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  • No Taper Is A Gift: Sell All Long-Term Bonds Now [View article]
    "Equities can and will fall long before the Fed stops QE."

    This may indeed be the case. If Yellen is appointed, its logical to assume that she wants to print even more than BB. So, what may happen is that the unemployment that will be created by Ocare and DF may set in before the Fed, and that brings risk-off before the Fed brings the risk-off.

    "the Fed is still behind the curve."

    This is another good point. The Fed, after all, are just gov regulators. Regulators are always behind the curve. Which is what we need to worry about. Since they don't understand real economics like the people making fiscal policy, what to watch for is who is going to cause the damage first.

    This morning we have this...

    and this...

    to create a little risk-off for a bit.
    Sep 30 08:36 AM | Likes Like |Link to Comment
  • Stability Of The European Union (21) August 28, 2013 To November 8, 2013 [View instapost]

    and this...

    Should help for a bit of the risk-off trade for a bit. 10yr down to 2.60.
    Sep 30 08:27 AM | 4 Likes Like |Link to Comment
  • Another Preemptive Withdrawal From The Fed Chair Race [View instapost]
    I would ask the same of you. You are about as far away from science as you can get. What's ironic is that you think your arguments are cutting edge, but they are as old as the hills. You can go back 1000s of years and see people making the same coercive arguments you are making, and the results every time was austerity, slavery, and bloodshed. Of course, you want to observe all of these observations in favor of your proffered dogma.

    Again, SA is an investing site. You have to deal in facts, not ideology.
    Sep 28 07:14 AM | Likes Like |Link to Comment
  • QC#263, September 24, 2013 [View instapost]

    You did indeed take it wrong. "You" was a generic sense. I am not a Libertarian, though I share their NAP. I am a Voluntarist. That means all human interaction is to be voluntary. The reason for this, is voluntary action is the most price sensitive, and price sensitivity maximizes capital creation, and capital creation maximizes human consumption, and maximizing human consumption is how we maximize our standard of living.

    The reason we care about our standard of living is because our first ownership right is our bodies. We make decisions what to do with our own bodies what we think will best improve our standard of living. Coercion is the threat upon our bodies that steals from us the right of those choices.

    In line with this families voluntarily cooperate with each other for mutual benefit. The last thing I would support is a coercive gov with their guns interfering with those decisions. As such, making decisions about the care and treatment of our family members are decisions that should be made within the confines of that voluntarily cooperating unit. As such, the decision about what treatments to apply or not apply, are also decisions that should be made without coercion. In that sense, if the decision is made under these voluntary circumstances, its one that is attempting to explore what is the depths of a standard of living. If such a decision results in a death, that is not killing.

    Perhaps your sense of loss makes you sensitive to the accusations of killing, as some would make. Rest assured that's not what I was doing, especially given the fact that my family made the exact same decision as yours did several years ago.

    However, this line of comments makes my point. The natural law of self ownership must be obeyed, and people's instinctive reaction to defend their decisions is the greatest evidence of all of nature's law of self ownership.
    Sep 27 03:21 PM | 5 Likes Like |Link to Comment
  • QC#263, September 24, 2013 [View instapost]
    "My broker has read the entire Affordable Health Care Act! Wow! Tedious stuff."

    You can save yourself a lot of time when it comes to reading any gov regulation by accepting the laws of nature and reality in recognizing that any gov regulation is a maximum wage law. Just like a tax functions as a maximum wage law. Another way to look at any gov regulation is as an arbitrarily imposed fixed cost. In other words any gov regulation just makes things harder.

    No, some things you want to be harder, like stealing or killing (of course killing is just stealing someone else's life). Everything else you want to be as easy as possible. So when gov makes rules about the creative process, like creating health care or healthcare insurance products, the result is things get harder or a maximum wage law. In the end a maximum wage law means unemployment, and unemployment doesn't necessarily mean not having a job, it also means doing less in the job you currently have. For example, lets say you work 50 hrs a week, and the gov just passed a law that says all wages earned over 40 will be taxed at 100%. Are you going to employ yourself over 40 hrs?

    Obamacare is a classic example of this. On one hand they are going to hand out subsidies to let people consume more healthcare, and on the other hand they are going to pass rules (maximum wage laws) that will result in people employing themselves in the creation of healthcare products. So what do you think is going to happen when demand shoots through the roof at the same time supply starts to drop through the floor?

    Think of it this way. Let's say the Fed decides to put an extra trillion dollars in the economy by growing its balance sheet by a trillion. Now let's say the Congress passes a law to increase taxes by a trillion dollars. The trillion in Fed notes that would have gone into the economy for exchange are taken up by the Treasury and eliminated. Regulations are taxes and taxes destroy Fed notes. So Ocare and DF will destroy Fed notes and offset anything the Fed is doing with QE going forward. See how the interplay between fiscal and monetary policy interact to affect what I call Net Fed Note Creation/Destruction?

    Without Fed notes, assets can't be bid up. Without assets being bid up, the risk-on trade begins to wane, and risk-off emergers. The result is to expect malaise to grow over the next few years if these factors hold. Not that I am advocating for any of this, but it is what it is, and if you understand what is really happening instead of the rhetoric that is designed to replace reality, you can find ways to protect yourself.
    Sep 27 02:08 PM | 5 Likes Like |Link to Comment
  • No Taper Is A Gift: Sell All Long-Term Bonds Now [View article]
    When QE stops, equities will fall and so will interest rates. They will fall to some level that will be in line with where ever the Fed balance sheet is when QE stops. If the Fed actually let its balance sheet shrink, then equities and rates would fall to a new lower level based on the balance sheet at whatever level that turns out to be. However, as long as QE stays on, its risk-on until some other macro change induces risk-off.

    Two large items on the horizon are Ocare and DF. Increased gov regulations are just taxes and taxes are just maximum wage laws. Maximum wage laws mean unemployment, and unemployment means risk-off. Another way to look at it, is the Fed is trying to create Fed notes that can be used to bid up asset prices, and fiscal policy is poised to destroy those Fed notes. So the question will be, "Will the Fed increase QE to deal with the additional Fed note destruction?"

    Its a hard guess, because the people at the Fed believe falsehoods about economics just like the people making fiscal policy. It becomes a tough game to protect yourself.

    In general what you need to learn from history is that gov taxes and regulations are designed to create income gaps. This reality is covered up with euphisms like "common good" or "public good" or "collective", but make no mistake gov taxes and regulations are maximum wage laws that prevent competition for those that manage to capture gov coercion for their benefit at the expense of the populace at large.

    The trick is to realize that what really happens via gov taxes and regulations is just wealth transfer. That's why a gov "stimulus" program (like QE or fiscal stimulus) runs up rates and equities. In other words its a wealth transfer from the general populace to special interests in the financial markets. By recognizing this reality, you can have some of that wealth transferred your way.

    Don't get suckered into the "well rates have to go up because they always go up". Take a look at a chart of the 10 yr since 1980, and consider what would have happened in 1980 to you if you were using such a statement.

    If you want to see what happens during QE and to the 10yr since 1960, here are a couple of good charts. Notice how the Fed reducing the number of Fed notes by raising the FF rate generally precedes a recession.
    Sep 27 10:21 AM | 1 Like Like |Link to Comment
  • Another Preemptive Withdrawal From The Fed Chair Race [View instapost]
    Read his treatise on Absolutism. You will find he is basically arguing your points. The result was the French descent into poverty which led to the French evolution.

    You are not following science. You are confusing specious reasoning with deductive reasoning. Part of the problem with our culture is not training children to learn the difference,so people grow up never learning to know the difference. The result will lead to a rich ruling elite and a peasant class.

    Your best hope is to become part of the ruling elite, like a Fed chair.
    Sep 27 06:26 AM | 1 Like Like |Link to Comment
  • Now Is The Time To Be Fearful [View article]
    If all the militaries were privatized, there would be no more wars. Since war is the ultimate manifestation of gov regulation, I can see why you love it so much.
    Sep 22 08:59 PM | 1 Like Like |Link to Comment
  • Another Preemptive Withdrawal From The Fed Chair Race [View instapost]
    You need to reject mainstream economics because it's incentives makes it bias just like the catholic church would advocate for the king (did you read Bossuet?) and taxes and the way the king would mandate a tithe.

    For you to underrstand the next advancement in human reasoning you will need to understand the nlightenement of noncompulsory gov. For you to understand that, you need to leave behind your primitive affinity for a dog eat dog world. I know that's tough considering that requires logic, but it is in you. You just need to let your higher functions have a chance.

    Here's some help. If everyone adopted mainstream economocics, the result would be a bloodbath and extreme austerity over seen by a minority of rich ruling elite. The poor would get poorer, and the rich would get richer. You may want that, but I don't, so I will have to resist the tyranny you are proposing.
    Sep 22 08:52 PM | 2 Likes Like |Link to Comment
  • Now Is The Time To Be Fearful [View article]
    "it is a market based insurance model that is vastly superior to the monopolistic, oligopolistic, vastly exploitative, inefficient, and inequitable non-system that precedes it."

    Everything is a market. The question is, do you have a free market ( a market free of coercion) or a coerced market. Ocare may be an attempt to get people to have private insurance, but it also mandates that insurance companies add to the already coerced product they currently have.

    It is this coercion from gov that has caused the "monopolistic, oligopolistic, etc" that you so lament. As such, the very things you lament, will get even worse. Gov coercion by subsidizing purchasers and increasing demand, and at the same time restricting supply via licensing and price blind regulations has resulted in increased demand and reduced supply. You're surprised that price has gone up and supply has shrunk?

    Your lack of understanding about markets and monopolies (a gov license to be the only provider) damages your credibility and reveals your ideology. SA is an investing sight, and you will be served better by sticking to the empirical facts.
    Sep 22 05:15 PM | 1 Like Like |Link to Comment
  • Now Is The Time To Be Fearful [View article]
    A comment from somewhere else.

    "Interest rates will rise, regardless of whether the Fed maintains QE a while longer or tapers. The effect of QE has been overtaken by the global economic expansion spreading, even to Europe, which will drive up loan demand and put pressure on rates and, perhaps, inflation, too. Rising rates will be absorbed by the economy without much impact, at these levels."

    Sep 21 12:40 PM | Likes Like |Link to Comment
  • Now Is The Time To Be Fearful [View article]
    "I've been puzzled for some time about the apparently common view that rates will naturally go up"

    We go through this every time QE or any gov stimulus program invokes the risk-on scenario. I remember tagging some articles in QE2 where everyone was claiming, "this is it, rates are finally going back to 'normal'". Then QE2 ended, and I remember the 10 yr dropping from the 3ish range down below 2%. BB stops buying, and rates went down. Then we got twist, which was just a reshuffle designed to induce risk, but the Fed BS didn't get any larger. Then we got QE right around the time the 10 yr was at 1.40ish. Now we are in the high 2s again for the 10 yr, and like clock work come the stories about rates getting ready to shoot back up.

    I think the reason this is happening is that people haven't really taken a macro look at what's going on. Interest rates go up when the supply and demand for capital fall into two categories. The first one is when economic opportunities are growing faster than the supply of capital, and the second is credit risk. The US is facing neither of these circumstances at the moment. As long as we are the highest deck on the sinking ship, rates would logically stay low.

    Take a look at a 10yr chart since 1960. Ever since the 80s, rates have been falling. So we think since they are low that they have to go up. They won't go up if the reasons that make them go up don't exist. What we do have are the reasons for rates to stay low. Since the 80s foreign buying of US notes has increased (waned some recently, but still high), no credit risk in relation to other choices people have with regards to US notes, and no sign of economic opportunity outstripping capital.

    The 10 yr could bounce between 1.50 and 3.50 for the next 10 yrs.
    Sep 21 12:27 PM | Likes Like |Link to Comment
  • Now Is The Time To Be Fearful [View article]
    Jake is arguing for slavery, but his gov school education has left him too ignorant to see it. If your system of theft works so well, where are the taborites?

    Also, you don't understand our monetary system. Taxes don't fund the gov, all the do is remove fed notes from the system of exchange.

    Also we are told the so called rich can leave, but supposedly they don't. Then when the rich leave a place like Detroit, we are told they are evil for leaving.

    The fact that your ideology fails to understand these basic, empirical facts damages your credibility. This is an investing sight. Perhaps you would be more comfortable on a site that's more on your level?
    Sep 21 07:14 AM | 1 Like Like |Link to Comment
  • Another Preemptive Withdrawal From The Fed Chair Race [View instapost]
    "Essentially, I have a Bayesian rather than logical understanding of the world and like empiricism. "

    No, you don't. That's just semantics. You are just rehashing the well refuted "binary" argument. It goes like this, "there is no binary thinking, there are only shades of gray". Well, such a statement is a binary statement, thus if your very thesis refutes your thesis, what you have is an oxymoron. Its like saying, "its true, there is no truth", or, "if we know one thing for sure, its that we don't know anything". Well if you say is TRUE that there is no truth, then you have just established that there is truth, and if you say we don't know anything for sure, well, then you've just established that you know ONE thing for sure.

    The world is fact. Granted we don't know all of the facts, but that's why a noncoercive approach is critical to nature's laws of learning. Learning is how we better utilize our environment for consumption, and for improved consumption. This is our goal, and to achieve that goal, we will either produce or steal to survive.

    As such, all economies exist between two extremes. One extreme is a completely coercion free society. Such a society would perpetually operate on the outer most limits of the production possibilities frontier. That means they have the highest standard of living possible given their current state of learning. In such a society people realize that other people are assets, and as such, fraud and theft are antithetical to improving the standard of living. From this we derive the free market. That is a market free of coercion, so as to maximize everyone's standard of living.

    The other end of the spectrum is a completely coerced economy. This is the dog-eat-dog society, like communism or socialism, since the both rely on force to so other people can attempt to confiscate the benefits of another person's labor. A purely coerced economy would result in everyone murdering everyone else, with the result being only a single survivor. At that point, the result the economy automatically reverts back to a free market, since there is no one left to coerce. A single person economy is a very poor economy, with a very low standard of living. Even though a single person owns all the wealth, all the resources, and all the land, a single person can only do so much in a day. There aren't many hands to make light work.

    Now we come to the important part. Seeking Alpha is an investment website, and you have to rely on empirical facts and not blind ideologies to analyze the realities of the world. The laws of nature that govern investing don't care about good intentions or semantics. The laws of nature require you obey them to improve your standard of living or be punished. So, to the extent you see coercion in the markets, is the extent to which you will see wealth transfer. Wealth transfer means asset inflation for one class of assets, and deflation for others. It also means one person inflates, while another person deflates. In other words, one person gets richer and another person gets poorer.

    It is this coercion, particularly from gov that causes credit expansionary periods (asset inflation) followed by a bust (deflation) which "conventional wisdom" economists have erroneously labeled the business cycle. Once you understand this empirical evidence from nature, you can then start to determine the direction of equities and interest rates from a macro level. But, in order to do this, you will have to leave behind any specious arguments for unreasonable ideologies.
    Sep 20 11:24 PM | 3 Likes Like |Link to Comment
  • Another Preemptive Withdrawal From The Fed Chair Race [View instapost]
    Econ professors are like catholic priests in 16 th century Spain, they advocate for tyranny, not all of course, but more often than not, because that's what they get paid for.

    Tryants always need advocates, and the advocates lie with terms like the public good. See Bossuet.

    In the end coercion can either be used for theft or a defense against theft. Either way it's a waste compared to capital creation activities and voluntary cooperation.

    If you believe in coercion, then you believe in slavery. Since you are not volunteering to be someone's slave, you clearly are demonstrating a conflict, which is the hallmark of a lack of logic.
    Sep 20 10:10 PM | Likes Like |Link to Comment