Don't fight them - yet. Unless you have the capacity of a Jimmy Rogers, don't try to be a hero. We all know what happens to heros.
Still, the government's action begs the question: What the heck are they going to do about the U.S. $? Considering the massive selloff in EVERYTHING compared to where it was just 3 weeks ago, the standout performance by the precious metals is nothing short of glaring. Still, "markets zig and zag, they don't zig and zig".
Just over 2 weeks ago I posted this, saying that I could not get excited about Oil at $142. Oil is $130, and I am still not excited about it. Now $120 might get my attention, and at $110 I would get hot and bothered...
Merrill Lynch, Microsoft, and Google all reported less than expected earnings after the close. Should make for an interesting day tomorrow considering the 500 point rally of the past 2 days. Short covering rallies are not new Bull markets.
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It appears the Administration has come to the conclusion that a military engagement with Iran would be counterproductive, if I may use the understatement. Oil coming out of the Middle East is going to decline over the coming decades. NO ONE disputes this. If a shooting war over Oil that won't be there in the future can be prevented until the oil isn't there, there would not be anything to fight over at that point, now would there? Perhaps Obama's position of dialogue does not appear as silly as it was presented to be by the Administration. (By the way, I am a McCain supporter. I am just calling them as I see them.) The idea that the U.S. can win an Oil war in the Middle East should now clearly be seen as folly. Maintaining the viability of shipping lanes, oil fields, docks, tankers, loading platforms, etc... so if someone is fighting to maintain the flow of oil, they better do it at the negotiating table. Now if you are fighting to prevent a nuclear event... well, that is a different matter entirely. If you think not, take your happy ass to Hiroshima and walk the grounds and museum.
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If the FDIC is concerned about system wide failure, shouldn't you be? Here is the deal. The following is a list of folks and entities that really don't matter (as applied to the slow motion train wreck of the banking system). Ready?
- The U.S. Treasury
- The U.S. Federal Reserve Bank
- The U.S. Congress
- The Administration
- The FDIC
- The SEC
- Ben Bernake, Hank Paulson, et al...
- Barnie Frank, Chuckie (Cheese( Schumer), Nancy Pelosi, Barbara Boxer, Dick Cheney, "pick your own personal boogey man" et al...
Here is what does matter:
HOME PRICES!!!!!!!!! (Trumpets Blair!!!)
If home prices go UP, the banks are in the clear as their assets will perform.
If home prices continue DOWN, the banks are in deep, deep doo-doo, the government will be forced into some kind of (Mortgage) Resolution Trust Company operation (I know I am dating myself here) and if they succeed in straitening the system out it will be at the expense of the U.S.$.
The rest is just NOISE.
Mentatt (at) yahoo (d0t) com
9 comments:
....and today should be even MORE interesting! What was that about a Lynching at Merrills?
Oh stop whining. We don't pay you to whine.
Here's an interesting article: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/17/MN8Q11OT2M.DTL&tsp=1
Any views on those numbers at the end?
The financial press and blogosphere is loaded with ominous talk about the falling U.S. dollar, yet almost no one explains why we should care. If I can go down the street and get my big box of "Mike and Ike" candy at Walgreens for a buck still, who cares about a falling dollar? Maybe you're aware of a slam-dunk explanation of why the average person should give a crap about a falling U.S. dollar. Thanks!
Lower dollar = higher prices for imported goods. That means oil. Significantly lower dollar may mean that foreign countries holding bazillions in US dollars may decide to dump them for something that'll hold its value better. If that happens, goodnight Sam.
Are you a McCain supporter simply because of your tax bracket?
Regarding my support of McCain:
I find him the less objectionable of the 2 candidates.
We don't know ANYTHING about Obama other than that he is good looking, charming, well spoken, and half black/white. (I am in a mixed race marriage and I find it objectionable that someone would label my kids one way or the other... just take a good look at the little one on my lap in the picture - YOU tell me what he is... (he is delicious) and I have another coming in December, G-d willing.
Knowing what I do about future oil imports, Presidential candidates supporting income redistribution fall flat with me - they are fighting the 1960's fight.
I am a HARDCORE libertarian.
Spare me the campaign dogma/propaganda that McCain is another Bush. Most of the Republican party HATES McCain. Not that that matters. Once he is in, the White House will employ 30,000 REpublicans that will collectively be the executive branch. The Pres is just the spokesman for this gang.
Once upon a time, I worked in politics. Even held elective office once (never do that again). Most voters I have spoken to over the years have NO IDEA how things REALLY work. And how manipulated they have been.
My disclosure about supporting McCain was just to make the point that Obama's idea of dialogue with Iran, which was BASHED initially, now seems to be getting the full embrace. I have no idea as wether or not it helps or hurts. I have no diplomatic experience.
If you believe 5% of either candidates B.S., you will be sorely disappointed - and you will have deserved it!
Home prices going up would fix everything? I agree, it would fix a ton, but if home prices increase to the point of the masses being 'right side up,' we're still going to need an energy miracle to not pass a shit storm to our kids and grandkids. Maybe the final comments of this post should have been prefaced with the phrase "short term".
Jeremy!
I was being rhetorical... Of course the oil import decline will SMOOSH housing eventually, and that is THE primary reason that the banks are not getting out of the woods - EVER. (10+years).
I was just pointing out that if by some MIRACLE of technology, we solve the car transport to and from suburbia problem, AND house prices go up, the economic problems of bank failure will go away.
And if your Aunt had B-lls, she would be your Uncle!
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