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361 comments on DrumBeat: July 31, 2007
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361 comments on DrumBeat: July 31, 2007
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"At gunpoint"? What did he mean by that?
He didn't elaborate, and the talking heads didn't ask. IMO, two possibilities (both may be correct): (1) Foreign governments, especially exporters to the US, are afraid of what might happen if they stop buying US bonds and/or (2) The US government is making an offer that some governments "can't refuse."
Marc Faber (in Barron's in January) described the 30 year US Treasury bond, held to maturity, as "The world's worst investment."
Do watch Motormouth Cramer on this little video: Just walk away
Translation: if it loses 20%, it'll lose more.
the more i see that Cramer guy, the more i like him. He might be ADD on steroids.. but he seems to speak more reality than any of the others.
High noise:signal ration though
--
When no-one around you understands
start your own revolution
and cut out the middle man
He got in trouble for suggesting on air people walk away from their mortgages and they made him come on and say, he wasn't telling people to walk away from their mortgages, then went on to qualify it saying HE would. You could see that just before he went on camera he had just been is a major argument and was adrenaline rushing. (Yes, I know he always looks like that, but you could see he was red faced and still angry.)
On another note, this could be it. The Hang Seng is down almost 1,000 points, close to 5%. All of Asia is significantly down. Nikkei is also down almost 5%. Today, all day they were talking about the FEAR that was a tangible presence on the trading floor. This from people who hold a pep rally whenever the market is even slightly down. Fear is a word they are not allowed to use.
FTSE 100 and CAC 40 just went into freefall. Dax off over 2%.
Ahha - I was surprised interest rates were not up already. There had to be a reason.
When do the heavy handed players Russia/China get (more) fed up. Allow a slow unwinding or push back a bit?
The video on housingdoom.com had an interesting comments. We should "plow under" the excess houses to maintain prices and sell all real estate!(that should help)
Everyone makes the assumption that all participates in the market act in their own economic best interest; but many times, they do not.
Peter is correct; the statistics show that the bulk of our T-Bill purchases are being done by foreign central banks, not individual investors. Foreign central banks do not always act with a profit motive; they act with geo-political motives, which results in situations that do not make economic sense (al la China and USA).
i thought that a lot of the t-bills were being bought up by "offshore" banks, i.e. cia laundered money.
I heard Martians
http://www.dunwalke.com/
Yes Mssr. Schiff certainly took his lumps from the MSM CNBC cheerleaders, et al. The "gunpoint" reference escaped them. No country wants to be the parent to tell his spoiled child that they don't get any more allowance, when the parent is selling candy. Schiff may have also been eluding to our sale of weapons, e.g. gunpoint to KSA, etc.
All the while, consumer confidence now at 6 year high *amazing*
-- All the while, consumer confidence now at 6 year high *amazing*
Which tells you, right there, that the person in the street has no clue as to the seriousness of our energy/geo-political/economic/climate predicaments. My guess is that the number is traceable to one simple event -- the DOW hitting the 14,000 mark.
What is so bad about all this is that not everyone is the man on the street. A Friend of mine ran for Governor of the state of Arkansas last year. We only met this year, he manages a store in the River Market area of downtown Little Rock around which I do some of my work with the Homeless.
The whole company is working a more Green effort. Recyclables in almost all of their products, and foodware, They are a food company. (( Best cheese selction this side of say Memphis ))
His lastest blog effort points out the headwinds we are all facing.
http://www.abandonthepresidency.typepad.com/
In a comment he makes about running for Governor of Arkansas in 2006. The media really does not get it. In my work for HUSH (Homeless United to Save the Homeless) I know that when we depend on the mainstream Media in our own backyards to do their part they drop off the map and can't remember where they last left their notes.
The Person on the street is not the worst issue here it is the Media, and When looking at Rod's site check out the Bill Moyers bilp.
Where is Max Headroom when you need a good Blip-vert.
On January 14th, 2000, the DJIA closed at 11722. If you use the Federal Reserve's own inflation calculator, and plug in 11722 and 2000 into the start value and year and then advance to 2007, you will see that the DJIA would have to get to 13988 just to break even. And this assumes that the Federal Reserve inflation numbers are accurate, a subject which is hotly disputed by many observers who contend that the Federal Reserve and the BLS both deliberately understate inflation.
"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone
Heh. Nice. Simple. Direct.
I would like to compare a bunch of things like the DOW/price of oil/etc... to some non-standard costs - does anyone know if this has been done by anyone else (I know the DOW has been)?
E.g. What is the price of oil compared to gold historically, or the average/median/lower and upper percentiles of wages, etc...
Will have a search later, but if anyone has come across any comparisons like this, info would be greatly appreciated. Cheers.
"You can never solve a problem on the level on which it was created."
Albert Einstein
Marc Faber (in Barron's in January) described the 30 year US Treasury bond, held to maturity, as "The world's worst investment."
Far from it: some of the mortgage backed instruments are going to zero. And there are ways to actually end up owing lots of money. Any form of long term bond is, however, a very bad investment, no matter what asset backs it.
...no matter what asset backs it.
Correction: I should have said "even if, unlike Treasuries, an asset backs it".
Faber sounds like a lunatic sometimes.
RE the "at gunpoint" remark.
What's to "elaborate" on or even bother to "ask" about it.
IMO, the *gun* is the insane system of profligate economic growth that makes an addict of everyone for the same thing, underpinned by the US leading the way to global consumption disease.
It's the classic "Monkey Trap" and in this case everyone has their hand in the trap but no one wants or dares to pull theirs out, because this one is rigged to go off like an IED.
Sooner or later, one way or another, everyone is going to get their hands blown off, but meanwhile they play along hoping to escape with just losing a pinky.
I think he meant China buys a bunch to make sure we keep buying their exports and our "friends" in the Middle East keep buying so that they can get that recent deal on our latest weaponry package.
Leanan-
As Freud said, sometimes a cigar is just a cigar. Look at Iraq, Iran, etc.
Well, buying treasury notes redeemable for advanced weapons is pretty much like paying with advanced weapons instead of U$S.
That's part of it.
When you really look at the whole picture, then we are paying twice what we are being told because other parties get an equivalent amount of weapons at no cost and for no valid reason at all, and in a strange way reflects a 50% discount on the US paper.
Sure it sounds like a stretch, but think about it.
This may be another piece of evidence that some of those
foreign countries that are feeling that hard, cold
finger of steel just behind their occipital lobe may
be starting to ponder a Van Damme-turnaround-jump-kick.