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Showing posts from February, 2012

Filthy lies from across the pond

Over at McDanger, sickening untruths.

GMO's Jeremy Grantham doesn't understand gold history

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I hate to beat up on Jeremy Grantham. The dude's a legend, and he's triumphed through a lot of market cycles.

And his latest quarterly letter is awesome. I can even overlook the part where he slanders libertarians by lumping them in with leveraged Wall Street bailout-junkies. Perhaps he hasn't spoken to enough libertarians to understand that Too Big To Fail is not part of the program. And click on over and see what he has to say about bonds... it's exactly what we've been saying here for some time.
The interesting overpricing that exists in global markets is in debt markets – those that are seen to be lower risk than the rest (e.g., most developed market government bonds ex the usual suspects: Greece, Portugal, Spain, and Italy). In some markets like the U.S. and the U.K., the long bonds can be so murdered by inflation that holders should end up concerned about return of capital and forget about being paid for the risk. On the plus side, if economies colla…

SLOBfest roundup

The brilliant and diverse group of bloggers known as the SLOBs (San Diego Local Order of Bloggers) have been covering a lot of important stuff that I've been too busy to write on.

Temple of Mut writes on the crack-up of Tea Party Patriots. Co-founder Mark Meckler has left the organization after seeing it co-opted by the GOP establishment. Meanwhile, local Tea Party groups like San Diego's Southern California Tax Revolt Coalition are breaking away from TPP to remain true to their grassroots nature. Meckler is the real deal, as are local groups like SCTRC. Good riddance to TPP.

Beers with Demo points out a story I meant to write on: England's tax-the-rich plan fails as raising income taxes to 50% causes a decrease in revenues! BwD also recently wondered whether libertarians were abandoning social conservatives on the issue of the Obama regime forcing contraception on the Catholic church. Click on over and tell him we're with them.

Left Coast Rebel on my favorite …

The General Theory of Progressivism

Instapundit linksBill Quick with this comment:

Incentives work, even when they’re perverse.

Exactly! And incentives are the key to the failure of progressivism. As I wrote three years ago: Modern-day liberalism has not been thought to have such a consistent theme. It appears to be a mishmash of grievance, entitlement, guilt, envy, group identification, deification of elected leaders, and love of big government.

Until now. I believe the unifying theme of modern-day liberal positions is the inability to recognize the incentive effect.

The media and liberals (but I repeat myself) have a myopia where they obsess on first-order effects and do not recognize second-order effects. Incentive effects are a complete mystery to them.

Click on over for a full discussion with examples.

The terminology has changed. "Liberals" are now "progressives" (which liberates the term "liberals" back to its noble classical liberal origins). But the General Theory is stronger …

Devaluation is like the weather

Texas oilman and once-aspiring politician Clayton Williams got into trouble for joking that rape is like the weather: “As long as it's inevitable, you might as well lie back and enjoy it.”

Well, devaluation is like the weather. It's inevitable, so you might as well do what you can to prepare for it.

That was the point of my July 2010 post, Devaluation is the only way out.

This past weekend, that post received angry comments:
You know, I like the blog but sometimes you go off the reservation, way off. [...]

Money for nothing and your chicks for free only works for rock stars. Money is a medium of exchange and, to a lesser extent, a store of value. That's all it is. Please note the Paul Krugman agrees with you wholeheartedly and the best real life example to support his thesis (by his own admission) is...wait for it...Argentina. I'm not advocating irresponsible monetary policy, just saying it's inevitable. No country in the history of the world has ever gotten ba…

Zimbabwe Ben comes for commuters

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Run on safe deposit boxes

It might be a good idea to get yourself a safe deposit box while they are still available.  Some countries are running out of them.

This from a Guardian story on gold burglaries from Indian homes in London:
[...] banks have started to stop giving people safe deposit boxes, so people are keeping their gold at home. And David Malone notes that the Swiss are running out of safe deposit boxes:
…if you want a bank box in Zurich today, they will require that you have a minum of half a million swiss francs on deposit in the bank, before they will even consider you. That is how short of space they are. You might be able to get a free safe deposit box from your bank or credit union depending on the size of your account. Even if you have to pay for one, smaller boxes can be had for $25 - $50 a year, larger boxes around $100.

Happy Gerard Finneran Day!

This Monday, as you're hitting the slopes or otherwise enjoying the three-day weekend, please remember the man behind the holiday: Gerard Finneran.

Gerard Finneran was born February 16, 1937. Truly a renaissance man, Finneran was a multi-sport athlete who went on to an extraordinarily successful career in banking. The details of Finneran's long and storied career are chronicled here in a 2005 obituary. But he will always be remembered for that one, shining moment. A quarterback for the Air Force Academy, Finneran would come to be known for a far greater feat in the air.
... on a flight back from Buenos Aires to New York, Mr. Finneran had a bit too much to drink.

He drank snowballs and other cocktails, starting before take-off and continuing until a flight attendant decided that it would not be appropriate to serve him any more. He assaulted her, then then started shouting "Fuck the President, fuck him in the ass" while serving himself from the trolley. (History does …

Rise of the Fourth Reich

Greenspan's Body Count: Woodrow Wilson Hall Jr. and Barbara Ann Hall

Greenspan's Body Count today returns to the great bubble state of Florida.

Ocala:

Barbara Ann Hall, 66, was shot four times in the head with a .38 revolver by her 68-year-old husband Woodrow Wilson Hall Jr., who placed a .44 Magnum in his mouth and pulled the trigger, according to a report released Wednesday.

[...]

The couple's daughter told the detective her parents argued over finances and said her mother wanted to move closer to her in Jacksonville because she was having a child, but her father did not want to move.

The daughter and son-in-law told Diaz the couple were behind in their mortgage payments by $5,000 and that Barbara Hall had suggested that her husband sell his Corvette, which was "a hot button topic" since he loved the car. The Halls appear to have bought the property in 1998 for $95,000.  If they'd put 20% down and got a then-prevailing 7% rate on a 30-year mortgage, they'd pay $506 a month and would now owe less than $60,000 on a house wor…

Bad Week for Freedom

Jim Quinn from The Burning Platform posted a great summary of that which is in this country.Only a deceitful government busybody do-gooder would actually argue that forcing insurance companies to cover millions more Americans and cover pre-existing conditions would result in lower costs for the average family. I wonder what will happen in 2014 when 30 million more Americans are guaranteed “free” healthcare under Obamacare. The saddest part of this oncoming train wreck is that millions of willfully ignorant people actually believed the blatant lies and false storyline fed to them by sociopathic politicians who desire to control every aspect of their lives. These people believe they know what is best for you. They believe they are smarter than you. They do not care what means are required to achieve their ends of absolute domination over your life. Personal freedom, individual liberty and a critical thinking populace are the antithesis to the desires of the governing elite.
...
It is mind…

Memorandum macht frei

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"The EU was set up in the aftermath of World War Two to bring peace, stability and prosperity to Europe."
               - Europa.eu, official web site of the European Union.

How's that workin' out for ya?

UPDATE: The inspiration for the headline appears to come from this letter by Νίκος Ελευθερόγλου. Here's the Google Translation:

The Rosie-Roubini Contra Indicator

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Making the e-mail rounds this week: when two of Wall Street's biggest perma-bears, David Rosenberg and Nouriel Roubini, go bullish, is it time to sell?



Creator unknown.

In trashing gold, Warren Buffett makes the case for gold

Warren Buffett has a good commentary in Fortune.

He starts by addressing one of my pet peeves. Academics and the financial industry dumbly equate volatility with risk. Volatility is not risk! I don't give a rat's ass whether my favorite stock bounces up and down ten bucks every day; what I care about is whether it's going to keep paying (and increasing!) its dividends and what it's going to be worth in 20 years. Here's Warren:
The riskiness of an investment is not measured by beta (a Wall Street term encompassing volatility and often used in measuring risk) but rather by the probability -- the reasoned probability -- of that investment causing its owner a loss of purchasing power over his contemplated holding period. Assets can fluctuate greatly in price and not be risky as long as they are reasonably certain to deliver increased purchasing power over their holding period. And as we will see, a nonfluctuating asset can be laden with risk. Exactly. And then o…

Constitutional Lawyer with complete comtempt for the Constitution

[Updated] King Obama has decided that in his wisdom he will allow organizations like the Catholic Church some flexibility in the health insurance mandate.
Amid a backlash from many Catholics and proponents of religious liberty, President Barack Obama announced Friday that his administration will not require religious institutions like hospitals and universities to provide free contraception to their employees in their health insurance.

Speaking to reporters at the White House Friday, Obama offered a compromise that would allow women to obtain free contraception but would require them to obtain it directly from their insurance companies if their employers object to birth control because of religious beliefs.

"Whether you're a teacher or a small businesswoman or a nurse or a janitor, no woman's 's health should depend on who she is, or where she works, or how much money she makes," Obama said, calling free contraceptive care a "core principle" of his hea…

Fed to Devalue Dollar by 33% Over Next 20 Years

Heck if the Fed Reserve can announce they're going to devalue our Dollars by 33% over the next 20 years, why couldn't the Fed some day announce, say, a 5% devaluation overnight? I guess we're supposed to think that will never happen here. Overnight devaluation of currency is so 2011. Besides, we should just implicitly trust that our Fed Reserve does what's best for us, right?

But, an increase of 2% a year over a period of 20 years will lead to a 50% increase in the price level. It will take 150 (2032) dollars to purchase the same basket of goods 100 (2012) dollars can buy today. What will be called the “dollar” in 2032 will be worth one-third less (100/150) than what we call a dollar today.The best the Fed can do — an average debauch in the dollar’s value of 2% a year while producing recurring financial crises and a more cyclical economy — is demonstrably inferior to the results produced by the classical gold standard. Here’s just one example. The largest g…

Government Spending Made Easy

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Lest we forget: a brief history of Rick Santorum

This blog has been following Rick Santorum since long before he was overwhelmingly rejected as a nut by the people of Pennsylvania in a  blowout re-election loss.

For the benefit of those who have not paid much attention to Senator Man-on-Dog until his recent caucus and primary victories, a recap:

May 15, 2005: Senator Easily Amazed
July 14, 2005: Santorum is a bigot
August 2, 2005: Santorum breaks speed record in going back on promise
August 2, 2005: Santorum vs. birth control
August 14, 2005: Santorum in trouble (bonus: gay marriage is a homeland security issue!)
September 3, 2005: Santorum: I support freedom, as long as it's only exercised by right-wing religious zealots
February 2, 2006: Rick Santorum is carne asada
June 4, 2006: Santorum is carne tostada
March 29, 2011: Abortion babies are killing Social Security
January 5, 2012: Santorum's ruling-class sellout problem

Want a landslide of epic proportions?  Pick Rick Santorum.

The more I see of the not-Romneys, Gingrich an…

Privacy-Hating Lamar Smith Is Coming After Your Internet Again

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Didn't we just send SOPA stumbling back into the abyss beaten and bruised? Didn't Lamar Smith get busted lifting other people's content without giving them credit like the copyright violators he apparently wanted to target with SOPA? Apparently we did not yell loud enough.

CNET:

Now Smith, a conservative Texas Republican, is being targeted a second time: for championing legislation that would require Internet service providers to keep track of their customers, in case police want to review those logs in the future. His bill is called H.R. 1981.

"This is yet another government assault on the Internet and its users," said Demand Progress Executive Director David Segal. "We taught Congress a lesson last month: we need to do to H.R. 1981 what we did to SOPA, and make it clear to Lamar Smith and the rest of Congress that they can't run roughshod over Internet freedom."
Here's the funniest part: Republicans in Texas elected this guy (seriously, if he i…

Chris Martenson - Why Our Currency Will Fail

Chris Martenson has posted a really important analysis entitled 'Why Our Currency Will Fail'. It is a must read.

Be careful Chris, this sort of well thought out argument including the controversial use of math might just get you labeled an EXTREMIST.

SEC tries to fix unfixable money markets

WSJ:
The proposal, which is set to draw stiff opposition from financial groups and could create internal tensions at the SEC, would affect both fund firms and investors. Firms would have to set aside capital reserves using one of three new methods. Investors who wish to sell all of their holdings at once would be able to get only about 95% of their money back immediately, with the remaining 5% returned to them after 30 days.

"Money-market funds remain susceptible to runs and to a sudden deterioration in quality of holdings, and we need to move forward with some concrete ideas for proposals to address these structural risks," SEC Chairman Mary Schapiro said in an interview last week.
Money markets were popular because they were sold to unsuspecting investors as a free lunch: big yields with zero credit risk and 100% immediate liquidity.

Well, Lehman showed that there's no such thing as zero-credit risk, and thanks to Zimbabwe Ben's perpetual Zero-Interest Rate Policy…

All about the Benjamins

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Another day, another $100 from the dirty Congress-owning, Fed-free-money-getting, TARP-sucking, TBTF banks.



You can't cheat an honest bank.

Charles Schwab: the Dirty Fed is destroying the economy

America's grandfatherly champion of the small investor on the Dirty Fed:
Average American savers and investors in or near retirement are being forced by the Fed's zero-rate policy to take greater investment risks. To get even modest interest or earnings on their savings, they move out of safer assets such as money markets, short-term bonds or CDs and into riskier assets such as stocks. Either that or they tie up their assets in longer-term bonds that will backfire on them if inflation returns. They're also dramatically scaling back their consumer spending and living more modestly, thus taking money out of the economy that would otherwise support growth.

We've also seen a destructive run of capital out of Europe and into safe U.S. assets such as Treasury bonds, reflecting a world-wide aversion to risk. New business formation is at record lows, according to Census Bureau data. There is still insufficient confidence among business people and consumers to spark an investm…

Greenspan takes a holiday

Greenspan's Body Count has a long-standing policy of not including foreign deaths, because Alan Greenspan didn't directly control monetary policy in other countries, even if he inspired other central bankers to follow in his murderous bubble-blowing ways.

Nonetheless, it's interesting to note the victims of reckless policy wherever they fall around the world.  And they happen consistently where the biggest bubbles were.  Today's episode comes to us from über-bubbly jolly old England.
Mohammed Tariq Aziz, 45, who had recently taken out a £110,000 life insurance policy, smashed his wife's skull in Buckinghamshire, prosecutors claimed.

He then then disposed of the murder weapon, his own blood-stained clothes and his mobile phone proceeded on with his normal daily tasks, they said. Mr Aziz drove around in his Volkswagen Caravelle minibus taxi. The car made a very brief visit to a far corner of town the day Zarina Bibi was murdered, police said

Mr Aziz drove around i…

Mailman Craps In Someone's Yard Like a Dog, Keeps His Job

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This is what it comes to, eh?

Via Ruralinfo.net (which is a very exciting aggregator of all things USPS if you're into news on the failing mail system in this country):
Some neighbors in Southeast Portland are upset that a postal carrier caught relieving himself in a backyard was returning to his old route.

A man in the 7000-block of SE Ogden snapped photos of his mail carrier defecating in his neighbor’s yard last April.

A spokesperson for the post office said the carrier was disciplined and temporarily taken off his route, but he has since been allowed back.
OK that's pretty bad. But what's even worse (what could be worse than your mailman taking a crap on your neighbor's lawn?) is the comment left by what I presume to be a fellow mail carrier in defense of his or her fellow letter carrier with a weak bowel:
He had to crap. It was an emergency, why fire someone for an embarassing moment. Well let's see. I am not familiar with Portland but I looked up the 7000 bloc…

Bill Gross on the Dark Side of ZIRP

While the Fed seems to think free money forever will save the world, prominent people living and investing in the real world disagree.

PIMCO's Bill Gross:

Duration risk and flatness at the zero-bound, to make the simple point, can freeze and trap liquidity by convincing investors to hold cash as opposed to extend credit.


Where else can one go, however? We can’t put $100 trillion of credit in a system-wide mattress, can we? Of course not, but we can move in that direction by delevering and refusing to extend maturities and duration. Recent central bank behavior, including that of the U.S. Fed, provides assurances that short and intermediate yields will not change, and therefore bond prices are not likely threatened on the downside. Still, zero-bound money may kill as opposed to create credit. Developed economies where these low yields reside may suffer accordingly. It may as well, induce inflationary distortions that give a rise to commodities and gold as store of value alt…

Groundhog Day

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One of my favorite modern-day social commentator artists is WilliamBanzai7, who posts his creations at Zero Hedge.

Today's post:
BANZAI7 NEWS, Jackass Island USA--Once again the world famous hedge hog Punxatawdry Ben came out of his Jackass Island printing bunker and failed to see the shadow banks. According to Punxatawdry Ben's trainer Lloyd Blankenfein, this can be interpreted to mean that cash strapped Wall Street bankstas and fat cats can happily look forward to many more ink filled printing rounds of quantitative schtupping in 2012.

"The ground hog is like most other prophets; it delivers its prediction and then disappears."--Bill Vaughn

"Punxatawdry Ben is the bellwether of false profits; he prints predictably and then the ink disappears."--WilliamBanzai7





The great thing about this Internet that Al Gore invented is there's pr0n for every interest -- even monetary policy fetishists like yours truly.

CBO Numbers Out

Everything is staggering, like normal, and Denninger provides his usual colorful commentary focusing on Medicare here. I only have one bone to pick with him though, and I think it's important.

That's not going to happen, because it can't. That number would represent approximately 1/2 of today's Federal Budget, incidentally.
I believe Tickerguy meant Federal spending because as far as I'm aware our Congress has failed to pass a budget in years. Just a reminder that these servants of the Kleptocracy are not only moral failures, they can't even do their f'in jobs.