Financial topics

Investments, gold, currencies, surviving after a financial meltdown
aedens
Posts: 4753
Joined: Tue Nov 04, 2008 4:13 pm

Re: Financial topics

Post by aedens »

This is the trap door. Revenues are plunging.

http://www.ebudget.ca.gov/pdf/BudgetSum ... Charts.pdf
Current budget deficit is projected at $26.5 billion, i.e. 26.5% of revenue.
They must turn on the water NOW to revive agriculture
or save minnows and all hell breaks loose. Water, Food, Shelter, Survival. It will be 6 month
befor the politicians know what the Hell hit them and why would they care now.
Very sad and Ironic how Libtards States topple first. Cap and trade
will finish the rest of the nation off. They do not get it yet
since they care less about ground intell. Public Bill Board
stated are you ready for a Pandemic from the U S Health Department.
People you are so screwed it's description from me is meaningless; They are clueless.

The difference, again, from the airbus article, is the government interferance.
9 months from buying a site in China, Airbus rolled its first passenger jet off the production line.
I work Aerospace and The Government is clueless and disconnected from the public.
===========================================================================
FOR THE LIBTARDS

Keynes: Trade surplus countries should stimulate their economies; Deficit countries should balance trade
John Maynard Keynes was the greatest economist of the 20th century and the founder of modern macroeconomics (the economic study of the economy as a whole). American economists consider themselves to be following Keynes' recommendations when they try to stimulate an economy with stimulus packages, but they studiously ignore the fact that Keynes' had different advice for trade-surplus countries and trade-deficit countries.

After graduation from college, Keynes held the same opinion about free trade that is still held in America's ivory towers and still believed in Washington. He thought that free trade is always the best policy.

Free trade only exists to stabilize vunerable democracy's going left and is the same as welfare on your dime as we are bleed dry since Ms. Schwab trade secratary stated there concern is about loopholes and not balance. Susan Schwab, US trade representative, said such exemptions would defeat the object of the talks, to create trade flows. “As we went through the layers of loopholes . . . we discovered that a couple of our trading partners were more interested in loopholes than market access,” she said.

However, as he began to study the economics of the real world, he realized that countries can improve their own lot by practicing strategies that produce trade surpluses. When they do so, they destabilize the trade deficit countries. As a result, during World War II he worked hard to set up a post-war economic institution that would keep trade in balance so that the post-war expansion in trade could be sustainable.

Volume 25 of his collected writings is full of his plans for the institution that would regulate the world economy after World War II. His institution was to have very different requirements for trade surplus countries and trade deficit countries (pages 79-81), with the goal of keeping trade in balance. Here is what his institution would require of trade surplus countries:


A Surplus Country shall discuss with the Governing Board (but shall retain the ultimate decision in its own hands) what measures would be appropriate to restore the equilibrium of its international balances, including
(a) measures for the expansion of domestic credit and domestic demand:

(b) the appreciation of its local currency ... or, if preferred, an increase in money-wages;

(c) the reduction of excessive tariffs and other discouragements against imports;

(d) international loans for the development of backward countries.
On the other hand, countries with a trade deficit would be allowed to take the following actions:
(i) restrictions on the disposal of receipts arising out of current trade and ‘invisible’ income.

(ii) import restrictions, whether quantitative or in the form of ‘duty-quotas’ (excluding however prohibitions genuinely designed to safeguard e.g. public health or morals or revenue collection);

(iii) barter arrangements

(iv) export quotas and discriminatory export taxes;

(v) export subsidies either furnished direction to the state or indirectly under schemes supported or encouraged by the state; and

(vi) excessive tariff.
Warren Buffet reinvented Keynes' prescription for a trade deficit economy when he put together his Import Certificates plan. This is not really all that surprising. Like Keynes, he has a sound understanding of the way economics works in the real world.

===============================================================================================
I watched The EU piss and moan so Airbus paid lipservice and changed gears.
Games over for EU there about 6 to 9 month behind the States on the stupidity meter.
The eye the storm is passing and the backside off it is nearing. Beware it's path
we have not stopped discharges of staff. Beware souls and your on your own there clueless.
Brush off your Mises. Hayek. and Rothbard your going to need it very soon since think you is if your
paying attention to who is people. The hour is late and Washington is miles behind reality.

Jul 6, 2009 6:36 pm US/Eastern NYC Freezes Hiring Because Of Senate Gridlock
Mayor Bloomberg Delaying Planned City Hires Indefinitely, Says Albany Chaos Is Holding Up New Tax Revenue
No New Cops, Firefighters, EMS Workers Or School Safety Agents.
They are destroying the States as we watch real time.
Name one function of value they create in the Senate. Prove us wrong, and indeed a very cold winter now announces
itself in this summer of discontent.

http://thetechnicaltakedotcom.blogspot.com/
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aedens
Posts: 4753
Joined: Tue Nov 04, 2008 4:13 pm

Re: Financial topics

Post by aedens »

aedens wrote:
Higgenbotham wrote:This is hilarious. A Russian has stolen Goldman Sachs' automated trading algorithms and the FBI is in a panic.

http://zerohedge.blogspot.com/2009/07/i ... trial.html

http://market-ticker.denninger.net/arch ... Pwned.html
This guy wanted to be hired about this issue since he has inside information on tactics
It is crucial at this point to insist on transparency on weekly volumes for obvious reason.

Thu Apr 23, 2009 12:48 am
http://rick.bookstaber.com/2009/04/arms ... ading.html

greghaught
Posts: 30
Joined: Sat Jun 13, 2009 1:41 pm
Location: sacramento

Re: Financial topics

Post by greghaught »

one of the doj attorneys said about the supposedly stolen code ...
“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,”
you guys do realize that everything GS communicates to the public is just PR for their client services, right?

now people with more money than brains start thinking "duh, let's use the company that actually manipulates the markets." and the doj doesn't know any better, they're just glad to be involved in something mysterious and sinister.

hilarious, but brilliant.

EDITED TO ADD:

can you say 'meme', boys and girls? i knew you could..
meme /meem/ n. [coined by analogy with `gene', by Richard Dawkins] An
idea considered as a replicator, esp. with the connotation that memes
parasitize people into propagating them much as viruses do.
dont feel bad. that's why GS is a master of the universe.

US123
Posts: 1
Joined: Tue Jun 30, 2009 8:11 pm

Re: Financial topics

Post by US123 »

Hi,

I am very unsophisticated in investing for this time. Can anyone guide me on how to invest in this market including where to put me cash (gold ? ) and what to invest in 401K ?

Thanks,

Paul

John
Posts: 11478
Joined: Sat Sep 20, 2008 12:10 pm
Location: Cambridge, MA USA
Contact:

Money market funds backed by T-bills

Post by John »

Dear Higgie,

A web site reader has asked me the following question:
Web site reader wrote: > Thank you for your fascinating blog! Towards the end of today's
> posting for 7/6/09, there is a reprint of Higgenbotham's comments
> concerning Money Market Funds 'breaking the buck'. You then say
> that the only safe investments today are cash, FDIC insured bank
> accounts, and short-term Treasury bills.

> How would you classify a Money Market Fund of just short term
> Treasury Bills? Not safe because it is a MMF, or safe because it
> contains T-bills?
Didn't you comment on this a while ago? Do you feel that a money
market fund back by T-bills is safe these days?

Sincerely,

John

freddyv
Posts: 305
Joined: Sat Oct 04, 2008 4:23 am
Location: Oregon, USA
Contact:

Re: Financial topics

Post by freddyv »

From Richard Russell's newsletter today:
Richard Russell wrote: The fact is that in the market, nothing is more powerful or insistent than the great primary trend. The primary trend can best be compared with the tide of the ocean. All man's efforts to thwart or turn the tide are like so many sand castles built on the edge of the nearest waves. The incoming tide will wash all the sand castles away, if not with the first wave then with the second or the third. Thus, the incoming tide will conquer all.

This is why all of Obama's and Bernanke's and Geithner's "sand castles" will be washed away by the bear market. All that will be left will be crippled corporations and monster debts.

Obama believes that Roosevelt with his spending and alphabet agencies ended the Great Depression. Sorry, President Obama, you are wrong. The Great Bear market and Depression finally ended when the bear market died of exhaustion on July 8, 1932. That was the day when the D-J Industrial Average halted its decline at Dow 41.22. At that time, the Dow provided a dividend yield of 10.2%. That's when the bear market actually ended. It ended the way all bear markets do - in utter exhaustion.

On another subject, I've felt all along that the government and the Fed should have allowed this bear market to run its course, rather than wasting trillions of dollars in an attempt to halt the bear market. Perhaps politically, this would have been impossible, but in the end it would have been better for the nation.

Accordingly, although I certainly do not want to see the March lows violated, my studies suggest that the odds favor an eventual breaking of the March lows and then a much lower bear market.
Richard Russell is about 150 (just kidding) and has seen it all by now so he's not easily impressed by the typical recession or bear market. He called the March bottom almost perfectly and the 2007 high. This guy knows what he's talking about and he's also one cool old dude. :-)

--Fred

Higgenbotham
Posts: 7436
Joined: Wed Sep 24, 2008 11:28 pm

Re: Money market funds backed by T-bills

Post by Higgenbotham »

John wrote:Dear Higgie,

A web site reader has asked me the following question:
Web site reader wrote: > Thank you for your fascinating blog! Towards the end of today's
> posting for 7/6/09, there is a reprint of Higgenbotham's comments
> concerning Money Market Funds 'breaking the buck'. You then say
> that the only safe investments today are cash, FDIC insured bank
> accounts, and short-term Treasury bills.

> How would you classify a Money Market Fund of just short term
> Treasury Bills? Not safe because it is a MMF, or safe because it
> contains T-bills?
Didn't you comment on this a while ago? Do you feel that a money
market fund back by T-bills is safe these days?

Sincerely,

John
A Treasury Bill only money market fund is safe.

There are a couple things I should mention though. I posted last Fall about a story in Jim Sinclair's blog where he got a call from an elderly lady who thought she had a t-bill only money market fund but really didn't. It turned out the fund had synthetic derivatives of t-bills in it instead of the real thing and she couldn't get her money out. Another thing would be the management fees. If t-bill interest rates go low enough it is possible that the effective rate of the t-bill only money market fund could go negative and I suppose in that case there might be small periodic deductions to cover expenses in the event that expenses exceed the interest paid on the fund.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.

Gordo
Posts: 122
Joined: Mon Sep 22, 2008 11:18 am

Re: Financial topics

Post by Gordo »

I still feel bearish, but for what its worth, I closed out most of my positions today. I'll probably be kicking myself a week or two from now...

Took profits and closed MBI short. Hedged SRS and SDS with July options (expire in 14 days) to essentially lock in profits. Still have long in nat gas which hit a new low today – it’s a very interesting situation, supply is up, demand is down, and nat gas is currently trading at about half of what it costs to produce it, if this continues for much longer, many companies will go out of business. I can’t think of a much better “value” right now than nat gas, unfortunately its hard to find a pure way to invest. You may not want to own the companies because they are getting hit hard, you may want to own the commodity which is seriously undervalued, but there is only one ETF that invests in nat gas futures and they lose money with every monthly contract roll-over. Contango could contract sharply over the next 6 months, which would make the ETF a better buy. For a serious long term “buy and hold” type of investor (are there still any out there?) I’d think there are big opportunities here. Our country will slowly begin relying on nat gas more and more (and hopefully oil less and less). We are basically heading back toward energy independence but it will take a while to make the transition. We have probably a 75-100 year supply of natural gas now, and more cars powered by it will be hitting the streets. I've already got a public cng filling station less than a mile from my house and I'm seriously considering converting my car (cost is about $1500 for the conversion to hybrid, switch between gasoline and cng with the push of a button).

bluebird
Posts: 41
Joined: Tue Jul 07, 2009 7:59 am

Re: Financial topics

Post by bluebird »

Higgie writes "A Treasury Bill only money market fund is safe.
There are a couple things I should mention though. I posted last Fall about a story in Jim Sinclair's blog where he got a call from an elderly lady who thought she had a t-bill only money market fund but really didn't. It turned out the fund had synthetic derivatives of t-bills in it instead of the real thing and she couldn't get her money out. Another thing would be the management fees. If t-bill interest rates go low enough it is possible that the effective rate of the t-bill only money market fund could go negative and I suppose in that case there might be small periodic deductions to cover expenses in the event that expenses exceed the interest paid on the fund."
***********************************************

Thank you, I was the reader who posted this question and registered to post my reply.
The Fund in question is my IRA holding Vanguard Treasury Admiral MMF (VUSXX). The prospectus says it is invested in 99.8% securities backed by the full faith and credit of the U.S. government. The semi-annual report shows these are all short term Treasury Bills. While this MMF appears safe, I worry that at some point in the future, the government may put holds on this account preventing electronic withdrawals, and the possibility the fund's rate could go negative. There is also the dilemma whether it is better to cash out of the IRA and pay the taxes, then use the proceeds to buy T-Bills directly via TreasuryDirect.gov. Now that I am registered, I will take some time to read more of the forum.
Thanks,
Bluebird

Higgenbotham
Posts: 7436
Joined: Wed Sep 24, 2008 11:28 pm

Re: Financial topics

Post by Higgenbotham »

bluebird wrote:The Fund in question is my IRA holding Vanguard Treasury Admiral MMF (VUSXX). The prospectus says it is invested in 99.8% securities backed by the full faith and credit of the U.S. government. The semi-annual report shows these are all short term Treasury Bills. While this MMF appears safe, I worry that at some point in the future, the government may put holds on this account preventing electronic withdrawals, and the possibility the fund's rate could go negative. There is also the dilemma whether it is better to cash out of the IRA and pay the taxes, then use the proceeds to buy T-Bills directly via TreasuryDirect.gov. Now that I am registered, I will take some time to read more of the forum.
Thanks,
Bluebird
Bluebird,
Welcome to the forum. It looks like you are doing your homework and thinking things through. I doubt the government would put holds on your MMF account preventing electronic withdrawals but anything is possible. If you decide to go with the TreasuryDirect account, there is a little known option. After you buy the t-bill and it matures, you can elect to park the proceeds in "zero percent certificates of indebtedness". These are basically electronic cash balances. Once you are in these, you can put a request in with Treasury to transfer any portion to your checking account and they will transfer it the next day.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.

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