Thinkr

SEC's Dangerous California Interference

From the standpoint of an attorney whose specialty is securities (me), this article is non-sensical. The IOU's issued by California have all the criteria for the legal definition of a security, and such classification affords any secondary purchasers of the IOUs the protections of the anti-fraud provisions of the Securities Act of 1933 and the Exchange Act of 1934. Failure to classify it as such would have invited fraud in the nascent multi-billion dollar market for these IOUs. The alternative of leaving these instruments in legal limbo would result in multiple massive schemes to defraud. This is clearly not preferable.

And although the following does not constitute legal advice and should not be relied upon accordingly, I am virtually certain that these IOUs will not change the legal status of debts between private parties and/or the government.

Lessons from the Past: Why Housing May Have More to Fall

This article had very little data or analysis. But thanks for the anecdotes, for what they're worth...

Monetary Madness in a Single Chart: Hyperinflation's Just Around the Corner

The graph does not tell the whole story. The money supply is not simply dollars in circulation. Creation of credit is equivalent to the concept of fractional banking that allows one dollar to become several. As the leverage used by financial institutions is being unwound (no more 30 to 1), the fed has to replace those lost dollars in the economy.

The problem is that the "phantom" dollars that exist on balance sheets are being replaced with "real" dollars. When the deleveraging stops, these "real" dollars will be re-leveraged and cause the inflation everyone is so concerned about. The very very thin line that the Fed is walking is knowing when to turn off the spigots at the right time and take this money out of circulation at the proper pace. Good luck...

This Rally Is Sustainable

i think all the negative commentary about this rally here and elsewhere signifies is that there is an incredible amount of latent fear in investors. Fear of (1) losing out on an historic investment opportunity if this rally turns out to be the real deal (which is what causes and thereafter drives it) and (2) fear that it is not the real deal. Point being, the market is being driven by fear, and the propensity of investors to "spook" at any opportunity, including this down week, should not be underestimated.

Buyer beware.

Housing: False Bottom Exposed

Perhaps the killing of the "cramdown" provision in the Senate is a partial answer to speeddaimon's question. Banks know foreclosures will put downward pressure on balance sheets in near term and do not want to accelerate the trend by giving BK judges this power. And what about the death of mark to market?

Bottom line is that there is a lot further to fall and the powers that be prefer to stretch this catastrophe over many years than have a cathartic clearing of the system. Go Jim Rogers~!

Quantitative Easing: Money Supply Is Actually Decreasing

The author is correct. The creation of credit is equivalent to the concept of fractional banking that allows one dollar to become several. As the leverage used by financial institutions is being unwound (no more 30 to 1), the fed has to replace those lost dollars in the economy.

The problem is that the "phantom" dollars that exist on balance sheets are being replaced with "real" dollars. When the deleveraging stops, these "real" dollars will be re-leveraged and cause the inflation everyone is so concerned about. The very very thin line that the Fed is walking is knowing when to turn off the spigots at the right time and take this money out of circulation at the proper pace. Good luck...

50% Returns, No Risk?

The first thing I thought was "what about compounding?" I don't imagine you took time to think this through or you wouldn't have penned this article. As Time Hope noted, I hope you're not advocating this strategy to your clients. If you had my money and I saw this post, my confidence in your financial accumen would be completely obliterated.