petyaczar

Why the Dow Is Headed to 6000

PRoblem is = in the words of Martha and the Vandellas = "There's no where to run to baby, no where to hide"

1)What to do in an environment (global and U.S.) in which the U.S. $$$ will not be worth squat, most all currencies are U.S. Dollar pegged one way or another and so paper money won't be worth squat.

2)Hyperinflation and a "new U.S. Dollar = $100 Old U.S. Dollars, and possession of Gold in all forms and hardmetals once more outlawed.

3)All leverage collapses down to 1:1

4)All municipalities go bnakrupt as RE Taxes fall by 80%

5)No payroll taxes to speak of coming into treasury

6)Social Security and Medicare Bankrupt as we speak.

7)Mass starvation and food riots as the infrastructure falls apart and can no longer support the population = only politicians get to eat.

Other than a store of basic commodities = guns and bullets.
Where do you invest to preserve capital (financially and from the political theives) on Mars?'

Answers would be welcome please. IMO

Welcome to Salvation (aka Mark to Myth)

Hello Joe,

You do know that ALL companies, including banks, have had strict write down rules on assets. IE when nonperforming assets could be written down, when nonperforming assets could be written off.

They also had rules on performing assets. AND one of these was that performing assets COULD NOT BE WRITTEN OFF or down - as this would enable companies to hide earnings in reserves.

Really!! MArk to Market is beyond stupid, Mark to market got us in trouble in causing the Great Depression of the 1930's, and Mark to MArket enabled the politicians to pull off a Coup deTat of free enterprise system - Much to be soon regretted by most all Americans when they see what the politicians have wrought.

IMO

Welcome to Salvation (aka Mark to Myth)

Mark 2 Market should actually be called our for what it is
Mark to Model where the model is based on the last sale
Ergo M2M is really mark to lasat sale.

Mark to Market is beyond Stupid. Its a theoretical construct that requires a willing owner (Unwilling seller) to mark down his assets to the point that a disinterested (unwilling potential buyer) might consider buying the asset.

Show me where - in the real world - An willing owner/unwilling seller is required to mark down assets to the point where an unwilling buyer might consider a purchase of said assets.

Only in Bizarro World. Never confuse accounting with reality.

Dump Mark to Market as they did in the 1930's when they determined Mark to Market contributed greatly to the Great Depression as it sets up a cyclical feedback loop, the worse things get, the greater the mark downs and so the worse things get.

Destroy Sarbanes/Oaxley, get rid of FASB 157.
Reinstate Glass Steagall ACT separating commercial and iinvestment banks
Reinstate the uptick rule on short sales
Up margin requirements on commodities trading to 50%
GET ALL POLITICIANS out of attempting to run U.S. companies.
Make it illegal for politicians to interefere with U.S. copmany operations.

IMO

Geithner's Plan: Mark to Market Tomfoolery

MArk to MArket is the root cause of our accounting problem that became a balance sheet problem, that begat a financial problem that turned into a financial panic as it cuased credit tightening.
The politicians created mark to market, the politicians should simply kill it, restore Glass Steagall, and the uptick rule on short sales.

Mark to Market is based on the crazy notion that a willing owner (unwilling seller) must mark down a protfolio of performing assets discounting the price of those assets down to the point where an unwilling/disinterested potential buyer might become a willing buyer. - THIS IS BEYOND STUPID.

Your analysis rightly points out the straighforward solution eliminating the circuitous route concocted by the Treasury.
However, the straigh forward solution has one fatal flaw. It does not allow the politicians to take over and control the free enterprize system. The politicians have pulled off a Coup deTAT of the free enterprize system, and are now in control. The politicians will not easily give up that control - we must wrest it from them, at the time of the next election.

We defeated the Communists - Thanks President Ronald Reagan -The commies have become Capitalists and returned for the next round of competition. Meantime, the U.S. has turned to Socialism and the politicians are now in charge of compensation, benefits, meeting agendas and locations, corporate jets, and everything else they can glom onto.

Will we win the next round of competition with the morons in Congress attempting to run the economy from their poilitical tower? remains to be seen.

Vote em out of office in the next election. IMO

10 Reasons Why We Still Haven't Hit Bottom

1)When the tide is going out, it lowers ALL boats that are still afloat.
2)Wait till the tide turns before betting on which boats will rise with the incoming tide.

To Artful Dodger, from another "old cat" who bought his first stock in the late 60's. just in time to gain enough investing experience - already had the hubris - to position myself for the fiasco of the mid 70's.

IMO we are not staring into the abyss of the Great Depression, No, IMO we are staring into the abyss of the GREATER DEPRESSION. and this will be the legacy of the Obamanation = good intentions, no experience, and lack of competence coupled with plenty of hubris.

Wall Street Breakfast: Must-Know News

doubleguns

You are of course right, I refered to this in my comment

"Its a big G/D "Do-loop" in computer speak. a self reinforcing death spiral."

In the computers when you have a Do-Loop = a badly written bit of code that creates a constant useless circular logic of calculation, you DO NOT redesign the computer hardware around the DO Loop you REWRITE the code so it functions properly within the system

You do not want an accuonting system that makes things look better than they are in good times, and worse than they are in bad times. In electronics, such circuits are known as positive amplifiers, they amplify in the same direction as the original incoming signal. You want something that will smooth out the discontinuities providing essential ballast to the balance sheet

IMO some of these folks are making the classic mistake of thinking the accounting system IS REALITY, No, the accounting system is supposed to characterize and represent a working version of reality. just as statistics are meant to represent a distribution of outcomes in a manageable and workable and understandable fashion. Statistics are never meant to represent any individual outcome at any individual point in time.

This will be a disaster for our economy and Obama has no experience and has shown no real understanding of the root cause of the financial panic and resulting credit crunch that has arisen out of the slime of this accounting problem. Kill mark to market, eliminate fair value accounting, go back to the accounting rules that haved served us so well since the first GReat Depression and see how quick;ly these financial problems dissipate.

In the "old days" companies got to decide when to write down or otherwise write off nonperforming assets. NOW regulators get to decide when to write off or otherwise write down performing assets. How the hll does a company manage that?

IMO

Wall Street Breakfast: Must-Know News

John,

Your comment re mark to marke "being good" is a theoretical assertion.
Look around you at the realpolitik of what this D/A mark to market has created. The village is burning !! There is no stability in balance sheets from quarter to quarter, there is no trust in the financial system and so there is a credit contraction.

Its a big G/D "Do-loop" in computer speak. a self reinforcing death spiral.

Process wise it has gone like this

1)The Government encourages leverage and "creative financing"
2)The Government changes the accounting rules now requiring mark to market
3)Credit contracts - market prices drop as forced sales occur.
4)MtoM forces further erosion and raises required reserves.
5)Putting more money into reserves - has a deleterious effect on profit- eliminating it.
6)The "Balance sheet" poor institutions have to petition the very government that caused the problem to "bail them out"
7)The govt transfers green paper printed at taxpayers expense to shore up the eroded balance sheets the government mtom created.
8)The government takes over operational control of the companies it has "saved"

Seems to me this is the 21 st Centiury version of the old Vietnam expression "We had to burn the village in order to save it"

The above statement of process IS NOT hypothetical It is ALL DOCUMENTED FACT.

Your prescription of a "public CDS exchange" is in my view euivalent to putting a band aid on a carcinoma. - hides the root cuase, doesn't solve the problem -merely allows it to fester.

Kill MTOM, fair value accting, reinstate Glass Steagall, reinstate the uptick rule, go back to the accounting rules that have served us so well since the first Great Depression. and watch what happens as stability returns, markets recover, and credit is once again freed up.

Don't do it, and we will be facing the Greatest Global Depression in history AND in the words of Martha and the Vandellas there will be "No where to run to baby, no where to hide" This to be followed by socialism, elimination of the free market system, and the emergence of a truly Big Beother" government.

IMO

IMO

Wall Street Breakfast: Must-Know News

The politicians caused this accounting meltdown, which caused the financial metldown, which caused the credit crunch, and will result in the Great Depression of the 21st Century.

The politicians caused this fiasco with their D/A Sarbanes Oaxley and the credit "reform" (sic) of 2004. with the institution of Mark to Market so called Fair Value accounting (sic).

So called fair value accounting destabilized the balance sheets of both borrowers and lenders. No one can trust anyoune's balance sheet anymore from one quarter to the next.

Go back to the accounting system that served us so well since the Great Depression, reinstate the Glass Steagall Act and the uptick rule on short sales. Drive a stke thru the heart of Mark to market accounting, cut off its head, and burn the corpus delicti and the financail markets will recover. IMO

Te politticians have pulled off a Coup DeTat overthrowing free market capitilism replacing themselves as rulers by fiat. And they managed to convince most of you torch bearing villagers to storm the wrong castle in an attempt to blame the financiers,bankers,tra... who are merely following the compulsory edicts of the G/D politicians.

You torch carrying villagers deserve the serfdom you will so surely achieve over the next few years. IMO

Stocks for the Long Run?

IMO, and with all due respect, your comment (below) is a specious and statistically false assertion, representing a wonderful example of the "dumbing down" of logic and analytical thought through out this country.

"I think we have entered into a particularly difficult moment for equities. They have made us no money as an asset class for a decade. They have become, on a daily basis, simply impossible to game. The notion of "buy and hold" has been decimated by the action as buying and holding even the most blue of "blue-chips" has become a total loser's game."

A decade has 3650 sets of data points. And so within a decade there are 3650 sets of start/end point combinations. That means to choose only one such set out of 3650 possible combinations means there merely a .03% chance. (probability) of your global decade long investment conclusion regarding buy and hold.

You should avoid making such meaningless statements -as should Kramer - as they negatively affect your credibility.

Instead I suggest you run a series of comparisons. Run the data on ALL 3650 such start/stop data points and then see how many of these resulted in Gains/No movement/Losses. This will provide a basis for a reasonable statistical assertion as to the expected outcome of a "buy and hold" investment strategy.

IMO, from someone who wentto school before the educational system was "dumbed down" and destroyed by the NEA.

Wall Street Breakfast: Must-Know News

What happener to Eli?
When will he be back?

Wall Street Breakfast: Must-Know News

Trucker Blues,

If you were to have a cognac with your morning coffee. then perhaps the comments in the breakfast report would seem even more insightful - if that's possible.

good luck to you

Wall Street Breakfast: Must-Know News

IMO, the Morning report is one of the absolute best things going by way of market info.

First thing I read every morning before my morning coffee and cognac.