K Smith

K Smith
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  • Retail Sales Reach 25-Month High in September  [View article]
    Me neither.

    The inflation numbers are being cooked like nobody's business. Signs of hyperinflation are just over the horizon.

    Don't expect to read about any of this here at Seeking Alpha.
    Oct 18, 2010. 02:32 AM | Likes Like |Link to Comment
  • Mortgage-Title Fraud: A National Catastrophe  [View article]
    A solution?

    The solution has already been crafted. The TBTFW (too big to f*&% with) banks are ten steps ahead of all of us. They will come out smelling like a rose.

    They are writing legislation that will be passed in the dead of night to protect them. They are scrambling to line everything up the way they want it passed by the lame duck Congress. Look for many, many more "unanimous consent" votes between election day and the swearing in of the newly elected members of Congress.
    Oct 9, 2010. 04:10 PM | 1 Like Like |Link to Comment
  • More Predictable Changes in Weekly Unemployment Claims  [View article]
    Government agencies have been manipulating statistics for decades. The Bureau of Labor and Statistics is notorious for massaging raw data to create metrics in an attempt to fool all of us into believing that the picture is rosier than it really is. Both the press and mainstream academia have been in bed with them all this time. Unemployment numbers are not the only ones that are wildly off base.

    In the age of the internet, where sharing of information is instantaneous, it is getting more and more difficult for them to keep us from seeing that the emperor has no clothes.
    Sep 26, 2010. 11:01 AM | Likes Like |Link to Comment
  • My Personal Stock Picks or Who Benefits From Low Bond Yields?  [View article]
    Equity risk premium may indeed be very large for quite a while to come, but the Masters of the Universe don't want any of us benefiting from it. Vocabulary is being created to demonize saving - for retirement, or for any other purpose.

    Those who save are being portrayed not as frugal, but as tightwads and misers. Watch for "scientific evidence" that we are hard wired to spend, and that the desire to save is a metal aberration.

    Watch for more and more personal finance pieces that focus on the idea that the goal of saving for retirement is to smooth out our standard of living, and that when it comes to saving, it is possible to save too much.

    I think this effort will backfire. There are too many of us out there employing equity risk premium strategies, as well as others, to boost our savings.
    Sep 25, 2010. 01:18 AM | 2 Likes Like |Link to Comment
  • The GMAC Fiasco  [View article]
    Elizabeth Warren's new agency is not subject to congressional oversight. It is not funded by Congress.

    It is funded by and overseen by the Fed, a private bank not subject to any oversight at all.

    We are all screwed.
    Sep 22, 2010. 05:35 AM | 1 Like Like |Link to Comment
  • Shadow Housing Inventory: The Coming Avalanche?  [View article]
    This is one of the best analyses I have seen on the state of the housing market.

    Many of the commenters suggest that population growth will slow the decline in housing prices.

    This is an inaccurate conclusion.

    Housing prices are not dependent upon the number of people who wish to own a home. They are dependent upon the number of people who can afford to buy one.

    Over 40 million Americans are on food stamps, and the number is projected to grow. 48% of every household in America has at least one family member who is receiving some form of government transfer payment.

    Have ya checked the long term unemployment and underemployment numbers lately? They are higher in absolute and relative terms than they were in the Jimmy Carter years. These people have little to no chance of ever being hired for any job at all.

    There is no net hiring in the private sector. State and local government will continue with furloughs and layoffs. The only job growth for the foreseeable future is at the federal level. Even this may slow down or stop after the November midterm elections.

    We are all paying a huge price for the boom and bust system we have allowed Washington to legitimize over the past 100 years. Our children and grandchildren will pay the biggest price of all. Smart and enterprising young people are already leaving our country in greater and greater numbers.

    We will continue to see high supply and low demand for housing in the foreseeable future. This will create a very long sawtooth slide in prices.

    There will be pockets of slower declines, or even rising prices. They will be in communities where local government operates very efficiently on a shoestring, and provides high quality public education.

    The only thing that will save the national housing market is well paying jobs - real jobs that provide products and services that have real value. The only thing that can make this possible is massive gains in productivity that would make our manufacturing sector competitive globally, precipitated by something like cold fusion.

    I'm not holding my breath on cold fusion.
    Sep 21, 2010. 02:04 PM | 8 Likes Like |Link to Comment
  • A Glance at Unemployment: 1930s vs. Today  [View article]
    Whoever says that unemployment numbers today as compared to the 1930s is exaggerated is being disingenuous.

    The data used is not the same as in the 1930s. pharmainsider1 and Eduard Fischer are correct. And the numbers they do use are purposely being undereported - they left out data from 9 states.

    It is fact that the Bureau of Labor Statistics has been monkeying with data used to compile statistical information for decades. Unemployment is not the only data they monkey with . It is purposely designed to make all of us think things are better than they really are. The internet is making it harder and harder for them to hide the truth.

    There is in fact a great deal of evidence that what we face today is even more disastrous that the circumstances of the 1930s, to whit -

    * Only 1 of every 2 working age Americans has a job.

    * Over half the population is dependent upon government either for their job or their survival. A record number of Americans - over 40 million - now receive food stamps.

    * Savings rates are no where near what they were in the 1930s.

    * Adjusted for inflation, over the past 17 years men's income has declined.

    * The housing market is on life support. At current sales rates, it will take 9 years to sell off current listed inventory plus the 70% of bank owned foreclosures that banks haven't put on the market yet to slow the descent of prices and keep the banking system form imploding.

    * 40% of seriously delinquent homeowners have given up even trying to cure their defaults - they have sent their keys to their lenders. Foreclosures are at a record high. The numbers have not yet peaked. In some markets up to 40% of all sales are foreclosures.

    * Government debt is in the stratosphere. A few weeks ago America's debt topped $166 billion in a single day - more than the entire US deficit in 2007. Our unfunded liabilities total over $200 trillion - yep, TRILLION.

    * What little is left in wage earner pensions is being looted by government. The debt bubble is in the process of being moved from bank balance sheets onto the books of public pension funds. Legislation has been written to move it to private pension funds.

    * We face a coming wave of commercial real estate defaults. Our zombie banks will become uber-zombie banks.

    * The Fed announced it is considering eliminating the reserve requirement for banks. Translation - "We will eliminate the reserve requirement." The hallmark of a bank will be not that it is solvent, but that it is "less insolvent than most. "

    The period of the 1930s is beginning to look pretty good.
    Sep 9, 2010. 06:56 PM | 13 Likes Like |Link to Comment
  • Jobless Claims: Sleight of Hand  [View article]
    I live in the best public school district in my state, in a very desirable upper middle income community. Last month I began noticing more and more travel trailers and motorhomes parked in people's driveways, with extension cords connecting them to power outlets in the garage. This means that homeless families are beginning to camp out in the driveways of family and friends.

    It's going to get much, much worse before it gets better. It may not get better in our lifetime. In 2009 three times as many Americans renounced their citizenship as in 2008.
    Sep 9, 2010. 06:11 PM | 3 Likes Like |Link to Comment
  • Is U.S. Debt Junk?  [View article]
    The fundamental question is not whether debt levels are okay. No matter how it all plays out - hyperinflation, inflation, deflation, stagflation, bond bubble, gold bubble - we will still have ginormous debt.

    The fundamental question is do we want a society composed of a very tiny wealthy elite, a very small intelligentsia, and massive numbers of people living at subsistence levels. Our children and grandchildren face greatly reduced opportunity at best, and impoverishment at worst.

    This is what we will have if we continue on the path we are on - no matter how the debt manifests itself. No country can borrow its way to prosperity. The system is set up to generate this result. Some believe we have already passed the point of no return.
    This is off topic - has anybody noticed that this site has removed its spellcheck feature?

    Methinks they are attempting to discourage readers from leaving comments. I predict the next move will be completely removing the comment feature.

    At that point the Fed and Treasury will be the only players left in the market.
    Sep 9, 2010. 12:01 AM | 1 Like Like |Link to Comment
  • Tim Geithner and I Agree on Public Policy  [View article]
    It is not true that 90% of mortgages are in good shape - 24% of borrowers are underwater. They owe more than their homes are worth.

    The historic mortgage default rate - prior to crazy securitization - was 1.5%. The default rate for the 2nd quarter 2010 was 9.4% - that is more than a SIX FOLD increase - 626%. 40% of delinquent homeowners have given up even trying to cure their defaults.

    The default rate for homes $1 million and up is 23%. Look for large numbers of high end properties to continue to hit the market - there are no buyers.

    70% of bank owned foreclosures aren't even on the market yet. Banks are holding them off the market to slow the decent of prices. In some markets, up to 40% of sales are foreclosures.

    Based on current sales rates, it will take nine years for the market to absorb the current inventory and the properties that lenders are holding off the market to keep the banking system from collapsing.

    Housing supply will continue to outpace demand. This means further declines in price, and growing strategic defaults - people walking away from their underwater houses.

    As borrowers face big ticket repairs, strategic defaults will increase. It is cheaper to rent a home in good condition that it is to pay for a roof or a new heating and air system.

    Only 1 out of every 2 working age American has a job. A record number of Americans - 40 million - receive food stamps.
    Businesses fear declining revenues related to the expiration of the Bush tax cuts. They fear rising expenses related to the new health care law. The new 1099 regs are causing small businesses everywhere to examine the cost and hassle factor of issuing 1099s. If the regs are not rescinded look for hundreds and hundreds of small businesses to throw in the towel. This means a new wave of job losses - and even more defaults.

    It is not true that nobody knew how to value mortgage packages. Whoever is saying this is being disingenuous. To paraphrase Donnie Osmond, "One bad apple spoils the whole bunch." This is not rocket science.

    Buzzer is correct. The real estate bubble is part of the Bankster plan to move wealth from the pockets of wage earners into Bankster pockets. The system is set up to operate this way. Unless there is fundamental change, we will only continue to see more of the same.

    The next Bad Boy on the horizon is the coming wave of commercial real estate defaults. Ya see all those empty retail spaces? Empty space means no rent. No rent means no payments. No payments means default.

    The commercial defaults will make the 2008 bank crash look like a walk in the park. I hope Messrs. Bernanke and Geithner are stocking up on their "5 Hour Energy" supplies for 2011.
    Sep 8, 2010. 04:18 AM | 1 Like Like |Link to Comment
  • Is U.S. Debt Junk?  [View article]
    There is no such thing as constructive debate. This is a contradiction in terms. Debate is not constructive. It is predicated on their being winners and losers. Debate does not lead to Truth.

    Discussion, reflection, and the application of common sense are constructive. They lead to Truth.

    In our time we have an abundance of debate, and a dearth of discussion, reflection, and the application of common sense.

    Discussion, reflection, and the application of common sense indicate that default is unavoidable. The US economy is incapable of generating the tax revenue necessary to pay back all we owe - unless we experience massive increases in productivity generated by something like cold fusion.

    To paraphrase C3P0 of Star Wars, "The odds of cold fusion being perfected before the US defaults on its debt is approximately 3,720 to1!"
    Sep 8, 2010. 02:38 AM | 3 Likes Like |Link to Comment
  • Tim Geithner and I Agree on Public Policy  [View article]
    On your site you say that the reason Western banks collapsed is because they were trading assets - mortgage-backed securities - that nobody could value.

    This is not true.

    You don't have to be a mortgage underwriter to know that many of the mortgages originated during the real estate run up were very easily valued - as trash. When you make liar loans, loans without verification of employment or income, you get what you expect - sky high default rates. This is not rocket science.

    Western banks collapsed because we operate under a fraudulent financial system, a system of fiat money and a private central bank, a system that is set up to be run by technicians. Technicians created mortgage backed securities based on the assumption that home values would never fall. Those of us who live in the real world and who understand human nature know that this is an inaccurate assumption.

    No amount of new banking regulation will fix what ails us. New regulation is the equivalent of rearranging deck chairs on the Titanic. As long as we have fiat money and a private central bank, a set-it-and-forget-it system that is designed to move wealth from the pockets of the wage earner into the pockets of the financial houses, we will continue to get more of the same.
    Sep 1, 2010. 02:13 AM | Likes Like |Link to Comment
  • We Are Not in a Bond Bubble  [View article]
    It is a true statement that "(A)s long as Team Bernanke insists on a zero funds rate policy the United States risks at least another decade of extremely low interest rates."

    But if the dollar is worth nothing, the interest rate paid on dollar denominated financial assets is meaningless.

    The unfunded liabilities of the federal government total over $200 trillion - yes TRILLION. Because of the internet, The Masters of the Universe no longer have the degree of control over ideas that they have enjoyed in the past. More and more people are learning the truth about our financial system, that it is set up to hijack our political system, and in turn move wealth from those create wealth thru work into the financial houses.

    The Chinese have saying - "Sixty years from now our children will be more prosperous than we are."

    What really matters is not whether we are in a bond bubble. What matters is whether our political and financial leaders will have the kahunas to face the music and pay the price today, and not pile even more debt on on the backs of our children and grandchildren.

    Until they are willing to do this, dollar denominated assets are headed into the toilet - whether there is a bond bubble or not.
    Aug 30, 2010. 10:29 PM | 1 Like Like |Link to Comment
  • Why Bernanke Can't Win on Friday  [View article]
    The extent of the BS promulgated by Mr. Bernanke in his speech at Jackson Hole will be directly proportional to the size of the helicopter he flies in on.
    Aug 27, 2010. 12:48 AM | Likes Like |Link to Comment
  • Tim Geithner and I Agree on Public Policy  [View article]
    Two years ago, as I sat in my family room watching then-Secretary of the Treasury Hank Paulson emerge from behind the double doors of a congressional committee room, followed by senators and congressmen with all the blood drained from their faces, who then approached the mike and declared that drastic action was necessary, I looked across the room at my husband and said, "We are all screwed."

    Jeff Neilson, corruption is too kind a word. What our leaders are engaging in is the moral equivalent of child abuse. Growing mountains of federal debt - unfunded liabilities are over $200 trillion - will be paid back by impoverishing our children and grandchildren.

    Shame on us for letting it happen.
    Aug 24, 2010. 01:53 PM | 9 Likes Like |Link to Comment