Financial topics
Re: Financial topics
Does anyone else have this foreboding feeling, or is it just me?
I fele like we are about to be in for something totally different, from what we have become accustomed to.
An analogy: Water is a solid from absolute zero (about -459 F) to about 32 F. Then in a matter of a few degrees, something totally different happens, and it is a liquid.
You adapt to the loss of solid behavior, and get used to the liquid behavior, from about 32 degrees F to about 212 F.
Then in a matter of a few degrees, something totally different happens, and it is a gas. From 212 degrees to who knows how high, it is steam.
The physical behavior is much different at each change of state; (Solid, liquid, gas.)
I have this foreboding feeling that we are in for a state change (pun intended.)
What it will be, I have no idea.
Mark
I fele like we are about to be in for something totally different, from what we have become accustomed to.
An analogy: Water is a solid from absolute zero (about -459 F) to about 32 F. Then in a matter of a few degrees, something totally different happens, and it is a liquid.
You adapt to the loss of solid behavior, and get used to the liquid behavior, from about 32 degrees F to about 212 F.
Then in a matter of a few degrees, something totally different happens, and it is a gas. From 212 degrees to who knows how high, it is steam.
The physical behavior is much different at each change of state; (Solid, liquid, gas.)
I have this foreboding feeling that we are in for a state change (pun intended.)
What it will be, I have no idea.
Mark
Ben Bernanke on 60 Minutes
-- Ben Bernanke on 60 Minutes
Watching Fed Chairman Ben Bernanke on 60 Minutes this evening, I
realized that I have a great deal of respect for him as a man.
Now, no one has been a bitingly critical of him as I have. I've been
relentless in mocking his policies, and pointing out that they
couldn't possibly succeed, as indeed they haven't.
But of the people that I criticize, I find most of them to be
personally sleazy, taking ideological positions on the left or right
designed to cover up their own personal failings, and their own
complicity in the disasters of our time.
But what I see in Bernanke is a somber, modest man who talks openly
and honestly about what's going on, who really believes what he's
saying, who doesn't put an ideological spin on it, and who feels
personally devastated about the state of the economy, much of which
he feels responsible for.
Unfortunately, he still apparently has no idea what's coming, which I
find totally astonishing for the head of the Princeton University
Economics Department. In the 60 Minutes interview he said that he
expects the recession to level off this year, and growth to begin
again next year. Does he really have so little understanding of the
long-term damage caused by the dot-com, real estate, credit and
stock market bubbles? Or is he saying what he's saying because he
doesn't dare talk about what he knows to be the truth?
http://www.cbsnews.com/stories/2009/03/ ... 2191.shtml
Sincerely,
John
Watching Fed Chairman Ben Bernanke on 60 Minutes this evening, I
realized that I have a great deal of respect for him as a man.
Now, no one has been a bitingly critical of him as I have. I've been
relentless in mocking his policies, and pointing out that they
couldn't possibly succeed, as indeed they haven't.
But of the people that I criticize, I find most of them to be
personally sleazy, taking ideological positions on the left or right
designed to cover up their own personal failings, and their own
complicity in the disasters of our time.
But what I see in Bernanke is a somber, modest man who talks openly
and honestly about what's going on, who really believes what he's
saying, who doesn't put an ideological spin on it, and who feels
personally devastated about the state of the economy, much of which
he feels responsible for.
Unfortunately, he still apparently has no idea what's coming, which I
find totally astonishing for the head of the Princeton University
Economics Department. In the 60 Minutes interview he said that he
expects the recession to level off this year, and growth to begin
again next year. Does he really have so little understanding of the
long-term damage caused by the dot-com, real estate, credit and
stock market bubbles? Or is he saying what he's saying because he
doesn't dare talk about what he knows to be the truth?
http://www.cbsnews.com/stories/2009/03/ ... 2191.shtml
Sincerely,
John
Re: Financial topics
I, also have been puzzled by Bernenke, and some others -- Are they Stupid? Are they part of the criminal banking consriracy? Are they lying? etc.
One of the problems with well educated and intelligent people is they cannot see outside their limited area of knowledge. This correlates, of course, with the generational dynamics.
These people cannot see the solution because it is outside the banking system -- the banking system is the problem -- but that thought will never enter the mind of a banker. It is repelled by everything they have learned or done. They think Ron Paul is a quack, when he is the only one that makes sense.
The solution to a problem always lies outside the problem, that is the problem.
Ask any uneducated man on the street, he will use common sense and come to his solution: "Piss on the banks..."
I, agree with John this country cannot move forward until Empire America, Wall Street America, and Politcal America have died. And that will take complete collapse.
Incidently, Geithner is one who just lies -- He said he is proud of his years of "Public" service -- The NY Fed is not a public bank -- it is part of the privately and criminaly held international banking cartel. Maybe, he forgot that just like he forgot to pay his taxes.
Bill
One of the problems with well educated and intelligent people is they cannot see outside their limited area of knowledge. This correlates, of course, with the generational dynamics.
These people cannot see the solution because it is outside the banking system -- the banking system is the problem -- but that thought will never enter the mind of a banker. It is repelled by everything they have learned or done. They think Ron Paul is a quack, when he is the only one that makes sense.
The solution to a problem always lies outside the problem, that is the problem.
Ask any uneducated man on the street, he will use common sense and come to his solution: "Piss on the banks..."
I, agree with John this country cannot move forward until Empire America, Wall Street America, and Politcal America have died. And that will take complete collapse.
Incidently, Geithner is one who just lies -- He said he is proud of his years of "Public" service -- The NY Fed is not a public bank -- it is part of the privately and criminaly held international banking cartel. Maybe, he forgot that just like he forgot to pay his taxes.
Bill
Re: Financial topics
Bill -wvbill wrote:From Martin Armstrong:
What we are confronted with currently, is what I have throughout the years defined as the "Waterfall Effect" that is a complete type of collapse from what you might call Exhaustion following a curved decline. Penetrating the Nov. low, could lead to a drop to 4,000 by June 2009 or September 2009.
Throughout the years of research covering all major economies and civilizations back to the beginning of recorded time, what has always distinguished the end of an era is how the decline unfolds. Sharp spike drops are indicative of corrections within a long-term trend that ultimately survives. When we see the “Waterfall Effect" the decline tends to mark the end of that organized state as we once knew it.
Link to full article:
http://www.contrahour.com/contrahour/20 ... ights.html
Bill
Thanks for posting this very intriguing article. The author has a unique perspective and I like how he provides some comparisons to great empires (and their collapse) in the past while drawing parallels to the US, the EU and the UK. I did have one quick question - would you know if the author, Martin Armstrong, is the apparent Ponzi Scheme criminal described here:
http://www.nytimes.com/2007/04/28/busin ... .html?_r=2
Thanks!
Andrew
Re: Financial topics
Yes, I think it is the same person -- there are some amazing articles about him and by him -- I have not read them all, but some of his previous articles (apparently written from prison) were very interesting and included some accurate predictions.would you know if the author, Martin Armstrong, is the apparent Ponzi Scheme criminal described here:
His most recent article, the one in the link, I feel has merit, as it fits in with the things being discussed in these forums.
I hope he is wrong -- I think he is right!
Bill
Re: Ben Bernanke on 60 Minutes
In another post I just read someone had asked if these people are stupid. I don't think so. A few years ago I had decided to expand my business and hired 10 people in less than a year and rented a large office. Things started off pretty well as revenue went up but then it sort of sputtered and each month I saw my savings shrinking, unable to keep up with my expenses. For several months I could see the handwriting on the wall but I didn't talk to my employees about it because I knew that would ruin the momentum we had built and I was certain we could turn things around...but I kept losing money and was in debt big-time and finally I could see that everything I had worked for and everything I owned was going to be lost if I didn't act by downsizing in a dramatic way. Even at that point I felt there was nobody who could really understand the situation I was in except for someone who has been through it.John wrote:-- Ben Bernanke on 60 Minutes
Unfortunately, he still apparently has no idea what's coming, which I
find totally astonishing for the head of the Princeton University
Economics Department. In the 60 Minutes interview he said that he
expects the recession to level off this year, and growth to begin
again next year. Does he really have so little understanding of the
long-term damage caused by the dot-com, real estate, credit and
stock market bubbles? Or is he saying what he's saying because he
doesn't dare talk about what he knows to be the truth?
http://www.cbsnews.com/stories/2009/03/ ... 2191.shtml
Sincerely,
John
I think that that's what these guys are going through. I only knew a few people who had gone through a similar situation and of course, nobody knows anyone who has gone through what we are going through with our economy. These people are basically flying blind and they are most blinded by their decades of experience that simply isn't working now.
They may well know that the numbers don't add up but it's their job to do and so they just go out and do it. As anyone who is paying attention knows, the problems are many and varied and the numbers are beyond comprehension, in many cases.
I alternately get very angry at what they are doing and then feel tremendous sympathy knowing how hard most of them work and knowing how critical most people are of them.
BTW, my business is doing great now, 2 1/2 years later. I scrimped and saved and worked my ass off and I cut out every wasteful expense I could. I am still paying off debt but I have never missed paying an employee or a creditor. Time was a key ingredient in the solution.
--Fred
Re: Financial topics
I have just been researching Gene Inger, who I heard about either here or on SeekingAlpha.com and I have been amazed by this guy. He strikes me as being as smart and knowledgable as all the Wall Street brains I see on TV (put together) except this guy doesn't just ignore the bad news he actually incorporates it into his outlook.
I went ahead and subscribed to his newletter after researching him and have been blown away at hearing someone in the know not speaking with a forked tongue; I am actualy giddy over this discovery. It has made me realize how rare it is to find a financial expert who is honest. And I think that's what it is, he is not just smart but he is intellectually honest, something very rare on Wall Street.
He has a website at
http://www.ingerletter.com/
GEEZ...I think my head might explode if I actually came across an honest politician.
--Fred
I went ahead and subscribed to his newletter after researching him and have been blown away at hearing someone in the know not speaking with a forked tongue; I am actualy giddy over this discovery. It has made me realize how rare it is to find a financial expert who is honest. And I think that's what it is, he is not just smart but he is intellectually honest, something very rare on Wall Street.
He has a website at
http://www.ingerletter.com/
GEEZ...I think my head might explode if I actually came across an honest politician.

--Fred
Re: Financial topics
You know John, I feel the same way about Bernanke. I think he has to attempt to put his best foot forward when talking about the economy. But, I have never thought he was bullshitting the world. Greenspan would just sit there and talk in circles. When he said something straight out, it wasn't reported. I have also seen Paulson interviewed. You would have to think this guy was a crook, but I suspect he was brought in because this stuff was brewing. We have been on a money train to hell ever since 1998 when it was so clear they couldn't let the stock market come apart and LTCM happened. 2000 was a systematic event that was cured by a 30% decline in mortgage payments and more equity out of housing. The tax cuts and low short term rates that fueled the carry trade didn't hurt either. All this money flowed to the bottom line of corporate America and to Asia and the rest of the world also had its housing bubbles. People forget how Enron and Worldcom and Parmalet all imploded. For those that don't know Parmalet, it was a Dow component of the European exchange that went from investment grade to broke in a day. The story was they fabricated a letter they had $2 billion in a bank of America Account in the Caymans. The whole banking world had to know that was false, as they know where the money is, but they were pushing bonds out the door onto Italians to the day it busted, AAA or AA rated.
Your financial post on the home page today, you might note the projected dividend rate on the SPX at 700. 3.25% and down from what it was trailing. There is talk that AXP cuts and I would imagine that MRK probably cuts its as well in that it took over someone (GLX?). Alcoa is rumored to be going to cut its dividend and I would imagine we will see a few more big payers cut theirs as well. Never before 1994 or so had the dividend rate gone below 3% and stayed there for over a few months. The 1929, 1966, 1973 and 1987 peaks were met with 3% dividends. There is nothing about stocks but dividends as all stocks eventually are either acquired or terminate at zero some time in the future.
Another thing. We are in the world of multinational media. Disney owns ABC. Dow component. CBS is independent for the time being. Fox is a media company that I think is worldwide. NBC is owned by GE along with its sisters, MSNBC and CNBC and CNBC Europe. TNT, CNN and TBS are owned by Time Warner, who brings you Bugs Bunny. My point here is I mentioned the rating agencies. GE is now having the government guarantee its debt. I don't think they are charging a fee for the guarantee, which is criminal seeing as I read default swaps on GE debt are now 7% up front. The rating agencies cut GE's rating to AA+ which doesn't line up to default swap rates of 7%. Point being that GE owns 4 major media outlets and has a hammer over the politicians and many other operations in the US. I read a booklet by a guy named Walker F. Todd who was chief Counsel of the Cleveland Fed about the Fed and the early 1930's. It was damn interesting read and it went into detail as to what Hoover was doing to try to stop the depression. One of the players was GE, which was pushing a corporate state solution and something to do with high tech. Point being is this is a fascist system they were pushing and GE probably hasn't changed. But the real point is that GE is AA+ and the question is, why are they AA+? I venture the rating agencies probably couldn't stand the heat GE could put on them with their blunders on the CDO's and other stuff they have been in the middle of. Pretty free country when it can be held hostage by a big conglomerate and a bunch of banks that are too big to fail. It makes me wonder why AIG allowed itself to be used as a dumping ground for Wall Streets toxic waste?
There are a lot of points that most Americans will never look into. John, you keep bringing up PE's. The reason I don't deal in PE's is because I believe they are fictions and have been for years. You take double the dividend and divide it into 1.00 and that is the maximum sustainable PE, as dividends are 50% of earnings generally. 1/.065 is about 16 which would be forward, backwards and sideways. This means we were looking at over 30 on the top, not the 15 they were tellilng us. There is some wiggle room in this number, but I believe from what I know about finance that it is in the ballpark. Being the dividend is falling now,the PE is getting worse. One reason I bring this up is Shiller has been talking about his PE/10, which would generally be a good measure except the earnings have been a fiction and they have been created in a 10 year bubble. 3000/300 are minimum targets on the Dow/SPX because this is what Japan did and it is better than we did in the Great depression and this a bigger mess than Japan or the Great Depression.
Your financial post on the home page today, you might note the projected dividend rate on the SPX at 700. 3.25% and down from what it was trailing. There is talk that AXP cuts and I would imagine that MRK probably cuts its as well in that it took over someone (GLX?). Alcoa is rumored to be going to cut its dividend and I would imagine we will see a few more big payers cut theirs as well. Never before 1994 or so had the dividend rate gone below 3% and stayed there for over a few months. The 1929, 1966, 1973 and 1987 peaks were met with 3% dividends. There is nothing about stocks but dividends as all stocks eventually are either acquired or terminate at zero some time in the future.
Another thing. We are in the world of multinational media. Disney owns ABC. Dow component. CBS is independent for the time being. Fox is a media company that I think is worldwide. NBC is owned by GE along with its sisters, MSNBC and CNBC and CNBC Europe. TNT, CNN and TBS are owned by Time Warner, who brings you Bugs Bunny. My point here is I mentioned the rating agencies. GE is now having the government guarantee its debt. I don't think they are charging a fee for the guarantee, which is criminal seeing as I read default swaps on GE debt are now 7% up front. The rating agencies cut GE's rating to AA+ which doesn't line up to default swap rates of 7%. Point being that GE owns 4 major media outlets and has a hammer over the politicians and many other operations in the US. I read a booklet by a guy named Walker F. Todd who was chief Counsel of the Cleveland Fed about the Fed and the early 1930's. It was damn interesting read and it went into detail as to what Hoover was doing to try to stop the depression. One of the players was GE, which was pushing a corporate state solution and something to do with high tech. Point being is this is a fascist system they were pushing and GE probably hasn't changed. But the real point is that GE is AA+ and the question is, why are they AA+? I venture the rating agencies probably couldn't stand the heat GE could put on them with their blunders on the CDO's and other stuff they have been in the middle of. Pretty free country when it can be held hostage by a big conglomerate and a bunch of banks that are too big to fail. It makes me wonder why AIG allowed itself to be used as a dumping ground for Wall Streets toxic waste?
There are a lot of points that most Americans will never look into. John, you keep bringing up PE's. The reason I don't deal in PE's is because I believe they are fictions and have been for years. You take double the dividend and divide it into 1.00 and that is the maximum sustainable PE, as dividends are 50% of earnings generally. 1/.065 is about 16 which would be forward, backwards and sideways. This means we were looking at over 30 on the top, not the 15 they were tellilng us. There is some wiggle room in this number, but I believe from what I know about finance that it is in the ballpark. Being the dividend is falling now,the PE is getting worse. One reason I bring this up is Shiller has been talking about his PE/10, which would generally be a good measure except the earnings have been a fiction and they have been created in a 10 year bubble. 3000/300 are minimum targets on the Dow/SPX because this is what Japan did and it is better than we did in the Great depression and this a bigger mess than Japan or the Great Depression.
Re: Financial topics
Intelligent people who overspecialize and don't learn about other areas are vulnerable to this kind of tunnel vision. People with broad areas of knowledge are more likely to think outside the box and utilize a cross-disciplinary perspective.wvbill wrote:One of the problems with well educated and intelligent people is they cannot see outside their limited area of knowledge. This correlates, of course, with the generational dynamics.
The solution to a problem always lies outside the problem, that is the problem.
Ask any uneducated man on the street, he will use common sense and come to his solution: "Piss on the banks..."
The solution to a problem is not always outside the problem. Sometimes people overthink things and try to reinvent the wheel when the wheel is working just fine...they're just using it wrong. Intellectuals can often be guilty of overcomplicating the simple, though.
Common sense is a double-edged sword. On the one hand, sometimes it really is the simplest and best solution. But sometimes it's the wrong answer and leads people to the wrong conclusions, thus leading to disaster. Sometimes the right choice is counterintuitive. The problem is, realizing this is often only the result of trial and error and/or serendipity.
You put too much faith in the uneducated masses. I value intelligence and education.
Re: Ben Bernanke on 60 Minutes
He's actually quite brilliant. If his plan goes through, the recession will technically end in 2009 - at least the way he calculates it. The rest of us will have to come up with a new word to describe the continuing disaster. The financial elite are the French monarchy of our time. "Let them eat cake!"John wrote:-- Ben Bernanke on 60 Minutes
...
Does he really have so little understanding of the
long-term damage caused by the dot-com, real estate, credit and
stock market bubbles? Or is he saying what he's saying because he
doesn't dare talk about what he knows to be the truth?
http://www.cbsnews.com/stories/2009/03/ ... 2191.shtml
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