Feedback and Community

I received some feedback today from a respected friend who passionately questioned some of the content in this blog, as well as some of the opinions expressed by Peter Schiff (Debt, Lies and Rhetoritape). It is my hope that he will post a comment here to voice his views, as he has an impressive skill set related to researching political issues, monitoring stimulus spending and finding potential benefits to the public, as well as direct and effective communication.

My hope is that readers of this blog will post their views whether they agree with me or not. Aside from having a venue to consolidate my own thinking, I hope to develop a community here. I believe acceptance of opposing views is vital to a healthy community, and is one aspect of American society that I find lacking.

What does the first ammendment say, again?

Oh yeah...

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

This from the G20 in Pittsburgh.

First off, I don't know what happened before this video, but based on the posture of the crowd and police, my guess is that it was similar to what is shown, shouting, assembling, etc... I don't detect violent behavior by the public.

Assuming that was the scene...

Is shouting peacable? What made this gathering/protest different than past protests in which police intervention was not required? Who is gathering inside the G20? Why are they so sensitive? Makes me wonder what this country will look like if the American public ever gets off the couch to voice opposition to public policy en masse? Although, you gotta admit, if ever there was a group that was a threat to national security, these students are it.

For anyone looking for a niche career...Non violent protest trainings.

Thanks to Zero Hedge for the quote and youtube link.

Fubsy

Fuck the Fed

Check this out. I love America! Sometimes.

http://www.youtube.com/watch?v=DiTikduJ15Y&feature=player_embedded#t=70

lmao

Debt, Lies and Rhetoritape

When President Obama was elected, I was excited. I believed the "Time for a Change" rhetoric, delivered in a manner that I had become unaccustomed to during the verbally vapid years of the Bush administration in which it seemed like we were being lead by a drunken frat boy. I thought Obama meant what he said, but over time, witnessing various appointments (Geithner, Sommers, Bernanke) and policies, the seduction has worn off. As a child I often heard, "actions speak louder than words" when my behavior didn't match my promises. Obama seems to have been lost on that lesson. He speaks beautifully. He says the right things. But all the while his administration's policies are heading South while his words head North.

Please read the following article by Peter Shiff, CEO and Chief Global Strategist for EuroPacific Capital, found at the 321Gold website. This article takes aim at Obama's rhetoric around the G20 summit in which he asks Americans to save more, and spend less, and asks the Chinese to do the opposite, all well intentioned words aimed at sever imbalances in budget deficits and import/export ratios that threaten to suck the life blood from both economies.

The questions posed and addressed:
Does Obama mean what he says?
Do his policies back his words?
If not, where are his policies taking us?

This is a first foray here into an issue that promises to have far reaching consequences for the direction of our country.

http://www.321gold.com/editorials/schiff/schiff092509.html

Fubsy

Weekly Links

Some weekend reading.

David Rosenberg: Equities Carry Too Much Risk. FT
http://www.ft.com/cms/s/0/5e449072-a859-11de-9242-00144feabdc0.html

Barry Ritholtz: Household Net Worth. The Big Picture
http://www.ritholtz.com/blog/2009/09/household-net-worth-financial-and-tangible-assets/

Karl Deninger: HR 1207 Audit the Fed. The Market Ticker
http://market-ticker.org/archives/1465-HR1207-Audit-The-Fed.html

Mish Shedlock: Fed offers 2 Cents on Audit The Fed, Global Economic Analysis
http://globaleconomicanalysis.blogspot.com/2009/09/fed-offers-2-cents-on-audit-fed-dollar.html

Paul Volker (ex Fed Chair and True Blue Economist):
Statement Before the Committee on Banking and Financial Services of the House of Representatives.
http://www.house.gov/apps/list/hearing/financialsvcs_dem/volcker.pdf

Karl Deninger: Watch that Thesis, FOMC Announcement, The Market Ticker
Karl gives his astute analysis of what the FED really is saying. I love this guy!.
http://market-ticker.org/archives/1463-Watch-That-Thesis!-FOMC-Announcement.html

Jim Q: Wish you Were Here, The Burning Platform.
http://theburningplatform.com/economy/wish-you-were-here-1
A biting commentary of the lack of truth in government.

Does History Rhyme? or Repeat?

Here are two charts. The chart above is courtesy of Barry Ritholtz' The Big Picture blog. It compares the 1937-38 DJIA to the 2008-09 SPY, as well as the 1929-39 DJIA to 2000-2009 Nasdaq. Uncanny!

The link below shows a chart found on Mish's Global Economic Analysis blog comparing the

GDP of US from 1990 to 2009 overlaying GDE of Japan from 1989 to 2009. Intriguing.

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSpUcyXpcQmGRH1r5y-TA91HRgrraiaSPzf40mKjwZG-kFjVp4jnn9jTz3zXi4tSBlURomteRhv6GkS0XD7S9pLj3jhDyKHQbdBRX-hCOZy4tJRybjBNfKY8ZFr20rhix0hR4ArsEH-PkO/s1600-h/footsteps+of+japan.png

What is the take away? For me, that markets are mechanisms of human behavior. That humans react to similar situations in similar ways. That the last credit crisis with the magnitude to match our current sutuation was during the great depression, and the current market has behaved accordingly.

From chart #2 US GDP vs. Japan GDE I believe we have the most recent example of a major economy moving through a credit crisis. Given that our government's response to our credit crisis is similar to Japan's response of printing massive amounts of currency (quantitative easing), using taxpayer dollars to prevent insolvent companies from failing, bringing interest rates to zero and leaving them there, and now buying our own debt, it becomes intriguing to analyze the slope of the Japanese stock market over the past two decades.

http://stockcharts.com/h-sc/ui?s=$NIKK&p=M&st=1980-09-24&id=p91741461629&a=179098887&listNum=4

Keep in mind that when Japan's financial system went bust, their populace had substantial savings compared to ours with negative savings, and their economy began it's slide during the most prosperous 20 year period of the 20th century, whereas we enter our crisis with the global economy in recession. Thus, this comparison may be trite for several reasons, one being that the outcome of the current crisis in the US could be more dire than theirs.

Fubsy

Give Me Liberty or Give Me Debt

The stock market is on a tear. The S&P 500 has logged gains of more than 50% in the last six months! Is it time to celebrate? Are we out of the woods? Is the stock market once again the road to riches? Is it time to buy stocks? Perhaps not. Contrary to what the USA Today, CNBS, and other mainstream media darlings would like us to believe, this market may not be reflecting the health of the economy. In my opinion, it is more likely reflecting the insane strategy of our government to cure a crisis born of excessive debt and risk taking with guess what? Excessive debt and risk taking.

Here's a link that says it better than I can.

http://www.huffingtonpost.com/robert-reich/why-the-dow-is-hitting-10_b_294682.html

My questions:
-Can our government service its debt without substantial cost to our budget?
-What will happen when interest rates rise to historic norms causing the cost of
our debt to increase to mulitples beyond what it is today?
-What option will the government choose if faced with a choice between defaulting on our
debt, or printing the money to pay it off?
-What will be the value of our dollar if the printing presses continue to run?
-Is the stock market reflecting real economic growth, or the ability of the federal reserve to
prop up asset prices?
-At what point will the fed be unable to support the stock market?
-What will be the cost?

Fubsy

My Brush with Health Care

Yesterday I needed to get a prescription filled for an Advair inhaler. Copay from my decent insurance was $30.00. I asked, "How much would this cost without insurance?" The answer, 240.00. Me: Cough, sputter, laugh uncomfortably, then mutter "that's bogus".

As I turned and walked out I had the thought that most Americans probably agree that our healthcare system is broken and designed for the monetary benefit of private enterprise rather than to support those in need of care. Why then, the chasm of divide over healthcare reform? Here's a link to Matt Taibib's piece published in this month's Rolling Stone. This is way closer to mainstream media than I like to tread, but this piece is worth the read. Heck, the first four paragraphs are brilliant.

Enjoy!

http://www.rollingstone.com/politics/story/29988909/sick_and_wrong

Fubsy