October 25, 2010 by Bill Cara
Morning Call [6:15am ET] I campaign for social equity, which simply means being fair and honest to our brothers and sisters, the common man. Social equity is not socialism. In fact, it is anything but.
The communiqué of the G-20 monetary authorities has been published. To me, it represents socialism. The world has gone mad if it thinks that public-private partnerships result in anything more than what can be encapsulated by a single word.
Can you say Zimbabwe?
Beyond some vague talk, the G-20 sums up, for those who don’t understand where these leaders of the financial world are taking us, thusly:
To build a stronger global financial system, we have agreed to prioritize the following issues on the agenda for the Seoul Summit:
•Welcome and commit to fully implement within the agreed timeframe the new bank capital and liquidity framework drawn up by the Basel Committee and the Governors and Heads Of Supervision.
•Endorsement of the FSB’s recommendations to increase supervisory intensity and effectiveness.
•Endorsement of the policy framework, work processes and timelines proposed by the FSB to mitigate the risks posed by Systemically Important Financial Institutions and address the ‘too big-to-fail’ problems.
•Commitment to implement all aspects of the G20 financial regulation agenda, in an internationally consistent and non-discriminatory manner, including the commitments on OTC derivatives, compensation practices and accounting standards and FSB principles on reducing reliance on credit rating agencies.
•Further work on macro-prudential policy frameworks, including tools to help mitigate the impact of excessive capital flows; the reflection of the perspective of emerging market economies in financial regulatory reforms, including through increased outreach; commodity derivative markets; shadow banking; and market integrity.
•Pursue our work decisively to tackle Non-Cooperative Jurisdictions.
There are words about financial regulatory changes, Non Cooperative Jurisdictions and global consultative mechanisms, but the concluding paragraphs, however, show how these people have been lining up their ducks:
10. Recognizing the importance of enhancing public-private partnership to promote economic growth beyond the crisis, we welcome the work done by the 12 Seoul G20 Business Summit Working Groups.
11. We thanked Korea for hosting the Finance Ministers and Central Bank Governors meetings this year and welcomed France as chair in 2011.
The world has moved from the wastage of the Non-Governmental Organization (NGO) to the utter folly of Public-Private Partnerships. A free and independent capital market system is now dead, a relic of past generations, conquered by socialists. The French must be proud. I am appalled.
This is the place to which these people have taken us:
CIA World Factbook: The government of Zimbabwe faces a wide variety of difficult economic problems. Its 1998-2002 involvement in the war in the Democratic Republic of the Congo drained hundreds of millions of dollars from the economy. The government’s land reform program, characterized by chaos and violence, has badly damaged the commercial farming sector, the traditional source of exports and foreign exchange and the provider of 400,000 jobs, turning Zimbabwe into a net importer of food products. The EU and the US provide food aid on humanitarian grounds. Until early 2009, the Reserve Bank of Zimbabwe routinely printed money to fund the budget deficit, causing hyperinflation. The power-sharing government formed in February 2009 has led to some economic improvements, including the cessation of hyperinflation by eliminating the use of the Zimbabwe dollar and removing price controls. The economy is registering its first growth in a decade, but will be reliant on further political improvement for greater growth.
And this is the currency we will soon all be using:
Ask yourself why the capital markets no longer operate on the basis of traditional corporate fundamentals, but look no further than the Sovereign Wealth Fund.
Those who create the wealth needed to grow prosperity for the common man, i.e., private sector capitalists and entrepreneurs, have been replaced by those people and organizations that represent the wealth-transfer machine: the public-private partnerships, like the Fannie Maes and Freddie Macs.
The world has gone mad. The rest of us have turned to precious metals.
This long-term chart of $GOLD shows that the new normal for the RSI-7 is the 70 line, with prices oscillating between 50 and 90 almost all the time.
For this you can thank France and China, Sovereign Wealth Funds, NGO’s, and Public-Private Partnerships.
Sadly almost 25% of the workforce in North America and Europe today is unemployed or vastly under-utilized, waiting for social support from government.
This is no way to live; it is wrong.
The answer, my friends, is NASDAQ, the securities exchange purpose-built for the world’s ultimate network of wealth-creating machines.
Beginning this week, I will be writing a weekly column for the NASDAQ Community, showing participants how I use the tools and resources of this rich site to build my own portfolios, starting with the NASDAQ 100 and the NASDAQ China-Hong Kong listed companies.
Government and central bankers are not the answers to our problems; they are the source of them. It’s up to us to make it on our own.
Our grandchildren, like baby Caitlin, are counting on us.
How cute is that?
Caitlin’s parents, Will and Fiona, celebrating my son’s 33rd birthday (coming up Tuesday).
Catlin woke up to enjoy the party with her aunt, my daughter Stefanie.
It’s all about what we can do for the young people. Have a good day.
Catch of the Day
Good afternoon. Vad here. [12:50pm ET]
Let’s touch on the method of playing reversal (yes, again). In this particular case, there are are two concepts helping with structuring the play. First is lower highs – you can see first top formed at 39.88, then lower ones at .84 and .77. Next step is finding a trigger for entry. This is where old principle of “former resistance becoming new support” comes in play (attendees of Bahamas conference will remember the detailed explanation how and why it works). You can see 39.70 resistance formed earlier in the morning, and you can see how this level becomes a support of the descending triangle shaping up after the peaking out. Break of this support signals short entry. Chart shows the drop for 1:3 risk/reward where we closed the trade; stock proceeded to slightly more than 1:4 after that.
Once again I want to reiterate the underlying philosophical principle of finding the reversal trade: we do it on the right side of the actual reversal when the recognizable setup forms – as opposite to attempts to find the reversal point beforehand, on the left side.
CTA Trading Desk Post-Close Report
Good evening. Patrick here. [18:35pm ET]
The G20 weekend meeting produced nothing of substance; a vague statement implying countries should move towards market determined exchange rates and resist the temptation to competitively devalue their currencies. Traders immediately sold the greenback and bought commodities (SLV+1.58%; GLD+0.88%; USO+0.34%) feeling the Obama administration would continue to push for a lower dollar as a means to boost the economy.
Goldman Sachs sent a note to clients saying the Fed may have to take QE to a whole new level, arguing as much as 4 trillion dollars might be needed to stimulate growth. A sane person may wonder why on earth the Fed should be given the authority to print this amount of money; ever since it was created the purchasing power of the Dollar has shriveled up to next to nothing. It’s hard to see that trend meaningfully reversing anytime soon with these masters of the universe manning the controls.
Financials have been and continue to be the market’s redheaded stepchild; banks were pounded again today. Bank of America (BAC-2.40%), Wells Fargo (WFC-1.49%), and JP Morgan Chase (JPM-1.67%) have miserably underperformed the market recently as investors clearly are wondering how these institutions can grow if they are not lending. And if the banks are not lending, how are companies going to grow their business if no funds are available for expansion?
Amid all this background the little engine that could keeps chugging higher, the market ignoring bad news, using any little excuse to climb to wall of worry. Until the market does something wrong (the S&P breaks under 1150 and then 1130) expect a move up to the yearly highs of 1220, with a second target of 1250.
Have a great evening.
AttachmentSize lvs_lower_high.jpg186.93 KB Login or register to post comments Comments The AntiG20/ The Anti-Trade Submitted by 2nd_ave (4865 comments) on Mon, 10/25/2010 – 07:00 #72592
So when you see standing in Gyeongju the Group of 20 —let the reader understand— then let those who are in the markets flee to the mountains. Let no one in gold take anything out of the vault. Let no one in cash chase after the train. How dreadful it will be in those days for 401(ks)s and IRAs! Pray that your flight-to-safety will not take place in winter or on the Sabbath. For then there will be great distress, unequaled from the beginning of the world until now—and never to be equaled again. If those days had not been cut short, no one would survive, but for the sake of the elect those days will be shortened. At that time if anyone says to you, ‘Look, here is the G20!’ or, ‘There they are!’ do not believe it. For false Ministers and false Governors will appear and perform great signs and miracles to deceive even the elect—if that were possible.
Man, I think I’m just going to play the anti-trade. Go to work and turn off the tickers.
Login or register to post comments Cara 100 Ratings Changes Submitted by Bull Hunter (1528 comments) on Mon, 10/25/2010 – 08:18 #72594
No POMO Scheduled For Today.
10:00 – Existing Home Sales
Cara 100 Earnings:
TXN reports after the close.
MSFT – Downgraded to Market Perform @ FBR citing a slower than expected enterprise PC refresh cycle and greater adoption of tablet computers. The firm dropped its price target for shares to $27 from $32.
SU – Suncor initiated with a Neutral at JP Morgan. Target C$38.
“Your merchants have multiplied until they outnumber the stars and like locusts strip the land and then fly away…Your leaders and officials are asleep, O King of Assyria, and your people are scattered and lost with no one to look after their interests. Your injuries cannot be healed and your wounds are fatal. When the world sees your decline they will rejoice that justice has been done. Your cruel evil has been felt by people everywhere who have suffered at your hands.” Nahum 3:16-25
Login or register to post comments The funky red warning windows continue Submitted by Les (3594 comments) on Mon, 10/25/2010 – 08:14 #72595
The window detailing problems when viewing the WIR was particularly impressive – see attached. Still some bugs to work out. Not a problem though – we’re getting our daily dose of the Cara team so all is well. cheers.
AttachmentSize screenhunter_01_oct._25_08.04.gif 121.63 KB Login or register to post comments Stiglitz on the subprime debacle Submitted by Grym (2669 comments) on Mon, 10/25/2010 – 08:25 #72596
I found this interview with Stiglitz to be an interesting overview of the subprime mortgage drama we are experiencing.
It’s a very clear and important explanation of the terrible practices which were allowed to evolve over a decade or more. We are not close to repairing the damage or preventing more damage in the future.
It is about 20 minutes (he’s a slow talker), the printed summary is pretty good, but leaves out some important issues.
Just one of his points not in he summary:
His view is that the corporate executives control the corporations and the corporations can give political funds is misused in benefiting the corporate executives themselves is key factor in what happened and is still happening, IMO.
The effect was evident at some of the local companies who I did work for.
Example: Repeal of Glass-Steagall Act.
Another: The 2005 Banking Law changes — creating indentured servants of borrowers
Login or register to post comments poisoned well Submitted by davefairtex (2417 comments) on Mon, 10/25/2010 – 08:38 #72598
Charles Hugh Smith wrote a nice column today which is right along the lines of what Bill is saying about social equity. Namely, why rule of law (and prosecution of fraud) is required to retain investor trust and participation.
“When financial markets have become riddled with fraud, embezzlement and corruption that goes unpunished, then institutional players will avoid that market as crooked: the well has been poisoned.
Without institutional trust and participation, the market then withers on the vine– exactly what has happened to the U.S. mortgage securities market. The market for mortgage-backed securities has vanished, except for one player: the Federal Reserve, which has bought a staggering $1.2 trillion in the past 18 months to create the facsimile of an active market.
The well has been poisoned. The only mortgages being traded are those 100% guaranteed by the U.S. government: in effect, the risks intrinsic to a corrupted market have been shifted to the taxpayers, while the criminals who profited from the fraud and embezzlement got away scot-free.”
Login or register to post comments Hussman Takes On Bernanke Submitted by Bull Hunter (1528 comments) on Mon, 10/25/2010 – 08:38 #72599
“At present, however, the governors of the Fed are creating massive distortions in the financial markets with little hope of improving real economic growth or employment. … The Fed is pushing on a string.”
Login or register to post comments Repeal of the mortgage interest tax deduction? Submitted by 2nd_ave (4865 comments) on Mon, 10/25/2010 – 08:58 #72601
Any comments, loannetter?
Login or register to post comments Cara 100 Update Submitted by Bull Hunter (1528 comments) on Mon, 10/25/2010 – 09:01 #72602
BUCY – PT Lowered from $82 to $78 @ RBC. Outperform
MSFT – Microsoft downgraded to Sector Perform from Outperform at PacCrest.
Pacific Crest downgraded Microsoft on concerns the company’s move into cloud computing could hurt margins and the increase in smartphone devices could to diminish its PC dominance. Note shares were also downgraded this morning at FBR.
Login or register to post comments Twiggs – Inflation fueled rally Submitted by Les (3594 comments) on Mon, 10/25/2010 – 09:24 #72603
Login or register to post comments On the way to socialism Submitted by Olaf (89 comments) on Mon, 10/25/2010 – 09:25 #72604
Another fantastic idea is the 4% of GDP limit on surpluses, a limit on the money flow of millions of independent people and companies. How does Teflon Tim want the IMF to monitor and enforce this limit?
Login or register to post comments Dudley vs The People aka Refusing to Accept the Reality Submitted by Bill Cara (1855 comments) on Mon, 10/25/2010 – 09:29 #72605
BP’s new Chief Executive Bob Dudley on Monday launched a robust defense of his company’s response to the Gulf of Mexico oil spill this summer, accusing the media and some in the oil industry of fear-mongering and a rush to judgment that exacerbated the crisis.
Mr. Dudley also reaffirmed that BP won’t quit its businesses in the U.S. and intends to keep drilling in deep water in the Gulf of Mexico despite the damage to its reputation. “I didn’t become chief executive of BP in order to walk away from the U.S.,” he said. “BP won’t be quitting America. There is too much at stake, both for BP and the U.S.”
The U.K.-based oil major’s new boss, giving his first speech on the company’s home soil, said he was shocked by the “protracted media and political firestorm” the oil spill ignited, which at its height “threatened the very existence of our company.”
As I see it, these b.s. artists are all the same. When they don’t like the fact the people refuse to fall in line, marching to their drum, they call us “fear mongers”.
Apparently, Dudley don’t know. The people will make the ultimate decision.
Login or register to post comments Re: poisoned well Submitted by lessmore (175 comments) on Mon, 10/25/2010 – 09:42 #72606 (in reply to #72598)
“When financial markets have become riddled with fraud, embezzlement and corruption that goes unpunished … the well has become poisoned”
Thanks to the Tea Party funders the public’s anger has been to a large extent redirected against government generally. For the moment, the anger has become ineffective. The anger will not promote change that will benefit the public.
Financial market fraud, embezzlement and corruption will not only go unpunished, it will be allowed to continue. The public is not so angry at them anymore. Instead, they are very angry at public office holders. They are being led to falsely believe that their vote will achieve change (whatever that means). There was a time when voting meant change, but no longer. These are dangerous times when the voting booth will not produce changes which the public desires.
An improved market can only be achieved by allowing the public to maintain a focused anger against crooked practices. If such focus were present it would compel the punishment of the crooks. I do not believe it is present anymore.
Foreclosuregate illustrates how easily criminal acts that should be prosecuted can be recast as clerical errors that should be legislatively corrected. The propagandists do their jobs too well.
Login or register to post comments Shorts Need To Say ‘Uncle’ Submitted by 2nd_ave (4865 comments) on Mon, 10/25/2010 – 09:54 #72607
Otherwise they’re just adding fuel to the fire.
Login or register to post comments TEN possible breakout Submitted by London (181 comments) on Mon, 10/25/2010 – 09:58 #72608
nice chart set up here.
Login or register to post comments Cara 100 Update (Final) Submitted by Bull Hunter (1528 comments) on Mon, 10/25/2010 – 10:03 #72609
BUCY – estimates, target reduced at Goldman. Shares of BUCY now seen reaching $83. Estimates also lowered, because of lower near-term orders. Buy rating.
CCL – Upgraded at Barclays. CCL upgraded to Overweight from Equal Weight. Favorable industry mix shift to Europe in 2011. Price target raised to $52 from $43.
EXC – estimates increased at UBS through 2011. Company is executing well in a difficult environment. Neutral rating and $41 price target.
RCL – Upgraded at Barclays to Overweight from Equal Weight. Favorable industry mix shift to Europe in 2011. Price target boosted to $46 from $36.
SLB – estimates upped at UBS through 2011. Offshore exploration should pick up and boost North American margins. Buy rating and $86 price target.
Login or register to post comments Re: Shorts Need To Say ‘Uncle’ Submitted by teamonfuego (2248 comments) on Mon, 10/25/2010 – 10:03 #72610 (in reply to #72607)
2nd – I wonder when bears/skeptics will learn…at 1,250? The Dow has already broken May highs.
Login or register to post comments Re: Shorts Need To Say ‘Uncle’ Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 10:08 #72611 (in reply to #72610)
teamonfuego – at 1,250 if we see it this year I will probably learn that the dollar is on its way to being useless. I’m a seller at 1,200 in the short term until we break through.
Login or register to post comments Sept. Existing Home Sales Climb 10% Submitted by Bull Hunter (1528 comments) on Mon, 10/25/2010 – 10:09 #72612
Login or register to post comments equities strong today Submitted by davefairtex (2417 comments) on Mon, 10/25/2010 – 10:10 #72613
I’m seeing a strong equity market today. The initial move up was caused by the buck’s drop in asian trading, but now with the buck moving sideways this morning, the S&P just kept moving up and up. I think part of the reason why is because perhaps half the sector funds are breaking out and making new highs – likely individual stocks are making breakouts, resulting in a bunch of short covering across the market.
I’ve done my part – I covered my FXY short after the yen broke out this morning. Now the Yen will probably drop like a stone. 🙂
Login or register to post comments Re: equities strong today Submitted by jack black (920 comments) on Mon, 10/25/2010 – 10:25 #72614 (in reply to #72613)
tell me about it. My shorts (DE, DBA and QQQQ) were stopped today. Fortunately, it was a small position only. I was lucky I covered all my SLV/SLW/GLD shorts and sold the UUP calls on friday. I just did not like how dollar was struggling while it should have been rebounding nicely from very oversold position.
Is today an opening salvo in another dollar leg down?
If so, I need to redeploy in GLD/miners, etc.
Edit: here is a conundrum, why TBT is down on such a day?
Login or register to post comments Re: Shorts Need To Say ‘Uncle’ Submitted by Vadym Graifer (1559 comments) on Mon, 10/25/2010 – 10:36 #72615 (in reply to #72610)
I wonder when bears/skeptics will learn
If I may chime in… to me, it’s not even about shorts/bears – it’s about reversal catchers that want to trade on the LEFT side of the reversal instead of waiting for the RIGHT side. In even broader sense, it’s about attempts to predict vs. waiting for confirmation. Same thing happens in downtrend with all the bottom fishers.
If 400 years of trading wisdom showed some “set in stone” things, impossibility to catch exact reversal is one of them. Necessity of applying stops is another. Stubborn refusal of trading masses to do either is third.
Login or register to post comments Re: Shorts Need To Say ‘Uncle’ Submitted by jack black (920 comments) on Mon, 10/25/2010 – 11:00 #72616 (in reply to #72611)
Yes, you were entirely correct on your bullish posture. I’m also bull, but was bearish short term. I made some decent money shorting PM last week however. Now, I need to figure out what to do with the cash in all accounts, as dollar doesn’t seem safe investment.
Edit: seeing how TBT went down and UUP is climbing back, I reopened my SLV/SLW shorts, small position this time.
Login or register to post comments Re: Shorts Need To Say ‘Uncle’ Submitted by gforce (400 comments) on Mon, 10/25/2010 – 10:51 #72617 (in reply to #72611)
“I’m a seller at 1,200 in the short term until we break through.”
I may not be a seller since selling would in fact be taking on a new position, but can we break through to the other side and will that magnificent force similar to “collective consciousness” be prominent or vacillating in the background:
Login or register to post comments Jan Hatzius at GS forecast on QE2 Submitted by JimG (48 comments) on Mon, 10/25/2010 – 11:09 #72618
Jan Hatzius at GS forecast on QE2 this AM. The scuttlebutt has been $500B or so in $100B a month dribs and drabs. He says(and GS a primary dealer with the Fed) $2Trillon. Blow that bubble up, and whatever you do don’t sell your bonds yet.
Login or register to post comments Re: Shorts Need To Say ‘Uncle’ Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 11:10 #72619 (in reply to #72617)
Great post. The same thing has happened with computer operating systems. You can’t improve very much in speed when it takes .5 seconds to open a program or .25 seconds.
My trades right now are long but currently in cash because I took profits this morning. Looking to buy them back when I see some strength. I don’t expect us to close too high today. Probably close tomorrow at 1,200 S&P.
Login or register to post comments Currency wars,POMO and investing… Submitted by prodisc (22 comments) on Mon, 10/25/2010 – 11:23 #72620
interesting video. Sounds like a house of cards to me..
Login or register to post comments LIke MOTR Submitted by London (181 comments) on Mon, 10/25/2010 – 11:26 #72621
and AUMN given last week, this QLIK can run quick as well.
Login or register to post comments G20 Geithner Replay Submitted by Dr. Strangelove (814 comments) on Mon, 10/25/2010 – 11:28 #72622
Here’s actual footage of Geithner outlining the U.S. position on currencies to the G20 this weekend.
Login or register to post comments Re: Hussman Takes On Bernanke Submitted by davefairtex (2417 comments) on Mon, 10/25/2010 – 11:29 #72623 (in reply to #72599)
One very interesting bit from Hussman, RE: gold:
“if one examines economic history, one quickly discovers that … negative real interest rates are associated with lower velocity of commodities (hoarding). Look at the price of gold since 1975. When real interest rates have been negative (measured as the 3-month T-bill yield minus CPI), gold prices have appreciated at a 20.7% annual rate. In contrast, when real interest rates have been positive, gold has appreciated at just 2.1% annually.
The tendency toward commodity hoarding is particularly strong when economic conditions are very weak and desirable options for real investment are not available. When real interest rates have been negative and the Purchasing Managers Index has been below 50, the XAU gold index has appreciated at an 85.7% annual rate, compared with a rate of just 0.1% when neither has been true.”
Your mileage may vary, but its an interesting data point.
Login or register to post comments Re: Jan Hatzius at GS forecast on QE2 Submitted by gforce (400 comments) on Mon, 10/25/2010 – 11:43 #72624 (in reply to #72618)
One has to ask…will the added yeast leaven the whole loaf as it were to play along with an apparent theme emerging recently at this blog; further, simply at what point, ala Occam’s razor, has this non fresh “transparency” already discounted and provided cover for what unfolds?
Login or register to post comments Re: equities strong today Submitted by Grym (2669 comments) on Mon, 10/25/2010 – 11:55 #72625 (in reply to #72614)
“here is a conundrum, why TBT is down on such a day?”
I can only speak for myself. TLT is up and my guess is that a lot of us expect rates to hold or fall due to fear. Fears induced by market trend over the last decade, big equity losses within the last couple of years, job loss or possibility of immanent loss, housing mess.
In general a loss of confidence in long held beliefs and government interference most recently.
FD: I have been trading in and out of TLT for about two years and recently started buying back after the last small profit taking in September. Also holding 10-year zeros since January.
Login or register to post comments TZA here Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 11:57 #72626
Just a day trade with tight stop. See if it pays for Longhorn tonight.
Login or register to post comments Re: Hussman Takes On Bernanke Submitted by Bill Cara (1855 comments) on Mon, 10/25/2010 – 11:58 #72627 (in reply to #72623)
Some people call it hoarding, which has negative connotations, probably introduced to the lexicon by Keynesian bankers who promoted the flow of money so they could skim several percent from every transaction.
I prefer the accurate term, investment demand, which is something that, as Hussman points out, grows quickest with collectibles such as gold when real interest rates turn negative, for whatever reason.
Login or register to post comments Re: Shorts Need To Say ‘Uncle’ Submitted by manx928 (62 comments) on Mon, 10/25/2010 – 12:04 #72628 (in reply to #72615)
“If 400 years of trading wisdom showed some “set in stone” things, impossibility to catch exact reversal is one of them. Necessity of applying stops is another. Stubborn refusal of trading masses to do either is third.”
Love it!! Wonderfully pithy and while sardonic, it’s optimistic. I have to acknowledge room for improvement in my trading behaviours, (particularly on the first part), but that makes me hopeful for even better results in the future.
Login or register to post comments INVESTING IN DARKNESS Submitted by kaimu (1857 comments) on Mon, 10/25/2010 – 12:07 #72629
Here is the story of a Bloomberg financial reporter who sought transparency via the FOIA(Freedom Of Information Act) from the US Treasury under the Obama administration and died waiting … The FOIA is an insult to Americans, to WE THE PEOPLE …
“More openness concerning the causes of the crisis and the government’s response would help the economy recover”, said Joseph Mason, a finance professor at the Ourso College of Business at Louisiana State University in Baton Rouge.
“Investors who don’t have information are investors who refuse to place funds in markets,” Mason said. “If we want investment and economic growth to resume, we want to be forthright about what happened. The longer we keep investors in the DARK, the longer that low economic growth will persist.”
Investing in darkness indeed … What would help the economy to recover would be much less government and more free markets. Allow failures to fail and allow winners to win. What is wrong with that concept? The US Treasury and the US FED are standing in the way of LIABILITIES to be liable. Instead they both practice the fine art of reclassifying liabilities as assets. This the US Treasury does on a daily basis. As I call it … PRICE FIXING 101. They are attempting to PRICE FIX the entire World and every market they deem crucial to retaining their monopolistic powers over money and politics.
Citigroup’s Largest Shareholder
That left Citigroup, in which the U.S. government was the largest shareholder as of Oct. 1, according to regulatory filings. Taxpayers’ stake, 12.4 percent, was three times the second-largest investor’s.
In the 560 pages of e-mails exchanged in the last two months of 2008 and January 2009, Treasury employees and their colleagues at the Federal Reserve Bank of New York discuss with attorneys the department’s $20 billion investment in New York- based Citigroup and the $301 billion in guarantees. Both followed an initial $25 billion investment in Citigroup through the Troubled Asset Relief Program in October 2008.
The Treasury Department also released 169 pages that included a “Securities Purchase Agreement” between the bank, the agency and the Federal Deposit Insurance Corp. The document had previously been disclosed in a Jan. 16, 2009, Citigroup regulatory filing — almost two weeks before Pittman sent his request.
The department held back 866 more pages, saying each was exempt from disclosure on one of four grounds: trade secrets, personnel rules and practices, memos subject to attorney-client privilege and violations of personal privacy.
Treasury also cited the trade-secrets exemption in responding to a separate, similar FOIA request by Bloomberg News for details about Citigroup’s segregated bad assets. In that response, 73 of 104 pages were completely blacked out except for headings. Only six pages — the cover, contents, a boilerplate list of legal disclosures and a paragraph titled “FOIA Request for Confidential Treatment” — were free of redactions.
The department’s reply to Pittman’s request will count statistically as a “partial response,” in government reports, said Hugh Gilmore, Treasury’s FOIA public liaison. The response “adhered to the rules, regulations, U.S. attorney general guidance and relevant case law that govern FOIA,” Steven Adamske, a Treasury spokesman, said in an e-mail.
This is yet more testament as to why neither the government or the US FED have a place in capital markets. In my mind one of the most important and urgent goals for Americans would be to eliminate the US FEDERAL RESERVE BANK before it eliminates us. It is about US vs THEM! To eliminate the US FED would be to eliminate private banks control of our money and our Congress. The US FED track record on all criteria has been abysmal at best, especially when it comes to “transparency”. With Obama in office there has been no CHANGE. Surely this article TREASURY SHIELDS CITIGROUP is testament to that fact.
When the US Military overran all of Saddam Hussein’s palaces and offices they found billions of pounds of documents that recorded the brutality of Saddam’s regime. I recall watching a news report showing Iraqis and US Army personnel rummaging through files and throwing papers around and yelling and crying at each other and I thought that would be a fair depiction of what it would look like if American Taxpayers decided one day to overrun the US Federal Reserve Bank HQ, discovering the horrors and deceit that has never seen the light of day. I am a student of the US FED transparency and I have studied many years of FOMC Meeting Transcripts and there is no real transparency unless you call “white-out” transparent and by no means does “real time” exist at the US FED as it takes five years for the dialogue of those FOMC Meeting Transcripts to be made public.
– ELIMINATE THE US FED
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 12:11 #72630 (in reply to #72629)
I hope they don’t get rid of the FED or our money would be out here for the slaughter. If you invest in dark times, you take the risk. If you don’t like the risk, wait for some clarity when they can give it. National security is at stake. They can’t have FD.
Login or register to post comments Re: Shorts Need To Say ‘Uncle’ Submitted by Vadym Graifer (1559 comments) on Mon, 10/25/2010 – 12:24 #72631 (in reply to #72628)
Today’s Catch of the Day will illustrate the concept with actual trade detailed once again. Watch for it to be posted 🙂
Login or register to post comments fools gold. Submitted by tartarin (1 comments) on Mon, 10/25/2010 – 12:25 #72632
I share James Altrucher’s reasoning that gold is only in a short term bubble.
see the article
Login or register to post comments UUP rising again Submitted by jack black (920 comments) on Mon, 10/25/2010 – 12:33 #72633
I think there maybe be another strong pop in dollar before it fizzles all together.
The dollar action is similar to June 2009 (especially RSI). Whether it will pull equities like it pulled SLV/GLD remains to be seen. Vad is right, we need confirmation before shorting equities.
Login or register to post comments Re: Hussman Takes On Bernanke Submitted by kaimu (1857 comments) on Mon, 10/25/2010 – 12:34 #72634 (in reply to #72627)
Some people call it hoarding, which has negative connotations, probably introduced to the lexicon by Keynesian bankers …
I agree Bill …
That terminology “hoarding” was widely used by FDR to describe people who were hoarding gold because they feared the USD would become worthless. Americans who were being prudent were punished by the FDR regime, the same as they are being punished by the REP and DEM political monopoly of today. In essence what FDR did was deem the US Treasury as the “HOARDER OF LAST RESORT” when he executed his Presidential Executive Order 1602 to confiscate the “people’s gold” in 1933. Apparently FDR believed that the US Treasury would make a much better long term “hoarder of gold” than the American people would, so “hoarding” was only negative when American citizens did it.
Hoarding is all relative … I suppose I could label the US Treasury as a “debt hoarder”, yet somehow this debt hoarder has the highest credit rating that rating agencies can bestow. To translate the US Treasury and the US FED are “liability hoarders” …
In essence I see gold as an unofficial “rating agency”, not sanctioned by the the money monopoly … Gold is the only honest rating agency WE THE PEOPLE have left. As the price of gold rises it is rating “liability hoarders” lower. Of course that is not welcome news to those who own the most monetary “liabilities”, which would be the global floating currency regime.
Login or register to post comments In Losing the Midterms, There May Be Winning Submitted by Dave M (214 comments) on Mon, 10/25/2010 – 12:34 #72635
Two attached articles, one from NYTimes and one from Reuters, suggesting losing both houses would help Obama’s reelection chances in 2012, as it did with Clinton in 1994 and Reagan in 1982. Apparently Reagan’s approval ratings were lower than Obama’s at this point in his presidency, yet he won by a landslide in 1984.
Login or register to post comments See Vad’s Catch of the Day Submitted by Jack Senett (66 comments) on Mon, 10/25/2010 – 12:50 #72636
New in the commentary at the top of the page.
Login or register to post comments Re: In Losing the Midterms, There May Be Winning Submitted by kaimu (1857 comments) on Mon, 10/25/2010 – 12:54 #72637 (in reply to #72635)
Yes, Dave, for my portfolio’s sake I do hope OBAMA wins, but for my nephews sake and my small business sake I hope he does not. Thanks to Obama and the G20 my junior gold portfolio is up over $98,000USD today! How do you say THANK YOU in Korean? Kamsahamnida …
In reality I have hedged my small business venture with a junior gold portfolio, something 99.99999% of farmers here in Hawaii and Texas would have never thought of … would have never thought they would have to do in their lifetimes! That’s the power of corrupt money and political monopolies!
Obama is corrupt …
Biden is corrupt …
Bush is corrupt …
Cheney is corrupt …
Bernanke is corrupt …
Greenspan is corrupt …
Lets not state the obvious!!!
Virtually the entire USA lives under a veil of corruptness due to the money we use. If you collect unemployment benefit checks you can do so only because the US Treasury can create money(debt)out of thin air. If the US Treasury was not corrupted in that manner then you would not be collecting any benefits. The same would go for banks who took TARP,whether they paid it back or not. Its all DEBT WELFARE … Its all CORRUPT!!
Login or register to post comments Obama is corrupt? Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 13:02 #72638
I’m not going to say you’re wrong. I can’t really be 100% sure either way. If he is corrupt though, why is he trying to spread healthcare to people who can’t afford it? Why is he trying to build a mosque to dispel the thought by extremist Muslims that the U.S. is evil? Why is he so for small business? These don’t sound like the work of someone who is corrupt to me.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by Craig (1450 comments) on Mon, 10/25/2010 – 13:05 #72639 (in reply to #72630)
“I hope they don’t get rid of the FED or our money would be out here for the slaughter. If you invest in dark times, you take the risk. If you don’t like the risk, wait for some clarity when they can give it. National security is at stake. They can’t have FD.”
This is a ridiculous statement.
The value of currency, like everything else, is based on supply and demand.
Since the FED and Treasury Dept. are the only entities that can change the supply, and Treasury is political and hence subject to the will of the people, then it is the FED that is the threat to our currency, not disclosure or openness.
As it is, the FED is slaughtering our money because of the lack of transparency.
There is a lot said about Keynes, but even Keynes recognized outright theft.
It is somewhat sad that in some ways he is taken out of context.
“Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
SO, WHAT IS THE TRUE THREAT TO OUR NATIONAL SECURITY?
Login or register to post comments How A Stimulus Package Works Submitted by Bull Hunter (1528 comments) on Mon, 10/25/2010 – 13:06 #72640
For your afternoon amusement:
It is a slow day in the small Saskatchewan town of Pumphandle, and streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.
A tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night.
As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Co-op.
The guy at the Co-op takes the $100 and runs to pay his debt to the local call girl, who has also been facing hard times and has had to offer her “services” on credit.
She then rushes to the hotel and pays off her room bill with the hotel owner.
The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything.
At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves.
No one produced anything. No one earned anything…
However, the whole town is now out of debt and now looks to the future with a lot more optimism. And that, ladies and gentlemen, is how a stimulus package works.
Login or register to post comments Re: Hussman Takes On Bernanke Submitted by davefairtex (2417 comments) on Mon, 10/25/2010 – 13:09 #72641 (in reply to #72627)
Bill – “Some people call it hoarding, which has negative connotations, probably introduced to the lexicon by Keynesian bankers who promoted the flow of money so they could skim several percent from every transaction.”
Most definitely “they” are trying to discourage particular behavior by denigrating it. Similarly, they also tried to discourage strategic defaults among homeowners – a practice engaged in routinely without criticism by every business whenever it seems appropriate. Isn’t it interesting that a standard business practice which, if engaged in by homeowners for the exact same reasons, would bring the system crashing down?
Likewise, it is amusing to think that a buy-and-hold investor might also be accused of hoarding stocks. “Stock hoarder!!”
Login or register to post comments Still Bullish but… Submitted by teamonfuego (2248 comments) on Mon, 10/25/2010 – 13:09 #72642
at some point a significant pullback is likely due to the heightened focus on the mid term elections. Ultimately, corporate earnings will rule the day.
I’d recommend listening to the Boyd Gaming (BYD) call, which is going on right now. The CEO’s comments are VERY positive in my opinion.
FD: Long March 2011 $8 Calls and long Jan 11 $10 calls on BYD.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 13:16 #72643 (in reply to #72639)
You sound angry. I’m just reading what you type but it at least sounds that way. If they are theives than they are signing their own death wish. I don’t think they could be that stupid. Even if they were to pull it off as theives, it’s no skin off my back. I’ll continue being happy and loving my life and they will face the wrath of God for their selfishness. Lighten up brother, let’s make some money. If they are stealing from the market, they wouldn’t exactly be stealing from the poor now would they? Let’s not assume the future but make it. Vote for me! haha just kidding.
Login or register to post comments Re: Obama is corrupt? Submitted by Dr. Strangelove (814 comments) on Mon, 10/25/2010 – 13:19 #72644 (in reply to #72638)
I can’t afford my $2,300/month healthcare for my family of three as a self-employed person with a premium still increasing over 10% per annum after the passing of the healthcare boondoggle no one even read. The healthcare bill was written by the healthcare lobby and is the epitome of corruption. As for Obama’s mosque building, why has he expanded the war in the Middle East? And, finally, Obama is not for small business when he allows the Wall St banking cabal to bankrupt the nation and shut down credit to Main Street.
You could start by reading the Constitution, Bill of Rights, and Declaration of Independence and rebuilding your belief system from there. LOL.
Login or register to post comments Re: Obama is corrupt? Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 13:23 #72645 (in reply to #72644)
I have read them. In fact I’m a veteran. Best of luck to you.
Login or register to post comments U.S. Sells 5 Year TIPS At Negative Yield Submitted by Bull Hunter (1528 comments) on Mon, 10/25/2010 – 13:26 #72646
Somebody’s a few fries short of a Happy Meal?
Login or register to post comments Re: Obama is corrupt? Submitted by Dr. Strangelove (814 comments) on Mon, 10/25/2010 – 13:38 #72647 (in reply to #72645)
Okay, jet8400, you’re a veteran and you’ve read the documents. What about allowing the Fed to destroy the U.S. currency since 1911 in deference to the Constitution preserving that control to Congress? It all starts there and Obama has enabled the Fed spending like none in his shoes that walked before him.
Semper Fi, brother. LOL.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by gforce (400 comments) on Mon, 10/25/2010 – 13:44 #72648 (in reply to #72639)
“This is a ridiculous statement.”
Thanks for standing up for the truth, its not fashionable, but needed!
Login or register to post comments Re: Obama is corrupt? Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 13:48 #72649 (in reply to #72647)
We are not privy to much of the information that the FED is. So it’s hard to judge their actions. A few years ago the FED existed and everything was quite well. Why can’t this be a future possibility? They will make mistakes, of course, we can offer advice or ridicule. That choice is the individuals. You seem to agree there are problems with healthcare. The new bill is hardly enacted and probably not in its final form. What do you propose we do instead? What exactly is wrong with the bill? If all you’re saying is you know the future, well I can’t believe that. I don’t assume you think you do.
Login or register to post comments Re: How A Stimulus Package Works Submitted by Dave M (214 comments) on Mon, 10/25/2010 – 13:50 #72650 (in reply to #72640)
Good one. Except I think Pumphandle should be in Nevada, as Saskatchewan has the healthiest economy in Canada, with unemployment at 4.9%, low debt, and they even introduced universal healthcare in 1961.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by Craig (1450 comments) on Mon, 10/25/2010 – 13:54 #72651 (in reply to #72643)
I’m not angry.
But I think you miss the point. Say you are the greatest trader on the planet and you “make some money”. Say a LOT of money.
By printing more and more “money” the FED devalues what you make and you become poorer. IE: you do not make what you think you make, yet you pay the same taxes on it, so they steal from you twice.
Then you try to purchase something, like say food with your “money” and you can only purchase a fraction of what you previously could buy with your “money”. Now they got you three times and so on and on….
Wealth is NOT money because the value of money, via the fed, fluctuates.
Wealth is actual purchasing power, not money.
Bill is trying to get you to see that by illustrating a Zimbabwe $5 million dollar note. If it takes $5 M to buy a loaf of bread then what does it mean to be a millionaire? Not much! So, in short, I think you are missing a large portion of the picture.
Login or register to post comments Start The Presses … Submitted by kim. (12 comments) on Mon, 10/25/2010 – 13:56 #72652
“What moved the markets so fast this morning
Goldman Sachs research note from Jan Hatzius and Sven Jari Stehn published Friday night said the Fed may announce $500 billion in purchases at the conclusion of the meeting, or perhaps slightly more, over a period of 6 months. The Fed could announce monthly buys of $100 billion, the analysts said.
“But as with any monetary easing or tightening campaign, the key strategic question is not the size of the first step, but how far Fed officials will ultimately need to move in order to achieve their dual mandate of low inflation and maximum sustainable employment,” the economists said — and on that front, the Goldman team came up with a $2 trillion number.
That number is higher than other estimates — Bank of America Merrill Lynch, for instance, expects $1 trillion in total Fed purchases of bonds, though a separate analysis from HSBC suggested the total plan would have to be at least $1.5 trillion to have a “meaningful” impact on the level of longer-term interest rates and economic activity.”
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 14:04 #72653 (in reply to #72651)
I do see that point. Do you think Bernanke is completely ignorant to it though? Such a fool shouldn’t be able to make it to the top. I’ll drop my head in disappointment when I see my first new crispy $5,000,000 bill but I don’t ever expect to see one.
Another thought – The market crashed in 1987 but I would be quite happy today if I had bought a ton of a strong companies shares the day before.
Login or register to post comments Re: How A Stimulus Package Works Submitted by kevin07 (29 comments) on Mon, 10/25/2010 – 14:14 #72654 (in reply to #72640)
Don’t you feel bad for the hotel owner? Maybe he can qualify for a $100 grant from the Pumphandle Department of Economic and Community Development. That way he gets the money from the taxpayer which is more analagous to how it really works.
Login or register to post comments Re: Obama is corrupt? Submitted by Dr. Strangelove (814 comments) on Mon, 10/25/2010 – 14:14 #72655 (in reply to #72649)
I propose we follow the documents: Abolish the Fed and reform the electoral process to eradicate the lobbies. Simple enough. It’s all there in the Constitution and the Declaration of Independence: Congress controls the money printing and gov’t is to be a representation BY the PEOPLE, For the PEOPLE.
The healthcare bill is too complex for anyone to understand so let’s start over by forcing the insurance giants to pay up without pre-existing conditions and coverage limits RIGHT NOW, not several years from now. No more cherry picking who gets coverage based on the sway of your union or corporation rep. Start over and simplify is the answer but no politician will go there because the unions, lobbies, and corporations control their political destiny.
I’m predicting my future with gold and silver. The global economies will be dictated by the resource of fossil fuels for centuries to come but the U.S. cannot sustain 10 Carrier Battle Groups, 12 Expeditionary Strike Groups, and all its ground forces deployed around the globe when the reserve currency of the world, the fiat based USD goes bust sometime in the near future under its unsustainable debt load. Full stop.
Login or register to post comments TZA at 22.00 Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 14:18 #72656
So far this trade has been boring. Looking at the 5 day S&P it would appear we are quite attracted to 1180 with a little bounce in either direction. Perhaps a G-20 extended weekend. If only I would have known. We’ll see if it continues. POMO go long and go golfing day tomorrow. Thank you e-trade app.
Login or register to post comments Re: Start The Presses … Submitted by Bill Cara (1855 comments) on Mon, 10/25/2010 – 14:19 #72657 (in reply to #72652)
With US election results in hand, the FOMC announces QE2 on Wednesday at 2:15pm ET. I don’t think they will make a bold statement in this report because the market is nervous, but I do think there will be a statement made regarding the problem of BAC and other banks that contributed to the crisis with mortgage-backed securities, particularly as the Fed Bank of NY is now a claimant, which by itself raises interesting conflict of interest issues.
Login or register to post comments Re: How A Stimulus Package Works Submitted by Dr. Strangelove (814 comments) on Mon, 10/25/2010 – 14:20 #72658 (in reply to #72650)
Yes and its the diversified Chilean miner known as SQM whose controlling interest is held by POT. Up 50% in just three months.
Login or register to post comments Re: Obama is corrupt? Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 14:21 #72659 (in reply to #72655)
Agree to disagree I guess. We just have different views. To me you are putting all your faith in pavement.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by Craig (1450 comments) on Mon, 10/25/2010 – 14:25 #72660 (in reply to #72653)
So tell me, what is the difference? Bernanke is one person and he is NOT the powers that be. He is a tool of the bankers and the real wealth holders of the world. He does what he’s told. He is appointed by those who do what they’re told.
In 1987 a average home was far less wooden nickels than in 2008.
My parents home in California cost $14,000 in 1959, in 1987 it cost about $250,000. In 2007 $600,000
A pick-up truck was around $8000, now $35,000.
It’s not that home values (or pu trucks) went up. It’s the value of the money we use to buy them went down, so it takes more of them to do anything.
How many ounces of gold did it take to buy the DOW in 1987 and how many now?
Everything looks like it went sky high if you price it in something that fell like lead. When you compare in real value, good for good, then the picture gets ugly.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 14:35 #72661 (in reply to #72660)
Has gold ever gone up and down in price? It’s been around longer than humans yet now it is something different. I don’t think so. Another lesson of the past is we will move forward, as we have always moved forward. You can’t account for when the next break through like the car or computer comes along and changes everything. If America is going down, I’m gladly going down with her.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by Dr. Strangelove (814 comments) on Mon, 10/25/2010 – 14:38 #72662 (in reply to #72661)
The U.S. is the best nation in the world and will be even better when she repudiates her debt.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by kaimu (1857 comments) on Mon, 10/25/2010 – 14:40 #72663 (in reply to #72653)
The problem in America is the short term tunnelvision we are all obsessed with. This is part of being caught in the Money Stockholm Syndrome, whereby no matter how much your Money Master(US FED)abuses you you are still loyal. You hoard those USD like they were the best money on Earth! How are you to know as you have known nothing different after decades of brainwashing. This is why these monopolies exist today and continue to exert their power, their will on your life.
Lets take that $5,000,000 and see what that would be worth in 1913. In 1913 USD it would be worth $228,896 by BLS standards of measuring inflation. That’s not my standards that is the official government BLS talking, so that is over a 2100% inflation rate. According to Shadow Stats the inflation rate is even higher than 2100%.
In 1913 you would be laughed at as a complete fool for spending more than $1,800USD for an average house. In 1950 you would be crazy and LOCO to pay more than $15,000 for an average house in America. Here today you are lucky if $1,800 is your annual property tax! But to pay $220,000 for an average house is acceptable today and in fact a “steal” in some cities. In San Francisco around Telegraph Hill $220,000 won’t even buy you a garage! In NYC on East 69th Street you can barely afford the front door!
From a long term “store of value” aspect you are essentially hoarding the last 4% of value left in a USD … Does Bernanke know this? Of course he does … its by design! And he and his banking cartel buddies are laughing all the way to the … uh, ummm … the BANK???? HA!!! THEIR BANK!!! HA! Its definitely not yours …
INFLATION CALCULATOR LINK: http://tinyurl.com/24kzhl7
Login or register to post comments Re: TZA at 22.00 Submitted by Les (3594 comments) on Mon, 10/25/2010 – 15:03 #72664 (in reply to #72656)
yeh TZA is marking time there pretty well. Another bet solidly in favour of the house. You’d need a damn solid reversal to get it marching forward again. I’ve learnt to give it a miss in an intraday time frame for better shorting opps.
Login or register to post comments Re: TZA at 22.00 Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 15:14 #72665 (in reply to #72664)
Yeah, well I’m trying to talk trades a little as well with all the intellectual debating going on. I hope you all are getting as much from my point of view as I get from yours. I’ll watch the close and if it’s weak I’ll go long and if it’s strong I’ll go long. Just gaming a little. I like to keep it interesting.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by davefairtex (2417 comments) on Mon, 10/25/2010 – 15:18 #72666 (in reply to #72661)
jet8400 – “If America is going down, I’m gladly going down with her.”
America, I like the concept, but the practice today is dreadfully corrupt. Giving the private banks control over our money supply invites centralization of power and influence over the political process. Concentrate all that cash flow into a couple large mega-banks, ratchet up the cash flow from financial activities in general, and the few guys at the top of those mega-banks gain effective political control over the system.
How do I know this control exists? Simple. Any bankers go to jail over the trillion dollar fraud? No? Now that’s control. Normal people who are in debt get thrown in jail for contempt of court over $5000, but Angelo Mozilo? He walks off with 2/3 of his 200 million payday leaving Fannie and Freddie with the stinking piles of manure his bank created. His “fine” was 1/3 paid for by BAC shareholders, and the remainder cost him basically one year’s stock sales.
One last point. The less you pay for money, the closer to the power center you are. Banks can borrow money from the Fed at 0%. Government 4%, Corporations, 6%. Consumers, 29%.
Who has the power again?
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 15:33 #72667 (in reply to #72666)
America is not perfect and can’t be. Earth is Earth. She can’t change over night to the better either. I still have faith in this country because I will never lose faith in God. I don’t want to come off as a spiritual ranter but I do expect “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness”.
It’s right there in the beginning. As long as we keep our faith, there is no failing. Feel free to ignore me if we do not share these same truths. I respect anyone’s freedom of speech, but expect you respect mine as well and politely say watch your mouth when you’re talking about my President.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by gforce (400 comments) on Mon, 10/25/2010 – 15:37 #72668 (in reply to #72663)
“From a long term “store of value” aspect you are essentially hoarding the last 4% of value left in a USD … Does Bernanke know this? Of course he does … its by design! And he and his banking cartel buddies are laughing all the way to the … uh, ummm … the BANK???? HA!!! THEIR BANK!!! HA! Its definitely not yours …”
I think that part of the problem is unrealized attribution during the fainting spell of America as it recovers it orientation to the light(Stockholm syndrome collapsing spell):
In psychology, heuristics are simple, efficient rules, hard-coded by evolutionary processes or learned, which have been proposed to explain how people make decisions, come to judgments, and solve problems, typically when facing complex problems or incomplete information. These rules work well under most circumstances, but in certain cases lead to systematic errors or cognitive biases.
Although much of the work of discovering heuristics in human decision-makers was done by Amos Tversky and Daniel Kahneman, the concept has been originally introduced by Nobel laureate Herbert Simon. Gerd Gigerenzer focuses on how heuristics can be used to make judgments that are in principle accurate, rather than producing cognitive biases – heuristics that are “fast and frugal”.
In 2002, Daniel Kahneman and Shane Frederick proposed that cognitive heuristics work by a process called attribute substitution which happens without conscious awareness. According to this theory, when somebody makes a judgment (of a target attribute) which is computationally complex, a rather easier calculated heuristic attribute is substituted. In effect, a cognitively difficult problem is dealt with by answering a rather simpler problem, without being aware of this happening. This theory explains cases where judgments fail to show regression toward the mean.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by davefairtex (2417 comments) on Mon, 10/25/2010 – 15:44 #72669 (in reply to #72663)
Kaimu, you tell a great story about inflation. It’s a true story too. But what’s missing in your story is motivation. Why are bankers laughing all the way to the bank? Why do they win?
Login or register to post comments Re: Obama is corrupt? Submitted by Grym (2669 comments) on Mon, 10/25/2010 – 15:47 #72670 (in reply to #72638)
“…why is he trying to spread healthcare to people who can’t afford it?”
Buying votes from minorities both legal and illegal with dollars stolen from us and future generations.
Login or register to post comments Sweet Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 15:54 #72671
Now I say thank you for the steaks and I’m hitting the course tomorrow. Good luck.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by Grym (2669 comments) on Mon, 10/25/2010 – 15:59 #72672 (in reply to #72666)
Dave and Jet,
I strongly recommend the Stiglitz interview or at least the summary statement. Note:The video is about 20 minutes but very clear on what the bankers and others did to arrange the subprime scam.
See my post 73596.
Login or register to post comments SPX print today Submitted by davefairtex (2417 comments) on Mon, 10/25/2010 – 16:03 #72673
Bearish Gravestone Doji, medium reliability bearish reversal pattern. Confirmation required.
VIX ticked up +5.75%. Someone is buying puts.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 16:10 #72674 (in reply to #72672)
They’re scamming no one but themselves. That’s where the comedy comes in. Who’s going to proudly say, “yeah I made my millions off of getting Americans kicked out of their houses”. Any smart man or woman would say back to them, “well then, you are a fool. Don’t you think they might take that as an offense requiring tough hard defense? Americans? You fool! Look at how many people you have allowed me to help. I pitty you and your clouded mind.”
Login or register to post comments here ya’ go, toby… Submitted by baz22 (1439 comments) on Mon, 10/25/2010 – 16:44 #72675
another step… http://finance.yahoo.com/news/Former-Chief-Scienti…
Login or register to post comments Day 1 success with the two Nasdaq portfolios Submitted by Bill Cara (1855 comments) on Mon, 10/25/2010 – 16:57 #72676
Beginner’s luck? The $100,000 portfolio of 20 Nasdaq-listed stocks based in China or Hong Kong closed up +2.75% at $102,753.41. Against the FXI’s gain on the day of +1.20%, that’s +1.55% positive alpha. For the $100,000 portfolio of 10 Nasdaq 100 stocks, the portfolio closed today at $100,747.03, a gain of +0.75%, which handily beat the Nasdaq 100 ($NDX), which closed up +0.44%, by +0.31% for another solid alpha result.
That was the buying algo at work.
Next, I have to finish up my algo for selling, and one for determining whether to hold cash or use it to buy the inverse. Then I intend to put real money to work for clients.
If every day could be like today, I’d be dreaming. Actually, this is serious stuff and I intend to use it to educate and inform as well as do well for clients.
Login or register to post comments Re: Day 1 success with the two Nasdaq portfolios Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 17:01 #72677 (in reply to #72676)
Nice. Congratulations on such a nice up day. Perhaps steaks for you tonight as well? Haha thanks again for providing such a great blog. Let me know if I ever come off as ranty.
Login or register to post comments I like economics and politics Submitted by Geoffrey (30 comments) on Mon, 10/25/2010 – 17:35 #72678
but I focus on the S&P 500. I like charts and the indicators and all too. But my focus is how likely is the index to test near term support. That on the weekly chart would be aound 1020. Thats only 165 points away. The weekly chart has rolled over, or allmost rolled over. Today saw a big candlestick hammer. Whats that all about? Anyway, my feeling is that we shall test the support. Maybe rally again to a high only marking time. This market likely will go sideways for a whole lot of weeks. So, I see the next swing to go down to support and rally to a lower high. Marking time. Some banks gotta fail and real estate to turn around before we are economicly viable as an economy again. Then employment must be better too. Maybe Uncle Sam will default on its debts. This mess could have us moving sideways far a looong time. Aisa, or maybe anything not US is a good place to look for growth. Grand baby. LOL…
Login or register to post comments Re: SPX print today Submitted by Dave M (214 comments) on Mon, 10/25/2010 – 17:35 #72679 (in reply to #72673)
Looks like a similar doji for COMPQ, and a number of sector ETF’s (XLI, XLK, XLV, XLY, XRT).
Login or register to post comments Re: SPX print today Submitted by davefairtex (2417 comments) on Mon, 10/25/2010 – 17:59 #72680 (in reply to #72679)
I have to say, moderate volume, and a bunch of breakouts that ended up collapsing back to their starting positions doesn’t sound bullish. But am I calling a top here? Not on your life.
One stock today that appears to have made a lower high: WFC. (I’m short WFC). It was down -1.5%, seriously underperforming SPX or even its index XLF.
In fact, look at the chart XLF:SPY. Now that’s an ugly chart. Underperformance since the April highs. Looks like perhaps traders no longer buy extend & pretend quite so much? (I’m short XLF too.)
Login or register to post comments FLASH CRASH will happen again and I AGREE… Submitted by analyst65 (224 comments) on Mon, 10/25/2010 – 18:06 #72681
Listen to this interesting interview if you have not done so already..
“Don’t Trust the Rally: “It’s Just High-Speed Guys Chasing Each Other,” Saluzzi Says
Posted Oct 25, 2010 03:28pm EDT by Aaron Task in Investing
Major averages are hovering near their highest levels since September 2008, but retail investors continue to flee the market.
Domestic equity funds have suffered outflows for 24 consecutive weeks through Friday, and over $81 billion has come out of domestic equity mutual funds year to date, according to Morningstar.
At the risk of stating the obvious, several factors explain why investors simply don’t trust the rally.
Twice bitten, thrice shy: Having been burned by the bursting of the tech stock bubble in 2000, the housing bubble and the financial crisis of 2008, investors are understandably wary of getting sucked in again. A “lost decade” for index investors hasn’t helped either.
It’s the Economy Stupid: With the “real” unemployment rate near 17%, millions of Americans simply have no money to put into the market; many are cashing out their 401(k) plans and otherwise raiding their nest eggs in an effort to stay afloat.
Given the economic backdrop, it’s no surprise many investors see the rally as being detached from reality and due only to the Fed’s easy money policies…and the promise of more!
Login or register to post comments one more thing Submitted by davefairtex (2417 comments) on Mon, 10/25/2010 – 18:08 #72682
Ok I can’t resist one more inflation/deflation comment. This from Charles Hugh Smith, who approaches the issue from a realpolitik angle:
“… extreme concentrations of wealth lead to concentrated political influence. Thus we are not dealing with a mechanical system here in which the gears of money supply, pricing of risk, and so on are mechanistically processed as if by “invisible hands;” on the contrary, the hands are quite visible, and the feedback between the political and the financial is self-reinforcing.”
In other words, assume the mega-wealthy control the process. Intervention of some kind is a given. Assume they will spend a small slice of their wealth to make sure what’s best for them comes out the business end of the sausage-making machine. What outcome would that be?
It’s certainly contrarian, I’ll give him that.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by Grym (2669 comments) on Mon, 10/25/2010 – 18:15 #72683 (in reply to #72674)
You must have had a very sheltered life. Good for you, really.
Login or register to post comments Kinross – K.TO Submitted by davler (5 comments) on Mon, 10/25/2010 – 18:19 #72684
Hi, I’m wondering if anyone is looking at Kinross here. It sold off a lot last week but hasn’t rebounded as much as the other majors. Weekly RSI(14) is 49 and daily is 41. I’m looking at this as long term hold.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by jet8400 (180 comments) on Mon, 10/25/2010 – 18:28 #72685 (in reply to #72683)
Haha thank you. Well you do have a bit of time to think while living in a steel tube. This is an investment blog. All I’m saying is invest at least a little into your eternity. I won’t talk about religion very often unless I think it need be brought up. If you have thought about it and disagree with me, then I’m sorry you feel that way. Evil takes its toll on everyone. Some give in and some don’t. One thing none of us are getting is more time than we’re alotted. So this investment is most important. Especially for you Grandpa. 😉
Login or register to post comments Re: FLASH CRASH will happen again and I AGREE… Submitted by Vadym Graifer (1559 comments) on Mon, 10/25/2010 – 18:33 #72686 (in reply to #72681)
Saluzzi from Themis Trading is speaking for bearish side and against “high-speed guys”? Wow, who would have thought. Except he and his cohorts said this 2 and 3 and 5 months ago… and if anyone went with them and stayed with them, the losses are mind boggling by now… and in their customary rant again “high speed guys” they never bothered to explain how rally could have been caused by net neutral method of trading.
Propaganda at its best.
Login or register to post comments Re: Kinross – K.TO Submitted by Dave M (214 comments) on Mon, 10/25/2010 – 18:34 #72687 (in reply to #72684)
I sold a couple months ago for 18 and change, missing the move to 19.95, but now its back where it was then. I’m not sure why, but if you look at a weekly chart of Kinross or Goldcorp they have underperformed over the past 2 years, i.e. K.TO was over $26 in early 2008; G.TO hit 52.48 in 2008 compared to $43.55 today. Its not the Canadian dollar, as it was above par when K.TO hit $26 in 2008.
Login or register to post comments Re: FLASH CRASH will happen again and I AGREE… Submitted by MoKat (214 comments) on Mon, 10/25/2010 – 18:50 #72688 (in reply to #72681)
I was looking at the ETF browser on Yahoo and surprisingly, most of the 1100 listed ETF’s are showing negative returns Year To Date, except for a few gold and resource and misc. categories. Year over Year… most are largely positive
so the healthy gains were made 4th qtr 2009. With the Dow at 11,100 you would think YTD performance would be better for at least some more mainstream funds.
Congrats Kaimu for showing how to become wealthy on junior miners. A 100K day…sweet !!
Big bets mean big returns if you’ve made the right buy. Curious … are your gains over the one year threshold
so you may take some at the 15% tax rate this year? Maybe the last for the 15 rate?
Anyone care to speculate on the Bush tax cuts… whether they get extended or not? Will the lame duck Congress leave it for the new Congress to decide and make it retroactive to 1-1-2011? Obama could veto as well.
Login or register to post comments The Art of the Un-Trade Submitted by 2nd_ave (4865 comments) on Mon, 10/25/2010 – 19:30 #72689
Nothing wrong with not trading. We all need a break now and then. I didn’t trade Friday, didn’t trade today. My last two trading days ended up ‘crisp and clean, no caffeine.’
‘Don’t you feel good about sitting out? Of course you do.’
‘Don’t you feel good betting on 7 Out? Of course you do.’
The Un-Trade- cap it off with the Un-Cola. Gimme a 7 and 7, and make it a double.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by Grym (2669 comments) on Mon, 10/25/2010 – 19:34 #72690 (in reply to #72685)
I was referring to your statement, “Who’s going to proudly say, “yeah I made my millions off of getting Americans kicked out of their houses”.”
Of course they are not about to say that in public. Between themselves they know what they have done and are most likely laughing at how so many still are clueless.
I have no intention of debating religion with you — been there, done that decades ago. (It was a long and troubling process and not done lightly.) If you are comfortable with your own religious views, good for you;-)
Login or register to post comments Re: Day 1 success with the two Nasdaq portfolios Submitted by 2nd_ave (4865 comments) on Mon, 10/25/2010 – 19:33 #72691 (in reply to #72676)
Login or register to post comments Tokyo Stock Exchange considers end to lunch break Submitted by Dave M (214 comments) on Mon, 10/25/2010 – 19:42 #72692
I wasn’t even aware of this until last week – sounds darn civilized to me. Break for some sushi or udon, a bit of saki, then back to work. This story is a few months old, but apparently a compromise has been reached and the lunchbreak will not be eliminated, just shortened to an hour.
LOS ANGELES (MarketWatch) — The Tokyo Stock Exchange is considering shortening or ending the venerable bourse’s lunchtime trading break and will seek opinion on longer trading hours, according to a published report.
Currently, the TSE closes for lunch from 11 a.m. to 12:30 p.m. local time, but the Nikkei business daily reported Friday that the bourse may end the practice after its smaller rival, the Osaka Securities Exchange, said it would discontinue lunch breaks for futures trading, starting in the January-March quarter of 2011.
With online brokerages lobbying for longer trading hours, the TSE is now considering either shortening or entirely eliminating the lunch break, the report said.
Other options include creating an after-hours session for cash stocks or expanding after-hours trade in derivatives, or even beginning the morning session earlier than its current 9 a.m. start time, it said.
The TSE will consult with investors and brokerages for their views on extending trading hours, beginning on Monday, the report said.
Currently, Asia’s top three stock exchanges — Tokyo, Hong Kong and Shanghai — all take 1-1/2- to 2-hour breaks each day. Sydney, however, mirrors most Western exchanges in trading straight through the midday.
The last time the Tokyo exchange lengthened its trading hours was in 1991, the report said. A previous push from the online-financial industry to add more trading time failed in the face of “opposition from bricks-and-mortar brokerages wary of costs from modifying computer systems and longer work hours for their employees,” the Nikkei report said
Login or register to post comments Re: Tokyo Stock Exchange considers end to lunch break Submitted by 2nd_ave (4865 comments) on Mon, 10/25/2010 – 20:08 #72693 (in reply to #72692)
Lunch? Lunch!?? And the Japanese wonder why the Nikkei has gone nowhere in twenty years?
Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by loannetter (844 comments) on Mon, 10/25/2010 – 20:43 #72695 (in reply to #72601)
Yes. A desparate bid to find roughly $240 billion to balance the budget by 2015 by CONgress. Do they really think they can attack this sacrosanct right of homeownership while rewarding themselves, HB&B and pals?
People will see right through this particular hypocricy and most likely the cuts will be around certain white collared necks.
Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by BOB 47 (95 comments) on Mon, 10/25/2010 – 21:25 #72696 (in reply to #72695)
Loannetter, I have believe these threats are bait and switch again. The real proposals won’t be as dramatic. The leaders only DAYDREAM of spending INCREASES , About that they are serious . Bob .
Login or register to post comments Gotta love GE Submitted by Luggie (246 comments) on Mon, 10/25/2010 – 21:30 #72697
Hi All – Nice article about one of my big losers through the years. I keep pulling the average cost down – did someone say that was foolish? Happy Trading
Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by loannetter (844 comments) on Mon, 10/25/2010 – 21:36 #72698 (in reply to #72696)
Bob- HA, you are probably right ’bout that! Anytime a threat about removing some sacred political cow lands, it seems to generate action for the people who oppose it (to get re-elected?)
Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by 2nd_ave (4865 comments) on Mon, 10/25/2010 – 21:50 #72699 (in reply to #72695)
You’re probably right. Any Congressman caught endorsing the largest tax break most Americans receive would soon see bumperstickers that read ‘Impeach the Deduction Sacker!’ Not quite as catchy as the one with Archibald Cox’s name on it. How about “Ded’ Sacker Walking?”
Login or register to post comments tof- This one’s for you/ Hulbert on ‘preconceived notions’ Submitted by 2nd_ave (4865 comments) on Mon, 10/25/2010 – 21:43 #72700
“here’s the conclusion on which I base my facts.”
Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by loannetter (844 comments) on Mon, 10/25/2010 – 21:57 #72701 (in reply to #72699)
LOVE “Ded’ Sacker Walking”!
How about: “DON’T BURY MY DED!”
Login or register to post comments Re: Gotta love GE Submitted by westcoaster (336 comments) on Mon, 10/25/2010 – 22:02 #72702 (in reply to #72697)
FWIW I had coffee for a friend who works for MDSI, now owned by ABB. He says the smart grid is just beginning, and GE also has huge opportunity there. There’s a boost. They are all trying to figure out how they can co-ordinate implementation amongst the big utility equipment makers of the world.
Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by 2nd_ave (4865 comments) on Mon, 10/25/2010 – 22:05 #72703 (in reply to #72701)
To ded’ is to be.
To be is to ded’.
‘Scuse me, ded’ be dead?
Login or register to post comments Re: Gotta love GE Submitted by Dr. Strangelove (814 comments) on Mon, 10/25/2010 – 22:16 #72704 (in reply to #72702)
Why would the big utilities want to co-ordinate implementation of a product, the smart grid, that will vastly reduce consumption of their product?
Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by loannetter (844 comments) on Mon, 10/25/2010 – 22:19 #72705 (in reply to #72703)
“No, the only way the mortgage-interest deduction will ever seriously be in play would be as a part of a complete overhaul of the U.S. tax code, one that would restore fairness and balance.
And that’s an endeavor we’re likely to get to about the time we land humans on Mars.”
— Steve Kerch, assistant managing editor/Mortage Market Watch
Fairness and balance. What a concept!
Login or register to post comments Buffalo Springfield/ World Series Submitted by 2nd_ave (4865 comments) on Mon, 10/25/2010 – 22:35 #72706
Where else would Neil Young’s Bridge Concert share headline space with the World Series? Where else could you catch both within a week of eachother?
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by Illini (455 comments) on Mon, 10/25/2010 – 22:37 #72707 (in reply to #72683)
Jet is an idealist and I will confess to same in other times. I can remember tuning in to early morning radio and hearing Dan Rather lambasting Nixon. Dan (CBS) was right but I thought ” Why does he persist in this incessantly against my President”. Since then I believe we have had a total collapse in true leadership. A cataclysm may be the only turning point, IMO.
As to local politics in Illinois….. Am noting that the Green candidate for Peoria based Congress from IL has qualified for the ballot automatically based on the last election. That is a first. Protest vote, which is always notable. No such luck with the Governor’s race.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by jet8400 (180 comments) on Tue, 10/26/2010 – 01:15 #72708 (in reply to #72690)
They can laugh all they want. We know a “man” who cannot stand up for his own actions, is no man at all. They are in fact the joke and will receive their due if they don’t realize their mistake and admit their guilt. Do what ever they feel is necessary to prove they truley are sorry. One of them will come to terms with that eventually. Then the snow ball starts. I’m sure they’re sleeping quite well. Must suck on the mountain right now, did you hear the wind blow? Are you sure? Glad I don’t know the feeling.
As for me, perhaps I am a captive, well I make for one happy slave. I love and am loved by many. Food for thought!
Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by davefairtex (2417 comments) on Tue, 10/26/2010 – 01:45 #72709 (in reply to #72705)
So let’s get this straight. What does a mortgage interest tax deduction actually do? Its a subsidy. Any subsidy automatically raises the price of the item being subsidized. We learned that from the recent home price bubble. Since everyone’s ability to buy the underlying item is increased, more money gets injected into the same marketplace, and prices rise. Debt levels rise too, don’t they? We saw that as well.
The net-net of this deduction is not increased housing affordability, it’s debt maximization. Home buyers end up taking out larger mortgages, because they can. And who does that benefit? Lets see, who wants you to go into as MUCH debt as possible, and stay there for as LONG as possible? Who might that be?
One interesting thing. I calculated the size of “the home mortgage deduction” just to see how much mortgage interest US taxpayers were paying. Turns out it adds up to more than state taxes and property taxes combined – about 8% of income. Federal income tax for that same group was 17%. Since money is power – cash flow is power, that slots in “the banking industry” underneath the feds but certainly above the state & local governments. And that cash flow is spread across fewer people.
And the best part? Its not even existing money the banks are lending. They created all that money from thin air! And they collect money on it (generally speaking) in perpetuity. And you, the homeowner, think you’re getting something.
If we eliminated the home mortgage deduction, people would immediately be able to afford only smaller houses. Housing prices would drop, average mortgage sizes would drop, the deflation adjustment would be staggering, and then we’d notice – no difference at all. Except for overall lower loan balances, less money going to bankers, and lower overall home prices. Ok, so all the newly-underwater existing homeowners who suffered another home price drop due to more money being sucked out of the housing market. They’d notice something.
I guarantee you, that deduction will stay, because it benefits banking, and it props up home prices. It is not going anywhere.
Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by jet8400 (180 comments) on Tue, 10/26/2010 – 01:53 #72710 (in reply to #72709)
I agree. Mortgage interest (American dream) and charity deductions are safe. The how ever many others. Maybe not so much. If people spent the time towards productively making money instead of how they can write off and so on, I think we’d be in better shape.
Login or register to post comments Re: Gotta love GE Submitted by westcoaster (336 comments) on Tue, 10/26/2010 – 02:17 #72711 (in reply to #72704)
Dr.! Surely you jest. Most of the people I know, particularly in the tech sector are not whacking the pinatta. Au contraire, they are putting their heart and soul into their work. It’s a dog eat dog world, you got to keep up, no time to dog it.
The smart grid will reduce power consumption by 7%, and there’s money in developing the devices and systems that will help us all to be more efficient in our use of power. Eg, power now has to be set to peak usage. Many of the draws are discretionary and could be programmed to run at off peak hours. A big challenge.
Login or register to post comments Re: Gotta love GE Submitted by jet8400 (180 comments) on Tue, 10/26/2010 – 02:44 #72712 (in reply to #72711)
I read somewhere, can’t remember off the top of my head exactly where but it talked about power plants near the mountains pumping water up the mountain to a tank at night and then using the hydro power to spin turbines during the day to aid in supplying the grid. So simple, yet so genius. Duke energy, I think was the company mentioned.
Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by kaimu (1857 comments) on Tue, 10/26/2010 – 03:02 #72713 (in reply to #72709)
Dave-You forgot about how this tax deduction favors the wealthy home owners as opposed to the poor homeowners and the poor who cannot even afford a house. Naturally if you have a McMansion sized mortgage you are paying more interest on your JUMBO loan …
Certain countries do not even have such deductions. I do not believe Aussies get such a deduction yet their real estate market does not seem to be suffering too much. Any Aussies out there that can verify that?
So let me get this straight … You buy a house for $250,000USD and by time you have paid off the loan in 30 years you have sunk around $550,000(6.25%) into mortgage payments of which some $300,000USD is interest. Say you are in the 25% tax bracket(average over 30 years) so you spend $300,000USD in interest to net $75,000 in tax deductions over a 30 year time period. Now add in all the property tax you will be paying for 30 years plus homeowners insurance(because you have to insure the bank’s asset against loss even if the bank has no skin in your mortgage)and add in all the costs of maintenance for 30 years. In the end the realtor takes 6%-10% off the top … Then you pray like crazy you broke even after all that … Hummmmm … what a DREAM COME TRUE! HA!!
Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by davefairtex (2417 comments) on Tue, 10/26/2010 – 03:12 #72714 (in reply to #72713)
Yes, (typically poorer) renters individually lose because of that deduction. Prices go higher, but they don’t get an offset. But the worst part is for me, the deduction amounts to a transfer of cash flow FROM the government TO the banks. All our other taxes are higher to make up for the lost money, and at the end of the day, mortgage loans are larger because of it.
If there is anything that tells me the banks are in charge in the US, its the home mortgage interest tax deduction. Notice that state taxes are also deductible. Name another expense that’s tax deductible. Your coca-cola purchases? Nope. How about your FOOD purchases? Nope. Only mortgage interest. Why is that, do you think? Who benefits?
And what is the message? “We will help you to take on more debt.”
And as Kaimu said, with higher home prices, everyone who gets a skim off home prices wins. Insurance companies, state property taxes, realtors…what’s not to like about this? This one is NEVER going to die.
Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by loannetter (844 comments) on Tue, 10/26/2010 – 03:37 #72715 (in reply to #72709)
I assure you that not everyone maxes out their mortgage debt any more than everyone maxes out their credit cards. Many people can barely afford to buy a home and the mortgage interest tax deduction is an incentive to those who might continue to rent but would benefit from the tax deduction as well as building some equity in real estate. Most W-2 waged employess have very few tax deductions which you would know if you were your average working stiff in America today.
By your reasoning we should eliminate corporate tax deductions and force businesses into smaller ventures they can ‘afford’?! These same businesses want to borrow money to do what…grow and expand their companies? EGADS!
We know the tax deduction benefits all the businesses who sell and build homes, offer loans, and all the related services to the real state industry.
Actually, Kaimu, the mortgage interest tax deduction tops out over $1M (see below) so your SUPER JUMBO types will have to find their tax breaks elsehwere like Uncle Warren
“One type of home mortgage interest tax deduction stems from the home acquisition loan which is defined as, to buy, build, or substanially improve a residence and cannot exceed $1,000,000. The other type of mortgage interest tax deduction credit stems from the home equity debt and that is defined as any debt that is other than the home acquisition debt and cannot exceed $100,000.”
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by Les (3594 comments) on Tue, 10/26/2010 – 05:07 #72716 (in reply to #72685)
Your thoughts on religion will cloud your judgement in trading for one simple reason – the expectations or idea that everyone can love each other (I’m quoting my dad here) would be catastrophic in the marketplace. This message of brotherly and sisterly love advocated by religious leaders is clearly a fantasy in the face of consternation, worry, hate, fear, greed et al. that makes up the gambit of human society.
How do you advocate buying or selling to someone if your primary concern is time alloted in this life? Would you not be taking advantage of them, or they of you? What criteria do you apply for the sale or purchase of an market based instrument? The very fact that you are here trading implies your willingness to ‘get greedy when others are fearful and get fearful when others are greedy’ to paraphrase an old hand at the game – assuming you can successfully apply these principles ** that will separate you from the herd **.
So are you one of the sheep or a wolf that can separate themselves from the herd? For it is this difference that is imperative if you are to succeed in, what I am clearly aware of now after some 3 years, the most difficult challenge I have yet faced in my life. Learning to think differently from the herd is proving to be the most liberating experience in my life.
FWIW, I have found an alternative to religion after some years of wandering, but you won’t hear me bringing up this belief system on this site:
RE your disclosure yesterday. In another life I was a grunt:
Login or register to post comments futures 4am – Asia pull back Submitted by Les (3594 comments) on Tue, 10/26/2010 – 04:27 #72717
S&P-2.10 / -0.18%
Nasdaq-3.75 / -0.18%
Dow-15.00 / -0.13%
Global markets are playing the same game that Patrick here has remarked upon. Range bound, testing the highs, reversing in the channels or zones of consolidation a lot of them are in. All waiting to see the green light given to a new thrust upwards or downwards.
Login or register to post comments Re: FLASH CRASH will happen again and I AGREE… Submitted by Les (3594 comments) on Tue, 10/26/2010 – 05:10 #72718 (in reply to #72686)
Thank you. Guys and gals, even a complete newbie like me can earn $100 a day thinking outside the box. If you wanna place yourself in the box created by every interested party in the game – the stance you take depending on your religion – then sit on the sidelines as Thetis’ boss is suggesting. Saluzzi and Roubini should get together in consultive management.
Either Saluzzi is making money as a trader – in which case he is a hypocrite confusing the public for his own agenda, or he’s losing money which makes him a lousy trader. This begets the question as to why are people asking his opinion on financial television? The moral nature of the story gives another dimension to his presence on bubblehead TV, but I’m pretty sure people have already worked out that the system is rigged. He’s not adding anything new to this story.
So, a new flash crash or a new high? Thanks to Bill’s grace everyone here should have – if one is serious about being a trader – a plan for both scenarios ready to enact as required. If you haven’t, get signed up to Vad’s crazy chat room and watch how it’s done in real time.
end of daily sermons (pun intended)
Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by davefairtex (2417 comments) on Tue, 10/26/2010 – 04:46 #72719 (in reply to #72715)
So you are agreeing with me that this is a subsidy, AND (due to the laws of supply and demand) that it is responsible for raising housing prices – effectively making housing LESS affordable. AND you are agreeing that at the end of the day, the banks collect more interest because of this.
“Many people can barely afford to buy a home and the mortgage interest tax deduction is an incentive to those who might continue to rent but would benefit from the tax deduction”
Translation: But for the deduction, many people would be priced out of the market. Thus, this subsidy enables more buyers to participate. Thus, overall BUYING PRESSURE increases, while supply remains the same. What happens when there are more buyers and same supply? Prices go up until a new equilibrium is reached. (We saw this with the home buyer bribe) So what we’ve done here is raise home prices. How has that helped the buyer again?
I suggest to you, get rid of the deduction. Home prices will DROP, bringing those prices into the range where that poor renter you want to help will then be able to afford it. His loan will be lower, his property taxes would be lower, the realtor would get less money. Who wins here? The buyer, that’s who. This renter you would like to help – you’re actually hurting him with this subsidy.
The working stiff’s marginal tax rate might be 25%. With the deduction, maybe that drops to 15%. Now take the rich guy. His MTR is 33%. Who benefits more with the home mortgage deduction again? Working stiff still has to pay higher prices, but gets less benefit from the deduction. And if his loan is small enough, he can’t even itemize, which means the deduction means nothing. He’s just like the renter, but has to deal with the higher overall prices caused by the subsidy, which benefits the rich proportionally more.
See, this is the trick they use. You think this is to your benefit, but once the system equalizes after all the subsidies are applied, the buyer doesn’t win. The bankers wins, the people with a skim off the top win, and the accountants and tax software companies win, but the buyer loses. Its a slick trick, but if you think about it from a macro perspective, you’ll see what I mean.
Still like the mortgage tax break? You must be a seller, or you must get a skim off the top. 🙂
Last point. There is a difference between home mortgage debt, which is just consumer debt, and a business loan to buy equipment, which is self-liquidating. Buying equipment makes the business able to produce more stuff (cars, ipads, etc), which means the equipment will eventually be able to pay for itself. Homes don’t do that. Homes don’t make anything, they’re just something people want – a consumer product. No different from a car, a boat, or a wristwatch.
In this country we’re subsidizing consumer debt, which increases the amount of money flowing to that sector, raising prices of the stuff in that sector. Is it any wonder we’re not manufacturing things anymore? All our money is being spent buying stuff, rather than improving the means of production. Is this really a good idea?
Login or register to post comments one last point Submitted by davefairtex (2417 comments) on Tue, 10/26/2010 – 05:11 #72720
If we didn’t have the mortgage income tax deduction, we could drop the Federal 25% bracket down to 17%, the 15% bracket to 7%, and the 33% bracket down to 25%, while keeping revenues the same. Phase this in over 10 years so people have time to adjust, and I’d say this levels the playing field between renting, owning, rich, and poor.
Its not going to happen though. Bankers, realtors, and the NAHB will scream bloody murder, forcing us to continue paying higher taxes for their benefit.
Login or register to post comments futures 5:30am – Europe consolidates following recent new highs Submitted by Les (3594 comments) on Tue, 10/26/2010 – 06:34 #72721
S&P-2.90 / -0.25%
Nasdaq-3.00 / -0.14%
Dow-19.00 / -0.17%
CAC and DAX popped in recent days and return to consolidate support. Twiggs had more to say on this buying pressure yesterday:
I recall the discussion here on cotton going parabolic. Well it ain’t finished yet:
Mind you, reversal in cotton and everything else might be in the cards now that USD/JPY b/d is showing itself to be a fakeout. A quick dive Monday morning followed by strengthening during the day and an overnight spike suggests watching for further strengthening of the $:
10 year yield continue to test resistance while 2 year yields are displaying a bullish divergence in the RSI indicator. Let’s see if the Fed loses control of short-term yields.
Yesterday’s sudden drop on no news indicates nervousness on the part of participants – JMO.
AttachmentSize ust2y.png 51.62 KB ust10y.png 22.95 KB Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by Grym (2669 comments) on Tue, 10/26/2010 – 07:03 #72722 (in reply to #72701)
“Better (in the) Red than DED!”
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by Grym (2669 comments) on Tue, 10/26/2010 – 07:15 #72723 (in reply to #72707)
How right you are. I can remember those same thoughts and feelings. I voted for Tricky Dickie 3 times. Well, against Kennedy and the others, more accurately.
Several years ago we went to the Museum of Broadcast News in the old Chicago Library and watched their debates. Kennedy essentially was saying, “Sure things are good now, but they are going to be terrible. His looks and demeanor topped Nixon, but radio polls had Nixon as the winner.
Perhaps Jet can be more optimistic because he hasn’t lived in Illinois 😉
Our list for next week looks like the “sick list” once again. Even our local sheriff race has a guy accused of sexual harassment vs the incumbent who changed the physical requirements to allow a promotion for his son.
Login or register to post comments Re: INVESTING IN DARKNESS Submitted by jet8400 (180 comments) on Tue, 10/26/2010 – 11:44 #72734 (in reply to #72716)
I have no guilt from making money in the market. If someone buys something and then sells it to me for cheaper. Well, that was their choice. I in no way swindled them to make their choices. We all sign the disclaimer when we participate in this market. It’s no ones fault if they lose money but themselves. Unless of course they’re physically forced to buy and sell to make losing trades. I don’t think this is the case.
If you’re not sure about religion, claim to be not sure. If you claim to know, you are given no mercy for ignorance. These are not my words. I would be a hypocrite if I believed we were in this burning building and I did not at least reverberate them and yell as I am walking out the door and I think you’re sleeping inside.
We are one nation under God no matter what you think and we will continue to be. If you are godless, you are the minority. Not any race or ethnicity. Why do you see our founding fathers as fools? Can’t you give any chance that perhaps these great men were right and you are the fool. 1%? Seek the truth with all your heart, mind, and soul. You’ll find it.
If the market is being manipulated as I think. It’s surely not done by me.
I am nothing special, yet I figured it out pretty easily. I am very open on here as to my thoughts and trades in the market. I don’t feel sorry for anyone who doesn’t seek and find the truth. That’s their own fault. If I let my faith effect my trades, well that’s my own. Besides, who’s to say I don’t donate the money in their name? Hmmmmm?
Login or register to post comments Re: Repeal of the mortgage interest tax deduction? Submitted by loannetter (844 comments) on Tue, 10/26/2010 – 18:06 #72819 (in reply to #72719)
We could quibble about tax breaks til the cows come home. I am not in disagreement with the very premise that our entire tax code is baffling and favors the rich while escalating prices for all.
However there is one thing we do disagree on here:
Homes do make something. They create the fertile growing ground for tomorrow’s healthy happy well adjusted human beings who might just feel a sense of community engagement and possibly fairtness toward their fellow man and grow up to make ‘things’ you like to trade.
If that is not a valuable commoditiy in this old world what is?
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