Archive - Aug 2011 - Blog entry

Regardless whether one or more of the Big 3 agencies would deal a credit downgrade to the U.S., the CDS market has already spoken.

It's getting hot out again. Especially on Wall Street.

Quote of the day ...

Are we headed for a major summer crash? I doubt it but there are serious structural issues that have yet to be addressed and are unlikely to be addressed anytime soon...

We are currently witnessing a pattern in the stock markets that has occurred multiple times in the last century. This pattern has occurred in 1907, 1929, 1931, 1987, 2000 and 2008. And every time it ended in misery.

He works hard for the money ...

Looking at the distribution of income, comparable data from the IRS show that the top 1%, who paid 38% of the taxes, earned 20% of the income and the top 5%, who paid 59% of the taxes, earned 34% of the income.  In contrast, the bottom half earned 12.5% of the income but paid only 2.5% of the taxes.

Ladies and Gentlemen, presenting the Greatest Farce on Earth...

Alas, this is just what the powers-that-be want. Not zonked out so much that you can’t work, but zonked out just enough that you really don’t (want to) care.

Next year is gonna suck.

Unsurprisingly CAC had a plunge yesterday, one of the worst performers in all of the European markets - exactly as we have warned... Leading the way down were the institutions that we explicitly warned about... When one reads about DB drastically cutting its BTP exposure and French banks having done [relatively] NOTHING its quite scary... Ready! Set! Bank Run!

Make no mistake, something big is afoot behind the rhetoric and political talking points being thrown around by the White House and the GOP. That something will be some means of letting the banks get through this period without getting crushed.

Relevant News by www.thetrader.se

This is the fun stuff about politics. Basically our politicians are being forced to do something they don’t want to do and our job is to cut through the obfuscation to see how they are doing exactly the opposite of what they say they are doing. It is fairly obvious that despite what they are saying publicly, they aren’t making significant cuts to the budget.

The economy has been stagnating as we had forecast early last year. In our opinion this stagnation is not a "soft patch." The debt from the huge malinvestment in real estate during the boom cycle is resolved, we believe the economy will continue to stagnate, despite whatever steps the Fed or the government take.