Archive - May 2010 - Blog entry

Since college students are already likely to end up living back at home with their parents after they graduate as the job horizon will appear no better in four years than it is today, why not spend that time immersed in self-education of how the financial and monetary systems really work? In the process, students will save their parents hundreds of thousands of dollars in tuition and save themselves the ignoble fate of being a sheep led to the slaughter by banking shills like Joseph Stiglitz, Paul Krugman and Jeffrey Sachs.

So what will work?

They're already talking about the next approach ....

It is obvious that the government's policies to revive the economy are not working. As soon as the stimulus money runs out, we will see GDP backtrack. Instead of trying the same failed policies over again we should try something new. That is, deleveraging the economy. Until that happens the economy will stagnate. (See: Japan) Here are some proposals that will allow the economy to recover, quickly.

More comments on pension compensation from a senior pension fund manager and some thoughts on David Einhorn's op-ed piece.

Can anyone confirm?

Can we borrow one of James Cameron's subs to go take a looksee?

There is a massive structural imbalance in residential real estate that will take at least a decade or more to unwind. 26 million homes for sale and 70 million missing buyers do not add up to a bull market. 80 million retiring baby boomers are putting huge generational pressure on the market. Losing a city the size of San Francisco in demand every year. A replay of 1929 to 1955 when prices remained flat? (XHB).

How the fear of bubble busting at home and in China leads to protectionism, which will ultimately lead to... bubble busting.

Michael Travaglini, head of Massachusetts' pension fund plans to quit next month, citing as a reason efforts by legislators to limit what he and his staff can earn. Interestingly, Travaglini is joining Grosvenor Capital Management, one of five firms slated to manage the Pension Reserve Investment Trust board’s $3.2 billion in hedge-fund assets last fall. Talk about violating basic pension governance rules!

If we are not there, we're pretty close.

Watch it live ...

David Wessel of the Wall Street Journal laments the fact that Mr. and Ms. America wrongfully scorn the bailouts of Wall Street. He believes the bailouts saved the world. I think Mr. and Ms. America have it right.

A review of the 1st Quarter 2010 FDIC bank data reveals an ever increasing amount of nonperforming loans for 1-4 Family First Liens. Banks are sitting on $185 Billion in loans that are either 90+ Days Past Due or on Nonaccrual.

The lucky country has become accident prone. Shooting itself in the foot with a 40% special tax on the profits of mining companies. Start scaling back into the Ausie dollar and the Ausie/euro cross. Australian stocks should be at the top of your list too. (FXA), (EWA).