Glen L.

The Facts Indicate We're Not in a Depression or Bubble

<<I am predicting 1800 on the S&P 500 by 2013 and I am fully invested and am enjoying the ride.>>

I hope you like downhill runs on the rollercoaster, too. Just remember they happen remarkably fast.

By the way, if the falling dollar is causing the stock market rise, should we not root for the dollar to fall to zero, which implies the S&P rises to infinity? If not, why not? Think things all the way through? Never!

Wall Street Breakfast: Must-Know News

Thanks, BlueOkie, I spit coffee on my screen at your "Wimpy" comment!

Mostly good comments all around.

To Spectrulater: "Does anybody on Seeking Alpha take a long term view? Who cares if 80% reductions will give the market a few hiccups? "

YES! I take the long, short, and medium view, and I CARE. What you call "a few hiccups" amount to socio-fascist destruction of capitalism. Ask the former residents of the Soviet Bloc, or Red China, if central planning is the way to go for the whole freaking world.

A Summary of Q1 Bank Earnings: World, You Just Got Hustled

"Also, a straight on headshot would be an improvement over you wearing a goofy Nationals cap, laying on a woman's lap. Just saying. "

I couldn't disagree more. Great photo, Naufal. And I will add my praise to others' for a great article.

Also, in regard to productivity gains from the computer industry, it should be noted that the berserk "intellectual property rights" patent regime has progressively tamped down, and threatens to halt altogether, progress and productivity in this area. This on top of all our other problems. Being bearish and pessimistic is the only sane way to look at our situation. I will change my outlook when the country throws out the socialistic parasites and once again embraces free markets.

Wall Street Breakfast: Must-Know News

Does anyone besides me notice that the news relayed here is almost ALL bad? Government interventions everywhere, weak gains here and there but mostly severe losses.

Down periscope, dive, dive!

Moral Hazard, Time Inconsistency and 'Too Big to Fail'

The Fed was created by the largest banks in the country in 1913, for the express (albeit unstated) purpose of perpetuating their own prosperity, at the expense, if necessary, of everyone else. The market turmoil caused by recent Fed interventions, as illustrated in this article, could not have occured minus prior Fed interventions and manipulations that led to the huge credit bubble.

Therefore, a 3rd solution not offered by the author: end the Fed. Since its inception, the dollar has lost 95% of its value, according to its own statistics! Their is no moral hazard that even remotely compares to letting a central bank inflate the money supply at will. This is what forced the FDIC to raise its guarantee on deposits to $250,000, increasing moral hazard by 150%, even though it has only enough reserves to cover the losses of one or two large banks. That's the sobering fact that's really behind "too big to fail".

This situation will continue to get worse until one of two things happens: a return to sound money, or national bankruptcy. Given the almost total ignorance of economics in Congress, the Administration, the vast majority of Americans, and in the Fed itself, the odds are heavily in favor of the latter outcome.

Geithner Plan Plus Housing News Offer Specks of Light on the Economic Horizon

I just read a stat from RealTrac that said foreclosures in CA were up in February over January, with over 80,000 for the month. An accellerating pace of foreclosures seems likely to keep house prices falling. There may be selected communities where the bottom of the market has already been reached, of course.

The Economy on Dope: Investors Fear Inflation, Embrace Gold

To the author: a generally good article, except for "(f)ull employment ignites inflation, whereas aggressively destroying price level increases cools the economy at best, and fosters recession - at worst." You will never fully grasp the problem until you understand that inflation is ever and always caused only by the government debasing the money supply, whether by debasing the metal in coins in ancient times, printing fiat money in recent times, or creating money by keystrokes in modern times.

To Steve Faseler: I'm 100% with you, man, as I too have educated myself in Austrian school economics, the school that Bernanke, Krugman, Paulsen, etc. all hate, because it correctly points the finger of blame at the government that they all worship. And I'm here on SA every day trying to educate investors as best I can. I can tell you that, for the most part, the response has been positive. That in itself is reason for hope, even though all the economic and political news is completely dispiriting.

Markets Have a Long Way to Go

Kelm,

I agree with your post, except that you seem to be buying into the "paradox of savings" fallacy of J.M. Keynes. If Americans achieve a 10% or higher savings rate it will be a good thing, mitigated only by the length of time it takes the banks to start lending out that saved money. Since they pay interest on savings, the answer is that they'll lend it out asap. And the bonus is that this is real money earned and saved by people, not money that rolled off the Fed's electronic printing press.


>Seriously, the American consumer needs to repair their personal balance sheets and get back to fiscal discipline at home. That will be painful for the economy but it is completely necessary. We cannot just go back to the mass leveraged consumption that created this mess.

'Huge Gap in Regulatory System' or Fed's Conscious Decision?

Let us imagine that the market was allowed to regulate itself, rather than the government, and the Fed did not exist. In such case, AIG would surely go belly-up if it engaged in such risky ventures (which would be far less likely anyway, minus the Fed-created credit bubble), and no one would be propping it up now at taxpayer expense. Wouldn't that be sweet?

To see Bernanke simultaneously bitching out AIG and proclaiming it too big to fail is just one too many crocodile tears. Down with the Fed!

Why Is AIG Backing Fannie / Freddie 'Enhanced' Mortgages?

As an addendum, I heard a caller on a radio talkshow that was discussing Obama's speech say that she received an internal email at her bank that said all of the TARP funds directed toward homeowner mortgage relief will go to Fannie and Freddie backed mortgages -- and no other mortgage companies. At this time this is a rumor until I see something else to back it up.

Why Is AIG Backing Fannie / Freddie 'Enhanced' Mortgages?

AIG just came back to the government saying it needs how many billions to continue operating? And Bernanke himself talked today about possible "systemic failure" if very large insurance companies go under. Ergo, AIG gets its money and continues to insure bad loans. This is "change". hahahahahaha