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Latest Comments72 Comments
When a Publicly Traded Hedge Fund Blows Up
After stealing so much wealth through bonuses and stock options - distributing excessive wealth to themselves - they then turned it over to hedge funds to make them richer. The hedge funds then borrowed out of thin air fiat money from the banks and proceeded to bid up the prices of everything from houses to oil to public stocks.
They pushed prices to high the sheeple upon whom this whole charade rests was unable to keep up because the banks would not leverage their own modest bank resserves by 10 or 20 to one.
Collapse.
The destruction is being felt by all but the greedy graspers at the top of the pyramid have no tolerance for economic pain - and screamed for the bailouts to restore their illbegotten fiat money.
Conde Nast Portfolio predicts thousands of hedge funds will go out of business. Good riddance. But that likely means the wreckage they have left in their wake - still held by us unleveraged sheeple - will grow back to the sky much more slowly.
It will be sustainable, hopefully.
As for the hedge fund managers - why shouldn't they be out of a job? They were too stupid to actually hedge.
And when they reincarnate into their new lives on Wall Street, they will still be stupid - but less stupid than the next wave of people who throw their left over money at them.
Why Didn't We Stop the Market's Chain of Events?
That latter comment though may be the key. Since the Federal Reserve Bank was created out of thin air in 1913 the value of a dollar has fallen to a nickle. A 95 percent drop in purchasing power.
With such relentless ongoing inflation constantly underway it was logical for all of us to assume the costs of housing would grow to the sky. We were like Pavlovian's dog, mentally conditioned.
Everyone should know that when the pundits on business tv praise the Fed as an inflation fighter they are speaking in code.
What happened was that the relentless inflation of the Fed ran head first into globalism, which has been working - through outsourced jobs, massive inflows of cheap labor and a general deconstruction of U. S. productive labor - to bring the U. S. wage structure down from its peak because a more level playing field is required for globalism.
Of course the people behind the Fed are globalists too. Its just that they were too stupid to get the big picture of what they were doing.
The result was massive deflationary holes in the all the major controlling puppeteer banks. The huge bailouts have attempted to fill these holes.
But the deflation of wages meant that workers could not keep up with what they were expected to pay for fuel, food or...homes.
The economists did not see this coming. Because they have been mesmerized into Fed fans.
Instead of constantly arguing whether the Fed should artificially manipulate the world by creating money out of thin air - and charging us and the government interest to boot - the argument should have been how quickly can The Fed be put out of business along with the racketeers who are part of it.
The New York Times Company: Bargain or Value Trap?
This analysis certainly constrains me from averaging down and buying some more.
I do know the Times has an ownership position in the Boston Red Sox and Fenway Park but I was not happy that money grubbing investment bankers - now discredited as frauds - talked them into selling off tv stations and other holdings. While tv and magazines are languishing too, the Times management should have held on to its broader base of assets. If nothing else, tv is arguably more digital than print.
TV would have picked up some political advertising that newspapers cannot capture at all anymore.
Can a Broken New York Times Be Fixed?
That's because people can and do go online and to meetups and learn a lot of documented anomalies about 9-11 that have never seen the light of day in mainstream media.
The media is dying from massaged content.
Why Should Companies Pay Dividends?
On the flip side, a company like brandywine reit has lowered its dividend for 2009 to $1.20, which is says it can cover. I bought some more shares at $4 and will get a 30 percent yield. But the danger is any naked short sellers will scream at brandywine to cut the dividend and conserve cash because they don't want to cough up payments for the uncovered shares they've sold.
Right now, companies that can cover dividends will be really pressured to cut them because of the extraordinary yields. - like enlay.pk at 18 - 20 percent.
But i think they should pay out the money whether the yield is 2 percent or 20. If they stay the course - and are not burning through cash like gm - they should get a quicker recovery once it is morning again in America.
Mature companies need to kick back some of the wealth to all holders, rather than immorally divert it to management options at obscene levels.
D
Manhattan Mansions Fall from the Sky - Barron's
The ones to pity are the former $3 million home owners now stuck in a $2.25 million home that they can't sell to trade up to a $8 million home now knocked down to $6 million.
I mean, why must these people suffer after all they have done for the rest of us?
I think the entire Wall Street matrix - which does nothing but talk on the phone and shuffle pieces of paper - should be outsourced to India. Those people have lower cost structures and would hopefully rip less out of our accumulated capital base for their own enrichment.
Still can't figure why a guy can walk into a bank and end up in prison for walking out with $10,000 obtained at gunpoint when white collar criminals - using the chicanery of stock trading - walk off with a few million fiat credits scott free.
Look at how Dr. John Malone appropriated $1 billion of shareholder value from his various liberty reincarnations of tele-communications - all through stock options. And look how these companies have performed over the last 10 years.
Even recently one of the liberty clones burned through something like $30 million of its capital - isn't capital king these days? - to take some stock off his hands. And the move, by reducing overall outstanding stock, only strengthened his strangehold.
This destructive greed has not only been on Wall Street, but inside the corporations whose paper stock and bonds they ruthlessly churn.
And how about those rating agencies and their highly overcompensated overseers.
And why should regulators who failed to regulate still cling to their federal jobs and perks?
Maybe we should sue the regulators to recover wages and benefits paid to them the past few years.
But we won't. After all, they did not walk into a bank and use physical intimidation.
Geithner, a Man Who Doesn't Lose His Cool
Is he really cool, or just on heavy doses of Prozac?
I agree, Amvet, this county needs a clean sweep of the greedy ones who have walked away with fortunes while bankrupting society.
Dan
Bailouts and Bankruptcy: The Code Needs a New Chapter
The new owners would be the bond holders, which would make the company debt free except for taxes (hah) and pension liabilities (hah hah). The courts would overhaul the latter. Don't know if bankruptcies give GM a tax loss carryforward.
But there might have to be a smaller injection of operating capital that would have to be additional "stock" owned by the public, or actually the semi totalitarian federal goverment.
But this does seem like a rational way to keep a business going without having the Chinese pick it up for a song and a prayer.
Ugly
I briefly dated a brilliant but bipolar woman who made big bucks at Lockheed Martin. She said half of her department was disfunctional.
I have long thought what Jadzi and she said are signs that big corporations are
too big to manage.
This thinking started when the O-ring problem caused the explosion of the Challenger on the launching pad.
It was vindicated when AOL and Time Warner merged, proving no tree grows to the sky.
GE is the latest supporting evidence.
Calling a Depression
A broader economic depression won't happen until tax revenues become so bad the huge government sector on all levels has to lay people off too. Right now, government and utility employment some sectors of the basic food are a drag on a depression.
General Electric: Genuine Risk of Collapse?
Several comments about Jack Welch but not one mention of what could be poor judgment by Warren Buffet.
Isn't Deflation a Good Thing?
But it appears much of the new money being created out of thin air is just to plug huge holes on balance sheets where credit (money) has evaporated. While there may be trillions of new "dollars" out there, are these dollars not actually just credits - obligations to be repaid? because that is what modern fiat money is. A credit against a debt. Much of the private debt has truly evanesced into the mist, never to be seen again. Thus fiat credit dollars have been lost forever.
Inflation is caused by huge buying pressure from below, which pushes up the cost of goods. But excess compensated rich people can do even more to push up inflation through leverage. Really rich people had so much excess money they turned it over to hedge funds, which then borrowed "out of thin air" money manufactured by the banks to leverage their rich people's contributions 10 fold or more. Then this out of thin air money was unleashed to buy up the prices of stocks, commodities, non-existent fraud mortgages etc. Basic commodities like energy got pushed up so high by this hot air money the buying pressure obviously exceeded the actual buying pressure from fast growing countries competing for post-peak oil. In turn, the consumers had to stop buying so much of a high priced commodity.
You can only deductively reason that the out of thin air inflationary dollars overpriced tangible assets from oil and steel to Brandywine Real Estate Trust and Freeport Moran and Fortress Investment Group. Because no tree grows to the sky, the puncturing of the containers holding these hot air credit dollars did indeed evaporate into thin air.
There does not seem enough hot air dollars salvaged in reserve to pump up asset classes anytime soon. That will require banks to start pumping credit dollars out of thin air again, but they are reluctant to do so.
And we will not have inflation until conjured up credit-collars are once again in the hands of the little people at the bottom of the pyramid.
A 5.8 percent payment boost for Social Security recipients is a start, a weak start, but a start toward getting money lower down on the social class structure.
As Italy Enters Its Fourth Recession Since 2000, Who Will Bail Out Unicredit?
I fail to see how the close linkages that come with globalism are really great for the New World Order because we now have everything more in lockstep and there is no fluctuating equilibrium from more random separate parts.
Clearly, the highest elites have been displaying the most panic, and this panic is becoming more self fulfilling as industries that might just slow are starting to brake more rapidly from fear.
But I recently used this panic to buy some Enlay.pk, the Italian electric utility I made money with and sold last year. But I bought it at 7 and now it is like 6.4 but I am still getting a 19 percent dividend yield, for now, from my purchase price.
It is interesting that the prior post points out the Austrian dominoe effect that is suspected as the first falling dominoe that led to the depression. And now small Austria has a far higher negative influence again, compared to the larger Italy.
This is all so strange. Is this financial crisis an accident, an unintended consequence, or a carefully thought out conspiracy to create a crisis that requires a more integrated global solution?
Dan
Obama to the Rescue?
Gold Coins Are in Short Supply, So Why Doesn't Their Price Rise?
If you cannot buy gold, consider buying commodities that are tradeable in hard times. Or forward buy the things you would buy with gold in hard times - dehydrated meals, tp, firewood, canned foods, canned meats, ammo, guns, farmland etc.