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Michael Clark

Michael Clark
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  • Bernanke Put's Perceived Permanence: Dispelling the Myth [View article]
    Fascinating article. The best I've read in some time.
    Jan 19, 2010. 10:57 AM | 3 Likes Like |Link to Comment
  • Analyst Dick Bove isn't pulling any punches when it comes to Obama's proposed bank tax. "It's just pure expropriation Venezuelan-style," he says, and costs will get passed along to consumers.  [View news story]
    Please. All taxation is expropriation of some sort -- a sort guaranteed by the constitution. Venezuelian style? The government just gave these bast__ds billions in free money, 0% loans -- and these 'victims' of expropriation are giving away billions in bonuses, while the rest of America sinks in poverty, unemployment, and declining asset values.

    Bove is out of touch with reality. Costs get passed on to the consumer no matter what -- but higher taxes pull some revenue back to the government.

    Poor bank executives. They are SOOOO misunderstood, so persecuted, and so victimized innocents. My God, some might even have to not buy that seventh house in the south of France. I weep for these poor souls day and night.
    Jan 19, 2010. 10:27 AM | 11 Likes Like |Link to Comment
  • Here Comes the 'Double-Dip Recession' [View article]
    I agree. Housing must come down still about 80%. Remember, prices jumped to ridiculous levels because of stupid and even criminal fake loans that now are considered unsustainable (0% down loans)...unless prices come down Americans can't afford houses UNLESS we continue offering the FAKE LOANS that caused the bubble and the bubble's collapse.

    Without the fake loans, at the fake interest rate, we would not have had the housing bubble, and the 200% increase in housing prices -- because Americans would not have qualified to buy houses. To get back to affordable housing, based on consumer income, we need to subtract that 200% gain, and return to conservative mortgage practices. (That is NOT what the real estate industry wants; and it owns a large part of the government so that we will not move in this direction of common sense.)

    Banks, insurance companies, mortgage companies...have not accepted that the gilded age is gone. They think they can resurrect the bubble, just by following the same methods they used before. Isn't that the definition of insanity: doing the same thing over and over and expecting a different result?
    Jan 19, 2010. 12:58 AM | Likes Like |Link to Comment
  • Here Comes the 'Double-Dip Recession' [View article]
    Actually, the Republicans provided the Democrats with the crisis. Let's not lose track of what really happened. (Both parties helped to create the crisis, but the Republicans were in power when all safeguards were stripped away -- Clinton played his part -- and business was trusted to police itself. That was Reagan's creed: business need to be de-regulated so it could be itself. Well, we found out that business, being itself, was also self-destructive, greedy, short-sighted, and criminal.)

    Republicans handed Obama the gun, fully loaded, telling him "Please don't shoot." Well, the crisis has engineered the result. Obama will pull the trigger, to try to preserve as much semblence of order as he can muster, for his own sake, for his own political survival.

    It's hard to listen to those anti-Obamaists loyal to the Republicans call out for 'free markets', a return to 'government by free enterprise, by business'...when one realizes that free enterprise has shot itself in the foot and is incapable of growing any jobs as it begs Congress to give it money so it can survive, and begin paying of the debt it unwisely pyramided into an empire.
    Jan 19, 2010. 12:51 AM | 2 Likes Like |Link to Comment
  • Alt-A Mortgage Catastrophe - Here It Comes [View article]
    Let's get a federal infrastructure payout to build more federal prisons for those guilt of securities and mortgage fraud, confiscate their assets through RICO statues, and fill up the new prisons. Now that's a stimulus bill I can live with.
    Jan 18, 2010. 11:18 AM | 9 Likes Like |Link to Comment
  • Economic Double-Dip? Try a Triple [View article]
    I'm not so sure about this. Clearly fascism and communism are poles with a similarity. Communism is totalitarianism of the poor; Fascism is totalitarianism of the rich. Communists make good fascists once they have taken over the society and thrown all the rich out -- and are the rich and powerful themselves.

    Hitler and his fascists fought a war in the streets of Germany against communists -- and then Hitler invaded Russia to wipe out communism, which Hitler considered a 'Jewish invention'.

    Discussing the invasion of Russia, Hitler wrote: "We must forget the concept of comradeship between soldiers. A Communist is no comrade before or after this battle. This is a war of annihilation."

    Both communism and fascism are governments of totalitarian imbalance. But that is where their similarity ends. Fascism is based in a religious racism. Communism is based in a 'religion' of class. In between these two poles, the North Pole of Fascism, and the South Pole of Communism, lies Democracy in the middle, part fascist and part communist.
    Jan 18, 2010. 07:11 AM | 2 Likes Like |Link to Comment
  • Economic Rationality vs. Time Horizons [View article]
    Another excellent article, David.

    "But near the peaks of bubbles, two things happen. The prices of the assets being financed are so high, that one borrowing to own the asset faces a negative arb — he has to keep paying to keep the asset afloat — the net yield is negative. The second thing is that chatter becomes uncertain, and the pace of closing deals slows.

    These are signs that the cash flows that the assets throw off are less than the cash flows needed to hold the assets. Such a condition can only exist for a short time during a mania. When the pace of deals slackens, and the arb is negative it is time to run, not walk to the exits.

    If enough economic actors did this, bubbles would self-deflate. But it hurts to think. Valuation questions are tough, and it is much easier to mimic the seemingly successful actions of others.

    Better it would be if the Fed, which is the main blower of bubbles through easy monetary policy, would pull back on policy when aggregate levels of debt in the economy get above 200% of GDP, or, would allow us to go through recessions where there is significant pain, and liquidation of bad investments. But no, during the bubble years, Greenspan was lionized for keeping the economy going smoothly — limiting the impact of recessions..."

    These paragraphs are packed with information and with wisdom. Recessions exist for a reason -- but we've been denying that reason for many years now, especially since the Fed became the domain of the Inflationists, who viewed recession as a death to be fought furiously.

    The point of recessions is to wash out bad investments, failures in the financial system, and to restrain the inflation of asset prices, pull prices back to earth, back toward the affordability level of most citizens, and ease the debt ratio of the society -- recessions ARE NOT permanent conditions but a season in the financial process. Inflationists demand a condition of constant growth, constant expansion -- constant growth is a description of cancer -- since the leveraging they have taken on requires a condition of continual price gain.

    When we finally audit the Fed books we will find that the Fed has been fully involved in bull market price appreciation for many years, not just since 2008.
    Jan 18, 2010. 06:47 AM | 2 Likes Like |Link to Comment
  • Nowhere to Go Economically but Up? [View article]
    Actually the opposite of the 'V-shaped' recovery is the '^-shaped' recovery. Nowhere to go but up? You can go sideways; and you can go down.
    Jan 18, 2010. 05:54 AM | 3 Likes Like |Link to Comment
  • Why Deflation Is Still the Greater Risk [View article]
    Clearly. Banks aren't loaning money because they are using all their profits (and low interest loans turned in to guaranteed profits in stocks, bonds, etc. are bank profits) to pay down their debts. This will go on for another decade.

    We are in for a LONG deflation period. Banks are scared to death that they are going to go belly up. Their actual condition is being hidden from the public. The government is following Japan into deflation because the banks are bankrupt unless they hide their debts and pay them off piece by piece, bite by bite.

    Businesses are not hiring for the same reason. They have to cut costs and cut debt.

    You can't grow in the Winter. Only the moss grows in the winter.

    You can't grow when you are retreating, trying to find a smaller perimeter you can defend. That is what contraction is.
    Jan 18, 2010. 05:47 AM | Likes Like |Link to Comment
  • FCIC Traveling the Wrong Path [View article]
    The inferiors have taken over. No statesmanship. Just self-interest. I'm a believer in cycles, so I'm convinced the era of decency will return. That's why I'm optimistic.
    Jan 17, 2010. 02:42 AM | 2 Likes Like |Link to Comment
  • FCIC Traveling the Wrong Path [View article]
    Mark: Excellent idea. The truth will always come from those with nothing left to hide.
    Jan 17, 2010. 02:40 AM | Likes Like |Link to Comment
  • Google's Act of War on China [View article]
    Sorry. Was the Chinese government employing an army of hackers to steal database information from Google when Google signed up to run their business in China?
    Jan 16, 2010. 06:50 AM | 1 Like Like |Link to Comment
  • Google's Act of War on China [View article]
    Every nation employs spies. It's a part of life. China knows that is is inviting spies into its nation when it opens up to foreign embassies and foreign governments.

    China is spying inside the US. So is Israel, Germany, Venezuela.

    Does this shock anyone?
    Jan 16, 2010. 06:45 AM | 1 Like Like |Link to Comment
  • A Tale of Three Empires [View instapost]
    You started a great thread, TK. Very stimulating discussion here. Many good minds working on this thread.
    Jan 16, 2010. 05:01 AM | 3 Likes Like |Link to Comment
  • Google's Act of War on China [View article]
    Yes. Let's put everyone is jail who don't agree with us -- or let's throw them out of the country.

    Actually, tolerance of unpopular ideas is what makes the West and America strong. Today's unpopular idea is tomorrow's conformist principle. That's how evolution works.
    Jan 16, 2010. 02:40 AM | 1 Like Like |Link to Comment