Financial topics

[OLD1953]

On the CO2 issue, nobody has argued that CO2 directly causes this much difference. The arguement is that CO2 causes a small increase in temp, which causes increased water vapor in the atmosphere, which is responsible for the bulk of the temp increase. Personally, I think it's due more to microflaking of coal, plus diesel soot. As far as the cap/trade thing goes though, it amounts to a tax the government is farming out to the banks. It will be a mess.

[aedens]

On the CO2 issue, nobody has argued that CO2 directly causes this much difference. The arguement is that CO2 causes a small increase in temp, which causes increased water vapor in the atmosphere, which is responsible for the bulk of the temp increase. Personally, I think it's due more to microflaking of coal, plus diesel soot. As far as the cap/trade thing goes though, it amounts to a tax the government is farming out to the banks. It will be a mess.

The EPA director was on today and stated middle size business and farm's will not be affected by carbon cap. Given revenue numbers the government has insured the Recessionary spiral will continue since there is no coherancy to the path forward. It appears there hellbent to maximum ruin by the Goverment so called guiding hand. I do not think for a second there motives are intended for our markets survival and cements the attitudes to build elsewhere so why bother in the United States. Given the scope of true corporate largess farm's they should be monitored and only corrective action should be considered and levy no fine unless gross violations are observed. The reality is given they are constructed out of the states now to circumvent many issues so mexico and eastern europe and the like are utilized. As for middle cap growth investments energy costs on there so called EPA policy approach if I heard heard her correct is was like being a little pregnant and business will not invest since no cost basis is available. A apple farmer got nailed $10,000 so the EPA is served notice by this investor as I see it as revenue harvesting. I did listen the the farmers report and the EPA so I decided not to invest in the Untited State small cap area since what I see and what I heard are two different things so she has no respect from this investor to preseve capital in this bear market.
I seen a good report some years ago when it was forwarded that one eruption he monitored was basically 100,000 years of the industrial age on a conservative scale and el nino thermal events was underwater encylical volcanic vents and it made sence by scale and frequency. Another observation we never really understood was how many there could be since we just found a few. I wish I remembered his name but the sulfur dioxide and other gases he listed with the back of the envelope calculation that night where posited in a correct context and absolutely made sense. We have came a large distance since the 70's technology I started my working career with. So many have switched to natural gas I feel there argument is a straw man issue in comparison to where we were. Later I will link the new department of energy report I posted in the forums a few weeks back for tangible percentages.

[John]

I feel like I've been hit by a sledgehammer. I moved yesterday, and
at age 65, moving boxes and furniture all day is not what it used to
be. And that was after packing everything in the last few weeks.
Well, the move was successful, and I now live in Cambridge, Mass,
except that it will take me years to unpack all the boxes. Other
than that, all is well.

One interesting thing I noticed in my sporadic opportunities to
listen to the news in the last couple of days. The story about the
FDIC running out of money was given little coverage in America (I
noticed that it was way on the bottom of the WSJ.com web site).

But it was huge news on the BBC. It was the lead item in the news
for most of the day, with lengthy discussions by various pundits.

Several years ago, when I first started posting warnings that the
FDIC might go bankrupt, Gordo wrote to me to point out that the FDIC
could never go bankrupt because it had unlimited access to the
Treasury. He's obviously right, but now that the time has come,
Sheila Baer doesn't want to go to the "humiliation" of begging money
from Geithner and Summers, and she doesn't want to raise the "tax"
that banks want to pay, so she's come up with this brilliant
compromise: All the banks have to pay their 2011 and 2012 taxes
within the next year. This is really hilarious. What will those
wonderful humorists in Washington D.C. think of next to entertain us?

Well, back to my boxes.

Sincerely,

John

[aedens]

by aedens » Mon Sep 28, 2009 6:37 pm

Prepare now since they are holding the taxpayer in a death grip. If you cannot discern the syndicalism and corporativism in the market condition there is no hope to convince you anyway. Economic history is a long road of government policies that failed because they were designed with a disregards for the laws of economics. I see the FDIC wants 3 years in advance for premiums. The Godfather wants you to do this favor since we sucked the life out the other's and burned it to the ground for our pleasure - er - ''profit to our Club"

[mannfm11]

John, the only money the FDIC can have is what is in the banks. The entire money game is so absurd that I want to write a detailed idea of how to get out of this and I can't even start. The treasury has to get its money out of the banks, which don't have the money they owe their customers. The idea the Fed is printing money by buying bank assets isn't any more legitimate than the banks themselves printing money to make loans, which they indeed do. I learned this about the FDIC years ago listening to a guy on a tape, that the money they can pay those they insure are in the accounts they insure. The banks live off a balance sheet and only need money to pay each other or acquire government securities. Thus they need funds they can send to the Fed. Being this is an advance to the FDIC, the banks will merely carry it as a prepaid insurance, meaning it is really no money at all. They will merely clear the checks of the FDIC.

This is probably something most of you know, but the modern bank game of money is nothing more than an accounting scandal that if one of us practiced it, we would go to jail. It would be nice to lend out $10 for every $1 I had in savings and have the government and its henchmen cover for me in event my solvency was questioned. This scheme goes well as long as interest rates are reasonable and the holding of money isn't so skewed as to the fact that I owe a different group of people a significant amount of credit more than they owe me and those that owe me are in no position to pay. All the money in the US is created, not by the Fed, but by the lending of banks. If the Fed or the government officially printed money as is supposed, its value on an international basis would probably collapse.

AS it is, the entire world is full of hope and little else that the US financial system can last. All the talk in the media is nonsense, like China not buying US bonds. The Chinese get dollars, buy bonds then issue their own currency off these bonds, thus they impound US debt. I can't swear this is how it is done, but it is in general how the entire world monetary system works. If the Chinese didn't want our money they would appreciate their currency. But, instead they jawbone down the dollar so they can hide behind it while devaluing themselves. China cannot stand through a strong dollar. They also can't stand a collapse and neither can the rest of the world.

I do believe the solution to this mess is going to be austerity and taxes, being the real dangerous liabilities are those of the banking system. Tax away the liabilities and you have your bailout. Eventually this is how the FDIC will be funded if the whole system doesn't collapse. I give them 18 months to get together some kind of bankruptcy rebalancing or we face entire collapse.

[mannfm11]

Global warming is nonsense in the sense that if it is real we can do anything about it. Man will probably poison himself first or find a way to commit suicide. I have read the same thing about volcanos, but I would suspect that the major source of global warming is the sun.

[aedens]

Global warming is nonsense in the sense that if it is real we can do anything about it. Man will probably poison himself first or find a way to commit suicide. I have read the same thing about volcanos, but I would suspect that the major source of global warming is the sun.

true but in addition http://www.tnr.com/article/drunk-power?page=0,0
there are things that can be done at a consumer lever to get off the grid
and every time the $/watt gets competitive we know what happens then.
http://www.opensecrets.org/lobby/billsum.php?id=107281

yea i agree with you as to the overall nonsense.

[richard5za]

The bear market rally has come to an end

Well, that what my technical analysis to 1st October is saying to me.

The Dow is showing strong RSI sell signals and I am expecting the index to fall quite significantly; how far I don't know but I'm not expecting the next bear market rally for some months. Have a look at this chart on the Dow to yesterday:

DJIA daily 1 Oct09.jpg (44.73 KiB) Viewed 5816 times

Interestingly the Dow Transports index lead the way and topped in September:

Dow Transport 1 Oct09.jpg (47.88 KiB) Viewed 5817 times

And we are seeing a very similar picture for Nasdaq:

NASDAQ daily 1 Oct09.jpg (47.5 KiB) Viewed 5817 times

I must say there were times during this bear market rally when I doubted my own sanity. Most everyone else had a different view to me.

I shall be watching events with great interest
Richard

[John]

Dear Richard,

> I must say there were times during this bear market rally when I
> doubted my own sanity.

You and me both.

But I just don't believe that it's impossible to see another leg up
in the stock market.

Right now, there's a great deal of confusion. The mainstream
analysts have no idea what's going on. There are some non-mainstream
analysts who realize how great the danger is, but anyone who talks
about it is quickly marginalized.

I saw Joe Kernen on CNBC gloating the other day about how dumb the
"bears" have been. He was mocking all the people who said the market
would go down, and laughed at them in view of the "best" quarter for
the S&P in many years. He epitomizes the worst of the mainstream
bulls.

The "mainstream bulls" believe that the may pull back slightly for a
few days, and then will take off again.

The "mainstream bears" believe that there will be a quarter or two of
slightly hard times, and then will take off again.

The "mainstream" is guided by the following beliefs:

• The possibility of another Great Depression has been completely
  eliminated by the clever policies of the Obama administration.
• We almost got spun into a Great Depression a year ago when Lehman
  collapsed, but Geithner, Summers and Bernanke got us out of it
  through bailouts, stimulus, and quantitative easing.
• Thus, nothing that happened prior to WW II is relevant.
• Thus -- and this is the most important belief of all -- the worst
  MUST be over, because the financial crisis has now lasted over two
  years, and nothing since WW II has lasted this long.
• Thus, any "green shoot" is a sign that an explosive recovery is
  imminent, and anything else (like the increasingly disastrous
  unemployment numbers) are "outliers," and irrelevant.

The main thing is that they can't believe this crisis isn't over. No
crisis in their lifetime has lasted this long, so it's IMPOSSIBLE
that this crisis will continue.

Probably the most egregious villain in this belief is Paul Krugman,
who won the Nobel Prize in Economics because of his hatred of George
Bush. This summer he declared that the crisis was over, because of
his love for Barack Obama, which is derived from his hatred for
George Bush. If one were inclined to be an unpleasant person, one
might indulge in some Schadenfreude over Krugman's recent purchase,
for $1.7 million, of a Manhattan condo that had been in the market at
$1.85 million for over a year (402 days).
http://www.bloomberg.com/apps/news?pid= ... 6QtJEQRJCI

It's once again time to post this quote:

> "A common feature of all these earlier troubles [previous panics]
> was that having happened they were over. The worst was
> reasonably recognizable as such. The singular feature of the
> great crash of 1929 was that the worst continued to worsen. What
> looked one day like the end proved on the next day to have been
> only the beginning. Nothing could have been more ingeniously
> designed to maximize the suffering, and also to insure that as few
> as possible escaped the common misfortune.

> The fortunate speculator who had funds to answer the first margin
> call presently got another and equally urgent one, and if he met
> that there would still be another. In the end all the money he
> had was extracted from him and lost. The man with the smart
> money, who was safely out of the market when the first crash
> came, naturally went back in to pick up bargains. ... The
> bargains then suffered a ruinous fall. Even the man who waited
> out all of October and all of November, who saw the volume of
> trading return to normal and saw Wall Street become as placid as
> a produce market, and who then bought common stocks would see
> their value drop to a third or fourth of the purchase price in the
> next twenty-four months. ... The ruthlessness of [the stock
> market was] remarkable." (p. 108)"

This is the text from which I derived the Principle of Maximum Ruin
so many years ago -- that the current stock market will ruin the
maximum number of people to the maximum extent possible. The rally
that started last March, and is ending just now (or may not even be
ending) has sucked huge amounts of money from short sellers, and will
suck more huge amounts of money from those holding stock.

I think it was Matt1989 who kept asking me, several years ago,
exactly how the Principle of Maximum Ruin would work, and I told him
that I honestly didn't know how it would work, only that it would
work.

But now we really see well it works. A lot of people were comparing
this rally to the 1930 rally, and when this one lasted longer, they
said, "See? This isn't like the Great Depression. This rally is
lasting much longer, so it's OK to assume that the market will keep
going up and up." Thus you get people like Joe Kernen gloating.

As Galbraith said, "Nothing could have been more ingeniously designed
to maximize the suffering, and also to insure that as few as possible
escaped the common misfortune."

Sincerely,

John

[aedens]

John you are correct.
I feel the maxum of delusion is redline it until february since it appears the third quarter employment numbers are the new normal desease we see. I opened one position as a hedge and you know how blantantly conservative I am. The market in this sick new normal have one thing, Speed if not common sense of data which in the correct hands is knowledge.