Brad Denny

Option Trader Friday Outlook: Is the Dollar Going UUP?

"Oil is scammed in a similar fashion but, unlike oil, the gold market is heavily dependent on physical demand and they can only drive up the futures as long as they have fresh suckers to reel in; but the price of gold collapses like quite the house of cards as soon as anyone tries to unload their shiny bits of metal."

Entertaining reading. I learned a lot and enjoyed every minute of it.
Is it possible that the two words "oil" and "gold" in the first line of the above quote are transposed?

When Recession Becomes the Norm, What Happens to Stocks?

Somewhere along the line, Jason said that his post was going to be about economics, not politics. Insofar as he stuck to economics, I would give his post high marks for insight and connecting the dots, but then he had to go on and sing the praises of that half witted movie actor Ronald Reagan as president while trashing Barack Obama on the basis that Obama is a "Sunday morning celebrity."

Good grief. Ronald Reagan was a Saturday night shoot em up hoot owl who couldn't remember the difference between reality and the films he had acted in. The last time I checked, no human being was perfect, but Obama's record so far in dealing with the problems bequeathed to him by the previous 30 years of maladministration in Washington has been superb. I would hate to think of where we would be with Reagan as president.

U.S. Pay Gap: A Problem or Just a Fact?

Barbarous R's economic theory is fine in theory and works quite well as long as there is a reasonable balance of power between the various players in the marketplace. There is no reasonable balance of power ion today's marketplace. According to a New York Times story this morning, the majority of all trading volume on the stock exchanges is now conducted by big institutional players like Goldman Sachs employing computerized trading programs designed to take advantage of information relating to plit second shifts in prices to which 90% of investors have no access.

This is only the latest example of the way in which the financial industry has essentially converted the stock markets to money making machines for themselves and their executives, while leaving ordinary investors and the bulk of employees spitting dust.

Is that the purpose of capitalism? If it is, then it is doomed. No system which benefits the privileged to an extraordinary degree at the expense of the vast majority has survived for long. The fact that Goldman Sachs has decided to pay the full value of what it owes to the government rather than argue about it, is nothing other than short term public relations.

Corporations are created according to law based on the assumption that their existence in in the public interest. If their existence proves to be not in the public interest, then they will lose their right to exist. Goldman Sachs, a trend setter in the financial industry for decades, is a prime example of a corporation that no longer serves the public interest and, if it does not alter its ways voluntarily, should be required to do so by regulation.

And if it still does not conform to the public interest, it should be dissolved by law, just like Standard Oil and the old AT&T.

Did Goldman Gain from America's Pain?

While the Goldman corporate chiefs and traders were hedging with bets against the markets, GS chief investment strategist Abby Joseph Cohen confidently maintained her S&P 500 target of 1,600. Was it just that the left hand did not know what the right hand was doing? Or is there a darker side to Goldman's "for profit" operation?

Why Economic Dogma Threatens Our Future Prosperity

Professor Weigand's assessment has touched many nerves, perhaps because it gets very close to the heart of the issue. But, the closest he gets, in my judgment, is not in the original piece, but in the response concerning "sustainability."

My inadequate acquaintance with economics reminds me that Adam Smith advanced the theory that the "Wealth of Nations" would be maximized if each person was allowed to pursue his or her private interests free of most constraints. Private enterprise has been the foundation of capitalism ever since and has been a major force in the achievement of rising living standards for a large part of the developed world.

But the world that Adam Smith knew has long since vanished. We are now in possession of a whole variety of "weapons of mass destruction" including fossil fuel based climate change, nuclear waste and weapons, international terrorism and global economic meltdown. Since this entire discussion is taking place on the internet, perhaps I need to add the enormous enabling and disabling potential of the dissemination of rumor, fact, fiction, information and disinformation worldwide.

Lets simplify the whole discussion by turning to the concept of
"sustainability" as the cornerstone of value assessment. Short run gains are no longer positive if they creat long term losses that cannot be reversed. If we burn up so many fossil fuels in the next 50 years that the ability of the planet to support life is reduced by
50% and our grandchildren and great grandchildren will lead lives of desparation, are we justified in pursuing our own interests by burning those fuels?

No. Case closed. It is time to alter Adam Smith. Sustainability rather than short term private profit must become the measure of value in the new economics. Private enterprise is great. But toward what end? We cannot do short term good by doing long term evil.

There Are Conceptual Limits to Efficient Markets

Very good advice. I have been drifting in that direction for years. The problem is it takes more time, attention and discipline than most of us can muster.