The big surprise about the US economy is that the consumer is not really all that strong.
Job losses have taken their toll. And, the bad news from Iraq along
with near two dollar gas is a REAL DOWNER!
And, did I mention DEBT! Out the wazoo for many people.
Addtionally, there is very little pend up demand. People have got to
be running out of storage space! Where are they putting all that
stuff they buy? Is the garage too full to park the new car yet?
NOTE WELL: A DECLINE IN CONSUMPTION THIS SUMMER COULD BRING
DISINFLATION BACK FAST! AND STOP ANY FED ACTION.
And NOW, with China tapping the brakes on it's economy?
Well, we could be back in the DEFLATION SOUP faster than you can say
ALAN GREENSPAN!
While corporations have had a period of profit windfall, with ultra-low rates and downsizing and offshoring;
Many CEO options are now back in the money. But alas, that is not
the "real economy."
MY HUNCH IS THAT BY SUMMER THE WEAKENING CONSUMER WILL STOP THE FED COLD!
AND, ANY WIND-DOWN OF THE INCREASINGLY OBVIOUS DISASTER IN IRAQ;
ALONG WITH SOME HEART FELT "MEA CULPAS" BY DUBYA, RUMMY, WOLFIE AND OTHER RESPONSIBLE PARTIES;
WE COULD "STABILIZE" THE MIDDLE EAST. AND REDUCE THE "RISK FACTORS" IN OIL PRICES CONSIDERABLY.
Of course, the lunatic fringe, Sharon, Osama, etal, will still be
raging at the moon. As usual!
But, the increasing prospect of a BOND FRIENDLY KERRY PRESIDENCY
could give The Fed the leaway it needs to put ANY rate hikes on the back burner indefinitely or at least until long after the election.
Postscript: I find it hard to believe that the Fed would monkey with rates during a presidential election anyway. Especially this election; where you'll be damned and blamed no matter what you do!
http://www.bea.gov/bea/newsrel/pinewsrelease.htm
Friday, April 30, 2004
NO FLOOR UNDER STOCKS.
In an enviornment of rising rates, it's always nice to have a FLOOR
under your investments.
TRADITIONALLY, THAT FLOOR HAS BEEN THE YEILD.
During periods of market decline, a yeild can act as support for a
stocks price; at least that is how things USED TO be done in the
markets.
Back in the olden days, say the 1930's or 1970's it was common,
indeed often demanded, that stocks pay something back to
shareholders. It was the sine quo non to make a stock investible.
Somehow that all ended in the 1990's.
AND, NOW WE ARE PAYING THE PRICE FOR IT.
If there is no yield--HOW TO YOU KNOW WHEN TO BUY, HOLD OR SELL?
IT'S AN IMPOSSIBLE SITUATION REALLY.
For NO-YIELD INVESTORS the only logical thing to do is DUMP! AND TRY
TO BE THE FIRST TO DUMP AT THAT!
BECAUSE THERE IS SIMPLY NOTHING HOLDING THE STOCK UP WITHOUT YEILD.
TRUE, WE HAVE HAD VERY LOW INTEREST RATES, AND MULTIPLE EXPANSION,
AND "GROWTH," PROFORMA AND OTHERWISE, AND, OF COURSE, MOMENTUM TO
FALL BACK ON RECENTLY. BUT THESE ARE NOT REALLY "FLOORS" TO THE
STOCK PRICE.
ALL OF THAT IS NO SUBSITITUTE FOR A YEILD!
On the other hand;
For the income investor the decision is different.
Do you want your 8% yeild to go to 10%, with a comparable reduction
of capital?
STILL, FOR THE INCOME INVESTOR, THERE IS A PRICE FLOOR-SOMEWHERE.
AT SOME POINT THE YEILD WILL BECOME COMPELLING. ONLY DEFAULT IS THE
ENEMY OF INCOME.
Conclusion:
IN THE CURRENT ENVIRONMENT, INVESTORS DUMPING NO-YIELD, NO-FLOOR
EQUITIES MAY DECIDED TO BUY INTO NEWLY CHEAP INCOME.
ESPECIALLY, WITH INCOME INVESTMENTS MOSTLY ON THE NYSE "NEW LOWS LIST" NOW;
While bonds are falling, income assets are falling MUCH FASTER! And,
the spreads between treasuries and other income is widening.
AN INCOME BUYING OPPORTUNTIY COULD BE NEAR.
under your investments.
TRADITIONALLY, THAT FLOOR HAS BEEN THE YEILD.
During periods of market decline, a yeild can act as support for a
stocks price; at least that is how things USED TO be done in the
markets.
Back in the olden days, say the 1930's or 1970's it was common,
indeed often demanded, that stocks pay something back to
shareholders. It was the sine quo non to make a stock investible.
Somehow that all ended in the 1990's.
AND, NOW WE ARE PAYING THE PRICE FOR IT.
If there is no yield--HOW TO YOU KNOW WHEN TO BUY, HOLD OR SELL?
IT'S AN IMPOSSIBLE SITUATION REALLY.
For NO-YIELD INVESTORS the only logical thing to do is DUMP! AND TRY
TO BE THE FIRST TO DUMP AT THAT!
BECAUSE THERE IS SIMPLY NOTHING HOLDING THE STOCK UP WITHOUT YEILD.
TRUE, WE HAVE HAD VERY LOW INTEREST RATES, AND MULTIPLE EXPANSION,
AND "GROWTH," PROFORMA AND OTHERWISE, AND, OF COURSE, MOMENTUM TO
FALL BACK ON RECENTLY. BUT THESE ARE NOT REALLY "FLOORS" TO THE
STOCK PRICE.
ALL OF THAT IS NO SUBSITITUTE FOR A YEILD!
On the other hand;
For the income investor the decision is different.
Do you want your 8% yeild to go to 10%, with a comparable reduction
of capital?
STILL, FOR THE INCOME INVESTOR, THERE IS A PRICE FLOOR-SOMEWHERE.
AT SOME POINT THE YEILD WILL BECOME COMPELLING. ONLY DEFAULT IS THE
ENEMY OF INCOME.
Conclusion:
IN THE CURRENT ENVIRONMENT, INVESTORS DUMPING NO-YIELD, NO-FLOOR
EQUITIES MAY DECIDED TO BUY INTO NEWLY CHEAP INCOME.
ESPECIALLY, WITH INCOME INVESTMENTS MOSTLY ON THE NYSE "NEW LOWS LIST" NOW;
While bonds are falling, income assets are falling MUCH FASTER! And,
the spreads between treasuries and other income is widening.
AN INCOME BUYING OPPORTUNTIY COULD BE NEAR.
Thursday, April 29, 2004
FALLUHJA DEFEAT!
Did the men, women and children of Fallujha, (aka terrorists and dead-
enders), just inflict a defeat on the world's greatest military?
It seems so!
After the mini-shock and awe show yesterday, in an industrial suburb
of Fallujha, suddenly the US has agreed to pick up and leave!
What gives?
Indeed, the "insurgents" won't have to give up their weaponry. And,
a former Saddam general has agreed to establish a "Fallujha Defense
Force" probably consisting of the Fallujha Insurgents we just
bombed! And, likely on the US payroll to boot!
DE-BAATHIFICATION HAS BECOME RE-BAATHIFICATION!
In truth we may find that Saddam was doing a pretty good job
of "handling" Iraq after all. I mean now American soldiers are being
charged with torturing Iraqi prisoners!
That used to be Saddam's Job Description!
WAY BACK BEFORE WOLFIE AND RUMMY SEND US OFF ON THIS DISASTEROUS WILD
GOOSE CHASE IN IRAQ; ALL BASED ON FALSE INFORMATION
AND "INTELLIGENCE" SUPPLIED BY A BUNCH OF IRAQ EXILE QUISLINGS,
MALCONTENTS, AND MENTAL CASES!
Should Americans' be ashamed that their military didn't carpet bomb
the women and children of Falluhja?
Well, I don't think so. In fact, I'm rather proud of the way THE
AMERICAN GENERALS handled Fallujha;
DESPITE THE INSANE TWADDLE COMING OUT OF WASHINGTON!
SOFT POWER IS BETTER THAN HARD POWER NEARLY EVERY TIME.
enders), just inflict a defeat on the world's greatest military?
It seems so!
After the mini-shock and awe show yesterday, in an industrial suburb
of Fallujha, suddenly the US has agreed to pick up and leave!
What gives?
Indeed, the "insurgents" won't have to give up their weaponry. And,
a former Saddam general has agreed to establish a "Fallujha Defense
Force" probably consisting of the Fallujha Insurgents we just
bombed! And, likely on the US payroll to boot!
DE-BAATHIFICATION HAS BECOME RE-BAATHIFICATION!
In truth we may find that Saddam was doing a pretty good job
of "handling" Iraq after all. I mean now American soldiers are being
charged with torturing Iraqi prisoners!
That used to be Saddam's Job Description!
WAY BACK BEFORE WOLFIE AND RUMMY SEND US OFF ON THIS DISASTEROUS WILD
GOOSE CHASE IN IRAQ; ALL BASED ON FALSE INFORMATION
AND "INTELLIGENCE" SUPPLIED BY A BUNCH OF IRAQ EXILE QUISLINGS,
MALCONTENTS, AND MENTAL CASES!
Should Americans' be ashamed that their military didn't carpet bomb
the women and children of Falluhja?
Well, I don't think so. In fact, I'm rather proud of the way THE
AMERICAN GENERALS handled Fallujha;
DESPITE THE INSANE TWADDLE COMING OUT OF WASHINGTON!
SOFT POWER IS BETTER THAN HARD POWER NEARLY EVERY TIME.
INCOME vs. STOCKS? INCOME!!
So, whose crying now?
The plunge in income, (see NYSE new lows list) was brutal!
As a result, many income investments are now at incredible yeilds.
Even as the bond has stabilized, but Fed Funds stayed the same.
Now you might argue that the "spreads" are still the same, and that might be true in some cases.
But still, income that has some risk attached to it, could out-perform risk free income, ie US Bonds, in an improving economy.
Examples, REITs, Junk, Preferreds, a lower quality Munis.
BUT, STOCKS WILL NOT DO WELL IN AN ENVIRONMENT OF RISING RATES! THEY NEVER DO.
EVERY EQUITY PLUNGE IN HISTORY HAS BEEN PREFACED BY THE SAD COMMENT: "AND THEN INTEREST RATES ROSE!"
AND THOSE NAZZI "LOTERY TICKETS?" FORGET ABOUT THEM!
A lot of the attraction of the NAZZ has been the one percent solution Mr G has imposed on savers.
And a 5%+ ten year bond could be the kiss of death for NAZZ hotties. (Sorry Google!).
So, I expect a 5% bond to mean about 9000 on the Dow, with
every percent up subtracting another 1000 points on the Dow.
To wit: 6% bond equals an 8000 Dow. 7% bond equals 7000 Dow. 8% bond equals 6000 Dow. Etc. Etc. So, a 10% bond equals a 4000 Dow? You bet! Sounds reasonable to me!
THE POINT IS RATE HIKES ARE THE DEATH OF "NO YEILD" STOCKS! ESPECIALLY ONCE YEILD ALTERNATIVES TO STOCKS ARE AVAILABLE. MOM AND POP WILL FLEE EN MASSE.
And, wither income?
I would expect some unpleasantness. But, not as much as with stocks.
IN EFFECT, THE "SPREADS" WILL NARROW.
MR G's ONE PERCENT SOLUTION WAS SO ODD;
THAT INCOME NEVER REALLY FULLLY ADJUSTED TO IT.
Everyone was SO completely focused on stocks.
AND, THAT'S WHY THE CARRY TRADE BECAME SUCH A NO-BRAINER! HUGE SPREADS!
But, if spreads don't narrow now? Well, show me a 10% tax free muni with acceptable risk, and I'll buy it today!
STOCKS vs. INCOME?
I SAY: STICK WITH INCOME! AND SELL STOCKS!
Postscript: Now, if we revert to the early 80's scenario of
16% and 20% primes? All bets are off!
But, a moderate interest increase now will CLEARLY be worse for stocks than for bonds.
The plunge in income, (see NYSE new lows list) was brutal!
As a result, many income investments are now at incredible yeilds.
Even as the bond has stabilized, but Fed Funds stayed the same.
Now you might argue that the "spreads" are still the same, and that might be true in some cases.
But still, income that has some risk attached to it, could out-perform risk free income, ie US Bonds, in an improving economy.
Examples, REITs, Junk, Preferreds, a lower quality Munis.
BUT, STOCKS WILL NOT DO WELL IN AN ENVIRONMENT OF RISING RATES! THEY NEVER DO.
EVERY EQUITY PLUNGE IN HISTORY HAS BEEN PREFACED BY THE SAD COMMENT: "AND THEN INTEREST RATES ROSE!"
AND THOSE NAZZI "LOTERY TICKETS?" FORGET ABOUT THEM!
A lot of the attraction of the NAZZ has been the one percent solution Mr G has imposed on savers.
And a 5%+ ten year bond could be the kiss of death for NAZZ hotties. (Sorry Google!).
So, I expect a 5% bond to mean about 9000 on the Dow, with
every percent up subtracting another 1000 points on the Dow.
To wit: 6% bond equals an 8000 Dow. 7% bond equals 7000 Dow. 8% bond equals 6000 Dow. Etc. Etc. So, a 10% bond equals a 4000 Dow? You bet! Sounds reasonable to me!
THE POINT IS RATE HIKES ARE THE DEATH OF "NO YEILD" STOCKS! ESPECIALLY ONCE YEILD ALTERNATIVES TO STOCKS ARE AVAILABLE. MOM AND POP WILL FLEE EN MASSE.
And, wither income?
I would expect some unpleasantness. But, not as much as with stocks.
IN EFFECT, THE "SPREADS" WILL NARROW.
MR G's ONE PERCENT SOLUTION WAS SO ODD;
THAT INCOME NEVER REALLY FULLLY ADJUSTED TO IT.
Everyone was SO completely focused on stocks.
AND, THAT'S WHY THE CARRY TRADE BECAME SUCH A NO-BRAINER! HUGE SPREADS!
But, if spreads don't narrow now? Well, show me a 10% tax free muni with acceptable risk, and I'll buy it today!
STOCKS vs. INCOME?
I SAY: STICK WITH INCOME! AND SELL STOCKS!
Postscript: Now, if we revert to the early 80's scenario of
16% and 20% primes? All bets are off!
But, a moderate interest increase now will CLEARLY be worse for stocks than for bonds.
Wednesday, April 28, 2004
GOLD CONSPIRACY REVEALED!!
Today's huge plunge in gold was too cute by half. Especially based on
the notion that "slower growth" in China was the cause.
THE REAL CAUSE: OIL PRICES!
EVERYONE KNOWS THAT DUBYA & CO ARE LOSING IT IN IRAQ AND IN THE
MIDDLE EAST IN GENERAL.
What is happening now is a variation of the old GOLD-PRICE THEORY of
the 1930's.
It was often said that gold was the king-pin commodity and all
others "followed" in tow. If gold went up EVERY commodity went up.
If gold went down EVERY commodity went down. Sort of like
a "commodity escalator."
WITH HORRIBLE MIDDLE EAST CHAOS LOOMING, THE US FACES A SERIOUS
POSSIBLITY OF AN OIL PRICE SQUEEZE, AND SOON.
SO THE LAST BEST AND RATHER DESPERATE WAY TO "DEFUSE" OIL PRICES IS
TO ATTACK GOLD, AND ATTACK IT HARD!
IN THEORY THIS SHOULD RAISE THE DOLLAR, AND DEPRESS COMMODITIES OF
ALL KINDS. FIRST GOLD, THEN OIL. GET IT?
AT LEAST THAT'S THE THEORY.
LOOK FOR THE FED AND CENTRAL BANKS TO TREATING GOLD LIKE IT
WAS "FALLUHJA!" IT'S THE ONLY MEANS OF CONTROL THAT THEY HAVE OVER
THE IMPENDING COMMODITY INFLATION, AND OIL IS CERTAINLY THE PRIMARY
CONCERN NOW.
OR TO PUT IT ANOTHER WAY:
IF THE MUSLIMS WANT TO USE THE "OIL WEAPON."
THE US AND THE WEST WILL USE THE "GOLD WEAPON."
TODAY'S ACTION MAKES NO SENSE ANY OTHER WAY.
Because the "China Excuse" is obvious nonsense.
IT'S A WAY TO "SAVE THE DOLLAR" DESPITE THE CRASHING OF THE US BOND
MARKET!
CONVOLUTED! YES! WILL IT WORK? PERHAPS FOR A LITTLE WHILE;
BUT THERE IS NOT FREE LUNCH, BAD POLICY WILL OUT SOONER OR LATER.
THIS IS JUST THE NEXT PITIFUL STEP IN A DESPERATE ATTEMPT TO KEEP THE
WHOLE DAMN HOUSE OF CARDS FROM FALLING IN A HEAP!
Postscript: I might add that the markets are acting very very strangely now. And, we are in uncharted territory on macro-economics. I don't want to be an alarmist but the possbilitiy of a "1929 Event" OR MUCH WORSE! Can not be ignored.
the notion that "slower growth" in China was the cause.
THE REAL CAUSE: OIL PRICES!
EVERYONE KNOWS THAT DUBYA & CO ARE LOSING IT IN IRAQ AND IN THE
MIDDLE EAST IN GENERAL.
What is happening now is a variation of the old GOLD-PRICE THEORY of
the 1930's.
It was often said that gold was the king-pin commodity and all
others "followed" in tow. If gold went up EVERY commodity went up.
If gold went down EVERY commodity went down. Sort of like
a "commodity escalator."
WITH HORRIBLE MIDDLE EAST CHAOS LOOMING, THE US FACES A SERIOUS
POSSIBLITY OF AN OIL PRICE SQUEEZE, AND SOON.
SO THE LAST BEST AND RATHER DESPERATE WAY TO "DEFUSE" OIL PRICES IS
TO ATTACK GOLD, AND ATTACK IT HARD!
IN THEORY THIS SHOULD RAISE THE DOLLAR, AND DEPRESS COMMODITIES OF
ALL KINDS. FIRST GOLD, THEN OIL. GET IT?
AT LEAST THAT'S THE THEORY.
LOOK FOR THE FED AND CENTRAL BANKS TO TREATING GOLD LIKE IT
WAS "FALLUHJA!" IT'S THE ONLY MEANS OF CONTROL THAT THEY HAVE OVER
THE IMPENDING COMMODITY INFLATION, AND OIL IS CERTAINLY THE PRIMARY
CONCERN NOW.
OR TO PUT IT ANOTHER WAY:
IF THE MUSLIMS WANT TO USE THE "OIL WEAPON."
THE US AND THE WEST WILL USE THE "GOLD WEAPON."
TODAY'S ACTION MAKES NO SENSE ANY OTHER WAY.
Because the "China Excuse" is obvious nonsense.
IT'S A WAY TO "SAVE THE DOLLAR" DESPITE THE CRASHING OF THE US BOND
MARKET!
CONVOLUTED! YES! WILL IT WORK? PERHAPS FOR A LITTLE WHILE;
BUT THERE IS NOT FREE LUNCH, BAD POLICY WILL OUT SOONER OR LATER.
THIS IS JUST THE NEXT PITIFUL STEP IN A DESPERATE ATTEMPT TO KEEP THE
WHOLE DAMN HOUSE OF CARDS FROM FALLING IN A HEAP!
Postscript: I might add that the markets are acting very very strangely now. And, we are in uncharted territory on macro-economics. I don't want to be an alarmist but the possbilitiy of a "1929 Event" OR MUCH WORSE! Can not be ignored.
Tuesday, April 27, 2004
KERRY SLIMED BY CHENEY!
I've seen the Anti-Kerry ads by Dubya & Co.
And, the amazing thing is that they show Mr, Kerry to be not only incompetent;
BUT POSITIVELY EVIL! KERRY IS WORSE THAN OSAMA ACCORING TO THE PRESIDENT CHENEY'S PEOPLE!
Consider:
Kerry actually WANTS to send soldiers into battle without body armor!
Kerry actually WANTS to crash the economy! Kerry can't wait to crash the economy and kill off job growth!
Kerry is a LIAR! AND WORSE A "FLIP-FLOPPER!"
Kerry "dissed" the military during Vietnam by throwing away his "medals." (But only the ribbons.)
HOW CAN THIS MAN EVER BE TRUSTED AS PRESIDENT!
WELL, CONSIDER:
Kerry has a very, very long LEGISLATIVE CAREER. And, this is not really evil. In the legislative process DEALS ARE MADE, AND RE-MADE, AND THEN RE-REMADE. Votes are numerous. And, often technical in nature. Sometimes a bill is "killed" because of a "rider" than is unacceptable. Sometimes a bill is killed because it's larded with pork.
I'm sure that Mr Kerry probably "voted against" sewers and sanitation, and defense spending and $800 toilet seats, (except if they were made in his state) and education, and police funding, and motherhood and apple pie!
THE POINT IS THAT IF YOU ARE A LEGISLATOR YOU VOTE CONSTANTLY!
AND THE LEGISLATIVE PROCESS AND "SAUSAGE MAKING" ARE BEST NOT VIEWED BY THE PUBLIC! Right?
The point?
While Mr Kerry was fighing in Vietnam and serving in the Halls of Government and being otherwise politically active at an early age?
DUBYA WAS WORKING ON HIS "DRINKING PROBLEM" AND HOPING TO "FIND JESUS!"
THE KERRY CAMP SHOULD DO A "TIME LINE" OF THE TWO CANDIDATES;
1971. 1972. 1980. 1985. 1987.
WHO WAS DOING WHAT? WHERE?
IF KERRY IS TRYING TO BE AN "OFFICER AND A GENTLEMAN;"
DUBYA AND CHENEY WILL "SLIME" HIM FROM HERE TO NOVEMBER!
And, the amazing thing is that they show Mr, Kerry to be not only incompetent;
BUT POSITIVELY EVIL! KERRY IS WORSE THAN OSAMA ACCORING TO THE PRESIDENT CHENEY'S PEOPLE!
Consider:
Kerry actually WANTS to send soldiers into battle without body armor!
Kerry actually WANTS to crash the economy! Kerry can't wait to crash the economy and kill off job growth!
Kerry is a LIAR! AND WORSE A "FLIP-FLOPPER!"
Kerry "dissed" the military during Vietnam by throwing away his "medals." (But only the ribbons.)
HOW CAN THIS MAN EVER BE TRUSTED AS PRESIDENT!
WELL, CONSIDER:
Kerry has a very, very long LEGISLATIVE CAREER. And, this is not really evil. In the legislative process DEALS ARE MADE, AND RE-MADE, AND THEN RE-REMADE. Votes are numerous. And, often technical in nature. Sometimes a bill is "killed" because of a "rider" than is unacceptable. Sometimes a bill is killed because it's larded with pork.
I'm sure that Mr Kerry probably "voted against" sewers and sanitation, and defense spending and $800 toilet seats, (except if they were made in his state) and education, and police funding, and motherhood and apple pie!
THE POINT IS THAT IF YOU ARE A LEGISLATOR YOU VOTE CONSTANTLY!
AND THE LEGISLATIVE PROCESS AND "SAUSAGE MAKING" ARE BEST NOT VIEWED BY THE PUBLIC! Right?
The point?
While Mr Kerry was fighing in Vietnam and serving in the Halls of Government and being otherwise politically active at an early age?
DUBYA WAS WORKING ON HIS "DRINKING PROBLEM" AND HOPING TO "FIND JESUS!"
THE KERRY CAMP SHOULD DO A "TIME LINE" OF THE TWO CANDIDATES;
1971. 1972. 1980. 1985. 1987.
WHO WAS DOING WHAT? WHERE?
IF KERRY IS TRYING TO BE AN "OFFICER AND A GENTLEMAN;"
DUBYA AND CHENEY WILL "SLIME" HIM FROM HERE TO NOVEMBER!
GUNS AND TAX CUTS!
Most income investments seem to be up a bit today.
Could this mean that the "GREAT INCOME PLUNGE AND INTEREST RATE PANIC
OF 2004" is over? (0r, is it short covering!)
Well who knows;
Perhaps, the older carry trades are all closed now;
And, it's time to put on new ones; albiet at HIGHER YEILDS!
Even has the Fed Funds rate has not moved!
So, it seems that a new cycle of carry trades could be in the works.
As I have said, this entire episode seemed a market event, not a
macro-event.
AND, CONSIDERING THE VAST OCEAN OF MORTGAGES OUT THERE AT VERY, VERY
LOW INTEREST RATES THAT WOULD PLUNGE IN VALUE IF RATES ROSE? MUCH TO
THE GRIEF OF BANKS, HEDGE FUNDS AND MAYBE EVEN FREDDY AND FANNIE?
THE INCOME SHOCK OF '04 COULD BE OVER.......until? Hmmmmm......?
The more I look at that wonderous 308,000 number, that started this
mess, the more I think it was a total fudge!
At first I thought it was Dubya & Co trying to goose their
pending "ad buys." Because, of course, Dubya really, really, really
needed that number, BAD! And, "needy" politicans tend to get what
they want.
But now, I think the Fed could have "cooked it up" somehow too!
Remember, that the JOBS HOSANNA only started up about the time that
the Euro was a "sure thing" to break 130.
AND, EURO 130 WOULD BE CERTAIN TO CAUSE A LOT OF RE-THINKING IN THE
MARKETS.
IN SHORT; EURO 130 HAD TO BE STOPPED AT ALL COSTS!
And, surprize! It was! Yet again, our mysterious "deus ex machina"
force was with us!
The Euro plunged! Gold plunged! Even oil plunged, and on the very
same day of the bomb attack against the House of Saud--to boot!
(That was good.)
NOTHING COULD STOP THE ALMIGHTY DOLLAR THAT DAY! NOTHING!
NOT THE TWIN DEFICITS! NOT THE LOW INTEREST RATES!
NOT THE INCREDIBLE "GUNS AND TAX CUTS" POLICY OF DUBYA & CO!
NOT THE LOOMING CATASTROPHES IN IRAQ, AND PERHAPS EVEN IN
AFGHANISTAN! AND MIDDLE EAST CHAOS IN GENERAL.
NOT THE DECLINE OF WAGES!
NOT THE PLIGHT OF THE STATES AND LOCAL GOVERNMENTS, GROANING UNDER
HUGE UNFUNDED EDUCATION AND MEDICARE COSTS!
THE DOLLAR, TRIUMPHANT!
FOREVER!
P.S. Or for about a month, whichever happens first.......
Could this mean that the "GREAT INCOME PLUNGE AND INTEREST RATE PANIC
OF 2004" is over? (0r, is it short covering!)
Well who knows;
Perhaps, the older carry trades are all closed now;
And, it's time to put on new ones; albiet at HIGHER YEILDS!
Even has the Fed Funds rate has not moved!
So, it seems that a new cycle of carry trades could be in the works.
As I have said, this entire episode seemed a market event, not a
macro-event.
AND, CONSIDERING THE VAST OCEAN OF MORTGAGES OUT THERE AT VERY, VERY
LOW INTEREST RATES THAT WOULD PLUNGE IN VALUE IF RATES ROSE? MUCH TO
THE GRIEF OF BANKS, HEDGE FUNDS AND MAYBE EVEN FREDDY AND FANNIE?
THE INCOME SHOCK OF '04 COULD BE OVER.......until? Hmmmmm......?
The more I look at that wonderous 308,000 number, that started this
mess, the more I think it was a total fudge!
At first I thought it was Dubya & Co trying to goose their
pending "ad buys." Because, of course, Dubya really, really, really
needed that number, BAD! And, "needy" politicans tend to get what
they want.
But now, I think the Fed could have "cooked it up" somehow too!
Remember, that the JOBS HOSANNA only started up about the time that
the Euro was a "sure thing" to break 130.
AND, EURO 130 WOULD BE CERTAIN TO CAUSE A LOT OF RE-THINKING IN THE
MARKETS.
IN SHORT; EURO 130 HAD TO BE STOPPED AT ALL COSTS!
And, surprize! It was! Yet again, our mysterious "deus ex machina"
force was with us!
The Euro plunged! Gold plunged! Even oil plunged, and on the very
same day of the bomb attack against the House of Saud--to boot!
(That was good.)
NOTHING COULD STOP THE ALMIGHTY DOLLAR THAT DAY! NOTHING!
NOT THE TWIN DEFICITS! NOT THE LOW INTEREST RATES!
NOT THE INCREDIBLE "GUNS AND TAX CUTS" POLICY OF DUBYA & CO!
NOT THE LOOMING CATASTROPHES IN IRAQ, AND PERHAPS EVEN IN
AFGHANISTAN! AND MIDDLE EAST CHAOS IN GENERAL.
NOT THE DECLINE OF WAGES!
NOT THE PLIGHT OF THE STATES AND LOCAL GOVERNMENTS, GROANING UNDER
HUGE UNFUNDED EDUCATION AND MEDICARE COSTS!
THE DOLLAR, TRIUMPHANT!
FOREVER!
P.S. Or for about a month, whichever happens first.......
Monday, April 26, 2004
THE ECONOMIC CONSEQUENCES OF FREDDY AND FANNIE!
The income sell off continues. Albeit at a slightly low rate of
decline.
The real question that I have is will the JULY 2003 lows hold?
If you punch up a chart on ANY income instrument you will notice that
the old July Low has not been breeched, yet.
But it is getting very very close.
So, if you haven't sold out yet, perhaps waiting to see if the lows
hold would be interesting?
Or, as one person I know said: "If you bought the damn thing for
INCOME, why bitch about a loss of CAPITAL?
There are an awful lot of 8% to 10% yeilds available now. Yippee?
So really the NEW CARRY TRADES are alot more profitable now than they
were before the plunge.
Why?
Well, Mr G is only "talking about talking about" raising rates!
SO, I'M STICKIN' TO MY STORY THAT GREENSPAN WILL NOT RAISE RATES.
NOT NOW, NOT EVER! WHY? WELL, TWO WORDS COME TO MIND: FANNY & FREDDIE! Nuff' said?
GREENSPAN LOVES THE BANKS, AND THE HEDGE FUNDS TOO. AND BANKS AND
HEDGE FUNDS LOVE THE CARRY TRADE. ALOT.
FRANKLY, THE MACRO-ECONOMIC CONSEQUENCES OF A 5%+ 10 YEAR BOND NOW
ARE TOO HORRIBLE TO CONTEMPLATE.
UNLESS AND UNTIL, THE JULY LOWS ARE CLEANLY TAKEN OUT;
I THINK THIS WHOLE AFFAIR IS JUST ANOTHER "MARKET EVENT," AND A
REPEAT OF THE "HEAD FAKE" OF LAST JULY.
Postscript: Very likely the economy will suddenly be "found," NOT TO
BE BOOMING, as much as we thought. Look a Walmart today.
And, anything less than 300,000 jobs in April will be cause for
alarm. Was the March Jobs Number just a strange seasonal anomaly?
Not to be repeated. Well, something about that number just didn't
pass the smell test with me. So stay tuned......
decline.
The real question that I have is will the JULY 2003 lows hold?
If you punch up a chart on ANY income instrument you will notice that
the old July Low has not been breeched, yet.
But it is getting very very close.
So, if you haven't sold out yet, perhaps waiting to see if the lows
hold would be interesting?
Or, as one person I know said: "If you bought the damn thing for
INCOME, why bitch about a loss of CAPITAL?
There are an awful lot of 8% to 10% yeilds available now. Yippee?
So really the NEW CARRY TRADES are alot more profitable now than they
were before the plunge.
Why?
Well, Mr G is only "talking about talking about" raising rates!
SO, I'M STICKIN' TO MY STORY THAT GREENSPAN WILL NOT RAISE RATES.
NOT NOW, NOT EVER! WHY? WELL, TWO WORDS COME TO MIND: FANNY & FREDDIE! Nuff' said?
GREENSPAN LOVES THE BANKS, AND THE HEDGE FUNDS TOO. AND BANKS AND
HEDGE FUNDS LOVE THE CARRY TRADE. ALOT.
FRANKLY, THE MACRO-ECONOMIC CONSEQUENCES OF A 5%+ 10 YEAR BOND NOW
ARE TOO HORRIBLE TO CONTEMPLATE.
UNLESS AND UNTIL, THE JULY LOWS ARE CLEANLY TAKEN OUT;
I THINK THIS WHOLE AFFAIR IS JUST ANOTHER "MARKET EVENT," AND A
REPEAT OF THE "HEAD FAKE" OF LAST JULY.
Postscript: Very likely the economy will suddenly be "found," NOT TO
BE BOOMING, as much as we thought. Look a Walmart today.
And, anything less than 300,000 jobs in April will be cause for
alarm. Was the March Jobs Number just a strange seasonal anomaly?
Not to be repeated. Well, something about that number just didn't
pass the smell test with me. So stay tuned......
CRASH BONDS! I DARE YOU!
Today's WSJ has a great op-ed about the consequences of a bond crash.
The conclusion is that even Freddie and Fanny could go down.
And, that major systemic risk is in play.
MR G SHOULD BE JAWBONEING THE BOND MARKET UP, NOT DOWN!
THE RESULTS OF FURTHER BOND MARKET DETERIORATION CAN NOT BE PREDICTED.
BUT ONCE THE MARKET STARTS TO COLLAPSE THE END WILL BE NEAR FOR
STOCKS AND BONDS!
THAT IS THE STAGFLATION SCENARIO THAT FEW PEOPLE HAVE EVEN
CONSIDERED, BUT THAT I FEEL IS VERY VERY PROBABLE.
Indeed the very scenrario that was my first posting to this board many years ago! It is axiomatic that when trouble comes to Wall Street it comes in the bond market first.
The conclusion is that even Freddie and Fanny could go down.
And, that major systemic risk is in play.
MR G SHOULD BE JAWBONEING THE BOND MARKET UP, NOT DOWN!
THE RESULTS OF FURTHER BOND MARKET DETERIORATION CAN NOT BE PREDICTED.
BUT ONCE THE MARKET STARTS TO COLLAPSE THE END WILL BE NEAR FOR
STOCKS AND BONDS!
THAT IS THE STAGFLATION SCENARIO THAT FEW PEOPLE HAVE EVEN
CONSIDERED, BUT THAT I FEEL IS VERY VERY PROBABLE.
Indeed the very scenrario that was my first posting to this board many years ago! It is axiomatic that when trouble comes to Wall Street it comes in the bond market first.
Saturday, April 24, 2004
GREENSPAN'S PARADOX, or MIRACLE AT THE FED!
Here is what I call GREENSPAN'S PARADOX, or THE MIRACLE AT THE FED!
GREENSPAN PRINTED SO MUCH MONEY THAT.....?
HE ACTUALLY CAUSED A CRASH IN GOLD!!
How so? This seems irrational. A paradox even! A most unusal
paradox!
But Consider:
It's like deflation causes inflation which causes deflation!
Clear?
Fearing the glut of goods from China and the deflation resulting,
GREENSPAN STARTED TO PRINT MONEY. To stop the "deflation" right?
But, Greenspan printed so much money that commodity speculation
started up; eventually causing some "pass through inflation" into the
real economy. Right? OK, so far?
But, this pass through inflation caused bonds to crash, and rates to
be raised.....
OK? Now hang on because it's going to get a little wierd!
THEN THE RISE IN RATES CAUSED THE OVER-PRINTED GREENSPAN DOLLAR TO
SURGE!!
AND, THAT, IN TURN, CAUSED GOLD, (the other side of the "short dollar
trade"), TO CRASH!
SO, BY PRINTING DOLLARS LIKE MAD GREENSPAN ACTUALLY MADE THE DOLLAR
STRONGER!
AND CAUSED GOLD TO CRASH!
Fasten you seat belts.....
The crash in gold caused other commodity metals to also crash! AND
THAT, IN TURN, IS DEFLATIONARY!!
SO, BY PRINTING DOLLARS WITH RECKLESS ABANDON GREENSPAN HAS CAUSED
THE DOLLAR TO GET STRONGER, AND THAT CAUSED THE DEFLATION TO KICK IN
AGAIN!!
DEFLATION CAUSED INFLATION WHICH CAUSED DEFLATION!
CALL THE POPE! WE HAVE JUST WITNESSED A MIRACLE!
I CALL IT: GREENSPAN'S PARADOX!
Postscript: To my knowledge this is the first time that this strange
economic phenomenon has been described in print.
Anyone wishing to use the above material is requested to give proper
credit to it's discoverer. Namely, the Gloom and Doom Club and
theeditorialdotcom.
If the Nobel Committee wishes to contact me about what name to put on
the check. Just e-mail this group for further instructions.
GREENSPAN PRINTED SO MUCH MONEY THAT.....?
HE ACTUALLY CAUSED A CRASH IN GOLD!!
How so? This seems irrational. A paradox even! A most unusal
paradox!
But Consider:
It's like deflation causes inflation which causes deflation!
Clear?
Fearing the glut of goods from China and the deflation resulting,
GREENSPAN STARTED TO PRINT MONEY. To stop the "deflation" right?
But, Greenspan printed so much money that commodity speculation
started up; eventually causing some "pass through inflation" into the
real economy. Right? OK, so far?
But, this pass through inflation caused bonds to crash, and rates to
be raised.....
OK? Now hang on because it's going to get a little wierd!
THEN THE RISE IN RATES CAUSED THE OVER-PRINTED GREENSPAN DOLLAR TO
SURGE!!
AND, THAT, IN TURN, CAUSED GOLD, (the other side of the "short dollar
trade"), TO CRASH!
SO, BY PRINTING DOLLARS LIKE MAD GREENSPAN ACTUALLY MADE THE DOLLAR
STRONGER!
AND CAUSED GOLD TO CRASH!
Fasten you seat belts.....
The crash in gold caused other commodity metals to also crash! AND
THAT, IN TURN, IS DEFLATIONARY!!
SO, BY PRINTING DOLLARS WITH RECKLESS ABANDON GREENSPAN HAS CAUSED
THE DOLLAR TO GET STRONGER, AND THAT CAUSED THE DEFLATION TO KICK IN
AGAIN!!
DEFLATION CAUSED INFLATION WHICH CAUSED DEFLATION!
CALL THE POPE! WE HAVE JUST WITNESSED A MIRACLE!
I CALL IT: GREENSPAN'S PARADOX!
Postscript: To my knowledge this is the first time that this strange
economic phenomenon has been described in print.
Anyone wishing to use the above material is requested to give proper
credit to it's discoverer. Namely, the Gloom and Doom Club and
theeditorialdotcom.
If the Nobel Committee wishes to contact me about what name to put on
the check. Just e-mail this group for further instructions.
Friday, April 23, 2004
CLOSED END SNAP BACK INEVITABLE!
The assault on income by the WSJ, and it's shills has reached the
outer-limit.
THE NOTION THAT A DEBT RIDDEN ECONOMY LIKE THE US CAN, SOME HOW,
SURVIVE A BOND CRASH IS TOTALLY ABSURD.
THE TWIN DEFICITS SIMPLY MUST BE FINANCED;
AND CITIES AND STATES ARE NEAR BANKRUPT AND NEED TO "FLOAT LOANS" AS
CHEAPLY AS POSSIBLE! Just ask Gov. Arnie!
AND. YOU CAN'T DO ANY OF THAT WITH A BOND CRASH!
NO MATTER HOW MUCH YOU SPIN THE DOLLAR STORY!
Indeed, yesterday many income investments bounced back.
REITS were up big. And, gold and metals were rebounding.
Today's WSJ had an article that was apparently intended to cause a
panic in closed-end funds.
The Journal notes that many of these funds use "leverage."
This is true, but at 1% why not use leverage?
Additionally, many closed-end income funds are now in ECONOMICALLY
SENSITIVE AREAS; like Real Estate, Preferreds, Corporates, Junk,
International, etc.
NOT ALL ARE IN US BONDS, OR MUNIS--AS IN THE PAST.
Finally, the notion of closed-ends becoming a "ghost town" is just
dishonest;
Because closed-end funds trade as stocks, unlike open-end mutuals
which have to disgorge assets to pay their redemptions.
THERE ARE NO REDEMPTIONS POSSIBLE IN THE CLOSED-END FUNDS!
SO, IT'S IMPOSSIBLE FOR THEM TO GO TO ZERO;
UNLESS ALL OF THEIR ASSETS ARE LOST IN THE MARKET.
To wit: Every bond, every muni, and every parcel of real estate
would have to become totally worthless! Not likely, under a Fed Hell
bent on HYPER-LIQUIDITY!
AND, ESPECIALLY NOT LIKELY CONSIDERING THAT GREENSPAN CONTINUES TO
PRINT MONEY LIKE THERE IS NO TOMORROW.
THE WORST CASE SCENARIO FOR CLOSED ENDS IS THAT THEY BECOME SO
DISCOUNTED TO THEIR NAV, THAT BUYING IT'S STOCK IS LIKE BUYING A HARD
ASSET FOR 50 CENTS ON THE DOLLAR!
OR, FROM THE POINT OF VIEW OF THE INCOME INVESTOR;
IT'S LIKE INVESTING $10,000, AND GETTING THE "INTEREST," OR THE
RETURN;
"AS IF" THE INVESTMENT WERE, SAY, $15,000!
A rebound in the closed-end funds is near inevitable.
outer-limit.
THE NOTION THAT A DEBT RIDDEN ECONOMY LIKE THE US CAN, SOME HOW,
SURVIVE A BOND CRASH IS TOTALLY ABSURD.
THE TWIN DEFICITS SIMPLY MUST BE FINANCED;
AND CITIES AND STATES ARE NEAR BANKRUPT AND NEED TO "FLOAT LOANS" AS
CHEAPLY AS POSSIBLE! Just ask Gov. Arnie!
AND. YOU CAN'T DO ANY OF THAT WITH A BOND CRASH!
NO MATTER HOW MUCH YOU SPIN THE DOLLAR STORY!
Indeed, yesterday many income investments bounced back.
REITS were up big. And, gold and metals were rebounding.
Today's WSJ had an article that was apparently intended to cause a
panic in closed-end funds.
The Journal notes that many of these funds use "leverage."
This is true, but at 1% why not use leverage?
Additionally, many closed-end income funds are now in ECONOMICALLY
SENSITIVE AREAS; like Real Estate, Preferreds, Corporates, Junk,
International, etc.
NOT ALL ARE IN US BONDS, OR MUNIS--AS IN THE PAST.
Finally, the notion of closed-ends becoming a "ghost town" is just
dishonest;
Because closed-end funds trade as stocks, unlike open-end mutuals
which have to disgorge assets to pay their redemptions.
THERE ARE NO REDEMPTIONS POSSIBLE IN THE CLOSED-END FUNDS!
SO, IT'S IMPOSSIBLE FOR THEM TO GO TO ZERO;
UNLESS ALL OF THEIR ASSETS ARE LOST IN THE MARKET.
To wit: Every bond, every muni, and every parcel of real estate
would have to become totally worthless! Not likely, under a Fed Hell
bent on HYPER-LIQUIDITY!
AND, ESPECIALLY NOT LIKELY CONSIDERING THAT GREENSPAN CONTINUES TO
PRINT MONEY LIKE THERE IS NO TOMORROW.
THE WORST CASE SCENARIO FOR CLOSED ENDS IS THAT THEY BECOME SO
DISCOUNTED TO THEIR NAV, THAT BUYING IT'S STOCK IS LIKE BUYING A HARD
ASSET FOR 50 CENTS ON THE DOLLAR!
OR, FROM THE POINT OF VIEW OF THE INCOME INVESTOR;
IT'S LIKE INVESTING $10,000, AND GETTING THE "INTEREST," OR THE
RETURN;
"AS IF" THE INVESTMENT WERE, SAY, $15,000!
A rebound in the closed-end funds is near inevitable.
GOLD SURGE HELPS CAT!
Well, it seems that CAT was greatly helped by the surge in mining equipment sales caused by soaring commodities!
SO SOARING GOLD PRICES HELPED CAT MAKE IT'S NUMBERS!
But gold is down now and the dollar is up.
Sorry no free lunch.
What will the surging dollar do to CAT next time? Hmmmm....?
This notion that the US economy can "allow" a bond crash, and get a surge in the dollar is just a little nuts.
A bond crash and a dollar surge might pass quickly, like ships in the night, but net-net the US NEEDS FOREIGN CAPITAL TO STAY AFLOAT!
SO, HIGHER RATES WILL EVENTUALLY CRASH THE DOLLAR, AND THE BOND.
THE STREET HAS GOT A LOT OF MILEAGE USING WISHFULL THINKING, CONTORTED REASONING AND ROSIE SCENARIO ARGUMENTS;
BUT THAT IS A MARKET EVENT EXISTING ONLY IN THE PAGES OF THE WSJ;
IT'S NOT A MACRO EVENT.
THE MARKET ACTION OF THE LAST WEEK CAN NOT BE FOUND IN ANY TEXT ON MACRO-ECONOMICS.
AND TO THAT END IT'S ALL LIKELY TO BE FAKE.
Most of the "action" for the last couple of weeks can be directly traced to the threat of Euro 130! That's when the panic button was hit, but nothing, I repeat, nothing has changed.
The weak dollar fundamentals are still in place.
And, crashing the bond market is still a doomsday scenario for the FED.
SO SOARING GOLD PRICES HELPED CAT MAKE IT'S NUMBERS!
But gold is down now and the dollar is up.
Sorry no free lunch.
What will the surging dollar do to CAT next time? Hmmmm....?
This notion that the US economy can "allow" a bond crash, and get a surge in the dollar is just a little nuts.
A bond crash and a dollar surge might pass quickly, like ships in the night, but net-net the US NEEDS FOREIGN CAPITAL TO STAY AFLOAT!
SO, HIGHER RATES WILL EVENTUALLY CRASH THE DOLLAR, AND THE BOND.
THE STREET HAS GOT A LOT OF MILEAGE USING WISHFULL THINKING, CONTORTED REASONING AND ROSIE SCENARIO ARGUMENTS;
BUT THAT IS A MARKET EVENT EXISTING ONLY IN THE PAGES OF THE WSJ;
IT'S NOT A MACRO EVENT.
THE MARKET ACTION OF THE LAST WEEK CAN NOT BE FOUND IN ANY TEXT ON MACRO-ECONOMICS.
AND TO THAT END IT'S ALL LIKELY TO BE FAKE.
Most of the "action" for the last couple of weeks can be directly traced to the threat of Euro 130! That's when the panic button was hit, but nothing, I repeat, nothing has changed.
The weak dollar fundamentals are still in place.
And, crashing the bond market is still a doomsday scenario for the FED.
Thursday, April 22, 2004
MASSACRE IN FALLUHJA, OR "BUNKING WITH SLOBO!"
Washington is filled with Vietnam era rhetoric these days.
We have to "put an Iraqi face" on the occupation. Remember
Vietnamization?
We had to "Destroy the village to save it."
We will "never retreat" because our "credibility is on the line."
Now alas, I fear the US military is about to make one the of biggest mistakes yet, in this Tragedy of Errors that is the Iraq Occupation.
THE COMING ASSAULT ON FALLUJHA WILL LOSE THIS WAR, AND IT WILL DESTROY ANY CHANCE OF IRAQI COOPERATION WITH THE OCCUPATION.
FALLUJHA IS AN ENTIRE CITY UNDER SIEGE.
The notion that Fallujha is only a few hundred "dead-enders" and "foreigners," who are "terrorizing the population" simply doesn't ring true.
AND, THE COMING MASSACRE OF CIVILIANS IN FALLUJHA WILL REPULSE THE WORLD AGAINST DUBYA AND THE NEOCONS.
Also remember, sooner or later, the truth will come out.
Sooner or later, the international community will want to talk to
people of Fallujah about what really happen.
And, this notion that the destruction and massacre of Fallujah was a "revenge killing" by the US military will not sit well with world opinion.
I have a strange feeling that this "Fallujha Thing" is all going to
end up in some War Crimes Tribunal, somewhere, someday, somehow.
BRUTAL MASSACRES HAVE A LONG TRADITION IN THE ANNALS OF IMPERIALISM.
INDEED, THE BRITISH MASSACRED THOUSANDS IN IRAQ, WAY BACK IN THE 20TH CENTURY.
BUT, THAT WAS THEN, AND THIS IS NOW.
If the US has to destroy Fallujha to save it;
The person or persons responsible for the resulting massacre will end up in The Hague "Bunking with Slobo!"
REMEMBER, THE WHOLE WORLD IS WATCHING!
NOT JUST THE FOX NETWORK.
We have to "put an Iraqi face" on the occupation. Remember
Vietnamization?
We had to "Destroy the village to save it."
We will "never retreat" because our "credibility is on the line."
Now alas, I fear the US military is about to make one the of biggest mistakes yet, in this Tragedy of Errors that is the Iraq Occupation.
THE COMING ASSAULT ON FALLUJHA WILL LOSE THIS WAR, AND IT WILL DESTROY ANY CHANCE OF IRAQI COOPERATION WITH THE OCCUPATION.
FALLUJHA IS AN ENTIRE CITY UNDER SIEGE.
The notion that Fallujha is only a few hundred "dead-enders" and "foreigners," who are "terrorizing the population" simply doesn't ring true.
AND, THE COMING MASSACRE OF CIVILIANS IN FALLUJHA WILL REPULSE THE WORLD AGAINST DUBYA AND THE NEOCONS.
Also remember, sooner or later, the truth will come out.
Sooner or later, the international community will want to talk to
people of Fallujah about what really happen.
And, this notion that the destruction and massacre of Fallujah was a "revenge killing" by the US military will not sit well with world opinion.
I have a strange feeling that this "Fallujha Thing" is all going to
end up in some War Crimes Tribunal, somewhere, someday, somehow.
BRUTAL MASSACRES HAVE A LONG TRADITION IN THE ANNALS OF IMPERIALISM.
INDEED, THE BRITISH MASSACRED THOUSANDS IN IRAQ, WAY BACK IN THE 20TH CENTURY.
BUT, THAT WAS THEN, AND THIS IS NOW.
If the US has to destroy Fallujha to save it;
The person or persons responsible for the resulting massacre will end up in The Hague "Bunking with Slobo!"
REMEMBER, THE WHOLE WORLD IS WATCHING!
NOT JUST THE FOX NETWORK.
HOW STRONG IS THE DOLLAR? REALLY.
Amazing! The recent victory of rhetoric over reality!
Greenspan's very slight intimation that "someday" rates will have to rise, sent the dollar soaring and gold and the income markets plunging!
Now, this could all have been a shot across the bow of the CARRY TRADERS. And, if it was, it worked!
Liquidation of all manner of income was en masse, and violent. The NYSE "new lows" list is filled with closed end income funds and preferred stock!
Since many closed end income funds were already selling at a discount to NAV, it will be interesting to see how much damage was really done, when things settle down.
In truth, income and metals had "got ahead of themselves," at least as far as The Street and The Fed were concerned.
So, it will be fascinating to see if Greenspan actually follows up the rhetoric with a REAL INTEREST INCREASE later this year.
I still say: He WON'T!
A STRONG DOLLAR WILL SINK PROFITS ON WALL STREET.
AND, A CRASH IN THE REAL ESTATE AND MORTGAGE MARKETS COULD BRING DOWN SOME BIG INSTITUTIONAL INVESTORS. EVEN FREDDY AND FANNIE COULD BE PUT AT RISK.
And, Greenspan's confidence in recent "hedging of risk" seems like a risky two edged sword. A Rube Goldberg Devise really!
BECAUSE, WHEN ALL OF THESE "EXOTIC DERIVIATIVES" START KICKING IN, WHO KNOWS WHAT WILL HAPPEN?
INSTEAD OF "PROTECTING" INSTITUTIONS; IT MIGHT CAUSE THE ENTIRE MESS TO IMPLODE IN ON ITSELF.
REMEMBER, THERE IS NO FREE LUNCH IN ECONOMICS.
There is also a good arguement that the recent unpleansantness was a "conspiracy" to boost the dollar; in the face of record US deficits, and increasing geopolitical doomsday scenarios in the middle east and in Iraq.
Clearly, recent dollar events have defied any logic. With the Iraq War running out of money now, and record twin deficits in Washington, where's the beef for a strong dollar?
And, the giant plunge in gold and silver and oil was too clever by half!
I mean, the House of Saud is bombed; and oil and gold drop sharply on the news? Pleaseeee!
MY HUNCH IS THAT THIS IS ALL A "MARKET EVENT" THAT IS BEING MANAGED BY THOSE EVER POPULAR "MYSTERIOUS FORCES" AGAIN.
THE STRONG DOLLAR CASE MAY BE NECESSARY FROM THE POINT OF VIEW OF WASHINGTON;
BUT IT FLYS IN THE FACE OF ALL KNOWN MACRO-ECONOMIC THEORY.
SO, HOW STRONG IS THE DOLLAR REALLY? NOT VERY!
Greenspan's very slight intimation that "someday" rates will have to rise, sent the dollar soaring and gold and the income markets plunging!
Now, this could all have been a shot across the bow of the CARRY TRADERS. And, if it was, it worked!
Liquidation of all manner of income was en masse, and violent. The NYSE "new lows" list is filled with closed end income funds and preferred stock!
Since many closed end income funds were already selling at a discount to NAV, it will be interesting to see how much damage was really done, when things settle down.
In truth, income and metals had "got ahead of themselves," at least as far as The Street and The Fed were concerned.
So, it will be fascinating to see if Greenspan actually follows up the rhetoric with a REAL INTEREST INCREASE later this year.
I still say: He WON'T!
A STRONG DOLLAR WILL SINK PROFITS ON WALL STREET.
AND, A CRASH IN THE REAL ESTATE AND MORTGAGE MARKETS COULD BRING DOWN SOME BIG INSTITUTIONAL INVESTORS. EVEN FREDDY AND FANNIE COULD BE PUT AT RISK.
And, Greenspan's confidence in recent "hedging of risk" seems like a risky two edged sword. A Rube Goldberg Devise really!
BECAUSE, WHEN ALL OF THESE "EXOTIC DERIVIATIVES" START KICKING IN, WHO KNOWS WHAT WILL HAPPEN?
INSTEAD OF "PROTECTING" INSTITUTIONS; IT MIGHT CAUSE THE ENTIRE MESS TO IMPLODE IN ON ITSELF.
REMEMBER, THERE IS NO FREE LUNCH IN ECONOMICS.
There is also a good arguement that the recent unpleansantness was a "conspiracy" to boost the dollar; in the face of record US deficits, and increasing geopolitical doomsday scenarios in the middle east and in Iraq.
Clearly, recent dollar events have defied any logic. With the Iraq War running out of money now, and record twin deficits in Washington, where's the beef for a strong dollar?
And, the giant plunge in gold and silver and oil was too clever by half!
I mean, the House of Saud is bombed; and oil and gold drop sharply on the news? Pleaseeee!
MY HUNCH IS THAT THIS IS ALL A "MARKET EVENT" THAT IS BEING MANAGED BY THOSE EVER POPULAR "MYSTERIOUS FORCES" AGAIN.
THE STRONG DOLLAR CASE MAY BE NECESSARY FROM THE POINT OF VIEW OF WASHINGTON;
BUT IT FLYS IN THE FACE OF ALL KNOWN MACRO-ECONOMIC THEORY.
SO, HOW STRONG IS THE DOLLAR REALLY? NOT VERY!
Wednesday, April 21, 2004
GREENSPAN'S STAGFLATION! 1974 REDUX!
Greenspan now sees INFLATION on the horizon, so rates must rise.
OK, but consider:
The looming Inflation is:
BAD FOR GOLD! Right?
BAD FOR REAL ESTATE AND RENTS! Right?
But, GOOD FOR THE DOLLAR!
And, higer rates? Well, always a big thumbs up for Stocks, right?
And, it's pretty clear that Greenspan's warning to the CARRY TRADERS
is being heeded.
BECAUSE ANYTHING INVOLVING INCOME IS BEING SOLD EN MASSE!
Eight Percent Munis soon? Fifteen percent junk? I'm buyin!
And, as for gold:
The bombings in Iraq and Saudi Arabia, and the generalized chaos in
the middle east, along with the carved in stone June 30 turnover date
for Baghdad?
WELL, THAT'S ONE BIG SELL SIGN FOR GOLD! Right?
IN SHORT, EVERYTHING IS UPSIDE DOWN NOW!
AND, IN MY VIEW, WE ARE VERY MUCH IN DANGER OF A NASTY STAGFLATION
SETTING IN LATER THIS YEAR!
HERE'S WHY:
Much of the recent "boom" was a liquidity driven reflation play on
stocks! And, of course, real estate too. And yes, that snot-nosed brat asset, Commodities, as well.
God knows, the boom surely wasn't based on "pent up demand!"
Or otherwise "demand based," because of a long period of decline, or tight money. In short it's not demand that "kicked in" it was a revival of the bubble mentality so beloved on Wall Street.
Indeed, the actual "boom" was based more on cost cutting and off-shoreing than anything else. And, of course, VERY CHEAP MONEY!
THE SINE QUO NON FOR GREENSPAN WAS THE REFLATION OF THE STOCK MARKET BUBBLE AT ALL COSTS!
But, only in the last few weeks has the liquidity bubble started to
seep into commodities---AT THE MAIN STREET LEVEL!
Now Greenspan panics!! Not during the asset bubble reflation!
But, if you have a SOLELY liquidity based boom?
Can the economy survive higher rates? PROBABLY NOT! DEFINITELY NOT!
AND THAT, GENTLE READER, IS WHEN THE STAGNATION PART OF OUR NEW
STAGFLATION KICKS IN.
TO BE CLEAR, STAGNATION HERE IN THE US. EVEN WHILE CHINA CONTINUES
IT'S "GIANT SUCKING SOUND" IN COMMODITIES INFLATION!
TRYING TO FIGURE OUT THIS MARKET, SHORT TERM, IS A FOOL'S GAME.
BUT, I WOULD CARVE IN STONE THE NOTION THAT THIS IS THE BEGINNING OF
A BAD STAGFLATION!
AND, NOT A "NEW EXPANSION."
OR, A NEW "BULL MARKET," OR ANY OTHER SUCH THING.
Why?
STAGFLATION ONLY HAPPENS WHEN MONEY GOES "FREAKY."
AND, GREENSPAN'S ONE PERCENT SOLUTION EXPERIMENT WAS ABOUT AS FREAKY
AS IT GETS!
WELCOME TO GREENSPAN'S STAGFLATION!
TIME TO PARTY LIKE IT'S 1974! REDUX.
OK, but consider:
The looming Inflation is:
BAD FOR GOLD! Right?
BAD FOR REAL ESTATE AND RENTS! Right?
But, GOOD FOR THE DOLLAR!
And, higer rates? Well, always a big thumbs up for Stocks, right?
And, it's pretty clear that Greenspan's warning to the CARRY TRADERS
is being heeded.
BECAUSE ANYTHING INVOLVING INCOME IS BEING SOLD EN MASSE!
Eight Percent Munis soon? Fifteen percent junk? I'm buyin!
And, as for gold:
The bombings in Iraq and Saudi Arabia, and the generalized chaos in
the middle east, along with the carved in stone June 30 turnover date
for Baghdad?
WELL, THAT'S ONE BIG SELL SIGN FOR GOLD! Right?
IN SHORT, EVERYTHING IS UPSIDE DOWN NOW!
AND, IN MY VIEW, WE ARE VERY MUCH IN DANGER OF A NASTY STAGFLATION
SETTING IN LATER THIS YEAR!
HERE'S WHY:
Much of the recent "boom" was a liquidity driven reflation play on
stocks! And, of course, real estate too. And yes, that snot-nosed brat asset, Commodities, as well.
God knows, the boom surely wasn't based on "pent up demand!"
Or otherwise "demand based," because of a long period of decline, or tight money. In short it's not demand that "kicked in" it was a revival of the bubble mentality so beloved on Wall Street.
Indeed, the actual "boom" was based more on cost cutting and off-shoreing than anything else. And, of course, VERY CHEAP MONEY!
THE SINE QUO NON FOR GREENSPAN WAS THE REFLATION OF THE STOCK MARKET BUBBLE AT ALL COSTS!
But, only in the last few weeks has the liquidity bubble started to
seep into commodities---AT THE MAIN STREET LEVEL!
Now Greenspan panics!! Not during the asset bubble reflation!
But, if you have a SOLELY liquidity based boom?
Can the economy survive higher rates? PROBABLY NOT! DEFINITELY NOT!
AND THAT, GENTLE READER, IS WHEN THE STAGNATION PART OF OUR NEW
STAGFLATION KICKS IN.
TO BE CLEAR, STAGNATION HERE IN THE US. EVEN WHILE CHINA CONTINUES
IT'S "GIANT SUCKING SOUND" IN COMMODITIES INFLATION!
TRYING TO FIGURE OUT THIS MARKET, SHORT TERM, IS A FOOL'S GAME.
BUT, I WOULD CARVE IN STONE THE NOTION THAT THIS IS THE BEGINNING OF
A BAD STAGFLATION!
AND, NOT A "NEW EXPANSION."
OR, A NEW "BULL MARKET," OR ANY OTHER SUCH THING.
Why?
STAGFLATION ONLY HAPPENS WHEN MONEY GOES "FREAKY."
AND, GREENSPAN'S ONE PERCENT SOLUTION EXPERIMENT WAS ABOUT AS FREAKY
AS IT GETS!
WELCOME TO GREENSPAN'S STAGFLATION!
TIME TO PARTY LIKE IT'S 1974! REDUX.
Tuesday, April 20, 2004
IRAQ: MASSACRING FOR SCHOOLS?
On this anniversery of the Columbine School Massacre, there is an
oddly similar situation going on in Iraq.
In Falluhja, Americans are threatening to shoot their way into the
city;
SO THEY CAN BUILD SCHOOLS!
This might be considered further proof of a looming "Vietnamization,"
where we had to: "Destroy villages in order to save them."
Indeed, we seem to DUMBING DOWN VICTORY in Iraq everyday now.
In a WSJ op-ed today, Francis Fukuyama seems to say we need to start
lowering expectations in Iraq.
Consider:
Dubya wants a democracy in Iraq, but he is afraid to let Iraqis
actually vote! After Falluhja, I don't blame him!
And, Dubya and the neocons are now big backers of the UN plan for a
temporary "Technocracy" in Iraq!
God save us from the technocrats!
And now, the US military is killing and threatening people in the
Sunni AND Shiite areas; so American contractors can
start "reconstrution" ASAP
In short the wheels are coming off to the point where even the
official spin doesn't make sense anymore
CLEARLY, IRAQ IS ALREADY "GOVERNING" ITSELF AT THE LOCAL LEVEL.
SADDLY, IN MOST OF THESE SELF GOVERNING AREAS THE IRAQIS ARE
SURROUNDED BY A HOSTILE US ARMY.
THE REAL QUESTION IS SIMPLY: IS A PRO-AMERICAN NATIONAL GOVERNMENT
POSSIBLE IN IRAQ?
And, I think the answer is NO!
But, getting Dubya & Co to accept this "reality on the ground" is the real job now.
It seems that the best that can be hoped for in Iraq presently is a
very loose CONFEDERATION OF STATES;
Not unlike that which the US had for the first eight years after
winning our Revolution.
IN SHORT, A LOOSE CONFEDERATION OF STATES FIRST, AND A FEDERAL
GOVERNMENT LATER.
OMINOUSLY, I WOULD NOTE THAT THE US HAD TO HAVE A CIVIL WAR BEFORE
THE FEDERAL GOVERNMENT WAS FINALLY ACCEPTED BY EVERYONE!
Hmm....was the American South sort of like The Kurds in Iraq today?
USING THE AMERICAN HISTORICAL MODEL, CAN WE EXPECT ANY MORE OR ANY
LESS IN IRAQ?
oddly similar situation going on in Iraq.
In Falluhja, Americans are threatening to shoot their way into the
city;
SO THEY CAN BUILD SCHOOLS!
This might be considered further proof of a looming "Vietnamization,"
where we had to: "Destroy villages in order to save them."
Indeed, we seem to DUMBING DOWN VICTORY in Iraq everyday now.
In a WSJ op-ed today, Francis Fukuyama seems to say we need to start
lowering expectations in Iraq.
Consider:
Dubya wants a democracy in Iraq, but he is afraid to let Iraqis
actually vote! After Falluhja, I don't blame him!
And, Dubya and the neocons are now big backers of the UN plan for a
temporary "Technocracy" in Iraq!
God save us from the technocrats!
And now, the US military is killing and threatening people in the
Sunni AND Shiite areas; so American contractors can
start "reconstrution" ASAP
In short the wheels are coming off to the point where even the
official spin doesn't make sense anymore
CLEARLY, IRAQ IS ALREADY "GOVERNING" ITSELF AT THE LOCAL LEVEL.
SADDLY, IN MOST OF THESE SELF GOVERNING AREAS THE IRAQIS ARE
SURROUNDED BY A HOSTILE US ARMY.
THE REAL QUESTION IS SIMPLY: IS A PRO-AMERICAN NATIONAL GOVERNMENT
POSSIBLE IN IRAQ?
And, I think the answer is NO!
But, getting Dubya & Co to accept this "reality on the ground" is the real job now.
It seems that the best that can be hoped for in Iraq presently is a
very loose CONFEDERATION OF STATES;
Not unlike that which the US had for the first eight years after
winning our Revolution.
IN SHORT, A LOOSE CONFEDERATION OF STATES FIRST, AND A FEDERAL
GOVERNMENT LATER.
OMINOUSLY, I WOULD NOTE THAT THE US HAD TO HAVE A CIVIL WAR BEFORE
THE FEDERAL GOVERNMENT WAS FINALLY ACCEPTED BY EVERYONE!
Hmm....was the American South sort of like The Kurds in Iraq today?
USING THE AMERICAN HISTORICAL MODEL, CAN WE EXPECT ANY MORE OR ANY
LESS IN IRAQ?
Monday, April 19, 2004
CLOSED END BUYING OPPORTUNITY LOOMS?
The recent unpleasantness in Bonds has caused a huge drop in closed
end income funds.
These funds are now selling at big discounts to NAV.
If the Fed raises rates to a whooping 1.5%, what will munis and REITS
be discounted down to THEN? Perhaps 8% on Munis? Or 11% on REITS?
If the bank gives you a 1% yeild after Greenspan raises rates, not
too many will rush for it. At least not for long.
BUT, THE COMING BIG SELL OFF OF ALL INCOME WILL CREATE A BUYING
OPPORTUNITY.
INDEED, A 50 BASIS POINT FED RISE COULD SEND THE DOLLAR TO 105 OR 110
ON THE EURO! GOLD WILL PLUNGE EVEN MORE.
Stocks of course will plunge too......
THE ENTIRE MARKET SEEMS POISED TO OVER-REACT TO EVERY EVENT NOW.
AND, THAT OVER-REACTION IS EXACTLY WHAT CREATES BUYING OPPORTUNITIES.
Now there is a real possibility that this is all a "fake crisis" to
scare people out of income. That's what happen last July, remember?
Wall Street is capable of putting on quite a show for mom and pop
when it wants them to run a certain way.
My hunch is that this is all just another "head-fake." This entire
so-called "boom" is so fragile and so tentative; and local and state
governments are so under-funded;
HIGHER RATES NOW WOULD BE A LONG TERM DISASTER.
GREENSPAN WILL NOT SPOOK THE MARKETS THIS WEEK WITH MORE RATE FEARS.
end income funds.
These funds are now selling at big discounts to NAV.
If the Fed raises rates to a whooping 1.5%, what will munis and REITS
be discounted down to THEN? Perhaps 8% on Munis? Or 11% on REITS?
If the bank gives you a 1% yeild after Greenspan raises rates, not
too many will rush for it. At least not for long.
BUT, THE COMING BIG SELL OFF OF ALL INCOME WILL CREATE A BUYING
OPPORTUNITY.
INDEED, A 50 BASIS POINT FED RISE COULD SEND THE DOLLAR TO 105 OR 110
ON THE EURO! GOLD WILL PLUNGE EVEN MORE.
Stocks of course will plunge too......
THE ENTIRE MARKET SEEMS POISED TO OVER-REACT TO EVERY EVENT NOW.
AND, THAT OVER-REACTION IS EXACTLY WHAT CREATES BUYING OPPORTUNITIES.
Now there is a real possibility that this is all a "fake crisis" to
scare people out of income. That's what happen last July, remember?
Wall Street is capable of putting on quite a show for mom and pop
when it wants them to run a certain way.
My hunch is that this is all just another "head-fake." This entire
so-called "boom" is so fragile and so tentative; and local and state
governments are so under-funded;
HIGHER RATES NOW WOULD BE A LONG TERM DISASTER.
GREENSPAN WILL NOT SPOOK THE MARKETS THIS WEEK WITH MORE RATE FEARS.
POWELL WILL RESIGN NOW!
Clearly the Woodward book is a DISASTER for the White House.
Indeed, Powell will have to resign now. He should have resigned a
long time ago. How can he continue now?
Consider:
With the war in Iraq going very badly, the Pentagon NeoCons are trying to reshape themselves suddenly into "Wilsonian Liberals!"
Go figure!
There must be a great deal of Paranoia in the Halls of Administration power, as the wheels SLOWLY come off geopolitically and economically.
And, Woodward's description of Dubya in the White House is, well......spooky! Even Nixonesque!
SO, EVERYBODY IS WRITING A BOOK TO COVER THEIR ASS!
And, in truth, if all is not suddenly Sweetness and Light in Iraq
soon; somebody may be charged by new President Kerry as a WAR
CRIMINAL.
AFTER ALL, KERRY SAID THAT THE US MILITARY COMMITTED WAR CRIMES IN
VIETNAM. Right?
AND, IF HE FELT THAT WAY ABOUT THE VIETNAM FIASCO?
PERHAPS HE WILL FEEL SIMILARLY ABOUT THE CURRENT DISASTER IN IRAQ.
WORSE YET, THE GLOBAL COMMUNITY IS GETTING TESTY ABOUT DUBYA, THE
NEOCONS AND THE IRAQ WAR.
IT MAY BE TIME FOR EVERYONE AT THE WHITE HOUSE TO "GET A BOOK OUT!"
PDQ! AND, ASAP!
Ya think?
Indeed, Powell will have to resign now. He should have resigned a
long time ago. How can he continue now?
Consider:
With the war in Iraq going very badly, the Pentagon NeoCons are trying to reshape themselves suddenly into "Wilsonian Liberals!"
Go figure!
There must be a great deal of Paranoia in the Halls of Administration power, as the wheels SLOWLY come off geopolitically and economically.
And, Woodward's description of Dubya in the White House is, well......spooky! Even Nixonesque!
SO, EVERYBODY IS WRITING A BOOK TO COVER THEIR ASS!
And, in truth, if all is not suddenly Sweetness and Light in Iraq
soon; somebody may be charged by new President Kerry as a WAR
CRIMINAL.
AFTER ALL, KERRY SAID THAT THE US MILITARY COMMITTED WAR CRIMES IN
VIETNAM. Right?
AND, IF HE FELT THAT WAY ABOUT THE VIETNAM FIASCO?
PERHAPS HE WILL FEEL SIMILARLY ABOUT THE CURRENT DISASTER IN IRAQ.
WORSE YET, THE GLOBAL COMMUNITY IS GETTING TESTY ABOUT DUBYA, THE
NEOCONS AND THE IRAQ WAR.
IT MAY BE TIME FOR EVERYONE AT THE WHITE HOUSE TO "GET A BOOK OUT!"
PDQ! AND, ASAP!
Ya think?
Sunday, April 18, 2004
THE KERRY TRADE
Soon to be President Kerry was OBVIOUSLY not preaching to the choir
on the Sunday talks TODAY.
Kerry backed the "New Sharon Peace Plan" immediately and without
reservations.
And, lucky for Wall Street, Kerry seems to be serious about balancing
the budget ASAP too.
All of this should be A BIG RELIEF to Mr. Greenspan, who I think will
NOW be very, very "dovish" on interest rates, when he speaks later
this week. Now that a Kerry Presidency seems all but INEVITABLE!
IN SHORT, THIS WAS KERRY, THE KONSERVATIVE!
Appparently, Kerry feels that the Anti-Bushies are so firm, that he
can now reach out to the conservative and Bubba voters.
Bad news for Dubya, who had a very bad week.
Even Fox News admitted that his "news conference" was a disaster!
AND, WILL THE WALL STREET JOURNAL EVENTUALLY BE FORCED TO ADMIT THAT
DUBYA JUST ISN'T WORKING OUT? I SAY YES!
WILL THE WSJ ENDORSE KERRY FOR PRESIDENT? Hmmmm.....? I think so.
But, don't tell the Journal! I don't think they're ready for this
quite yet.
But they will be as this "Summer of Our Discontent" heats up on every
front.
ONE THING I WOULD LIKE TO SEE KERRY PROPOSE IS:
"PAY TO PLAY FREE TRADE."
UNDER "PAY TO PLAY FREE TRADE," THE US WOULD LEVY A 10% TARIFF ON ALL
GOODS FROM "LOW WAGE COUNTRIES;"
THIS, TO BE EARMARKED, TO PAY FOR NATIONAL HEALTH CARE FOR ALL
AMERICANS.
ANY COUNTRY THAT "RETALIATES" COULD BE TOLD SIMPLY NOT TO LET THE
DOOR HIT THEM ON THE WAY OUT!
THE US CONSUMER MARKET IS A "DREAM" FOR NEARLY ALL OF ASIA AND LATIN
AMERICA.
IN ASIA, LOW WAGES AND HIGH MARGINS ABOUND. SO. WHY NOT LEVY A TARIFF ON THESE LOW WAGE GOODS TO PAY FOR AMERICANS NATIONAL HEALTH INSURANCE?
IT WOULD GO A LONG WAY TOWARD LEVELING THE GLOBAL PLAYING FIELD.
AND IT WOULD BE A BOON TO AMERICAN COMPANIES THAT HAVE BEEN "FAIR"
WITH THEIR OLDER AND CURRENT WORKERS. PROPERLY DONE, IT COULD ALSO
ELIMINATE WORKERS COMPENSATION MEDICAL COSTS AS WELL.
Of course the Editorial Page Idiots at the Wall Street Journal would
have a fit!
But then again, you could argue that the US was doing just fine,
until Mr G started letting Kudlow and Cramer run US monetary policy!
AND IF THE US IS GOING FOR AN "IN YOUR FACE" MIDDLE EAST POLICY?
WHY NOT AN "IN YOUR FACE" FAIR TRADE POLICY?
A TEN PERCENT TARIFF ON ALL LOW WAGE GOODS WOULD GO A LONG WAY
TOWARD "MAKING THINGS RIGHT" WITH THE NEARLY FORGOTTEN AND ANGRY
AMERICAN WORKING CLASS! .......YA THINK?
AND, THIS "KERRY TRADE" GAMBIT WOULD ANSWER A LOT OF QUESTIONS ABOUT
WHERE ALL OF THE NEW MONEY IS GOING TO COME FROM TO TACKLE HEALTH
CARE ISSUES!
LET THE GREEDY "FOREIGNERS" HELP PAY FOR AMERICAN NATIONAL HEALTH
CARE!
NOW THAT'S A "KERRY TRADE" PEOPLE WOULD UNDERSTAND!
on the Sunday talks TODAY.
Kerry backed the "New Sharon Peace Plan" immediately and without
reservations.
And, lucky for Wall Street, Kerry seems to be serious about balancing
the budget ASAP too.
All of this should be A BIG RELIEF to Mr. Greenspan, who I think will
NOW be very, very "dovish" on interest rates, when he speaks later
this week. Now that a Kerry Presidency seems all but INEVITABLE!
IN SHORT, THIS WAS KERRY, THE KONSERVATIVE!
Appparently, Kerry feels that the Anti-Bushies are so firm, that he
can now reach out to the conservative and Bubba voters.
Bad news for Dubya, who had a very bad week.
Even Fox News admitted that his "news conference" was a disaster!
AND, WILL THE WALL STREET JOURNAL EVENTUALLY BE FORCED TO ADMIT THAT
DUBYA JUST ISN'T WORKING OUT? I SAY YES!
WILL THE WSJ ENDORSE KERRY FOR PRESIDENT? Hmmmm.....? I think so.
But, don't tell the Journal! I don't think they're ready for this
quite yet.
But they will be as this "Summer of Our Discontent" heats up on every
front.
ONE THING I WOULD LIKE TO SEE KERRY PROPOSE IS:
"PAY TO PLAY FREE TRADE."
UNDER "PAY TO PLAY FREE TRADE," THE US WOULD LEVY A 10% TARIFF ON ALL
GOODS FROM "LOW WAGE COUNTRIES;"
THIS, TO BE EARMARKED, TO PAY FOR NATIONAL HEALTH CARE FOR ALL
AMERICANS.
ANY COUNTRY THAT "RETALIATES" COULD BE TOLD SIMPLY NOT TO LET THE
DOOR HIT THEM ON THE WAY OUT!
THE US CONSUMER MARKET IS A "DREAM" FOR NEARLY ALL OF ASIA AND LATIN
AMERICA.
IN ASIA, LOW WAGES AND HIGH MARGINS ABOUND. SO. WHY NOT LEVY A TARIFF ON THESE LOW WAGE GOODS TO PAY FOR AMERICANS NATIONAL HEALTH INSURANCE?
IT WOULD GO A LONG WAY TOWARD LEVELING THE GLOBAL PLAYING FIELD.
AND IT WOULD BE A BOON TO AMERICAN COMPANIES THAT HAVE BEEN "FAIR"
WITH THEIR OLDER AND CURRENT WORKERS. PROPERLY DONE, IT COULD ALSO
ELIMINATE WORKERS COMPENSATION MEDICAL COSTS AS WELL.
Of course the Editorial Page Idiots at the Wall Street Journal would
have a fit!
But then again, you could argue that the US was doing just fine,
until Mr G started letting Kudlow and Cramer run US monetary policy!
AND IF THE US IS GOING FOR AN "IN YOUR FACE" MIDDLE EAST POLICY?
WHY NOT AN "IN YOUR FACE" FAIR TRADE POLICY?
A TEN PERCENT TARIFF ON ALL LOW WAGE GOODS WOULD GO A LONG WAY
TOWARD "MAKING THINGS RIGHT" WITH THE NEARLY FORGOTTEN AND ANGRY
AMERICAN WORKING CLASS! .......YA THINK?
AND, THIS "KERRY TRADE" GAMBIT WOULD ANSWER A LOT OF QUESTIONS ABOUT
WHERE ALL OF THE NEW MONEY IS GOING TO COME FROM TO TACKLE HEALTH
CARE ISSUES!
LET THE GREEDY "FOREIGNERS" HELP PAY FOR AMERICAN NATIONAL HEALTH
CARE!
NOW THAT'S A "KERRY TRADE" PEOPLE WOULD UNDERSTAND!
Saturday, April 17, 2004
GREENSPAN WILL ALWAYS CHOOSE INFLATION!
One of the big myths about Greenspan is that he is against inflation.
Greenspan is the Grand Champion ASSET INFLATIONIST of all time.
The problem is that commodity inflation and asset inflation are
almost twins. You can't have one without the other, at least, not
for long.
Fortunately, for Mr G wage inflation became extinct with free trade
and globalization. But for free trade Greenspan would never have
been able to pull off this very long period of asset inflation
without "real" inflation showing up in the economy.
But alas, all good things come to an end.
Just as Johnson's guns and butter in Vietnam eventually inspired the
oil price inflation of the 70's, with it's eventual currency
devaluation in 1971;
So too, the current bout of asset inflation is trickling down into
the real economy via it's favorite route, COMMODITY PRICES.
IT SEEMS THAT, AS MS STEIN MIGHT SAY: INFLATION IS INFLATION IS
INFLATION!
The 70's invented a particularly bad kind of inflation called
STAGFLATION.
THIS COMES ABOUT WHEN MONEY IS PRINTED DESPITE GULT IN GOODS AND
PRODUCTIVE CAPACITY.
IF THE NEWLY PRINTED MONEY IS NOT "INVESTIBLE" IN PLANT AND EQUIPMENT;
ULTIMATELY IT WILL DRIVE UP THE PRICE OF ASSETS, AND THEN GOODS,
USUALLY THROUGH THE "BACK DOOR" OF COMMODITY INFLATION.
This is where we are today.
The problem is can the US economy survive without asset inflation?
After all, the entire foundation of 401k retirments is based on the
constant increase in asset prices.
When INFLATION is confined to the stock and real estate markets, things work out fine.
But if the inflation spreads to the gas pump and the supermarket?
Problems arise.
My hunch is that Mr G knows all of this, and he will not be able to
stop the commodity inflation without stopping the asset inflation.
THE MONEY SPIGOT WILL BE KEPT OPEN WIDE SIMPLY BECAUSE TO STOP THE
ASSET INFLATION NOW WOULD BE TO INVITE DISASTER ON A HUGE SCALE.
IS THIS SHOCKING?
Actually no.
THE 20TH CENTRUY IS FILLED WITH EXAMPLES OF CENTRAL BANKS FINDING
HYPER-INFLATION TO BE "LESS EVIL," THAN A GENERALIZED DEFLATION IN A
HIGHLY INDEBTED ECONOMY.
Or, put another way; Greenspan would rather deal with a future hyper-
inflation, than with a disasterous collapse of the asset markets
now.
Frankly, I would be preparing for hyper-inflation and devaluation
before any other scenario. Given a choice Greenspan has always opted
for inflation over deflation.
Greenspan is the Grand Champion ASSET INFLATIONIST of all time.
The problem is that commodity inflation and asset inflation are
almost twins. You can't have one without the other, at least, not
for long.
Fortunately, for Mr G wage inflation became extinct with free trade
and globalization. But for free trade Greenspan would never have
been able to pull off this very long period of asset inflation
without "real" inflation showing up in the economy.
But alas, all good things come to an end.
Just as Johnson's guns and butter in Vietnam eventually inspired the
oil price inflation of the 70's, with it's eventual currency
devaluation in 1971;
So too, the current bout of asset inflation is trickling down into
the real economy via it's favorite route, COMMODITY PRICES.
IT SEEMS THAT, AS MS STEIN MIGHT SAY: INFLATION IS INFLATION IS
INFLATION!
The 70's invented a particularly bad kind of inflation called
STAGFLATION.
THIS COMES ABOUT WHEN MONEY IS PRINTED DESPITE GULT IN GOODS AND
PRODUCTIVE CAPACITY.
IF THE NEWLY PRINTED MONEY IS NOT "INVESTIBLE" IN PLANT AND EQUIPMENT;
ULTIMATELY IT WILL DRIVE UP THE PRICE OF ASSETS, AND THEN GOODS,
USUALLY THROUGH THE "BACK DOOR" OF COMMODITY INFLATION.
This is where we are today.
The problem is can the US economy survive without asset inflation?
After all, the entire foundation of 401k retirments is based on the
constant increase in asset prices.
When INFLATION is confined to the stock and real estate markets, things work out fine.
But if the inflation spreads to the gas pump and the supermarket?
Problems arise.
My hunch is that Mr G knows all of this, and he will not be able to
stop the commodity inflation without stopping the asset inflation.
THE MONEY SPIGOT WILL BE KEPT OPEN WIDE SIMPLY BECAUSE TO STOP THE
ASSET INFLATION NOW WOULD BE TO INVITE DISASTER ON A HUGE SCALE.
IS THIS SHOCKING?
Actually no.
THE 20TH CENTRUY IS FILLED WITH EXAMPLES OF CENTRAL BANKS FINDING
HYPER-INFLATION TO BE "LESS EVIL," THAN A GENERALIZED DEFLATION IN A
HIGHLY INDEBTED ECONOMY.
Or, put another way; Greenspan would rather deal with a future hyper-
inflation, than with a disasterous collapse of the asset markets
now.
Frankly, I would be preparing for hyper-inflation and devaluation
before any other scenario. Given a choice Greenspan has always opted
for inflation over deflation.
Friday, April 16, 2004
TONY GETS HIS MARCHING ORDERS
I'd like to be a fly on the wall at the White House when Tony meets
George today!
Clearly, Dubya broad-sided Tony during the Sharon meeting. Do you
think that Tony was even notified about the 180 Dubya was planning to do on settlements in the West Bank? Or did Sharon "brain-wash" Dubya on the spot?
If not? Tony should be chewing Dubya out big time!
These seem to be the final days for most of the pro-Iraq War leaders
in the West.
I seriously doubt that we will have Tony, Dubya and Ariel to kick
around anymore after 2005.
MY SENSE IS THAT THE WORLD IS GOING TO DEMAND THAT GROWN-UPS WHO CAN
TALK IN COMPLETE SENTENCES BE RETUNED TO POSITIONS OF POWER.
Tony, Dubya, Ariel and the other RELIGIOUS FANATICS have done their
damage.
IF DUBYA LOSES IN NOVEMBER, THERE WILL BE DANCING IN THE STREETS ALL
OVER THE WORLD! YOU KNOW IT AND I KNOW IT.
AND IF DUBYA, SOMEHOW, PULLS OFF A WIN?
A GREAT GROAN WILL RISE UP FROM EVERY NATION AND THE WORLD WILL
BECOME A VERY DANGEROUS PLACE INDEED.
POSTSCRIPT: WILL THE WALL STREET JOURNAL ENDOSE KERRY?
The shocking truth will finally be reveal on this important
question! Stay tuned,....and stay ahead of the pundits!
George today!
Clearly, Dubya broad-sided Tony during the Sharon meeting. Do you
think that Tony was even notified about the 180 Dubya was planning to do on settlements in the West Bank? Or did Sharon "brain-wash" Dubya on the spot?
If not? Tony should be chewing Dubya out big time!
These seem to be the final days for most of the pro-Iraq War leaders
in the West.
I seriously doubt that we will have Tony, Dubya and Ariel to kick
around anymore after 2005.
MY SENSE IS THAT THE WORLD IS GOING TO DEMAND THAT GROWN-UPS WHO CAN
TALK IN COMPLETE SENTENCES BE RETUNED TO POSITIONS OF POWER.
Tony, Dubya, Ariel and the other RELIGIOUS FANATICS have done their
damage.
IF DUBYA LOSES IN NOVEMBER, THERE WILL BE DANCING IN THE STREETS ALL
OVER THE WORLD! YOU KNOW IT AND I KNOW IT.
AND IF DUBYA, SOMEHOW, PULLS OFF A WIN?
A GREAT GROAN WILL RISE UP FROM EVERY NATION AND THE WORLD WILL
BECOME A VERY DANGEROUS PLACE INDEED.
POSTSCRIPT: WILL THE WALL STREET JOURNAL ENDOSE KERRY?
The shocking truth will finally be reveal on this important
question! Stay tuned,....and stay ahead of the pundits!
GROSS ON BONDS
Was the recent YEILD SPASM a MACRO EVENT OR A MARKET EVENT?
Well, Time will tell.
But Bill Gross on NBR last night stuck to his story that ALL YEILDS
ARE NOT CREATED EQUAL.
True, long US bonds may be risky today.
But other income instruments were recommended by Gross.
For example, he thinks the yeild on some Muni bonds are interesting
at 7%+ TAX FREE. Also foreign bonds were mentioned.
And, could junk and corporates also be included?
And, this notion that REITS are bad in a good economy is just
nonsense.
My hunch is that the recent unpleasantness in the income market was
just a MARKET EVENT reflecting a greatly over-bought condition.
And, this idea that Mr G is going to start a series of rate hikes is
just nuts. Mr G loves his asset inflation too much to risk it all
now.
TODAY, REITS, PREFERREDS, MUNIS AND OTHER INCOME ARE IN "BUYING
OPPORTUNITY" MODE.
THE SELL OFF WAS PRE-MATURE. STILL, IF THE JOBS NUMBER WAS REAL--THE
TROUBLES COULD COME BACK QUICKLY.
BUT FRANKLY, I DON'T BELEIVE THE JOBS NUMBERS.
THEY JUST DON'T REFLECT THE REALITIES ON MAIN STREET, AS FAR AS I CAN
TELL.
Even so REMEMBER, as Bill Gross clearly stated, all income is not
created equal. Some yeild instruments are safer than others, even in a "good" economy.
Well, Time will tell.
But Bill Gross on NBR last night stuck to his story that ALL YEILDS
ARE NOT CREATED EQUAL.
True, long US bonds may be risky today.
But other income instruments were recommended by Gross.
For example, he thinks the yeild on some Muni bonds are interesting
at 7%+ TAX FREE. Also foreign bonds were mentioned.
And, could junk and corporates also be included?
And, this notion that REITS are bad in a good economy is just
nonsense.
My hunch is that the recent unpleasantness in the income market was
just a MARKET EVENT reflecting a greatly over-bought condition.
And, this idea that Mr G is going to start a series of rate hikes is
just nuts. Mr G loves his asset inflation too much to risk it all
now.
TODAY, REITS, PREFERREDS, MUNIS AND OTHER INCOME ARE IN "BUYING
OPPORTUNITY" MODE.
THE SELL OFF WAS PRE-MATURE. STILL, IF THE JOBS NUMBER WAS REAL--THE
TROUBLES COULD COME BACK QUICKLY.
BUT FRANKLY, I DON'T BELEIVE THE JOBS NUMBERS.
THEY JUST DON'T REFLECT THE REALITIES ON MAIN STREET, AS FAR AS I CAN
TELL.
Even so REMEMBER, as Bill Gross clearly stated, all income is not
created equal. Some yeild instruments are safer than others, even in a "good" economy.
Thursday, April 15, 2004
STAGFLATION LOOMS!
Surprise! The economy is not booming!
THAT IS GOING TO BE THE BIG STORY IN THE NEXT FEW WEEKS.
THE RECENT "SELL OFF" OF INCOME WAS WAY, WAY OVERDONE AND PREMATURE.
I'm sticking to my story that Mr G will not raise rates now or EVER!
This so-called "recovery" was confined to reflation of the stock
market only.
The American Consumer NEVER QUIT spending and piling on debt.
The problem is that there is simply no PENT UP DEMAND to be satisfied.
EVERYBODY AND EVERYTHING IS BLOATED TO THE POINT OF GLUT.
HOW YOU "RECOVER" FROM GLUT IS THE REAL QUESTION. Because the
excesses were never purged, ANY recovery will be weak and fragile.
And, Mr G knows it. And worse, he fears unwinding the MOTHER OF ALL
CARRY TRADES to wit: THE US ECONOMY!
That said, there is always the worst case scenario of STAGFLATION!
IF THE RECENT RECOVERY IS CAUSED BY EXCESSIVE LIQUIDITY, AND IT IS,
YOU CAN GET COMMODITY AND ASSET INFLATION, EVEN WHILE THE REAL
ECONOMY STAGNATES, AS IT NO DOUBT WILL.
And the so-called "jobs recovery?" Oh Please....a one off combo of
seasonal and fudge factors! And, even a blind squirel finds an acorn
occasionally.
And, the fact that jobs "boomed" almost equally across the economy is
a little bit odd. Don't ya think? And, why are jobs "booming" with
weekly hours declining! And, temps in the toilet! Something doesn't
pass the smell test here.
BUT THEN AGAIN WITH AN ODD-BALL RECOVERY CAN YOU TRUST ANYTHING NOW?
QUITE FRANKLY THE OLD MODELS ARE FLAWED AND WE HAVE NOT YET
DISCOVERED NEW MODELS THAT WORK.
THE RECENT SELL OFF OF BONDS AND INCOME IS WAY OVER-DONE; UNLESS YOU
THINK WE ARE IN A DEATH SPIRAL INTO A DISASTEROUS STAGFLATION.
THE FED WILL NOT RAISE RATES THIS YEAR.
THAT IS GOING TO BE THE BIG STORY IN THE NEXT FEW WEEKS.
THE RECENT "SELL OFF" OF INCOME WAS WAY, WAY OVERDONE AND PREMATURE.
I'm sticking to my story that Mr G will not raise rates now or EVER!
This so-called "recovery" was confined to reflation of the stock
market only.
The American Consumer NEVER QUIT spending and piling on debt.
The problem is that there is simply no PENT UP DEMAND to be satisfied.
EVERYBODY AND EVERYTHING IS BLOATED TO THE POINT OF GLUT.
HOW YOU "RECOVER" FROM GLUT IS THE REAL QUESTION. Because the
excesses were never purged, ANY recovery will be weak and fragile.
And, Mr G knows it. And worse, he fears unwinding the MOTHER OF ALL
CARRY TRADES to wit: THE US ECONOMY!
That said, there is always the worst case scenario of STAGFLATION!
IF THE RECENT RECOVERY IS CAUSED BY EXCESSIVE LIQUIDITY, AND IT IS,
YOU CAN GET COMMODITY AND ASSET INFLATION, EVEN WHILE THE REAL
ECONOMY STAGNATES, AS IT NO DOUBT WILL.
And the so-called "jobs recovery?" Oh Please....a one off combo of
seasonal and fudge factors! And, even a blind squirel finds an acorn
occasionally.
And, the fact that jobs "boomed" almost equally across the economy is
a little bit odd. Don't ya think? And, why are jobs "booming" with
weekly hours declining! And, temps in the toilet! Something doesn't
pass the smell test here.
BUT THEN AGAIN WITH AN ODD-BALL RECOVERY CAN YOU TRUST ANYTHING NOW?
QUITE FRANKLY THE OLD MODELS ARE FLAWED AND WE HAVE NOT YET
DISCOVERED NEW MODELS THAT WORK.
THE RECENT SELL OFF OF BONDS AND INCOME IS WAY OVER-DONE; UNLESS YOU
THINK WE ARE IN A DEATH SPIRAL INTO A DISASTEROUS STAGFLATION.
THE FED WILL NOT RAISE RATES THIS YEAR.
SEPERATE PEACE FOR EUROLAND
Osama's offer of a "seperate peace" for Euroland may be irresistable.
Clearly, Europeans do not support the US blind support for Israel
against the Palestinians. Indeed, a cynic might say that Dubya is
Sharon's Stooge in the middle east! Thank God I'm not a cynic.
Need proof?
With US troops poised to assault the Holy Shrines of Shia Islam,
Dubya does a complete 180 on the issue of the occupied terrorities!
What gives? What are they thinking?
THIS IS NO WAY TO WIN FRIENDS AND INFLUENCE PEOPLE IN THE ARAB/MUSLIM
WORLD!
BUT THEN AGAIN, MAYBE DUBYA HAS ADOPTED THE SHARONIST/LIKUD VIEW THAT
JUST KILLING MUSLIMS IS SUFFICIENT. (But, who knows what Dubya is
thinking in these last few months of his disasterous presidency.)
CLEARLY, JUST KILLING MUSLIMS HAS NOT WORKED SO FAR. AND, FRANKLY I
DOUBT IT EVER WILL. THERE ARE JUST TOO MANY OF THEM.
Osama's SEPERATE PEACE will go a long way toward isolating the US and
Israel in world opinion, as if they weren't already isolated enough.
Seperately, Kerry now seems blessed to have a SEPERATE PEACE with the
American electorate.
With the indefinite extention of service for military in Iraq;
I doubt that Dubya & Co will be waiting anxiously for the military
absentee ballots THIS TIME!
NOW, KERRY CAN ADOPT A "ROSE GARDEN" STRATEGY, AND JUST BE CONTENT TO
BE THE "NON-BUSH" CHOICE IN NOVEMBER.
IRAQ IS A QUAGMIRE, BUT NOT "LIKE VIETNAM." IRAQ IS WORSE BY FAR!
The VietCong were well organized, and resembled a conventional army.
IN IRAQ, DUBYA WILL SOON HAVE A FULL SCALE POPULAR UPRISING ON HIS
HANDS.
AND THIS WILL BE WITHOUT PRECEDENT IN MODERN TIMES.
Clearly, Europeans do not support the US blind support for Israel
against the Palestinians. Indeed, a cynic might say that Dubya is
Sharon's Stooge in the middle east! Thank God I'm not a cynic.
Need proof?
With US troops poised to assault the Holy Shrines of Shia Islam,
Dubya does a complete 180 on the issue of the occupied terrorities!
What gives? What are they thinking?
THIS IS NO WAY TO WIN FRIENDS AND INFLUENCE PEOPLE IN THE ARAB/MUSLIM
WORLD!
BUT THEN AGAIN, MAYBE DUBYA HAS ADOPTED THE SHARONIST/LIKUD VIEW THAT
JUST KILLING MUSLIMS IS SUFFICIENT. (But, who knows what Dubya is
thinking in these last few months of his disasterous presidency.)
CLEARLY, JUST KILLING MUSLIMS HAS NOT WORKED SO FAR. AND, FRANKLY I
DOUBT IT EVER WILL. THERE ARE JUST TOO MANY OF THEM.
Osama's SEPERATE PEACE will go a long way toward isolating the US and
Israel in world opinion, as if they weren't already isolated enough.
Seperately, Kerry now seems blessed to have a SEPERATE PEACE with the
American electorate.
With the indefinite extention of service for military in Iraq;
I doubt that Dubya & Co will be waiting anxiously for the military
absentee ballots THIS TIME!
NOW, KERRY CAN ADOPT A "ROSE GARDEN" STRATEGY, AND JUST BE CONTENT TO
BE THE "NON-BUSH" CHOICE IN NOVEMBER.
IRAQ IS A QUAGMIRE, BUT NOT "LIKE VIETNAM." IRAQ IS WORSE BY FAR!
The VietCong were well organized, and resembled a conventional army.
IN IRAQ, DUBYA WILL SOON HAVE A FULL SCALE POPULAR UPRISING ON HIS
HANDS.
AND THIS WILL BE WITHOUT PRECEDENT IN MODERN TIMES.
Wednesday, April 14, 2004
DUBYA: RAMBLING WRECK FROM CRAWFORD TECH
Now we know why Dubya doesn't have many "news conferences."
I was with a bunch of "Bushies" last night, and, of course, sports
programing was on every available TV.
But, when the time came for the news conference I insisted that at
least one TV stay tuned to Dubya.
The Bushies all groaned!
When Dubya started talking the Bushies looked bored and dejected.
They protested: "Nobody is actually watching this!"
And, of course, with all of the sports programing; from snow boarding
to golf, on other networks, they were right!
I held my ground.
The Bushies drifted away to other TVs, all tuned to the sports
programs.
I held my ground, and listened to Dubya ramble on and on and on.
Doesn't he ever say: "Next Question?"
Dubya reminded me of an eight grader, who was playing video games all
nite, and then, when asked to recite his "homework" the next day,
trys to "fake it" by talking endlessly about what ever pops into his
head.
But when you have dogma, who needs facts. Slogans will do. Compleat
and connected sentences are really unnecessary.
But the Bushies didn't care. They weren't even watching!
One Bushie walked by and said: "You know nobody's watching this
ANYWHERE!"
I looked up, and said: "I know."
I was with a bunch of "Bushies" last night, and, of course, sports
programing was on every available TV.
But, when the time came for the news conference I insisted that at
least one TV stay tuned to Dubya.
The Bushies all groaned!
When Dubya started talking the Bushies looked bored and dejected.
They protested: "Nobody is actually watching this!"
And, of course, with all of the sports programing; from snow boarding
to golf, on other networks, they were right!
I held my ground.
The Bushies drifted away to other TVs, all tuned to the sports
programs.
I held my ground, and listened to Dubya ramble on and on and on.
Doesn't he ever say: "Next Question?"
Dubya reminded me of an eight grader, who was playing video games all
nite, and then, when asked to recite his "homework" the next day,
trys to "fake it" by talking endlessly about what ever pops into his
head.
But when you have dogma, who needs facts. Slogans will do. Compleat
and connected sentences are really unnecessary.
But the Bushies didn't care. They weren't even watching!
One Bushie walked by and said: "You know nobody's watching this
ANYWHERE!"
I looked up, and said: "I know."
Tuesday, April 13, 2004
CARRY TRADE GETS A MARGIN CALL!
Much is made of the so-called "bond carry trade," but what has not
been noticed is that: THE ENTIRE US ECONOMY HAS BEEN ONE BIG CARRY
TRADE!!
AND, TODAY?
THAT TITANIC "CARRY TRADE" GOT A BIG MARGIN CALL!!
Consider:
EACH AND EVERY ASPECT OF THE US ECONOMY HAS BEEN MOLDED BY THE ULTRA-
LOW RATES OF RECENT YEARS. IT'S NOT JUST BONDS.
EVERYONE HAS BEEN COMPELLED, OVER THE LAST FEW YEARS, TO
SEEK "RELIEF" FROM GREENSPAN'S INCREDIBLE "ONE PERCENT SOLUTION."
And, indeed, MANY have borrowed, mortgaged or bet the future to do it!
THAT'S WHAT STARTED UNWINDING TODAY!
So Forget Bonds and the Bond Carry Trade.
What about the huge STOCK MARKET CARRY TRADE?
AND, THE REAL ESTATE CARRY TRADE? AND, THE REFI CARRY TRADE IN HOMES?
Everyone has been acting "as if" one percent money would last forever.
AND, THE COLLAPSE OF THAT ECONOMY WIDE CARRY TRADE IS WHAT WE ARE
SEEING NOW.
AND, ODDLY, IT LOOKS ALMOST LIKE A MARGIN CALL! THE MOTHER OF ALL
MARGIN CALLS!
Ain't no doubt that the REIT sellers were unwinding their carry trades today.
And, the stock sellers are unwinding their versions of a carry trade.
And, the refi and home speculation is also very close to a big carry
trade, viewed properly.
TODAY'S SELLING ALMOST LOOKED "FORCED." IT RESEMBLED A
PANICKED "MARGIN CALL."
My hunch is that once the carry trade speculators have been driven
from the temple, some new equilibrium will be established.
Curiously, the "demand" for the dollar today may have been the result
of all of the selling by foreigners and others---going EN MASSE TO
CASH! And, with dismal consequences for the gold carry trade!
SPOOKY! REAL SPOOKY! A RARE REVERSAL OF MARKET POLARITY IN ONE DAY!
What's next? Stay tuned for,......
HOW TO PLAY THIS TITANIC CARRY TRADE "MARGIN CALL!"
been noticed is that: THE ENTIRE US ECONOMY HAS BEEN ONE BIG CARRY
TRADE!!
AND, TODAY?
THAT TITANIC "CARRY TRADE" GOT A BIG MARGIN CALL!!
Consider:
EACH AND EVERY ASPECT OF THE US ECONOMY HAS BEEN MOLDED BY THE ULTRA-
LOW RATES OF RECENT YEARS. IT'S NOT JUST BONDS.
EVERYONE HAS BEEN COMPELLED, OVER THE LAST FEW YEARS, TO
SEEK "RELIEF" FROM GREENSPAN'S INCREDIBLE "ONE PERCENT SOLUTION."
And, indeed, MANY have borrowed, mortgaged or bet the future to do it!
THAT'S WHAT STARTED UNWINDING TODAY!
So Forget Bonds and the Bond Carry Trade.
What about the huge STOCK MARKET CARRY TRADE?
AND, THE REAL ESTATE CARRY TRADE? AND, THE REFI CARRY TRADE IN HOMES?
Everyone has been acting "as if" one percent money would last forever.
AND, THE COLLAPSE OF THAT ECONOMY WIDE CARRY TRADE IS WHAT WE ARE
SEEING NOW.
AND, ODDLY, IT LOOKS ALMOST LIKE A MARGIN CALL! THE MOTHER OF ALL
MARGIN CALLS!
Ain't no doubt that the REIT sellers were unwinding their carry trades today.
And, the stock sellers are unwinding their versions of a carry trade.
And, the refi and home speculation is also very close to a big carry
trade, viewed properly.
TODAY'S SELLING ALMOST LOOKED "FORCED." IT RESEMBLED A
PANICKED "MARGIN CALL."
My hunch is that once the carry trade speculators have been driven
from the temple, some new equilibrium will be established.
Curiously, the "demand" for the dollar today may have been the result
of all of the selling by foreigners and others---going EN MASSE TO
CASH! And, with dismal consequences for the gold carry trade!
SPOOKY! REAL SPOOKY! A RARE REVERSAL OF MARKET POLARITY IN ONE DAY!
What's next? Stay tuned for,......
HOW TO PLAY THIS TITANIC CARRY TRADE "MARGIN CALL!"
LIMBO LOWER NOW!
Frankly, I never knew why REITs were soaring, and now I don't know why they are falling!
REITS are essentially an INCOME PLAY. They are economically sensitive, and they should respond well to inflation and a booming economy.
The recent plunge in REITS could mean that higher rates are coming, but that would be a disaster for MUNIs, and eventually for stocks in general.
Additionally, we have ABSOLUTELY NO EVIDENCE THAT THE FED IS PLANNING AN IMMINENT RATE HIKE!
Just the HUGE "carry trade" alone would give the FED reason to pause on any rate increase.
SO, LET'S SEE MORE OF A SELL OFF IN BONDS, AND MUNIS;
WHICH ARE TOTALLY "NON-ECONOMY" PLAYS; BEFORE WE WRITE OFF REITS TOO MUCH.
The current "income correction" was justified, just on the basis of valuation.
Indeed, who were these recent "plungers" into REITS anyway?
The gold/dollar relationship is also interesting.
If the dollar is going to collapse, because of recent "excess printing" by the FED; the bond market should "raise rates," which amazingly, will cause the dollar to soar!
CONSIDER;
SO, THE LOOSER THE FED GETS, THE HIGHER RATES GO, AND THE STRONGER THE DOLLAR BECOMES!
SO, PRINTING THE DOLLAR LIKE MAD ACTUALLY MAKES THE DOLLAR MORE VALUABLE! YIKES!
And then this: All other commodities are soaring, even as ONLY gold "sells off!" Is gold no longer a commodity? Well.......?
PERHAPS WHAT'S REALLY HAPPENING IS AN "INFLECTION POINT."
OR, IF YOU LIKE, A REVERSAL IN THE MARKET'S "POLARITY."
IN PERIODS OF POLARITY REVERSAL, THERE IS A PERIOD OF CHAOS AND UNCERTAINTY.
OR AS I SAY IT; ANYTHING CAN BE ANYWHERE AT ANYTIME.
SO EVERY PUNDIT IS ALWAYS, AT LEAST, A LITTLE BIT RIGHT!
Conclusion: This is not the time to put new money into the markets. The markets are extremely OVER-BOUGHT from the year long rally.
The economy and the markets clearly need a long rest from Mr G gross OVER-STIMULATION of late.
A VERY CHAOTIC CORRECTIVE PHASE IS COMING.....
BUT HARD ASSETS LIKE GOLD, GAS, REITS, STILL SEEM SAFE TO ME. INDEED, A BUYING OPPORTUNITY MAY DEVELOP IF THE SELL OFF CONTINUES!
SO, KEEP SELLING THOSE REITS! AND GOLD! AND GAS!
YEAH BABY, LIMBO LOWER NOW................
Postscript: I would also note that volume has been collapsing on rallies and sell offs. And, that could be meaningful later.
REITS are essentially an INCOME PLAY. They are economically sensitive, and they should respond well to inflation and a booming economy.
The recent plunge in REITS could mean that higher rates are coming, but that would be a disaster for MUNIs, and eventually for stocks in general.
Additionally, we have ABSOLUTELY NO EVIDENCE THAT THE FED IS PLANNING AN IMMINENT RATE HIKE!
Just the HUGE "carry trade" alone would give the FED reason to pause on any rate increase.
SO, LET'S SEE MORE OF A SELL OFF IN BONDS, AND MUNIS;
WHICH ARE TOTALLY "NON-ECONOMY" PLAYS; BEFORE WE WRITE OFF REITS TOO MUCH.
The current "income correction" was justified, just on the basis of valuation.
Indeed, who were these recent "plungers" into REITS anyway?
The gold/dollar relationship is also interesting.
If the dollar is going to collapse, because of recent "excess printing" by the FED; the bond market should "raise rates," which amazingly, will cause the dollar to soar!
CONSIDER;
SO, THE LOOSER THE FED GETS, THE HIGHER RATES GO, AND THE STRONGER THE DOLLAR BECOMES!
SO, PRINTING THE DOLLAR LIKE MAD ACTUALLY MAKES THE DOLLAR MORE VALUABLE! YIKES!
And then this: All other commodities are soaring, even as ONLY gold "sells off!" Is gold no longer a commodity? Well.......?
PERHAPS WHAT'S REALLY HAPPENING IS AN "INFLECTION POINT."
OR, IF YOU LIKE, A REVERSAL IN THE MARKET'S "POLARITY."
IN PERIODS OF POLARITY REVERSAL, THERE IS A PERIOD OF CHAOS AND UNCERTAINTY.
OR AS I SAY IT; ANYTHING CAN BE ANYWHERE AT ANYTIME.
SO EVERY PUNDIT IS ALWAYS, AT LEAST, A LITTLE BIT RIGHT!
Conclusion: This is not the time to put new money into the markets. The markets are extremely OVER-BOUGHT from the year long rally.
The economy and the markets clearly need a long rest from Mr G gross OVER-STIMULATION of late.
A VERY CHAOTIC CORRECTIVE PHASE IS COMING.....
BUT HARD ASSETS LIKE GOLD, GAS, REITS, STILL SEEM SAFE TO ME. INDEED, A BUYING OPPORTUNITY MAY DEVELOP IF THE SELL OFF CONTINUES!
SO, KEEP SELLING THOSE REITS! AND GOLD! AND GAS!
YEAH BABY, LIMBO LOWER NOW................
Postscript: I would also note that volume has been collapsing on rallies and sell offs. And, that could be meaningful later.
Monday, April 12, 2004
THE FOUR PERCENT SOLUTION!
What a difference 4% makes!
Greenspan's "One Percent Solution" is morphing into the "Four Percent Solution!"
With the 10 year bond at 4% everyone is dumping income ASAP!
REITS ARE PLUNGING!
GOLD IS WAY DOWN!
PREFERREDS CAN'T FIND THE BOTTOM!
Is all of this pre-mature? Perhaps, but you don't need the economy
to boom to justify these declines.
It is equally possible that a STAGFLATION SCENARIO is in the offing.
Here, layoffs continue and the economy stagnates, even while the Fed
tweaks rates slowly up, while the dollar and stocks soar albeit
temporarily.
In short, I'm looking for a STAGNATE ECONOMY WITH HIGHER RATES AND A
STRONG DOLLAR RESULTING THEREFROM.
AS TO STOCKS? CALL IT RANGE BOUND SMOKE AND MIRRORS.
STOCKS AND GOLD WILL LIKELY BE RANGE BOUND INTO MAY, BUT WITH ENOUGH
YADA YADA TO KEEP THE SUCKERS FLOCKING IN AND OUT IN A STATE OF NEAR
CONFUSION AND PANIC.
GREAT FOR WALL STREET COMMISSIONS!
BUT NOT GOOD FOR MOM AND POP, WHO SHOULD PROBABLY GET OUT UNTIL THE
GEOPOLITICAL, ECONOMIC, AND ELECTORAL DUST SETTLES.
Curiously, there could be a KERRY RALLY coming;
As The Street prepares for a new administration with the
attendant "optimism" about getting "the grown-ups" back in charge in
Washington!
MORE ON THE COMING "KERRY RALLY" LATER.............stay tuned, this
is going to get "interesting."
Greenspan's "One Percent Solution" is morphing into the "Four Percent Solution!"
With the 10 year bond at 4% everyone is dumping income ASAP!
REITS ARE PLUNGING!
GOLD IS WAY DOWN!
PREFERREDS CAN'T FIND THE BOTTOM!
Is all of this pre-mature? Perhaps, but you don't need the economy
to boom to justify these declines.
It is equally possible that a STAGFLATION SCENARIO is in the offing.
Here, layoffs continue and the economy stagnates, even while the Fed
tweaks rates slowly up, while the dollar and stocks soar albeit
temporarily.
In short, I'm looking for a STAGNATE ECONOMY WITH HIGHER RATES AND A
STRONG DOLLAR RESULTING THEREFROM.
AS TO STOCKS? CALL IT RANGE BOUND SMOKE AND MIRRORS.
STOCKS AND GOLD WILL LIKELY BE RANGE BOUND INTO MAY, BUT WITH ENOUGH
YADA YADA TO KEEP THE SUCKERS FLOCKING IN AND OUT IN A STATE OF NEAR
CONFUSION AND PANIC.
GREAT FOR WALL STREET COMMISSIONS!
BUT NOT GOOD FOR MOM AND POP, WHO SHOULD PROBABLY GET OUT UNTIL THE
GEOPOLITICAL, ECONOMIC, AND ELECTORAL DUST SETTLES.
Curiously, there could be a KERRY RALLY coming;
As The Street prepares for a new administration with the
attendant "optimism" about getting "the grown-ups" back in charge in
Washington!
MORE ON THE COMING "KERRY RALLY" LATER.............stay tuned, this
is going to get "interesting."
Sunday, April 11, 2004
STUPID WHITE MEN AT WAR
The news from Iraq goes from bad to worse.
Viceroy Bremer seems almost shell-shocked and distracted.
Confronted with a general rebellion, the US is running out of rationalizations and excuses.
Indeed, it was interesting to see Geo.Will "spank" Richard Perle
today on the Sunday talks.
Perle was spouting the "party line" (ie Likud Party!) about Iraq.
You know: "It's all a small bunch of thugs who hate democracy."
When Will interupts saying in effect: "Let's quit kidding
ourselves. This is a general uprising with at least some degree of
popular support among the Iraqis."
Dubya? He's holed up in Texas.
And now, the US military seems to be ready to "sue for peace" in
Falluhja! Why? To avoid the necessity of a possible "criminal"
massacre of the local citizenry! War Crimes are still possible you
know.
Even as the Iraqi "army" refuses to fight. The "police" join the
rebels. And, the Iraqi "governing council" threaten to resign en
masse!
The hope of Bremer being able to turn over control to an Iraqi
government on June 30 has about as chance as a skunk making love to
a fart!
It's a fiction attached to a hope wrapped inside a fantasy!
Hell of a way to run a war! Stupid white men at war! Not a pretty
sight.
Viceroy Bremer seems almost shell-shocked and distracted.
Confronted with a general rebellion, the US is running out of rationalizations and excuses.
Indeed, it was interesting to see Geo.Will "spank" Richard Perle
today on the Sunday talks.
Perle was spouting the "party line" (ie Likud Party!) about Iraq.
You know: "It's all a small bunch of thugs who hate democracy."
When Will interupts saying in effect: "Let's quit kidding
ourselves. This is a general uprising with at least some degree of
popular support among the Iraqis."
Dubya? He's holed up in Texas.
And now, the US military seems to be ready to "sue for peace" in
Falluhja! Why? To avoid the necessity of a possible "criminal"
massacre of the local citizenry! War Crimes are still possible you
know.
Even as the Iraqi "army" refuses to fight. The "police" join the
rebels. And, the Iraqi "governing council" threaten to resign en
masse!
The hope of Bremer being able to turn over control to an Iraqi
government on June 30 has about as chance as a skunk making love to
a fart!
It's a fiction attached to a hope wrapped inside a fantasy!
Hell of a way to run a war! Stupid white men at war! Not a pretty
sight.
Friday, April 9, 2004
ATTACKS ON SHIA WILL LOSE THE WAR
If the US makes good on attacking the Shia in Southern Iraq, the war will be all but lost.
Up to now the Americans have been killing mainly Sunni in Baghdad and in the north.
Now, we are promised American attacks in Sadr City in Bahgdad, and the "elimination" of Sadrs militia in the south.
Curiously, the US could use the Shia militia to re-estabilsh order in most of Iraq, if they were smart enough to see this.
What difference does it make if US "Quislings" occupy the police stations, or the Sadr "army?" None really. Indeed, it would be best to use the indiginous elites to police their own territory. Legitimate social control is what is needed now, and at any cost!
And, this notion of Wolfie and Rummy that EVERYONE in power in Iraq has to be a trained American stooge, is a recipe for disaster. As, alas, I fear we are about to find out!
KNOW THIS;
ONCE THE AMERICANS START KILLING SHIA, EN MASSE, THIS WAR WILL BE TOTALLY AND COMPLETELY LOST.
AND THE AMERICAN "HOPE" THAT THE "SHIA ESTABLISHMENT" WILL WELCOME THE DEATHS OF THE SHIA "UPSTARTS" IS PROMBLEMATIC AND MISPLACED.
THE PROMISED ATTACKS ON THE SHIA WILL LOSE THIS WAR.
JUST WATCH.........
Postscript:
Most of the problem is the hypocrisy of the American position in the first place. This idea that the US had or has great sympathy for the "plight of the Shia" never was true.
Indeed, it was merely the pretense for invading Iraq, and getting rid of Saddam, who was really doing a fairly good job of controlling the various radical factions in Iraq for years!
America policy never was pro-Shia, which translates into pro-Iran, really. Was it?
Now if destroying Falluhja is somehow different than Saddam's destuction of Shia cities, fine. But it really is no different.
Dubya and the Neocons have no love for the people of Iraq, and it is the ultimate hypocrisy to say they do.
It is this ultimate and final "truth" that is now showing itself all over Iraq now.
The solution? Probably turn Iraq over to the Iraqis. And, let the chips fall where they may.
The alternatives are too horrific: More fighting, and possible War Crimes by Americans, the total destruction of Iraq, the radicalization of all of Islam against Americans, even as Euroland scrambles for a "seperate peace."
Up to now the Americans have been killing mainly Sunni in Baghdad and in the north.
Now, we are promised American attacks in Sadr City in Bahgdad, and the "elimination" of Sadrs militia in the south.
Curiously, the US could use the Shia militia to re-estabilsh order in most of Iraq, if they were smart enough to see this.
What difference does it make if US "Quislings" occupy the police stations, or the Sadr "army?" None really. Indeed, it would be best to use the indiginous elites to police their own territory. Legitimate social control is what is needed now, and at any cost!
And, this notion of Wolfie and Rummy that EVERYONE in power in Iraq has to be a trained American stooge, is a recipe for disaster. As, alas, I fear we are about to find out!
KNOW THIS;
ONCE THE AMERICANS START KILLING SHIA, EN MASSE, THIS WAR WILL BE TOTALLY AND COMPLETELY LOST.
AND THE AMERICAN "HOPE" THAT THE "SHIA ESTABLISHMENT" WILL WELCOME THE DEATHS OF THE SHIA "UPSTARTS" IS PROMBLEMATIC AND MISPLACED.
THE PROMISED ATTACKS ON THE SHIA WILL LOSE THIS WAR.
JUST WATCH.........
Postscript:
Most of the problem is the hypocrisy of the American position in the first place. This idea that the US had or has great sympathy for the "plight of the Shia" never was true.
Indeed, it was merely the pretense for invading Iraq, and getting rid of Saddam, who was really doing a fairly good job of controlling the various radical factions in Iraq for years!
America policy never was pro-Shia, which translates into pro-Iran, really. Was it?
Now if destroying Falluhja is somehow different than Saddam's destuction of Shia cities, fine. But it really is no different.
Dubya and the Neocons have no love for the people of Iraq, and it is the ultimate hypocrisy to say they do.
It is this ultimate and final "truth" that is now showing itself all over Iraq now.
The solution? Probably turn Iraq over to the Iraqis. And, let the chips fall where they may.
The alternatives are too horrific: More fighting, and possible War Crimes by Americans, the total destruction of Iraq, the radicalization of all of Islam against Americans, even as Euroland scrambles for a "seperate peace."
Thursday, April 8, 2004
PILLS FOR EVERYONE?
The HDL LDL hype has got everyones attention.
Less is better for LDL and More is better for HDL. Right? Or is it
the other way around? LOL.
Anyway;
Exercise, Eat your veggies, and keep your weight down seems the best
and cheapest way to go.
CURIOUSLY, THE WSJ HAD AN INTERESTING FACTOID THIS MORNING:
HALF OF ALL HEART ATTACK VICTIMS DIDN'T HAVE A PROBLEM WITH THEIR
BLOOD LIPIDS OR HIGH CHOLESTEROL BEFORE THE ATTACK!
This raises the real possiblity that heart attacks are more related
to artery wall inflammation!
Perhaps, cholesterol is really just the "patch job" done after the
artery wall has burst because of some "sudden" inflamatory reaction.
Some have said that finding cholesterol near a blood clot is like
finding a fireman near a fire!
Do firemen "cause" fires?
Does cholesterol "cause" blood clots?
Curious....very curious.
http://biz.yahoo.com/fo/040407/ada6ae4f06f0d8cbbdecc3fa7091635c_2.html
Less is better for LDL and More is better for HDL. Right? Or is it
the other way around? LOL.
Anyway;
Exercise, Eat your veggies, and keep your weight down seems the best
and cheapest way to go.
CURIOUSLY, THE WSJ HAD AN INTERESTING FACTOID THIS MORNING:
HALF OF ALL HEART ATTACK VICTIMS DIDN'T HAVE A PROBLEM WITH THEIR
BLOOD LIPIDS OR HIGH CHOLESTEROL BEFORE THE ATTACK!
This raises the real possiblity that heart attacks are more related
to artery wall inflammation!
Perhaps, cholesterol is really just the "patch job" done after the
artery wall has burst because of some "sudden" inflamatory reaction.
Some have said that finding cholesterol near a blood clot is like
finding a fireman near a fire!
Do firemen "cause" fires?
Does cholesterol "cause" blood clots?
Curious....very curious.
http://biz.yahoo.com/fo/040407/ada6ae4f06f0d8cbbdecc3fa7091635c_2.html
ALL IS "FALLUJAH" NOW
Confusion is the order of the day.
The ongoing massacre at Fallujah will defeat Bush in November, even
if the economy is "strong."
The Iraq War is lost. And, the Pentagon's "spin, spin, spin" will
peter out in a few more days.
And the Markets are massively confused about interest rates now.
Clearly, rates are too low; but if rates are raised, MANY WILL LEAVE
THE MARKETS ALTOGETHER FOR THE SAFETY OF BANK DEPOSITS!
Everyone knows that the Hosannas about the "booming economy" are way
over-done. In fact, much of the recent "boom" could disappear as
quickly as it appeared with just a few key data points.
WORSE, THERE IS NO LOGIC IN THE CURRENT TRADING;
EVERYTHING CAN BE ANYWHERE AT ANYTIME!
IF THE MARKET HATES UNCERTAINTY, IT HAS IT IN DROVES NOW.
PERHAPS THINGS WILL "SETTLE DOWN" EVENTUALLY. PERHAPS.
BUT THERE IS ALSO THE STRONG POSSIBILITY THAT THINGS WILL "SPIRAL OUT
OF CONTROL."
EVERYTHING IS IN A STATE OF "FALLUJHA" NOW!
ANYTHING IS POSSIBLE IN THE COMING DAYS.
P.S. My hunch is stick with hard assets and cash. Avoid any need for
a "leap of faith" in the coming weeks.
The ongoing massacre at Fallujah will defeat Bush in November, even
if the economy is "strong."
The Iraq War is lost. And, the Pentagon's "spin, spin, spin" will
peter out in a few more days.
And the Markets are massively confused about interest rates now.
Clearly, rates are too low; but if rates are raised, MANY WILL LEAVE
THE MARKETS ALTOGETHER FOR THE SAFETY OF BANK DEPOSITS!
Everyone knows that the Hosannas about the "booming economy" are way
over-done. In fact, much of the recent "boom" could disappear as
quickly as it appeared with just a few key data points.
WORSE, THERE IS NO LOGIC IN THE CURRENT TRADING;
EVERYTHING CAN BE ANYWHERE AT ANYTIME!
IF THE MARKET HATES UNCERTAINTY, IT HAS IT IN DROVES NOW.
PERHAPS THINGS WILL "SETTLE DOWN" EVENTUALLY. PERHAPS.
BUT THERE IS ALSO THE STRONG POSSIBILITY THAT THINGS WILL "SPIRAL OUT
OF CONTROL."
EVERYTHING IS IN A STATE OF "FALLUJHA" NOW!
ANYTHING IS POSSIBLE IN THE COMING DAYS.
P.S. My hunch is stick with hard assets and cash. Avoid any need for
a "leap of faith" in the coming weeks.
Tuesday, April 6, 2004
BOND CRASH: DAY THREE
Day three of our GREAT BOND CRASH!
And, the Job Joy seems to be fading into a realization that
nothing has really changed with the economy.
The TWIN DEFICITS are all alive and well.
Iraq is still a gathering nightmare.
The dollar rebound will reduce multinational earnings.
And, earnings may not be all that good after all, based on demand.
The GOODS GLUT continues apace;
And China is still sucking up commodities; and India is still taking
jobs out of America. US Layoffs continue apace.
And, perhaps that HOSANNA NUMBER of 300,000 jobs might have been a
combination of a one-off SEASONAL AND "FUDGE" FACTORS IN A HAPPY
COMBINATION.
Every so often the stars occasionally do, "line up," at least for a
while.
BUT STILL, THE ROOF IS ON FIRE IN OUR BELOVED HOUSING SECTOR;
REITS CONTINUE TO PLUNGE; NO MATTER THAT THE CURRENT
ALLEGED "GOOD ECONOMY" SHOULD BE GOOD FOR REAL ESTATE TRUSTS TOO.
DON'T YA THINK?
Or, is all this higher rates sweetness and light only good for those
NAZZ small cap hotties?
And last, and possiblity most important;
IF YOU GIVE MOM AND POP A 6% BANK CD...............?
ALL WALL STREET WILL SEE OF THE "OLD FOLKS" IS THE BOTTOMS OF THEIR
FEET!
That's right! A 6% yeild at the bank will suck money out of stocks
big time.
NEED PROOF?
JUST GIVE ME AN HONEST CD 6%, AND I'M OUTTA HERE, BABY!
Finally, while the bond market is presently raising rates.
THE FED ISN'T! AND WON'T!
I STILL HOLD TO MY CONVICTION THAT GREENSPAN WILL NEVER RAISE
RATES DURING HIS CURRENT TERM AS FED CHIEF.
WHY?
WELL, DESPITE THE RECENT "IMPLIED JOY" ABOUT THE STRONG ECONOMY AND
JOBS.
I REALLY, REALLY DOUBT THAT THE STREET CAN HANDLE TOO MUCH
HARD CORE "REALITY" AT THIS POINT;
LIKE, FOR EXAMPLE, AN HONEST TO GOODNESS RATE HIKE BY THE FED.
That just ain't gonna happen.......
So, deal with it.
P.S. On the REIT CRASH:
REITS had been soaring everyday just prior to the recent
unpleasantness. So, even now, they are only back to the levels of a
couple weeks ago.
The REIT crash is really just some old fashion profit taking, with a
little help from the momo boys on the short side. The REIT crash is
probably just about OVER-DONE, whether you look at theory or
practice.
If higher rates mean a booming economy, then the dismal rental market
should pick up. But higher rates will never be good for the NAZZ
penny stocks which rely on being "default investments" in an ultra-
low rate environment.
And, the Job Joy seems to be fading into a realization that
nothing has really changed with the economy.
The TWIN DEFICITS are all alive and well.
Iraq is still a gathering nightmare.
The dollar rebound will reduce multinational earnings.
And, earnings may not be all that good after all, based on demand.
The GOODS GLUT continues apace;
And China is still sucking up commodities; and India is still taking
jobs out of America. US Layoffs continue apace.
And, perhaps that HOSANNA NUMBER of 300,000 jobs might have been a
combination of a one-off SEASONAL AND "FUDGE" FACTORS IN A HAPPY
COMBINATION.
Every so often the stars occasionally do, "line up," at least for a
while.
BUT STILL, THE ROOF IS ON FIRE IN OUR BELOVED HOUSING SECTOR;
REITS CONTINUE TO PLUNGE; NO MATTER THAT THE CURRENT
ALLEGED "GOOD ECONOMY" SHOULD BE GOOD FOR REAL ESTATE TRUSTS TOO.
DON'T YA THINK?
Or, is all this higher rates sweetness and light only good for those
NAZZ small cap hotties?
And last, and possiblity most important;
IF YOU GIVE MOM AND POP A 6% BANK CD...............?
ALL WALL STREET WILL SEE OF THE "OLD FOLKS" IS THE BOTTOMS OF THEIR
FEET!
That's right! A 6% yeild at the bank will suck money out of stocks
big time.
NEED PROOF?
JUST GIVE ME AN HONEST CD 6%, AND I'M OUTTA HERE, BABY!
Finally, while the bond market is presently raising rates.
THE FED ISN'T! AND WON'T!
I STILL HOLD TO MY CONVICTION THAT GREENSPAN WILL NEVER RAISE
RATES DURING HIS CURRENT TERM AS FED CHIEF.
WHY?
WELL, DESPITE THE RECENT "IMPLIED JOY" ABOUT THE STRONG ECONOMY AND
JOBS.
I REALLY, REALLY DOUBT THAT THE STREET CAN HANDLE TOO MUCH
HARD CORE "REALITY" AT THIS POINT;
LIKE, FOR EXAMPLE, AN HONEST TO GOODNESS RATE HIKE BY THE FED.
That just ain't gonna happen.......
So, deal with it.
P.S. On the REIT CRASH:
REITS had been soaring everyday just prior to the recent
unpleasantness. So, even now, they are only back to the levels of a
couple weeks ago.
The REIT crash is really just some old fashion profit taking, with a
little help from the momo boys on the short side. The REIT crash is
probably just about OVER-DONE, whether you look at theory or
practice.
If higher rates mean a booming economy, then the dismal rental market
should pick up. But higher rates will never be good for the NAZZ
penny stocks which rely on being "default investments" in an ultra-
low rate environment.
Monday, April 5, 2004
THE ZEN OF INVESTING, OR REIT RIOT!
A few days ago the REIT RIOT was all on the upside.
Today, REITS can't be sold fast enough!
Clearly, everyone feels that the days of ultra-low rates are over.
Income instruments are dropping like a stone.
Munis! REITS! Preferred! Junk! All are plunging today.
SHADES OF JULY, REVISITED!
But, in July there was a miraculous recovery. Will we be so lucky
this time. Maybe not. But Consider:
GREENSPAN IS UNDER ENORMOUS PRESSURE TO "NORMALIZE" RATES.
Additionally, gas is at an historic high. And, China is creating
a "giant sucking sound" in the commodities markets.
But the banks are up to their eyeballs in "carry trade" bets. And,
Fanny and Freddie are looking like star-crossed lovers these days. I
fear for the banks if the wheels come off the bond market.
OK, that's the yada yada, but what to do?
IF YOU BAIL? THE MARKET WILL STABILIZED IN A FEW DAYS AND REBOUND
NICELY. RIGHT?
AND, IF YOU DON'T BAIL? THE ENTIRE BOND MARKET WILL GO DOWN THE
TIOLET LIKE A GIANT TURD! WITH MR G WORKING THE PLUNGER!
Right now, "the system" can't really handle a BOND MARKET CRASH.
So, my hunch is that once some of the suckers have panicked again,
things will settle down. They always do.
Remember, the entire banking system is riding on this bond market,
not just your 401k.
So, those "nefarious forces" will likely be at work to "save the
banks" again
INDEED, EVEN THE CENTRAL BANKS MAY NEED SAVING!
THE BOJ MUST BE ABOUT FRANTIC NOW.
Presently, the daytraders are dumping income and buying the NAZZ
hotties. But, I'm not going down that rat hole again.
IF THE BOND KEEPS CRASHING,.....I'LL STAY COOL......AND BUY MORE
BONDS WHEN THE PRICE AND YIELD IS RIGHT!
CONSIDER:
"WHAT WOULD BOJ DO?"
Ahhhh yes,.....THE ZEN OF INVESTING!
Today, REITS can't be sold fast enough!
Clearly, everyone feels that the days of ultra-low rates are over.
Income instruments are dropping like a stone.
Munis! REITS! Preferred! Junk! All are plunging today.
SHADES OF JULY, REVISITED!
But, in July there was a miraculous recovery. Will we be so lucky
this time. Maybe not. But Consider:
GREENSPAN IS UNDER ENORMOUS PRESSURE TO "NORMALIZE" RATES.
Additionally, gas is at an historic high. And, China is creating
a "giant sucking sound" in the commodities markets.
But the banks are up to their eyeballs in "carry trade" bets. And,
Fanny and Freddie are looking like star-crossed lovers these days. I
fear for the banks if the wheels come off the bond market.
OK, that's the yada yada, but what to do?
IF YOU BAIL? THE MARKET WILL STABILIZED IN A FEW DAYS AND REBOUND
NICELY. RIGHT?
AND, IF YOU DON'T BAIL? THE ENTIRE BOND MARKET WILL GO DOWN THE
TIOLET LIKE A GIANT TURD! WITH MR G WORKING THE PLUNGER!
Right now, "the system" can't really handle a BOND MARKET CRASH.
So, my hunch is that once some of the suckers have panicked again,
things will settle down. They always do.
Remember, the entire banking system is riding on this bond market,
not just your 401k.
So, those "nefarious forces" will likely be at work to "save the
banks" again
INDEED, EVEN THE CENTRAL BANKS MAY NEED SAVING!
THE BOJ MUST BE ABOUT FRANTIC NOW.
Presently, the daytraders are dumping income and buying the NAZZ
hotties. But, I'm not going down that rat hole again.
IF THE BOND KEEPS CRASHING,.....I'LL STAY COOL......AND BUY MORE
BONDS WHEN THE PRICE AND YIELD IS RIGHT!
CONSIDER:
"WHAT WOULD BOJ DO?"
Ahhhh yes,.....THE ZEN OF INVESTING!
HELLBOY LOOSE IN SADR CITY!
Clearly something is ending in Iraq!
Probably, the coalition is going to get the war they planned on
fighting at the beginning. House to House. Street to Street. Hand
to Hand!
Any attempt to arrest the Sadr City Hellboy and his gang will likely
turn the Shia against the occupation in ominous ways.
Up to now it's been all, "bad" Sunnis and "good" Shia. Well, that's
over.
Any massacre in Falluja will cause rioting all across Iraq.
THE NEOCON MYTHOLOGY IS FALLING AWAY BY THE HOUR.
AND, IF THE US MILITARY KILLS OR CAPTURES THE SADR CITY HELLBOY?
ALL HELL WILL BREAK LOOSE.
A major turning point in the Iraq War looms. Indeed, Dubya & the
Neocons may find themselves in a situation where the war is
unwinnable.
Or, like one US General said before the war:
TELL ME HOW THIS ENDS?
Probably, the coalition is going to get the war they planned on
fighting at the beginning. House to House. Street to Street. Hand
to Hand!
Any attempt to arrest the Sadr City Hellboy and his gang will likely
turn the Shia against the occupation in ominous ways.
Up to now it's been all, "bad" Sunnis and "good" Shia. Well, that's
over.
Any massacre in Falluja will cause rioting all across Iraq.
THE NEOCON MYTHOLOGY IS FALLING AWAY BY THE HOUR.
AND, IF THE US MILITARY KILLS OR CAPTURES THE SADR CITY HELLBOY?
ALL HELL WILL BREAK LOOSE.
A major turning point in the Iraq War looms. Indeed, Dubya & the
Neocons may find themselves in a situation where the war is
unwinnable.
Or, like one US General said before the war:
TELL ME HOW THIS ENDS?
Sunday, April 4, 2004
WHEELS COME OFF IN IRAQ
Only a totally "Blind Bushie" would not see that the wheels are
coming off in Iraq.
Indeed, a cynic might say that the only thing that is holding Iraq
together is the hatred that all Iraqis have for the American
occupation.
Thank goodness, I'm not a cynic.
In the Sunni Triangle the US military is promising a massacre in
retaliation for the killing of the four American contractors.
In the south the Shia radicals are battling the occupation as well.
ALL OF IRAQ IS A POWER KEG FOR THE OCCUPATION AUTHORITY!
ANY MASSIVE KILLING OF IRAQIS BY AMERICANS, OR OTHERS IN THE
OCCUPATION, COULD SEND LITERALLY MILLIONS OF IRAQI PROTESTERS INTO
THE STREETS.
Can 100,000 Americans hold off 26 million outraged Iraqis?
Well, this sounds like the stuff of fable and epic--but alas, this is
not the Golden Age of Epic Poetry.
Will the occupation "win" if it massacres 10,000 Iraqi protestors in
the next few months? Will that "do the trick?"
Or will the Americans be forced to fight their way out of Baghdad
even as they fought their way in?
Shades of "Chinese" Gordon trapped in the Sudan at Kartoum!
Shades of the "evacuation" of Siagon, from the very roof tops!
Will Dubya and the Pentagon Likud suddenly decided that, if we are
loosing anyway, let's level the Iraqi cities and kill millions on the
way out!
This is the modern Sharonist thinking in action.
This is what was called, in ancient times, a Pyrric Victory.
History, not Poetry. Redux.
coming off in Iraq.
Indeed, a cynic might say that the only thing that is holding Iraq
together is the hatred that all Iraqis have for the American
occupation.
Thank goodness, I'm not a cynic.
In the Sunni Triangle the US military is promising a massacre in
retaliation for the killing of the four American contractors.
In the south the Shia radicals are battling the occupation as well.
ALL OF IRAQ IS A POWER KEG FOR THE OCCUPATION AUTHORITY!
ANY MASSIVE KILLING OF IRAQIS BY AMERICANS, OR OTHERS IN THE
OCCUPATION, COULD SEND LITERALLY MILLIONS OF IRAQI PROTESTERS INTO
THE STREETS.
Can 100,000 Americans hold off 26 million outraged Iraqis?
Well, this sounds like the stuff of fable and epic--but alas, this is
not the Golden Age of Epic Poetry.
Will the occupation "win" if it massacres 10,000 Iraqi protestors in
the next few months? Will that "do the trick?"
Or will the Americans be forced to fight their way out of Baghdad
even as they fought their way in?
Shades of "Chinese" Gordon trapped in the Sudan at Kartoum!
Shades of the "evacuation" of Siagon, from the very roof tops!
Will Dubya and the Pentagon Likud suddenly decided that, if we are
loosing anyway, let's level the Iraqi cities and kill millions on the
way out!
This is the modern Sharonist thinking in action.
This is what was called, in ancient times, a Pyrric Victory.
History, not Poetry. Redux.
Saturday, April 3, 2004
FLY ON THE WALL
This is BOND MARKET WEEKEND around the world.
I would like to be a fly on the walll this weekend at the BOJ. They
must have lost tens of billions yesterday during the BOND CRASH!
Additionally, ALL INCOME INSTRUMENTS CRASHED WITH THE BOND!
REITS! MUNIS! CONVERTIBLES! PREFERREDS! JUNK! THEY ALL CRASHED
YESTERDAY!
Indeed, the puny wages that those 300,000 jobs put into the economy
was off set by BILLIONS AND BILLIONS IN LOST WEALTH IN THE BOND
MARKETS!
While the NAZZ small cap hotties rejoiced, THE HOUSING BUBBLE MAY
HAVE BURST BEFORE OUR EYES!
AND IT'S THE HOUSING BUBBLE THAT HAS BEEN SUPPORTING MUCH OF THIS
ECONOMY!
SO, IS IT TIME TO SAY BYE-BYE TO REFI?
Well, there is always the possiblity that the jobs number was a
fake. After all, the nabobs of positivity like Greenspan, Snow and
Dubya were absolutely desperate for a good jobs number on Friday.
Indeed, failure of the jobs number was really not an option.
So, was the jobs number just another "ad buy" by Dubya & Chums? We
shall see. There was a lot of "odd trading" prior to the release.
Hmmmmm.....where big contributors told in advance that the "fix was
in" on jobs? Well, let's hope not! The last thing we need is more
insider trading scandels, and Ms. Trial rogue juries.
ANYWAY HERE WE ARE, WHAT TO DO?
Clearly, Greenspan has been under pressure to "normalize" interest
rates. It's rather embarassing to be running around with your "one
percent solution" hanging out for too long. And, the jobs number is
just the thing to give the Fed "permission" to raise rates ASAP. I
would hope that they would go for 1/2 percent straight away,
too "just get it over with." But, there is the massive bond carry
trade to consider, and the huge housing bubble too.
KNOW THIS; MONDAY MORNING WILL BE MORE IMPORTANT TO THE FUTURE OF
THE MARKETS THAN LAST FRIDAY.
IT WOULD BE GREAT TO BE A FLY ON THE WALL....IN THE HALLS OF HIGH FINANCE OVER THIS WEEKEND.
My hunch is that the markets will normalize on Monday.
The bond will rise. Stocks will fall. And, what passes for
the "normal" equilibrium will be restored; albeit temporarily.
If, on the other hand, the bond falls big. The question will be: Is
it another "headfake" like last July. Income has been getting TOO
pricey lately. And, three or four days off "sell off" might do the
trick on the over-bought condition. But, if you sell on the fourth
day, all you'll probably do is screw up you taxes for '05, and
probably miss the bounce back.
So, I seriously doubt that Mr G wants to upset the carry trade, the
derivatives market and the housing bubble all at one time. Perhaps a
time-out is in order?
Still, there is no time like the present to correct these
persistance "bubbles" in bonds, housing, debt, and the various carry
trades and derivatives.
Because, these things will not "go away" on their own.
I would like to be a fly on the walll this weekend at the BOJ. They
must have lost tens of billions yesterday during the BOND CRASH!
Additionally, ALL INCOME INSTRUMENTS CRASHED WITH THE BOND!
REITS! MUNIS! CONVERTIBLES! PREFERREDS! JUNK! THEY ALL CRASHED
YESTERDAY!
Indeed, the puny wages that those 300,000 jobs put into the economy
was off set by BILLIONS AND BILLIONS IN LOST WEALTH IN THE BOND
MARKETS!
While the NAZZ small cap hotties rejoiced, THE HOUSING BUBBLE MAY
HAVE BURST BEFORE OUR EYES!
AND IT'S THE HOUSING BUBBLE THAT HAS BEEN SUPPORTING MUCH OF THIS
ECONOMY!
SO, IS IT TIME TO SAY BYE-BYE TO REFI?
Well, there is always the possiblity that the jobs number was a
fake. After all, the nabobs of positivity like Greenspan, Snow and
Dubya were absolutely desperate for a good jobs number on Friday.
Indeed, failure of the jobs number was really not an option.
So, was the jobs number just another "ad buy" by Dubya & Chums? We
shall see. There was a lot of "odd trading" prior to the release.
Hmmmmm.....where big contributors told in advance that the "fix was
in" on jobs? Well, let's hope not! The last thing we need is more
insider trading scandels, and Ms. Trial rogue juries.
ANYWAY HERE WE ARE, WHAT TO DO?
Clearly, Greenspan has been under pressure to "normalize" interest
rates. It's rather embarassing to be running around with your "one
percent solution" hanging out for too long. And, the jobs number is
just the thing to give the Fed "permission" to raise rates ASAP. I
would hope that they would go for 1/2 percent straight away,
too "just get it over with." But, there is the massive bond carry
trade to consider, and the huge housing bubble too.
KNOW THIS; MONDAY MORNING WILL BE MORE IMPORTANT TO THE FUTURE OF
THE MARKETS THAN LAST FRIDAY.
IT WOULD BE GREAT TO BE A FLY ON THE WALL....IN THE HALLS OF HIGH FINANCE OVER THIS WEEKEND.
My hunch is that the markets will normalize on Monday.
The bond will rise. Stocks will fall. And, what passes for
the "normal" equilibrium will be restored; albeit temporarily.
If, on the other hand, the bond falls big. The question will be: Is
it another "headfake" like last July. Income has been getting TOO
pricey lately. And, three or four days off "sell off" might do the
trick on the over-bought condition. But, if you sell on the fourth
day, all you'll probably do is screw up you taxes for '05, and
probably miss the bounce back.
So, I seriously doubt that Mr G wants to upset the carry trade, the
derivatives market and the housing bubble all at one time. Perhaps a
time-out is in order?
Still, there is no time like the present to correct these
persistance "bubbles" in bonds, housing, debt, and the various carry
trades and derivatives.
Because, these things will not "go away" on their own.
Friday, April 2, 2004
JOB NUMBERS LOOK FAKE!
The BIG JOBS NUMBER looks a little bit fake.
It's almost as if they started with a number, of say 300,000, and then just worked backward to get it.
The "jobs" were not concentrated in any one area; the whole economy is oddly "expanding" equally!!
And, the numbers people did keep manufacturing at zero, just to not make it look to phoney!
Frankly, the report, see link below, looks like someone was just "plugging in" numbers that "work!"
Worse yet, Dubya & Chums are now confidently predicting 300,000 jobs per month for the rest of the year. And, of course, I think that they will get it! If you start with the bottom line and work your way up, any number is possible!
Hmmmm....maybe Dubya's labor people are using Denny & Kenny's accountants now? Ya suppose?
ANYWAY;
IF HAPPY DAYS CONTINUE IN THE LABOR MARKET (BY ANY MEANS NECESSARY) BEFORE THE ELECTION.
THE BOND MARKET WILL SURELY CRASH!
WELL, MR G? THE BALL IS NOW SQUARELY IN YOUR COURT!
http://www.bls.gov/news.release/empsit.nr0.htm
It's almost as if they started with a number, of say 300,000, and then just worked backward to get it.
The "jobs" were not concentrated in any one area; the whole economy is oddly "expanding" equally!!
And, the numbers people did keep manufacturing at zero, just to not make it look to phoney!
Frankly, the report, see link below, looks like someone was just "plugging in" numbers that "work!"
Worse yet, Dubya & Chums are now confidently predicting 300,000 jobs per month for the rest of the year. And, of course, I think that they will get it! If you start with the bottom line and work your way up, any number is possible!
Hmmmm....maybe Dubya's labor people are using Denny & Kenny's accountants now? Ya suppose?
ANYWAY;
IF HAPPY DAYS CONTINUE IN THE LABOR MARKET (BY ANY MEANS NECESSARY) BEFORE THE ELECTION.
THE BOND MARKET WILL SURELY CRASH!
WELL, MR G? THE BALL IS NOW SQUARELY IN YOUR COURT!
http://www.bls.gov/news.release/empsit.nr0.htm
Thursday, April 1, 2004
SOMALIAIZATION OF IRAQ
We may long for the day when Iraq was just another VietNam!
Yesterday's, brutalization of corpses by Iraqis raises the possiblity
that Iraq is becoming another Somalia!
Something about the Iraqi occupation just doesn't pass the HISTORICAL
SMELL TEST.
I have searched the historical record for another case similar to
what the US is trying to do in Iraq; with only limited success.
IN ALMOST EVERY CASE WHERE ONE COUNTRY TAKES OVER ANOTHER, THE
VICTORIOUS COUNTRY USUALLY TRYS TO FIND AN INDIGENOUS POWER GROUP TO
ASSIST WITH THE OCCUPATION.
Whether you look at Judea in the time of the Roman occupation, or the
British take over of the middle east after the Great War, THERE IS
ALWAYS AN ALLIANCE WITH A NATIVE POWER CENTER!
The Brits had their "Lawrence of Arabia." But, do the Americans yet have a "Wolfie of Arabia?" I don't think so. Something is wrong with this "occupation model." It seems designed for disaster.
DUBYA'S ATTEMPT TO COMPLETELY RE-WRITE THE HISTORY OF IRAQ AND REMAKE
IT INTO A JEFFERSONIAN DEMOCRACY ON THE WESTERN MODEL IS SIMPLY
WITHOUT PRECEDENT!
The closest example I can find is the German take over of Belgium in
1915, and we all know how that ended.
To pull off this occupation, the US would have to brutalize and
terrorize the Iraqi population in ways that have never been seen or
permitted in recent times. And, I just don't see that happening.
Additionally, why stay in Iraq now that Saddam and the WMD
are ...well, "gone?" Did we "Come for Saddam," but now
we're "Staying for the oil?" See the point?
THE OCCUPATION HAS REALLY LOST IT'S REASON FOR BEING!
IF INDEED, THERE EVER WAS A REASON FOR IT IN THE FIRST PLACE.
DUBYA SEEMS TO BE SAYING THAT WE ARE IN IRAQ NOW "BECAUSE IT'S
THERE!" AND, THAT'S WHAT'S EATING EUROLAND AND THE REST OF THE WORLD
NOW.
SADDAM IS GONE. THE WMD ARE "GONE." SO WHY STAY?
AND IF THE SOMALIAIZATION OF IRAQ GROWS?
VICEROY BREMER AND THE OTHER "SUITS" WILL NOT BE ABLE TO CONTROL IT
FOREVER.
Indeed, I have visions of the FINAL EVACUATION OF SAIGON after
yesterday's unpleasantness.
Yesterday's, brutalization of corpses by Iraqis raises the possiblity
that Iraq is becoming another Somalia!
Something about the Iraqi occupation just doesn't pass the HISTORICAL
SMELL TEST.
I have searched the historical record for another case similar to
what the US is trying to do in Iraq; with only limited success.
IN ALMOST EVERY CASE WHERE ONE COUNTRY TAKES OVER ANOTHER, THE
VICTORIOUS COUNTRY USUALLY TRYS TO FIND AN INDIGENOUS POWER GROUP TO
ASSIST WITH THE OCCUPATION.
Whether you look at Judea in the time of the Roman occupation, or the
British take over of the middle east after the Great War, THERE IS
ALWAYS AN ALLIANCE WITH A NATIVE POWER CENTER!
The Brits had their "Lawrence of Arabia." But, do the Americans yet have a "Wolfie of Arabia?" I don't think so. Something is wrong with this "occupation model." It seems designed for disaster.
DUBYA'S ATTEMPT TO COMPLETELY RE-WRITE THE HISTORY OF IRAQ AND REMAKE
IT INTO A JEFFERSONIAN DEMOCRACY ON THE WESTERN MODEL IS SIMPLY
WITHOUT PRECEDENT!
The closest example I can find is the German take over of Belgium in
1915, and we all know how that ended.
To pull off this occupation, the US would have to brutalize and
terrorize the Iraqi population in ways that have never been seen or
permitted in recent times. And, I just don't see that happening.
Additionally, why stay in Iraq now that Saddam and the WMD
are ...well, "gone?" Did we "Come for Saddam," but now
we're "Staying for the oil?" See the point?
THE OCCUPATION HAS REALLY LOST IT'S REASON FOR BEING!
IF INDEED, THERE EVER WAS A REASON FOR IT IN THE FIRST PLACE.
DUBYA SEEMS TO BE SAYING THAT WE ARE IN IRAQ NOW "BECAUSE IT'S
THERE!" AND, THAT'S WHAT'S EATING EUROLAND AND THE REST OF THE WORLD
NOW.
SADDAM IS GONE. THE WMD ARE "GONE." SO WHY STAY?
AND IF THE SOMALIAIZATION OF IRAQ GROWS?
VICEROY BREMER AND THE OTHER "SUITS" WILL NOT BE ABLE TO CONTROL IT
FOREVER.
Indeed, I have visions of the FINAL EVACUATION OF SAIGON after
yesterday's unpleasantness.
THE GAS LIE!
During the recent run-up in gas prices, there are persistant stories
about how gas doesn't count as much now as in the 1970's. The idea
being that the US economy is more "diversified" now and gasoline just
isn't the same as in the 1970's.
But consider:
If gasloine prices today where adjusted for inflation!
Gas would be selling for about $2.90 per gallon! In other words you
gotta compare apples to apples here. In truth, gas is much much
cheaper now than it ever was in the 1970's, so we can not say that
it's a LESSER PART of the total economy USING CURRENT DOLLAR PRICING.
The point:
WELL, WHEN GASOLINE HITS $2.90 PER GALLON, THEN AND ONLY THEN WILL WE SEE HOW IT EFFECTS THE ECONOMY!
THEN AND ONLY THEN CAN WE SAY; "GAS DOESN'T COUNT AS MUCH TODAY AS BACK IN THE 70'S!"
MY HUNCH IS THAT GAS AT AN INFLATION ADJUSTED $2.90 WOULD HAVE
EXACTLY THE SAME EFFECT ON TODAY'S ECONOMY AS THAT EQUALIZED PRICE LEVEL HAD ON THE 1970'S ECONOMY.
The notion that, GAS DOESN'T COUNT AS MUCH TODAY, is just another big lie!
But, God help us if this theory is ever PUT TO THE REAL TEST!
about how gas doesn't count as much now as in the 1970's. The idea
being that the US economy is more "diversified" now and gasoline just
isn't the same as in the 1970's.
But consider:
If gasloine prices today where adjusted for inflation!
Gas would be selling for about $2.90 per gallon! In other words you
gotta compare apples to apples here. In truth, gas is much much
cheaper now than it ever was in the 1970's, so we can not say that
it's a LESSER PART of the total economy USING CURRENT DOLLAR PRICING.
The point:
WELL, WHEN GASOLINE HITS $2.90 PER GALLON, THEN AND ONLY THEN WILL WE SEE HOW IT EFFECTS THE ECONOMY!
THEN AND ONLY THEN CAN WE SAY; "GAS DOESN'T COUNT AS MUCH TODAY AS BACK IN THE 70'S!"
MY HUNCH IS THAT GAS AT AN INFLATION ADJUSTED $2.90 WOULD HAVE
EXACTLY THE SAME EFFECT ON TODAY'S ECONOMY AS THAT EQUALIZED PRICE LEVEL HAD ON THE 1970'S ECONOMY.
The notion that, GAS DOESN'T COUNT AS MUCH TODAY, is just another big lie!
But, God help us if this theory is ever PUT TO THE REAL TEST!
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