Jason722

JPMorgan and the Alabama Swaps

Also, what has happened to the elected officials in the Alabama county that happily handed over $120M of taxpayer money for $8M that went to their friends?

The Intrinsic Value of Nothing, Part 1

There are also other schools of economic thought -- like Keynesianism, socialism and communism. But those schools suck, so I guess they don’t get to put cities or countries in their titles (that’s just my theory -- I can’t say for sure).

Thank you, Paco, for the laugh. A solid post all around, too.

Insiders Are Still Not Buying the Rally

All the points here about using insider buying/selling as the lone reason for an investment decision are correct. Especially when looking at a small period in time. However, I believe the insider buy/sell numbers have been skewed this way for months. Insiders haven't really been buying since last November/December. In that context, this indicator has a much higher correlation with future stock/market moves.

U.S. Economy: It's Up to Us to Make It Better

The Separation of Church and State is a slogan, not a constitutional right. The point was that the government was not to make laws favoring one religion and was not to adopt a state religion. These ARE bedrock principles of freedom and liberty.

Unfortunately, in the hands of idiots everywhere, that slogan (probably invented as a simple way to teach the constitution to children!) is now so universally misunderstood that it does more harm than good.


On Oct 23 01:43 PM Radardoc wrote:

>
> manya,
>
> I challenge you to show me where "separation of Church and State"
> came from in our constitution, or anywhere else other than an activist
> judicial interpretation of the requirement of goverment not establishing
> a religion.
>
> Can you explain why such a "bedrock principle" would help in this
> economic catastrophe?
>
> Did Christianity cause the colapse in housing? Perhaps Judaism is
> fueling the pseudo bull market? Taoism driving CRE in the dirt?

U.S. Economy: It's Up to Us to Make It Better

Manya05, an interesting approach. +1

I agree 100% that the 'two' party system has failed us. And I agree that abolishing the winner-take-all approach would offer more choice and create a more diverse government. But I don't think that will solve the problems at hand.

Government's side of the social contract is to preserve order and protect the citizenry. If you really want to stretch it, you can argue that the government should promote growth and well-being (I don't wholly share that view, but I can leave it in for now). The government can not fulfill its side of the social contract as long as one group (the majority) can legally steal from others. There will always be a way to cobble together a majority by promising the majority something for nothing. Government is made up of humans, and as such, suffers the same failings as the electorate. Regulation and curbs need to be applied at least as liberally to those to which we hand over power...as they propose to govern us.
On Oct 23 12:36 PM manya05 wrote:

>
> Today you brought up the importance of separation of Corporate Interests
> and State, a bedrock principle, widely ignored in the US (there truly
> IS a revolving door between Washington and the Corporate boardroom).
>
>
> By the way, separation of Church and State should be a bedrock principle
> too...but it is also widely ignored in the US.
>
> To me the core principles of American Democracy are very solid and
> can last a few more centuries, the problem is they have been perverted
> by a two-party system that offers no real choice to voters. Americans
> understand the importance of competition as a tool for continuous
> improvement, yet this principle is not used in self-regulating the
> quality of politicians that represent us. The tweaks needed to save
> American Democracy are not a big deal, but their effect on breaking
> the monopoly on power that the few have over the many are so profound,
> that these changes will not come easy. All we would need is to abolish
> the winner-take-all approach on a district-by-district basis, and
> go to a proportional representation system allowing other minor parties
> to grow and prosper. It is only through a true competition in a multi-party
> system that we will be able to keep the political process clean.
> If a given party gets in bed with corporate interests, it will not
> matter how much money gets poured into the party, people will vote
> with their feet and go to the party that is perceived as clean and
> on the side of the people (no matter what ideology is being espoused).
> People are yearning for honesty and cleanliness in politics and governance,
> and they are not getting it right now.
>
> Will we ever see a more honest, more inclusive and representative
> multi-party system in the US? I doubt it.

U.S. Economy: It's Up to Us to Make It Better

The root cause of the current decline of the US is not in capitalism at all. It is in democracy. The next truly great (free) culture will contain the elements of liberty and freedom set forth by the Founding Fathers PLUS two key protections:
1) Fair taxation (flat tax, national sales tax, something neither progressive or regressive) that congress can not adjust and limitations that the government can not spend more than X% of last year's revenue (x being < 100!).
2) Service limits. No more than 10 years for any individual across positions. Period.

This is the only way to avoid the damage that voters inevitably do to themselves as a society because EVERYONE ALWAYS VOTES FOR FREE MONEY FOR THEMSELVES REGARDLESS OF THE COST TO ANYONE ELSE AND I AM SO SICK OF IT!!!!!

Sorry for yelling. Thanks for the great post today, EconDist

Credit Card Companies Gone Wild and Other Economic Happenings

"If this is the kind of garbage data that moves the market, then fuck this sh#t."

Nice. Make an effort to remove the 'i' and leave the f-bomb out there in all its glory? Editorial excellence! :)

Analyzing Larry Summers

Obama and Biden were senators. Geithner was in charge of the NY fed. Summers was taking a fat salary from a hedge fund (many would say) manipulating the markets. It is all BS. No one currently in power 'inherited' this mess. They created it and the music stopped and they had no chairs.

Now, under the cover of 'we didn't do this...it was someone else', they are continuing the reckless policies that created the problem in the first place (some would argue that are throwing more fuel on the fire...but that is the same political BS from the other side).

If you sincerely believe there is a difference between Republicans and Democrats IN WASHINGTON, you are lost. The fallacy that is our two-party system is what has dealt a possibly fatal blow to America. The emergence of a party believing in the rights of man and freedom for all is the only hope...but it won't come until people realize that every single player in Washington is against them.

Markets Have Little Sympathy for Investors

Feeling your pain and laughing with you, not at you.

Get Ready for a British (Bank Executive) Invasion

That's exactly it. The failings of corporate socialism are that: 1) when laws are broken, they are not enforced (lack of deterrence) and 2) bad decisions are protected by public money (moral hazard).

While I think the salaries and compensation of CEOs in America are ridiculous, what is really the problem is that almost NONE of these highly paid individuals have lost their jobs. In other words, I am actually ok with any amount that someone garners for themselves when things are going well and they are not breaking laws. It is what DIDN'T happen when laws were skirted and excessive risks turned on their masters that is the problem. How can anyone claim this is a free market when management teams can blow up billions of dollars of capital and no one gets fired?

To me, we have a choice:
- (my choice) A free market where successfully executed risks are bestowed with riches while failed risks are punished ruthlessly

or

- A firmly regulated market where no one takes excessive chances and no one hits the big time; but where failure is bailed out by the whole.

There are pros and cons with both paths. I prefer to have my destiny in my own hands and chose the option that gives me a level of control.

USDA Subprime

That's not really new. It is actually the definition of socialism!


On Sep 24 02:45 PM Gravity404 wrote:

> New Obamanomics colloquialism:
>
> The rich get poorer and the poor stay the same.
>
> ...

Cash for Clunker Homes Is the Real Expense to Taxpayers

@ Lower98th - Both posts here are spot on. The government can play with the financial markets a lot longer than they can play with home prices. We can juggle the balls a little bit, but in the end, supply is just crushing demand. The scary thing is, we are, to a degree, working through some supply. But no one knows how much 'shadow supply' is out there to overwhelm any stabilization (my personal hunch is that there is a lot of supply waiting to hit the market if it ever really turned). We need to do something radical.

We need to bulldoze some entire suburbs in every major city and make parks (trust me, I am no eco-freak) or plant orchards/forests or something. Builders/developers/le... need to take the hit - they benefited on the false rise - so we should focus on new subdivisions with mostly unsold lots/spec houses.

We could drag this on longer by barring the building of any new homes (unless replacing an existing structure). At least that would *eventually* end this mess.

The U.S. Federal Budget in Pictures

I think everyone is missing the forest for the trees here. Look at the 3rd graph. ONLY 3-4 YEARS SINCE 1969 HAVE WE TAKEN IN MORE THAN WE SPENT (for the record, this chart highlights government spending cuts for a decade before Clinton allowed for income (tax revenue) growth, but I digress). This is infuriating. That's over 40 years of democrats, republicans, boom cycles and busts.

Honestly, what is even worse is that in only 1 year did revenues even touch the AVERAGE outlays. That is proof that we will never have a reasonable debt, even if we manage to trim the bleeding in any single year. Congress has the keys to the treasury and they are the ones who should be locked out.

The longer republicans and democrats battle over who gets to spend our money poorly, the longer this deterioration continues. Our one party system (elitists) is raping us and laughing while we 'fight' amongst ourselves.

State and Local Governments Increase Jobs: Even the Experts Are Shocked

Mark, I agree. That's kind of what I was attempting to say in the 2nd paragraph of my original post. What should be done and what is being done are completely out-of-whack, BUT adopting simple protectionist measures won't solve the problem.

It's all part of the same animal. The government takes from some to give to others. It creates inefficiences and dislocations (which congress is SHOCKED to find out about) and then those heavy-handed idiots make it worse by interfering again. And the cycle repeats. So we have fair wages not even able to support a meager standard of living. But as we combat this with the easy button we increase dislocations and in the end, things get worse. We just keep shifting the blame and kicking the can.


On Aug 24 01:35 PM TraderMark wrote:

> Here is the problem
>
> Your fed and government love inflation
>
> if they allowed markets to clear - i.e. if the Fed was abolished
>
> prices would go down
>
> real estate would drop
> hence your cost of living would drop
>
> it would hammer those currently in homes of course - and we do everything
> we can to protect them (I am one of those homeowners by the way)
>
>
> Wages could go down and Americans could still be ok...

State and Local Governments Increase Jobs: Even the Experts Are Shocked

Ah ha. And THAT is the core of this debate. We are not actually talking about protecting a job; the cry is that we need to protect the WAGE. You simply can not pay American auto workers (an example) higher wages than foreign auto workers, unless those workers can show a benefit to their employers that exceeds the additional wages (in this sense, benefits of current and future employees/retires are included as wages). The jobs are there, if the rate demands are reasonable in the global context. But in the end, if two cars are essentially equal, but one costs less......

All principles aside, the US government has spent years fighting the wrong trade battles and in many cases going after the wrong causes. If China and Japan hold their currencies artificially low, that is not free trade and should be dealt with. If Japan manufactures ridiculous amounts of steel and wants to dump it at huges losses (and giant gains to steel consumers) in the US, what is the problem? We don't need protectionism; we need fair and balanced trade.

On Aug 24 11:55 AM John Galt wrote:

I mean, would YOU want to be doing some of this low skilled factory work? Would you want to be doing a 3rd world job, on low wages in a 1st world country, or do you think it would be better off outsourced?