Daily Digest

Daily Digest - August 13

Thursday, August 13, 2009, 10:47 AM
  • Bailout Nation Wins First Amendment Award for Outstanding Journalism
  • Bailed Out Wives
  • Easy Al and the B"L"S
  • Interactive Job Loss Map (H/T Ruhh)
  • Banking and Credit: It Is NOT Over
  • China and Silver (Video on page from the Coming Depression.blogspot.com)
  • There is No Recession - It's a Planned Demolition
  • A Threat to Small Banks? No, Really?
  • Bob Prechter - "Quite Sure" Next Wave Down Will Be Bigger and March Lows Will Break
  • More Trouble In The Baltics as S&P Downgrades
  • JP Morgan Chase Caught Speculating with Customer Money

Economy

Bailout Nation Wins First Amendment Award for Outstanding Journalism

Many authors, journalists, and publicists have asserted causes for the financial crisis and stock market crash of 2008. However, none have done as comprehensive a job as Barry Ritholtz in his Mount Everest view of how it all went down: Bailout Nation.

Bailout Nation avoids all the disingenuous blame-shifting onto specific political parties or individuals. Instead, the surprisingly easy-to-read overview has the balls to publish the entire laundry list of culprits and variables. If you are interested in Truth rather than fancy academic erudition or rhetorical smoke and mirrors, Bailout Nation will fill your brain with the equivalent of a nutritious gourmet meal.

Bailed Out Wives

Meanwhile, in the Hamptons, Goldman Sachs CEO Lloyd Blankfein's wife, Laura Blankfein, and Susan Friedman, wife of Goldman distressed-debt specialist Richard Friedman, reportedly "caused a huge scene" when asked to wait in line at Super Saturday in the Hamptons last weekend.

"Their behavior was obnoxious. They were screaming," said one witness. Blankfein said she wouldn't wait with "people who spend less money than me."

Friedman shouted at the event organizer, "You have lost so much money because of this ... Why should we be treated like the $650 donors?"

Nice one, ladies.

Easy Al and the B"L"S

a former banker, told CNBC that when Easy Al saw that productivity numbers were not showing bigger gains, the worst Fed CEO in history went to the BLS and told them ‘this cannot be true!’ Bennett added, ‘and do you know what, when the BLS reworked the numbers they found huge productivity gains.’

We literally jumped out of our chair when the naive senator unintentionally suggested that Easy Al had the BLS cook the books so Al could keep pumping credit and paper over declining US living standards due to the massive transfer of wealth abroad.

Interactive Job Loss Map (H/T Ruhh)

Banking and Credit: It Is NOT Over

Gee, more truth-telling this morning!

In its latest assessment of the $700 billion financial system bailout, the Congressional Oversight Panel warns that banks still hold many risky loans of uncertain value. If unemployment rises sharply or the commercial real estate market collapses -- as many economists fear -- the banking system could again lose its footing, the panel says in a report to be released Tuesday.

China and Silver (Video on page from the Coming Depression.blogspot.com)

There is No Recession - It's a Planned Demolition

The Fed is abandoning the printing presses (presumably) because China told Geithner to stop printing money or they'd sell their US Treasuries. It's a wake-up call to Bernanke that the power is shifting from Washington to Beijing.

That puts Bernanke in a pickle. If he stops printing; interest rates will skyrocket, stocks will crash and housing prices will tumble. But if he continues, China will dump their Treasurys and there will be a run on the dollar. What to do? Either way, the malaise in the credit markets will persist and personal consumption will continue to sputter.

A Threat to Small Banks? No, Really?

While the Congressional Oversight Panel is seeing problems (finally) with small banks, they are still ignoring the gigantic problems at the large banks. All these balance sheet problems are going to fester until BOTH the DEBT and DERIVATIVES are cleared out of balance sheets. BOTH the BIG and SMALL banks that are infested will not survive such a cleaning. THAT’s the problem, only no one wants to acknowledge, much less handle, the truth.

The ostrich with his head buried in the sand will not be able to stop a freight train barreling down upon him (H/T David)…

Bob Prechter - "Quite Sure" Next Wave Down Will Be Bigger and March Lows Will Break

More Trouble In The Baltics as S&P Downgrades

Latvia has been having severe difficulties getting its IMF monies disbursed due to the lack of fiscal belt tightening. Just today Latvia released dreadful economic news with statistics revealing a19.6% fall in gross domestic product. As macabre as the figures were, they were better than analyst expectations of a 22% fall. Nonetheless, S&P has decided to use this backdrop as an occasion to downgrade the country’s debt along with northern neighbour Estonia.

Win Thin, an analyst at Brown Brothers Harriman, had this to say about the downgrades (emphasis added):

Somehow, Lithuania escaped this time but it should have been cut from the current BBB, as we rate it BB- vs. actual BBB/A3/BBB. The only surprise to us was that the downgrades weren’t deeper, as we see eventual junk status (below BBB-) for all three. As we noted in our most recent FX quarterly, the ratings agencies have been overly generous with Eastern Europe, particularly the Baltics. Our sovereign rating model puts Estonia at a BB/Ba2/BB rating, way below actual ratings of A-/A1/BBB+. For Latvia, we rate it B- vs. actual BB/Baa3/BB+. Others that are overrated in the region include Bulgaria (we rate it BB vs. actual BBB/Baa3/BBB-), Hungary (we rate it BB- vs. actual BBB-/Baa1/BBB, and Romania (we rate it BB vs. actual BB+/Baa3/BB+).

JP Morgan Chase Caught Speculating with Customer Money

JP Morgan Chase, whose chief executive Jamie Dimon last year recruited the former prime minister as an adviser, is being investigated by the City's watchdog, the Financial Services Authority for allegedly failing to keep track of £8.5billion of clients' money.

31 Comments

fujisan's picture
fujisan
Status: Gold Member (Offline)
Joined: Nov 5 2008
Posts: 296
Re: Daily Digest - August 13

Goldman, JPMorgan Face Carbon Market Curbs in Senate Proposals - Bloomberg.com

The Commodity Futures Trading Commission is considering new restrictions on dealers in existing energy markets that may also apply to carbon trading. The commission’s general counsel maintains it can act to limit speculation without action by Congress. The Obama administration sent Congress draft legislation this week that would place new limits on derivatives trading.
...
Markets will have inadequate liquidity without bank participation, Bill Winters, co-chief executive officer of JPMorgan’s investment bank, said at a July 23 press conference in New York.

Carbon markets “will die, and the temperature on the planet will go up by a couple of degrees, more than it would have otherwise, and we’ll be really sorry about it,” Winters said.
...

My comments: Why the hell do we need bubble machines to speculate on such markets? They should ban any non-professional from carbon-emmision as well as any commodity markets. They indeed are manipulating, vampirysing those markets at the cost of everyone and do not play any role at all. The so-called "providing necessay liquidity" is just propaganda.

One1776's picture
One1776
Status: Bronze Member (Offline)
Joined: Jan 24 2009
Posts: 52
Re: Daily Digest - August 13

RBS uber-bear issues fresh alert on global stock markets

"I expect this risk rally to continue into – and maybe through – a large part of August. What happens after that? The next ugly leg of the bear market begins as we get into the July through September 'tipping zone', driven by the failure of the data to validate the V (shaped recovery) that is now fully priced into markets."

Ruhh's picture
Ruhh
Status: Gold Member (Offline)
Joined: Nov 12 2008
Posts: 259
Re: Daily Digest - August 13

http://www.msnbc.msn.com/id/22425001/vp/32385463#32385463

Yeah, I know it's from MSNBC but a good little chat about toxic assets and CRE.

hucklejohn's picture
hucklejohn
Status: Gold Member (Offline)
Joined: Dec 13 2008
Posts: 281
Warren Pollock

http://inpoints.blogspot.com/2009/08/inflationdeflation-ideals-and.html

Warren Pollock is amazing.  He takes complicated big picture issues and boils them down into simple concepts we can understand.   

JNZ's picture
JNZ
Status: Member (Offline)
Joined: Jul 20 2009
Posts: 2
Re: Daily Digest - August 13

Thanks for your work Davos!  I'm currently living in New Zealand and have been trying to keep up with the US and global economies.  I've watched the Crash Course and made some adjustments accordingly.  I still have $ tied up in US$.  I had a couple of ?'s I was hoping someone could help me out on.  As Bob Prechter predicts, if the stock market sinks to new lows, would that cause a US$ rally?  Also, Is it possible ( I know this might sound crazy) that the big 5 banks, along with some others, use the bailout $ they've received to continue to prop up the stock market thru secret trading?  I just hoping to make some wise decisions with my US$ and plan for the future.

Thanks for any help,

J

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Daily Digest - August 13

http://culturechange.org/cms/index.php?option=com_content&task=view&id=508&Itemid=1

Peak coal review
by Tom Whipple
11 August 2009

USGS officials project peak coal in Appalachian Basin in ten years. Could we be wasting money on very expensive carbon sequestration schemes? China thinks carbon sequestration is prohibitively expensive and instead is focusing on vehicle and building efficiency and alternative power sources.

Peak Coal in Appalachia
(Excerpt from Peak oil review - Aug 10 by Tom Whipple)

Last month the Geological Survey published a new study that attempts to quantify US coal reserves. An important part of the study was an effort to determine how much of the nation's coal resources can be mined at current prices and how much sulfurous coal can be legally sold to users that are not equipped with the necessary scrubbers.

Although not using the term "peak coal," USGS officials project that the key Appalachian Basin which produces the bulk of coal used in eastern power stations may reach peak output in as little as 10 years. Production of low and
medium sulfur Appalachian coal has been increasing steadily as the favorite source for generating electricity after nuclear power went out of favor 30 years ago. About 40 percent of the remaining coal in the Appalachian basin is high
sulfur coal that is not useable without EPA waivers or expensive modifications to coal plants.

<MORE>

TechGuy's picture
TechGuy
Status: Gold Member (Offline)
Joined: Oct 13 2008
Posts: 420
Re: Daily Digest - August 13

"I expect this risk rally to continue into – and maybe through – a large part of August. What happens after that? The next ugly leg of the bear market begins as we get into the July through September 'tipping zone', driven by the failure of the data to validate the V (shaped recovery) that is now fully priced into markets."

 

The biggest push that has permitted the stock maket to rebound was the extremely low interest rates. Back in March the Fed started its quanltive easing program to buy $300 Billion in US treasuries to force US interests rates lower. Yesterday the Fed stated that it was going to wind down the QE program, So we should see interest rates begging to rise in a few weeks. At some point the interest rates rise to the point that money leaves equities and moves into bonds. This will probably happen sometime between September and November.

However, when the market crashes, I would expect the the Fed would resume quanitive easing or some measure to stop the market falling over the cliff. I would have thought that Beranke would have renewed QE until after his reappointment as Fed Chairman. Perhaps either he already knows he is going to be replaced, is really clueless, or has decided to leave the Fed after his term is up.

 

 

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Daily Digest - August 13

This isn't aimed at you in particular JNZ (welcome to the fray BTW), but as a total stocks and investment ignoramus (I've never invested in anything whatsoever you might all be surprised to discover!) I cannot be but surprised that anyone could consider staying in any investment markets knowing what's coming...? How can any of you have any idea of what's coming next, and risk your valuable (for the time being!) assets on a system doomed to fail?

I would've thought anyone with any understanding of the CC would pull all their money out, and find somewhere to buy debt free to hunker down and ride the perfect storm out.....

Just my 2c worth...  Mike

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2245
Re: Warren Pollock

Hucklejohn, thanks for the link to the Warren Pollock video; I really liked it.  I was unfamiliar with Pollock before, but now plan to read/hear more by him to see what else he has to say.

This is my first impression, so take that into account.  But he does seem to share some qualities I really admire in Chris:

- He boils things down to their essence to get to the core and truth of things,

- He isn't afraid to call things the way he sees them, and

- He seems to be a genuinely decent human being.

Thanks again for sharing!

dcm's picture
dcm
Status: Silver Member (Offline)
Joined: Apr 14 2009
Posts: 214
Re: Bailed Out Wives

"Their behavior was obnoxious. They were screaming," said one witness. Blankfein said she wouldn't wait with "people who spend less money than me."

Friedman shouted at the event organizer, "You have lost so much money because of this ... Why should we be treated like the $650 donors?"

 

 

- Now class, before we resume, I wanted take some time to review some of the root causes of the French Revolution 

Dogs_In_A_Pile's picture
Dogs_In_A_Pile
Status: Martenson Brigade Member (Offline)
Joined: Jan 4 2009
Posts: 2606
Re: Daily Digest - August 13
Damnthematrix wrote:

This isn't aimed at you in particular JNZ (welcome to the fray BTW), but as a total stocks and investment ignoramus (I've never invested in anything whatsoever you might all be surprised to discover!) I cannot be but surprised that anyone could consider staying in any investment markets knowing what's coming...? How can any of you have any idea of what's coming next, and risk your valuable (for the time being!) assets on a system doomed to fail?

I would've thought anyone with any understanding of the CC would pull all their money out, and find somewhere to buy debt free to hunker down and ride the perfect storm out.....

Hello Mike -

You don't need to know what's coming next if you keep your trades short and trade in the direction the market is moving.  Such market awareness and a handful of technical indicators are priceless.  Of course you have to have a knife edge sharp entry and exit strategy and the discipline to exit when the trade moves against you.  Cat is lights out with her trades now and takes what the market gives her. 

One of the biggest keys is market neutrality.  Up or down - Cat and I don't care what direction the market moves, just that it moves.

And we make a night and day distinction between trading and investing.  Trading generates a revenue stream to pay down debt and help prepare.  Investing long term.  Hmm.  All of those positions are long closed and converted to physical gold and silver.

So the way I look at it, we have the perfect storm of knowledge - an understanding of CC (which factors into market awareness) plus the knowledge and discipline to trade successfully. 

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - August 13
JNZ wrote:

Thanks for your work Davos!  I'm currently living in New Zealand and have been trying to keep up with the US and global economies.  I've watched the Crash Course and made some adjustments accordingly.  I still have $ tied up in US$.  I had a couple of ?'s I was hoping someone could help me out on.  As Bob Prechter predicts, if the stock market sinks to new lows, would that cause a US$ rally?  Also, Is it possible ( I know this might sound crazy) that the big 5 banks, along with some others, use the bailout $ they've received to continue to prop up the stock market thru secret trading?  I just hoping to make some wise decisions with my US$ and plan for the future.

Thanks for any help,

J

Hello JMZ:

I'm not licensed and really can't offer advice. I will tell you what I did, and what my take is, but I need to tell you upfront that I just read a lot and have absolutely no education what so ever (I barely got out of HS with a diploma). There are far more savvy investors on this site, Cat and Dogs and many others. As for the gene pool of intelligence here - the same goes, I'm just a guy that read a few hours a day and then cuts and pastes what I don't think the main stream media sees or bothers to cover.

We got out of the 401ks and IRAs in 2003,4,5, and 6. My better half had a little left over and didn't listen to me in 2008 until she saw the market really dip. She has since watched the CC and follows the same blogs I do. Our ideology is paying taxes on something is better than losing everything.

We saw real estate rising in 2002 and questioned how people could afford homes with flat wages. We realized that a lot of our friends' wealth and even ours was perceived wealth. We realized that the music was going to stop and a lot of us wouldn't have chairs to sit in.

We downsized. I purchased a lot of acres, subdivided it and exited real estate in 2004 and again in 2007. I sold the land and paid capitol gains out the proverbial. I kept 3 acres and we built a tiny house ourselves to keep cost down. Our AGI that year was insane and so were the taxes. We had regrets until the residential real estate market collapsed, we were kicking ourselves wondering if we could have held it longer, gotten more and not paid capitol gains. After it tanked our short lived regrets went away.

I have faith in the 3 G's and since we don't discuss religion on this blog so I'll skip the first G and move on to the others:

  1. G____
  2. Gold
  3. Government will F&*# it up - royally!

Greenspan's paper from 1966 says that the government would make owning gold illegal if people shunned the dollar. Paper ETF's, from what I read exceed the amount of physical metal and some are based on leased metal.

I had some puts on the dollar, my wife insisted we exit in the money last week, she feels the dollar will gain strength like it did last year when the derivatives went to heck. I do have a few bucks left in the market, all if it is in options, puts in CRE, Hotels, Retail, and the indecies (S&P and the DJIA). I'm not sure the dollar will or won't gain strenght this time around, if people think Treasuries are safe they may flee from equities to securities. But I'm not greedy. I honestly don't know what is keeping the market up, BS numbers, BS media, or BS manipulation (that might or might not be occurring.) The numbers can't be conned for long. There is no such thing as a jobless recovery, and growing government may help add to the 30% of GDP but it won't replace the 70% that was consumer credit driven and it will clobber everyone in taxes. So this plan of theirs is not a plan. Neither was Katrena.

I do know we are broke. It is one thing to have massive debt and be able to borrow enough to service the existing debt and the new debt. We have passed that point this year and it got a whisper of attention. Ben Bernanke is doing Quantitative Easing because Ben Bernake has NO OTHER CHOICE, it is that or default, other countries can't and won't lend enough, the Regan era bonds are coming due now. It is debt upon debt and we don't manufacture enough.

Enron and Madoff are different than the USA with regard to one specific point - their gig was revealed sooner than ours will be.

The show will come to an ugly end.

When?

I have NO idea.

A guess? Likely when the 1.5 trillion dollar wave of residential alt a's and option arms hits shore this fall, next spring and summer and when the 3.5 trillion dollar CRE (Commercial Real Estate) crashes. If 1.5 trillion in sub-prime mortgages did the damage it did in 2008---then I don't think you have to be a London School of Economics graduate to realize that 5 trillion is going to be the last punch to a wounded and insolvent nation.

Could the dollar go first? 

I think that is a possibility.

That's my simplistic take, and I'd debate anyone on it no matter their gray matter or education. The facts are the facts.

Having said that I saw no merits for holding paper. Food and little or no debt made more sense. I'm pretty confident we will come out the other side, but I think it is going to be a tough road, but many, many times countries have devalued and re-denominated currencies. We won't be the first, nor sadly do I think we will be the last.

New Zealand looks nice, I have recently spent a lot of time thinking of where I'd go if our perceived democracy took a (further) turn for the worse. Take care

 

 

timG's picture
timG
Status: Member (Offline)
Joined: Apr 22 2009
Posts: 15
Re: Daily Digest - August 13

This does not have anything to do with the above articles; but the news here in the UK has been focusing on the US debate on health care, in particular the attacks on the NHS in the UK.

The NHS here does an excellent job, it saved my son's life when he was four, from orbital cellulitis (a staphlococcus or streptococcus infection in the eye socket). Without the prompt treatment he would have either died, or been severely brain damaged and blind in one eye. Without NHS treatment I would have had to sell the house to pay for the medical fees. Then I would have been made homeless. But now he is a healthy young man, in work and paying taxes.

There is a lot of nonsense from morons such as Sarah Palin, that should not be taken seriously. I would also like to point out that if you want private medical treatment in the UK, you can either pay for it when the need arises, or pay for private medical insurance. If you can afford it, you do not have to have any 'government interference', but if you can't afford it, you will receive excellent care anyway.

I have stated on this site once before, if your country would let you suffer and die needlessly in your hour of need, then by what moral authority does it have to extract any taxes at all from you?

America has outrageous property taxes, as well as an amazing amount of other taxes and stupid regulations, so don't say that you are a low-tax economy.

That said, you probably will not get an NHS because you are broke. The UK is broke too, so we might lose ours. Bad times.

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - August 13

Hello TimG:

I'm sorry to hear your son got that but I am glad he got super treatment and was saved!

Health care here is a mess! I despise my plan! I'd take a better plan in a NY minute. I watched Moore's Sicko, I listened to both stories like yours and stories where folks in Canada came here for care. If I had to guess I would imagine your plan is better than the cr*p I have.

I read 1,017 pages of HR 3200 and I have to be honest. These guys can't even pronounce health care, they sure as heck can't explain it and given how they have ruined anything and everything they have ever administered I wouldn't want to risk my life or my kids life on some plan they can't describe and I can't explain (after reading it).

And oh, by the way neither do they. The amendment saying Congress should take this plan for their health care was voted down.

That IS a HUGE issue. They serve us, not the other way around. America lost it's way. We are NOT second class citizens to elected servants.

They have jacked up Social Security, Medicare, Cash For Clunkers, Katrina and a lot more. They don't have a reliable track record. Well, I take that back. They do have a reliable record. They are good at going broke and indebting us for insane plans like TARP, which if you recall, was emergency, emergency, give us money to go purchase troubled assets, then a week later it was ah, we will not do that we will give the banks money instead.

Paulson should have been canned, right then, right there - and Bernanke with him.

Anyway, I'd likely be in support of a plan like you have, but I don't think your plan was to be our plan, and if  it was and they can't even explain that then they blew it.

Plus, how are we going to pay for it?

I didn't vote for McCain, or President Obama, but I did vote. Until now I respected the man, I question if I can any longer. This plan is not the priority, his ONLY priority should be the financial situation which he is botching terribly. Putting a good [health] plan into effect for it and everything else to go broke is stupid. It serves no purpose.

It is like me moving into a McMansion on my income and getting foreclosed a week after I get in.

It is proof that the man is likely out of touch with reality and I question if he has any business what so ever in that office.

Anyone who says the recession is over and the economy is fixed is lying to themselves and if they believe what they are saying they shouldn't be allowed to drive and chew gum at the same time, let alone run a country, or represent a state.

Take care.

 

timG's picture
timG
Status: Member (Offline)
Joined: Apr 22 2009
Posts: 15
Re: Daily Digest - August 13

Davos,

I agree with you entirely on your analysis of your country's financial situation. My gripe is with the Republican party using stupid advertisements saying that the UK NHS is 'evil' with 'death panels' etc.

Please don't listen to this nonesense. Why insult our system for their agenda, when it has no financial ties to the US?

By the way, here the 'cash for clunkers scheme' is called the 'scrappage scheme'. We also have quantitative easing (£175 Billion so far), and nationalized banks, bailouts, loan guarantees etc, etc. Both of our economies are doomed, both involved in the same wars, with the coffins flown home daily.

I also agree with you on the 'green shooters', they make my blood boil.

Take care

 

 

bluestone's picture
bluestone
Status: Gold Member (Offline)
Joined: Dec 29 2008
Posts: 263
Re: Daily Digest - August 13

 TimG

I think your last line sums it up.  what's the point in debating (in the US) over national healthcare versus private healthcare if one's country is flat broke?  A high quality healthcare system is for wealthy and productive nations.  The U.S. used to be a wealthy nation, but those days are over.  Consequently, the healthcare system will suffer and deteriorate, govt healthcare or no healthcare.

Ironically, as the U.S. faces bankruptcy, currency crisis,  peak oil, etc, we actually may become healthier as a people.  Americans tend to suffer diseases of indulgence (heart disease, diabetes, alcoholism, emphysema, obesity).  
As food becomes scarce and Americans are forced to perform manual labor again, many of these health problems will improve.

Brian

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - August 13

 

Both of our economies are doomed, both involved in the same wars, with the coffins flown home daily.

Hello TimG:

Well said! +++++1! Sad state of affairs, take care

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - August 13
bluestone wrote:

...Ironically, as the U.S. faces bankruptcy, currency crisis,  peak oil, etc, we actually may become healthier as a people.  Americans tend to suffer diseases of indulgence (heart disease, diabetes, alcoholism, emphysema, obesity).  
As food becomes scarce and Americans are forced to perform manual labor again, many of these health problems will improve.

Brian

LOL, I'm in stiches.

timG's picture
timG
Status: Member (Offline)
Joined: Apr 22 2009
Posts: 15
Re: Daily Digest - August 13

Brian (bluestone),

Thank you for getting my point.

But it is not just lifestyle choices that affect healthcare, accidents do happen!

Everyone be careful!

Tim

Dante's picture
Dante
Status: Bronze Member (Offline)
Joined: Jan 22 2009
Posts: 31
Re: Daily Digest - August 13
Davos wrote:

I'm not licensed and really can't offer advice. .............................

Davos,

You may not think you are qualified but I appreciate the post.  Thanks for sharing.  It always helps to here what others have done.

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - August 13

Hello Dante: Pleasure to contribute to this fine community that Chris built, take care

hucklejohn's picture
hucklejohn
Status: Gold Member (Offline)
Joined: Dec 13 2008
Posts: 281
Re: Daily Digest - August 13

Thanks again for all your work Davos.  Your remark about Congress is supposed to serve us struck a nerve with me.  Obama and his democratic allies insist on demonizing the criticism from their health care opponents as though they are still in Chicago & have a need to intimidate, then crush their opponents.  This is not a healthy sign -- no pun intended.  Things could get ugly.  Obama and his democratic allies are not even going "through the motions" of listening, maybe conceding their opponents make some good points, then going ahead as planned. 

timG's picture
timG
Status: Member (Offline)
Joined: Apr 22 2009
Posts: 15
Re: Daily Digest - August 13

Davos,

I recall a conversation I had with a US army sergeant in Seoul, south Korea, just before the first Gulf war: he posed the question: "how much is a human life worth?".

I replied: "priceless". He went on to say that I was naive, and the price of an American soldier was $100, 000. Any more would not be financially responsible/ recoverable.

That was for a man offering his life for his patriotic service. Is this not a case of a 'death panel'?

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - August 13

Hello HuckleJohn:

I agree, this isn't turning into a debate about merits. They have dumbed it into yet another right, left, liberal, conservative, right to this, right to that shout fest.

All I do is read. After reading 1017 pages of HR 3200 I couldn't tell you what is in the bill if I tripped over what was in the bill. Like everything else they have administered and written - they blew this one before it even taxid out to the runway.

I think the war was somehting like 100:1 and Congressional oppositon to the Paulson "bail"out was 300:1. Both passed. I estimated the other day that this will be 30,000:1 and still pass. Today I saw this picture on Drudge (little right of where I am, but for "main"stream they are the best of the worse IMHO) and I read that Congress's mail servers are at capacity. Maybe it will be 300,000:1 or 3,000,000,000:1.

I'm glad I'm not in Congress. American's are getting fed up (and I think that only a small portion of this (protest anger) is about health care) and when the economy tanks I think we are going to see some resignations.

 

 

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - August 13

Hello TimG:

I hope he realizes his ways before his kids go off to war. Take care

Headless's picture
Headless
Status: Gold Member (Offline)
Joined: Oct 28 2008
Posts: 363
Re: Daily Digest - August 13

Those who don't want to hear ranting maniacs do what ranting maniacs do best, just skip this post and go to the next one. Really.

Fujisan said:

"Why the hell do we need bubble machines to speculate on such markets? They should ban any non-professional from carbon-emmision as well as any commodity markets. They indeed are manipulating, vampirysing those markets at the cost of everyone and do not play any role at all. The so-called "providing necessay liquidity" is just propaganda"

 

Absolutely agree. Something needs to be done about this before it gets started--whatever that something is! The nation--hell! The WORLD! was sacked for BILLIONS during the oil rape, and now we're going to let the same scumbag criminals take food out of childrens mouths across the country so that they can have larger yachts?

Dear Obama:  I say the probability of you not being a crook is quickly approaching zero, and this is your last chance to save your reputation, your Presidency, and the spirits--and lives?-- of all those innocent, hard-working non-racist Americans across America that celebrated the redemption of America's Bush-wacked image with your election (I voted for you and I am white).

If what you've been doing (Geithner, Summers, Big Pharma Christmas; not going after Goldman, The Lynch Mob (as in Merrill), B.O.A.sters, Hank Paulson, etc. etc.) is some sort of Chess game which was designed to let the criminal elite checkmate themselves, well it's time to yell "CHECK!"; and that, that you are, in fact, Sacrificing Pawns for now, is the only way I can imagine that you're not as criminal as the rest of Wall Street. What have they got on you? Maybe Alex Jones is right. How does a guy come from nowhere in the space of a few short years and get to where you've found yourself? Money whore? Blackmailable criminal? What?  What! What has stolen your soul!

You got my vote for two--no, three--reasons: 1. You're not George Bush (so I thought); 2. you came from humble beginnings (not as humble as Africa, no doubt); 3. you're black; yes, I considered that and felt that our nation's international image would be somewhat salvaged if we elected a non-white to the Presidency--didn't matter to me which color, just anything other than white--oh, and anything other than Miss Endless Airspace (Joke: What's the difference between Palin and and a quart of oil? Burning one is professional suicide; burning the other will allow you to communicate by smoke signal with the Russians from your front yard).

Had you, Obama,  not been "in the race," I probably wouldn't have voted. No point, as pretty much all white politicians are criminals (given the results of random encounters we have so far); it's just that nobody has taken a sufficient look in their closets. Think "taxes" as a mere starting point... 

You say I exaggerate? Test my hypothesis: look in "the closet" of any random ten senators and I'll bet you my next year's wages that you get nine potential roommates for Bubba the child rapist. Oh! You say that's a harsh comparison? Well you may be right, as I'm not sure whether I'd rather have Bubba rape my daughter or have a politician kill her by trading her next meal  for some bankster's Masserati. Perhaps politicians are true humanitarians--assuming other dangerous criminals were allowed to wander free in New York and rape our children. 

Well Obama, I hereby UNVOTE for you. Please prove me impatient, impulsive, and a short-sighted Chess player.

I am, by no means, the only one out here who is pathetically trying to keep the faith that you are just waiting for the right time to do the right thing. We've all agreed to hope a little longer: "He's got to be setting them up. Right?"  I guess we're all in denial. How could we have been so wrong about you?

Tax evaders, banksters that contribute nothing of value (as Fujisan notes) to the real world, and continued Whitehouse support for Murder by The Disease Management Mafia and their denial of service? That's all you've got for a nation of needy and abused souls? Shame on you you loser!

I hope you believe in God (I don't), 'cause you're sure as hell never going to meet Him given the way you have decided that the size of banksters' yachts takes precedence over food in a child's stomach.

Your ex-supporter,

A teacher by trade; fool by virtue of birthplace and my last ballot-box apparent misadventure.

 

 

Headless's picture
Headless
Status: Gold Member (Offline)
Joined: Oct 28 2008
Posts: 363
Re: Daily Digest - August 13

Hucklejohn said:

"Warren Pollock is amazing."

 

Wow! They're out there, aren't they? How do we get them into congress? What we need is a a billionaire that has "gone upriver"; i.e., one that's willing to sacrifice his wealth to the end of ousting the 500+ criminals that are currently seated and replacing them with Pollock-like pro-republic Citizens. That's would be a country I could love and die for--as opposed to a collective of criminal elite that I despise and would happily die deposing.

Headless's picture
Headless
Status: Gold Member (Offline)
Joined: Oct 28 2008
Posts: 363
Re: Daily Digest - August 13

timG said:

"But it is not just lifestyle choices that affect healthcare, accidents do happen!"

Accidents like the chondrosarcoma (cancer) that I had and that went undiagnosed for several years because of lack of access to healthcare...

I spent seven years being sick off and on, sometimes in bed for two or three weeks, too weak to get up. In the end, I was diagnosed with cancer by a volunteer surgeon who happened to be in a clinic when I was in to have what I thought was a hernia checked out. Sheer luck. Wouldn't be here now if that man hadn't decided to donate some of his time that particular day. My angel.

I have pondered what the problem is with this nation: how could we be the only developed nation that hasn't recognized the moral imperative to share our healthcare resources such that those whom nature has chosen to suffer don't suffer for our pleasure and selfish convenience? The models are there. The spokespeople, in the form of hundreds of millions of people with national health care, are there speaking out--from adjacent countries and distant shores. Perhaps it is actually true that the average American is too stupid to be anything other than a pawn, a slave, a mortal member of the  Darwinian winnowing of the Feast from the Feasters: The Middle Class becometh Meat.

 

TheRemnant's picture
TheRemnant
Status: Silver Member (Offline)
Joined: Jan 29 2009
Posts: 141
Re: Daily Digest - August 13

Many authors, journalists, and publicists have asserted causes for the financial crisis and stock market crash of 2008. However, none have done as comprehensive a job as Barry Ritholtz in his Mount Everest view of how it all went down: Bailout Nation.

Bailout Nation avoids all the disingenuous blame-shifting onto specific political parties or individuals. Instead, the surprisingly easy-to-read overview has the balls to publish the entire laundry list of culprits and variables. If you are interested in Truth rather than fancy academic erudition or rhetorical smoke and mirrors, Bailout Nation will fill your brain with the equivalent of a nutritious gourmet meal.

 

I've never heard of Bailout Nation.  I'll put it on the radar. 

The best explanation I've read as to what factors led up to the current financial calamity is "Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse" by Thomas Woods.

The audio book is what I listened to.  Putting education on the ol' iPod really brings out the value of the device.

 

TheRemnant's picture
TheRemnant
Status: Silver Member (Offline)
Joined: Jan 29 2009
Posts: 141
Re: Daily Digest - August 13

A bit off topic, but I guess these Daily Digests are a bit of a free for all.   I am a bit confused about the healthcare debate.

We all need healthcare from time to time, except for those of us who are unfortunately very sick.  Is healthcare important?  Yes!  Should healthcare be accessible to everyone?  Certainly!  Should government provide healthcare services?  I'm not convinced of it.  BTW, I'm Canadian.

Would you not say food is more or less important than healthcare?  We all need food more, on average, than we need healthcare.   I would feel miserable if I didn't eat for a day and even more so after 2-3 days.  So if this is true, why don't we call upon the government to save us from the "evils" of the free market and run food production and distribution?  It reminds me of a joke:

Two old school Russian women were standing in line waiting for their daily ration of bread.  On turns to the other and complains, "I feel like I have wasted half my life standing and waiting for my ration of food!".   The other pipes up, "Oh yeah?  You should pity the western world.  Over there, their government doesn't even distribute food!"

What about shelter?  We all need that.  Should government provide housing to all of us?  Clothing?  Heat?  Hydro?  Water?  Where does it end?  When government provides a service, it taxes us to provide it - sort of.  I'll leave deficit financing and the Fed's monetary "printing presses" out of the argument for now.

Given a free market, prices tend to trend downward and quality trends up - given a free market.  That's an important distinction.  When government intervenes in a market and provides a service that could (note that I am not arguing should as of yet) be adequately provided by the free market, the exact opposite occurs.  Prices trend up and quality trends down as it monopolizes or at least distorts the market where that service is concerned.  Why?  The absence or relative absence of free market competiton. 

I want to take a moment to state that a free market, that is to say, a true free market - something we don't have - does not preclude charity or charitable acts.  Here in Canada, I've read that we have 38,000 registered charities *DESPITE* having a significant welfare state.  I have a member of the family who is a cop.  She sees the seedy underbelly of society, yet when she attends charity events, in particular police charity events, she tells me she is always staggered with people's generous donations.  50's and 100's all 'round.  A true free market can aptly be described as  voluntary society who exchanges via honest trade including charity, not force or fraud, like the hideous market we have today.

What kinds of competition are out there? Most people I ask can think of one off the top of their heads.  I can think of four:

  • Direct Competition - What we are most familiar with.  Airline X directly competes with Airline Y servicing the same airport going from point A to B. X battles Y for Customers. Television networks compete for viewers so they can impress potential advertisers with ratings and so forth.
  • Indirect or Parallel Competition - is not readily seen by voters, but oh my, is it real.  Airline X not only competes with Airline Y, but they ALSO compete with Train Company Z, Bus Company M, and even Autocar Maker N, all taking customers to points A and B.  Television stations compete for the attention of voters with newspaper companies, radio, magazines, and the Internet.  Living in Canada, we are well aware that Rogers (arguably the largest communications provider up here) has recently expressed deep concerns of losing advertising revenue in its conventional old media to viewers “switching off” and going to the Internet for information.
  • Dollar Competition - What’s this?  It is an area of competition where every product or service competes against EVERY OTHER product or service for the limited dollars in your pocket/wallet/purse.  Explain?  Well, if I go buy product A, but I don’t have enough dollars to buy product B.  I wanted both, but I had to forego B.  The manufacturer of product B loses out.  In this case.  Those of us who have stuck to budgets know this one implicitly.
  • Market Competition - What’s that?  It is this notion that at any time, anywhere, any individual is free to enter or exit a particular area of business or industry to compete with the incumbents or leave the industry altogether and let the incumbents take up whatever Customers you may or may not have had.  Another way of describing it is “equal barrier to entry” or a “level playing field” for all participants.   For example, if government regulatory enforcements can be borne by a large corporation but cripple a smaller company, we don’t have Market Competition.  If big banks can borrow funds from the Fed at near zero and lend them out at higher interest rates, and smaller banks cannot get access to this perk, this is one reason as to why big banks are...well...big.   If I cannot practice fractional reserve banking by printing up money and loaning it out to my friends as I actually have to *HAVE* the money to lend, but banks can.  This puts me at a disadvantage.  Note that I am not arguing whether or not I should practice fractional reserve banking or whether or not it is good or bad, but simply pointing out the government won't let us all do it.  Just certain people it has given a license to do it and will crack down on those who do not have said privilege.

Now.  That all said.  Given a free market, does it sound like it trends toward monopolies?  I will immediately concede the point that every businessman *WOULD LIKE* to obtain a monopoly in their respective industry, but, given a free market and the at least 4 areas of competition I described above, they just can’t do it....without government..ahem...help (think lobbyists, special interests, campaign donations, high level positions in companies after politicians leave..etc. etc. etc).

Government can.  How?   Well, government takes your money by force.  Let's not beat around the bush.  It can and does.  Some call it redistributing wealth, and this has a nice cooperative ring to it, but there is nothing cooperative about it.  You could equally say, it redistributes impoverishment, but that has a less catchy ring to it, doesn't it?  Wealth is not money.  Wealth is the relative absence of poverty and poverty is the relative absence of wealth, subject to the eye of the beholder.

If government funds a service, it does so with revenues you cannot opt out of no matter the quaility of it.  For example, take the recent automotive bailouts.  Not only do I have to pay for the car I did buy, I have to pay for the car I *DIDN'T" buy.  The one I rejected in the market as I felt it wasn't worthy of my dollars due to criterion I set (like reliability, durability, mileage etc) and a competitors was.   How can a competitor compete with that?  They can't force their customers (and non-customers) to buy their product, can they?  Remember I said forced is *NOT* a natural feature of exchange in a true free market.

Back to healthcare.  If healthcare is too expensive, I would begin scouting around to find out why.  I mean, REALLY why?  If profit is so vast in this industry, why isn't their a rush of competition into this industry?  If doctors make too much money, why isn't there a rush of competition to be doctors?  There's no shortage of real estate agents.  Is government or doctor cartels like the AMA restricting the number of doctors keeping the prices up?  Is the cost of being a doctor artificially high via State legislation or regulation?  If insurance prices are so vastly expensive and profit gouging, should their not be a rush of competition into insurance market?  You see, the free market is alot like the ocean.  It is constantly crashing around with currents, eddies, waves, but it is *ALWAYS* seeking equilibrium.  A crest fills a trough.  The ocean wants to be perfectly flat and still.  Is it ever in equilibrium?  Nope, too many forces acting on it...seen and unseen.  However, it is perpetually seeking it.

My personal experiences with Canada's healthcare system is tepid.  Sometimes it works, sometimes not.  I have fewer satisfied experiences than irritating ones.  I'll tell you what I was really impressed with...the veteranarian business. 

My dog passed away a few years ago due to cancer.  The weekend before we had to put him down, it was nothing but trips to the vet to determine what was wrong.  The vets was clean, well lit, courteous, and my dog was seen within 5 minutes.  The vet took the time to discuss symptoms, behaviour, eating/drinking habits etc, took tests and so forth while searching for the root cause.  The vet was empathetic, polite, and respectful.  I kept bringing my dog back over that weekend and the normal fee just to even be seen was waived by the administration as I was - unfortunately - too often a repeat customer that weekend.  Normally, they charge seperately for every needle, service, or drugs they prescribe but more and more of these things were waived as the were very concerned about my dog.  They figured I spent enough, I guess.  The diagnosis was hemangiosarcoma, a particularily nasty form of cancer.  We had to let him go.  Again, full professionalism, empathy, allowed us to take a room for as long we wanted to say goodbye.  Boy, its tough to write this part...you'd never think a dog could affect you this much.  They took care of everything yet managed to give us the feeling that we, the Customer, were in total control.  And we were...other than being out of control with grief some moments.

When it was over, the vet/staff asked if there was anything else they could do.  I said, "Can I sign up my family as your new patients so you can be our doctors and opt out of our healthcare system?"  They laughed.  I didn't.  Oh wait.  I can't.

I've typed enough.  I gotta go to bed.  Sorry for being so long winded.  Good night.

Jeff Borsuk's picture
Jeff Borsuk
Status: Silver Member (Offline)
Joined: Jul 25 2008
Posts: 150
Re: Daily Digest - August 13

Thanks Davos!

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments