Archive - Aug 7, 2011 - Blog entry

“Some wags are saying this downgrade is already built in, but with the level of cognitive dissonance in the market I say otherwise. I am sure all the government put mucky mucks are meeting over the weekend and are stirring and preparing their usual toxins to stem any blowback." (Russ Winter)

Washington probably had it coming by handing S&P one necessary ammunition--the Political Soap of the American debt ceiling debate, but on the other hand, I would not give that much credence to S&P’s claim that “it's our duty to make that call" either.

This isn’t the time to hope.  This is the time to take some action to protect yourself and your money.

Just like in 2008 we’re going to see a full-scale market Crash. Only this time it will also involve countries defaulting on their debt, bank holidays, civil unrest, and more. In simple terms, it’s going to be 2008 on steroids.

You won't find this kind of hard hitting investigative roasting anywhere else folks...

The hard thing about China is to truly comprehend what is really happening on the growth front. Are the statistics real? But most importantly, is this sustainable? Is China a lemon or a long-term high performer? On the one hand, China has this amazing track record of very high growth for the last 30 years. Betting against it appears foolish. On the other hand, China is still, for the most part, a command economy which after a while, you would think, would stop allocating resources efficiently.

So simple Einstein can understand it...

Over the past several months, I have been debating with my good friend and mentor David Kotok of Cumberland Advisers over the impact of the new FDIC insurance assessments on the money markets. David as well as another friend, Jim Bianco, insist that the imposition of the new deposit insurance assessment on all bank liabilities net of capital is blocking Fed monetary policy. I totally disagree.

The market has taken a nasty hit this past week, and as expected, investors have turned bearish.

CBO spins an an important report. Why?

What is the difference between -13 and +7?  The answer is 20.  Twenty is the market-based pricing of the cost of the FDIC asset-based fee assessment.  For the first time, we were able to see its impact.  It is important to understand this calculation in order to fully appreciate what is happening in the financial markets.