Global Market Commentary, Analysis and Investments
Why don’t people borrow?
Because it’s not a liquidity problem. It’s a debt problem. A solvency problem. And it won’t go away by making more cash and credit available. Instead, all those bad decisions, bad loans, and bad investments have to be cleaned up. And that takes time. And while the economy is de-leveraging, people are becoming more cautious…more risk-averse…more modest in their expectations.
[Read more...]The market giveth and the market taketh away.
Last Friday, the Dow Jones industrial Average gaveth 165 points. Yesterday, the Dow tooketh 141 points away. What should we investors learneth from this occurrence?
Should we trust that the economy is recovering, as the politicians pretend to believe? Or should we distrust that the economy is recovering, as most of the rest of us believe?
[Read more...]Bad day for stocks, yesterday. A bad day. Not a terrible day. Not a crash day. Just a bad day.
The Dow fell 140 points. This was baaaad…because it shows that the stock market does not really buy Bernanke’s storyline.
You’ll recall that when we left off last week, Ben Bernanke assured the world that while the recovery was not exactly what he had hoped for, he nevertheless had the situation in hand. He said he had the tools necessary to fix the problem and would do whatever was required.
[Read more...]It was an interesting psychological phenomenon when I read where Michael Kosares of USAGold.com wrote, “Private citizen, Alan Greenspan, could afford to be blunt,� but I interpreted it in my Mysterious Mogambo Mind (MMM) to mean, “Private citizen, Alan Greenspan, should be afforded a blunt instrument applied with extreme prejudice to his stupid head, over and over, as he is the moron that, as chairman of the Federal Reserve from 1987-2006, created all the money and credit to finance the now-busting booms in stocks, booms in bonds, booms in houses, booms in derivatives, and booms in the size and cost of governments, and if there is one sorry, worthless bastard who can be singled out as guilty, guilty, guilty, it is Alan Greenspan.�
[Read more...]According to an article that appeared in The New York Times, written by Norihiro Kato, the Japanese have gotten good at sloughing off their worldly cares. Japan is no longer the world’s number two economy; it was eclipsed this summer by China. But the Japanese are used to slippage. We all know the story of their 20-year economic decline; Japan’s GDP actually peaked out about 15 years ago. It has been sliding ever since. That is only a part of the story. In terms of rice production, the Japanese have been downsizing for more than 40 years. Japan’s population, too, grew by 1% per year from 1917 to 1977. It peaked out in 2005. There are fewer Japanese now than there were 5 years ago. If the trend continues, eventually there will be none.
[Read more...]Most of the time, I am so freaked out that I spend most of the day in the Mogambo Bunker Of Paralyzing Fear (MBOPF), scared out of my mind at catastrophic ramifications of the economic stupidities that are being foisted upon us, like, for instance, increasing taxes in a recession! Gaaahhhhhh!
And then people ask me, “Why are you screaming your head off in fear, you irritating little moron?� Naturally, I answer, with a voice tinged in scorn and loathing, “Because taxes are being raised in a recession, and so screaming in fear and outrage is the only appropriate public response, while buying gold, silver and oil is the only appropriate private response. So, ha! Who’s the moron NOW, you moron?�
[Read more...]Most of the time, I am so freaked out that I spend most of the day in the Mogambo Bunker Of Paralyzing Fear (MBOPF), scared out of my mind at catastrophic ramifications of the economic stupidities that are being foisted upon us, like, for instance, increasing taxes in a recession! Gaaahhhhhh!
And then people ask mem, “Why are you screaming your head off in fear, you irritating little moron?� Naturally, I answer, with a voice tinged in scorn and loathing, “Because taxes are being raised in a recession, and so screaming in fear and outrage is the only appropriate public response, while buying gold, silver and oil is the only appropriate private response. So, ha! Who’s the moron NOW, you moron?�
[Read more...]It still looks like the US stock market is rolling over. The Dow dropped another 39 points yesterday.
The Fed has already said it will leave its key interest rate at a very low level for a very long time. The US Treasury has already announced a budget with more than $1 trillion of fiscal stimulus in it. “Cash for clunkersâ€� …first time homebuyer tax credits…TALF – the “recoveryâ€� programs have all pretty much run their courses.
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Rounding Up the Culprits of Rising Prices
From Bloomberg.com we get the bad news that “Bank of England Governor Mervyn King said inflation is likely to exceed the UK government’s upper 3% limit in coming months as higher sales taxes drive gains in consumer prices,� which “rose 3.1% in July from a year earlier after climbing 3.2% in June.�
[Read more...]