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Today's Bizarro Economic World

...and please do excuse the double z (in my various bizzarros) instead of the single z (as in bizarre, spelled correctly) which was just an innocent mistake or a repeated typo...and was not at all meant to make the whole thing any more bizarre than it already is.....

Today's Bizarro Economic World

Thank you very much for bringing up and also for defining for us reasonably well "Bizzarro World" and what it is. Recently I often had found myself asking myself exactly what kind of a World I was living in, (and in particular when reading certain Seeking Alpha articles) and now you have at last answered this key question for me. Or at least you have done so in part. So many thanks.

The only problem I see with your otherwise impeccable argument is the fact that there there may be several Bizzarro Worlds which all exist in parallel, and not only one. (much as in the concept of Parallel Universes or Parallel Worlds in modern physics)

And just as in relativistic physics each of these Worlds appear to be real (and in a sense ARE real) to observers (and participants) from those Worlds and in particular if such observer-participants are moving (and investing money) at much less than the speed of light.

So this might exclude the ten trades per second crowd... -which I am just assuming is rather thin anyway, outside of Goldman Sachs- since those guys will presumably gain no matter what world we may all happen to be living in;....(except an honest one of course)

So what to do to guide one's trading strategy going forward? Does one "sum over many paths" (and many worlds) and try to take the average of the various Bizzarro Worlds as being "the real reality"...(or could the real reality simply just stand up for us instead) or does one select one weird world over another? And if so, how and by what specific criteria?

In other words (and in other worlds too) should one believe Dr. Doom and Dr. Stiglitz or should one instead believe one or another of the roaring Bulls or the roaring bull-artists?

Moreover since the World of Planet Earth is also divided into many Regions and Countries, what if one Bizzarro World is found to apply to one region but not to others? (where other Bizzarros may instead be reigning supreme -or trying to- from their own commanding heights of their "socialist-market" economy)

Rest assured that I do NOT expect an answer to the preceding question (or to the several Bizzarro Questions all simultaneously inherent in the above) but I did think that my questioning could provide "food for further thought". Either by the Bizzarros themselves, or by some of the more normal folks trying to figure out what the heck might be "really" going on. (besides the "many worlds" interpretation of quantum physics)

If a Boom Is Coming, Will a Bust Follow?

I think it's a very good article but I didn't see anything mentioned in it about global warming and climate change. (the next major world crisis coming up in just a few more years)

Though the number of dramatic examples of climate change from all over the globe is getting larger and their impact more significant by the day, the bulk of the world seems still to be in denial. (or in some form or another of "I couldn't care less-'ism' " because "I am far too busy making money")

There will be yet another big global conference about this issue (of ever more hot air) this December in Copenhagen featuring the usual even bigger doses of "hot air" . That is, the most likely outcome of that meeting will be more of the four D's. (denial, deception, dissembling and delaying) Perhaps with some minor shift in emphasis this time towards some of the latter "D's";
(the final three of which I had omitted so as not to appear to be "too pessimistic".....i.e. Disaster, Destruction and Death)

And this since "the political economy" of the issue (both nationally and globally) is such that we obviously "just can't" do anything about it. (much better instead to destroy the planet's assorted delicate balances irreversibly....while at the same time of course leveraging, selling short, buying long, and buying up and down tons of derivatives....and derivatives of derivatives... and (authentic) "default" swaps... on gold and all other commodities.... including also on the planet as a whole)

But it should be very clear to anyone who is also a physical scientist (and not only one or another of the abundant so called "social scientists") (which of course includes economists) that reverting to "3% economic growth forever" simply will not work on a planet with limited resources and limited "environmental sinks".
Isn't it time to start to think seriously and long and deep and wide about what to do about this? Maybe we need a different world "economic development" model than the current one?

At some point "physics" is going to force humanity to listen. Though of course by then it will very likely be too late; and the price to pay next time will undoubtedly dwarf the few trillions that this last debacle cost.

I see remarkably little being written on "Seeking Alpha" about this next major world crisis and "hot topic". (even if only about its impacts on the global economy and the financial markets) A crisis which -if not properly addressed- and it almost surely will NOT be- is going to make the current one look like child's play.

Fasten your seat belts folks -and in particular all of you Alpha Seekers out there-....somewhere, somehow there probably still will be LOTS OF MONEY to be made!

And may all the loonie "tree huggers" and Oracles of Doom and Cassandras out there like me move to Mars if they don't like it here on Planet Earth. ...(or better yet, may they all go to burn in hell) (instead of here)

9 Great Excuses to Be Stubbornly Bullish

Whether the bullish arguments above are right or wrong....(I think they are right) there also seems to be ever more awareness and cynicism about "the robots of Goldman Sachs cleaning up in the last five minutes of trading"....and about ten other such "tricks of the trade"...such as issuers shorting their own ETFs, gold and oil markets both being grotesquely manipulated, plus of course all of the other more traditional rip-off artistry. (which date back to Long Term Capital Management days...i.e. "the good old days")

So what has happened to all of those "regulatory and systemic reforms" that were promised a few months ago? Yet again on the back burner?

The "country risk" of investing in the United States is getting to be worse than Russia's or the Democratic Republic of Congo's. Isn't it time to clean up the acts of a lot of folks? (and for real this time)

Today May Be Markets' Turning Point

I think Mr. "Albertarocks" above is more likely right than not. I am not sure if it's Bankers, but somebody out there certainly is manipulating markets.

Something related to his argument that also may be useful to keep in mind is that nowadays there is not just one market, but several markets (with an "s") and although they are not totally decoupled from one another they are partially decoupled.

For instance I don't think that Rothschild bankers manipulate the Chinese stock market all that much. (whether directly or indirectly) Though there is no doubt whatsoever that bureaucrats in Beijing DO manipulate it...and a whole lot. (so different countries have different rip-off artists and different schemes through which they operate)

I would suggest that people (particularly Americans) start to apply the concept and basic principles of "political risk and country risk" ALSO to their investments (if any) in the U.S. and in U.S. markets.

That is, in Russia one has to worry about the oligarchs, Mr. Putin and assorted Russian Mafiosi. In China one has to worry about Mr. Hu Jin Tao and the communist party. And in the U.S. one has to worry about mafiosi bankers, Goldman Sachs, lying and duplicitous Congressmen, and a bunch of other Wall Street rip-off artists.

I also would add that generally speaking (and in international affairs in particular) the United States seems to be a lot more capable at coming up with fairly subtle and sophisticated propaganda and related practices (including in the financial and markets arena) that are "plausibly deniable" than -let us say- the Russians or the Chinese who tend to use much older and much more "crude" methods. (for example, arresting some innocent Rio Tinto employees and locking them in jail without charge)

In the U.S. those who do the equivalent of "stealing state secrets" are rewarded with mega-jumbo bonuses or huge trading commissions instead...and the terms of the argument are ably shifted to become about the size of the bonus, not the length of the jail term.

Two or three markets around our sorry world that seem to me to be marginally more honest are the Norwegian stock market (Norway has the World Bank's highest ranking on its good governance index) and the Canadian and Australian markets. Those countries are also resource or commodity countries and their markets include lots of small and medium-sized businesses.

The preceding characteristics make it harder (though of course not impossible) for assorted rip-off artists to concoct schemes to steal from the small retail investor investing in those markets.

So watch out for that "country and political risk" (as understood more widely and more properly) and good luck with your foreign investments, including those you make in the United States.

Caveat Emptor.

Today May Be Markets' Turning Point

...Let me join some of the others who posted above and also comment your: "I am an amateur investor so take this for what it's worth" (others above who mostly told you that you probably don't need to be so humble, while at the same time appreciating your modesty)

I can't really tell or begin to analyze (or -as is much more prevalent- simply assert) what your analysis may be "worth" or not; perhaps because I am an amateur myself or maybe because -just like you- I also "believe" in big and healthy doses of "analytical humility".

Your arguments are certainly plausible though other arguments could be made that might sound just as plausible. Such as those made recently elsewhere on Seeking Alpha that although markets have now "gotten ahead of themselves" (either a little bit, or "way ahead") they can just pause and take a breather where they stand right now.... for "a year or so".....so that whatever it is that they have gotten ahead of....has time to catch up with them;

....and with "that chasing thing" presumably being assorted kinds of "company fundamentals" and "economic indicators"... while of course leaving completely aside the key issue of "which fundamentals ....and of what specifically" and "what indicators and of which" and also leaving in abeyance for a minute...or maybe for that whole entire "one year or so" .....of when "the catching up" is likely to be complete....(this of course being a BIG disappointment to all of those "waiting for the correction" so that they can catch that train they probably already have long since missed;

(in some things life often offers "no second chances", though luckily in many others, sometimes it does) and not even to go near the fact that "within a year" a new SARS epidemic might have wiped out half the planet, or a nuclear war might have broken out...or a meteorite might have fallen onto Wall Street....or a number of other such sundry "minor details" might have taken place. (predicting the future is certainly a TOUGH business)

Or maybe it's me who is missing something pretty important here instead.... but it certainly appears to me.... that whether it be other amateurs (such as yourself and me) or "expert professionals"....(whe... real or imagined or simply self-declared) NOBODY has really managed to consistently predict (or even inconsistently predict) what was going to happen next in markets over the past few months.

Again, also conveniently forgetting for a minute the fact that "markets" are now also much more than just the U.S. market.

And I suspect that a careful statistical analysis over much longer time frames of those folks whose batting average was above average in guessing (o.k. "predicting" and based on nearly infallible analytical frameworks) what was going to happen next ....is mainly due to the fact that in any game some folks' batting average will be higher than the norm and some others' will be lower.

And this regardless of their actual skill at swinging at fast balls, slow balls or curves. (and recently there also have been plenty of curves thrown that drop about two feet in the last five feet traveled)

So watch out for those abundant and omnipresent folks (snake oil types?) who tell you that last season they hit a bunch of balls out of the park and will gladly sell you their secret.

And should that also mean (more broadly) that the whole "science or art" of market prediction at any given point in time (or of even knowing with some minor degree of certainty which particular variables to focus on) is at a pretty low level of development?

But then again in saying that .....I am nearly sure I have said absolutely nothing new....whether as an amateur or as an expert and whether in complete modesty or in some quasi-pathetic self delusional state of arrogance.

The Feds and UBS Reach a Squeal of a Deal

Only one thing is for sure in this case: The U.S. will stand on top of an aircraft carrier and declare VICTORY. The "details" will then follow.

Confidence Games and Ponzi Schemes: No Way to Run the World's Largest Economy

Now I have finally got it. (thanks!) I am supposed to regain confidence in the confidence games and in Mr. Ponzi and his brother too and then everything will be honkey dory once again.

But not until I first also go out and convince everyone else to get back their own confidence in the confidence game.

Once we are all done convincing one another and have finally achieved a "critical mass" -that is, have become a completely non critical mass of folks ("the masses are asses"?) and "true believers" in the confidence games yet again, then the game will once again work "as it should".

It's all perfectly clear and perfectly logical.

But then why are you messing things up by going around telling folks about this whole gig Tim? Are you maybe some kind of an anti-patriotic traitor type? (god bless the USA) (and thanks again for the great article)

Wall Street Breakfast: Must-Know News

I don't mean to be facetious (or maybe I do) but why exactly is the fact that "Twitter fell silent" "Wall Street Must Know News"? (I looked out my window and strangely enough the World was still there)

I am assuming that something over 99% percent of all people -though maybe on Wall Street the figure is a bit less- who don't use it (and probably never will) couldn't care less and never even noticed?

Let those twittering folks and their twitty followers do their own marketing instead of doing it for them.

Buffett's Betrayal

Is it really possible for Buffet -or anyone else for that matter- to amass a huge fortune operating 100% honestly within THE SYSTEM (economic, political and social) that we all need to operate in?

Maybe 100% honesty is simply incompatible with either becoming ultra-rich or becoming ultra-powerful politically? It's not a clean world out there and if one really wants to be completely clean unfortunately it's pretty hard. (and there will NOT be any reward up in heaven either for those who succeed - or even try to)

Why Did AIG Rally Yesterday?

Another way of looking at the above:

"By the way FNM and FRE also rallied yesterday. Coincidence?
Caveat Emptor"

True enough, even though Caveat Emptor applies nearly all of the time and to most things one buys these days anyway.

A better question today (but right now and either just before or just after the opening bell rings in about one hour and not after the meetings in DC take place later on today) would be this:

What is the likelihood (and better yet a what is the precise statistical probability between zero and one) that "the guys in DC will be THAT generous" ....and finally go for that "bad bank / good bank" solution (or would it be the "good bank / bad bank" solution) that they had shied away from before so that FNM and FRE will live to fight again another day and pop up to about $ 5 per share, in just a couple of weeks as markets anticipate their becoming once again going concerns? (that used to trade at about 50 dollars instead of 50 cents)

That is, will FNM and FRE skyrocket in the next few days (or even hours) due to a bottom- fishing feeding frenzy from all those buyers throwing Caveat Emptor out the window? Or maybe all those people will definitely live to regret it, as Larry Summers and Tim Geithner decide it would really be much much better to just throw FNM & FRE to the dogs instead of to the usual feeding piranhas......but in that case, what would be (or possibly could be, either imaginably or un-imaginably) their Plan B?

Right now I feel caught between worrying too much about becoming a dog or a piranha but I will probably just play it safe and stay a Caveat Emptor s.o.b........(touch choice)

Economic Talks with China: Not Likely to Accomplish Much

Both the author and "user 353372" above raise some very good points.

Let me try to add a couple more ideas about "east and west" and
"West and East":

It is probably not too late to avoid the worst if the U.S., the EU and Japan were to act together and in concert... "key policy by key policy" (and also play much harder hard ball)

Their combined GDP is 35.5 trillion and China's is still only 3.5 trillion...or 10%. And acting together much more also since China seems to have become particularly adept at "divide and conquer" .....(as a matter of tacit -and even explicit at times- policy) and in so many ways...during its current (of course) only "peaceful rising" stage.

But -at least for now- China still needs the West a whole lot more than the West needs China. Naturally if China were a democratic state (or were ever to actually become one) (or even start trying to) it too then would be part of the "Eastern West" (much like Japan and Australia and South Korea) and we wouldn't have to be nearly as concerned.

But hoping against what are extremely poor odds is naive and can be outright dangerous and - as the reasonably well known British proverb says-..."if wishes were horses then beggars would ride" (so please don't get on any horse heading either East or West and count on China becoming an "Eastern Sweden" or a "Western Norway"....at least not just yet)

But if the so called "West"....(and by now it's clear that a good bit of it is also "East") (though just as "Western") doesn't try to reverse the "every man for himself" disunited (and groveling?) policies and practices of the recent past....the only thing left to do is to learn Manadarin, just like the Australian prime minister did.

And as we all just witnessed it didn't help him a whole lot in getting those Rio Tinto employees out of jail. In fact the Chinese press ridiculed "the noise" the Australians were making. They might have laughed a bit less if the U.S.A. the EU and Japan immediately at least sent their leadership a joint telegram, (though even an email would have been better than nothing) instead of leaving Australia basically to stand alone.

The Chinese invariably march in lockstep and know precisely where they want to go.

The West could at the very least talk and coordinate just a little bit more (and better) on some of the truly "key policies"

And -incidentally- is that what's happening right now in Washington D.C. at the U.S.A - China big Love-Fest?

China's $2T Expansion Bid: Punching Below Its Weight

What about the fact that if their current mining shopping spree (at bargain basement recession prices) continues and intensifies... in the future they easily could end up controlling -or at least distorting- the prices and the destinations of all key industrial metals?

If disunited and militarily weak Middle Eastern countries -often also without any long term national strategies- having a stranglehold on Oil was considered bad....then how about China -marching in lockstep and knowing full well its own national interests- having a stranglehold on so-called "rare earths"? (which are needed for nearly all the new green technologies and for many military applications too)

And, incidentally, they already have 95% of all world deposits of rare earths but somehow they think they also need to buy up the remaining deposits in Australia. (whatever for... one could ask?...
certainly not to meet domestic demand)

Wouldn't it be much better if they just bought up the whole of Wall Street instead? At least in the long term (particularly if the Chinese were running it) it's a lot more likely to be worthless than rare earths.

Kinder Morgan's Dividend Payout Rate Is Unsustainable

Paul: Your Penn West cautionary tale cuts both ways. For those who had bought Penn West earlier, you are right. For those who bought it after it cut its dividend to 11.8%, they are now collecting that 11.8% dividend (higher than KMP's) and are also looking at significant upside potential as oil and gas prices and volumes recover. So what's most important is to be aware of the arguments you have made and then watch one's entry timing. (but I agree with you regarding Kinder Morgan)

Why Apple's iTouch Tablet Will Become Its Flagship Product

I agree that Apple is a great company and in fact is probably one of the very best (and "best" by many different criteria) of the 20th century (and maybe of the 21st too) and moreover one to which all of us also owe a lot. It has helped everyone dramatically improve their personal and professional productivity and, along with it, probably also augment their creativity. So its direct and indirect impacts on the lives of individuals and on society as a whole have been immense and immeasurable.

(and in particular if one also counts in the impact of the copycats such as Microsoft)

Personally, I have been using Apple products since the mid-1980's (my old little 1985 Macintosh still works even though I now don't use it any more) and I also have remained a faithful customer over the entire past 25 year period... and I will probably continue to buy whatever new products they come up with.

This since their products invariably are of high quality, easy to use, "work every time" and make life easier and more pleasant. (all aspects that definitely cannot be said to characterize the competition, whatever real competition they've even really had, that is)

Notwithstanding the preceding I probably would disagree with some of the people posting on this thread who seem to think that Apple stock is a great stock to buy right now.

Investing in a company is not necessarily (though sometimes it also could be) about whether one likes the target company or not and thinks its products are great or not. Investing is primarily about trying to make money and choosing among alternative investment products and strategies and the specific securities available and attractive at any given point in time in the market. (since few people have "infinite" money and therefore can buy every single stock they might like)

And at this point in time and in this particular market context -and at its current valuation- I am not convinced that Apple is among the best investments available now among the myriad of very good buys which now exist out there in the big broad market.

(and a twenty five percent forecasted likely increase by year's end is also not necessarily impressive in this market)

I very much would like to be convinced because I like the company so much.

Could someone please put forward some good arguments for buying Apple stock right now that might be able to convince me and also include some future expected target prices a couple of years out?

Though I certainly would accept that no one (ever) can foretell the future and that -for instance- in two years time (if the World Health Organization is to be believed) one billion people around the world will have contracted Swine Flu and (if the World Bank also is to believed) as a direct consequence World GDP may have taken an additional 4% hit.

Something which it seems to me also may not be getting sufficient attention at the moment. (though it probably doesn't have all that much to do with Apple)