Financial topics

[aedens]

http://www.magnumphotos.com/Archive/C.a ... ul%20Fusco

Nuclear energy is the most evil lie ever seen to mankind.

[Trevor]

Bill Moyers is way over on the left. The article aedens references is
Bill Moyers complaining about alleged attempts to limit a "truly free
and independent press." He gives one dubious example after another of
the right supposedly trying to limit the liberal press. But there's
not a single mention of the well-funded attempts that have been going
on for over a decade to try to get Fox News and Rush Limbaugh off the
air.

In fact, Moyers joins in with this, by whining about Murdoch.

I agree that we've had a breakdown of the value system. But Bill
Moyers is oblivious to that, since he and NPR are part of the
breakdown of the value system.

A major theme of my new book was "honesty is the best policy,"
though I didn't use those exact words. I think I'll add them
in somewhere.
http://generationaldynamics.com/gx113

John

Reminds me of what I saw on Media Matters, where they've declared "war" on Fox News and want to get them off the air, any means necessary. It's actually cost them a lot of their support. Being a liberal media watchdog is one thing, but censorship is crossing the line.

[Trevor]

I think people in leadership positions like to think they can frame a problem so as to propose and administer a solution. For example, in Bernanke's case, he might say, yes, we had an economic breakdown and we can fix that with economic "tools". He doesn't look further than his narrow study.

I think Bernanke's realizing that his program isn't working. What else can he do, though? If he stops his QE plan, he'd have to admit he was wrong and he's not about to do that. Not only that, but the economy would fall into a depression, leaving him the scapegoat in any case. There are times I have some sympathy for him, since he's pretty much screwed no matter what path he takes.

[gerald]

I think people in leadership positions like to think they can frame a problem so as to propose and administer a solution. For example, in Bernanke's case, he might say, yes, we had an economic breakdown and we can fix that with economic "tools". He doesn't look further than his narrow study.

I think Bernanke's realizing that his program isn't working. What else can he do, though? If he stops his QE plan, he'd have to admit he was wrong and he's not about to do that. Not only that, but the economy would fall into a depression, leaving him the scapegoat in any case. There are times I have some sympathy for him, since he's pretty much screwed no matter what path he takes.

The root problem is not financial, the financial problem is an out growth of some unpleasant NON-PC facts that leaders and people prefer to avoid.
These can be skirted for a while but not indefinitely.

some of these are simply stated --

Society needs to produce or "take from other societies" more then it consumes.(The excess is needed to cover loss).
The producers need to get the lion's share of their efforts ( other wise, why produce )
Society needs to support the concept of " if you do not work, you do not eat' -- because human nature being what it is, most would rather do as little as possible.
Think not? look at how people vote for politicians who promise rewards that are to be paid for by others. Of course --- society must also allow the productive to work and keep the rewards of their efforts, and not hinder the productive, for the benefit of the well connected.

Ignoring or not addressing the above eventually leads to disaster.

[at99sy]

I have been watching things like all of us on these boards, and have been noticing patterns building up. It seems the market is reluctant to push past 13K for any amount of time and it appears to become very erratic when approaching that number. on May,3 201 it hit 12,807 then pulled back to 11,897 on June 15,2011. Then hit 12719 on July 7, 2011 and 12, 724 -July 21 and promptly retreated to 10,719 by Aug, 10th. Then it began a long climb to peaking above 13K from about mid March 2012 to first week of May before dropping down close to the 12K level and just in the past week and a half it has climbed almost 1000 points to push against the 13K level once more. All of the increases of late and most of the past increases are stemming from promises of free money for the banks in the form of bailouts. I get the sense that this is playing up the analogy used here before about bringing maximum ruin to the masses and ultimately destroying wealth at a pace that will make the GD look like child's play.
I optimistically predict that nothing major will occur until the election plays out. This administration would stop at nothing to hide the real structural failure from the American sheep. But even the sheep are starting to recognize that the barn ain't looking to wonderful at the moment. Hiding unemployed workers by not counting them, shifting them to SSI, masses on food stamps..... If Obama is not reelected they are set up to make Romney the fall guy when the SHTF and if he is reelected then I would expect the constitution to be tossed in the rubbish pile. If the Market can sustain 13K+ levels for a few weeks that should bring the rest of the suckers in and then down it goes. But the fix is in. nothing until after the election.

my .02
cheers
sy

[John]

I'd like to respond to the posting, quickly deleted, that said that my
claim that "Generation-Xers are in charge" is laughable because, for
example, Jamie Dimon is a boomer, and is running JP Morgan.

Jamie Dimon couldn't create a residential mortgage backed
collateralized debt obliglation (RMB CDO) if his life depended on it.

In all the dozens of companies where I've worked as a sw engineering
consultant, I can only think of one or two where I've even met the
CEO, except in passing. It's the middle managers that hire me, tell
me what to do, and fire me. In my experience, the CEO is a salesman
who understands the business purpose of the software product I'm
working on, but has no idea how it works.

That's always been true, but the change has been in the last decade
when all those managers have been Gen-Xers, whereas previously they'd
been Boomers.

If I were in a software group where we all worked together, including
the manager, to claim that we'd developed a software algorithm that
could predict next month's weather, and we all supported this claim,
and we wrote memos on the subject, and we all told the CEO that we'd
done that, the CEO would almost always believe it, and would go out
and sell it.

That's what happened -- not with predicting weather, but with
purposely creating fraudulent financial models that predicted that RMB
CDOs would be AAA rated investments. The Gen-Xer financial engineers,
and their Gen-Xer (or Boomer) middle manager claimed that they'd
developed a complex product that was AAA rated, even though they knew
it was fraudulent.

That's what happened in Jamie Dimon's organization. Even if he
suspected that some fraud was going on, he didn't say anything because
they were making so much money.

So when Jamie Dimon spewed crap at the Congressional hearing today,
it's because he was covering his ass. And, as usual, even though
there was obvious fraud, the Generation-X culture refuses to blame
anone for anything, even obvious crimes. This is especially true in
Congress, where they get their share of the fraudulent RMB CDO sales in
the form of massive election contributions.

John

[Higgenbotham]

John, I read your whole book and saw you addressed the issue about Boomers being in charge in official capacity but not really being in charge as a practical matter. So when I saw the explanation in the book I deleted that part of the post.

I would note that the size and complexity of most businesses today makes them more vulnerable to the kinds of abuses you are discussing. The sole proprietership on Main Street in the 1930's that was run by a Prophet or a Nomad for that matter could insulate itself from these kinds of abuses.

Still, I found the opening statement in your book that Generation X runs the world to be funny. X is a relatively small part of the population and many in X are free lancers who have tried to stay out of the system, or been locked out. That's very much in evidence if you read about the need for employers in key industries to replace retiring personnel. Many key industries such as the oil and utility industries have median ages well into the 50s, which proves those industries are dominated and run by Boomers. Being in the relatively young and growing high tech industry has probably skewed your view.

[gerald]

An addition to my June 19th post

Compassion- Killer of Society

http://www.testosteronepit.com/home/201 ... ciety.html

[aedens]

I will reread that post but will somewhat blindly forward what all have seen from increasing moral hazzard
tossed onto a brush pile of investors.
Namely, In simpler format:
1.Frontrun what the Fed has publicly telegraphed to be doing
2....
3.Profit

even those "sophisticated" ones at banks, hedge funds, and prop desks who can trade CDS, IR Swaps, variance swaps, swaptions, and things the retail investor has never heard of, are doing something else, and something much simpler, entirely.

They are simply front-running the Fed!

And as long as the Fed continues on the course of LSAP, either unsterilized or sterilized ala Twist, this will continue, and the Fed will continue
failing upward. Sadly, this also means that at the end the Fed has only one option: to go Japanese and start buying not only REITs and ETFs, but ultimately individual stocks. At that point the best purchase, however will not be the stock market, but wheelbarrows.

Tyler may be correct and would carefully unbraid the observation. As we have observed the micro end is when more avoid the market, or as we have seen
in flow "goods" which is the end of the event since the velocity of money ceases since the consumer who decides all things is overwhelmed to bread and water issues. I feel both end from economic rules have paused the consumer and the crossfire is taking down the rest. First cup of coffee so bear with me. Raising taxes now is like raising debt. We are overwelmed bottum up from top down macro policy. Bread and beer stocks survived the imposion back then since I asked them before they passed what did. The veloscity of money for some is zero unless it is for staples only. These tiny bubbles as I was warned will and are taking the core down. When, I do not know but in Michigan it is not hard to see the macro reality. Comments on the street is blind faith walks with two feet.

At the height of the Genocide Ukrainians were dying at a rate of 25,000 per day. Nearly 1 in 4 rural Ukrainians perished as a direct result.
The Soviet Union dumped 1.7 million tons of grain on Western markets during the Genocide. Nearly a fifth of a ton of grain was exported for each person who died of starvation. Over 3,000,000 children born between 1932-1933 died of starvation. The US Congress 1988 Commission on the Ukraine Famine concluded:
"Joseph Stalin and those around him committed genocide against Ukrainians in 1932-1933".

My first thoughts are water wheat weather. Many reasons the taxpayer do not trust the pushers in the government. They lie to us point blank. EPA destroys cluster groups, decades in Asian land war. Public sector untouchable and on and on until the law of economics takes over. The people shut down from edicts, abuse, and lies. A time when Unions set things straight and Government of the people for the people has passed to appointed four year pandering.
The pusher mindset will lead to permanant polarization and thugs and it appears it has since usefull idiots we read pass the law so then we can read them. Many know the EPA superstate is here on what lives and dies but still off the normal press radar. On a local level unless you have owned and operated a business you will never even begin to understand.

http://www.youtube.com/watch?v=pSOGwthC_JQ Ask the folks next door what the problem is?
Jim assumes SDR Masters. So the CDO as me and H, and many others trend will destroy "no man status" the rest of the tranches.
Corporate Bond reset are here guys. Our reset is the Family Farm and I see no solution but more of the same myopic scenarios
that debt is wealth slaves. Some risk capital is in UPL, PBA, CHK, Select Corporate Bonds. Back to basic or perish since the tranche
funds will be toast. We can see the signs of the weather but not the signs of the times all over again. I do not see the fig tree
giving leaf for some time in a few areas.

[Higgenbotham]

On a local level unless you have owned and operated a business you will never even begin to understand.

I keep beating on this indirectly when I refer to the sole proprieter of yesterday who is now a rare bird. A sole proprieter, whether it be a doctor, store owner, landlord, or what have you, who has direct contact with individual customers is a person who understands at a higher level.

About a year ago, I was at a local strip mall and found one of my favorite local businesses had closed shop. The owner of the strip mall was outside working and told me the store was closed. I kind of shrugged my shoulders and said, "Well, Bernanke got another one." and he immediately nodded his head and said, "Yup, Yup." We then engaged in a 5 or 10 minute conversation about how Bernanke destroys local business.

Now I don't make a comment like that unless I size a person up and know that the person understands what I am talking about. A person who owns a strip mall has the experience and the common sense from being in that business to know exactly what the hell is going on. Most of the population is so brain dead nowadays that they would pass that comment off as coming from someone who is either mentally impaired or full of hate.

The truth of the matter is that because most of this population can't stand on its own two feet and has never done any real productive work in their entire lives (including Bernanke), that they can't even begin to make the connection. A Russian commented that most of the US population couldn't even run across a parking lot without blowing their knees out, much less spade up a garden.