Group think of the day along with co-worker Steve ...
"Being the bear (we both are super bearish on the economy and the stock market) is a lot of fun, until you realize what happens if all of your bearishness becomes reality."
With the bear mantra in mind check out these articles...
Mambo Guru writes some powerful stuff today. I have taken out some of my favorite parts, but you really need to read the entire thing to appreciate it.
Osama is back in the news, exhorting the faithful to murder the Great Satan, which is, oddly enough, you and me. I never actually felt particularly satanic, but I always had a sneaking suspicion about my wife's family, but don't tell them I said so, because you know how they get. Probably put a spell on me or something.
But killing us? How old-fashioned! If he really wanted some modern action, he would get all the faithful to buy put options on every American security they own, then sell every security they own, have the money from the sales deposited into American banks, close out the in-the-money put options (which rose when the massive sales collapsed asset prices), and then have the faithful go to the banks and demand it all in a huge, glorious cash withdrawal.
Conceivably, such a run on the banks could crash the banking system and destroy us all without firing a shot. Of course, Bush would merely sic Janet Reno on them, who would happily kill them all and slap a little asset forfeiture action on them, so maybe the plan isn't such a hot one after all.
- The Bush tax plan is being assailed as a sop to the rich. The idea is that the rich would not use this extra after-tax money to do anything that will benefit America. So I guess the rich ARE different from the rest of us: they get to keep more of their money but they don't do anything with it! They probably don't even cash the check! The money, I guess, will just stay in a desk drawer or under the mattresses of the rich. Wow! I never knew this! I mean, I see on TV the houses and lifestyles of the rich and famous, but I never even DREAMED that they do not spend money! Even when it is handed to them!
On the other hand, so the theory goes, the poor would take that tax-cut money and buy stuff, and this consumption would benefit America. And what, exactly, would the poor buy? Stuff imported from foreign places that actually make stuff, adding to the trade deficit? The extension of this scenario is that the foreigners who make the stuff that the poor would buy would take the money and do something that would benefit America. Assuming that they aren't rich, I suppose, for as we just learned, the rich do not spend or invest money.
That the poor could actually make use of some money can be instantly deduced from the notion that they are poor, and they are poor because they have no money, and if they had some money then they would not be poor anymore. Unless they spent the money to buy stuff. And then they would be poor again. And the rich, who own the means of production and the productive assets that produce the stuff that the poor buy, would end up with the money. And because we now know that the rich do not spend the money they get, how will any of this benefit America?
And the poor will not only be poor again, but poorer still, as the tax-cuts financed by deficits, which are in turn financed by the execrable Fed creating money out of the proverbial thin air, automatically reduces the buying power of the few dollars that the poor can manage to scrape up. So, at the end of the day, and then every day for the rest of their lives, the poor are poorer, because from that moment on they will pay higher and higher prices for the few things that they can still buy, because all of that monetary inflation HAS to filter through to final prices.
And the Democrats champion themselves as the benefactors of the poor? Hahahaha! They are the ones who are destroying the poor!
The Daily Reckoning offered up this scrumptious diatribe on the "housing bubble".
"After a year of slowly moderating price increases, the cost of a home is shooting back up," USAToday replies. "The median home price in the U.S. rose at an annual rate of 8.8% to $161,600 in the 4th quarter last year. That's the biggest quarter-over-quarter increase reported since 1981. And the upward push on prices is widespread: 39 metro areas registered double-digit price growth for the quarter, triple the number of metros with such increases in 1999."
"The big jump reflects the explosive mix of tight supplies of homes for sale and mortgage interest rates below 6%, the lowest in four decades," David Lereah, chief economist at the National Association of Realtors, told McPaper.
We Daily Reckoneers have noted on occasion that throughout history, as one bubble deflates, investor fervor is often directly transferred to a new asset class...most notably real estate. With the Fed locked in low rates for a long- time, we suspect the "housing bubble" every one is so keen to talk about may have not even begun.
I have a couple other like the one on inflation and the devaluation of the dollar, one on businesses basically telling Greenspan he is full of beans by blaming the coming war with holding up the economy and an article on the increased debt of the American consumer. Oh yeah and Bush's budget raises spending 7.8% from last year and 22% from last year in 04. What a joke. Did I mention yet that the government also needs to increase their borrowing ceiling because they are smack up against. Can you imagine if they would default? I think that is enough good news for one day. At least I went long some gold today in the form of Newmont Mining. Anyone know any good commidity funds? It is time to prepare for inflation.
"Being the bear (we both are super bearish on the economy and the stock market) is a lot of fun, until you realize what happens if all of your bearishness becomes reality."
With the bear mantra in mind check out these articles...
Mambo Guru writes some powerful stuff today. I have taken out some of my favorite parts, but you really need to read the entire thing to appreciate it.
Osama is back in the news, exhorting the faithful to murder the Great Satan, which is, oddly enough, you and me. I never actually felt particularly satanic, but I always had a sneaking suspicion about my wife's family, but don't tell them I said so, because you know how they get. Probably put a spell on me or something.
But killing us? How old-fashioned! If he really wanted some modern action, he would get all the faithful to buy put options on every American security they own, then sell every security they own, have the money from the sales deposited into American banks, close out the in-the-money put options (which rose when the massive sales collapsed asset prices), and then have the faithful go to the banks and demand it all in a huge, glorious cash withdrawal.
Conceivably, such a run on the banks could crash the banking system and destroy us all without firing a shot. Of course, Bush would merely sic Janet Reno on them, who would happily kill them all and slap a little asset forfeiture action on them, so maybe the plan isn't such a hot one after all.
- The Bush tax plan is being assailed as a sop to the rich. The idea is that the rich would not use this extra after-tax money to do anything that will benefit America. So I guess the rich ARE different from the rest of us: they get to keep more of their money but they don't do anything with it! They probably don't even cash the check! The money, I guess, will just stay in a desk drawer or under the mattresses of the rich. Wow! I never knew this! I mean, I see on TV the houses and lifestyles of the rich and famous, but I never even DREAMED that they do not spend money! Even when it is handed to them!
On the other hand, so the theory goes, the poor would take that tax-cut money and buy stuff, and this consumption would benefit America. And what, exactly, would the poor buy? Stuff imported from foreign places that actually make stuff, adding to the trade deficit? The extension of this scenario is that the foreigners who make the stuff that the poor would buy would take the money and do something that would benefit America. Assuming that they aren't rich, I suppose, for as we just learned, the rich do not spend or invest money.
That the poor could actually make use of some money can be instantly deduced from the notion that they are poor, and they are poor because they have no money, and if they had some money then they would not be poor anymore. Unless they spent the money to buy stuff. And then they would be poor again. And the rich, who own the means of production and the productive assets that produce the stuff that the poor buy, would end up with the money. And because we now know that the rich do not spend the money they get, how will any of this benefit America?
And the poor will not only be poor again, but poorer still, as the tax-cuts financed by deficits, which are in turn financed by the execrable Fed creating money out of the proverbial thin air, automatically reduces the buying power of the few dollars that the poor can manage to scrape up. So, at the end of the day, and then every day for the rest of their lives, the poor are poorer, because from that moment on they will pay higher and higher prices for the few things that they can still buy, because all of that monetary inflation HAS to filter through to final prices.
And the Democrats champion themselves as the benefactors of the poor? Hahahaha! They are the ones who are destroying the poor!
The Daily Reckoning offered up this scrumptious diatribe on the "housing bubble".
"After a year of slowly moderating price increases, the cost of a home is shooting back up," USAToday replies. "The median home price in the U.S. rose at an annual rate of 8.8% to $161,600 in the 4th quarter last year. That's the biggest quarter-over-quarter increase reported since 1981. And the upward push on prices is widespread: 39 metro areas registered double-digit price growth for the quarter, triple the number of metros with such increases in 1999."
"The big jump reflects the explosive mix of tight supplies of homes for sale and mortgage interest rates below 6%, the lowest in four decades," David Lereah, chief economist at the National Association of Realtors, told McPaper.
We Daily Reckoneers have noted on occasion that throughout history, as one bubble deflates, investor fervor is often directly transferred to a new asset class...most notably real estate. With the Fed locked in low rates for a long- time, we suspect the "housing bubble" every one is so keen to talk about may have not even begun.
I have a couple other like the one on inflation and the devaluation of the dollar, one on businesses basically telling Greenspan he is full of beans by blaming the coming war with holding up the economy and an article on the increased debt of the American consumer. Oh yeah and Bush's budget raises spending 7.8% from last year and 22% from last year in 04. What a joke. Did I mention yet that the government also needs to increase their borrowing ceiling because they are smack up against. Can you imagine if they would default? I think that is enough good news for one day. At least I went long some gold today in the form of Newmont Mining. Anyone know any good commidity funds? It is time to prepare for inflation.
posted by Champion at 9:22 PM
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