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Michael Clark

Michael Clark
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  • Lending Lunacy: Will the Madness Ever End? [View article]
    Megalomania almost always leads to tragedy.
    Dec 15, 2009. 10:52 AM | 3 Likes Like |Link to Comment
  • Pessimism and the Financial Crisis: How Much Is Too Much? [View article]
    Is it time to be 'optimistic'? Optimism and expanding credit go together, after a time of high interest rates and an unwinding of debt.

    The author seems to want more koolaid. Ok, the bad times have passed -- it's time for more EXPANSION again. Expansion has to give way to real contraction AND (key word) a return to sane solvency. We are more indebted now than we were when the crisis began. How can we return to optimism UNTIL we move through the causes of the pessimism? BBernanke is pretending there is no crisis. He wants to be optimistic too. Trouble is, we can't really get to the Dawn until we really go through the Night..and Ben and Obama are spending all they can so we don't have to go into the Night.

    Optimism is scheduled to get weaker and weaker...until 2019. Then it will begin to grow. 2019 is to this cycle what 1983 (Reagan's advent) was to the 1965-1983 Night Cycle that culminated in Jimmy Carter and Paul Volcker).

    I agree with the author. There is a time for all things, including optimism. But it isn't time for optimism yet. It's time for even deeper pessimism. Sorry. We haven't paid for all our sins yet.
    Dec 15, 2009. 10:37 AM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]

    I always enjoy your posts. You pack a lot of useful information into a relatively small packet. That's a compliment.

    Today's post is loaded with information. Thanks.
    Dec 15, 2009. 09:40 AM | 6 Likes Like |Link to Comment
  • A Peak at the "New" Nuclear [View instapost]
    Very interesting article. Being a secondhand-native of that area in Oregon (Eugene), it is nice to hear the name of Corvallis again. Such a beautiful area.

    I'm convinced that nuclear IS the direction to go -- and that Nuclear Fusion will be the ultimate energy source eventually. The sooner we get there the better.

    But smaller efficient nuclear energy is a step in the right direction. The Sun is a nuclear reactor -- and we all get our life from the Sun. Does it not make sense to bring down a piece of the sun to Earth to help us with our need for energy? Solar and wind may be pieces of this puzzle. But they are small pieces.
    Dec 15, 2009. 09:34 AM | Likes Like |Link to Comment
  • Germans Don't Trust the American Economy [View article]
    "...the greatest thing that Germany can teach the US is how much more valuable industrial engineers are than financial engineers."

    There is a certain stoicism in the German nature that I find attractive. Certainly the obsession with quality is admirable. America has a different history and a different nature than Germany. America was founded as a democracy, and, as such, seeks the greatest good for the greatest number of people. Europe has strong aristocratic roots, which sought the greatest good for the elite. Perhaps this contradiction will always make the American experience different than the German experience.

    I certainly long for an era of quality again. We have flirted with such eras in the past. I long for an era of cultural quality again, a time who art, music and literature are considered the essence of a good life, instead of merely something antecedent to money-making. The world seems bankrupt to me today not only in terms of its finances, but even more in terms of its soul-expression: where is the music, the art, the literature that tell us who we are as humans, and where we are in the wheel of time, and why we are on earth. Are we here only to build more houses, to buy more gold, to buy a larger boat than our neighbors? Without an active relation to our God there can be no more purpose to life than chasing titles, prestiges, fortunes, concrete expressions of wealth. But we are souls as well as bodies. Our souls are sick. That is the real problem and the real crisis we face today.
    Dec 15, 2009. 09:26 AM | 2 Likes Like |Link to Comment
  • Germans Don't Trust the American Economy [View article]
    I like this idea. Bankers who are too imaginative are dangerous to the world. Banking isn't supposed to be too imaginative.

    As far as corporations who off-shore American jobs, higher tax rates can help make it much less profitable for these corporations to abuse America in this way.

    We hear about how 'globalism' (suddenly it is a religion) requires this and that from a competitive economy. Let us remember that the late great globalism was one economic model; there are other models. We create the world we inhabit. We can create a better model. First, we have to re-create America as a nation and as a society. The time for this will be after the defeat of the Inflationists lead us down into the waters of chaos.

    On Dec 15 01:50 AM William Legrand wrote:

    > "Volcker: ... You are dedicated to exporting, we are dedicated to
    > financial engineering and it hasn't worked out too well. I wish we
    > had fewer financial engineers and more mechanical engineers."
    > How about we STOP off-shoring our manufacturing and design engineering
    > jobs and START off-shoring all the bankster jobs. It's time we started
    > producing "real value" physical goods again, instead of a false "services"
    > economy based on ultra-marketeered, easy-credit, overnight-flipping
    > Ponzi schemes, further inflated with layer upon layer of worthless
    > derivatives garbage that creates a fatal economic version of Jenga,
    Dec 15, 2009. 09:11 AM | 2 Likes Like |Link to Comment
  • Germans Don't Trust the American Economy [View article]
    I agree. This is the most important message of this interview, which, in fact, has quite a few important ideas.

    Volcker is still speaking like a man who understands how the world works, unlike Bernanke who speaks like a man who wants the world to work in a certain way.

    On Dec 15 01:18 AM a fat panda wrote:

    > " I must say, I admire Germany in this situation even with its high
    > costs. In some ways, I think the labor cost is higher in Germany
    > than it is in the United States but you can somehow maintain that
    > export edge. "
    > There is a lesson to be learned here. Cost of labor isn't the driver.
    > It is productivity. We can have high cost of labor provided that
    > our productivity justifies those costs. If you are 10 times as
    > productive as the competitor you will get 10 times the wage.
    Dec 15, 2009. 09:05 AM | 1 Like Like |Link to Comment
  • Banks Are Damned if They Lend, Damned if They Don't [View article]
    Actually, damn the banks, cut them down to size, spread their wealth into smaller pieces that cannot destroy the world's economy and CANNOT use its power to take over the American government.

    I agree, banks should NOT be lending now. No one should be lending or borrowing now. We should be paying down debts instead of taking on more debts.

    But the poor banks have really not been damned enough yet. They destroy the world; the governments of the world pay them for their service, enabling them to grow larger than before, and use taxpayer money to generate obscene profits in a stock rally that has been backstopped by the government (by the #1 banker, Uncle Ben, who has essentially guaranteed them that if they invest in stocks they CANNOT LOSE money because Ben will see to it himself that stocks don't come down. How will he do this? By using more taxpayer money to support stocks and bonds -- taking on more and more debt for our children and grandchildren to pay. This is the biggest heist and plundering of public coffers in the history of human existence...and it is still going on).

    Poor banks. Poor misunderstood bankers.
    Dec 15, 2009. 07:47 AM | 2 Likes Like |Link to Comment
  • Thoughts on Fed's Exit Strategy: Stephen Roach vs. Mish [View article]
    Inflationism is the policy (and creed) by which the rich confiscate wealth from the poor (legally, and without much notice). The populace views inflationism as organic, as necessary expansion of the money supply -- but it is engineered theft.

    Inflationism implies a balancing deflationism, wherein debts are unwound and prices fall.

    If we want inflationism we also MUST ACCEPT deflationism, for without it we have a desperate, cancerous situation of perennial attempted expansion, cells stealing life from other cells, constant panic-driven bubble creation, theft on a massive scale, currency devaluation, class warfare....deflation comes but also so does social revolt, polarization, perhaps civil war.

    Deflation is a kind of death -- and the Inflationists need to learn how to die easily, without panic, understanding that rebirth is around the corner. Inflation is Day; Deflation is Night, rest. The Day will return -- and the frantic building of civilization (through money) will return.

    The cost of going to college (tuition) is up 1800% since 1977. The cost of buying a new automobile is up 1100%. Look at health-care, housing, medicine, energy, food.

    The Inflationists believe that life is not worth living UNLESS profits are growing at an obscene rate. But escalating profits are the way that the rich steal money from the poor.

    We had 18 years of inflation (1983-2001); we are now having 18 years of deflation (2001-2019). Why are we using this natural, organic deflationary night cycle as a chance to go even deeper into debt, as a chance to panic...what goes up also has to come down.

    We will NOT grow the economy during the Deflation Cycle. Government money (including higher taxes on the rich) need to go into social programs that help provide support to the poor during the Night Cycle. We will be able to expand the economy again beginning in 2019 (2019-2038), at which time we should try to grow the economy again.

    During the Summer the economy grows (1983-2001). During the Winter, the economy does not grow (2001-2019). (Remember the Bible: 7 fat years followed by 7 lean years. Well, in this case, it's 18 fat years followed by 18 lean years.)

    Inflationists don't know how to do anything but INFLATE bubbles. Deflationists don't know how to do anything but DEFLATE bubbles. If we have a Fed, we need to see that the Fed understands the nature of these twin cycles, and is committed to the principle of both Day Cycles (growth cycles) and Night Cycles (rest cycles). Volcker gets it. Raise rates when you need to rest. Lower rates when you need to grow. But few bankers are willing to take money out of their own and their friends' pockets in the name of national health and sanity. They would rather be rich and insane, and over-extended, and addicted to viagra.
    Dec 15, 2009. 07:26 AM | 3 Likes Like |Link to Comment
  • Government Action: Mission Not Accomplished [View article]
    The administration HAS to do something. It's a lot like the Global Warming scenario. We are told by our visionaries that we HAVE to do something. So we throw money at the problem.

    This depression is just starting. We will have wave after wave of crisis. Depression is simply the Winter Season in the social organism. Can we throw money at Winter and keep storms from coming? Can we throw money at Global Warming and keep the Earth from changing?

    The Earth (Nature) is going to do what it wants to do, no matter what humans think about it.

    Instead of giving billions to the banks, we could have allowed the banks to fail, and redistributed deposits to healthy banks -- and used the federal money to safeguard deposits. The banks SHOULD have taken losses on their bad investments. A lot of bankruptcies all around, borrowers and lenders: but that's what capitalism involves, the risk of failing. You profit when you run your business correctly; you suffer when you try to take shortcuts, and try to get rich quick running scams. Instead, we handed over a windfall to the banks -- essentially saying that the government forthwith will provide insurance for future large-scale scams. Indeed: the biggest scam artist in the world now is Ben Bernanke. AND the problems of bank insolvency still ARE NOT fixed. They are coming back soon, with a vengeance.
    Dec 15, 2009. 06:37 AM | 25 Likes Like |Link to Comment
  • Government Action: Mission Not Accomplished [View article]
    Apparently the unemployment rate SLOWING is the cause for such celebration, the decline in housing values SLOWING, the growth in national debt SLOWING. Is the financial media going to let Obama get away with this? Well, yes. The financial media has been leading the cheers for the 'New Economy' for 9 months now.

    (The 'New Economy' is the one where the rich still make money off the stock market; and where Obamaville's spread across America -- and food stamps replace soup kitchens and male suicides become epidemic.)
    Dec 15, 2009. 05:17 AM | 14 Likes Like |Link to Comment
  • When Obama Told Fat Cats to Start Lending He Forgot Samuelson [View article]
    Very good post. I agree 100%.

    On Dec 15 03:03 AM Warm_Paw wrote:

    > The banks have caused Obama to lose face.
    > He isn't that important.
    > They used the govt thanks to Paulson and Obama was handed the situation
    > like being handed the bag outside the robbed bank.
    > Now he's the fool...
    > Time for Obama to become truly transparent and bring back accounting
    > rules which show exactly where the toxic assets are on the bank balance
    > sheets.
    > Time to pare off a few banks and get this mess out of the way so
    > employment CAN surge.
    > Time for Obama to pull a few strings (if he has any) and show the
    > banks who wears the pants.
    > Not a good thing for a president of the United States of America
    > to treated like a bitch.
    Dec 15, 2009. 05:09 AM | Likes Like |Link to Comment
  • When Obama Told Fat Cats to Start Lending He Forgot Samuelson [View article]
    It is a mess, isn't it? The banks lend recklessly and bring the economy down to its knees. The Fed continues to lend recklessly and demands that the banks follow suit. Of course, the banks are shell-shocked -- bad loans tore out their guts: why would they do it again.

    What the nation really needs is a heavy dose of deflation and the unwinding of debt. What the nation doesn't need is MORE DEBT. But Obama can't tell Americans that they need a heavy dose of deflation. So he blames the banks.

    He should blame the banks for sinking the economy. He should have his gardening shears out and he should be hammering the banks for greed and complicity. But, please, Obama: don't encourage more debt. And, oh, by the way: fire Bernanke.
    Dec 15, 2009. 02:02 AM | 1 Like Like |Link to Comment
  • Germans Don't Trust the American Economy [View article]
    Americans don't trust the American Economy either.

    Americans don't trust Ben Bernanke. Americans should not trust the 'Inflationists' and their religious creed. An imbalanced philosophy is a form of poison: and we're still drinking the kool-aid.
    Dec 15, 2009. 12:59 AM | 7 Likes Like |Link to Comment
  • Strategic Default: The New Stimulus [View article]
    Why bother to pay your bills? Let the government pay them for you. If you are big enough, that seems to be what happens.

    Talk about resentment against the rich. This is how the resentment grows and grows and grows until it's a tumor. And then you have a polarized society -- remember the 1960's and 70's? -- we had a polarized society. Remember the 1930's: polarized society. What saved us from a civil war in the 1930's? The World War.

    1890's?: polarized society.
    1860's?: a society in open civil war.
    1830's?: Andy Jackson against the rich....

    In fact, every bank heist in American history has been followed by a polarized society and a declining economy. And the bank heists come regularly about every two decades.

    During the Depression cycles, the Bears are stronger than the Bulls. And the tipping point of this depression (the Autumn) is 2010. In 2010, the Bulls, who have hitherto been stronger than the Bears, go under, and the Bears take over. This is not meant just for stock market purposes -- but, in an even larger sense: politically, historically, culturally.

    The last Night Cycle autumns were 1974-1983; and 1938-1947. Both of these were very 'bearish' in terms of world history and the spread of western civilization.
    Dec 15, 2009. 12:55 AM | 4 Likes Like |Link to Comment