Monday, March 22, 2010

Sad day to be an American....

As a student to Austrian economic theory this is one of the worst days of my life (second only to the passing of PATRIOT act). I don't have anything else to say, if you want our argument against health care read this post:

“One of the consequences of such notions as "entitlements" is that people who have contributed nothing to society feel that society owes them something, apparently just for being nice enough to grace us with their presence.” - Thomas Sowell

“Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.” -Frederic Bastiat, French Economist (1801-1850)

“I don’t make jokes… I just watch the government and report the facts.” -Will Rogers

“If you think health care is expensive now, wait until you see what it costs when it’s free!” -P.J. O’Rourke

“Suppose you were an idiot. And suppose you were a member of Congress….But then I repeat myself.” -Mark Twain

“I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” -Winston Churchill

“The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery.” -Winston Churchill

“Socialism is workable only in heaven where it isn't needed, and in hell where they've got it” - Cecil Palmer

“Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it” -Thomas Sowell

“Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” - Winston Churchill

“Socialism: nothing more than the theory that the slave is always more virtuous than his master” - Henry Louis Mencken

“Socialism values equality more than liberty.” - Dennis Prager

Tuesday, March 16, 2010

.......and this time isn't different?

Excess Reserves of Depository Institutions

Friday, March 12, 2010

Lessons from accounting fraud (Lehman debacle)

Barry Ritholtz of The Big Picture Blog wrote a great article today. He explains once again that we don't seem to, learn much from history (Enron, WorldCom). People are greedy. They will do almost anything, including accounting fraud, to make money. This is how it has always been and it always will be. See the full article here, Accounting Fraud, Short Sellers & the SEC.
The bankruptcy report on Lehman is both revealing and damning. Once again, the investing public learns — after the fact — the basic truisms of modern markets:
  • Major accounting firms are worthless to investors. They were either unable or unwilling to detect fraud amounting to 50 billion dollars. The incompetents at Ernst & Young deserve the same fiery death as Arthur Anderson; Whether they are hired guns or paid whores, they — like the rating agencies — are worthless to investors.
  • The Shortsellers turn out to be the good guys. Consider the absurdity fraud of “protecting” the bankster frauds — from the truth, as revealed by Einhorn et. al.
  • The ban on short selling is an indictment of the inability of the SEC to understand WTF is going on, and a reward to the criminal corporate management teams.
This is where it gets interesting. The SEC is limiting short selling (see here, and here), seen as a "devil" practice by some, in its efforts to "strengthen" the financial markets. What people don't seem to understand is that without short sellers we have no way to expose the truly fraudulent companies and rid our economy of excess fat. Short sellers don't be on a company to go bankrupt if it has truly efficient and profitable operations. They short because of some weakness in a companies fundamentals. Driving the bad companies out of business moves capital towards the stronger, more efficient businesses that can better utilize resources for society.

Basically....without short selling we don't have efficient markets and without efficient markets society will not operate to its true potential.

What are we reading?

Financial News

The genesis of Repo 105
(Financial Times)

The "Repo 105" Scam: How Lehman Fooled Everyone (Including Allegedly Dick Fuld) And How Other Banks Are Likely Doing This Right Now

Renminbi rumours
(Financial Times)

CDS Speculators May Or May Not Be Cause For Riots In Greece To Turn Violent


The Gold Standard

Kansas City School District Faces Bankruptcy, Closes 29 of 61 schools; Every Child Left Behind For Decades

The Stimulus Scam (Mises)

All Money In The United States Comes Into Existence As Debt – So What Will Happen Now That Bank Lending In The U.S. Is Contracting At The Fastest Rate In History?
(The Economic Collapse)

Technicals & Trading

Potash (POT) Raises Guidance
(Fund My Mutual Fund)

March 11, 2010 Looking at the TIPS Yield Curve (Crossing Wall Street)

Digital River (NASDAQ:DRIV): Checks Indicate McAfee Is Running Tests With DRIV; Raising Price Target to $34 - JMP Securities
(Notable Calls)

Gartman: Here's Why Europe Is About To Dump Lots Of Gold Onto The Market

Market Recap: The next important date is 03/12

Elliott Wave Theory

Elliott Wave Update ~ 11 March

From My Favorite Blogs

NY Fed Implicated in the Accounting Fraud at Lehman
(Jesse's Café Américain)

EXPLOSIVE: Lehman - Where Are The Cops?
(Market Ticker)

New Fed Z1: Market Move Is NOT Sustainable
(Market Ticker)

Political Commentary

Jim DeMint's bid to embrace tea party irks Senate GOP colleagues (Politico)

What Biden told Netanyahu behind closed doors: "This is starting to get dangerous for us"Politico)

(U.S. Government Confirms Sanctions Don't Work (Campaign for Liberty)

Is GOP Better Served If Health Care Passes Or Fails? (Real Clear Politics)

Other Analysis & Commentary

The Health Care Reform Bill: Welcome To The Biggest Tax Increase In U.S. History

Lehman Fraudulently Cooked Its Books, Accounting Giant Ernst & Young Helped, Geithner and Bernanke Winked and Slapped Them on the Back (Washington's Blog)

Thursday, March 11, 2010

Can you believe this?

From Mish's Global Economic Analysis:
"We have to pass the health care bill so that you can find out what is in it." That unfortunately is the sad state of affairs, not just with health care, but with virtually any bill passed by Congress.

The only people who know what is in these bills are the lobbyists who write them.
It's safe to say that Washington has no interest in representing the people anymore. The sheer ignorance and complacency of our elected officials baffles my mind. These people need to be voted out of office in 2010 and 2012. That is the only way we can begin down the road of recovery.

Sunday, March 7, 2010

Keep in mind what's important...

I think this chart speaks for itself....