Move Your Money?

I don't see why not, actually, I rather love the idea.




http://moveyourmoney.info/

Current Stock Market Valuation In Perspective

I am sure by now if you read this blog you know I am someting of a perma-bear. This is not because I am unwilling to consider other points of view, or only pay attention only to data that support my position. It is because I see things from the perspective of a 25-40 year cycle in the economy.

In the fall of 2008, unbelievably just over a years ago, the great bull market that started in 1982 and was driven primarily by aggregate demand spurred by baby boom generation consumption, debt driven over-consumption, and pure speculation, finally fell apart.

Look at this ENTIRE chart, not just the "up" parts. Look at it with periods of 15-40 years in mind.

The above picture is from:
http://stockcharts.com/charts/historical/djia1900.html

Please notice that the DJIA is in the process of forming a "head and shoulders" top. Here is a graph to compare it to:

Why does this matter? Because, from: http://web.streetauthority.com/terms/h/headshoulders.asp

"Why it Matters: The Head and Shoulders pattern is a major reversal formation. Typically, it takes at least two to three months to complete -- and sometimes much longer. When a stock breaks below the neckline, there is no longer any support and very rapid declines can occur, often on increasing volume.
A confirmed head and shoulders formation offers an excellent shorting opportunity. On the other hand, it can also provide an early warning sign for those with long positions to sell quickly. Often, traders will mistakenly hold on in "hope" that the stock will bounce back. In many cases, though, they soon find out that hope is one of the most dangerous four letter words in a trader's vocabulary."

Now, there is one more thing for you to consider, P/E ratios. Take a look at this:

Notice how far P/E ratios are from there historical norm.

I really do not think it takes any special insight to read these cues. Anyone can do it. You just have to know what to look at.

Cash, high quality bonds, and if you want to take on lots of risk buy short ETF's like FXP, EEV, DXD, and SDS. Trade at your own risk. You have to know how to trade ETF's to work with them. They can lead to substantial loss of principal if you are wrong or if you don't know when to sell.

Dow Adjusted For Inflation

Have you looked at your inflation adjusted return on the DOW lately?
http://online.wsj.com/article/SB10001424052748703991304574621903850508632.html?mod=WSJ_hpp_LEFTWhatsNewsCollection

Cival War In Iran?

Could Iran be the place where Islam transforms itself?
We shall see.

http://www.cnn.com/2009/WORLD/meast/12/27/iran.protests/index.html

Merry Christmas!

To anyone who reads this blog, I just want to say THANK YOU! You must be just a little strange, like me, and thank God for that, or I would have no readers!

I hope this is not too disappointing, but I have had little writing inspiration this Christmas season. I have no idea why, sometimes it just rolls like that.

Anyway, Merry Christmas, and here is what I wrote last year, when I was feeling more inspired. I still believe it wholeheartedly:

http://econmom.blogspot.com/2008/12/what-does-christmas-mean-to-you.html

Day Of Reckoning?

Is a day of reckoning coming for the S&P? If you read this blog at all you already know what I think.

Geitner Headed For A Fall

A man who has no respect for the economy, like a surfer who has no respect for the ocean, will drown in his arrogance.

Another meltdown is coming, like a tsunami, and there is nothing Geitner can do about it.

http://www.cnbc.com/id/34571036

The only thing he can do is help steer the government's response to it.

The government should have written down principal on mortgages when it had the chance 18 months ago.

http://www.cnbc.com/id/34571747

All of our money that went to the banks, should have gone to homeowners. If that had happened, the banks wouldn't have needed nearly as much anyway.

Stiglitz Sees Negative GDP Next Year

A respectable economists view of where GDP is headed next year:

http://www.cnbc.com/id/34507080

I Missed Louise Yamada Last Month

I love to read and listen to just about everything Louise Yamada puts out there. She is my favorite technical analyst.

I missed this interview with her from November, but I think she was right then and she is still right now. This 60% rally is nothing but a retracement of some of 2007 losses. You have to look at the period we are in as part of a bigger 30-40 year cycle. Note the part where she compares our current situation with the late 1930's.

Comedy Is All Too True

I have posted this before, but you just have to watch it again.

Copenhagen Mess

What do you think the envirofacists agenda is now? Environmentalism is like a relgion to many people. Chavez agrees with the protesters, if that tells you anything about their agenda. (I told you we shouldn't have bailed out the banks - it just gave the far left ammo.)

The Quest For Inner Peace Is Thwarted By PBS & Copenhagen & Ray Suarez

"I could see peace instead of this." But I don't.

If anything was capable of disturbing my inner peace, it is Ray Suarez's take on Copenhagen and the Global Climate Conference.

http://en.cop15.dk/

I am hoping the full video broadcast will be available tomorrow, and I will post it then.

After listening to the story of a poor Ugandan female farmer, whose life has been ruined by the evil western Capitalist powers, who have cause it to rain too much sometimes, and be dry too much sometimes, I feel like throwing up.

Guess what? She believes she deserves financial compensation from the industrialized world because she had a bad crop this year. Did you ever read the Little House On The Prairie books? Did Charles Ingalls blame someone when he had a bad crop one year? Did he curse the Africans because the frost came early one year and his family almost frickin' starved to death? Did he blame them because a volcano wiped out the sun one year and because of a lack of Vitamin D his newborn son died of scarlet fever? NO - I don't think so!

Do you think that Ugandan farmer really understands this, or do you think she has been brainwashed by a bunch of left wing radicals from the Western countries she demands compensation from? Now, I don't deny the woman deserves compassion, and if I was rich I may send her a check just because I feel sorry for her for being born a woman in Uganda. But really people, let's call these envirofascists what they are. (Is that a word? Well, if it wasn't, now it is.)

So, all you American consumers should feel guilty tonight for screwing over the poor farmers all around the world. It is all your fault. I bet you didn't know this, but HUMANS are NOT PART OF NATURE! Our impact (oh, only some of us - the industrialized world) on the planet is deplorable. Raising living standards for a huge percentage of the population does not count. WE ARE BAD! And we must pay the poor farmers of Africa and India to repent. PAY THEM CASH!

If there was a giant volcanic explosion tomorrow that blocked the sun's rays for a hundred years, you would thank your lucky stars for Global Warming!

Are we really arrogant and simple minded enough to think that we control Mother Nature at all?
Humans are evolutionary animals just like the rest of the creatures on this planet. So are our industrial accomplishments. Does this sometimes damage the Earth? Yes. Can we be better inhabitants of the Earth and have more humility and respect towards nature? Absolutely.

But comets, asteroids, and sunspots, could do more damage than man in a millisecond. We have just as much right to pursue survival as any other species.

To think we owe compensation to farmers in Uganda for producing too many greenhouse gases is a total, unintelligent, envirofacist load of crap.

Man is part of Earth. Man is part of evolution. Think bigger people.

Oil and Gold

Oil has fallen for nine straight days. Gold is also breaking here. Remember, when commodities go, so will the market.

It will make last March look like a dress rehearsal.*

I am VERY short. I am accumulating EEV (ultra short emerging markets) at an average cost of $13 per share. I also hold Sears puts with a March expiration.

I can't tell you exactly when this fall is coming, but it's coming.

*Trade at your own risk. This is a very risky environment. If you are trying to just hold on to retirement money, stay in cash or VERY high quality LONG-TERM bonds.

Optimism Vs. Denial

I believe in the power of perception. I also believe there is an objective reality out there, and subjectivism is a result only of the limited ability of humans to perceive the whole in its complex entirety.

Many people who see themselves as objective and realistic, are just downright negative. They mispercieve their ability to see reality as it is and take it a step furthur into despair.

Many people who miss the truth in its entirety see them selves as "optimists", but are really in denial. They are lying to themselves (as we all sometimes do). This is the worst kind of lying.

http://speroconsulting.com/2009/11/03/the-worst-kind-of-lying/

Now, I had to listen to a few people today, almost all day.....well, basically whine and bitch and complain about things not being as they should be. Leadership would present a plan to promote positive change and the troops would say, "Well, that won't work." Or, "I can't do that." Etc, etc. You get the picture.

The leaders in this corporate environment were in denial. They believed they could change people's behavior without providing the proper incentives. They believed that through sheer pollyanna like motivational techniques, they could convince people to work harder for less money, while providing absolutly no financial incentive for them to do so. Yeah....good luck with that.

On the flip side, the realists sounded like a bunch of negative whiners who had no stake whatsoever in their destiny. "Corporate" was screwing them over once again. Never mind that many of them had been returning to this "oppressive" employment year after year, sometimes for 15+ years. Never mind that in the midst of THE GREAT RECESSION, they had a job.

My little voice said this one thing: "The entire structure needs to be changed. I hope our new leadership recognizes this, and I think they do. In the mean time, do your best and you can go home feeling good at night." I also wanted to say, "And if you still want to create problems instead of solutions, go home and don't come back." But I am not the boss (yet), so that is for a later day.

And that is my tale of corporate philisophical woe for the day.

THE END

Motherhood and The Rat Race

Last year was my first back in the workforce since making the decision to be a "stay at home mom" 10 years ago. I was only a "full-time stay at home mom" for about half that time. Anyway, now that I am back in the workforce (part-time) I am realizing just how difficult it is to balance work and family.

Being home with small children and running a household was actually harder (emotionally and physically) than managing a bank while working on my MBA. That blew my mind. Now I am quickly realizing that balancing work and motherhood is more difficult than being a stay at home mom, but being a stay at home mom was still harder than having a career and no kids.

I am exhausted. I woke up at five thirty A.M. (which I know hard working men and women all over the world do every day), got the wonderful rug rats to school, went to work and was on my feet for five hours straight in heels (I hate heels!), picked up the kids from school, picked up dinner, came home, cleaned up the BREAKFAST dishes, wrapped the dead pet bunny (yes, he died in the midst of this, I cried all the way to work because I knew he would be dead when we got home) in garbage bags and stuffed his cold dead body in the garbage before the kids could see it, took the garbage to the curb, etc., etc., etc. Now I will help the kids with their homework, try like hell to connect with my husband for at least five minutes, and well, you get the picture... because I am not all that unique. Just a typical day in the life of a mom (parent for you guys that take offense).

I have no idea if the Christmas cards are going to happen this year. Don't be offended if you don't get one, because you probably won't unless we hire help.

All that said, I wouldn't change a damn thing. I feel so fortunate, to both my husband and my parents (thanks Dad for getting my snow blower going!) for loving me enough to help me set up my life so I could make these kind of choices. I see working women all day at work that sure as hell don't make enough to pay for quality child care, and I realize how blessed I am to be able to work part-time and to have enough education and resources that if I went back full-time I could afford to hire a nanny.

Rock on mom's - stay at home or not. You rule.

p.s Am I a bad mom because I didn't take the rabbit to the vet in the middle of all this? I am feeling a little guilty!

TIRED!

Econmom is tired, and when I am tired I have to wait for inspiration. We'll see what tomorrow brings!

Taleb Is Still Right

The author of "Black Swan", who predicted the 2008 meltdown, is somewhat of a genius in my opinion.

He has apparently decided that the reappointment of Bernanke is enough to make him depressed enough to withdraw from the world economic scene for a while.

http://www.cnbc.com/id/34234721

Be Careful!

Be careful what news you pay attention to. I tend to think there is a reason these people have a high net worth in the first place, so I will listen to this one.

http://www.marketwatch.com/story//upper-income-consumers-gloomy-on-economy-survey-2009-12-02

Plus, the fact that it generally supports my argument doesn't hurt either.

And there is this too:

http://www.marketwatch.com/story/consumers-will-pay-down-debt-before-shopping-2009-12-01?link=MW_related_stories

Don't believe the wall street hype.

Inflation Vs. Deflation - Not So Simple

In college, I wrote my senior paper on the gold standard and its historical connection to free trade. To truly understand what inflation and deflation are, one must understand how the creation of the Federal Reserve Bank transformed our economy from a free-market economy to something entirely different.

See, in ECON 101 we learn how supply and demand interact to determine price. On the micro level, we can look at this for a particular commodity, say gold, or oil if you prefer. Looked at in this way, markets are fairly simple, extremely rational, and in my opinion, a reflection of the natural laws of the universe.

So if you really start thinking, you can see that there is a market for money itself, the price for which in a free market, would be set by supply and demand. Interest rates are the "price" of money.

You can see how if economic activity is low, the demand for money will be very low. If you have little need or desire to exchange goods, you don't need very much money. When economic activity picks up, more money is needed to carry out the demanded transactions.

Inflation and rising prices are not the same thing by definition, though many (including myself in the past) tend to believe this fallacy. Inflation occurs when there is a rise in prices brought about by an increase in the supply of money in circulation itself. When this "oversupply" of money floods the system, the value of the money falls, if there is not a corresponding increase in the level of economic activity desired by the populace to offset the increase in money supply. Hence, each dollar in your pocket buys less than it used to. This is inflation, otherwise known as currency devaluation. Rising prices that are not accompanied by a devaluation of currency are demand driven and reflect an increase in economic activity and increased prosperity. They are not accompanied by reduced purchasing power of a currency, and as such, are not considered inflation.

Now, why did I go into all of that? Because, it helps us understand what is going on today. Two basic forces are at work. The first is massive downward pressure on the general price level (deflation) caused by a collapse in aggregate demand (busting of the credit and housing bubbles). The second is monetary inflation (currency devaluation) driven by the Federal Reserve Bank and the Treasury.

The Government believes it can "stimulate" aggregate demand by making more money available (credit) in the system. It wants you to keep living beyond your means to keep the level of economic activity in our country high.

When economists debate about whether deflation, or inflation is the biggest threat facing us, the real question is this: Can currency manipulation (in this case devaluation) stop deflation without causing inflation?

I think the answer is multi-fold. It depends on many factors. Can you fill up debt holes with fiat currency? Can you inflate your way out of debt? The answer: yes, but not without devaluing your currency. Now, I think this is what Captain Capitalism is referring to when he says we are headed for an inflationary period, and I understand the argument.

http://captaincapitalism.blogspot.com/2009/11/chinese-should-listen-to-cappy-cap.html

But I think the deflationary force of aggregate demand falling off a cliff and the massive debt holes that need to be filled in are going to offset rising prices. (A great counter-force if you will.) I also think that the slow velocity of money (the rate at which it circulates through the economy) will keep inflation in check in the near term. In addition, the debt holes absorb currency much like black holes absorb light. Velocity won't kick in until the debt is paid down by substantial amounts. This may take a very long time, considering the size of the holes.

http://econmom.blogspot.com/2009/01/inflation-risk.html

There is much for me to learn on this subject. The confusion of having a money supply manipulated by the government throws a huge wrench in the cogs of classical economic theory.

It seems that we are entering a period much like the Great Depression, only on a larger scale. So in the near term, deflationary pressures will be very strong. In March 1933, Roosevelt effectively did away with the gold standard (confiscated private gold holdings) in an attempt to inflate the currency and stop the deflation. Did it work? That is debatable. It still took the U.S. 10 years to emerge from the depression and twice that long for the stock market to recover. Did massive hyperinflation take hold? No, not in the U.S. But it did in Wiemar Germany.

I am not sure which path we are headed down, but I really hope our government will learn to accept the correction that a deflationary period can bring. It may be painful, but I really don't want the U.S. to be remembered like Wiemar Germany.

So which way are we headed? Will inflation or deflation be the predominent force in our economy this decade? Well, perhaps both are occurring at the same time. I still think demand will not recover for a very long time, and I don't believe the government is going to have to print so much money that we will have a massive devaluation of our currency.

In the near term (3-6mos) I would be long the dollar and short the market.

Will Dubai Trigger Massive Selloff?

Remember, I said when oil and gold fall apart, so will stocks. This emerging market debt fiasco will cause the dollar to rise. This may be the beginning of a massive sell-off.

I am already short, but if you are an average investor who has been lucky to recover some of the gains you lost in the 2007 sell-off, now would be the time to take profits.

If you are a 10+ year investor and want to ride it out - enjoy the ride!

Forgiveness Is The Key To Happiness

I just got done watching an incredible PBS special on the Mumbai terrorist attacks that occurred last year at this time.

http://www.pbs.org/wnet/secrets/episodes/mumbai-massacre-watch-a-preview/494/


Most of the victims had forgiven the perpetrators of the atrocities. I have more fear and hatred toward those men than they do. They have truly forgiven. I have not.

They felt sorry for the men (or boys) who perpetrated the crimes, because they knew they were scared, brainwashed individuals, whom were not even valued by the men that had sent hem on their murderous rampage. Surely, they would all die.

Forgiveness does not condone immoral actions. Forgiveness sees humans in the light they were destined to live in. Through the eyes of forgiveness we become free from our own demons. This is what forgiveness is all about.

"Forgive them, for they know not what they do," to quote the Master of all time. They are in error. They have chosen violence and murder as a way to cope with life. They have chosen the path of the ego, not the path of God, no matter what they say to the contrary. God is not anti-life. God is life itself. God is not anti-anything. God is pro-everything. Being the creator of existence, God is for existence.

I am angry at the men who put hateful ideas in the minds of terrorists. I have not forgiven them. While watching the program I often wondered why the victims didn't band together, jump those (expletive, expletive, expletive), take their weapons, and blow their blanking brains out.

Apparently many victims of terrorism have already forgiven. They are as a consequence, at peace. God has already blessed them.

I have already forgiven in many areas of my life, but his is a big one for me. I am definitely still very angry with Muslim extremists.

That is how it is.....and I believe in loving what is. Because it is.

Gold and Oil Will Collapse Soon

This guy is a fabulous technical analyst. I agree with him completely. Please read this article:
I know I have friends who are short the dollar right now - please be careful - that trade could fall apart at any minute.
http://www.cnbc.com/id/34121808

American In Mecca

Hmmmmmmmmmmm. Why is this interesting to CNN? Not exactly what I'd call a hard hitting interview. (It should be the correct video now.)

http://www.cnn.com/video/#/video/world/2009/11/22/sesay.us.convert.hajj.cnn

Isn't it ironic that conversion to Christianity carries a death sentence in many Muslim countries, but when Americans that convert to Islam they show up on "feel good" CNN specials. Not that all Americans are Christians. Many are not. But then, not all people living in Muslim dominated societies are Muslims either. There are probably American Muslims who ardently support the American Constitution and the Separation of Chuch and State. (If you are one, please raise your hand - make a comment - speak out against the extremeists that are hijacking your religion.)

This is a very tolerant and free country, and that is good. Let's just be aware of which of our enemies would like to destroy those freedoms. Religion, when used improperly by man, can be a very dangerous thing. Let's not be too naive.

Meridith Whitney Is Right Again

Read This

Please read - and send me some cash so I can double my shorts.

http://www.marketwatch.com/story/the-next-meltdown-is-coming-in-2012-2009-11-17?pagenumber=2

Please Listen To Louise

If you won't listen to me - listen to Louise Yamada. She is incredible.

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/10/23_Louise_Yamada_files/Louise%20Yamada%2010%3A23%3A2009.mp3

When Oil Really Breaks, So Will the Market

If you have profited in this run up, my humble advice is to take profits NOW. THERE IS NOTHING WRONG WITH HOLDING CASH (and very high quality bonds)IN A DEFLATIONARY ENVIRONMENT, and that my few dear readers, is what we are in.

When the current commodity price bubble pops it will be accompanied by a sell-off that makes last October look like a dress rehearsal.

There, I said it. If I am wrong at least you won't lose the rest your life savings. You can also laugh on my face, or yell at me. If I am right, well, then you will make it through the coming depression quite painlessly.

You can call me Chicken Little and I will still say it again - get out now. (Unless you have fifteen years to sit around and wait for your stocks to come back. Many of them never will.)

If you still are jonesing for some risk, drive down any suburban highway and count the number of "For Lease" signs you see. When you lose count maybe you will believe me.

I Am A Geek

I know I already have a link to Mr. Smith's blog on my site, but his latest is about an issue that has been perplexing me for years now. I am beginning to think he is an absolute genius.

http://charleshughsmith.blogspot.com/2009/11/bubbles-inflation-and-overcapacity.html

Perhaps that is why he gets monetary donations to his site and I don't. Perhaps it is because I don't ask for them. Perhaps it is because my particular blend of interests is only really interesting to me and, well, a few very loyal readers. Perhaps they are not really that interested, they just love me enough to read my blog.

But I do know I have always been a bit of a geek at heart. Even if I seemed popular in high school, even if I used to be easy on the eyes, even if I tried to be cool, underneath it all I am just one big math-loving geek.

I like math and economics because it makes sense. You can always rely on it to make sense when nothing else does.

For example, I was trying to teach my son his "sight words" the other night and one of them was "of ". My son has a brain that works like mine (strangely-poor thing) and he said something like, "Shouldn't it be 'o-v'?, they want us to sound it out. I hate reading!"

I immediately thought, "Hell yeah, you are right, we ought to change those stupid rules, or at least admit that phonics leads our youth astray and.... well screw them, you spell it 'o-v'."

However, I did not say that. I said something like, "Just remember for the test that you think they are wrong, but you have to put down "of" if you want to get 100%."

Guess what, my son likes math!.

Thanks loyal readers - I promise this blog will probably never be of the caliber where I can justify asking for monetary donations to it.

But God only knows.

Love To You ALL!

Goldman Sach's Doing God's Work

The Human ego knows no bounds. Lloyd Blankfein statements about banks doing God's work is a great example of this. Does he see himself as among the chosen few? Absolutely, unbelievable arrogance.

http://www.huffingtonpost.com/2009/11/07/goldman-sachs-ceo-lloyd-b_0_n_349620.html

http://www.cnbc.com/id/33783316

This is the kind of crap that gives Capitalism a bad name. I will admit that in the greater sense banks are the financial tool that helps the economy grow by allocating capital. But honestly, Mr. Blankfein, do you really think you can compete with God? Banks, like all people and institutions serve a purpose under God. That is true for even you and your corrupt firm. Everything, even the ego, has a place in the order of things.

So, Lloyd, I guess in that way you are doing God's work. But by that logic, so is the rapist and the burglar.

Here is how much taxpayer money your firm took (I am sure you know the number): $10 Billion.* Yes, that is how much taxpayer money it took to keep your do-gooder firm afloat. Now, the way I see it, you should be sending those bonus checks directly to the taxpayers who lent it to you instead of to the Treasury. Oh, I know, that would be impossible to figure. Yes, it would.

Perhaps having access to Fed Funds at nearly zero percent is just to damn tempting. I can't believe we have not brought back Glass-Steagall. I consider myself an old school capitalist. But you know what, the reality is that since the creation of the Federal Reserve System our economy has been slipping further and further away from real capitalism. What we have now is some sort of hybrid monster. Glass-Steagall kept the monster calm. Glass-Steagall was a "rule of the game" that actually worked.

When is the last time you tried to play any game without rules? How did that go? What happens when you give one guy in the game an unfair advantage by giving him more information than the other players and a back-stop ensuring he will win every time, no matter how poorly he plays the game? How do you think that would work?

Ok - I am done with my rant now. I just wish we could get back to a time where capitalists were seen as honorable men who had morals and values they used to guide their behavior. Where did these egomaniacal, narcissistic rule breakers come from?

I argue they would be out of business and mostly good guys would be left if the damn government had let them fail. But than that is an entire dissertation for any young PhD candidate in economics who wants to take it on.

And Lloyd, don't slit your wrists. I don't think anyone would be happy if you did. I certainly wouldn't. Then you wouldn't have the opportunity to heal that massive ego of yours and start making some real contributions to the world. I mean it, no matter how lost you are, you are a valuable human being, just not for the reasons you think.

*I finally found an article saying GS has already paid the TARP money back. Good. Now, cut off their access to Fed Funds and see what happens. I wonder if God will still employ them.

http://dealbook.blogs.nytimes.com/2009/06/17/jpmorgan-repays-treasury-as-tarp-exits-continue/

Hillary Pulls a Pelosi

You see, when powerful women who cover come to to the U.S., they usually don't remove their headscarves for photo-ops. Oh wait, there are not enough women in positions of power in the Middle-East for that to ever happen anyway.

Bhutto paid for her power, the ultimate price.

If anyone can find me a picture of Obama in traditional male Middle-Eastern dress while President (yes, I know it's no homogeneous, but you know what I mean) please do send it to me.

And you know, I really did like Hillary. Oh well. It's just the damn principal of it. It really irks me.

Gotta Love Meredith Whitney

She is right again. So to all the people out there who say no one could have seen the crash coming: many did. Meredith Whitney was among the bravest of them, and now people listen to just about everything she says.

http://www.cnbc.com/id/33618030

James K Galbraith on Bill Moyers Journal

You know, when you take taxpayer money, you can't pay outrageous bonuses. Watch this video, it is fabulous. It is full of great historical economic information. Watching the son of John Kenneth Galbraith, who wrote the most famous book on the Crash of 1929, talk about the era we are now entering is both sobering and enlightening.

http://www.pbs.org/moyers/journal/10302009/watch.html

I do love Bill Moyers Journal, even if I disagree with him often on political issues. He is like the George Will of the Left. He is classy, well reasoned, and has a sort of anarchist disdain for power that I am drawn to.

One of the best points that comes out in the discussion is that the Obama administration is trying to restore what was, instead of dealing with what is. We cannot and should not restore what was. We must move forward and deal with what is. This is a fundamental shift in the economy, and fighting it is like fighting the tide. Debt levels must me reduced. Economic activity must shift toward investment and away from unsustainable consumption. If we are to ditch this bubble economy and experience real, healthy, sustainable growth, this must happen.

I share in common with Moyers, Galbraith and Will the astonishment and outrage at the behavior of the large financial institutions. Many of them ran themselves into the ground and took massive amounts of taxpayer dollars to bail their stupid selves out. Now they have the audacity to celebrate their so called return to profitability by paying egregious bonuses to traders who have access to FEDERAL FUNDS at nearly 0% and are risking taxpayer money manipulating stock prices. I apologize for the long sentence, but it really makes me mad! Worse, they have the gall to call themselves capitalists and so too are guilty of ruining capitalism's image for the good guys!

People, the outrage against the behavior of these money lenders is entirely justified. Their behavior is indeed outrageous, if not outright criminal.

Here We Go

Here we go, the VIX has spiked 25% so far today. Hold on for the ride, hope you sold last week.

That GDP number wasn't so great after all.
http://www.cnbc.com/id/33549682

I heard on NPR that Obama has proof that his stimulus has created or saved about 600,000 jobs. Too bad 500,000 were lost last week.

GDP 3.5%? No, "Cross-Addicted" Economy

3.5% Really? No, reeeeeeeeaaaaaaaaaallllllllllllly?

Here are the questions you should be asking yourself: Is it sustainable? Is it real? Is it accurate? Unfortunately the answer to all three is a big fat NO.

This guy came up with the term "cross-addicted" and I agree with him:

http://www.cnbc.com/id/33530661

What About Risk?

I get very irritated when people who are supposed to be investment "experts" talk about return without relating it to risk.

Over the last six months I have been wrong about the direction of the stock market. The bounce from the lows in March has been much bigger than I thought was possible. But then one of my failings is that I fail to realize the human minds potential to delude itself for long periods of time. (I do not exempt my own mind from this judgement.)

But to all of you who are so worried about missing the unprecedented run up we have has since the March low, I tell you this: you are ignoring risk. Return is a meaningless concept if risk is not considered.

Is a bond yielding a 16% annual return a good investment? Is it better than cash? The answer to both of these questions (as my favorite professor from CSOM said) is, IT DEPENDS. In this case it depends on a lot of factors, the most important being risk of default.

So, if you are an investor, not a trader, do not fret about missing this last run-up. It probably isn't sustainable (if you were in and stay in you will likely lose most if not all of your gains). If you are a trader, missing that run-up was a huge bummer. If you didn't miss it, lock in your profits now.

In the following video Rosenberg is right:

Worse Than The Great Depression?

Could the period we are entering end up being as bad or even worse than the Great Depression?

My humble answer: Yes. I simply do not buy the idea that because our economy is bigger, it is more resilient.

Now, I am not trying to depress you, just give you a chance to prepare for what may be coming. The temporary relief we are feeling from massive government stimulus is not sustainable.

As I have said before, our economy will recover, but it will take from 7-10 years for it to do so. The changes we are seeing are fundamental. They are going to change our economy from a debt driven one, to a more balanced one, where investment and exports catch up with consumerism.

The recovery process, though, while painful like withdrawal, is necessary if the healing of the economy is to be sustainable.

I just hope we don't have to hit rock bottom before we change our overspending, over consuming ways.

Here is an informative article for those who think things can't get as bad as the Great Depression this time:

http://www.cnbc.com/id/33481862

"Elliptical Delusion"

Kids are the best.

We have had a long month at our house. Two cases of H1N1, Strep, an attempted break-in, etc.

My son, after recovering quickly from H1N1 (Thanks Tami flu!) and being back at school healthy for a week, now has another low grade fever. (99.5) He is a bit congested and very tired. My daughter - after three weeks and a few days out of school (first Flu, then strep, then an allergic reaction to anti-biotics, and then a sinus infection) is finally healthy and back at school.

Perhaps I am losing it at this point, but in the midst of all this, my son was messing around on an ipod touch and says, "Look mom, I made an elliptical delusion." I haven't laughed so hard in a long time. "Honey, its an optical illusion," I said. "I don't care," he said, "To me it's an elliptical delusion!"

Kids are so wonderful. So we looked at some new elliptical delusions together.

Fear

Sometimes inspiration is hard to come by. This past few weeks have been that way for me.

Both of my kids were sick, one more so than the other. Mercifully, they are both doing fine.

If your kids having H1N1 doesn't scare the crap out of you, well then maybe having someone try to kick down the door into your house from the garage at 6:24am in the morning will.

Oh, all is well, the alarm system went off and scared them away. The police were here in minutes, and everyone is safe.

But I tell you what, if you haven't had that kind of experience you don't want to. It brings you face to face with FEAR.

On my journey toward inner peace, I have visited a state where fear is absent. Several times. Sometimes for long periods of time. The last few weeks have been a reminder that I have not defeated my demons for good. There is still much fear in me. So I have been asking myself after several sleepless nights, what is it exactly that I am afraid of? The answer seems to be so scary to talk about, perhaps even read about, be cause it is the ultimate fear for us all...Death.

The truth is that every single fear we have is rooted in one fear - fear of death. Go even deeper and you will realize it is a fear of life. How? We are afraid that what we view as our most precious gift, life, will be taken from us if we live it fully. Being unaware of this, many of us do not live life to its fullest.

Our ego falsely believes that fear of death will save us from it. It won't. We are all going to die someday. We don't know how, or when. Just if.

So what is the solution to this human conundrum? Mine is this:

Look Fear in the face and keep walking. Try to love as much as possible. Know fear is there, but don't let it control you. Believe me, if you don't know it's there, it will control you.

Know the difference between what you can control and what you can't. Control is sometimes beneficial on the physical level. (Alarm system, motion lights & perhaps a move to a better neighborhood, maybe even become a pistol packin' momma!)

At the same time realize who is really in charge. It is not us. Whatever, or whomever it is apparently thinks this Odyssey called human life is necessary.

My life is really pretty easy, abundant, and wonderful compared to that of most. I have won the lottery of life by just being born in the good old USA.

But regardless of class, race, or sex, we all have to face the same FEAR. Perhaps doing it early on on life makes us able to enjoy the rest more fully.

Parenting With H1N1

Alright, I just have not had it in me to talk about much about the market - obviously I am getting killed. Art Cashin and I had coffee the other day and shared our misery. (Just Kidding)


No really, while I am waiting for the market to correct I thought I'd talk a bit about parenting.

Why do people have so many issues around sick kids? Both of my kids had H1N1 this month. It was NOT fun. It was anxiety producing and terrible. Just so you know, the last stage of the virus for many children is hives that cover their entire face, torso and arms. Apparently, many children are having an immune reaction to the virus even after they are feeling better.

Zyrtec works. After two full weeks at home, both of my children should be happily back at school tomorrow, where they got it in the first place. How comforting.

The really interesting thing is I have picked up on some serious societal stigma for admitting that my kids had H1N1. (and not just pumping them full of cold medicine and ibuprofen and sending them off to infect everyone else)

Here are some of the fearful comments I had to endure:

"Really? Are you sure that was it?"
"I heard it's not that bad."
"Wow, my kids have never been sick for that long."
"Are they healthy eaters?"
"Don't they take vitamins?"
"Wow, your kid is always sick!"

My dear friends and family responded in a much more loving way:

"How can we help?"
"Are they ok?"
"Are you ok?"
"Do what you need to do."
"Don't send them back until they are ready."

I thank you loving people!

It really does illustrate the contrast between fear and love. Fear attacks, Love supports.


I had the guts to ignore the conventional advice out there and actually brought my son in to get tested.

Please, do NOT pretend like this is no big deal. I really wanted to, but the illness hit my family very hard, and showed me otherwise.

Telling your kids to wash their hands all day won't work. They will just get coughed on at school.

So please people, KEEP YOUR KIDS OUT OF SCHOOL IF THEY ARE SICK!!!!!!!!

I know it is hard. JUST DO IT!

And if you decide not to, don't give the rest of us crap for doing the right thing!

New Edge Group Has It Right Again

This firm called it right last Fall, and they are right on again.

Lone Survivor

I am reading a book called "Lone Survivor" by Marcus Luttrell. I believe every so-called Liberal should read it. It's definitely not Hemingway.

I am often torn between two ideas:

First, I believe that violence begets violence. Therefore, in my spiritual and personal life I consider myself a pacifist.

Second, I passionately believe Einstein was right when he said, : "The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing."

It is implied in Einsteins quote that when we see evil, we should at least identify it.

I believe on 9/11, evil paid us (the USA) a visit. I also believe that the only true path to world peace is the inner journey of eradicating evil from within ones own soul.

How do we fight evil without becoming evil? Is it morally acceptable to defend oneself on the physical level? On the collective level, is it moral to defend one's nation against what we perceive as evil?

Is there even such a thing as a collective physical level?

These are very tough philosophical questions. I mean, Hitler percieved the Jews as evil, and look what transpired. He thought himself righteous and took action to back up his views.

I do believe that the ideology of the Taliban and Al Qaeda are evil. Why? Because they are anti-life. They worship death, the ego, and the collective as opposed to life, liberty and the pursuit of happiness. Does this mean the people who believe in anti-life ideologies are evil? Not necessarily. They may have been brainwashed. They may be completely unconscious on a spiritual level and living in the complete grip of their ego. But they do perform evil acts, and these we must identify, as Einstein requests.

On the physical level, we must protect ourselves against this evil. In the long run, it stands no chance against the evolution of consciousness toward Love. But in this temporal realm, in this physical world that we find ourselves in, we have a moral obligation to protect the innocent. By physical force if necessary.

So that ends the confusion for me. And that is why I cannot be anti-war in any circumstance. That is why I think that many of the men who now fight the Taliban and Al Qaeda deserve our utmost support and outright admiration.

In Marcus Luttrell's words from "Lone Survivor": (a brave Navy SEAL-thank you for my freedom Marcus)

"I promise you, every insurgent, freedom fighter, and stray gunman in Iraq who we arrested knew the ropes, knew that the way out was to announce he had been tortured by the Americans, ill treated, or prevented from reading the Koran or eating his breakfast or watching the television. They all knew Al-Jazeera, the Arab broadcasters, would pick it up, and it would be relayed to the U.S.A., where the liberal media would joyfully accuse all of us of being murderers or barbarians or something. Those terrorist organizations laugh at the U.S. media, and they know exactly how to use the system against us."

A few paragraphs later:

"And I know one thing for certain. If I ever rounded a mountainside in Afganistan and came face to face with Osama bin Laden, the man who masterminded the vicious, unprovoked attack on my country, killing 2,752 innocent American civilians in New York on 9/11, I'd shoot him dead, in cold blood.

At which point, urged on by an outraged American media, the military would probably incarcerate me under the jail, never mind in it. And then I'd be charged with murder.

Tell you what. I'd still shoot the sonofabitch."

You can call it angry, you can call it unenlightened. I call it heroism, on par with Valkrie.

Kids With H1N1 & Tamiflu

Well, the H1N1 saga continues at our house. Luckily, we have much to be thankful for as nothing horrible except two weeks straight in the house, extreme anxiety, and several co-pays transpired.

My daughter had it first, and then developed a secondary strep infection. She is still weak and tired two weeks later, but thankfully, doing very well.

My son came down with it about five days ago and I brought him to the Fairview clinic in Maple Grove where they tested him for H1N1, confirmed a positive test, checked for secondary infections and prescribed Tamiflu. He quickly improved and never developed a secondary infection. I can not say enough positive things about the Fairview system. Their compassion and professionalism shows at all levels, even the pharmacy.

As for the pediatric clinic I took my daughter to (Partners in Pediatrics, MN), well, let's just say they were horrible, at pretty much all levels, and I will never bring either one of my children there again. Their lack of compassion and absolute unwillingness to identify my daughter's illness and check for complications was an outright disgrace.

I had to tell them to run a strep test, to which they replied, "There is no strep out there." Well, her culture came back positive and she only began to improve from serious symptoms after 24 hours on amoxicillan. I guess there was no strep out there, except for my daughter.

The point of my rant is this: be your children's advocate if they get this flu. DO NOT accept substandard care. Do not submit to the arrogance of incompetent clinic staff just because they are wearing scrubs. Do your homework. Know the CDC guidelines. Absolutely DO NOT be afraid to bring your child in!

A Must Watch

You must watch this if you want to understand the last year's economic events in a historical context. It is also crucial if you want to see where we are headed.

http://www.pbs.org/wgbh/americanexperience/crash/

Vain Obama?

George Will says it best.

http://abcnews.go.com/Video/playerIndex?id=8747101

Vain - Yes, that's it. I perhaps would have said narcissistic in a very unaware sort of way. Not that I can't understand this human failing, I can. I, however, am not the President.

Can you believe that Katrina vanden Huevel? She is absolutely unbelievably unintelligent. Or at least she can't think clearly. Even Cokie Roberts thinks she is a pain in the ear - watch as she rolls her eyes at her in the Afghanistan round table.

Cokie does an absolutely fabulous job of explaining why we better think very long and hard before abandoning Afghanistan, and particularly the WOMEN of Afghanistan. This does little to soften the hard heart of that bleeding heart Katrina. We need more Cokie's on the left and the right. Real feminists that will stick up for all women, not just ones with pants suits and degrees from Princeton. Real feminists who know evil when they see it and are willing to call a spade a spade regardless of looking politically incorrect. Real feminists that are not afraid to stand up for what's right. I could care less whether Cokie is a liberal or conservative, a republican or a democrat - she said what is true, and I commend her for that.

Watch the video:

http://abcnews.go.com/Video/playerIndex?id=8747143

Kids With H1N1

Boy have I been a bad blogger lately. I simply have had too little time and too little inspiration.

Not to mention a visit by what the doctor told us was probably H1N1. They are no longer testing for the virus because so many people have it.

My eldest daughter had it and then developed strep this week. Thankfully she is now on the proper anti-biotics and is doing fine.

I know that clinics are telling people not to come in unless they have a fever of 103 degrees or higher. I believe this is rotten advice and you should not follow it.

My daughter's fever never exceeded 100.3. If I had not brought her in, and demanded they do a strep test, she would have only gotten sicker and who knows how sick.

What the media and doctors are not very loud about is that most of the deaths associated with H1N1 are not caused directly from the virus itself, but by bacterial infections that set in later in the course of the illness. If you don't bring your child in, they can not test them for bacterial infection.

Clinic staff do not always know what they are talking about. As a parent, trust your gut, and insist on all of the proper testing and care for your children. Do not be afraid to speak your mind to and ask for what you need of people in the medical profession - they are just people.

So,even though the current advice ou there is: send your kid to school when their nose is running like a faucet and they are coughing up a storm (as long as they haven't had a fever in the last 24 hrs), but don't bring them to the doctor unless their fever is at least 103 for more than 48 hrs - what a load of crap.

Ignore it and do what you think is right.

True Meaning

I wonder, I bet, Whitney Houston never did grasp the true meaning of this song. She is incredible though. Perhaps she does now, or is hopefully closer to it.




Gotta love the 80's.

Now, Compare & Contrast

In Ahmadinejad's view, WWI and WWII were racist wars - he is correct - he is just wrong about who the racists were. This man is a complete meglomaniac. Just listen, and carefully.

Must Watch & Listen Carefully

Einstein: "The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing."









Of course, I think only Fox carried the full speech.

Notice the female diplomat from Palestine walks out in the middle of the third segment when Netanyahu says Israel is defending itself. I wonder how she will feel when Palestine is ruled by Al-Qaeda's brotherhood? Perhaps not so self-righteous.

I Wish I Had Come Up With The Term

Toilet shaped recovery - BEAUUUUUUUUUUUUTIIIIIIIFULLLLLLLLLLL!!!!!!

Love it. Go Roche!

Good Interview

I like the term "economic Disneyland". This guy is right on the money, listen to him.

FDIC Needs More Money

A sign of the times, economically speaking:

http://www.cnbc.com/id/32962379

It amazes me that this little tidbit of news hasn't sparked a sell off in the pre-markets.

Sheila Bair herself warned of this possibility back in march:

http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=alsJZqIFuN3k

Oh, but I forgot, the recession is over. Ok, Dow 14,000!

I Don't Care If You Believe Me

When you speak what you believe to be the truth, it matters not if anyone disagrees, or if doubters abound. You speak what you believe to be the truth and if you are wrong, so be it. Agreement and acceptance are not required. You merely observe the world around you, report your findings, and be done with it.

When you say 2+2=4, you don't need someone else to verify your observation. You are merely reporting the facts as you see them, and though misperception abounds among us humans, we keep trying to percieve accurately because that is in our nature.

In a previous post, I said Peter Schiff was right, and he was.



http://www.kelowna.com/2009/09/18/u-s-economic-recovery-cant-work-peter-schiff/

So, as Peter says "Don't believe the propaganda!"

I am telling you - the Dow could run to 11,000 on pure irrationality and market manipulation.

If you want to, or you believe the propaganda, get in now! Or, better yet, try to be a trader if you aren't one. (obvious sarcasm)

If you don't, listen to Peter, he has been right all along. His logic is sound, and the market will correct.

The emperor has no clothes.

Right now deflation is the biggest threat to our economy. However, if the government keeps adding debt at the pace they are, hyperinflation will be. Actually, we will be facing hyperstagflation. (Inflation of the money supply with falling asset prices-most notably stocks and bonds and consumer goods-combined with dollar devaluation.)

The only way out is if consumers, small businesses and corporations massively deleverage and we start from scratch with a freer economy. This will require anemic GDP growth for some time.

From this new place of economic health (perhaps 15 years from now), we can move forward at a sustainable place and take to heart the lessons we learned by believing that GDP growth alone is the measure of societal abundance.

One can only hope.

You Are Not Your Thoughts

I am still getting hammered in the markets by irrational exuberance. Same pattern...nothing new to say. So I thought I would write about spiritual matters instead.

How often are we, as humans, unaware of our thoughts?

I have been fortunate enough to realize that I am not my thoughts. I have learned that thoughts are energy forms that pass through consciousness. They can be very overwhelming, and if your level of awareness is low, they begin to control your emotions. Instead of noticing the thoughts, we start to believe them, and our emotional state is affected, depending on the nature, frequency, and energy level of the thought.

Try a little experiment today. When you feel any negative emotion, such as stress, anxiety, or anger, ask yourself this question: What was I thinking about just prior to my change in mood?

You may find that you were thinking things like:

There isn't enough time.

There is never enough money.

I can't do that.

It's too late.

I am too old.

I am too fat.

My house is too dirty.

Now, try thinking some other thoughts. I don't care how hard it is.... just do it. Thoughts like:

There is enough.

I can do that!

There is enough time.

I feel great when I eat right and exercise.

Messes can be picked up.


How are you feeling now? It is only when you don't notice your thoughts, that negativity can take you over. (I am not saying you won't continue to have negative thoughts - just be aware of them) Negativity, as an energy form, can actually begin to feel comfortable if you start to believe in lack instead of abundance.

I am here to tell you all (and myself) this truth: The universe is abundant. It does provide. It can also take away. Don't ever underestimate the impact your thoughts have on the whole. We are all powerful creators.

What will you create today?

Jim Is Right

I couldn't agee more. We would have not had systemic collapse if the banks that had screwed up were allowed to fail. You just can't have it both ways and still call yourself a capitalist.

Re-leveraging simply gives more money to the incompetent and changes the rules of the game so that the competent don't want to play.

In order for us to heal we need honest capitalism, not a bunch of incompetent, corrupt bankers. Good ones can't take their place unless the government quits bailing out the bad ones.

Must Read

This post is a must read if you want to understand what is going on with our economy today:

http://charleshughsmith.blogspot.com/2009/09/has-central-bank-management-of-economy.html

Painful Keynesian Lesson

I am much more drawn to the teachings of Hayek and Von Mises than those of John Maynard Keynes.

However, our current government attempts to control our economy by implementing Keynesian principles, and has since the creation of the Federal Reserve system in 1913.

His famous quote that is becoming all too painful for me goes like this: "The market can stay irrational longer than you can stay solvent."

Another famous Keynesian quote: "There is nothing so disastrous as a rational investment policy in an irrational world."

Now, if you are an trader, you understand exactly what I'm talking about. Timing is crucial.

If you are not a trader, you can stay safely in cash and avoid all this craziness for a while.

(Fortunately, there are ways to be short where you can stay solvent and stretch out your time horizon.)

http://econlog.econlib.org/archives/2009/08/how_to_stay_sol.html

If you missed this great rally by sitting mostly in cash, don't fret. At least you weren't short.

All that said, I am still net short this market through put options.

The fundamentals HAVE NOT changed. This run-up is driven by government over spending and bubble-like hopes that the worst is behind us. I am afraid it is not. We will break through the March lows, I obviously just don't know exactly when that will happen.

Don't forget what sparked the rally off the lows: the government suspending mark-to-market accounting for the large financial institutions. Instead of letting the market correct, the government basically stretched out the timeline banks had to disclose their bad assets. The hope being this would give them time to save themselves as the stimulus kicked in.

The problem with this logic is that there are many, many more losses to come. There are hundreds of billions of bad loans sitting on the books of the banks. Housing prices have not bottomed. There are millions of more foreclosures on the way.

I am not trying to be depressing, rather just interpreting the facts as I see tham and being as realistic as possible.

Market Still Higher

The market may be up this morning, but so is the VIX. Be careful, don't get sucked in to this suckers rally.

http://www.cnbc.com/id/32729831

Does Spirituality Have To Be Liberal?

I was listening to NPR this morning. There was an episode of "Speaking of Faith" on about Yoga and the ways in which it can assist one on a spiritual journey. The woman being interviewed was a yogic master who preached self -responsibility for ones inner state. Her basic point was that if you can't defeat the demons within, you have no chance against those outside your Self. I couldn't agree more. The irony to me is that this true personal responsibility we all have to our Selves and humanity seems to contradict the Liberals who espouse it. Almost without exception they are Democrats who support increasing government control of the economy. This seems like a huge contradiction to me.

Now, the yoga lady in the broadcast never endorses a political view, but it obviously bugs Terri Gross that she is so focused on personal growth and suspends judgement about the ills of the world. You can find the podcast with a little work at:

http://speakingoffaith.publicradio.org/



What I find so interesting here is that the spiritual quest, in contrast to many religious ones seems to always be politically allied with Liberals.



Why? Is it because "religious Conservatives" and evangelical types like the Assembly of God people have taken over the right wing?



Where are the thinkers that believe passionately in freedom and personal responsibility? Are we really left with a right wing that thinks of God as a big white man handing out judgements from a chair in the sky and a left wing that wants government to grow big enough to take care of all the whiners of the world on the backs of the innovators?



A Left that wants to blame everyone, including the right for their own shortcomings?



Isn't there an alternative? Can't people who have the strength to go within and fight the darkness there embrace the idea that Government isn't a babysitter or a mommy?



This is a call for all those that have the courage to go within and heal their own demons to embrace a freer America. One that is more like the America our founding fathers envisioned.



Do not surrender your freedoms to a parent state. If you have the courage to look within, cut the Liberal bullshit.



Isn't it ironic that "Liberal" actual means free.



People; freedom, not just power, comes with great responsibility.



Step up.

Bloomberg Special

I saw a great special on Bloomberg this morning while I was working out. It doesn't look like I can embed it so here is the link:

http://www.bloomberg.com/avp/avp.htm?N=video&T=Whitney%2C%20Stiglitz%2C%20Welch%2C%20Sarkozy%20on%20Financial%20Crisis%20&clipSRC=mms://media2.bloomberg.com/cache/vyKk.ta7JrXE.asf

If you are looking for a great take on this crisis, this is the program for you. I agree with Sarkozy more than any other on the panel. (About 26-28 min in to the video.) Notice how after he speaks the other "green shoots" guys , including Goolsby (I call him Austin Foolsby) are absolutely at a loss because he puts all the political bullshit and fancy talk aside and just tells the truth.

I realize if you are not into this sort of thing it might bore you. However, if you can stand it, you will learn much.

Also, isn't it so cool to see Meridith Whitney up there with those guys? She is smart, beautiful and articulate. She also had the guts to call this crisis and stand up to the big boys. I think she is being a little too bullish now, but you gotta like that powerful woman!

Will Housing Prices Turn Around Soon?

http://www.cnbc.com/id/32672765

No....they won't. We have another 30-40% down to go in most markets. That is unless banks start demolishing entire neighborhoods to dry up supply. It could happen.

Watch Out!

If you are long financials you should take profits now.

American Consumer Debt

I have been saying for a while now that the reason this recession is more serious than others is because of high consumer debt levels.

I just got done watching a documentary recommended by a friend called, "In Debt We Trust".

It is a few years old, but has a lot of information.



The problem is, it has a very liberal slant. Most of the blame for our current consumer debt problems is placed on the Bush administration and big banks. Oh yeah, and the rich.

While it is true that large financial institutions made many bad loans to people they knew would not be able to repay them, they did so because there was demand for these loans.

Many American consumers (and yes, that includes me) have been acting like spoiled brats for the past fifteen years or so. They have been spending more than they made to buy, well, STUFF. A lot of that stuff is junk. A lot of it is worthless.

Most of it was purchased because of something ancient religions have warned against for thousands of years: WANTING.

It is time to pay the piper. It is time to live within our means. It is time to stop wanting more and more STUFF.

The Buddha called wanting the root of all suffering.

Psalm 23:1 "The Lord is my Shepard, I SHALL NOT WANT"!

Stop blaming the government and the banks and cut up all your credit cards for god sakes!

Take a look in the mirror - I know I am.

It's over people, enough is enough.

Hilarious!

I found out about this guy from another blog, http://captaincapitalism.blogspot.com/.

He is great! Very funny!

This particular episode is great.

http://unclejayexplains.com/2009/04/12/uncle-jay-explains-april-13-2009/

Panic Buying?

The short answer - yes, this rally was driven by panic buying.

Government Health Insurance

Now, I haven't written much about health care, as I know little about the system as it stands.

Yes, I have read many articles about it and listened to all the rhetoric....but unless I have actually studied the system myself, I am not arrogant enough to think I understand it fully.

I do have a few thoughts on the subject:

The private sector tends to function best and most efficiently when the government stays out of the way. I get very suspicious when governments say they "must control costs" or prices in any private sector or industry.

As we all know, the government has done a fabulous job of controlling the cost of its own operation! Because of their "success" at cost control, we are stuck with a national debt that will be paid for by my generation, our children, and their grandchildren. The effect of the massive tax increases that will be needed for the U.S. government to remain solvent will be stagnant economic growth for years, perhaps decades...at best.

Would you go to your dentist for financial planning advice? Why on earth would you trust the government to bring down the cost of health care?

Cash For Clunkers

Are you anywhere close to as sick of hearing about Cash For Clunkers as I am?



"Your credit approval is guaranteed!"

i.e. The government is subsidizing consumerism in order to make it look like our economy is healthy when it isn't.

The government is putting a floor under prices temporarily which is a HUGE waste of your tax dollars and will fail ultimately.

Oh, by the way.....since this is a government program you are paying for it with an increased tax bill!

Oh no, I take that back....the guy who was providing your job is paying for the new car you can't afford with his new tax bill and he will be laying you off as a result!

But yeah - Cash For Clunkers is a great idea!

THINK PEOPLE - THINK! Or is that too much to ask?