Blatant Appeal for Page Views
As you know, I write this site for my own personal fulfillment and the hope that I can offer you, the readers, something of value and entertainment. I have NO ADS and no tip jar. I get "paid" by your comments and the fact that I appreciate your readership. I would like to ask you for one thing now.
There is an economic directory that is tracking blogs devoted to finance. The site can be seen here:
http://www.gongol.com/lists/bizeconsites/
Economic Disconnect resides currently at the 105th spot. I want to crack the top 100 so I can say "My blog is in the top 100 economic blogs". It is a point of pride. So what can YOU do?
Well, obviously visit my site! What would help is if you can recruit around 5 people to visit a couple times a week to push my numbers up. I can break the top 100! Woo Hoo! Thanks for any help.
Gold Getting Plenty of Buzz
Full disclosure: I am a fan of the yellow metal. That said, Gold has been getting quite a buzz as of late, and I am not sure if that is good or bad! The December COMEX delivery issue is even making the rounds in somewhat more mainstream news sources. I read a piece tonight that is very sensational in that the writer sees the G20 meeting this weekend as a plot to revalue the world currencies, get this, based on some kind of gold peg:
http://www.moneyandmarkets.com/the-g-20s-secret-debt-solution-27996
Now I think this is both nuts and out in left field, but it does make good reading! Gold to $5,000 an ounce? $10,000 an ounce? Wild stuff.
Stock Market So Fake It's A Waste of Time
The banana republic show that is the US stock market was on full display this week. Wild intraday swings, reversals, last hour sell offs, and ripper days to the upside all happened this week. So what is the story?
I have a simple explanation. Nobody has a clue about what to do so market participants have given themselves over to purely technical mumbo jumbo. Terms like "retest of lows", "head and shoulders", "oversold", and the like are all chart related with no fundamental grounding. When the markets hit a point X, they buy and at point Y they sell. Everyone is in the same trades, and thus the crazy moves up and down.
I also have ZERO doubt that the FED/Treasury (the Feasury) has been out this week buying stocks on the open market at key times. In the future we will see just how much they were buying. In the meantime, there is no reason to get into this market except for a trade. There is no value in stocks. The coming recession will kill estimates, and this has not been reflected at this time by prices. I may mention market action, but the markets moves themselves are no decoupled from anything that could shine a light on things, so it is kind of a waste of time. My 2 cents!
All Your TARPS Belong To Us!
I keep going back and forth in my head as to whether Hank Paulson knowingly prodded players in non banking companies to try and become some kind of bank, or if the companies themselves took the initiative to get in under the TARP. I am not sure as yet, but I think it would be a good question to ask the Treasury Chrome Dome (remember Destro from G.I. Joe anyone?)
A compilation of headlines from Yahoo Finance this evening:
Reuters
Hartford Financial soars on plan to join TARPFriday November 14, 5:18 pm ET
By Jonathan Stempel
Note: A stock rallies because it is in so much trouble it needs government financing and will jump through loops to get it! Sounds like a winner to me.
It is not just companies getting into the act, check this whopper out:
TARP CityPosted by David Gaffen
Meena Thiruvengadam reports:
Three of America’s largest cities have asked the U.S. Treasury for billions of dollars to shore up pension systems, cover short-term borrowing needs and boost infrastructure spending.
In a letter to Treasury Secretary Henry Paulson Friday, the mayors of Philadelphia, Phoenix and Atlanta asked for the creation of a $50 billion fund to spur infrastructure investments as well as for loans to cover unfunded pension liabilities and to address cash flow crunches amidst tight credit markets.
“Cities will disproportionately bear the brunt of the dislocations caused by the credit crisis and a contracting economy unless the federal government steps in to assist us,” the mayors wrote.
And now we arrive right where anyone with half a brain figured we would. The gloves are off. It's nasty time. If the Feasury is going to pump cash all out, there will be fistfights for the loot. Banks cry "systemic risk; give us cash!"; US automakers cry "systemic unemployment; give us cash!"; Sinking insurance companies cry "What does systemic mean?; give us cash!"; and now bankrupt cities all over the country cry "systemic risk to government employee cash cows; give us cash!". It is now a free for all with nobody wanting to be left out of the goodie bag.
Of course we are on the clock waiting for the great state of California to come out and basically take whatever is left of the TARP funds for itself. The day is fast approaching where California will play "Way to big to fail" card and secure a ton of cash. Mark my words.
So where does this leave us? TARP was a failure, and it is also too small to deal with all these requests. Early 2009 will see a plan drawn up that will simply be astonishing in its recklessness and size. Paul Krugman, the money crammer himself, is calling for a 600 Billion dollar stimulus plan. Why stop there Paul? I mean why not go to the mattresses to save the economy?
It is my thinking that a shiny new plan will be unveiled, and the range I am looking for will be at the 2-3 Trillion dollar mark. I did not type that wrong. 2-3 TRILLION dollars will be created to fund all the worlds needs by the US Feasury by March 2009 at the latest.
How can this be done? I have no idea, but then I thought you could not just give out 700 Billion though the TARP without serious repercussions. As there have been none, I think the bold factor just got amped up a few levels. A force will act until it is acted upon, so the physics lesson tells us, and thus I think the US will blow out as much cash as possible until they are stopped by an external event. Foreign debt holders saying "No More" or some other calamity is the only way to stop this runaway train named the city of bailouts. (reference song; "I'm the train they call the city of New Orleans. I'll be gone 500 miles before the day is done.")
Is this not wildly inflationary? Glad you asked! I must say that the whole deflation thing has a strong basis (see Mish Shedlock) for that call. I am gradually moving towards the hyperinflation/dollar mega devaluation thesis at this point. There is nothing else that can happen in my mind. For a great take on about where I stand, you have to read this iTulip piece by Eric Janszen:
http://www.itulip.com/forums/showthread.php?p=60311#post60311
Take home point:
"The deflationistas apparently think what comes after post-bubble deflation is more deflation, as occurred in the early 1930s in the US but nowhere else ever since. It has not occurred to the deflationists why no similar period of deflation has ever occurred since the 1930s, or when they do confront the question they explain that the debt is really, really, really big debt this time, bigger than the Fed. Or that differences between the kind of money that the Fed prints versus the kind of money that the endogenous credit markets create when money is loaned into being by businesses and consumers means the Fed cannot impact the latter.
As we explain that in The truth about deflation, the reason no deflation spiral has occurred in any nation since the one instance in the US in the 1930s is because since then no nation has chosen to remain on the gold standard through a debt deflation. Needless to say, the US is not on a gold standard today."
I am a huge Mish fan, but this piece is so well written and well thought out that i think it makes the best argument. Leave your comments about what you think.
Friday Night Entertainment
It is that time!
Comic Relief
When I saw his video, I could not stop laughing. This thing is a work of art that should be leading the nightly news across America, instant classic:
Book Passage
"They are mine," he said softly, "They belong to me. The Red Bull gathered them for me, one at a time, and I bade him drive each into the sea. What better place could there be to keep unicorns, and what other cage could hold them? For the Bull keeps guard over them, awake or asleep, and he daunted their hearts long ago. Now they live in the Sea, and every tide still carries them within an easy step of the land, but they dare not take that step, they dare not come out of the water. They are afraid of the Red Bull."
-From "The Last Unicorn" by Peter S. Beagle
Music For the Masses
An excellent film was "Quicksilver" starring Kevin Bacon. A great song from the soundtrack was "Quicksilver Lightning" sung by Roger Daltry (who was in several Highlander episodes so he rules!):
I have no idea in the universe why I have had this song stuck in my head all day, but take a listen to Culture Club and "Karma Chameleon":
Another song I had stuck in my head today was "Jet City Woman" by Queensryche. have at it:
Have a good night.
