Archive - Apr 2010 - Blog entry

Whether you like it or not, Goldman is THE scapegoat for what is perceived as capitalism's failures. Goldman was not the cause of the boom or the bust, but Congress is looking for heads. The threat of criminal indictment hangs over Wall Street. Let the bloodletting begin.

Paging, Teddy Roosevelt ...

Anyone (I'm talking to you, Larry Summers) who says that giant banks aren't bad for the economy should be sent this list ...

As we discussed in our Q4-09 Broyhill Letter, it appears that the EU’s initial plan of action (see illustration below) was not exactly a robust plan after all. At the time, we suggested that Mr. Almunnia consult his history books, when he claimed that “There is no bailout problem. In the euro area, default does not exist.” Actually, European nations have defaulted on their debt a stunning 73 times since 1800, with Greece in default more than 50% of the time!

Just connecting the dots. You tell me.

Remember, practically everybody poo-poohed my research and opinion in 2008 when I said Goldman was drastically overvalued. Those 600% to 1,000% gains on put options proved otherwise. Speaking of which, look at those July 150 puts… Can you smell what old school, fundamental analysis (you know counting profit and discounting for risk) is cookin’???

If you look beyond the Greek crisis, you have to ask yourself where are we heading and will the current form of Casino Capitalism survive? Greece is the birthplace of democracy, will it also be the birthplace of a new form of capitalism?

All assets are going up, period. Fundamental research has become an irrelevance. Is Obama a moderate in liberal clothing? The Fed’s need to inflate new bubbles to rescue us from the old ones. Listen to the wakeup call, and adjust your risk controls accordingly. Keep a hair trigger on your mouse for when the dreaded “Risk Off” trade hits.

Gold, now?

I just saw an offering of the famous Screaming Eagle 1997 cab for $52,000 for the case. Parker gave it 100 points. I passed. I don't think anyone told the purveyors that the market has loosened up a bit. Wine prices are falling and vineyards are going into foreclosure.

In light of the fact that Goldman Sachs actively trades against its clients, it is now high time for the U.S. federal prosecutors probe into Goldman’s trading practice of Baidu IPOs as well.

"Too Big to Fail is Too Big to Regulate"

Where were you on March 4th? It was an important date in history. It might just have been a tipping point.

These nominees are prominent members of the Washington-Wall Street-Academia Economics Complex, whose members shift between government, Wall Street, and academia. All of the nominees are Keynesian economists. They are known as regulators, technocrats, and inflationists.

If I'm going to carry around fiat money, this design is my choice.