Archive - Blog entry

Project Mayhem reviews the most important financial and geopolitical news of the past week and takes a look at the week ahead

Let me know the chances of the FDIC's absorbing a behemoth such as the CDO trading, CDS writing, off balance sheet VIE having, QSPE bulging, California and Florida Zero recovery 2nd lien sporting Wells Fargo in the case some of its arcane and non-performing assets really hit the fan. I am getting ahead of myself though. Let's take this from the beginning.

The following post is a revision of an article I wrote for my blog. The topic is the similarities between the leap of faith that investors took when they gave their money to Bernie Madoff and the leap of faith required of those who currently own and buy shares of Goldman Sachs. Upon some reflection, there are a number of interesting parallels. The data does not include the most recent earnings report, but given another incredible performance this quarter I thought the commentary was still very relevant.

You know that the government and the giant banks are not being responsive to the needs of the economy and the American people when even PhD economists and economics professors are calling for protests.

Last Friday, U.S. crude oil futures finished above $78, the highest level in a year, even though the U.S. continues to sit on ample supply of petroleum. Some analysts said a sudden upward spike was still unlikely, while others are predicting an immanent correction down below $70. However, if you take a closer look, it is evident that the current crude oil market is almost entirely detached from fundamentals. Furthermore, there are several factors supporting oil rising to new levels, as fundamentals are out the window in the near to medium term.

There is probably greater risk of a market down draft now than in past weeks.

The sad part in all of this is that pension contributions are funding this Casino Capitalism. Money is going to develop new ways to screw buyside clients that invest trillions in the markets. Pensioners don't stand a chance in a neo-Feudal world. I think it's time for a revolution, hopefully one without bloodshed, that will democratize the financial system by loosening the grip of the financial oligarchs.

My version of link aggregation is slightly different from that of many other bloggers. I try to be highly selective in terms of what I link to and focus on themes that I think are really important for all investors. As such, I usually provide just a few links but include the most relevant excerpts and my own commentary. I hope enjoy the links I have selected for this week.

We have forgotten what money is. Here is a fable for your weekend entertainment that explains what it is. You've had a hard week, enjoy some light reading. Lots of pictures, no big words. Have fun.

After reading all about our "solid Canadian pension system" in the mainstream media, I decided to quit Pension Pulse. What's the point? If Mercer says we are among the best pension systems in the world, then there is nothing to worry about, right? Wrong.

Cantwell slams derivatives bill ...

Barney Frank's possible role in the mortgage meltdown . . .

The JPM gnomes co-located in the basement of the NYSE building at 10 Broad Street must have had their adding machines on overdrive in 1932 because, after that July low, the Dow would never trade below -24% of VWAP measured from that low. In fact, you could have made some major market calls by...

I said it in 2007. I said it in 2008, and I'll say it again, the banking system is INSOLVENT!!!