mayday
Active member
http://online.barrons.com/public/page/barrons_econoday.html
Next weeks events. Hit on 12 Holiday Monday market closed.
Next weeks events. Hit on 12 Holiday Monday market closed.
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Mayday's Account Talk
- Thread starter mayday
- Start date
mayday
Active member
You sound excited my friend. Think about how your going to spend some of those winnings. Have a great weekend.
mayday
Active member
The Numbers Don't Lie: Financial Apocalypse Is Coming
The powers-that-be in Washington may have delayed the Financial Apocalypse, but they have also made the ultimate consequences far worse. By building the mountain of debt ever-higher in order to create the facade of a growing economy, they have made it impossible for the United States to avoid the disaster. It's mathematically impossible to avoid. The numbers speak for themselves. Here are some figures John Mauldin included in his Thoughts From the Front Line e-letter this weekend.
Currently, US Government debt is growing at the rate of 11% of GDP per year. If the economy returned to 3% GDP growth next year, the debt would rise to $18 Trillion by 2015, 110% of GDP. According to all the experts, a debt-to-GDP ratio more than 100% will cause massive disruption in our economy. And this is with a very optimistic estimate of GDP growth rate that not many economists think is possible. Even if GDP were to grow at 4%, an even less likely prospect, the debt-to-GDP ratio would hit 100% by 2015. Clearly, the math simply says that the US economy is going to hit the wall in the next five years---and probably a lot sooner than that.
One "solution" to the problem is for the Fed to print money and buy a large quantity of government debt. In fact, that's exactly what the Fed has been doing over the last year---printing money electronically and buying government bonds. 50% of the bonds issued in the last year have been bought with newly-printed money. That's one reason the dollar has been so weak, in fact. By printing money, the Fed has increased the supply of dollars and, according to the law of supply and demand, the price of those dollars has to go down. The fear is that the Fed will be forced to continue to print money to monetize the debt, essentially pushing the value of the dollar down to the point where no one will accept dollars in payment of debt simply because it will be verging on worthlessness at some point in time.
How will we know when the end is nigh for the dollar? When interest rates hit double-digits, the collapse will be underway. The only way to avoid the ultimate collapse of our economic system, the Financial Apocalypse, is to put the "adults in charge". The teenagers have been in charge and are driving this economic train straight down the mountainside, heading to an ultimate crack-up when we reach bottom.
Mauldin echoes what we've been saying for a long time now:
You cannot cure a too much debt problem with more debt. We cannot borrow our way into prosperity. Every crisis of the past decades has been a result of too much debt and leverage and we seem to want to repeat the past mistakes, hoping that this time it will be different. It won't.
John likes to offer hope in his letter and he suggests some changes which might avert the coming apocalypse. But, in order to make the changes that are necessary, the teenagers either have to mature, or get replaced by the adults. There is no sign whatsoever that that maturation process is underway, or is even a faint possibility.
Odds are so heavily in favor of Financial Apocalypse that it's virtually certain to happen. The behavior of the powers-that-be in Washington shows no sign that they even understood the crisis of the last two years. "They know nothing!", as Jim Cramer said two years ago. And, they've learned nothing since then.
The powers-that-be in Washington may have delayed the Financial Apocalypse, but they have also made the ultimate consequences far worse. By building the mountain of debt ever-higher in order to create the facade of a growing economy, they have made it impossible for the United States to avoid the disaster. It's mathematically impossible to avoid. The numbers speak for themselves. Here are some figures John Mauldin included in his Thoughts From the Front Line e-letter this weekend.
Currently, US Government debt is growing at the rate of 11% of GDP per year. If the economy returned to 3% GDP growth next year, the debt would rise to $18 Trillion by 2015, 110% of GDP. According to all the experts, a debt-to-GDP ratio more than 100% will cause massive disruption in our economy. And this is with a very optimistic estimate of GDP growth rate that not many economists think is possible. Even if GDP were to grow at 4%, an even less likely prospect, the debt-to-GDP ratio would hit 100% by 2015. Clearly, the math simply says that the US economy is going to hit the wall in the next five years---and probably a lot sooner than that.
One "solution" to the problem is for the Fed to print money and buy a large quantity of government debt. In fact, that's exactly what the Fed has been doing over the last year---printing money electronically and buying government bonds. 50% of the bonds issued in the last year have been bought with newly-printed money. That's one reason the dollar has been so weak, in fact. By printing money, the Fed has increased the supply of dollars and, according to the law of supply and demand, the price of those dollars has to go down. The fear is that the Fed will be forced to continue to print money to monetize the debt, essentially pushing the value of the dollar down to the point where no one will accept dollars in payment of debt simply because it will be verging on worthlessness at some point in time.
How will we know when the end is nigh for the dollar? When interest rates hit double-digits, the collapse will be underway. The only way to avoid the ultimate collapse of our economic system, the Financial Apocalypse, is to put the "adults in charge". The teenagers have been in charge and are driving this economic train straight down the mountainside, heading to an ultimate crack-up when we reach bottom.
Mauldin echoes what we've been saying for a long time now:
You cannot cure a too much debt problem with more debt. We cannot borrow our way into prosperity. Every crisis of the past decades has been a result of too much debt and leverage and we seem to want to repeat the past mistakes, hoping that this time it will be different. It won't.
John likes to offer hope in his letter and he suggests some changes which might avert the coming apocalypse. But, in order to make the changes that are necessary, the teenagers either have to mature, or get replaced by the adults. There is no sign whatsoever that that maturation process is underway, or is even a faint possibility.
Odds are so heavily in favor of Financial Apocalypse that it's virtually certain to happen. The behavior of the powers-that-be in Washington shows no sign that they even understood the crisis of the last two years. "They know nothing!", as Jim Cramer said two years ago. And, they've learned nothing since then.
mayday
Active member
mayday
Active member
JTH
Well-known member
mayday
Active member
Mayday, slip in behind me; I'm over here following Birchtree he hasn't noticed the hole in his money bag yet, I'm scooping up some loose change.
I like using what little IFT's I have. We are in the high end of the trend channel. I expect a retrace.
Easy money.
Lobo
Member
I like using what little IFT's I have. We are in the high end of the trend channel. I expect a retrace.
I jumped to the G today after a good long ride in the S and I. Like you, I expect a retrace in the trading channel.....but, I still have one IFT to get back in should that come soon.
I like to be "in" at the change of the month so I can get out, back in, and out again (if needed) during the month...giving me at least 3 IFT's for the month.
Lobo
mayday
Active member
I jumped to the G today after a good long ride in the S and I. Like you, I expect a retrace in the trading channel.....but, I still have one IFT to get back in should that come soon.
I like to be "in" at the change of the month so I can get out, back in, and out again (if needed) during the month...giving me at least 3 IFT's for the month.
Lobo
Good idea Lobo if your in that position. I wish I had more IFT's
mayday
Active member
Made $1.1149 in S fund, and $1.2627 in the I fund per share since October 2. Not a shabby little profit for half a month. Stuck in the F fund at the moment, and have a safe out to G. No more IFT's to get in equities this month. I wish the good ole days were back when we could make IFT's daily.
JTH
Well-known member
Made $1.1149 in S fund, and $1.2627 in the I fund per share since October 2. Not a shabby little profit for half a month. Stuck in the F fund at the moment, and have a safe out to G. No more IFT's to get in equities this month. I wish the good ole days were back when we could make IFT's daily.
Great timing
mayday
Active member
End the Banks
Does banking contribute to the good of society?
Author Roger Bootle examines our society and finds banks are the debilitating force which is impoverishing us. He makes an excellent case for not only ending the Fed, but ending the banks as well.
Banks are responsible for destroying the lifeblood of civilization. After the Financial Apocalypse hits next year, the public will clamor to End the Banks. You see, banks are in business to make money and take risks. But, they periodically overplay their hand and government (the people) are forced to come to their rescue. This rewards excessive risk-taking and punishes the population for the action of a small elite corps of banksters. This is simply wrong and it undermines all the values of the society. Therefore, the only long term solution is to End the Banks completely.
An exhaustive study of banking was done and the results published in This Time Is Different: Eight Centuries of Financial Folly. The authors, Carmen Reinhart and Kenneth Rogoff, found that our claim is true that banks periodically go bust and have to be bailed out by the taxpayers. Often, the bailout is relatively small. Every so often, the bailout is enormous. This time is different only quantitatively, not qualitatively. There is a fundamental flaw in the concept of banks which can only be fixed by ending the banks.
FT.com's Martin Wolf summarized the book's lessons:
The biggest lesson, alas, is that we have been here before. The details may change, but the story does not. Cycles of confidence and panic are inevitable in our world of debt, be that debt public or private, domestic or foreign. Credit is extended freely and then withdrawn brutally.
A second lesson is the recurrence of public sector debt crises. One of the salient features of the book is the light it sheds on the role of domestic public debt, on which data have hitherto been poor. This database shows how often high levels of domestic public debt have explained simultaneous outbursts of inflation and default on foreign debt, even though the latter appears to be at low levels. Crises on foreign debt also recur throughout the ages, from the default to Florentine bankers by Edward III of England, in the 14th century to the default of Argentina to its foreign creditors in 2001. In all, sovereign default turns out to be almost, though not quite, universal, with serial default on domestic, foreign or domestic and foreign debt quite common. No less universal, again particularly for emerging countries, are periods of currency debasement or, today, inflation.
A third lesson is that, while advanced countries appear to leave their days of sovereign default behind them (possibly, famous last words), this does not apply to banking crises. These are "an equal-opportunity menace". As the authors note, "the incidence of banking crises proves to be remarkably similar in the high- and the middle- to low-income countries". Out of the 66 countries in their sample, only Austria, Belgium, Portugal and the Netherlands managed to escape banking crises between 1945 and 2007. Financial systems are accidents waiting to happen.
Banking crises are also devastatingly expensive, in terms of lost national income and public debt. On average, note the authors, government debt rises by 86 per cent during the three years following a banking crisis. The red ink drowning the fiscal accounts of the crisis-hit US and UK are exactly what past experience would have led us to expect.
A fourth lesson is that bad things go together. In a boom, property prices jump, current account deficits explode, fiscal receipts soar and governments borrow easily; then, in the slump, property prices tumble, the financial system implodes, capital flows out, the currency falls, the fiscal deficit soars and inflation jumps.
The final lesson is that financial liberalisation and financial crises go together like a horse and carriage. It is no surprise, therefore, that the last 30 years have seen waves of financial crises, of which the latest one is merely the biggest. The current crisis is the worst since the Great Depression. Yet, argue the authors, no one should have been surprised by this outcome. The US showed all the classic symptoms of a country heading for crisis: a huge current account deficit; soaring house prices; headlong credit growth; and, let us not forget, excessively complacent regulators.
One way to end the banks might be to short sell their shares into oblivion. The SEC has done nothing to stop naked short selling by day-traders. Naked short sellers profit by jumping on a stock going down and create new shares out of thin air---electronically printing shares in their brokerage account---by selling them short. Day-traders, if they team up together and sell short continuously once the next leg down in this bear market begins, can sell enough shares of banks short to drive them into bankruptcy. They almost did it one year ago and now that the secret of driving stocks into the ground is out, it will be an even more popular strategy during the next big wave down. Short sellers normally have to "locate" shares which can be borrowed, but day-traders always close their positions out at the end of the day, so they will never be required to deliver shares they sell short---even under the new SEC SHO Regulation---because settlement takes place days after the trade. This can be done through the right broker (not all brokers will allow naked short selling). Matt Taibbi, the renowned financial journalist for Rolling Stone magazine, explains how to do this. A video on his blog demonstrates how a trader is able to "locate" five times as many shares as the entire float of a major bank. The broker allows this because they know that the shorted shares will be covered long before settlement takes place and they love the commissions it generates.
If the short sellers don't destroy the banks, the Congress certainly will in the aftermath of the coming Financial Apocalypse.
Obama's Latest Lies
Obama tells us he will reduce the influence of lobbyists in Washington. At the same time, he has stuffed the Treasury Dept with banksters. Can anything other than lies come out of this man's mouth?
The Fed Is Actively Debasing The Dollar
The Fed is impoverishing the country by selling dollars and buying foreign currencies in a foolish attempt to make exports stronger. This is the secret behind what's driving the dollar's decline.
They even admit they're doing it.
The good news is that the Fed doesn't have enough ammunition to continue this campaign to destroy the dollar. And, when the dollar turns up, it will pull stocks and commodities lower.
End the Fed
Does banking contribute to the good of society?
Author Roger Bootle examines our society and finds banks are the debilitating force which is impoverishing us. He makes an excellent case for not only ending the Fed, but ending the banks as well.
Banks are responsible for destroying the lifeblood of civilization. After the Financial Apocalypse hits next year, the public will clamor to End the Banks. You see, banks are in business to make money and take risks. But, they periodically overplay their hand and government (the people) are forced to come to their rescue. This rewards excessive risk-taking and punishes the population for the action of a small elite corps of banksters. This is simply wrong and it undermines all the values of the society. Therefore, the only long term solution is to End the Banks completely.
An exhaustive study of banking was done and the results published in This Time Is Different: Eight Centuries of Financial Folly. The authors, Carmen Reinhart and Kenneth Rogoff, found that our claim is true that banks periodically go bust and have to be bailed out by the taxpayers. Often, the bailout is relatively small. Every so often, the bailout is enormous. This time is different only quantitatively, not qualitatively. There is a fundamental flaw in the concept of banks which can only be fixed by ending the banks.
FT.com's Martin Wolf summarized the book's lessons:
The biggest lesson, alas, is that we have been here before. The details may change, but the story does not. Cycles of confidence and panic are inevitable in our world of debt, be that debt public or private, domestic or foreign. Credit is extended freely and then withdrawn brutally.
A second lesson is the recurrence of public sector debt crises. One of the salient features of the book is the light it sheds on the role of domestic public debt, on which data have hitherto been poor. This database shows how often high levels of domestic public debt have explained simultaneous outbursts of inflation and default on foreign debt, even though the latter appears to be at low levels. Crises on foreign debt also recur throughout the ages, from the default to Florentine bankers by Edward III of England, in the 14th century to the default of Argentina to its foreign creditors in 2001. In all, sovereign default turns out to be almost, though not quite, universal, with serial default on domestic, foreign or domestic and foreign debt quite common. No less universal, again particularly for emerging countries, are periods of currency debasement or, today, inflation.
A third lesson is that, while advanced countries appear to leave their days of sovereign default behind them (possibly, famous last words), this does not apply to banking crises. These are "an equal-opportunity menace". As the authors note, "the incidence of banking crises proves to be remarkably similar in the high- and the middle- to low-income countries". Out of the 66 countries in their sample, only Austria, Belgium, Portugal and the Netherlands managed to escape banking crises between 1945 and 2007. Financial systems are accidents waiting to happen.
Banking crises are also devastatingly expensive, in terms of lost national income and public debt. On average, note the authors, government debt rises by 86 per cent during the three years following a banking crisis. The red ink drowning the fiscal accounts of the crisis-hit US and UK are exactly what past experience would have led us to expect.
A fourth lesson is that bad things go together. In a boom, property prices jump, current account deficits explode, fiscal receipts soar and governments borrow easily; then, in the slump, property prices tumble, the financial system implodes, capital flows out, the currency falls, the fiscal deficit soars and inflation jumps.
The final lesson is that financial liberalisation and financial crises go together like a horse and carriage. It is no surprise, therefore, that the last 30 years have seen waves of financial crises, of which the latest one is merely the biggest. The current crisis is the worst since the Great Depression. Yet, argue the authors, no one should have been surprised by this outcome. The US showed all the classic symptoms of a country heading for crisis: a huge current account deficit; soaring house prices; headlong credit growth; and, let us not forget, excessively complacent regulators.
One way to end the banks might be to short sell their shares into oblivion. The SEC has done nothing to stop naked short selling by day-traders. Naked short sellers profit by jumping on a stock going down and create new shares out of thin air---electronically printing shares in their brokerage account---by selling them short. Day-traders, if they team up together and sell short continuously once the next leg down in this bear market begins, can sell enough shares of banks short to drive them into bankruptcy. They almost did it one year ago and now that the secret of driving stocks into the ground is out, it will be an even more popular strategy during the next big wave down. Short sellers normally have to "locate" shares which can be borrowed, but day-traders always close their positions out at the end of the day, so they will never be required to deliver shares they sell short---even under the new SEC SHO Regulation---because settlement takes place days after the trade. This can be done through the right broker (not all brokers will allow naked short selling). Matt Taibbi, the renowned financial journalist for Rolling Stone magazine, explains how to do this. A video on his blog demonstrates how a trader is able to "locate" five times as many shares as the entire float of a major bank. The broker allows this because they know that the shorted shares will be covered long before settlement takes place and they love the commissions it generates.
If the short sellers don't destroy the banks, the Congress certainly will in the aftermath of the coming Financial Apocalypse.
Obama's Latest Lies
Obama tells us he will reduce the influence of lobbyists in Washington. At the same time, he has stuffed the Treasury Dept with banksters. Can anything other than lies come out of this man's mouth?
The Fed Is Actively Debasing The Dollar
The Fed is impoverishing the country by selling dollars and buying foreign currencies in a foolish attempt to make exports stronger. This is the secret behind what's driving the dollar's decline.
They even admit they're doing it.
The good news is that the Fed doesn't have enough ammunition to continue this campaign to destroy the dollar. And, when the dollar turns up, it will pull stocks and commodities lower.
End the Fed
Viva_La_Migra
Well-known member
I don't see an end to banking, given that electronic deposits of paychecks are largely the norm in both the public and private sectors. What would you suggest as the alternative to banking?
