Thursday, December 31, 2009

Barney Frank Gives Wall Street Crooks $4 Trillion Gift

The first thing I usually do every morning is scan Bloomberg. There's always something good in there given the state of affairs we now see. I would encourage anyone who is interested in economics, Wall Street or cleaning up this mess to do the same. Not every story is good. In fact, some content is dubious. But for the most part Bloomberg is pretty doggone good reporting.

I suppose Barney Frank's real name is Barney Rubble. It's interesting to note the glaring examples coming to light in this crisis of who works for the American people and who works for themselves in our government. I suppose Barney Frank works for himself as he holds court to the gift-giving lobbyists.

Financial reform you can believe in. All part of change you can believe in.
posted by TimingLogic at 12:27 PM

A Look At The Dollar, The S&P And Bonds Since The Start Of This Economic Crisis

(Dollar chart is inverted to show direct correlation with the S&P and bond market.)

1) We remarked that the Federal Reserve could print a fair amount of money and not worry about inflation when this crisis started. And that the Fed should set short term interest rates at zero the moment this crisis started. Both positions would have been considered ludicrous at the time. Absolutely no one was taking any type of position that the Federal Reserve either should or could print money. Monetizing the debt is still a position that brings out the hecklers who have a limited or ideological understanding of money. I still support this position. A position based on merit not ideology. None of that merit includes bailing out the criminals on Wall Street which seems to be a Bernanke and Obama favored pastime. Instead it is a position which should be used to assist society in dealing with this crisis constructively.

2) Throughout December of 2008 and early into 2009 we wrote numerous times that the seeds of a rally were building but that a tradeable bottom was not in. That the rally was building but needed time to germinate.

3) We highlighted part of quantitative easing was really an attempt to drive money out of safe havens and into risk. Indeed that is exactly what happened. Unfortunately, it did not work as Bernanke expected because none of that risk was economic risk. It was simply more fraudulent financial speculation.

4) When Citigroup dropped below $1, we wrote that we were no longer bearish on banking stocks. That exogenous factors would determine the fate of banks. This after being incredibly bearish on banks before and during the financial collapse. Banks soon roared higher.

5) We wrote that the Transports were likely headed down to 2200 before any possible bounce. And that is exactly where they landed before rallying 90%.

6) President Obama made a public pronouncement that now was probably a good time to buy stocks. The President has shown through various commentary since that he actually knows very little about economics or how to effectively deal with this crisis. But we can be completely assured Wall Street and the President knew privately what the Fed was about to announce publicly - it was about to start monetizing debt. That very act gave Wall Street cover to front run credit and the effects of monetizing - a nearly certain guarantee of a falling dollar. The dirty little secret as we have always said is that Wall Street's brilliance is tied to one dynamic - insider information about what the Federal Reserve is going to do with monetary policy. And, we can be assured they knew exactly what was going to happen before it was announced to the public. Just as the President did. That is what started this rally in financial assets.

7) The Federal Reserve publicly announces it is going to start monetizing debt. ie, Printing limited sums of money.

8) We wrote that the market had most certainly made a low for the year and the S&P could rise to 1100. At the time, that was a generally unfathomable perspetive. Yet, we are here today. The S&P is now at about 1120.

9) Bob Pisani, CNBC reporter and generally very uninformed about how the economy or financial markets work, gives an on-air tutorial to the general public about how to employ the carry trade. ie, Shorting the dollar and buying stocks. Within weeks the dollar was rallying rather substantially. Contrarily, we have been writing for years that Wall Street has been speculating against the U.S. dollar. As the stock market hit new highs before the collapse, we wrote that the only financial assets we liked were U.S. dollars and Japanese Yen. A position which is still valid. Wall Street continues to speculate aggressively against the dollar. Goldman Sachs recently issued remarks that they believed the dollar would continue to decline because of the current account deficit. A rearview mirror position which has absolutely no merit in any type of analysis and again shows how little Goldman Sachs actually understands about the world around them.
I am completely amazed that there is literally no one stating that the dollar could be or is likely putting in a long term low. There is a near unanimity that the dollar's rally is a short term movement based on an overcrowded trade. That the dollar will start its descent again in the not too distant future. Once again, this perspective is a Wall Street perspective. One of a trader. We wrote a few years ago that it mattered not what traders attempted to do with the dollar. That fundamentals would crush forex traders were they attempting to short the dollar. And in fact that is exactly what happened to Wall Street as the dollar rammed higher when global financial assets collapsed.

Fundamentals, not traders, drive markets. A strong qualitative and quantitative understanding of fundamentals has allowed us to call more macro outcomes to this cycle than any other source I am aware of. Fundamentals allow or disallow traders to take certain positions until fundamentals change and force traders to change or to lose their money without mercy. At some point fundamentals will crush traders again. I am still of the perspective that the dollar is putting in a long term bottom driven by fundamentals. A very, very lonely position. But a position based on qualitative and quantitative analysis of data. Not of opinion.

One can argue all day long whether the Federal Reserve is a valid institution but given the dynamics of what was unfolding, Ben Bernanke literally did save the world as we know it. At least temporarily. If he hadn't, we'd all be living in caves right now foraging for grubs. The failure of politicians to take this opportunity to fix what ails the global economy will ultimately mean a substantial amount of the global population will very likely be foraging for grubs in the not too distant future.

What's next for the stock market? Frankly, I don't like this rally because I know it isn't driven by fundamentals. Powerful fundamentals that I respect all too well to play with. That said, this rally was indeed real. We'll take a stab at guesstimating where markets will head some time in January but let's end 2009 with a point to ponder - the very reason this rally was so powerful is because the underlying economy is so broken. We'll discuss the fundamentals behind this statement in detail next year.
posted by TimingLogic at 7:23 AM

Wednesday, December 30, 2009

Here It Comes - Rising Nationalism

We are about to enter the fifth year of discussing rising nationalism. Something I still don't believe anyone else is talking about. I suppose this too will be a dynamic the status quo eventually states was never predictable. How about we take a look at four dynamics which have unfolded in the last two weeks alone. (links below) Something else we have written of extensively, which is an outcome to rising nationalism, is that unbeknownst to the savants at the G20 meetings, the banksters or politicians is that globalization and global finance are both dead.

One of the larger themes of this blog is that we are now in a cycle of volatility. In the last few months Marc Faber has publicly discussed war cycles for those who follow any type of cyclical rhythms or cycle theory. We wrote a few years ago that we were entering a period of heightened potential for global conflict. I'm sure most people would have laughed reading my remarks at the time. Most still will. But fewer will now that Marc Faber has publicly remarked of it. Whatever you want to call it, cyclicality is not a theory. It is a reality. The forces well misunderstood or not understood at all are theory, not the cyclical patterns themselves. One of our first posts was on cyclicality. The world around us is driven entirely by cycles. The cycle of gestation, the heart's rhythm, the cycle of planets, the cycle of life, the cycle of seasons, the cycle of time, even the cycles of electricity delivered to your house or the cycles driving your computer and on and on and on. Without cycles the world would not exist. Now comes the cycle of volatility.

It is hilarious to read the term Great Recession over and over in the financial press. A term of arrogance and propaganda. That any savants who were in the ozone before this crisis started are now predicting its exact demise is preposterous. There is no recovery. There never was. Even government data corroborates this. There is only temporary stabilization at a new state. Anyone who understands state theory will understand when I say that we are likely in a transitory state which will be replaced by another new state. A final state which will be the new normal without transformational change. A state reached by the introduction of new inputs not anticipated by the status quo. One which cannot be "fixed" by printing money, backstopping all of Wall Street's criminal behavior, G20 tea and crumpet parties or global bureaucrats at the United Nations pledging peace and prosperity. ie, Writing checks they cannot cash. Making claims they have no ability to back up.

posted by TimingLogic at 8:38 AM

Tuesday, December 29, 2009

American Empire And Japan's New Populist Prime Minister

From personal experience I know that U.S. military bases in Japan are a very thorny issue for many Japanese. Not because Japan doesn't want a strong relationship with the U.S., but because many view the U.S. as dominating the relationship. And because there is often a perceived arrogance in how the Japanese are treated in the relationship. That includes many acts of violence against Japanese citizens by servicemen stationed there. Violence that often seems without consequence as servicemen are not tried in Japanese court but instead returned to their bases where justice is doled out.

Arrogance is severely frowned upon, even shamed, in many cultures including Japan. When Japanese business or political leaders are publicly shamed for wrongdoing, it is not uncommon that they commit the ancient act of seppuku or ritual suicide as an act of atonement. (One can imagine the horror of Wall Street's behavior in many countries given the outrage Americans feel.)

Anyhow, it hasn't been a focus of the media but President Obama actually went to Japan earlier this year. While the media was worried more about the President's genuflecting during the trip, I believe the major reason of substance for that visit was to ensure Japan political leaders understood the importance of keeping America's bases in Japan. In other words, the continuation of its hegemony over Japan.

I am quite confident it is not lost upon Japanese politicians or business leaders that a self-determined Japanese foreign policy would create millions of high-paying technology jobs in the military-industrial complex rather than playing a servile role to the American war machine.

The question is whether Japan will ever say no to the United States. Given that the shame of World War II is but a memory read in school textbooks for anyone younger than sixty, I believe the answer is yes. The only question is when.

Frankly, empire is not compatible with democracy. Period. Just ask the Romans who lost their freedoms as Rome became a war state. An empire. Thousands of years later, we have the same dynamic at work in our society - a government which arrogantly believes in its own hegemony rather than serving the sovereign. Have we learned nothing in two thousand years? Of course we haven't. Human behavior is timeless. That issue is playing a much more substantial role in our current economic crisis than anyone in the mainstream media would dare to ponder.

posted by TimingLogic at 10:40 AM

Finally Serious Discussions Of Banking Reform - Some In Congress Wish To Restore Glass Steagall

This is the first real discussion of true banking reform in the federal government. Ironically, it comes from John McCain. McCain's chief economic advisor during his Presidential campaign was Phil "I'm a Wall Street Stooge" Gramm who actually did more to dismantle our banking system than anyone I know of through his constant meddling as a politician under the influence. Apparently, McCain still has his faculties and has learned that common sense and reason applies to good governance.

A New York law firm remarks in this article that Glass Steagall would not have kept firms from failing. Now, I wonder where most New York law firms get the majority of their fees. Could that be an unbridled Wall Street? Either directly or indirectly? This position is either one of outright deception or ignorance.

Wall Street must be reformed beyond the ridiculously weak attempts at regulation undertaken by this current Congress and Presidency. Restoring existing regulation that was dismantled under the influence of lobbyists would be a first start. Our banking system should not be gambling with our savings. Overturning the Gramm-Leach-Bliley Act would be a big start in the right direction.

posted by TimingLogic at 8:32 AM

Sunday, December 27, 2009

The Card Game - How U.S. Banks Are Scheming New Ways To Rip Off Society

I just laugh at the people who argue we should do away with all government regulation to restart the economy. That is just about the most ridiculous position I could ever imagine. Yet there are many who argue such a position. I do agree that there is too much red tape. But red tape is different. Red tape are unnecessary rules to competing in the economy. Regulation keeps chemical companies from dumping mercury in your back yard. Or keeps firms from treating their employees like disposable devices. Or keeps banks from preying on consumers.

That Washington politicians keep playing their corrupt game of meddling with specific regulation in the economy is driven by the lobbyist money machine. Washington should lay down basic rules to compete in the economy and get out of the way. Only when some new, unforeseen invention impacts the economy's rules should the government ever meddle with existing regulation. And that need for change should be explained to the American people before ever being considered. Instead, we have constant meddling and changing of the rules to the game by money-seeking pandering bureaucrats.

A perfect example of this corruption is the credit card industry. That these firms can continually prey on American people by skirting regulation is heinous. You can't offer credit terms or any other economic contract then change the rules of the contract half way into the game. That the government allows this predatory activity by banksters is criminal. But the banksters are well into creating new schemes to rip off Americans, all courtesy of your elected government officials.
posted by TimingLogic at 7:12 AM

Thursday, December 24, 2009

Happy Holidays

Well, unbelievably another year has almost passed. It has been a whopper. The largest rally per unit of time in history driven by the most fiscally irresponsible Federal Reserve actions in history, the largest government deficits in history to keep the government-endorsed Frankenstein from collapsing, the largest taxpayer-funded bailout of the largest fraudulent Wall Street schemes in history, the largest transfer of wealth from average Americans to morally-bankrupt mobsters in history followed by the largest bonuses using taxpayer money ever stolen from the American people in history and as of today the largest lobbyist-manipulated government mandate in history appears close to becoming law as public officials accept the largest legal bribes in history driven by the largest lobbyist bubble in history.

Somehow it just doesn't feel like a holiday for me. It's pretty goddamn hard to celebrate when so many people are hanging on by a shoestring courtesy of a corrupt few. It simply didn't need to be this way.

Be that as it may, hopefully for the next few weeks most people will have an opportunity to forget many of the stresses of reality and enjoy quality time with their friends and families. To remember the things in life which truly matter. That is respect and compassion for all of humanity. For the world around us. To idealize our greatest virtues as sentient beings and the capability for constructive change or transformation that goes along with that gift. To remember what it means to be a free society and what responsibilities that entails. Not only to ourselves but to society. To our brothers and sisters. To mercilessly strive to make the world better so that young people and those who follow us don't have to live with the corruption and evil of a very few.

If you are able to do so, why not make the world just a little bit better by impacting the life of someone less fortunate than you through the gift of giving. There are a handful of children's charities which score highly for transparency and governance on the left side of the blog. Or there are countless local organizations across the country and the world.

Regardless of what happened yesterday or today, you can always get back up and fight the good fight.


Happy Holidays.
posted by TimingLogic at 9:00 AM

Wednesday, December 23, 2009

November New Home Sales Plunge

Link here.

It's not bad enough that the government is encouraging a reduction in the glut of homes for sale by attempting to direct economic activity without understanding the root cause of this crisis. Government meddling is why we have an economic crisis in the first place. In the end, these incentives to reduce the housing inventory glut will fail because as we have stated countless times over the last four years, the problem is not housing. As we have said, that everyone if focused on housing is because that is what they understand, not because they are right. In fact, we wrote numerous times on here that it is impossible for housing to create the crisis we see before us. A free holiday gift to drive this point home will be posted by the end of the year or the first week of January. In the mean time we keep seeing the same asinine government policy that is creating future economic problems. That being incentives to reduce the housing glut. It's the same foolish policy that was cash for clunkers. We saw how that ended. The government, ie taxpayers, basically bought new cars for its participants. A lovely policy indeed.

Btw, I love the headlines every time bad data comes out. It is always unexpected. Unexpected to whom? The status quo?
posted by TimingLogic at 12:56 PM

Wall Street's Scheming To Create Its Next Great Fraud - Cap And Trade

The casino seeks its next big game. Just like all of the others, it too will come out of your wallet if they are successful. Wall Street's involvement in cap and trade is no different than the derivatives game. It is a wealth-shifting scheme of a very few to steal from society. That is not an opinion. It is a fact.

If for no other reason than climate change benefits big business, big government and Wall Street, it should be doubted for its legitimacy. The same tremendously fraudulent voices who have destroyed the American economy, are now plotting its future with more corrupt policy - the climate change initiatives. Were climate initiatives driven by bottoms up economic policy benefiting the people of this country, it would be more believable. Instead it's more of the same sham. A handful of crooked politicians and elitists are attempting to make untold riches off of the back of the majority of Americans. ie, It's the same goddamn mess that created Enron, unregulated commodity trading and Frankenstein finance now trying to trade its way to economic prosperity with cap and trade.

After you read the first two paragraphs of the article link above what are your impressions? Mine? It is very clear. Developed economies are trying to keep poor nations poor through climate change initiatives. To stop any countries from self-determined lives. To stop economic development. To keep underprivileged people cooking in clay pots while the privileged few drive their Land Rovers. In return those driving the Land Rovers will pay those cooking in clay pots a small stipend out of yours and my pocket. To me, this sounds like nothing more than twenty first century economic colonialism. The same fraud which has plunged the generally innocent people of Africa into a quagmire of constant corruption, constant death, constant war and constant misery. All courtesy of colonial Europe.

Albert Schweitzer was right about colonial Europe. Climate change initiatives in their current form are equally fraudulent.
posted by TimingLogic at 9:56 AM

Credit Card Reform Starts Off With A Bang - 80% Interest Rates

posted by TimingLogic at 9:43 AM

Government Employees Live High On The Hog While Its Masters Live In Greater And Greater Squalor

We have written on here many times that no government programs create wealth. That every dollar spent is a collected tax on society. That means every dollar spent could have potentially been used to create the next Google or buy your next meal or new shoes for your children. That said, I am a firm believer in government services that work for the people. That includes social programs because we do live in a society. Freedom yes. Freedom to shun society? I don't think so. That was never the intent of our Constitution even though many want to bastardize its meaning to draw this conclusion. A society has common interests and goals. The only question is where do we draw the line of government services. We could all argue justice is best served by every single idea one can imagine in the form of a government program. Under that rule, we simply would not have the capital to sustain ourselves. We already have a socialist or semi-fascist government policy benefiting big business.

Some view any form of government as evil. As we have highlighted before, Thomas Paine, America's first progressive (often misquoted and misrepresented by less than progressive elements) said the only thing worse than government was no government. And, in fact, that is often what we see today. Where regulation has been dismantled we see the rule of law left to the vices of always fallible people. To businesses concerned first about personal gain at the expense of society. A reminder of why we have a written rule of law. A written Constitution. For were we not protected by either, we would have lost all of our liberties long ago. Frankly, I believe it has become apparent that not only do we need a constitution to protect our personal liberties, but we need an economic constitution protecting those considered the least in our society by elitists. Protection from the ravages of cronyism, corruption, sociopathic Wall Street-types and crooked politicians. We'll talk more about this in the future.

One timeless element that never changes is that concentrated power without transparency and oversight (effectively regulation of government) always results in evil. I don't care if that is the Catholic Church or the government of the most free society or your favorite charity. Even if its action is well-intentioned, all concentrated power without good governance will ultimately induce evil policy. That is why we have a Constitution. Good governance. Our government is such a mess because the American people have little oversight and transparency into its dirty little secrets. And because we trusted those who were elected to be the stewards of our country. Because the Constitution has become just a piece of paper rather than the rule of law in the eyes of crooked politicians. Instead, what they have turned our government into is a personal brothel. Now the cloak has been removed and we see the level of whoremongering that is government without transparency. With a dismantled rule of law.

The capital-producing economy - which pays for every single dollar the government and our banks rake in - has seen salaries and opportunity declining for decades. At the same time, the tax on society has increased astronomically to fund out of control government. And while the average American's wages have not kept pace, the federal government's wages are now double those of the private sector. The private sector who pays government wages. A clearly unsustainable dynamic.

The government in its current form has become an unsustainable tax on society. I told some friends who work for the government a few years ago that they should brace for potential standard of living reductions. It seems quite impossible to fathom but this situation must resolve itself. We now live in an economic model which bears more resemblance to the Soviet Union than the United States of yore. That is, the government provides the best job opportunities for average Americans and government-supported businesses (monopolies in every private sector industry similar in structure to state-run Soviet businesses) stifle innovation and competition.

There are two ways to remedy this situation. Or some combination of the two. Drastically raise private sector wages and economic opportunity or drastically lower federal wages. But, it will resolve itself at some point. The trend is clearly not sustainable.

Civil servants or our masters?

Link here.
posted by TimingLogic at 7:46 AM

Tuesday, December 22, 2009

Derivatives Reform Update- The Wall Street Profit Bubble Will Collapse

We have written a handful of times that the vast majority of derivatives should be banned. That financial innovation is, at its roots, nothing more than legalized fraud. Derivatives serve no purpose other than to provide income at the expense of counterparties. They create no economic wealth. To the contrary they destroy wealth. Effectively, one could look at derivatives as a form of hyper-consumption or tax in its effect. Derivatives aren't proper risk-hedging instruments. In fact, they are a major source of risk. Concentrated within a handful of major Wall Street firms, they become a source of systemic risk. Eventually that income generation achieved through the losses of a counterparty will create another Wall Street collapse. It's a mathematical inevitability compounded by the amount of income transfer and the muted state of capital creation in the underlying economy. This isn't some great epiphany to anyone who understands basic mathematics. Yet we don't get meaningful reform because of Wall Street's fraudulent involvement in government policy decisions via legalized bribery better known as lobbying.

We wrote some time ago in a lengthy derivatives post that deregulated derivatives are actually a design point sought by Wall Street. That such an environment lacking in transparency and asymmetric access to information in counterparty arrangements is necessary for outsized profits. This dynamic allows Wall Street firms to rip off society including our schools, municipalities and companies who are acting as counterparties. We have witnessed this in countless lawsuits and stories of fraud. We the People are left with the bill for this fraud.

While most derivatives should simply be banned given their design point was actually the legalization of fraud, transparency has a very powerful effect as well. Advanced Trading has an article with an introduction as follows:

Indeed this is the dynamic we wrote about quite some time ago. That transparency itself will reduce profitability and more than likely make their usage undesirable. Wall Street fears transparency because it will threaten their profits. In other words, when all counterparties to a derivatives contract have access to the same information, profits will be squeezed very, very substantially. Possibly even making the use of many derivatives an endeavor of futility and losses. Competition does in fact cause Wall Street much consternation. For when everyone has access to the same information, Wall Street's fraudulent money machine will fail.

Future profits of Wall Street are very, very overestimated. The Federal Reserve and government cannot keep the bubble from eventually popping.
posted by TimingLogic at 6:15 AM

Monday, December 21, 2009

Health Care Insurance Stocks Soar On Passage Of Senate's Corrupt Health Reform Bill

Need I say more?
posted by TimingLogic at 5:14 PM

Sunday, December 20, 2009

New Pan Arabian Monetary Pact Signed

As I have said before, I don't believe the concept of a reserve currency has any relevance in today's world. I guess if I actually think about it, the concept of a reserve currency is a relic from the days of colonialism. And in today's world emerging markets are often in fact colonies of the United States in some form or another. We have remarked on here that no one would be happier than me if the dollar were no longer the world's reserve currency. Such a move would be the final nail in the coffin of globalization and the mark of the America's economic re-emergence. Bad news for the colonies might I add. But then bad news for the colonies is an outcome that is guaranteed anyway.

A pan Arabian central bank is an absolutely horrid idea economically and politically. But then the Arab states are absolutely horridly-run, corrupt fiefdoms so this is no great surprise. This idea of a pan Arab currency has been floated about for a long, long time. Needless to say because this dynamic is being pushed for many dubious reasons, I'll believe it when I see it. The next few years have many more surprises for the oil fiefdoms. Surprises that may just throw a wrench in this plan. As we have remarked many times, the European Union in its current form could very well not survive and it is comprised of democracies. I can't even begin to imagine a pan Arabian currency surviving given the political apparatus in each of these countries.

You'll hear a lot of squawking around this announcement that foretells doom for the dollar. Just as we have remarked with all of the other senseless squawking in the past, this too is nonsense. Regardless, none of this has any impact on our theme over the last few years of a strengthening dollar.

posted by TimingLogic at 3:47 PM

China Central Banker Says Harder To Buy U.S. Treasuries

Once again another of our anticipated outcomes is developing as we expected. We wrote these exact words years ago. That this dynamic would come to pass. That China would be unable to keep buying Treasuries as their economy collapsed. That is exactly what is happening. We wrote what China's central bank is now saying years before they said it. And we did so at a time when absolutely no one was accurately talking about this coming dynamic. It was a time when global bulls including firms like Goldman Sachs, McKinsey and Morgan Stanley and just about every financial blogger and the media were cluelessly consumed by the China miracle and those bearish on on the U.S. economy including Marc Faber, Peter Schiff, Jim Rogers and others were very incorrectly citing China as a safe haven, and the yuan as a stable currency. Baaahaaahaaa! And many were actually yapping that China was going to dump U.S. Treasuries to destabilize the U.S. or as a vote of no confidence for U.S. profligacy. They will all be wrong in the end as we have written countless times.

Now many are rewriting their own history by talking about crises that are well underway. Yet, they are well too late. Their analysis is worth little, if anything, to those who have made major investments including fixed investments in developing markets. Often with your money. Often without your consent.

All of our anticipated outcomes are working out quite nicely. Many have already come to pass but many more are still working their way through to fruition. We will add many more over time. By the time this crisis has passed, we will dismantle most major theses put forward by Wall Street, the blogging community, the media and, if it is even worth mentioning, every economist.

It's good to be a contrarian when it is backed up by a strong quantitative analysis. Well too many on both sides of any issue rely almost completely in an incomplete understanding of fundamentals and the associated data.

posted by TimingLogic at 12:28 AM

Saturday, December 19, 2009

Florida Leads The Nation In New Job Losses. Unemployment In The State Continues To Rise.

Flagler County leads the way with nearly 17% unemployment. If underemployment and disgruntled workers in Flagler is similar to the national average, that means approximately one in three people are either unemployed or underemployed.

It is now nine months since we were told the economy bottomed. Nothing more than propaganda in some attempt to keep the current economic scheme going. Global employment is still deteriorating. The global economy is and will remain in a depression.

Even though Ben Bernanke did save the global financial system from complete collapse, at least temporarily, no single entity short of God himself can recreate economic opportunity for the countless tens upon tens of millions of people around the globe affected by this collapse. In fact, Bernanke hasn't saved the global economy from anything unless you believe a single man sitting in his closet printing money is now the new method of creating wealth for billions upon billions of people. I have my own closet and my own printer. I have tried that experiment. I can tell you I have tried it countless times and the experiment has failed every single time. And I know of no other person in the history of humanity who has successfully completed this experiment. Yet, dimwitted central bankers, politicians, the financial media and Wall Street seems to believe to the contrary. And they call current economic ideology science? Math doesn't lie. But people surely do.

We already knew voodoo economics doesn't work because in a moment of lucidity, a politician actually told the truth thirty years ago. That was before he learned selling his soul would get him elected. There's plenty of company in that deep, dark, fiery place called Washington D.C.

posted by TimingLogic at 10:53 AM

Friday, December 18, 2009

President's Administration Writes A Check It Cannot Cash - $100 Billion In Annual Climate Change Aid (Other People's Money) To Corrupt Governments

What a terrible disappointment President Obama has become for those seeking some type of "cleanup" in Washington. Healthcare reform is a corrupt mess, the government gave trillions of dollars to banksters so they could pay themselves record bonuses for unprecedented fraud, only about 30,000 mortgages have been modified while record numbers of Americans lose their home to criminal bankers, the TARP money was never used as intended and banks are still holding trillions of dollars of mispriced assets, banks reform remains a joke while they again are taking on unprecedented risk, nothing has been done to fix the private economy, stimulus funds were used to bail out fiscal irresponsibility and the state and local level, we have record unemployment, we are spending hundreds of billions more to prop up a government in Afghanistan which is possibly the most corrupt government on earth ............... and now we have the Secretary of State Clinton promising the most corrupt countries on earth a hundred billion dollars a year of other people's money through the climate change boondoggle. How many of you voted for any of this?

A year ago I thought this President had the potential to be a transformational figure. Instead he may be turning out to be the worst President in my adult life time.

If there is one thing we do know to be a near certainty, that is chronic poverty is a sign of systemic fraud. And yes that explanation can easily be applied to the United States today. There is no need for the United States to be in the middle of this self-inflicted crisis whose roots lie in systemic fraud. That "developing countries" have been developing for hundreds of years is a sign of the systemic fraud of illegitimate governments who choke off economic development, self-determination and a rule of law. Or from systemic fraud due to never-ending exploitation and meddling of colonialism. For developed countries to transfer our wealth to these fraudulent banana republics for some climate change scam will only result in one guaranteed outcome. That outcome will not be eradicating any human involvement in climate change. Instead that outcome is incredible and systemic fraud.

Any concept of appeasement of fraudulent governments, seemingly a never-ending belief of the naive, simply doesn't work. Sociopaths, psychopaths and evil-doers like Pol Pot, Stalin, Hitler, Mugabe, Hassan Al-Bashir or any of the dozens of other crooked "leaders" in "developing" economies today will instead syphon off massive sums of this money as has happened in every single aid program to fraudulent governments in the history of mankind.

What a surprise that the major stumbling block to the Copenhagen scam is a binding aid deal to poor, fraudulent governments. This is an opportunity of a lifetime to extort massive sums of money for todays goons and thugs. And our kings and queens want us to pay for it.

How about we focus on fixing the American economy rather than giving away more of our wealth?
posted by TimingLogic at 10:04 AM

Thursday, December 17, 2009

Chaos At Climate Conference - Good For America

I have a big problem with the climate change agenda planned for the American economy by liberal elites whether that is cap and trade or de-emphasizing industry or penalizing the market without offsetting employment or worst of all, paying blatantly corrupt developing nations for our "mistakes". Mistakes determined not by the American people but by some bumbling idiot at the United Nations.

At the same time, I can hardly listen to the other side, the Republican agenda - the anti-science party seeking to disrupt anything the Democrats propose often simply for political reasons.

There truly is little representation for the American people's interests.

I would think many people would support market-based incentives to innovate in the energy space and create new jobs and new companies in the United States. It's good for the economy, it's good for our independence, it's good for sustainability, it's good to help reduce our military budget and it's simply good for democracy.

I do not support a government-directed global plan determined by harebrained bureaucrats in either the United States or some far off bureaucracy not under control of the American people. This is effectively feudal economics. Other countries should develop their own plans under their own self-determined soveriegnty. To legally bind the American people's future to developing economies, every single one of which is corrupt as noted in our Transparency International post, is anti-American and anti-democratic. These developing economies have little, if any, rule of law, almost universally they have no democratic institutions and they are sources of constant corruption. Binding the American people in any way to these countries is corrupt in itself.

I believe the United Nations serves some useful role of dialog, providing coordinated crisis relief programs and economic development for underprivileged people but that's about it. Most members of the United Nations and almost all developing country governments have little to no legitimacy. As an American, I want absolutely no binding economic ties with any country which does not embrace democratic ideals. And neither should you. That fact should be used to drive democratic change in the world. If you want to trade with us, you adopt our ideals and democratic institutions. That's a bit more productive than demanding democratic structural change by using tanks and missiles.

I couldn't be more happy that bureaucrats in Copenhagen are experiencing substantial failure at some attempt of creating a global framework for dealing with any issue which is a detriment to American sovereignty.

posted by TimingLogic at 7:43 AM

Wednesday, December 16, 2009

Bernanke Is Time Person Of The Year

The last time we mentioned Time's person of the year was when we noted Time for picking Putin given our writings that the Russian economy was a bubble. Indeed it was. Time was just a tad off base as the Russian economy collapsed.

Bernanke did save the American and to a lesser extent the global economy from complete collapse for some period of time. If you have been with us for long, we have written repeatedly that the Fed does not control the economy. A ridiculous myth believed by many in the financial community has always been that the Fed indeed does control the economy. That is preposterous. The Fed has control over one simple data point. That would be credit. If you understand this statement, you realize that the Fed cannot then be responsible for the economic collapse before us. Or for an economic recovery. And, in fact, the global economy has not recovered. It continues to shed jobs while economic activity remains very muted.

The Fed does the same thing cycle after cycle after cycle. It expands the availability of credit to goose the economy and contracts it to slow the economy. If the Fed does the same thing each and ever cycle, yet the economic response is different, one of these days maybe the mainstream financial press and economists will learn to actually understand underlying fundamentals to explain the economic dynamics or what type of recovery is possible.

When the only tool you have is a hammer, everything problem looks like a nail. The Fed is using a hammer in an attempt to fix a problem that needs a wrench.

Bernanke most definitely has been the most focused upon international figure in 2009. But I would argue most of that focus is infamous rather than famous. Time's honor again is a dubious one. But then what else would we expect from Time? Does a semi-paparazzi magazine actually understand anything about economics or monetary policy?

posted by TimingLogic at 9:44 AM

Paul Volcker - The Banking Changes Proposed Are Like A Dimple. More Like A Pimple On The Ass Of Society Put There By Profligate Pimpled Politicians.

Needless to say, with our incessant rantings about enormous risks and lack of real regulatory reform, I agree with Mr. Volcker.

Volcker remarks that banks have driven us close to a depression. The reality is the world is already in a depression. Something we said would happen while the world's leaders and bank mobsters were giddy with the new era of Pax Globalia - a complete illusion built by elitist idiots. I have used the term Pax Globalia repeatedly since starting this blog and it is more than perfectly appropriate. Because following Pax Romano came a world of severe volatility. A world of severe volatility has been and remains one of our major themes on here. Don't be fooled by this low volatility environment we are now experiencing. The first volatility tide has receded and the tsunami wave will return with a vengeance and it will take no prisoners.

The U.S. is one of the few countries who can get out of this very, very rapidly with the right policy. A position we have remarked of on here for a long time. We'll eventually tie all of our major posts from the last four plus years together and share how easily this could be accomplished. But, as I have stated for quite some time, I am in no hurry because the elitist boobs running our country are so incompetent that I have plenty of time. Plus it continues to let me put up more and more posts supporting my positions while the media, politicians and other bloggers continue to stick their foot deeper into their mouths about how this is simply a recession, how the banks have recovered, how the economy is recovering and how the U.S. must be doomed because of its massive debt load.

I sort of view this whole process as a little healthy market-based competition. And it's my goal to win the financial olympics as the top blogger or financial commentary when it comes to anticipating the most global outcomes over this cycle. And eventually how to fix it. My Ouija board is still very active and there is lots more to cover.

posted by TimingLogic at 7:09 AM

Tuesday, December 15, 2009

Rasmussen Reports: 85% Of Americans With Populist Views Are Angry At The Federal Government And The Number Continues To Rise

Interestingly, I saw an interview with the Blackrock CEO just about the time this poll came out. His major concern? Rising populism. Now, in a democratic country which has a rule of law, why are we concerned about economic populism? We aren't. Elitist crooks are. Populism defines the will of the people. And this populism is driven by virtue across all race and gender.

If we truly believe in democracy, in other words that people of all walks of life and abilities are able to self-govern, to rule our society by electing people from amongst us to manage our affairs, we should be embracing populism, not to be confused with the will of the mob. Populism defines America's greatness and always has. Populism is a repudiation of authority by birth right, by economic standing and cronyism. Populism embraces free will and free determination. Populism embraces economic opportunity for the many not determined by the few. Populism embraces entrepreneurs at the expense of monied interests. Today that populism is being driven by a search for truth, a return to self-rule, cleaning up corruption and economic populism. Concern that Washington is run amok. Realization that a very few are setting our economic policy for their personal gain and stealing our economic opportunity and livelihood.

On the surface we see both political parties misinterpreting November's election results. The Republicans believe they are again gaining an upper hand with their message. The Democrats believe election results were poor because President Obama was not on the ballot. The reality is neither case. The reality is Americans are now thinking for themselves and they now understand Washington is a den of vipers and neither party represents the people.

Most people in Washington live in a bubble and have little concept of reality. Washington continues its games of corruption and power while we witness the largest social and political shift in our lifetimes. Political independents now comprise the greatest percentage of Americans in modern history. Maybe ever. And that is a very, very good thing. That's a good thing because Americans are giving up political ideology and embracing truth. Good news for America. Bad news for elitist politicians who believe they can continue to bamboozle Americans with rhetoric while doing little if anything to further the will of the people.

There are quite a few polls showing independents substantially outnumber either of the two political parties. The Washington Post's recent poll shows the Republicans are in la-la land with 20% of respondents, Democrats not much better with 33% and Independents now the clearly dominant political force at 42% of respondents. 42% and rising. I suspect that number has risen by more than a few points since that poll. Combine this with the very, very substantial drop in the President's approval rating with independents (who were single-handedly responsible for President Obama's victory in November.) and there is absolutely no chance President Obama would win were a re-election to take place today. The President gives himself a B+ rating? Do the President's political advisors realize his most important constituents are not ideologues or part of the political class but instead are populists? Populists demanding reform in Washington and economic transformation. As obvious as this might be, I seriously doubt it. At the exact time the American people are shifting their economic and political views in record numbers, political ideologues are experiencing a never before seen nirvana with 45,000 lobbyists lining their pockets. And skewing their view of reality. Political parties have never had so much power in American history. Ever. Washington is in an unprecedented bubble. That bubble is going to pop.

This all confirms a couple of points we have been writing about over the last few years. One, we have a tremendous leadership vacuum in this country. And regardless of attempts by the main stream media to paint most Americans as stupid or uneducated, the vast majority of people realize this dynamic on some level be it a conscious verbalization or simply through a realization Washington is corrupt. And, two, the United States is on the verge of a major populist movement which could obliterate political parties or force them to adopt radical, tranformational new ideals to survive. Ideals of economic populism, of transparency, of a return to virtuous governance. Regardless, people need to worry less about economic statistics and more about sociology. The economy is not coming back without transformation. It's not ivory-towered academics with their ridiculous theories that will drive the future of the American economy. It is going to be the American people. And that means Wall Street and corporate influence which now dominates American politics is going to take a massive tumble. Were President Obama and his handlers to realize they were elected by a populist wave, their policies would likely be very, very different. The President is squandering the greatest opportunity for to become a transformational figure in Washington in seventy years.

Notice below that the only real statistical significant change in consumer confidence took place as financial markets started to rally in March. In other words, people saw improvement in their 401K statements or investments and concluded happy times were here again. This was affirmed by financial media hoopla, government statements and Wall Street bankster bullishness. Both before and after the start of this current rally the polling responses vary insignificantly. If the American people generally believe the recovery of financial markets is a sign of economic recovery, this leaves politicians very exposed if financial markets collapse again before the 2010 elections. As I wrote a month or so after this rally started, I expect the next major low to be in 2010. If that happens, it will be bad news for incumbent politicians.

The President has an opportunity to use this populist movement to transform American politics and the American economy. Or, he'll eventually be mowed over by some deft politician and leader who will. This data supports our thesis that the U.S. will lead the world out of this morass. In other words, a populist economic transformation will drive a resurgence of American economic might. It's not a matter of if but when. America is far from dead. But in order for it to assert its rightful economic standing, the rightful owners of this country, its people must save us from the political stooges and lobbyists who destroyed it.

85% of populists are angry at the federal government. The elitist liberal media fawning all over our new President initially blamed dissent on right wing nut jobs, Ted Kaczynski-types who feel marginalized by society and racists. Ditto with Homeland Security in their report on dissent which labeled many upstanding Americans as terrorist threats to our government. Preposterous and degrading to the vast majority of Americans who are none of the above. They are Americans. They seek a return to a self-determined life. They seek economic freedom. They seek justice and a government which represents the will of the people be that a conservative or a progressive will. Not the neoliberalism and liberalism which defines the Republican and Democratic agendas. Agendas driven by political stooges seeking to maintain their grip on power and monied interests. The polling data confirms this is not a right versus left divide. It is a right versus wrong divide.

Still the same forecast. 2010 elections - bad news for incumbents - keepers of the status quo. Good news for any candidate embracing economic populism and a progressive view of society.

Chart courtesy of
posted by TimingLogic at 10:07 AM

Monday, December 14, 2009

Once Again The Myth Of Goldman Sachs' Brilliance Is Replaced With The Reality Of Complete Incompetence

And the arrogance of a company who uses massive sums of money to curry favor with our government.

Let's be frank. Anyone who wins in any market as much as Goldman has over the last decade has done so because of unfair rules, restricted competition or as William K. Black has noted, outright fraud. Anyone who understands simple statistics knows this beyond a shadow of a doubt.

There are six billion people on this planet, I don't care if Goldman Sachs hired the smartest 30,000 people on earth, which they clearly haven't regardless of the ridiculous Goldman mystique, there is still no way Goldman could be bailed out for some many stupid mistakes or money they are making off of the taxpayer's wallet without rigging the rules to the game. Setting the rules, currying favor with politicians, having insider knowledge, gaining favor by being bailed out for enough stupidity that would have easily bankrupted the company and then having the arrogance post facto to deny you needed a bailout so it could pay itself massive bonuses at the expense of the taxpayer. All part of the scheme. It's ironic that after the largest Wall Street heist in history, President Obama is now going to cap executive pay in companies do not pay back TARP. You have got to be kidding me. TARP is a ruse. The American taxpayer is backstopping tens of trillions of dollars in assets that is keeping Goldman Sachs and other Wall Street mobsters afloat. All Wall Street pay should be capped regardless of their TARP position until the American taxpayer is off the hook. And there should be a clawback of any existing bonuses as well.
posted by TimingLogic at 11:00 AM

President Obama Gives Himself B+ For His First Year Performance - A Performance Marked By The Embrace Of Corrupt Clinton And Bush Neoliberal Economics

I actually had reasonably high expectations that President Obama could become a transformational leader. But it took less than a month in office to realize he lacked leadership qualities necessary to drive transformational change. And, instead he was a master politician with too many ties to the status quo. That the President gives himself a B+ rating for his work in a first year of office shows how powerful the ego can be. And how much of an insular bubble that exists in Washington. I have listed to the President speak about the economy and Wall Street numerous times. Beyond the rhetoric of publicly shaming Wall Street while catering to them with policy, it's clear to me the President is clueless about how to solve the problems facing our economy. And, instead is embracing the same neoliberal ideology which defined the Clinton administration. Policy which caused this crisis. I guess that shouldn't surprise us since he surrounded himself with the same Clinton idiots. It would be a sign of tremendous arrogance to give himself an A. But, that he gives himself a B+ tells me he could actually believe he deserves an A but would never publicly remark of it due to perceptions.

As far as Wall Street and the economy, I would give Obama the same grade I would give Clinton and Bush before him. That would be an unqualified F. Complete failure. He has done nothing to solve any systemic issues. Nothing.

Tomorrow we'll look at a reality-based look at the President's first year in office. One driven by a very clear real-world perspective.

Link here.
posted by TimingLogic at 10:26 AM

Friday, December 11, 2009

Matt Taibbi - Obama's Big Sellout

Matt Taibbi is at it again. Let's be clear though. It was noted during the election that Obama was raking in huge money from Wall Street comparative to John McCain. When discussing the candidates with friends, the topic of Wall Street's fear of an unpredictable John McCain was often a center piece. Wall Street paid for President Obama. And in a town where money buys favor, this wasn't exactly out of left field. I think what is out of left field is the blatantness of the sellout. The blatantness of Washington's corruption.
posted by TimingLogic at 12:52 PM

Thursday, December 10, 2009

The Movie 'Escape From New York' Pretold Reality .... And So Did We

We have been writing for years that the epicenter of this crisis would eventually land in New York. And the city would experience one of the worst, if not the worst, real estate crises in the country. At the time we first started writing of this, there were few concerned. Definitely no one in New York. Wall Street was basking in its brilliance and New York was booming. But, as I wrote before, I lived through hellish New York conditions in the last real estate crisis. I saw real estate listings drop by millions literally overnight. And that crisis was minuscule comparatively.

Now we see foreclosure activity in New York is through the roof, albeit it is starting at a reasonably low level. Imagine what it would be were the government not to handed so much money to Wall Street crooks? And if the government would actually ban much of the ridiculous behavior of our banks - using our money to gamble with bets equivalent in scale to the GDP of the universe.

Separately, yesterday Governor Paterson made a personal pledge that New York would not run out of money. A laughable statement unless he is about to unveil himself as the caped crusader from Gotham. If the governor is really up to the task, I'd appreciate a visit to my house to fill my coffers first. The only way the governor can make this claim is to actually do the opposite of what government is doing today. That is, to empower Americans to recover this economy in lieu of spending money to prop up government and big business. Return America to a self-determined, self-sufficient, market-driven economy. A first step is for the governor to clean up the corruption in New York government.

New York is just starting to crack around the edges. New York is headed for a very hard landing as is Wall Street. Untold thousands upon thousands of New York jobs are going to be gone by the time this crisis is over. And they will be gone forever. That's a long, long time.

The caped crusader has much work to do.
posted by TimingLogic at 11:50 AM

Howard Zinn's The People Speak - Democracy Is Not A Spectator Sport

I have no idea what this television event will be like but I'm a big fan of free thinkers and those able to stand against the tide of evil and wrong. Howard Zinn is one such person. And so are the great Americans throughout our history who stood against the tide of evil and wrong. Many are referenced in this documentary.

We don't idealize people for all of their shortcomings and foibles. We embrace the nobility and virtue of their messages when they are at their best. When they stand to account for dignity, righteousness, integrity and honor.

We are now living through a time of great evil and wrong perpetuated on the American people. Wrong perpetrated by the tyranny of a crooked few. Tune in and join the populist movement for constructive progress. Take back our country from the tyranny of those who desire to be our kings and queens were they able to steal our freedoms from us. And steal they try. Even if they believe they do so for misplaced reasons of virtue.
posted by TimingLogic at 9:42 AM

What Dirty Secrets Of Transferred Sovereignty Are Being Negotiated Outside Of The American Citizen's View In The Copenhagen Climate Boondoggle?

Sunlight is the greatest antiseptic for dirty games of politicians. Politicians acting outside of the view of the sovereign.

I have no problems with international cooperation on many issues. I have enormous problems with any attempt at usurping our national sovereignty to a bunch of international political goons for any reason, let alone a dubious one.

Funny how those posts on State's Rights over the past few years are looking more than prescient. The political ideologues tried to marginalize State's Rights advocates as fringe fruitcakes. Thomas Jefferson would be proud. Our federal government is out of control.
posted by TimingLogic at 8:57 AM

GDP Update And A Few Remarks About Unemployment

Our standard GDP chart we put up from time to time. Final GDP came out not too long ago so I wanted to stick this up before it became stale.

I suppose a pastime of mine is attempting to get into people's heads. Not everyone and not all the time but it's a habit. The President has been quite confident this crisis has passed since the unemployment report last week. In fact, that day he took the liberty of extolling the virtues of the great economic turnaround and intimated that the worst was over. Hmmm. This crisis has been building for decades. The President has not undertaken a single truly substantive action to resolve it. Nor is it possible to solve it with the wipe of a wand by backstopping tens of trillions of dollars of assets using taxpayer money. President Obama may be getting a little ahead of himself.

On that note, I'll take a quick diversion into unemployment for a second. We don't really talk about unemployment in any detail. Frankly, there are too many other people and firms who have spent years dissecting the deficiencies of government unemployment models. That said, frankly unemployment data is really irrelevant to any type of economic analysis. Seriously. All of the outcomes we anticipated and continue to anticipate have nothing to do with employment. Unemployment data doesn't factor into any of my models or analysis. The world was collapsing well before unemployment ticked higher and the stock market has plowed the largest rally per unit of time since the age of dinosaurs and unemployment has again lagged. We had 4% unemployment while the world was crumbling underneath the surface. Ditto with the same dynamic before the Great Depression and any other serious economic crisis. What relevance does employment have in any analysis? It's a highly correlated lagging indicator. Well, most of the time it is. Though there is a twist to that dynamic in this cycle. ie, Credit is typically used to restart the engine of recovery, be it inventory builds, plant and equipment spending, etc. This takes place well before hiring. That dynamic has proven elusive this cycle as we have highlighted. That means unemployment should be interpreted differently in the 2008-2009 economic meltdown. I guess I could argue unemployment is a leading function of the future to some degree. That also means Wall Street is holding the bag with all of the financial assets they now own by front running credit in anticipation of an economic recovery - the sneaky little scheme used by the bankster monopoly. But, this time they are wrong. Very wrong.

The announcement that we only had 11,000 job losses could be taken as positive news if taken at face value. Yet the trend may be accurate but the specific date surely is not.

There are many data points which do not make sense with the most recent unemployment report. Likely to be flaws in the calculation and/or the data capture process. ie, A tremendous amount of Americans are self-employed or small business owners. Additionally, the services ISM employment numbers are horrible yet the government data shows services as the source of job growth. The industrial ISM data is marginally better yet the jobs data shows the industrial data to continue to shed jobs. The unemployment rate dropping is also dubious for many reasons. I would guesstimate the economy must add somewhere around two hundred thousand jobs just to absorb new entries into the work force and maintain employment levels. That the unemployment rate dropped while we are well below that trend tells you the data is flawed. I'm sure many people have already written of these dynamics but because I don't really follow this data in any detail, I am simply making anecdotal observations about substantial inconsistencies.

The real point to take away from unemployment, be it this month or any month, is that we have the government backstopping tens of trillions of assets and pumping trillions of dollars into the banking system. Yet more than a year later we are still loosing jobs. The return on invested capital for this exercise shows that the government has spent millions of dollars for every job loss and that has had little impact on turning the economy around. And there are many enormous headwinds left in the global economy. Many. In fact more than we have seen to date.
Well, back to GDP. As opposed to prior GDP posts, this time I highlighted an anomaly on the GDP graphic below. My highlight has nothing to do with inventory. There's probably not more than a handful of economists in the country who would know what I am talking about. That is one reason why almost every economist in the U.S. was completely oblivious to this crisis and will be oblivious to the future as well. I could think of one in particular who might know but I doubt he reads my blog. My point is GDP is falsely reported as better than it really is. That means the status quo is again becoming well too comfortable that they have weathered this crisis and hoodwinked the public to their profligacy in the process.

Positive GDP surely isn't a surprise as we said it would turn positive. We can make GDP whatever we want by simply printing enough money or creating enough spent debt. We'll eventually pull this dynamic out and explain it in a future post as we have done so often. I'm just not ready to do so yet. Bada bing bada boom!

posted by TimingLogic at 5:23 AM

Wednesday, December 09, 2009

Bloomberg Chart Of The Day - State Tax Receipts

posted by TimingLogic at 8:35 AM

The Next Scheme - Wall Street Starts The Ramp Up For Carbon Trading

posted by TimingLogic at 7:37 AM

The Lynch Amendment And Derivatives Reform - Will Congress Disable Or Enable The Banksters?

posted by TimingLogic at 5:35 AM

Tuesday, December 08, 2009

Is 70% Of Afghanistan's Current GDP Heroin?

This isn't really relevant to the blog but the Real News is one of my favorite Youtube Channels. I found this statistic rather incredible while watching this episode. An interesting look at Afghanistan and an honest assessment of how to possibly deal with the crisis without turning the country into our next military morass.

Why don't we see any similar views from policy experts in the mainstream media?
posted by TimingLogic at 5:45 PM

S&P Update

We have shown this trendline chart a handful of times. It is of the rally starting in March. This is a short term view. What we basically see is after the market first broke the lower trendline, we had a technical oversold rally that pushed up to the middle trendline. Since then we have a meandering market. Trendline breaks as an event seldom result in a massive selloff but instead the eventual formation of a new trendline. That said, market behavior has changed substantially over the last three months as we have noted on numerous occasions.

December is likely to be a low volume, listless market. That is, unless we get some type of substantial exogenous events. There are many out there which will indeed put pressure on the market at some point. Most shock-type events will be from outside of the United States. You know what that means ......... one shouldn't be short the dollar. But indeed that dynamic has played some role in the commodities, gold, bond and equity market rallies. Booyah!

posted by TimingLogic at 10:56 AM

John Stossel Teaches Al Gore Second Grade Mathematics And Other Global Warming Myths

My first remark is Al Gore is just about the worst voice for anthropogenic global warming I could ever imagine. ie, Global warming caused by humanity. Gore has no scientific training nor has he been willing to publicly address scientific issues. He instead uses tactics of marginalizing dissent whenever a reasoned argument is put forth.

I have observed Gore over a period of nearly twenty years and can cite example after example of behavior I would classify as clearly histrionics. Two well known examples are his grandiose lies associated with his invention of the internet and his similarly grandiose lies perpetuated as the Clinton administration henchman for propagandizing NAFTA benefits to the American public. There are countless more examples. Al's egocentricity longs for appreciation. He has finally received it with his anti-science movie An Inconvenient Truth.

I would argue there are two dissenting groups to humanity being the cause of global climate change. (The supporters of global warming ideology have already changed semantics from global warming to global climate change as recent data makes the former moniker dubious.) One is the political dissent driven by ideology seeking to usurp power from the global warming political movement. Generally a Democrat versus Republican political dung-throwing exercise. The other is a reason-based approach which understands there are forces in the universe whose potential impact on our planet cause more effect in the blink of an eye than any impact humanity has made in its entire existence. A reason-based approach is concerned about the future of our planet and our interactions with it. With ecology and the sustainability of life. It realizes we cannot continue to pollute the earth with reckless abandon. It realizes the volatility surrounding our planet needs to be studied and taken seriously. And it supports a constructive market-based approach to innovation and its associated job creation to improve the world around us rather than submit to a group of international political goons in Copenhagen determining what job-destroying burdens should be laid on the American people. Job-destroying burdens which our founding fathers warned us about. That would be entangling alliances. We don't need an international body of politicians with no understanding of our Constitutions, our democracy or any accountability to the American people determining our economic or political future or undermining our sovereignty through international regulations and penalties. This is completely anti-American and undermines our Constitution. If the rest of the world wants to adopt our Constitution and our form of government and civil laws, then I'm all for a global agreement. Until then, these political goons can shove it. I don't want an economic or regulatory agreement with communists and fiefdoms of murdering thugs determining my sovereignty.

As I watched this clip I was reminded of the horror of brainwashing on every level of society be it the media, our children or our politicians. When children who aren't old enough to add 2+2 are completely certain of the causes of any substantially complex scientific issue, (might I add substantially more complex than any human being has the ability to understand, let alone Al Gore) we know there is a mass movement of the herd. This is borne out by the radical and rabid challenges to any reasoned dissent. The same dynamic we highlighted a few days ago in Gustave LeBon's The Crowd - A Study of the Popular Mind. This dynamic is as old as humanity itself.

It's hilarious that Gore uses CO2 emission correlations as a primary support in his conclusions of global warming. If complex systems - ie. earth, our atmosphere and the universe - were only so simple that we could represent them using such boneheaded and simplistic mathematical models. Stossel slams Gore on this second grade interpretation of a highly complex system which, clearly, the smartest people ever to grace this planet still only understand at a very rudimentary level. (That would not include Al Gore.) This is the same dynamic we have hammered on here many times as voodoo anti-science use of science in the use of correlation equals causation baloney which drives Frankenstein finance's worthless "scientific" models. Models Wall Street spent decades and hundreds of billions of dollars creating. And then one sunny afternoon these same models completely failed.)

posted by TimingLogic at 7:54 AM

Monday, December 07, 2009

Bill Gross And Nouriel Roubini Focused On Yesterday's News

Roubini and Gross are revered with almost cult-like status in the financial community. As is El-Erian, a peer of Gross at Pimco. I have nothing against these people but let's get real. Gross and El-Erian were completely oblivious to the world around them until it had collapsed. El-Erian was and is on another planet in his view of reality. Roubini was spot on in the housing crisis but as we have said countless times over the years, housing is not the problem with the U.S. economy. Roubini served in the Clinton administration and therefore, I can only assume his views of economics are representative of the Clinton economics that created the destruction of the U.S. economy. Maybe he now eschews those policies. If he does, I'd like to see his plan for reviving the economy that includes the repudiation of neoliberal economics the Clinton and Bush administrations embraced.

Now both are focused on yesterday's news. I find it almost hilarious that people are now talking about a bubble building in China. The bubble has been building for at least ten years and it popped two years ago. Just a little late to be considered any type of serious insight. How is worrying about what China is doing right now of any relevance to investors? The money has been lost long ago whether it was financial investment or soon to be physical investment. Looking at the chart of the Shanghai Index below, we can see the bubble collapsed two years ago. What China is doing today is simply trying to keep the scheme going. It will fail and the bubble will continue deflating.

My point with these types of posts is that society needs to realize most hero-worship is misplaced and most people held on a pedestal don't generally have any great insight into policy or economics. The sooner we as a people jettison this belief that we should defer decisions about our lives, our economy and society's money to someone else, the sooner we will get out of this crisis. That most definitely includes politicians as well. The fact that Gross and El-Erian are making tens to hundreds of millions of dollars off of other people's money by supposedly providing superior insight is just laughable.

Link here.

posted by TimingLogic at 11:50 AM

American Banksters Association Attempts To Pull Gestapo Tactics On Credit Unions - No Loans For Small Businesses

There are some things that are clearly wrong. Lobbying the government to stop credit unions, community organizations, from providing credit to local businesses when major banks in the ABA clearly aren't playing that role is nothing short of criminal. Our economy is clearly being destroyed by people who simply don't give a damn about America or its citizens. Is this really surprising? This is the modus operandi for all economic crises and has been since the beginning of time. The ABA seems to have more in common with Gestapo terrorists than with any American ideals.
posted by TimingLogic at 5:23 AM

Saturday, December 05, 2009

70% Of Nevada Homeowners Upside Down On Mortgages - Survey Ranks Nevada As One Of Unhappiest States

Umm. Could these two dynamics are related? The tyranny of the crooked banksters who caused this dynamic. How is this democracy? Regardless of any great imperfections a public banking system may have, one would not be the perpetual fraud associated with the criminals on Wall Street.

Link here.

And here.
posted by TimingLogic at 2:56 PM

Super Cool

posted by TimingLogic at 1:31 PM

China's Media Control - A Culture Of Lying. The Future Will Be Much Different Than The Mob Believed.

By the time this cycle is over no one will admit to being duped by the China myth. Many in the financial and blogging community who were duped are already rewriting their own history. Yet, almost everyone was completely duped. A true sign of the ability of the media to shape public opinion. Effectively brainwash society. We have even highlighted people like Thomas Friedman in his best selling book and his viewpoints were completely brainwashed by the media of which he is actually a part.

There is very little incontrovertible truth in this world. That includes a substantial amount of science where group think also exists. China's media control is truth. And so is the fact that the communist party has been moving towards locking down the country and possibly even taking away many of the short term freedoms granted over the last decade.

The future will not be as most anticipate across a wide array of topics. A testimony to the herding mentality of humanity. Whether that is the cult of personality that defines our current President regardless of whether his policy actions match the hopes of many or the rabid certainty that humanity is clearly the cause of global warming by many liberal journalists and the political class or the desire to immediately blow up something or anyone after 9/11 (including rage against many innocent Americans of color) or the xenophobic blame of job losses on immigrants or the belief (hope) that electing a new President was going to fix our problems or the global consensus (schadenfreude) that America is forever doomed or that America is clearly the biggest economic crisis in the world or any of a dozen other topics which define the mainstream psyche at any given point in time. Remember, the intellectual capacity of any crowd is defined by its basest component. A frightening reality of a mob.

It is that distorted sense of self that defines the herd. When one realizes the forever distorted sense of self that defines the human condition, how can anyone be anything other than a contrarian if one's position is backed by reason and analysis? Being a contrarian is as timeless and proven as humanity itself.

It has been a few years since I have mentioned one of my favorite books written long, long ago. Gustave LeBon's The Crowd - A Study of the Popular Mind. It's still available at Amazon for a few bucks but it now available online for free at the University of Virginia. I would encourage everyone to read it. It not only provides insight into our interactions with the world around us but it is a primer for becoming more self-aware in your own journey of self-discovery.
posted by TimingLogic at 11:20 AM

Friday, December 04, 2009

Hedge Funds Most Bullish Since Late 2007

"The more sophisticated investors are seeing the opportunity, but retail investors are still scarred," said James Dunigan, chief investment officer for the wealth management division at PNC Financial Services.

Hahaha. Wanna bet Mr. Dunigan was fully invested in stocks and commodities when markets collapsed in 2008? The stream of carnival barkers masquerading as clowns is endless. How sophisticated were most hedge funds in 2008? Some made a fortune on the collapse. Most were caught with their pants down. Sophisticated? Please. Sophisticated investors were short or in cash during the crash. Clowns are loading up on stocks today. The market's price to earnings ratio is 3x what is was in 2000. Without the biggest earnings recovery in the history of the world, this market is will eventually be in serious trouble. That is unless we've entered a brave new world where discounting fifty to one hundred years of earnings with little or no dividend is going to attract permanent capital. When the free money train runs out and the carnival barkers realize how much risk there truly is on planet earth, we'll see more messes. That is, if Wall Street's risky bets don't blow up first. Central bankers can't print their way out of the enormity of this crisis.

We have discussed the dynamic of money flows in numerous posts. People, businesses, banks and governments are unwinding and often selling investments, selling businesses, raising capital, etc, not because they are panicking or making a poor investment decision. They are or will be doing so because they need to raise capital. We have been writing of this dynamic for a long time. Long before the collapse. The dynamic hasn't passed. Not even close. That Mr. Dunigan doesn't understand this simple fact in his perspective of why money is flowing out of stocks shows he doesn't understand what is happening in the economy or how it will affect the financial markets.

Sophisticated investors most bullish since late 2007? You remember 2007? If not, here's a friendly reminder.

posted by TimingLogic at 11:44 AM

In Two Weeks, China Unicom Sells Five iPhones At Their Online Store

Apple is a stock I absolutely abhor as we have talked about repeatedly over the years. By any measure Apple is one of the biggest bubbles in history. It is a favorite of hot money which plows the stock for trading gains. Apple is an incredible brand and Steve Jobs has done an incredible job as CEO but what does that have to do with totally absurd stock market behavior since the mid 90s?

Apple still hasn't issued a momentum sell (a favorite algorithm of Wall Street boneheads) but it has been stuck for the last two months. To date, it appears the iPhone is a complete flop in China. At some point momentum traders are going to dump Apple hard. The trigger could be a forced sell or could be poor business results. We already witnessed this once. Regardless of hedge fund and trading desk games in the stock, my downside target discussed before the first collapse still holds. That's a long drop from here.

Story link here.
posted by TimingLogic at 11:05 AM

Thursday, December 03, 2009

Senator Bunning Goes Postal On Ben Bernanke

The only honest feedback in the morning testimony of Bernanke's appointment was that of crusty Senator Bunning. Instead of asking Bernanke questions, he went on a lengthy diatribe of facts supporting his decision to block Bernanke's appointment. It is one of the best videos you will watch this year. Bunning's remarks start at 01:14:30 of the video.
posted by TimingLogic at 6:44 PM

Majority Of Private Sector Economy Is Shrinking Again

posted by TimingLogic at 6:38 PM

Japan's Prime Minister Will Not Tolerate A Rising Yen

In this era of completely unsustainable and very unstable economic ideology, who will win the race to the bottom of the barrel? Who will destroy their currency first in the name of comparative advantage? Not to be outdone by other nations, Japan politicians have been talking down the yen quite regularly. Geithner comes on tout television this morning and either outright lies about U.S. economic policy and the dollar or is either the most mentally-challenged boob we have ever had in Treasury. Or both. The monkeys truly are running the zoo. Truly. It's amazing how many monkeys support the game of chicken we see around the globe. Speculators took the Bank of Japan's announcement earlier this week, which was basically nothing more than to provide liquidity if needed rather than outright easing, and used it to ram the Nikkei up 4% overnight. More free money for the financial buffoons to speculate. Yet no relief for the citizens of Japan. Sound familiar? It should. World political leaders and the global financial machine truly are an amazing lot of monkeys.

The world is working out exactly as we have anticipated.

It's a madhouse. A madhouse. (I use this link repeatedly because I loved the original Planet of the Apes. A truly creative masterpiece which uniquely reflects society today. Gorillas were the military class and those who advocate violence as a way to solve society's problems. Orangutans were the political class and ideologues often eschewing science and reason as keepers of the faith. And Chimpanzees were the scientists and those who chose to use reason and intellect as a basis for society and governance. In today's world, the Chimpanzees have been almost completely marginalized by Gorillas and Orangutans.)
posted by TimingLogic at 8:52 AM

Bernie Sanders Set To Block Bernanke Confirmation

Bernie Sanders is actually someone in Washington that I respect greatly. Ideologues try to marginalize Sanders as someone out of the mainstream but the reality is Sanders has a true compassion and desire to serve the people of this country. I know because Sanders was a lone voice of support more than ten years ago when a situation I was involved in came to Washington. You can disagree with Sanders on approach but in my book, Bernie is the real deal.

Now Sanders again takes a stand for the common good. Clean up the Federal Reserve with his sponsorship of the Federal Reserve audit legislation and now his attempt to stop the Bernanke confirmation. Bernanke's actions over the past nine months have pointed to someone committed to a failed system. And a terribly fraudulent system. It is perfectly plausible that Bernanke should step aside. He has done nothing to further discussions on meaningful reform nor has he made any public pronouncements that would stimulate discussions on new economic transformation or assisting those devastated by Wall Street's lecherous and often crooked activity. The Congress looks to Bernanke for financial leadership and, for that, he has been a complete failure. Bernanke did save the system from complete collapse but since then he has only supported perpetuation of abhorrent policy. Abhorrent policy which caused the collapse in the first place. That said, Bernanke's future powers are likely to be severely thwarted and that means his post could become comparatively much less relevant to the future of the U.S. economy. I am more concerned about what role Congress will play in the future of monetary policy and re-regulation. Efforts which should box the Federal Reserve's reckless behavior and authority on some level.

I would encourage anyone and everyone to remain actively involved in this process by letting your voice be heard with your Congressional representatives. Your voice and vote are the only difference makers.

If you have a chance to watch, the Bernanke confirmation hearings today are likely to be televised on C-SPAN or one of the financial channels.
posted by TimingLogic at 5:23 AM