I'm back after a long hiatus. So many thoughts lately on the oblivious nature of the American populous. How the general public's ability to perceive the breadth, width and depth of cause and effect relationships is sadly lacking. Mostly I think about this in regard to how it gives me an edge as a speculator/investor, but also how it appears to be dooming our society to one hell of a cleanse in the not too distant future.
Want a fun/disturbing game? Notice the paradigm shifts as they accelerate in the coming years. Here you go...this says it all....
Wednesday, December 1, 2010
Sunday, January 17, 2010
How Much has the Financial Crisis Really Cost
I put this in the categories of
-Stop Lying Tim Geithner
-WTF. How much money can we spend?
-Are the laws governing government the same as the laws governing the people? uh,no.
-A Dozen More REasons to Get Your Money Out of the Big Banks.
and finally...
-Wake up America!
-Stop Lying Tim Geithner
-WTF. How much money can we spend?
-Are the laws governing government the same as the laws governing the people? uh,no.
-A Dozen More REasons to Get Your Money Out of the Big Banks.
and finally...
-Wake up America!
Visit msnbc.com for breaking news, world news, and news about the economy
Friday, January 15, 2010
Weekend Links
Again, some good food for thought. All I can say is, why are we not making more noise? What I believe...Americans are sheep.
Pat Buchanan: Is America’s Financial Collapse Inevitable?
http://www.wnd.com/index.php?fa=PAGE.view&pageId=122030
Pat Buchanan of all peple telling it like it is. Scary when I line up with arch conservatives. Fuck!
Barry Ritholtz, The Big Picture: Record Bank Bonuses Based on Record Bank Fraud
http://www.ritholtz.com/blog/2010/01/record-bank-bonuses-based-on-record-fraud
Barry RItholtz, The Big Picture: SEC Helped AIG Hide Pass Thorugh Bailouts to Big Banks
http://www.ritholtz.com/blog/2010/01/sec-helped-aig-hide-passthru-bailouts/
Barry nailing it again. Change We Can Believe In, or Four More Years?.Ridiculous. If we don’t wake up, we will not persevere as a democracy.
Pat Buchanan: Is America’s Financial Collapse Inevitable?
http://www.wnd.com/index.php?fa=PAGE.view&pageId=122030
Pat Buchanan of all peple telling it like it is. Scary when I line up with arch conservatives. Fuck!
Barry Ritholtz, The Big Picture: Record Bank Bonuses Based on Record Bank Fraud
http://www.ritholtz.com/blog/2010/01/record-bank-bonuses-based-on-record-fraud
Barry RItholtz, The Big Picture: SEC Helped AIG Hide Pass Thorugh Bailouts to Big Banks
http://www.ritholtz.com/blog/2010/01/sec-helped-aig-hide-passthru-bailouts/
Barry nailing it again. Change We Can Believe In, or Four More Years?.Ridiculous. If we don’t wake up, we will not persevere as a democracy.
Friday, January 8, 2010
Where Are We Headed Part Deux
Hey Guys,
Just thought I'd pass this quick read along (link below) as it sums up my views in easier to understand language. I know the urge to join the party is strong, but this last 8 months, and perhaps the next few are classic bear market rallies which are steep, fierce, and unsustainable. All of the gains we have seen are on the backs of an escalating national and public debt, and record low interest rates. What happens when interest rates reverse? WHat happens if the treasury and fed turn off or slow down the spigot? What happens if they don't? The answer to each of these is lower stock prices, lower bond prices, lower real estate prices, and higher commodity prices. I find it hard to believe that the greatest financial breakdown in the past century has been healed in less than two years, and we're off to the races. Especially considering that NOTHING has changed. THe fed continues its policies of printing more money, and forcing low interest rates, which is what they did in 1998, leading to the tech bubble, and in 2001 to 2003 leading to the bubbles in real estate and the financial markets. Each bubble is progressively larger. Each resce is more expensive. And now, with 2.5 trillion spent on the rescue and counting....what is next?
http://madhedgefundtrader.com/Today_s_Diary_Entry.php
Just thought I'd pass this quick read along (link below) as it sums up my views in easier to understand language. I know the urge to join the party is strong, but this last 8 months, and perhaps the next few are classic bear market rallies which are steep, fierce, and unsustainable. All of the gains we have seen are on the backs of an escalating national and public debt, and record low interest rates. What happens when interest rates reverse? WHat happens if the treasury and fed turn off or slow down the spigot? What happens if they don't? The answer to each of these is lower stock prices, lower bond prices, lower real estate prices, and higher commodity prices. I find it hard to believe that the greatest financial breakdown in the past century has been healed in less than two years, and we're off to the races. Especially considering that NOTHING has changed. THe fed continues its policies of printing more money, and forcing low interest rates, which is what they did in 1998, leading to the tech bubble, and in 2001 to 2003 leading to the bubbles in real estate and the financial markets. Each bubble is progressively larger. Each resce is more expensive. And now, with 2.5 trillion spent on the rescue and counting....what is next?
http://madhedgefundtrader.com/Today_s_Diary_Entry.php
Monday, December 28, 2009
For 2010: Debt is Again Taking Center Stage
From Barry Ritholtz at the Big Picture http://www.ritholtz.com/blog/, another look at how debt will shape the economy going forward. We are nowhere near out of the woods. I am beginning to recognize that not only is the stock market not a discounting mechanism that alludes to the future fundamentals of the economy, but in fact, it has become an inverse measure of economic health. As the market rises, I am more convinced that its backing is to the detriment of the public interest via printed dollars for which the public will be held accountable in ways many of us are not able to imagine.
Here's the brief article. I will be adding debt based articles to this post in the days to come.
Fubsy
http://www.ritholtz.com/blog/2009/12/pomboy-a-looming-new-credit-bust
Here's the brief article. I will be adding debt based articles to this post in the days to come.
Fubsy
http://www.ritholtz.com/blog/2009/12/pomboy-a-looming-new-credit-bust
Sunday, December 27, 2009
The Dollar, Interest Rates, and the Forces That Will Shape Them in 2010
Hey folks!
Been taking a hiatus for a few weeks as the babe arrived, and I've been focused on other aspects of life than maintaining a blog. But, I'm back, at a slower clip for awhile. I thought I'd share with you two articles that address the changing tides in the value of the dollar and interest rates in the US. Unfortunately for us, and the Bernanke/Geithner/Obama team, the forces that will dictate the direction of interest rates in the US, as well as the value of the dollar, are not under the control of US policy. Albeit, US polcy has got us to the scary precipous we stand on as a still barely viable economy, but decisions and policies by other nations will determine the rise or fall of interest rates in the near and lasting future, and will likely send the dollar sliding to nauseatingly low valuations. Read on, but be warned. This information is not pleasant. As I always, I welcome comments.
From Zero Hedge the following two articles.
http://www.zerohedge.com/article/brace-impact-2010-private-demand-us-fixed-income-has-increase-elevenfold-or-else
As everyone is engrossed by assorted groundless Christmas (and other ongoing bear market) rallies, and oblivious to the debt monsters hiding in both the closet and under the bed, Zero Hedge has decided it is about time to present the ugliest truth faced by our 'intellectual superiors' and their Wall Street henchman who succeeded in pulling off Goal #1 for 2009 - the biggest ever bonus season (forget record bonuses in 2010... in fact, scratch any bonuses next year if what is likely to transpire in the upcoming 12 months does in fact occur).
If someone asks you what happened in 2009, the answer is simple - two things. There was a huge credit and liquidity crunch, and then there was Quantitative Easing. The last is the Fed's equivalent of band-aiding a zombied and ponzied corpse, better known as the US economy. It worked for a while, but now the zombie is about to go back into critical, followed by comatose, and lastly, undead (and 401(k)-depleting) condition.
In 2009, total supply of all USD denominated fixed income, net of maturities, declined by $300 billion from $2.05 trillion to $1.75 trillion. This makes sense: the abovementioned crunches stopped the flow of credit from January until well into April, and generally firms were unwilling to demonstrate to the market how clothless they are by hitting the capital markets until well into Q2 if not Q3. What happened was a move so drastic by the Fed, that into November, the worst of the worst High Yield names were freely upsizing dividend recap deals (see CCU) - the very same greed and stupidity that brought us here. Luckily, so far securitization and CDOs have not made a dramatic entrance. They likely will, at which point it will be time to buy a one-way ticket for either our southern or northern neighbor, both of which, in the supremest of ironies, transact in a currency that will survive long after the dollar is dead and buried.
Back to the math... And here is the kicker. Accounting for securities purchased by the Fed, which effectively made the market in the Treasury, the agency and MBS arenas, but also served to "drain duration" from the broader US$ fixed income market, the stunning result is that net issuance in 2009 was only $200 billion. Take a second to digest that.
And while you are lamenting the death of private debt markets, here is precisely what the Fed, the Treasury, and all bank CEOs are doing all their best to keep hidden until they are safely on their private jets heading toward warmer climes: in 2010, the total estimated net issuance across all US$ denominated fixed income classes is expected to increase by 27%, from $1.75 trillion to $2.22 trillion. The culprit: Treasury issuance to keep funding an impossible budget. And, yes, we use the term impossible in its most technical sense. As everyone who has taken First Grade math knows, there is no way that the ludicrous deficit spending the US has embarked on makes any sense at all... none. But the administration can sure pretend it does, until everything falls apart and blaming everyone else for its fiscal imprudence is no longer an option.
Out of the $2.22 trillion in expected 2010 issuance, $200 billion will be absorbed by the Fed while QE continues through March. Then the US is on its own: $2.06 trillion will have to find non-Fed originating demand. To sum up: $200 billion in 2009; $2.1 trillion in 2010. Good luck.
http://www.zerohedge.com/article/whither-chinas-vassal-state
2010 will be a year of major transformations, punctuated by the following key escalating divergence: i) on one hand, the ongoing contraction of the US consumer will accelerate, because even as the stock market ramps ever higher (and on ever decreasing trade volume a 2,000 level on the S&P while completely incredulous, is attainable, but will benefit only a select few insiders who continue selling their stock at ridiculous valuations), household wealth will at best stagnate (as a reminder, an increase in interest rates "withdraws" much more household net worth, due to implied house price reduction, than any comparable boost to the S&P can offset), ii) on the other hand, China, which is faced with the ticking timebomb of continuing the status quo and hoping that US consumers can keep growing the global economy, or alternatively, looking inward at its own consumer class, and shifting away from its historical export-led model. The one unavoidable side effect of this prominent departure would be a renminbi appreciation, and a logical drop in the US currency, once the US-China peg if lifted (a theme opposed recently by SocGen's Albert Edwards, who sees the inverse as likely occurring). The main question for 2010 and beyond is whether this will be a gradual decline or a disorderly drop. And behind the scenes of all the bickering, jawboning and posturing, this is precisely what high level officials from both the US and China are currently negotiating. This will be one of the major themes that defines the next decade. Another phrase to describe this process is the gradual drift of US into a nation that is aware it is no longer the primary economic dynamo of global growth as China eagerly steps in to fill that spot.
Looking at the aftermath of the financial crisis, the two major consequences that will define US economic trends for an extended period of time, are the increasingly more frugal US consumer, whose savings rate is likely to increase gradually to the long-term low double digit average, and an ongoing outflow from equities into safer assets such as municipals, bonds and loans, as the maturing baby-boomers finds the volatility of the engineered equity market far too risky as they enter retirement age.
Thanks for reading!
Fubsy
Been taking a hiatus for a few weeks as the babe arrived, and I've been focused on other aspects of life than maintaining a blog. But, I'm back, at a slower clip for awhile. I thought I'd share with you two articles that address the changing tides in the value of the dollar and interest rates in the US. Unfortunately for us, and the Bernanke/Geithner/Obama team, the forces that will dictate the direction of interest rates in the US, as well as the value of the dollar, are not under the control of US policy. Albeit, US polcy has got us to the scary precipous we stand on as a still barely viable economy, but decisions and policies by other nations will determine the rise or fall of interest rates in the near and lasting future, and will likely send the dollar sliding to nauseatingly low valuations. Read on, but be warned. This information is not pleasant. As I always, I welcome comments.
From Zero Hedge the following two articles.
http://www.zerohedge.com/article/brace-impact-2010-private-demand-us-fixed-income-has-increase-elevenfold-or-else
As everyone is engrossed by assorted groundless Christmas (and other ongoing bear market) rallies, and oblivious to the debt monsters hiding in both the closet and under the bed, Zero Hedge has decided it is about time to present the ugliest truth faced by our 'intellectual superiors' and their Wall Street henchman who succeeded in pulling off Goal #1 for 2009 - the biggest ever bonus season (forget record bonuses in 2010... in fact, scratch any bonuses next year if what is likely to transpire in the upcoming 12 months does in fact occur).
If someone asks you what happened in 2009, the answer is simple - two things. There was a huge credit and liquidity crunch, and then there was Quantitative Easing. The last is the Fed's equivalent of band-aiding a zombied and ponzied corpse, better known as the US economy. It worked for a while, but now the zombie is about to go back into critical, followed by comatose, and lastly, undead (and 401(k)-depleting) condition.
In 2009, total supply of all USD denominated fixed income, net of maturities, declined by $300 billion from $2.05 trillion to $1.75 trillion. This makes sense: the abovementioned crunches stopped the flow of credit from January until well into April, and generally firms were unwilling to demonstrate to the market how clothless they are by hitting the capital markets until well into Q2 if not Q3. What happened was a move so drastic by the Fed, that into November, the worst of the worst High Yield names were freely upsizing dividend recap deals (see CCU) - the very same greed and stupidity that brought us here. Luckily, so far securitization and CDOs have not made a dramatic entrance. They likely will, at which point it will be time to buy a one-way ticket for either our southern or northern neighbor, both of which, in the supremest of ironies, transact in a currency that will survive long after the dollar is dead and buried.
Back to the math... And here is the kicker. Accounting for securities purchased by the Fed, which effectively made the market in the Treasury, the agency and MBS arenas, but also served to "drain duration" from the broader US$ fixed income market, the stunning result is that net issuance in 2009 was only $200 billion. Take a second to digest that.
And while you are lamenting the death of private debt markets, here is precisely what the Fed, the Treasury, and all bank CEOs are doing all their best to keep hidden until they are safely on their private jets heading toward warmer climes: in 2010, the total estimated net issuance across all US$ denominated fixed income classes is expected to increase by 27%, from $1.75 trillion to $2.22 trillion. The culprit: Treasury issuance to keep funding an impossible budget. And, yes, we use the term impossible in its most technical sense. As everyone who has taken First Grade math knows, there is no way that the ludicrous deficit spending the US has embarked on makes any sense at all... none. But the administration can sure pretend it does, until everything falls apart and blaming everyone else for its fiscal imprudence is no longer an option.
Out of the $2.22 trillion in expected 2010 issuance, $200 billion will be absorbed by the Fed while QE continues through March. Then the US is on its own: $2.06 trillion will have to find non-Fed originating demand. To sum up: $200 billion in 2009; $2.1 trillion in 2010. Good luck.
http://www.zerohedge.com/article/whither-chinas-vassal-state
2010 will be a year of major transformations, punctuated by the following key escalating divergence: i) on one hand, the ongoing contraction of the US consumer will accelerate, because even as the stock market ramps ever higher (and on ever decreasing trade volume a 2,000 level on the S&P while completely incredulous, is attainable, but will benefit only a select few insiders who continue selling their stock at ridiculous valuations), household wealth will at best stagnate (as a reminder, an increase in interest rates "withdraws" much more household net worth, due to implied house price reduction, than any comparable boost to the S&P can offset), ii) on the other hand, China, which is faced with the ticking timebomb of continuing the status quo and hoping that US consumers can keep growing the global economy, or alternatively, looking inward at its own consumer class, and shifting away from its historical export-led model. The one unavoidable side effect of this prominent departure would be a renminbi appreciation, and a logical drop in the US currency, once the US-China peg if lifted (a theme opposed recently by SocGen's Albert Edwards, who sees the inverse as likely occurring). The main question for 2010 and beyond is whether this will be a gradual decline or a disorderly drop. And behind the scenes of all the bickering, jawboning and posturing, this is precisely what high level officials from both the US and China are currently negotiating. This will be one of the major themes that defines the next decade. Another phrase to describe this process is the gradual drift of US into a nation that is aware it is no longer the primary economic dynamo of global growth as China eagerly steps in to fill that spot.
Looking at the aftermath of the financial crisis, the two major consequences that will define US economic trends for an extended period of time, are the increasingly more frugal US consumer, whose savings rate is likely to increase gradually to the long-term low double digit average, and an ongoing outflow from equities into safer assets such as municipals, bonds and loans, as the maturing baby-boomers finds the volatility of the engineered equity market far too risky as they enter retirement age.
Thanks for reading!
Fubsy
Friday, December 11, 2009
Barack W. Obama
The latest piece by Matt Taibbi chronicling the Obama administration's economic policies of massive bailouts to Wall Street banks that simply continued the direction of economic policy under George W. Bush.
Here is an excerpt:
Barack Obama ran for president as a man of the people, standing up to Wall Street as the global economy melted down in that fateful fall of 2008. He pushed a tax plan to soak the rich, ripped NAFTA for hurting the middle class and tore into John McCain for supporting a bankruptcy bill that sided with wealthy bankers "at the expense of hardworking Americans." Obama may not have run to the left of Samuel Gompers or Cesar Chavez, but it's not like you saw him on the campaign trail flanked by bankers from Citigroup and Goldman Sachs. What inspired supporters who pushed him to his historic win was the sense that a genuine outsider was finally breaking into an exclusive club, that walls were being torn down, that things were, for lack of a better or more specific term, changing.
Then he got elected.
What's taken place in the year since Obama won the presidency has turned out to be one of the most dramatic political about-faces in our history. Elected in the midst of a crushing economic crisis brought on by a decade of orgiastic deregulation and unchecked greed, Obama had a clear mandate to rein in Wall Street and remake the entire structure of the American economy. What he did instead was ship even his most marginally progressive campaign advisers off to various bureaucratic Siberias, while packing the key economic positions in his White House with the very people who caused the crisis in the first place. This new team of bubble-fattened ex-bankers and laissez-faire intellectuals then proceeded to sell us all out, instituting a massive, trickle-up bailout and systematically gutting regulatory reform from the inside.
http://www.rollingstone.com/politics/story/31234647/obamas_big_sellout
Sorry, the link didn't work. please edit and paste the url into your address box.
Fubsy
Here is an excerpt:
Barack Obama ran for president as a man of the people, standing up to Wall Street as the global economy melted down in that fateful fall of 2008. He pushed a tax plan to soak the rich, ripped NAFTA for hurting the middle class and tore into John McCain for supporting a bankruptcy bill that sided with wealthy bankers "at the expense of hardworking Americans." Obama may not have run to the left of Samuel Gompers or Cesar Chavez, but it's not like you saw him on the campaign trail flanked by bankers from Citigroup and Goldman Sachs. What inspired supporters who pushed him to his historic win was the sense that a genuine outsider was finally breaking into an exclusive club, that walls were being torn down, that things were, for lack of a better or more specific term, changing.
Then he got elected.
What's taken place in the year since Obama won the presidency has turned out to be one of the most dramatic political about-faces in our history. Elected in the midst of a crushing economic crisis brought on by a decade of orgiastic deregulation and unchecked greed, Obama had a clear mandate to rein in Wall Street and remake the entire structure of the American economy. What he did instead was ship even his most marginally progressive campaign advisers off to various bureaucratic Siberias, while packing the key economic positions in his White House with the very people who caused the crisis in the first place. This new team of bubble-fattened ex-bankers and laissez-faire intellectuals then proceeded to sell us all out, instituting a massive, trickle-up bailout and systematically gutting regulatory reform from the inside.
http://www.rollingstone.com/politics/story/31234647/obamas_big_sellout
Sorry, the link didn't work. please edit and paste the url into your address box.
Fubsy
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