Carey Rowland

Investors Throwing Caution to the Wind?

Time to pray.

Underemployment Is the Problem

Underemployment is actually an opportunity for many Americans to find new directions in life, probably involving more productive uses of their time and resources. It's time for innovation; it must begin at the grassroots. People need to find something else to do besides making widgets and pushing paper.
I know this because I am one of those unemployed underemployed, but I've got a few irons in the fire. And I hope that most of those other unemployed/underemployeds are doing the same--looking to the horizon for new possibilities.
Carey Rowland, author of Glass half-Full

Preview from Europe: Another 'Glass Half Full' Day

Thanks, Mole, for your perspective. Especially helpful is Paddy Hirsch's lively instruction.

Carey Rowland, author of Glass half-Full

Armageddon Part Two: Securitization Is Too Big to Fail

<i>Mr. Butter</i>, this novice reader has learned greatly from your very instructive article. Thank you.

A securitizaion process of a thousand miles begins with a single step.

And you are suggesting, it seems, that the first two steps toward legitimate valuation of a load of dead fish is determining performance based on: cash flow, and on comparisons to other similarly-classed assets; and you are arguing that prospective investors need access to proprietary data in order to undertake such studies.

Dr. Jang Wei's database, in which 700,000 mortgages are analyzed using line-by-line-data--is it owned by a bank? What, specifically, prevents public access to such data by the public?

Are there other sources for such data? Is it just a matter of having the time and resources to dig out the data and run the analyses and comparisons? And what would be the relationship between PPIP and individuals/companies who would be interested in acquiring this information.

Thanks for the excellent article.

Carey Rowland, author of Glass half-Full

The 'New Normal' for Unemployment

The LTCM debacle of the late 90s was an early sign of what has happened and what will yet unfold. Bill Gross' observations in RL's posting above, about black swans and fat tails--these will be the determinants for the <i><b>new normal.</b></...

Homer II's comment just above, about buying junker autos, is true. The <i>cash for clunkers</i> comedy is an indicator of the government's desperation, just as the TARP from which it arose was a desperate measure to begin with.

What this country really needs is a new manufacturing base, built upon a new growth industry or two. I don't have any money, and I am in fact one of those newly unemployed (although I write novels), but I'd suggest that you moneyed guys out there take some serious looks at pooling your resources and initiating a new infrastructure based on clean,efficient, 21st-century rail travel, rather than the inefficient, unsustainable automobile-junkyard- groupthink that is presently inhibiting our drive toward true progress and new paths of prosperity.

Let's get America busy again, building 21st century rails and railcars, with solar collectors on their roofs to power up the laptop-toting passengers within. And don't forget <i>heirloom</... seeds for all these newly unemployed growing a few veggies in the back yard to supplement their benefits.

Carey Rowland, author of Glass half-Full

Judging High-Frequency Trading

I'm seconding Pat C's motion. Somebody should "Start a true public exchange that relies on fundamental's." We need an exchange where real people can do real business-- a facility where (as Felix calls it) "price discovery" and "transparency" can dispel the darkness of the dark pools.

Winter's Coming for the Boomers: Part 1

Very interesting. We'll keep it mind, and see how this scenario plays out as the crisis unwinds. We are due for some major structural rearrangements, although the war element in the Crisis phase does not bode well for us.

What Happens After Banks Repay TARP Loans?

Thanks, Daniel, for your very informative posting.

I take back all the negative comments I made about Paulson last fall. This scenario is starting to come into focus.

And there is still hope for American capitalism after partial "nationalization." The old "pump-priming" strategy seems to be working. It would be humming like a well oiled Henry Ford machine if this (possible scenario that you mentioned) does happen: ".. those banks which paid back TARP funds early will begin to get the lion’s share of business."

But instead, you report that the "...ones which have handed back government funding are arguably much riskier than they were while the U.S. government held a vested financial interest in them." I don't think so, not in the long run. Surely not.

Sound investment practice has to win in the end. That's the American way. Good work, USB and BBT!

Carey Rowland, author of Glass half-Full, www.careyrowland.com

Will China Drop U.S. Debt? Unlikely

Thanks for your cogent analysis.

Speaking of behavior, the Chinese are using <i>behavior modification</i> to protect their investments, making precise use of positive and negative reinforcements. Since they've got the world's most vigorous GDP expansion along with the trillions invested in us, it's likely they'll be able to prod us along a path that's favorable to their continued robust development.

Now we're the banana (or should I way <i>walmart</i... republic trying to court favor with Uncle Wen. Donald Ingram's assessment is correct: "... they will take a leading position on the world's stage as befits their size of population. This will happen." Yep, 't'will.

Ironic, isn't it that the world's most potent "communist" nation is calling us capitalists to account for our irresponsible use of $$$$?

There could come a day when they have little use for our $$$$, although your theory and a few comments following it convince me that it won't be <i>too</i> soon.

I'm headed to Shanghai next week. We shall see.

Carey Rowland, author of Glass half-Full

The Bond Market Strikes Back at the Fed

y3115y: I'm with you on that. You've got the right idea. We're so far down now there's no way to go but up, and it starts in your (and my) own back yard. Better get out the hoe.

Why Consumer Confidence Is Not a True Indicator

So... for the faithful, somewhat wary, garden-variety solid middle consumer with a reasonably secure job...what would be the recommended application for a little discretionary income?
~buy a new Ford to replace the '98 model that's got 180,000 miles?
~6-month cd with small local bank?
~6-month cd with Bank of America?
~10-year Treasury?
~new wedding band for wife who dropped old one down drain a month ago?
~ vacation?
~WalMart stock?
~kid to college?
~new mattress? (sleep better)
~old mattress that needs padding?
~big stock of Campbell's soup?
~Campbell's soup stock?
~Chinese power company stock?

Which is the best use? This consumer needs to know.

Preparing for Financial Innovation's Downside

Yes, Clive, I agree with John. This is a very insightful discussion. Thank you for shedding some light on these unfolding events.

John commented: "Innovation for the purpose of creating greater leverage on existing debt, without adding any more real productive capacity to the economy, is wasted effort and wasteful, as well."

Yes, it's wasteful. Not only that--it's immoral. As a member of the John Q. Public segment, and a taxpayer who is compelled, though unwillingly, to bail out "those guilty of inevitable miscalculations", I agree that such innovation is wasteful. Furthermore, it is unethical; it has brought down the house of derivative and credit-default cards.

Now it's time to bring in the regulators (as much as this free-market advocate hates to say it) to make some sense (and justice) out of the mess.

I didn't sign up to subsidize anybody's "riskless" free lunch.

Carey Rowland, author of Glass Chimera

Are Business Schools to Blame for the Crisis?

1.)Thanks, TraderMark, for the very timely article.
2.) Thank you, User353732 for your perceptive comments, especially your last point:
"The schools taught the fiction of the "economic man" because it is much harder to teach about the "whole man or whole woman".
3.) There is, in economics, an Invisible Hand that works correctively. Over time, it balances the numbers from crest to trough, from boom to bust, feast to famine, free-market to regulated-market, one side of the pendulum to the other side.
4.) That Invisible Hand also works morally. Let those who have eyes to see and ears to hear Master the Beneficial lessons from this present Avalanche of value-destroying events. Fear of the Lord (and regulators, and shareholders) is the beginning of wisdom.
5.) So now the pendulum is swinging back the other way--toward regulation and accountability. Goodbye Friedman and Greenspan. Hello SEC and FDIC. The Invisible Hand says the market gets what it deserves.
5.) One important lesson that should not be overlooked in schools is this <b>M</b>ost <b>B</b>en... <b>A</b>dv... When spending other people's money, remember that the tails of the bell curve are fatter than everybody thought.
4.) Here's another; it's a fundamental law of human nature and economics: <b>M</b>ur... <b>B</b>est <b>A</b>na... aka <i>Murphy's Law</i>. Google it if you haven't heard it mentioned since Glass-Steagall was broken and derivatives were allowed to run free.

Carey Rowland, author of Glass half-Full

The Sleepwalkers' Rally

This newcomer thanks your for the very informative article.

As a teacher, I especially appreciate this connection between events long ago and what is happening now: "The U.S. dollar became the world's reserve currency because, at the time, it was "as good as gold." Through political sleight of hand, the gold backing was withdrawn, leaving the world floating - and now sinking - along with the dollar "
That explains a lot.

I also appreciate Mr. Woong's edifying comments above. And I'll address his concern by agreeing with his implication: No, this is not the direction I want America to go. Thank God for our Constitution. Let's make use of it.

As for Mr. Altendorf's declaration that "We are screwed," I must say that, while I understand his pessimism, it is unproductive. Life is not defined by what the Fed does, or what the Supreme Court does, or the Treasury, Fannie, Freddie or AIG.

Life is about how we respond to whatever challenges and opportunities are presented to us. We can act, individually and collectively, to protect and prosper our well-being and our families. We may be robbed, but we are not screwed.

And thank you, Sunnsea, for enlightening us about the banks' daytrading TARP $. It's a cover-up for sure. I was wondering where all the hot air was coming from.

U.S. Markets Propped Up by Delirious Toxicity

wheelbarrowsfullofcash writes: "
Everyone else in the world that can reduce their exposure to the USD is doing so."
I'm new at this game, and would like to ask: How does he know that?