortunately (or perhaps unfortunately) they still have valuable financial news sprinkled among the political commentary.

John Mauldin still can't figure out where all that money is supposed to come from: "I don't think the U.S. can find $2T this year and then come back to the well for another $1.5T next year without serious disruption in the markets. Where do you find that much money when all the rest of the world also wants to borrow massive amounts?"

Here's how it works: I lend you a hundred, you lend someone else a hundred, who lends it to me. Now I can lend you another hundred and you can lend your friend another hundred who can lend it to me. The longer the term of all these loans the better it is because each hundred dollar loan then has only a tiny payment due each month which means that I (we) only need a tiny income to support a pyrimid of debt. It works for nations too.

'The Crash of 2008 and What It Means' by George Soros

Short of bubbles, which happen infrequently, the same principles apply to simple bull and bear trends. Recently, we heard the drum beat of the actual trend that economic data of all sorts was "less bad" which translated into the distorted view by many that things were either getting better or soon would.

The multiplier effect takes hold when the financial and/or popular media make the public increasingly aware of a trend-to-become-a-bubble. Bubbles can only happen when enough people become aware and want to jump on the bandwagon, causing the trend to exponentiate. Otherwise, a trend remains linear and runs its natural course.

So communication media play an important role in the development of bubbles, perhaps unwittingly, perhaps not, perhaps through advertising, perhaps through news stories, perhaps just through word of mouth (if you've never heard of a tulip there is no reason to one).

I just wonder what the financial world has in store for us with Twitter and even more sophisticated instant communication tools to become available in the future. "What are people investing in RIGHT NOW?!" Will we have more transparent information availability? Will we have increasing amounts of misinformation to manipulate markets? Will we have intraday bubbles? Does George Soros Twitter?

UBS (UBS) to U.S., Swiss governments: You guys figure this out.

The Swiss provided the banking interface between the 3rd Reich and and the outside world. Later, they became the bankers for nazi refugees. Since WWII, many mafiosi, drug cartel cheiftains, 3rd world dictators and just ordinary tax dodgers from all over the world have been major clients of Swiss banks. Secrecy has always been valued by Swiss bank clients and rigorously maintained by the Swiss government which has profited handsomely, as have the Swiss people, from the profits derived. The Swiss government is complicit in all these criminal enterprises and should be sanctioned by the US and all other civilized governments.

The Guardian unloads a big-time scoop: Illegal wiretapping at News Corp.'s (NWS) U.K. tabloid News of the World was far more widespread than initially understood, including hacking the deputy prime minister's phone (!). The executive running the show at the time? Les Hinton, now CEO of Dow Jones.

News Corp is not usually know as supporting liberal democrats. This should be criminally prosecuted all the way to Rupert. Les Hinton should be removed for this crime as well as the editorial crime of letting political editorializing supplant a formerly respected business editorializing the Wall Street Journal used to be respected for. Carl Rove has no business writing for a business periodical neither the many other political-only WSJ writers. Who is Rupert hacking and wiretapping in America?

Game Over for U.S. Oil, Natural Gas ETFs?

Please explain me the difference between "investing" and "speculation" since it seems to me, perhaps mistakenly, that all investing is speculation. The only differences among investments are risk and return. The least risky, reputedly, are US treasuries, speculating that the US dollar will at least retain its value against other currencies and/or that future inflation will not erode thieir value before maturity. Etc., etc.

Wednesday Outlook: Commodities, Global Markets

Sorry - got the DJTA wrong - here's the correct one

bigcharts.marketwatch....

Wednesday Outlook: Commodities, Global Markets

To view the major indexes bear consensus, chart references to look at are:

bigcharts.marketwatch....

bigcharts.marketwatch....

bigcharts.marketwatch....

bigcharts.marketwatch....

There's Still No Household Debt Crisis

Go to the T2 Partners presentation at www.businessinsider.co...
and you will get a very, very different perspective. Basically their well documented analysis shows that the credit crisis is very far from over, in their works the middle innings, another minus 15% to 20% to go in housing prices, and the recent stabilization is "the mother of all head fakes". Even if their forecast is too bearish, if you just look at the current state of affairs in all areas of credit risk you will come away non-bullish at the very least.

Wednesday Outlook: Commodities, Global Markets

All 4 of the major indexes - DJIA, DJTA, APX, RUT show the same head and shoulders breakthrough. They all have also broken down through the 50 day MA. I prefer to look at EMA's and of the 4, only the Russell 2000 broke above the 200 day EMA. For the other 3 the 200 day EMA was resistence and until the last few days, the 50 day EMA was support for all 4. This seems like consensus. Sell and sell short.

Justice Dept. is informally reviewing U.S. telecoms; could explore carriers' deals to lock up popular phones. (WSJ)

Is it "free market" or "anti-competitive" for Apple and AT&T to hook up for an exclusive deal? In this case it's Apple that is being "too successful" as it provides the cash flow to ATT. Apple could have hooked up with anyone or everyone.

Thoughts On Today's Job Numbers: Rahm, the Economy Is Not a Giant Investment Bank

Dear Socialism Cannot Compete: You wrote, "Your distaste for some bankers is justified. But you need to realize that the far greater pillaging that has been done for decades is in the form of ongoing socialist government. Why not add the bankers to the rolls? Social (in)Security already pilfers 7% of my pay. Throw in Medicare for another 1.5%. Sales taxes. Property taxes. Fees to use the local dump. Burn permits. This permit. That permit. Fees and more fees. The working man is not only now being pillaged to give to the banks. He's being pillaged to give to the non-working man. And to other nations. It's sickening, and it has to end. Our federal government needs DRASTIC downsizing. It should only be performing a few functions anyway -- it is SO far from what was Constitutionally designated to it."

I hope you don't want to live where people dump trash wherever, drive on dirt paths or toll roads, put out fires with their own hoses or pay for fire services on-demand, form their own vigilante committees instead of police (an don't need judges), have a well or private-sourced water, etc., etc. Imagine 300 million people without sewage treatment, or that which is privately supplied (by Goldman Sachs or some hedge fund who has cleverly bought and collateralized it, 'insured' the CDO through other devious devices and sold it around the world). There are services, oh did I forget the military and homeland security, that "socialist" government enterprises can do more effectively than "private enterprise".

Incidentally, in my working career, I paid roughly $100,000 in Social Security taxes. This is my fifth year as a recipient and I have collected nearly all of that back. In another 5 years I will receive back all of my employers' contributions. My normal life expectancy is around 20 years from now. Do the math! The payback given average life expectancy will be pretty good. Sorry, but this is another "socialist" program that works, even if it does need some adjustments going forward.

Job Losses Signaling Recession Isn't Over

Dear Up Yours SP500: did you survey only your own household? The auto industry alone has destroyed more than 5% of the nation's jobs. Your 'factoid' is absurd.

Dear Stone Fox Capital: I hope you're short (just in case) going into the 2Q earnings reports. Your optimism is admirable. Were you a cheerleader in college? Just a note on the "end of the recession": it is declared by NBER usually 6 to 12 months after the fact (just as we learned only in 4Q08 that it had begun in 12/07). So trumpeting that it has ended this month means that you either have been to the future and seen the past or are speculating. In addition, the primary 'factoid' taken into account by NBER is when GDP turns positive. Many economists differ with this classical definition of recession. When you broaden the definition to "turnaround in the economic well-being of citizens, companies and governments (fed,state,local)" it will clearly take much longer to leave this recession behind us.

Job Losses Signaling Recession Isn't Over

Tax cuts for companies losing money and people losing jobs and taking pay cuts are not especially stimulative for jobs. It can be argued that Bush's tax cuts did not create jobs, rather the wars and their ramped up spendng created the jobs. The tax cuts were just squirrelled away in Switzerland and the Cayman Islands. The table below is interesting.

President Term Beg Jobs End Jobs Ann % Chg
Roosevelt 1933-1945 25,700 41,903 4.37%
Kennedy/Johnson 1961-1969 53,683 69,438 3.25%
Carter 1977-1981 80,692 91,031 3.10%
Clinton 1993-2001 109,725 132,469 2.45%
Truman 1945-1953 41,903 50,145 2.40%
Nixon/Ford 1969-1977 69,438 80,692 1.95%
Reagan 1981-1989 91,031 107,133 1.85%
Eisenhower 1953-1961 50,145 53,683 0.90%
H. W. Bush 1989-1993 107,133 109,725 0.60%
"W" Bush 2001-2008 132,469 134,580 0.20%
Hoover 1929-1933 32,100 25,700 -9.00%

All democrats created more jobs than all republicans. Reagan cut taxes, however he also gave us a huge boost in defense spending and the largest deficits since WWII. Even so, job increases were a measly 1.85% a year. Our worst president on the jobs front (since Hoover) is the one we just got rid of. Bush! 0.2%!! And the largest spending increase in history which, it can be argued, was responsible for keeping millions employed, rather than the tax cuts advocates seem to praise so much. Tax cuts are a knee-jerk conservative reaction to every economic problem. I fear the problem is much more severe and much more complex than a tax cut will cure. Our economy is changing dramatically and we need to figure out what it is changing to and then change our businesses and workforce accordingly. Consumerism is dead for awhile - perhaps it will come back some day. And globalization means production is everywhere in the world, the owners of production are everywhere in the world, and the U.S. no longer controls the world economy.

Bank Earnings: Why I Don't Trust Analyst Reports

"Even more astonishing is that despite the obvious fact that the average analyst estimates are rarely even close to actual results, the market still reacts with shock when a company fails to match the consensus view" -- espcially true of banks but true across the board. The great rally has been fed by results "exceeding analysts expectations" without noting that many, many, many were LOSSES and without noting that many, many, many companies had sales in the range of -15% to -20%.

But banks! You can't really expect anyone to predict earnings when they can make 'em up, at least the big banks with lots of those illiquid assets that they no longer have to mark to market.

Andrew Butter - I like your bank picking strategy!