"Wall Street employment is down 9%."
Boy. Now there's a yawner...
Wall Street employment might be down 9%... but compensation is down closer to 25% (and maybe 30%... and its only that high because the senior exec's ripping the government and the shareholders off... trader and broker income is off more)... and that's with all that the Fed and the U.S. Treasury did to soften this blow.
Well, speaking of blows... Europe is blowing. And this wind is going to level what is left of "Wall Street".
(And just who is "Wall Street", anyway? Lehman? Gone. Bear Stearns (my alma mater)? Gone. Goldman is staying off the the radar and out of the media... and don't even mention MF Global (ROFL!!!). Its embarrassing to watch CNBC - they have to struggle to get a dolt capable of fogging a mirror from "Dewey-Fugam & Howe" and "Laydown and Whackett" to entertain the masses of disinterested investors....
Because there are no individual investors left. Its all machines. The volatility going on in the market is the result of infinite buy and sell programs - with the result that people just can't take it any more. I speak to CPA's regularly... first thing I ask is how their clients are doing trading the market... the answer, unsurprisingly is "not too hot". Since high frequency trading is now over 70% of the volume, and it was non-existant 10 years ago... and hedge funds are 30% (just making that number up... but I bet I am close), and they pretty much didn't exist 10 years ago, too... and trading volumes are down... it then follows that there are no individual investors left.
So... IMHO, it ain't long before New York and environs goes feral.
We are in a uniquely bad spot here.
Sunday, December 18, 2011
Friday, December 9, 2011
Blowback
The CIA uses the term "Blowback" to describe the unintended consequences that result when groups or nations that have been dealt with coercively respond with violence in return.
I have no idea what the facts are in the case of the shooting of a Police Officer at Virginia Tech University yesterday... but a thought was nagging at the back of my mind...
I am continually surprised that the police officers involved in the killing of civilians are not then subjected to vendettas and revenge. Police kill people in no-knock raids, traffic stops of unarmed people ("the car was a weapon"), and other encounters... have not then been subject to violent response from the victim's family. I am astounded, frankly.
When I heard this story, well, I am interested to hear what the facts are. This is probably not the case here... but it is only a matter of time before the father/brother/son of one of these police killing victims settles the score the old fashioned way.
I have no idea what the facts are in the case of the shooting of a Police Officer at Virginia Tech University yesterday... but a thought was nagging at the back of my mind...
I am continually surprised that the police officers involved in the killing of civilians are not then subjected to vendettas and revenge. Police kill people in no-knock raids, traffic stops of unarmed people ("the car was a weapon"), and other encounters... have not then been subject to violent response from the victim's family. I am astounded, frankly.
When I heard this story, well, I am interested to hear what the facts are. This is probably not the case here... but it is only a matter of time before the father/brother/son of one of these police killing victims settles the score the old fashioned way.
Thursday, December 8, 2011
We Paid Big Money to get this *&^ed Up
Big Money.
The "Euro Could Explode"?? ROFL!!
This is what happens when you addict people to social programs and structures that are not compliant with the laws of mathematics. People start to actually believe that whatever condition is some kind of right.
The solution for Europe is fairly simple... unfortunately, several more governments will have to collapse and the people humbled before we get there.
--------------------------------------
Is it War in Iran? I certainly hope not. This analysis is certainly worth considering.
From the article:
-------------------------------------------
Pearl Harbor Day came and went with little fanfare... and that's the way it is. A political disagreement worth killing hundreds of millions (WW I & II) is pretty much forgotten in a single human lifetime... and for a number of reasons... not least of which is this:
"When strange peoples meet: First they fight. Then they fornicate."
My father spent 3 1/2 years in the South Pacific during WWII fighting the Japanese. Me? I am married to a beautiful girl from JAPAN. We have 2 children. Groups that insist on walling themselves off from others - dividing the world into 2 kinds of people - will continue to provide the fuel that stokes the flames of War.
Way to go.
-----------------------------------------------
I have several "go to" guys in my universe. "The Wise Man". "The Mad Scientist". "Einstein".
I had an interesting conversation with The Wise MAN ("TWM") yesterday. He's an older fellow (If someone my age says you are "older", well, you have had a long time on this planet to observe) who has spent a lifetime with a keen eye taking in the human condition.
Says he: "Everywhere I look, I see people accommodating the new reality, and some that are doing so in fact while pretending otherwise... but it is happening. The World just got a lot bigger... and that means our individual "world" has gotten a lot smaller. And it can get a whole lot smaller. We will adjust. Life will go on. But people's expectations are being adjusted as we speak. Many will have to humbled."
I love talking to TWM.
The "Euro Could Explode"?? ROFL!!
This is what happens when you addict people to social programs and structures that are not compliant with the laws of mathematics. People start to actually believe that whatever condition is some kind of right.
The solution for Europe is fairly simple... unfortunately, several more governments will have to collapse and the people humbled before we get there.
--------------------------------------
Is it War in Iran? I certainly hope not. This analysis is certainly worth considering.
From the article:
Nonetheless, at this point war looks likely. Under our political system, the side that can pay for election campaigns invariably gets what it wants. There is, simply put, no group of donors who are supporting candidates for president and Congress based on their opposition to war, while millions of organised dollars are available to those who support the neo-con agenda. Pundits used to say: As Maine goes, so goes the country. It's just as simple today: As the money goes, so goes our policy.I am a Free Market, Capitalist/Libertarian... and even I hope to see The Powers That Be running the International money and banking system crushed before they destroy us all. Maybe the Fed saved the system to keep the world safe for future conflicts like this.
-------------------------------------------
Pearl Harbor Day came and went with little fanfare... and that's the way it is. A political disagreement worth killing hundreds of millions (WW I & II) is pretty much forgotten in a single human lifetime... and for a number of reasons... not least of which is this:
"When strange peoples meet: First they fight. Then they fornicate."
My father spent 3 1/2 years in the South Pacific during WWII fighting the Japanese. Me? I am married to a beautiful girl from JAPAN. We have 2 children. Groups that insist on walling themselves off from others - dividing the world into 2 kinds of people - will continue to provide the fuel that stokes the flames of War.
Way to go.
-----------------------------------------------
I have several "go to" guys in my universe. "The Wise Man". "The Mad Scientist". "Einstein".
I had an interesting conversation with The Wise MAN ("TWM") yesterday. He's an older fellow (If someone my age says you are "older", well, you have had a long time on this planet to observe) who has spent a lifetime with a keen eye taking in the human condition.
Says he: "Everywhere I look, I see people accommodating the new reality, and some that are doing so in fact while pretending otherwise... but it is happening. The World just got a lot bigger... and that means our individual "world" has gotten a lot smaller. And it can get a whole lot smaller. We will adjust. Life will go on. But people's expectations are being adjusted as we speak. Many will have to humbled."
I love talking to TWM.
Saturday, December 3, 2011
The Anti-Chirst Was Here
Goldman Sachs the anti-Christ and a member of my most unholy trinity (along with the USDA and the Department of Homeland Security... come to think of it, I may have to expand from a trinity to some larger number) has been out of the news of late. Amazing, really. Goldman was unindicted co-cospirator Numero Uno in the European Debt Disaster.
These guys are like the anti-Johnny Appleseed... only the seeds they leave behind are cancer clusters. And boy, do they get paid well for their trouble.
Not that the EuroZone wasn't doomed from the get go... but with friend's like Goldman, who needs an enema?
It was Goldman (and OK, Lehaman/Bear/Morgan et al... but with Goldman as the Don of Dons) that helped Italy and Greece structure (read: hide) their deficit spending so that it wouldn't appear "on balance sheet"... thereby "maintaining compliance" with their Maastricht agreements (the guys from Enron went to jail for this stuff. Goldman? They got special dispensation for counter party risk... essentially getting paid BIG MONEY for taking no risk and, in reality, actually providing no risk coverage for those seeking such... but they DID go to Harvard... so they must be smart, right? Snicker...).
Not long long after, these doer's of "God's work" helped blow the U.S. financial system up with their contributions to high finance in the mortgage market as well as Washington D.C.'s regulatory and law garage sale.
We have the largest percentage of people in prison as a percentage of the population in the history of mankind... but not one guy from Goldman.
Because everybody works for Goldman. The Department of Justice, the SEC, the U.S. Senate... everybody.
I wonder if they'd hire me?
Prolly not...
These guys are like the anti-Johnny Appleseed... only the seeds they leave behind are cancer clusters. And boy, do they get paid well for their trouble.
Not that the EuroZone wasn't doomed from the get go... but with friend's like Goldman, who needs an enema?
It was Goldman (and OK, Lehaman/Bear/Morgan et al... but with Goldman as the Don of Dons) that helped Italy and Greece structure (read: hide) their deficit spending so that it wouldn't appear "on balance sheet"... thereby "maintaining compliance" with their Maastricht agreements (the guys from Enron went to jail for this stuff. Goldman? They got special dispensation for counter party risk... essentially getting paid BIG MONEY for taking no risk and, in reality, actually providing no risk coverage for those seeking such... but they DID go to Harvard... so they must be smart, right? Snicker...).
Not long long after, these doer's of "God's work" helped blow the U.S. financial system up with their contributions to high finance in the mortgage market as well as Washington D.C.'s regulatory and law garage sale.
We have the largest percentage of people in prison as a percentage of the population in the history of mankind... but not one guy from Goldman.
Because everybody works for Goldman. The Department of Justice, the SEC, the U.S. Senate... everybody.
I wonder if they'd hire me?
Prolly not...
Friday, December 2, 2011
Europe, Debt, and the Keynesian Jag-Offs
Merkel says fixing Europe's debt crisis will take "years".
Madame Prime Minister: It will take years??!! That's if you are lucky. If you are not, it might fix itself over a long weekend.
------------------------------------------
If you are an equity investor you really gotta ask yourself: What is it that the Bond market sees that you don't? I spent an entire morning earlier this week looking around for short term U.S. Treasury paper without a negative yield... why do you suppose that is?
----------------------------------------------------
The U.S. economy and the American worker simply cannot afford the level of "payroll tax". The "payroll tax" is insufficient to support and maintain the solvency of the U.S. Social Programs. If you have read my older stuff, well, this is EXACTLY what I have been saying since the day I started this blog. It does not matter what you think, or feel, or wish... the numbers matter... and the facts on the ground say that these programs will be cut so deeply that they will resemble "defaults" on promises far more than cuts in benefits.
--------------------------------------------
And finally... anybody besides me realize that any "bailout" of Europe by the Fed will be at the expense of American Taxpayers?
Madame Prime Minister: It will take years??!! That's if you are lucky. If you are not, it might fix itself over a long weekend.
------------------------------------------
If you are an equity investor you really gotta ask yourself: What is it that the Bond market sees that you don't? I spent an entire morning earlier this week looking around for short term U.S. Treasury paper without a negative yield... why do you suppose that is?
----------------------------------------------------
The U.S. economy and the American worker simply cannot afford the level of "payroll tax". The "payroll tax" is insufficient to support and maintain the solvency of the U.S. Social Programs. If you have read my older stuff, well, this is EXACTLY what I have been saying since the day I started this blog. It does not matter what you think, or feel, or wish... the numbers matter... and the facts on the ground say that these programs will be cut so deeply that they will resemble "defaults" on promises far more than cuts in benefits.
--------------------------------------------
And finally... anybody besides me realize that any "bailout" of Europe by the Fed will be at the expense of American Taxpayers?
Thursday, December 1, 2011
Europe Explained by a Regular Guy
Wall Street economists just love to talk in jargon and show everybody how smart they are... consequently, most people, and most investors, tune them out and few American's really understand what the heck is going on over on the other side of the pond.
Well... it is a very similar story to America circa 2008 when our bank's collateral (mortgages) turned out to not be worth what people thought they were... only in Europe, the asset that is FUBAR is the sovereign debt of the EU members... the bonds sold by the various member country's departments of treasury.
Europe's banks are freaked out, and rightly so, about the potential for spreading defaults on those bonds... so they are in full flight, de-leveraging mode... and since they cannot (or won't) raise capital at these equity prices (some, like Bank of America are down 90%) they MUST work from the other side of the balance sheet - calling in loans and selling off collateral and seized assets. What happens when the banks all try to sell stuff at once? The prices for that "stuff" collapses.... and if the "stuff" happens to be sovereign debt? Well, as asset/prices go down the interest rate for new debt goes UP! When you are on the razor edge, like Italy (forget Greece... they are off they edge and small potatoes, anyway) you go from "Everything's fine" to "my rectum thinks my throat's been cut!" in a matter of days... and what happens when the banks all call their loans at once? Liquidity - CASH - dry's up in the system, forcing down the prices for the stuff they are trying to sell to raise cash and deleverage in the first place... get it? The ultimate negative feedback loop.
And the response from The Powers That Be? Lend the banks more cash printed up over at the U.S. Federal Reserve... which had the effect of lowering the value of the US$ and raising asset prices.
This is a band aid over a festering, gangrenous wound. Italy's debt is such that any rise in interest rates and POOF! They won't be able to fund it any more (remember... Italy cannot print its own currency), and will simply have to default... And Japan makes Italy look like a pilgrim!
But wait! There's more! If you order now we'll throw in a U.S. pension system disaster right on time for the Presidential election! OR... an energy shock! Either way... you are gonna get something!
You see... the U.S. Fed is only to willing to do this despite the obvious draw backs because if they do not... and the markets continue crumble... it won't just be American Airline's that is defaulting on its pension obligations. So the U.S. Fed was willing to sacrifice the US$, at least a little bit, to buy the Europeans some time... with the risk that if it were to actually work the price of Oil could (though I doubt this very, very much) spike and put the kabosh on things in general.
Europe will have to shred its safety nets and generous pensions. Period. End of Report.
Well... it is a very similar story to America circa 2008 when our bank's collateral (mortgages) turned out to not be worth what people thought they were... only in Europe, the asset that is FUBAR is the sovereign debt of the EU members... the bonds sold by the various member country's departments of treasury.
Europe's banks are freaked out, and rightly so, about the potential for spreading defaults on those bonds... so they are in full flight, de-leveraging mode... and since they cannot (or won't) raise capital at these equity prices (some, like Bank of America are down 90%) they MUST work from the other side of the balance sheet - calling in loans and selling off collateral and seized assets. What happens when the banks all try to sell stuff at once? The prices for that "stuff" collapses.... and if the "stuff" happens to be sovereign debt? Well, as asset/prices go down the interest rate for new debt goes UP! When you are on the razor edge, like Italy (forget Greece... they are off they edge and small potatoes, anyway) you go from "Everything's fine" to "my rectum thinks my throat's been cut!" in a matter of days... and what happens when the banks all call their loans at once? Liquidity - CASH - dry's up in the system, forcing down the prices for the stuff they are trying to sell to raise cash and deleverage in the first place... get it? The ultimate negative feedback loop.
And the response from The Powers That Be? Lend the banks more cash printed up over at the U.S. Federal Reserve... which had the effect of lowering the value of the US$ and raising asset prices.
This is a band aid over a festering, gangrenous wound. Italy's debt is such that any rise in interest rates and POOF! They won't be able to fund it any more (remember... Italy cannot print its own currency), and will simply have to default... And Japan makes Italy look like a pilgrim!
But wait! There's more! If you order now we'll throw in a U.S. pension system disaster right on time for the Presidential election! OR... an energy shock! Either way... you are gonna get something!
You see... the U.S. Fed is only to willing to do this despite the obvious draw backs because if they do not... and the markets continue crumble... it won't just be American Airline's that is defaulting on its pension obligations. So the U.S. Fed was willing to sacrifice the US$, at least a little bit, to buy the Europeans some time... with the risk that if it were to actually work the price of Oil could (though I doubt this very, very much) spike and put the kabosh on things in general.
Europe will have to shred its safety nets and generous pensions. Period. End of Report.
Wednesday, November 30, 2011
Coming Home (to Roost)
The world's financial system is about to conflagrate and The People need their blow by blow analysis. Therefore, I am (again). Blogging that is.
It is simply not as much fun to blog when the folks running the train set have the trains running on time... From 2005 to 2009 the action was just too good to pass up, and when it appeared that The Powers That Be had patched up the system pretty well, well... that's just not as much fun to cover.
This is different. This is NOT 2008 all over again... this is much better (worse) for blogging... I had remained an unbowed and slightly bloodied deflationist... but it appears that while the FED and the other various central banks were, in fact, able to strike fast and hard (my hat was off to Bernake, Paulson, Bush, Obama and a few other courageous members of the Establishment, hehehehehe), they are pretty much out of gas at the moment.
And not because of the price or supply of Oil! Europe is leading the way in "Keynesian End Game" (I don't know who to credit, but I like that term... may have even used it myself at some point as I love chess metaphors and analogies...)
Oh, sure... Oil prices and supplies are not helping at all, and are in fact contributing to the never ending torture that is the Western economy (because its all relative... ask some Indigenous person living in the Andes if the recession means much to them...)... but that's only because we live in this Television induced fantasy of what our life is - food comes from the grocery store, water from your tap, gasoline out of a pump at the corner store, money comes from the ATM, financial security is bytes on a freaking screen... holy molly! Are we FOS, or what? (We, as jurors, put people in prison to be raped, murdered, and tortured... for "killing or abusing" animals... and then go home and set out rat and mouse traps and poison - I have to wonder... WWJD?!)
But I digress...
The Central Banks are in full panic mode, now... don't let them fool you... check in with me and I'll be happy to set you right...
Remember the incredible growth in China? Here's a link to the Hang Seng Index 5 year chart.
Do you see any "growth" there? Me neither.
OK. Here's a 10 year chart. Looks to me like a market growing at a compounded 7% per year... with harrowing moves... During the best decade that China could have possibly had? What will it look like a decade from now?
For now, the risk trade could be on... use this as an opportunity to sell any long positions you have left... hide out in short term Treasuries and US$... a Bear Market is in the offing, maybe The Big One... this will create the greatest opportunity for Capitalist pigs (like me!) since March of 2009... and perhaps a shade better.
OK. That's if you have money.
No money? Not to worry... things can't get any worse for you... no point worrying about it... but if you are young enough and bold enough to have a thirst for life rather than a thirst for commiserating... Think!
The answers are fairly obvious!
In a deflationary environment you must avoid debt nearly as much as death... because debt will lead you there. Too, you must avoid property taxes like the plague. This likely means that if you are fortunate enough to have not set up shop in some high cost Blue State you'd be better off elsewhere. The life long difference between paying $1,800 in property taxes and $18,000 in property taxes (per year) is overwhelming! (Its the after tax equivalent of being able to spend winter in Costa Rica or other warm local... or working 4 days per week rather than 5...) Let the Keynesian Left eat their own cooking... its poisonous to your freedom as well as your life and health.
The West, and the U.S. in particular, is in for a rapid-rate-of-change-event. Not so rapid that its the end of the world... life will go on... but our economic arrangement will under go a tremendous shake up... it will be sooooo much easier on you to swim with the tide rather than against it. Or "Against the Wind".
Nice tune. Don't let it be your anthem.
"There will be two dates on your tombstone everyone will read them, but the only thing that matters is the little dash between them." Kevin Welch
It is simply not as much fun to blog when the folks running the train set have the trains running on time... From 2005 to 2009 the action was just too good to pass up, and when it appeared that The Powers That Be had patched up the system pretty well, well... that's just not as much fun to cover.
This is different. This is NOT 2008 all over again... this is much better (worse) for blogging... I had remained an unbowed and slightly bloodied deflationist... but it appears that while the FED and the other various central banks were, in fact, able to strike fast and hard (my hat was off to Bernake, Paulson, Bush, Obama and a few other courageous members of the Establishment, hehehehehe), they are pretty much out of gas at the moment.
And not because of the price or supply of Oil! Europe is leading the way in "Keynesian End Game" (I don't know who to credit, but I like that term... may have even used it myself at some point as I love chess metaphors and analogies...)
Oh, sure... Oil prices and supplies are not helping at all, and are in fact contributing to the never ending torture that is the Western economy (because its all relative... ask some Indigenous person living in the Andes if the recession means much to them...)... but that's only because we live in this Television induced fantasy of what our life is - food comes from the grocery store, water from your tap, gasoline out of a pump at the corner store, money comes from the ATM, financial security is bytes on a freaking screen... holy molly! Are we FOS, or what? (We, as jurors, put people in prison to be raped, murdered, and tortured... for "killing or abusing" animals... and then go home and set out rat and mouse traps and poison - I have to wonder... WWJD?!)
But I digress...
The Central Banks are in full panic mode, now... don't let them fool you... check in with me and I'll be happy to set you right...
Remember the incredible growth in China? Here's a link to the Hang Seng Index 5 year chart.
Do you see any "growth" there? Me neither.
OK. Here's a 10 year chart. Looks to me like a market growing at a compounded 7% per year... with harrowing moves... During the best decade that China could have possibly had? What will it look like a decade from now?
For now, the risk trade could be on... use this as an opportunity to sell any long positions you have left... hide out in short term Treasuries and US$... a Bear Market is in the offing, maybe The Big One... this will create the greatest opportunity for Capitalist pigs (like me!) since March of 2009... and perhaps a shade better.
OK. That's if you have money.
No money? Not to worry... things can't get any worse for you... no point worrying about it... but if you are young enough and bold enough to have a thirst for life rather than a thirst for commiserating... Think!
The answers are fairly obvious!
In a deflationary environment you must avoid debt nearly as much as death... because debt will lead you there. Too, you must avoid property taxes like the plague. This likely means that if you are fortunate enough to have not set up shop in some high cost Blue State you'd be better off elsewhere. The life long difference between paying $1,800 in property taxes and $18,000 in property taxes (per year) is overwhelming! (Its the after tax equivalent of being able to spend winter in Costa Rica or other warm local... or working 4 days per week rather than 5...) Let the Keynesian Left eat their own cooking... its poisonous to your freedom as well as your life and health.
The West, and the U.S. in particular, is in for a rapid-rate-of-change-event. Not so rapid that its the end of the world... life will go on... but our economic arrangement will under go a tremendous shake up... it will be sooooo much easier on you to swim with the tide rather than against it. Or "Against the Wind".
Nice tune. Don't let it be your anthem.
"There will be two dates on your tombstone everyone will read them, but the only thing that matters is the little dash between them." Kevin Welch
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