The folks that "control" the financial system simply can't/don't step up to the microphone and say what they really think - if what they really think might scare the begeezus out of people and make things worse.
They speak in tongues. They drop hints.
When you hear the U.S. Treasury Secretary saying things like "this will take a worldwide coordinated effort", or that the G20 nations will need to take "forceful" action, and (my favorite) when Geithner proposed "expanding" the IMF's balance sheet by $500 billion...
This stuff is the "truth" between the "fluff" and "puff" pieces of propaganda. Warren Buffet's piece in the Wall Street (while VERY patriotic), Jamie Dimon's "belief in America", Larry Kudlow's silly rants on CNBC... what else should the very folks that have reaped substantially ALL of the benefits of our system say? That it is horribly broken? NAFC. They know that it is all about confidence, and we don't have much of that anymore.
And actually (I know I am not supposed to start a sentence, let alone a new paragraph with "And", but this is my blog, so I can make up the literary rules here) the SYSTEM is not broken. What has been broken are the habits and actions of the PEOPLE that benefited asset prices, credit expansion, capital aggregation, etc... like Humpty Dumpty, that part of the equation will prove far more challenging to put back together.
This just isn't the time for individual investors to be buying equities. Disciplined traders and professionals MIGHT make profits here - and they might not - but for the little guy at home, the time just ain't here yet (of course now that I just jinxed myself we are going to have a 25% rally). Now is the time for commodities and bonds (and not just any bonds). If you must buy equities look for low debt to equity, good cash flow, and dividends.
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This just in from the New York Times: This Is Not A Test.
Meanwhile, the Republican Party behaves as if it would rather see the country fail than Barack Obama succeed.That is what is known as being STUNNINGLY hypocritical. This began under Clinton, hit new levels with Bush, and will end soon, but only because the Left and the Right do not matter anymore. They are both under the false impression that because they are still being broadcast on T.V. that they do matter. Sorry, guys, but that is just an illusion. Your power came from money that is no longer there. People keep comparing the recent economic event to Pearl Harbor. Wrong War (or should I say "Wrong Battle"?). This is the Summer of 1914, and the Arch Duke just got shot, and the only World War there ever was (The War started in Summer of 1914, stayed hot until 1918, enjoyed a 20 year or so armistice, and got hot again in 1938 for another 7 years. The I and the II are best described as rounds in a fight) just might get its sequel - at least if these 2 false prophets keep speaking into the microphone.
You heard it here first.
The Left will disintegrate. The Right will bifurcate into "Fascists" and "Libertarians". If history shows us anything it is that it only takes a small, committed group of guys with steel in their b---s to bring about massive change. That pretty much leaves the Left out (spare me about the Communists. They were Fascists in drag. Feel free to point out to me which issues the Left would be willing to shed blood over.).
This has nothing to do with what I WISH will happen, or what I HOPE will happen. I just call them as I see them.
Good Luck!
Mentatt (at) yahoo (d0t) com
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8 comments:
I get the hint. Things is gettin worse. I'm still learning to trade, in my own fumbling way. I've got a small IRA account as my sandbox. No margin. No shorts. Thank Goodness. After three years of losses, starting to get ahead, year over year even in this down market. I'm betting on about 8000 as the max, getting nervous above 7500. We'll see. I'm getting better at getting out. Much harder to figure out when to go in.
As far as fascists go, they seem to lurk at both ends of the spectrum. Bad times make otherwise reasonable people buy their bull. I'm always suspicious of people that absolutely know they are right. There's always some strong man among them who is willing to jump in and kill everyone who disagrees with him to prove it.
Just like seeing where the administration stands, look at the legislation. The Patriot Act, Sorbaines-Oxley and HIPAA all erode constitutional protection and go a long way toward turning clerical errors and faulty memory into felonies. All had bi-partisan support, despite some insincere squeaking from one side or the other. The trend needs to change. It is not toward Libertarianism.
Regards,
Coal Guy
"The Trend needs to change".
Amen.
Take the cop off the block.
Let looting continue unpunished for a good while because we wouldn't want to dampen their freedom or creativity and Mr. Market does know best. It's called the free love, feel good Montessori Mr. Market where all the little marketeers get to express themselves as they see fit.
What a bunch of hippies.
Every (almost) night I watch the NBC Nightly News with Brian Williams, and for the last few months, I have been saying to myself "I need to write him an email" (as if it would do any good), asking him why the mainstream media outlets like his were deaf, dumb and blind to the upcoming mini-depression we are now in, when there were lots of other people saying we were in deep shit, and why did it take my skimming the alternative media to figure out what was going to happen. Because of Jeffers and his buddy Scientist and others (Shedlock, Savinar, the Agora people, Kunstler, Rogers, Roubini, Rapier, The Oil Drummers, ASPO, Kevin Kerr, Mike Whitney, and all the other "alts"), I was able to move my whole retirement balance out of stocks in late 2007, and saved a couple hundred thousand bucks. I am a traditionalist for the most part. I believe a lot in the status quo (I am first born after all), but it really bothers me that Williams and NBC were wasting time, creating an internal war for themselves over how much "happy positive" economic news they want to report every night, while our economic prob is far from explained or settled or projected into the future. :(
Hey Anonymous.
I'm not talking about taking the cop off the block. I'm talking about law that let's them get you, just because you pissed somebody off. My brother went through two years of federal investigation because someone who didn't like him made an anonymous false call to some tip line.
Sorbaines-Oxley requires the company you work for to keep all emails for 5 years. When they investigate, the read the emails and then ask you what you remember. If there is a significant divergence ( and after 5 years there probably will be ) they get you for interfering with an investigation, even if they decide not to prosecute the original charges. Being "safe in your papers" means being able to throw them away. Good luck to you!
Regards,
Coal Guy
"They know it is all about confidence...". So, they're all confidence men?
IdahoDave
IdahoDave:
Perhaps.
That does not mean that the "confidence" game is a bad thing. Th only reason Gold has any value is the confidence each of us has that the other will be willing to trade for it (and the early history of THAT is all about the oldest profession in the world).
We DO need a medium of exchange. And we need to have markets, not just financial markets, but farmers markets, food markets, cattle markets, etc... and we absolutely need a means to settle these trades. Bartering just does not cut it, which is why silver and gold got traction in the first place.
But yes, our system is a giant ponzi scheme, and once we reach terminal size and can't grow the system will absolutely begin to crack.
Is that what is happening now? I have no idea as it will be years later that we will figure that out with any certainty.
Best of luck.
Hey I know this may be a little off topic, but have you looked into the Term Asset-Backed Loan Facility (TALF) program? It allows investors to borrow from the gov't cheaply w/ no recourse and purchase AAA rated ABS paper and one can easily make 10%+ on the spreads. Since you operate a hedgefund, you may have more insight on how one may be able to participate directly or indirectly through an investment vehicle.
It seems to me that this program is a giveaway to investors who are aware of this program.
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