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Dis and Dat
On Cocktail Party Stocks
A chart of NFLX and some thoughts.
There are good and valid reasons for this 75% drop in 4 months. The stock deserved to have gotten crushed. But this is more than just bad company news. There are a bunch of other “names” that have been slammed to the ground of late (FSLR/MCP etc). Those who listened to the TV hosts, stockbrokers and “smart guy” talk over drinks deserve everything they get. But I have to ask,
“How much of the ‘air’ in NFLX was just a phony push caused by Ben Bernanke’s Fed?”
The answer is that Ben’s contribution to this stockholder debacle is not zero. All the Fed talkers have said again and again they want to force people to buy risk assets. They succeeded. And along the way those that listened to Ben got stepped on.
For sure this will happen again and again. When money has no intrinsic value due to ZIRP it will create froth in prices of stocks, commodities and bonds. I can’t think of a dumber policy than that. I hope that Bernanke followed his own advice and loaded up on NFLX.
On Flat Taxes
So Perry is out with his flat tax. The joke is that under his proposal one could either pay a flat rate or go back to the 1040 and do it the old way. This achieves a worst-case outcome. Less revenue and more paperwork.
I’m in favor of ripping up the tax code. I’m also in favor of a progressive tax code where those with high incomes pay more. The arguments from liberals are that with a flat-tax (or a 999) those in the lower brackets would pay more than they do today.
I don’t think that has to be the case.
The critical question when considering an alternative tax plan is what happens to FICA (payroll) taxes. The combined FICA is now 15.3%. In a flat tax world, that would be eliminated. Half would go to the worker via lower taxes. The other half would be retained by the employer. The employer could rebate that amount to the worker with a 7.65% salary increase. There would be no pre or post tax consequence for employers to do that. Their revenues/profits would not be impacted at all.
For a worker who makes $40k who today is subject to FICA AND pays 10% federal tax the numbers are:
Current treatment:
Pre tax = $40,000
Federal Tax = 10%
Take home including FICA (7.65%) = $33,000
With a 20% flat tax:
Old salary = $40,000
New Salary (7.65% increase) = 43,060
Take home = $34,448
A flat tax approach could be structured to achieve a neutral/positive tax result for the average worker. Liberals are fools not to embrace this. It is the most progressive tax approach out there. It would put money in the pockets of those making less than $100k.
On Rage
I got an email from a regular reader. This one is a full professor at a top Ivy League school. He had this to say:
One of my usually staid colleagues said to me the other day, "I am hoping for some violence." How odd.
How odd indeed. It would be a huge mistake to underestimate the level of anger in our society. Could this go from a relatively peaceful OWS to something far more ugly? You bet it could. All that would be required is some more bad economic news and an increase in gas prices……
.
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On FX
I’m hearing that many big players have stepped back from the FX market. The devaluation of the CHF a few months ago hurt some of the interbank hitters. Hedge funds have been whacked every which way and have also cut positions. The UBS rogue trader story scared a bunch of the prop traders at the big banks. They’ve scaled back too.
So without the usual dancers adding liquidity the FX market is reverting to good old supply and demand to set prices. As Zero Hedge has been reporting for some time, there has been liquidation of dollar based assets by EU banks. Some of the liquidity is being repatriated back into Euros in an effort to prop up weak balance sheets.As a result, there has been demand for EURUSD.
The strong Euro flies in the face of the crumbling and bumbling of what is actually happening. That does not matter. As long as there is Euro repatriation, the EURUSD will remain overvalued. It’s about day-to-day demand, not the backdrop of the news.
I can’t predict how long this will take to wash out. My guess is under a month. I think the Euro is a big short.
There is also a very big question growing for the Yen crosses. I’m betting we see some action by the BOJ before month end.
This is, net - net, a strong dollar story, the worst news for Obama, Geithner and Bernanke. It's also a strong gold story. I can see EURUSD = 1.3000, Gold = 1900, USDX = 82 by year end
Seatbelts on.
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So.... Without any tax, how would any public services get funding? Would people pay for roads out of the goodness of their hearts? How is it theft if it is used for the everyone as a whole? I'm all for smaller non-corrupt gov't but a blatent "taxation is theft" statement is ridiculous.
Chappy, before income taxes, how did those services exist?
Seems the users of a service like roads should pay for it. For example, gas taxes, licence fees, registration fees. Tolls for new projects like bridges tunnels, new roads etc. Don't allow this money to be diverted to other functions.
Ditto for education, medicine etc. Do you benefit from education, training etc.? Then you work and pay for it. Do you benefit from a medical proceedure or drug. Then you work and pay for it from savings or borrowing against future earnings.
Do we benefit from drug testing by the FDA, clean water and air regs, food inspection? Yes, yes, yes on my yes. So, attach fees to these products via your water bill, food tax etc.
Does the entire society benefit from basic science research-well our entire economy is basically the beneficiary of "free" information from research funded via Federal agencies like NIH. Make the industries which use this information to develop new technology for profit pay via a modified patent system with much higher fees than at present.
Where we get into trouble is when prices are hidden via subsidy and/or price fixing by central authorities/experts. Make as many functions local as possible and minimize role of the FEDs.
Fees and excise taxes should be sufficient to run a smaller, Ron Paul type federal government sans the social welfare state which actually increases prices, particularly for medicine and education. Costs should be transparent. No borrowing from the future, cash flow basis only.
taxation is theft and merely calling that notion ridiculous does not an argument make. In case you've never considered the idea that taxation in its current form might not be the only way a government can function, here's a snippet to ponder:
"In a fully free society, taxation—or, to be exact, payment for governmental services—would be voluntary. Since the proper services of a government—the police, the armed forces, the law courts—are demonstrably needed by individual citizens and affect their interests directly, the citizens would (and should) be willing to pay for such services, as they pay for insurance." Government Financing in a Free Society,”
The Virtue of Selfishness, 116
The fact that we're light years away from a society as free as it should be, does not mean it's "wrong" to argue for it.
I go with delusionally ignorant due to lifelong indoctrination.
Yay!!!...I spewed forth similarly before reading your great post. It's so rare to read someone on ZH who doesn't ultimately demand more, more, more giant government. On first glance, they seem to hate the crappy mixed economy we've got going on and generally loathe how gubmint intervenes but when it gets down to brass tacks, they've never understood the true nature of liberty.
What a breath of fresh air you are NA!
Um, what?
Either you haven't been reading this site long or you are trolling. Perhaps both.
Well, I found the site a couple, three months ago and wonder whether Tyler ever sleeps but I'm quite glad he doesn't seem to. No troll. I read nearly every scrap and comment. I've learned a ton.
A significant number of commenters and posters at this site want government solutions. I haven't conducted a study or anything. I want laissez-faire. Most people don't. It's surprising since it requires full-fledged individual liberty.
Hence, my comment.
Laissez-faire? I read that as a total hands off government, is that what you argue for?
Government's proper role is to establish and enforce standards. Those standards include weights, measures, and impartial regulatory controls, and the rule of law.
Yes, they do have many other functions related to diplomacy, etc. but, internally, that is the only reason for a government to exist as a nation. Otherwise we would have snake oil cures, inaccurate gas pumps, vastly differing utility billing bases, on and on.
Unfortunately, not one of us has ever lived under a proper free market operating under the proper function of government. We haven't experienced Capitalism in our lifetimes, we've only been exposed to what's call Corporatocrasy aka Global Corporate Oligarch.
Our government no longer operates under either the Constitution OR the Rule of Law. Both have been scrapped piece meal over the last 98 years to enable the financial rise of the 'Ruling Elite'.
While I agree that the current government, the current financial structure and the current whores in office all need to be terminated with prejudice; we have to think about what really worked. Andrew Jackson had the right idea, but what we need to think about is the fact that finance is the only socialism embedded within the US Constitution. Banks should be nothing more than a utility similar to the gas company or water company. Money creation is the sole responsibility of Congress and is enumerated under Article One, Section Eight of the US Constitution.
When the shit collapses, I'd rather have a framework to fall back on that operated generally well for about 140 years.
Laissez-faire was a pathetic, complete failure. Deregulate the banks? The business world? We can trust them? What a joke. We've seen what happens when we loosen the canons on the deck. We're PAYING for it this second!
Anyone arguing a hard return to "hands off" will just receive a good laugh from me, right into their face.
Full fledged liberty stops as soon as you bump into the next person.
Right on, right on, right on.
Flat tax at the most. A voluntary would not work, and I'm not so sure that would be a bad idea.
I get squat from Goobermint.
Please list if you disagree.
Would like to see a 'you vote for it, you pay for it' system.
No participants, so allow me to help.
Military - illegals invade daily
Laws - glad I didn't have GM bonds
Edication - Oweblahma?
Clean water - thanks for the reminder, need to get more filters
Clean air - are you kidding? DC stinks of tourists, just ask Reid
Money - say what?
Land Management - but I could graze cattle there!
Great list, mynhair.
I had a vision as I was reading it of Uncle Goodbar grabbing you by the tail, holding you up in the air and stroking your fur backwards and when you objected, dry shaving some sensitive parts of your anatomy.
Yup.
It's outta control. Way the fuck out of control. Kinda on the same reality plane as a 1950's cheesie B-rated sci-fi movie with the Amazon Women running around in high heels on the Planet Zarcon enslaving the White Anglo Saxon Astronauts and winding up crying about it after being spanked.
Uplifting reality programming.
It is soooooooooooooo fucked.
'You vote for it, you pay for it' will never work. All would have to be done to undermine this would be for the govt to subsidize some and not others, effectively eliminating some from paying. I don't like it.
You do sound serious..
The professor doesn't need to worry; his ivory tower is protected by tons of Keynesian bullshit; the protesting hordes will not get past the smell.
What? The protesting hordes are just at home in that Keynesian smell as the ones in those ivory towers.
What happens to those who now feel safe in their ivory towers when students, angry about their overwhelming loan balances figure out that they're paying for generous retirements for those university administrators and professors, and union employees? It was hardly just Kent State that was "occupied" back in the '60's. The difference is that the other campuses didn't see the violence that punctuated Kent State, but now things are different and people are more aggressive. There have been small protests in the UC and Cal State systems over tuition and fee hikes in the past but given the impetus of the #OWS, further demonstrations are likely to be far more energetic.
Obviously you never heard of, or have forgotten the University of California at Berkeley or the "Peoples Park War". I remember it as an elementary aged school kid growing up in south Berkeley.
Now there is tremendous pressure building within the UC system due to a shift in student body make up to a more heavily out of state/country dynamic to boost tuition receipts. So now the state education system, heavily subsidized by state tax dollars to educate state residents is getting admissions siphoned off to collect some extra cheese. I agree that the UC system and others are going to see issues. Especially when students and parents alike take a closer look at all the stupid things Regents built over the past decade that had little to do with education, but students are having to subsidize through increases in their student loan balances. Student loans backed by the federal government as one more stealth bail out of the banks, this time on the backs of students at the expense of future household formation!!
I had never heard of it but just read a 1969 Rolling Stones article that detailed what happened:
http://www.beauty-reality.com/travel/travel/sanFran/peoplespark3.html
Thanks. I knew there were lots of demonstrations on California campuses but didn't realize that this happened. I live in California now but grew up elsewhere (and it's a ways before my time). I wonder why this incident didn't register in the national memory in the same way as Kent State? Was a Reagan thing? An anti-Berkely thing? It seems like it should have come up during the time of the controversy over the new stadium at UC Berkely, if only as a historical reference.
I think you're exactly right about what is coming and how it happened. That was the most recent bank bail-out. The next one it seems, will be the housing refi plans of Obama's. Sure, people need help but the banks (along with Fannie & Freddie) are the main beneficiaries.
I wonder why this incident didn't register in the national memory in the same way as Kent State?
It did, just MORE SO. This event marked the politicization of a neighborhood incident and made it the meme for a whole two generations of political underpinning that reverberates to this very day.
It started when folks residing in an area without a public park [south Berkeley] claimed a space left rotting by the UC Regents and turned it into a place where parents could bring kids to play, folks could read a book and students could sunbathe and converse. This action drew some very hard core political elements of the age and provided the meme of the "dirty commie hippie that wants to subvert society" and the responding "silent majority" Nixon and Reagan used to great effect. So, whenever you hear or see concerted action attempting to draw parallels between then and now you will know a big part of its origins and a reason the OWS effort is working hard to protect itself from this sort of thing.
Remember, Kent State was the heartland while Berkeley was the fringe. These very elements are being used to both promote and fracture the Tea Party, OWS and society broadly. I refer you to my last response to nmewn up thread for a bit more comprehensive discussion from this point.
Just remember, Berkeley is now home to John Yoo, the architect of extrajudicial rendition, state sponsored torture and more as well as supermacroeconometric theologians as Christina Romer and Laura Tyson. What these seemingly disparate elements have in common is macro centricism at the expense of the rule of law and individual liberty. Folks also forget that prior to all this the "Berkeley Mafia" had a wholly different connotation..
http://en.wikipedia.org/wiki/Berkeley_Mafia
It is good to remember that the park that now occupies this very space is overrun with drug addicts, homeless and drifters making it unsafe for the residents of south Berkeley and students at Cal to congregate and use as a safe space rendering the situation the same as it always has been. Tragic.
Thanks for asking and engaging in conversation and debate.
Best-
Thank you, Miles, for the conversation and education. I did read your exchange with nmewn and enjoyed the links.
When times are good and a reasonable percentage of the people are getting theirs (whatever that is), people are not likely to notice or speak out about the corruption, lawlessness and general inequality they see around them.
What interested me most about the tea party was that people (including me) were becoming educated about history, and not merely the revisionist versions that has made it through the school systems; about governement, and not merely what the citizenry has been persuaded or coerced to accept; and about law -- particularly about the rule of law and what that an exquisite principle means. The more people understand, the less they will accept. I hope. That is why I applaud both the tea party and OWS. The old saying is true: If you're not angry these days, you really aren't paying attention.
Jena
Along those is this classic. Adieu
http://bastiat.org/en/the_law.html
Also out here in the Winter Home of the Great Satan, there have been a number of student protests when what with the state budget being cut, tuitions have been raised..... as have already more than fucking generous salaries and perks for the school administrations.
Yoo hoo, Alice! Have you seen any of those fellows brandishing swords? The ones been yelling off with her head?
As I've written for days, there has been a discernible shift taken place over virtually the last month. Fellows who are comfortable whom I know are worried, paranoid, not about the "Masses" but about Uncle Dimwit Ripping the Country Off. The absolute Waste and Graft. It's gone too far. The middle class fellows are terrified with nowhere to turn. 401k's were wiped out in 2007-9, homes gone to shit, a true example of Milton Freidman's wealth effect come true in spades. Kids can't get jobs, newly minted graduates, moving back home all over the place. Anger and resentments are building like the tsunami waters hitting Fukushima. Public servants are being vilified...not the guy on the beat or manning the ambulance or fire engine, but the staff, piles and plies thick treating the public like scum peasantry, electing bonus pools and retirements more generous than any others seen whilst treating them as God given entitlements.
The mood is downright bad.
And want to set it alight? Take some more actions like Oakland and the OWS folks, arrests, being expelled from a park when peacefully demonstrating. I know, there opinions galore, but the question being raised is whats happened to peaceful assembly and freedom of speech... not me talking, just reporting. My own opinion means naught, here.
And bailing out the bankers, again, and this time not even Americans?
Hold the Boat.....
Gonna need to get a grip....
I've been reading what you've been writing for days and for what it's worth, I think what you say makes great sense. I feel the increasing generalized anxiety among people we know and see here too, and the only ones who don't exhibit any symptoms are the ones seriously absorbed in diversionary tactics of one sort or another. But that's really just a coping technique, don't you think? And the anger! It's a fury that is ready to spill out of people at slightest prompt. Last month, I was surprised and excited to see people in the grocery store so pissed at the Fed; this month some of them DO want heads on pikes. (Maybe they're ZH readers.)
My fondest wish is that OWS sticks it out and avoids being co-opted in the manner that I believe it is in danger of being. It's spreading to small towns here and I'm glad to see it. I expect it'll be forced to move to college campuses because more municipalities will act like Oakland, even though it is wrong. Cities aren't willing to shoulder public safety costs and residents are going to get crabbier as time goes by. Even better would be if OWS and the tea party could find common ground and realize that what they are battling is not really so different, at least not on the most important points. But I guess the "important points" are subjective -- for me, it IS the intersection of corrupt government (both parties) and banking. The social issues I just don't see as being as crucial.
One small flicker of hope: Ron Paul raised more money than expected in his last money bomb: $2.75 million, most of it in small amounts. I'm proud to say I'm a donor.
And yes, maddogs, you're right about the for-profit schools. They've secured a lot of money via the student loan program.
Banking is our government. That's what both the Tea Party and the 99%'ers need to realize.
Why would we be surprised then when our true government bails itself out, at our expense of course, over and over?
probably should include the for profit schools, set up via shennanigans from Wall Street(Goldman Sachs)
Went out of many equities last night and back to PMs. Will take profts in physical and will wait until december to see If I get burned on that trade.
Not that I'm complaining about repetition, but NFLX has been done to death on ZH, and yes Ben's fingerprints are all over this one as well as all the others. Next one to be talked up by Ben and his minions on the mainstream media: The facebook IPO, the darling of the psychos at GS coming early next year. Full retard on that one, for sure.
I understand everyone's rage at the daily tickertape parade of inequity, injustice, fraud, and plain old sociopaths preening their feathers, sucking cock, and pilfering the public coffers for their colleagues higher up the food chain. I feel some of it myself. But it is at these times you need to keep a cool head. You do not want even a small portion of the mindless violence on your own doorstep that seems so exciting and attractive when seen from afar. Your so-called Ivy league professor friend would do well to remember that complex systems, and that includes mob violence, have a way of becoming unpredictable, often hurting the very people they are trying to help and destroying the livelihood of innocent people.
There is no differentiation in a riot between 'good" or "bad" property to destroy. Hence the reason i suspect that Ivy prof likes the idea. Rebuilding after major social unrest is like rebuilding after a war. Both are a JMK'ers wet dream
Thought Krugman's first name was Paul?
Krugman should change it to Saul, and lead from the front rather than sipping tea in someones rear.
http://www.youtube.com/watch?v=7eeijbtbnjQ
Fucking War Pig
http://www.youtube.com/watch?v=pZCyOWLrRTE
Oh, so now he's Saul changed from Paul, so he had something "removed" during his moment on the road detouring around Damascus.
Now it makes sense.
Fucking moron. He's a Fucking Moron.
And what is most disturbing about the man is that as a claimed trained Economist brandishing the Nobel Prize, the vast majority of his work is speculation, political theater, anecdotal tales, character assassination, falsehoods and leftist truisms mistaken for reality, presented as truths.
Then again, he is in the Exalted company of Maureen Dowd and Tom Freidman at a periodical slowly dying a diminishing paid readership death.
Speaks for itself, many time over.
(How's that equity position in the NYT going these days, Mr. Slim?)
Paul Krugman has never bothered with traveling any road less traveled. Being content to shovel shit and call it gold safely ensconced within his theological cocoon. Tragic where this theology has led us all.
BTW, that name twist was a continuation from another venue with that respondent.
On the positive side...
The public at large is now actually talking about the insurmountable debt imposed on the populace...the proper role of government in our personal lives & the economy at large.
And of course...the trained puppets of the MSM who brought us to this point of clarity ;-)
To youze both a HELL YA.
Ignorance is curable, stupidity not so much
Since this is ZH and Krugman and the rest are bloody asses, an attempt at a little back and forth
http://www.youtube.com/watch?v=FiJvzKel5NQ
I agree, denial, anger with a twist of bargaining. A place to start getting things done
And to you Miles...Us versus Them.
http://www.youtube.com/watch?v=vcG47CpsU6c
There are definite ways through this morass that do not include incineration and wanton destruction. Too bad folks with actual ideas are never consulted until tragedy strikes. Tragedy sold as an essential element of the foundation of modern economics that is "Manufactured Mayhem tm". The mental impaction of what passes for cognition in policy making circles is simply astounding.
http://www.youtube.com/watch?v=Y9KC7uhMY9s
Brutha brutha bruthaaaa...absolutely.
Now, is it a great fantasy to speak of the "criminal class" swinging from lamp posts...sure.
But in that place the Madam Defarge's will multiply like vermin & the deranged, useful idiots around her are given a voice when they should be relegated to the loony bin. I have no doubt you and I (as well as many here) could survive in that place as easilly as this place. But multiples more could not.
The rule of law has been compromised. But at the heart of it is still us.
We elect people to positions of responsibility...to make our laws...under the open premise that they will pass laws to steal from one to give to another.We promote through the ranks of corporations & academia some of the most infantile, purient yes-men imaginable.
Then we feign shock and horror that they are revealed to be some of the weakest, most corruptable, morally & ethically challenged scum our society has to offer...lol.
Knukles is right, people from all walks of life and across the globe are pissed. What I see is we all need to look at ourselves just as hard as the mental midgets we send off to captains of industry and state.
Indeed.
We humans, by our very nature are corruptible. By extension so will our social structures. We have examined this process at length both directly and indirectly, their impact upon the whole and more as germane elements to these ongoing discussions. Inherent in our observations is the essence of specialization and the sense that one can outsource what were once known as "civics" broadly to the experts and leaders in whatever specific field of endeavor one is considering trusting those to be both expert and worthy of entrusting the whole unto. Blindly forgetting that where money & power meet will by definition attract, foster and promulgate the most corruption. The essence of the build up and leaking of this festering corruption is what I think forms the basis of our [as individuals and the broader community to which you speak and we both hold in high regard] observations, discussions and our mutual appreciation of where we stand in relation to the whole and how our observations overlap.
http://www.artistdirect.com/video/garden-of-aalah/31851
The rule of law has been compromised. But at the heart of it is still us.
TRUTH! This forms a foundation for folks all over the spectrum to meet on common ground. In this I, as a strong proponent of the fiscal responsibility leads social responsibility genre will toss up a leading voice from the social responsibility leads fiscal responsibility crowd as an example of this collapse of the axis lines process into a pool of commonality.
http://www.thenation.com/article/164162/how-rich-subverted-legal-system-...
BTW, pop culture already has its well produced effort [to be widely available at stores in time for the holidays] of attempting to popularize an essence...
As things rotate from
http://www.youtube.com/watch?v=89mr4Cqo4-4
To
http://www.youtube.com/watch?v=NjCbGHI_4Hs&ob=av2n
Meanwhile we observe "CEO" administration of government opt for the oxymoronic; "We have to destroy capitalism to save it". Then we observe the rotation to "Constitutional law" administration of government that is the embodiment of the progression of Plessy to Brown devolve into the oxymoronic "extrajudicial execution as judicious" rendering the premise of the KKK the law of the land.
Have a scrumptious one. Laters
"This forms a foundation for folks all over the spectrum to meet on common ground."
Said it before, I'll say it again...I have never lost faith in my countrymen. When given all the facts we always come to the same conclusion. Cooler heads will prevail.
But half the fun is getting there ;-)
But half the fun is getting there ;-)
Perhaps. I'll consider a bit more once I've recovered from being all rund over.
Now you've done it!!!
http://www.youtube.com/watch?v=CjoOdSrq-BY&feature=related
:))
This is the digital landscape after all ... and I've only just begun
http://www.youtube.com/watch?v=ReuBms-qZQk
Exceause me, Sir, do happen to know the time?
http://www.youtube.com/watch?v=NaLoSBmuhN8
We gonna do this to BK's thread?...we'll have to be Ironmen ;-)
http://www.youtube.com/watch?v=9QQ0hH4MYsk&feature=related
We did .. and BK is a terrific sport.
I know our graffiti doesn't measure up. Still, we're writing on the wall and it's never too late :)
Excellent post!
That Ivy League professor you quoted, wants a proxy to enact his would-be revolutionary fervour.
This is not surprising at all. Mr Professor wants someone else to take the bullet in the chest while the Bastille is stormed by The People, and Mr Professor hopes he can then play scribe for the fighters and the martyrs.
This is what has happened in the now secular West. Fewer people have courage to die for a cause, and instead people hope that others will do the dying for them, while they 'supervise'.
Faith in a better world helps make revolution, and gives courage. That's why the oligarchs have worked so long and energetically to destroy and undermine religious belief.
Sure, that's why they spend a goodly portion of their campaign time trying to out-Christ each other. Uh huh.
That's why emotional hot-buttons for people of "faith" are used in every campaign, because the religulous are so difficult to control. Uh huh.
Religion has been a tool of almost every major empire to justify squelching the poor, dumb indigenous folk of <you are here>.
http://www.youtube.com/watch?v=bWVZ5kPV1Ts
Ivy League professors do not teach, or a few hours if they do. All work done by graduate students. The professors do researcxh they like and if they're good, get consulting pay oin the side. Amusing to see one complaining