Archive - Nov 5, 2010 - Blog entry

What's going on in the Gulf now?

Here is the fifth and final part of Simoleonsense's interview with author Alice Schroeder of "The Snowball: Warren Buffett and the Business of Life" fame.

DON'T READ THIS ... Nobel prize winner Joe Stiglitz said that the wars in Iraq and Afghanistan basically have bankrupted our country and crowded out spending on domestic stuff, but anything having to do with those wars is ... er ... irrelevant to ... ummm ... deficits and economics and business and spending and unemployment and ... uh ... DON'T READ THIS!

Hells yeah. The jobs report was released today and the economy added a headline 151k new jobs which means we will be back to a Keynesian healthy unemployment rate sometime around the year 2172, just in time for the third Tralfamadorian invasion of Earth, OJ to find the real killers, and Rocky XVII to be released.

Main Street is not stupid enough to believe that engineered rallies as a result of QE2 stimulus are making them wealthier and so they should go out and buy another Coach bag. This is really crazy stuff that I can't say enough negative about...

There is a strong financial incentive for at least some (ex. Citi) mortgage servicers to foreclose in lieu of working the mortgage out. That incentive comes in the form of getting up to a full 1/4 of the foreclosure proceeds - quite possibly causing HAMP and other loan mod programs to fail. After all, the lending business ain't so hot these days, but risk free foreclosure proceeds... You can't beat that!

Fat cats talk about QE. Did Treasury listen? Did Ben?

This is part 4 of the 5 part interview with Warren Buffett's biographer Alice Schroeder. It includes insight into what makes the Oracle of Omaha tick that you will not find anywhere else.

A more in depth look at Morgan Stanley’s returns on equity reveal an even uglier snapshot of performance than the unimpressive, cursory annual overview illustrated in our quarterly analysis released yesterday. Bubblicious credit, QE x 2, and regulators that look the other way from rotting assets still result in piss poor economic performance. What do you think will happen when rates resume their upward move?

Back on May 17, 2010, I granted an interview to Lars Schall of MMNews Germany, in which I stated, “if U.S. regulators stepped in and said Goldman Sachs, HSBC and JPMorgan couldn’t participate in the gold and silver futures market for three weeks, I really think you would see the gold and silver price more than double in that time.” The last seven trading days in the silver markets, in which the price of silver has risen 11.93%, has provided a window into just how much Central Banks and their puppet bullion banks have suppressed gold and silver prices over the past decade.

"I thought we could mark this November the 5th, a day that is sadly no longer remembered...to sit down and have a little chat..."

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QEII has suddenly made this paper appear a bargain. Treasury bond investors are not being compensated for their risk at current yields, but muni bond investors are. If the Bush tax cuts are not extended, the effective taxable yield pops up to 4.27% for top earners. That’s a lot in this zero yield world we live in. And let’s face it, taxes are going up a lot, no matter who won the election, making these bonds even more valuable in the future. The risk of an outright default on this paper has been vastly overblown by the media. (NCP), (NVX).