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Michael Clark

Michael Clark
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  • The Fracturing Energy Bubble Is The New Housing Crash [View article]
    The FRB can lower or raise interest rates within the ability of the market to support those changes but it does not force anyone to borrow money. It does not alter what is or is not a success in business. If a business earns a profit and survives, it is a success and if it becomes bankrupt it is a failure. The FRB cannot change that and no one says that it can.

    __
    David, I think if that were true we would have less on which to disagree. But the entire QE,ZIRP fiasco was designed to save failing banks, save failing businesses, and rescue companies on the verge of bankruptcy. The FED feared raising interest rates in an over-indebted society because to do so would endanger entities and individuals who had over-indulged at the Debt Banquet. How many banks would have failed except for the FED intervention? I'm saying this to point out that you are not seeing what you are saying. You are like the Lord Baltimore catechism of FRB godhood, defending the existing order for the sake (it seems) of seeing only the theoretical side, the bright side, rather than the practical side (what they are actually doing, underneath their clean rhetoric).

    See no evil; hear no evil.
    Dec 19, 2014. 10:51 PM | Likes Like |Link to Comment
  • The Fracturing Energy Bubble Is The New Housing Crash [View article]
    Kertch:
    Thank you for the compliment. The 'job' of the mundane is to reduce everything magical and significant down to its least magical and signficant level. This is the so-called 'real' level.

    Science, at the theoretical level, is all about magic. I agree. Dragging it down to the 'useful' level, in truth, deadens it. This is what they call 'the fall' in theological writing.
    Dec 19, 2014. 10:41 PM | Likes Like |Link to Comment
  • Qihoo 360 Q3 FY2014 Results [View article]
    I'm still short; and I like the short still. Who knows who will be right on this one?
    Dec 18, 2014. 07:10 PM | Likes Like |Link to Comment
  • The Fracturing Energy Bubble Is The New Housing Crash [View article]
    Nothing helps encourage bubbles, David, like lower and lower interest rates. But you deny that this has any role in bubble-creation. I agree that investors are looking for investment money, speculators especially are. And low interest rates encourages speculation, and rewards speculators. And QE, ZIRP and government bailouts really encourages speculators -- it is not the job of the FED to reward speculators. The job of the FED is to do what is best for America. But the FED doesn't work for America; the FED works for the speculators. That is why interest rates are still so low. So the speculators can continue to gain.

    As for Japan, Japan made the mistake of following Krugman's advice because he had a Nobel Prize. Now they are in hell, dying from Chinese water torture, importing inflation and exporting deflation to the rest of the world.

    The Book of Revelation writes about the plagues that visit mankind at the end of the world. In truth, the Book of Revelation writes about the curses that come to mankind during the Night-Cycle, every 36 years (1929-1947; 1965-1983; 2001-2019...) During the Night-Cycle, all the curses of the world are poured down on humankind, floods, plagues (ebola), hurricanes, tsunamis, wars and rumors of wars... Every world we build we also must destroy, or watch being destroyed. The world we built from 1983-2001 we are now experiencing being destroyed. The creation of the world lasts six days (Old Testament), but 'days' is metaphorical. The first day of creation is also the last day of destruction (1983-1986); the second day of creation was 1986-1989; the third day of creation was 1989-1992; the fourth day of creation (the balance, man) was 1992-1995; the fifth day of creation was 1995-1998; the sixth day of creation was 1998-2001; and the sabbath was the seventh day, which was essentially the last day of creation and the first day of destruction. As there are six days of creation, there are also six days of destruction, plagues, curses, failures, natural catastrophes.

    You may dismiss this as 'superstition', but it is 'thinking', envisioning, with the right-side of the brain, pattern-recognition. This is more closely attuned to the dreaming mind; the number-crunching mind, what we call reason, or rationalization, is the machine-brain used during the Day-Cycles (for counting money).

    Superstition or not, one has to learn how to also deal with this reality also. We argue that the day-mind is real, the day-world real; but both worlds are equally real and unreal. Matter seems solid, but is empty; anti-Matter seems empty, but is solid. Dreams seem empty, non-sense; but they are solid in meaning, and in significance. When we wake up, the unreal dream world vanishes. When we sleep, the unreal waking world vanishes. We, in truth, have two lives, which we continue (help evolve) in both world. When we wake, we do our job in the material world, building our lives another step forward. When we sleep, we do our job in the spiritual world, built that world as well, and out lives there. We do not remember the dream world well when we wake; we do not remember the waking world well when we sleep. The two worlds do reflect each other in each world. But we are cut off from the dream world when we wake; and we are cut off from the walking world when we dream. Which world is real; they are both real (and unreal).

    So this Night-Cycle world has rules and laws that everyone needs to know, if they wish to survive in this world, and make it back out to the next Day-Cycle world, when joy and light and pleasure return. The Sun rules the Day-World, and it has its own laws and rules, which reward individualism, Ego, will, unbending certainty, and rationality. The Moon rules the Night-World; the moon was considered by many ancient cultures to be a male force, and the sun was considered female, materiialistic, greedy, body-oriented, which was considered female. The Moon-logic is much different than the individualistic Sun-logic. For instance, the Sun-Force is a jealous god who demands allegiance, and breeds monotheism, king-worship. The Moon is much less this autocratic, is more democratic, since the Night Sky shows to the earth many heavenly dynastics, stars by the millions, surrounding the Moon. The Night-Force is polytheistic, more emotional, more imagistic and imaginistic, rewarding imagination and metaphor-mastery; and breeds a whole gallery of deities and welcomes pattern-recognition, which allows one to thrive in this world. Objects are not isolated and lonely, as in the Day-World. In fact, there are no objects in the Night-World. During Day, the wave-function collapses into the object-function; during Night, the object-function collapses back into the wave-function.

    During the Day there is only one God in the sky visible, the Sun, with an occasional pale moon appearing like an almost forgotten holy ghost. I know I'm off-topic here. But I'm attempting to point out that the certainty of the Ego breaks at some point, and multiplicity comes flowing in (the first word in Joyce's "Finnegans Wake" is 'riverrun' for a reason). And that is where we are now, in the water, not on the promised land, solidity, which comes always AFTER the flood, after Noah, after Noah's ark lands on Mount Ararat (2019) and, to mix metaphors, after Dante passes out of the Inferno and is allowed to drink from the River Lethe, which wipes out his memory of having eaten from the Night-Cycle Tree of Knowledge of Good and Evil.

    To conclude: Eating from the Tree of Life is the Day-Cycle, 1983-2001, for instance, living without self-judgment, and without a memory of one's sins and failures; eating from the Tree of Knowledge of Good and Evil is the Night-Cycle (2001-2019 for instance), which is death, the end of the world, the end of Time (as we know it, Modern Time versus the Eternal Time of Death). The world does end; and this involves a slow painful descent into hopelessness, despair, depression (I know we are not supposed to use this word, Great Recession insntead), but also the way back out of all this Night-Cycle plague. We actually live out this drama, as individuals, as a nation, as membrs of the human race. Watch what you are going through during this Night-Cycle; open your eyes to the structure in which we live.

    The two sides of the brain have different rules, laws, realities to navigate. But each human being needs to recognize both sides of the brain, because we spend an equal amount of time in each world.

    I apologize to anyone who wishes this type of discussion was posted elsewhere. I'm trying to demonstrate the two forces that also buffet the financial world.
    Dec 18, 2014. 03:01 PM | 1 Like Like |Link to Comment
  • $60: Not A Reasonable Price For Oil [View article]
    Keith:
    The paradigm has shifted. The FED was using QE and ZIRP to keep the US Dollar weak. Now the Dollar is raging. When the Dollar rages, the oil patch crumbles. See the telling chart in the instablog below, showing the UUP overlaid with the XOI, Index of Oil and Gas stocks. Very telling.

    http://seekingalpha.co...
    Dec 17, 2014. 11:30 PM | Likes Like |Link to Comment
  • The Fracturing Energy Bubble Is The New Housing Crash [View article]
    Wow. I love your narrative, Tom.

    Clearly, failure of bad industries (and bad debt) can and does further our quest. Let the old forms die. That is evolution. Your example of the progress of the computer is a perfect picture of this. If the banks die, we have to recreate better banks. Our ancestors all went through this inflation/deflation cycle, as you point out. And they did it with courage and with faith. The deflation cycle tests your faith. But it is a test, to make one stronger. Sometimes you have to earn what you get. We should not be afraid of having to earn our future, to build it like our ancestors did.

    Very nice post.
    Dec 17, 2014. 09:06 PM | 2 Likes Like |Link to Comment
  • The Fracturing Energy Bubble Is The New Housing Crash [View article]
    Let me add a moral point to this discussion, which CoinsK suggests. IF the FED knew that 2001 was the end of the business cycle, and knew that this meant anyone taking on loans at that late date would be put at a severe disadvantage of buying at the top, and they continued to push interest rates lower and lower to seduce borrowers into the catastrophic debt bubble they were building, then that is immoral in my mind, luring borrowers in to try to protect the banks. This is much like the snake in Eden, to my mind.

    Then using broad powers to make all Americans pay (rather than the banks themselves, and those who took out bad loans at the top of the business cycle) for the salvation of the banks and for attempts to hold inflated housing prices up when they wanted and needed to go down. Yes: immoral.

    If housing prices had been allowed to return to normal levels, we would not have had such a jump in food stamp use in America. And most Americans would have a lot for of their income to use toward financing an economic recovery.
    Dec 17, 2014. 08:20 PM | 2 Likes Like |Link to Comment
  • The Fracturing Energy Bubble Is The New Housing Crash [View article]
    The Fed led; but world central banks allowed themselves to be led. The Fed did not cause housing bubbles all over the world; but bank policy all over the world did. In China, in Vietnam, in Thailand....they all had housing bubbles.

    The FED's interest rate policy and the weakening of the US Dollar 'caused' hot money to flow into China, Veitnam, Thailand....etc. in the form of our 'exported inflation'. This led to housing bubbles all over.

    A weak dollar exports inflation to the world. The FED's low interest rates cause the weak dollar and our exporting of inflation. Now, with the strong dollar, they are exporting deflation back to us.
    Dec 17, 2014. 08:07 PM | 3 Likes Like |Link to Comment
  • The Fracturing Energy Bubble Is The New Housing Crash [View article]
    David:

    You focus on the differences between eras. In terms of principles, it is always the same. There is no difference.

    In the world you are perceiving, the particulars, the world of objects, everything looks different. But from my perspective, from the perspective of the 'seasons' that drive everything, the universals, it is never different. The things that are different don't really matter. In terms of principles every Summer is like every other Summer; temperature may deviate; there may be more rain this time than last time; but in terms of principles, every Summer begins on June 21, and every Summer ends on September 21 -- there may be more grain to harvest this year than last. But is is always the growth season that leads to the harvest season.
    Dec 17, 2014. 08:01 PM | 1 Like Like |Link to Comment
  • The Fracturing Energy Bubble Is The New Housing Crash [View article]
    David:

    I wish the FRB (you say this with such reverence) had the intention of moderating the extremes instead of becoming the extreme. The FED is now the EXTREME. It is the patron of the EXTREME. The FED's behavior since 2001 has been extreme, unprecedented, and mad.
    Dec 17, 2014. 07:56 PM | 4 Likes Like |Link to Comment
  • The Fracturing Energy Bubble Is The New Housing Crash [View article]
    All of Japan's options at this point are ugly, Abenomics is simply the least ugly.
    ___
    All are painful. But they are not all ugly. Japan has the option of admitting they made a HUGE MISTAKE in believing they could spend their unborn grandchildren's money without a payback. Japan can embrace the end of this cycle, destroy their debt, and proceed toward rebirth.

    Each option will be painful. But why do we view the painful path as unacceptable? We've had the pleasure side; now we are afraid to pay for it? Maybe we should have thought of this when we were taking on a mountain of debt to fund the party.
    Dec 17, 2014. 07:53 PM | 2 Likes Like |Link to Comment
  • The Fracturing Energy Bubble Is The New Housing Crash [View article]
    Thank you, Tom. You are clearly correct. Japan was a bubble-economy in the 1980's and now they are paying for it.

    We should be learning from what they are going through. Because that is our path also.
    Dec 17, 2014. 07:49 PM | 1 Like Like |Link to Comment
  • The Fracturing Energy Bubble Is The New Housing Crash [View article]
    DAVID: Japan has had their bubbles. Remember the 1989 Housing Bubble? They were becoming the world's powerhouse economy. American writers were writing that they were going to take over the world, take over America. They were buying New York Real Estate hand-over-fist. Very similar to the Chinese in the past decade.

    Bubbles are not growth. AND they have a massive lingering side-effect, with which we (and Japan, and England, and Spain, and Ireland, and China, and Vietnam...) will all be paying for many years.

    What the Japanese have today -- despite massive QE and ZIRP and all the bubble-creations that central banks can manufacture -- is what happens at the end of FED/Central Bank manipulation, when after spending trillions to PROTECT DEBT they have no growth and no bubbles, where they have both inflation and deflation, and where they are still trying to carry on their backs the great cross that is the massive debt bubble, which should not be preserved, but destroyed. They are like a dead whale not knowing what to do, where to go, where to turn. They are lost. They allowed themselves to be led by the Paul Krugmans of the world and he led them into a dead end, because he is one-eye blind, he only believes in the Day-Side of reality. Common sense tells you that spending money you don't have will eventually lead you to significant darkness and death.

    If my ideas were adopted, we would have a rational economy finally, rather than the emotional, dreary mess we have today, powered by greed and fear, by the 'flying by the seat of our pants' philosophy of our leaders (Bernanke and Paulson were not leaders), the 'making it up as we go along' masters of the universe. My ideas tell you when the business cycle starts and ends, when to raise rates and when to lower rates, when to raise taxes and lower taxes, when to glorify capitalism (business cycle growth season) and when to glorify socialism (end of the business cycle growth season, so we can survive collectively during the dark season of the economy's winter season).

    My philosophy accounts for both sides of the equation, accepts both sides equally, sees in both sides the good they can do, and the bad they can do. Your philosophy is one-sided. Growth at any cost; growth or death. Expansion is not forever; contraction is not forever. When the day cycle of growth and power and wealth and body-pleasure ends, don't moan and weep, embrace the opposite side and conform to the laws of that side also, develop a great culture, a great culture of ideas, in the inner world of life.

    Be the master of both sides. Develop both sides of one's nature, both sides of one's brain (right-brain, left-brain). Be great in the material world, and also be great in the spiritual world.
    Dec 17, 2014. 07:43 PM | 2 Likes Like |Link to Comment
  • The Fracturing Energy Bubble Is The New Housing Crash [View article]
    David: I will take your questions one at a time:


    1) Would the market have supported higher interest rates? Was there sufficient demand for credit to raise interest rates? The Federal Reserve Bank (FRB) cannot set interest rates at a whim. In actuality the low interest rates in 2001 reflected the reality of the credit market, there was low demand.

    Yes, in 2001 the market would have supported higher interest rates? 2001 began an immense build-up of credit, that lasted...well, is still lasting. You can't know if the market would have suppported higher interest rates indefinitely. That's why interest rates float in the market, when they are not manipulated DOWN by the FED spending TRILLIONS to do this. Sometimes the FED must LEAD. If we have a debt bubble forming, the FED needs to lead, by raising rates. Greenspan did understand that rates needed to go higher. He raised rates in 2002, and 2003; and then he resigned or retired. He did not want to be the bad guy. Did the market support Paul Vocker's raising interest rates to 23% in 1982? No. The market wanted Congress to impeach him. This shows you what a real leader is and does. He acts according to his perception of what the country needs, not what the country WANTS. This is an important distinction. One that we need to think about long and hard. We are a feel-good country. We don't want to make anyone unhappy. We want everyone happy, smiling, living the good life. But there are times when leaders must make hard decisions. IF the business cycle ended (as I claim) in 2001, then low rates did not feed growth, but only debt growth. This is another important distinction. Debt growths, in my vocabulary, mean cancerous pockets of misallocation of capiital, for the sake of theft and last-minute extortions. Greed frenzy.


    2) Quite aside from the demand situation, it would have been impossible for the FRB to raise rates for political reasons. The White House, Congress, and every state and local government wanted economic growth and the FRB can best achieve that by lowering interest rates. The FRB would come under intense political pressure to lower rates. Republicans and Democrats both wanted any sort of economic growth and the FRB was not going to deny it to them.

    The FED, if we want to keep the FED, must be independent of politics, as it claims it is. Volcker ignored political interests, even to the point of threats of impeachment. The FRB NEEDS to come under intense pressure if it is doing the right thing. Volcker did. The Supreme Court (sometimes) stands up to political pressure -- everyone in Washington needs to stand up to intense political pressure if they are going to be leaders. Leaders, by definition, see the new world much before the masses do. Leaders need to lead, not follow the blind masses over the precipice.


    3) What if somehow the FRB had raised interest rates earlier than they did. I would draw your attention to the fact that the Federal Funds Rate was at its lowest level in January of 2003 at 0.98% and increased every month until February of 2007 at 5.26%. That did not stop the Housing Bubble.

    Well, .98% is not going to stop a housing bubble. Fed funds rates declined from 22% in 1983 to .98% in 2003. Greenspan then realized he should raise rates. He did, from 2002-2004. From 2006, Greenspan's rates were reverse from 5.26 (low historically) to .18 today. 5% interest is still very low historically in order to feed a housing bubble.


    4) Even if the FRB had somehow prevented the housing bubble, what would have replaced it? What other outlet for investment would have yielded similar profits? Where would all of that investment money gone if not to the housing bubble?

    If the FRB had begun seriously raising interest rates we would have had no housing bubble. What would we have had? First, you have to understand how I think reality works. We DO NOT need to grow all the time. Profits do not need to grow all the time. Nature does not work that way. Many humans would like nature to work that way. And humans have made a living of defeating Nature at many turns; but humans have not defeated the seasons of nature and time, life followed by death, expansion followed by deflation, growth followed by gestation and rest. Light (matter) followed by Darkness (anti-matter). So you and I have a differnt picture of what is needed and what is possible. If the Fed had raised rates in 2001, the global economy would have begun to contract. This is not a problem, it is a fact. And there is a good side to this contraction, which you cannot see from the Growth-always side of the circle. The growth season culminates in the world city, civilization, world trade, the fruit in the tree. Then the fruit is harvested. And the fruit not harvested rots and falls back to earth; and the seed in that fruit works its way out of the corrupt body, plants itself underground, in the earth, and waits for the Sun to return to walke it up (2019) and begin the growth process again. The good side of deflation? Prices retreat, making the world economy 'affordable' again, which it needs to be for the next stage of growth. The global culture gets to develop the other side of its nature: the growth cycle honors money, power, engineering, the 'civilization arts' (building the world in matter), problem solving, the left-brain activity -- which is does by splitting the world into us against them, men against women, rich against poor, west against east: the gap between the rich and the poor gets greater, but there is a greater trickle down affect, so the poor do better when there is more money in the society. Deflation draws these two groups, rich and poor, man and women, west and east, white and black, back toward one another. It allows for the development of the non-engineering side of the brain: religion, philosophy, poetry, art, myth, love, the 'cultural arts,' the building of the inner world, right-brain activity. The be a true culture, both sides need to be developed. Greece was the culture-building side of the equation; Rome was the civilization-building side. Europe was the culture-building side of the equation; America is the civilization-building side. But every transition from growth to rest is a transition from left-brain to right-brain; the science idea gets energized in the growth cycle; religion gets emergized in the rest cycle. We need both sides. We need to produce IDEAS, because that is the source; and IDEAS are produced in the Darkness, rest and gestation period, the Night-Cycle. We produce OBJECTS in the growth or left-brain cycle, objects within which are embedded with the IDEAS produced durig the rest-sleep cycle. Matter is embedded with Spirit, Ideas, Imagination; and the material world takes the shape of the Ideas inside the body. IDEAS come first and create the material image, a secondary affect.

    We would have had a weak global economy; and we would have needed to become more collective in our approach to survive as a nation and as a world. We would have had to develop our spirits. The darkness (of the Material World) exists for the strengthening of the Spirit. When the body gets strong, the Material World, the Spiirit gets weak; when the body gets weak, the Spirit gets strong.

    I am NOT saying that raising rates in 2001 would have produced growth and pleasure. In 2001, material growth and pleasure ended. It was time for a differnt type of experience, one stressing the inner world, not the outer world. One stressing the return to God, to religion, to the life of the Soul. Body-Life by Day (1983-2001); Soul-Life by Night (2001-2019).


    5) As bad as the Housing Bubble was, it was better than the alternative, which was no growth at all.

    See my comment above. If you admit that nothing in Nature grows perpetually, then you will have to change the way you think about this. No growth at all, as you put it, is the other side of the growth coin.

    You need to give equality in your hierarchy of values to both sides: Light (matter) and Darkness (spirit); Man and Woman; West and East; Life and Death; Expansion, Civilization, Science, Evolution and Contraction, Culture, Religion and Devolution. This is all a paradox, in fact. Material Evolution is Spiritual Devolution. Spiritual Evolution is Material Devolution. Material Light and Spirit Darkness.

    The necessary (and I emphasize this word) decline is part of the rebirth process, an alchemical process that involves the transition from the BIG WORLD (Urban, Global, Egoic (the I World), FRUIT) to the SMALL world (Local, National, Collective (the We world), SEED involves pain, suffering, doubt, despair, depression. It is a symbolic death. Without making this passage, one (and one's society) does not attain rebirth. The point is to keep moving from one world to the next, from the Material World to the Spiritual World. This is the nature of eternal life. From the Fruit to the Seed and then back to the next generation of Fruit. Civilization is the fruit. Religion (God) is the seed.
    Dec 17, 2014. 06:20 PM | 3 Likes Like |Link to Comment
  • The Fracturing Energy Bubble Is The New Housing Crash [View article]
    Agree, Ecoman.
    Dec 17, 2014. 05:00 PM | Likes Like |Link to Comment
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