Poor Texan

We’ve Survived Worse Markets (and Economies) Before – the 1970s

Excellent article, Joseph and many good comments. I struggled through the Seventies but I was much younger. I am fearful that this time it really is different, mainly because our media doesn't give us the wholesome examples we had then. And I'm afraid the media is a reflection of what we've become. But we still have to live one day at a time and your guidelines are a practical guide. Meanwhile we give thanks for what we have and pray that our children will not be impoverished and enslaved.

Gold and Silver - How High Will They Go?

On Nov 25 11:47 AM Freya wrote:

" Worthy of note, Oil is not moving up relative to the USD's decline
but the day has just begun and the Mice are about to come out and
play."

There has been a great amount of 'demand destruction' in oil yet the price continues upward. The price of gasoline is higher year over year yet demand is lower and a major refiner is closing down a refinery. That 's a confirmation of the rest of your thoughts.

A lawyer for employees of AIG's (AIG -1.3%) Financial Products unit - the CDS-selling division that was the source of the company's meltdown - threatens "instant litigation" and mass departures in March if promised bonuses aren't paid.

Maybe these prima donnas should join the U.A.W. Then they can go on strike.

Three more Case-Shiller-based measures - price-to-rent, price-to-income and real prices - give hints that home prices may still have a ways to go to the bottom.

Hope is part of everyone's psyche. A person's home may have a mortgage of 120% based on current prices, but if the mortgage payment is still a reasonable percentage of income, if the home is in an agreeable area, if the person's income looks to remain stable, and if there is no forced job relocation, the person will stay put. In addition to the house , they have furniture and other personal property that will discourage a move and perhaps even family and friends close by. As long as they can find an excuse to hope, they'll stay put and avoid the expense of starting over. Been there, done that, like many others during Carter's malaise.

Gold ETFs: Will the Record Run Last?

How can fiscal irresponsibility cause the dollar to go up? It's not only gold that has gone up in relation to the dollar but anything that is finite compared to the infinite number of potential dollars.

The proposal capping a too-big-to-fail resolution fund at $150B has made it out of committee. Large firms with $50B in assets would pay into the fund, which could borrow $50B from the Treasury with congressional approval. The fund would pay creditors and counterparties to a failed big bank.

Good! We'll be able to bail out Citibank's creditors.

Ethanol Versus Natural Gas or Coal: Not Even Close!

As pointed out, one law our lawmakers do not understand is the law of unintended consequences. We are threatening the ecology with 'alternate fuels' because we want to protect the ecology from traditional fuels. But hey, if this buys the farmers votes now, someone else can repair the problem later. The lack of intelligent, not intellectual, leadership in this country is frightening.

The U.S. is flirting with a double-dip recession if it doesn't act to contain rising U.S. deficits, President Obama warned Wednesday in an interview with Fox TV. The government is challenged in trying to boost the economy and spur job creation while setting a path toward long-term deficit reduction. Obama said the administration is considering tax measures to spur companies to hire.

What a clueless intellectual. Since he has never met a payroll, he hasn't a clue as to the difficulties, responsibilites and liabilities that an employer faces, which all distract from the difficulty of selling a product. This tax incentive business is like pushing on a string as far as its effectiveness. Those that would be hiring normally get an extra benefit and those that aren't hiring will look for a way to get the credit anyway.

Another place where congressional bank-reform efforts are coming together: reducing the power of the regional Fed presidents, and putting more authority in the (presidentially appointed, Senate-confirmed) Fed governors. (earlier)

The regional presidents occasionally say honest things which don't jibe with the government line. Solution? Have the president appoint them:-(.

“We participated in things that were clearly wrong and have reason to regret. We apologize.” - Goldman Sachs (GS) CEO Lloyd Blankfein, saying the bank is sorry for its role in the financial crisis.

Actions speak louder than words. There is much he can do to make this 'apology' honest, starting with some transparency to the dark pools and HAL 9000.

GMAC has taken $12.5B in TARP money and has gone back to the well a third time to ask for $5.6B more. Meanwhile, its Ally Bank offers depositors best-in-the-nation rates, hurting other banks, despite terrible financial condition. Maybe it shouldn't have an ally in government, says Rolfe Winkler - and should be put out of its misery.

Trying to keep this corpse breathing so G.M. and Chrysler can sell cars to keep the union honchos happy.

Eight months after President Obama began prodding banks to increase small business lending, numbers continue to move in the opposite direction. The 22 banks that got the most help from the Treasury's bailout programs cut their small business loan balances by a collective $10.5B, according to a report Monday.

What a perverted world! Actions are consistently the opposite of words. 'Does anybody really know what time it is?'(Chicago)

If This Is a Recovery...

The unemployment number is probably understated. Many undocumented workers who worked off the clock have left due to lack of work. (It's much cheaper to survive in a less developed economy). Workers on unemployment will be glad to pick up a few bucks off the clock so they don't disturb their main source of income thus relieving the pressure on the employer to hire. So slowly but surely the tax base erodes and depreciation of the currency becomes the only way for the government to keep the appearance of solvency. Meanwhile, investment dollars go overseas where, even in a no growth scenario, there is profit in the local currency's relation to the dollar. The Canadian dollar is almost at par with the U.S. dollar; not so many years ago the Canadian dollar was only worth seventy five cents. However, there will continue to be a brisk market for tax shelters as the rich look for ways to protect their net worth. Just study Buffet, Gates and Soros for examples.

Discretion and Financial Regulation: Always Doing the Wrong Thing

I heard a wise man once say, 'Government is not the solution; government is the problem.' We have greedy politicians running the country, not patriots.

UBS (UBS) may only need to hand over a small number of client records to the IRS following its successful amnesty program, which was a precondition to the Swiss bank outing its U.S. clients.

It's all for show. You don't think they'll mess with a Marc Rich do you?