Thursday, March 25, 2010

All Systems Proceed Towards Disorder

So much to do and so much going on! It's a whirlwind sometimes.

What Have I Been Up To?
A regret that I have is that I have not been writing much and when I do the material has not been as sharp as I would like it. Of course time constraints are a huge factor. I fear this may continue on. Here is what i have been up to and some other items, should you be interested in the slightest.

As I have stated, I have been on a pretty serious workout using the boxing equipment I bought some time ago. As time has passed it is taking longer and longer workout times to get to that zone where you know you are pushing your body to grow and get stronger. As I have a Bahamas vacation scheduled for the last week in April, I wanted to get more in shape to look a little better for my beautiful wife. The results so far:
The Good
-I feel great
-I can go a solid 10 rounds all out; I will have to withdraw my long standing challenge to Bill Gross for a steel cage match, it would not be fair
-I think I look a bit better
The Bad
-I wear a lot of long sleeve button down shirts for work (no tie, but I have to look "professional") and now they really do not fit my shoulders and arms. I like my shirts!
-My hands hurt a bit. This is what stopped my boxing years ago, but spacing the workouts has helped.
Sorry, no before and after pictures! I am too ugly for those kinds of pictures unless it is AFTER plenty of drinks. Only 3 readers of the blog know what Economic Disconnect looks like, the man behind the dark cloak.

Going forward I have the vacation and on order is a Bass Pro Shops FS-10 fishing Kayak with which I am planning to do plenty of small water prowling for bass. I also want to hit the Wachusett and Quabbin Reservoirs a ton more this season. Obviously this will take up time. Any fisherman near the area that wants to go with me, I am always open for some company!

Why do I mention all of this? It is because I respect the time most of the readers spend here and all the great feedback. This blog is my outlet and it is very fun, especially Friday nights! I just wanted to convey that I am engaged elsewhere and not just ignoring the issues or scared of the bull market stampede. I trust you understand.

Pensions Looking at 401k's as a Bailout
Struggling pensions all over must not be satisfied with the almost guaranteed government bailout on the way, or they think it will be too small because they would just love to include your 401k in their pooled money mix to go down the drain with them (via Market Ticker):
Having ruined the pension funds of Americans nationally through corrupt and utterly unsustainable "projections" of future growth labor unions are now targeting your money to make up the difference:

One of the nation's largest labor unions, the Service Employees International Union (SEIU), is promoting a plan that will centralize all retirement plans for American workers, including private 401(k) plans, under one new "retirement system" for the United States.
In effect, government pensions for everyone, not unlike the European system and regardless of personal choice.

Yes, because labor unions have done such a great job of managing their pension plans, right?
Oh wait, they haven't. In fact, virtually none of them are actuarially sound, and they know it. So instead of addressing this (which would mean that workers would have to put up much more of their wages to be funneled into these funds) the SEUI is effectively advocating stealing your 401k - to cover for their outrageously rosy "estimates" on portfolio returns (which in fact have been negative over the last ten years.)
Safe to say i will pull my 401k regardless of penalty should this happen. I do most of my own investing anyway but I do take advantage of the tax status and matching aspects of my company program. On a related note......

The REAL Health Care Endgame
I have long thought the Health care bill was both a scam to gain funding and in the end a final take over of the entire system. I feel 100% confident I will be right after this Mish piece chock full of real world information. Some snippets:
Had a VERY INTERESTING conversation this evening with a CFO for a local business who employs about 100 people total..
I asked him how this health care bill was going to affect the company he works for.
He told me that he had run the numbers based upon providing health care for all of their employees and realized that he could save the company 1/2 million dollars by just paying the $2000 per employee penalty and not offering any coverage at all.
Is this how the government plans on taking over all health care?
Bingo! We have a winner!
While most will buy into a plan based on fear of illness, many will not and companies, whose entire earnings rebound has been built on cutting everything possible and not revenue growth, will take the lowest cost path. This will cause howls and force (as planned) the government to expand the program to the full on single payer system wanted by socialists everywhere. Nicely played you commie red nanny state lovers.

On a related note, guest poster at The Big Picture, Invictus, writes the following:
Cramer, late last week (prior to its passage), on health care reform:

First, it is the single biggest impediment to the stock market going higher.

As I write this (late Thursday morning), the market (S&P500) has tacked on ~1.3% so far this week, with healthcare, pharma, etc. — all the companies Obamacare was going to kill — chugging right along (I note a new 52-wk high on BMY).

Might it be:
A) That the market — forward-looking beast that it is — had already priced in health care reform?
B) That healthcare reform is not the dire economy-killer many made it out to be?
C) That Cramer is still the best contrary indicator in the history of mankind?
By now I would have thought even the "pros" may have figured out the market looks ahead sometimes, in 20/20 hindsight, but in reality cannot see jack even when it is dangling in front of them. Maybe the entire market rally has been on health care reform? Still, Cramer is a good contrary indicator!

Bond Auctions Getting Sloppy
Regular readers know that I know much more about James Bond than the bond market but that said the 2 and 5 year auctions have been sloppy and today's 7 year sale was ugly as well, via Zero Hedge:
$32 Billion 7 Year Auction Closes At 3.374%, Very Weak Auction With Huge Tail
I like huge tails usually (hi J-Lo!) but I gather this is bad.

The 30 year is looking to go higher as well:
30 Year On Verge Of Breakdown As Yield Hits Highest Since June 2009

Higher borrowing costs will not help the credit environment, and is deflationary. As Anon pointed out last comment thread:
Deflation ceased about 6 months ago and we now have (very mild) inflation:
CHART
Gotta admit, the fed has thus far threaded the needle between deflation & hyperinflation. We shall see how long that lasts.
Of course deflation in prices is one thing and the slowing of the velocity of credit is another (this is what always gets confusing on this topic). Prices paid is a poor indicator as the data is massaged quite a bit. Money creation/velocity is still deflationary. If prices were all that mattered the FED would be all done here, as they "threaded the needle". Instead get ready for more programs.

Like this one:
Obama To Take Big New Step On The Foreclosure Crisis, As He Orders Lenders To Cut Jobless Homeowners A Break
Using the TARP money to help out deadbeats, I mean banks, I mean down on their luck home debtors stay in homes they cannot afford to side step the DEFLATIONARY collapse of money should the banks have to eat the losses. The owners equivalent rent parameter is stable, why bother?

Wait, as a gold/silver lover, should I not be clamoring for hyperinflation? Maybe you missed this post from the other night.

That's about it. Post ideas for tomorrows blog in the comments. I have the night off from the bags and can try and answer any questions that are interesting. Also get your Friday Night requests in!

Have a good night.

19 comments:

Dave in Denver said...

Hey dude. BUTLER gonna give Syracuse a dirt nap!!! Wooo hooo.

The bond auctions this week were 50% monetized by the Fed. PD's took down over 50% of each. PD's are funded by the Fed. I looked at the 5's and 7's in Feb/Jan and the PD's were more like 35-40% in those auctions.

The fact that the PD's had to take over 50% of the 2-yr. this week is horrifying, cuz foreigners and funds had been feeding heavily on the shorter paper.

The big "tail" on this auction tells us that the PD's were indeed the "cover" bid.

Anonymous said...

Could you play some Belinda Carlisle? How about "Circle in the Sand"? Thanks.

getyourselfconnected said...

Anon,
I did the "Go Go's" (with Carlisle) last week; I do like that tune though. Give me an alternate request just in case!

Dave,
you know I am sidestepping the real facts because no one cares (but a few of us); that said even with the FED buying their own crap it went bad. Tell Jesse for me he is a rock star on fire!

getyourselfconnected said...

Where is Lisa? She may or may not be one of the three!

getyourselfconnected said...

If interested, here is my second cook on the new grill:
http://bubbakeg.com/bboard/index.php?topic=700.0

or

http://tinyurl.com/yj4ntql

Be nice!

Stagflationary Mark said...

GYSC,

"He told me that he had run the numbers based upon providing health care for all of their employees and realized that he could save the company 1/2 million dollars by just paying the $2000 per employee penalty and not offering any coverage at all."

I have not run all the numbers yet, but it does seem likely as an individual that I will be paying the tax penalty each year to remain uninsured. Paying the fine may be my new catastrophic health insurance plan, since I know insurance companies will be forced to insure me if I ever get an expensive long-term medical condition.

It doesn't protect me in the short-term much, but it is the long-term that could more easily ruin me financially.

Anonymous said...

For an alternate, how about A Flock of Seagulls, "I Ran So Far Away"? (I'm in an '80's mood). Thanks for suggesting an alternate. Do you not like to use the same artist two weeks in a row?

getyourselfconnected said...

Anon,
I try to mix it up but great songs have a habit of showing up again and again. The FOS song WILL be on and great request!!

Isn't everyone in an 80's mood all the time?? I am.

Mark,
That pre existing clause is the door to full on gov running of all. With my family history (no cancer ever, no high cholesterol, no high blood pressure, no really anything) except sudden death young (that kind of sucks) whats the point. Its all a scam to get the Gov in control of everthing, a liberals dream, a citezens nightmare.

GawainsGhost said...

Well, I'm self-employed, and I have money. I've run the numbers. It's way cheaper for me to just pay the fine than to take out insurance I don't want or need.

The way I figure it, if I get infected by a germ that can't be killed with whiskey, well then I better start praying.

As far as the Idiot in Chief's plan to stop foreclosures goes, it's doomed. Like everything else he proposes. The man is incompetent.

Karl Denninger is precisely correct when he says that all bubbles are at their core credit bubbles. What we've been through over the last decade is a massive credit bubble, and now the bills are coming due.

I've been saying this all along. We didn't have a housing bubble, that was the symptom. We had a financing bubble, that was the disease.

And it's an old saw, if the disease don't kill you, the cure will.

A lot of people are going to have to swallow some strong medicine. There is no avoiding it. Politicians bailing out their butt buddies at the banks only postpones the inevitable and makes matters worse.

For Friday night entertainment, I'm torn. As I'm in an eclectic mood.

Nazareth, "Hair of the Dog." That should be the anthem of the patriots protesting government tyranny.

Cheap Trick, "I Want You to Want Me." The lighter side of sports.

Mostly though, I'd like to hear Black Sabbath, "Rock N Roll Doctor." We could all use a healthy dose of what the doctor is prescribing these days.

getyourselfconnected said...

Gawains,
Unreal requests, all SAWEET! Great observations too. I wonder, if everyone can see the problem then whats with the wrong solutions? It answers itself really.

Anonymous said...

REO Speedwagon's "Keep On Loving You" is another alternate. BTW, the Cheap Trick request is a really good one.

getyourselfconnected said...

Anon,
My fav Cheap Trick 'The Flame'; I have featured it!

REO speedwagon, now I am going to have a full boat of requests!

Anonymous said...

"GYSC said...

Money creation/velocity is still deflationary"

You sure about that???

http://www.economagic.com/gif/g71019102350191100843364431930462121.gif

OR

http://www.economagic.com/gif/g71019102350191100248364482175365686.gif

regularly scheduled programming said...

Thought of the day:

For underwater homeowners, the Titanic could be above water before their home values, suggests a new study by First American CoreLogic released Thursday.


http://www.centralvalleybusinesstimes.com/stories/001/?ID=14732&source=patrick.net

regularly scheduled programming said...

>Might it be...

Maybe it's D) The market is psychotic.

getyourselfconnected said...

RSP,
sounds about right!

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