Search This Blog

Tuesday, July 31, 2012

This Day in History: July 31


Really not much new or interesting in the world of finance and markets today and thus we will direct our energies today to something a little more interesting and worthy of thought..

As regular readers know, we enjoy introducing history into our posts because everything is interconnected-- past.. present.. future..   There was a world in existence before each of us was born and the people and events of the 'Then' affect us in the 'Now' even if in small or non-noticeable ways.

Admittedly not very much occurred in history on this date that we found particularly interesting except for this one nugget...

On July 31, 1790, the first U.S. patent is issued, to inventor Samuel Hopkins for a potash process.

Potash is the common name for various mined and manufactured salts that contain potassium in water-soluble form. (photo of potash at top of page)

But that in itself is not vital to know or remember.   Its the issuance of the patent that matters.

Patents are the lifeblood of the protection of intellectual property and thus provide the legal protections which allow great minds to create/invent products and ideas.
~ patent photo of a shoe

Without them, barely anything gets invented or developed--  it just wouldn't be worth the time to a Thomas Edison or a Henry Ford to build new machines or technologies.  Anyone could just steal an idea or creation wholesale and make it 100% theirs without any credit or money going to the original inventor.

Patents are also the lifeblood of capitalism and what makes a national economy strong.   And there was a time when an inventor could acquire a patent within months.  The original US Patent statute was put into law on April 10, 1790 and Hopkins received his patent about 105 days later.

Now to receive a US Patent, you should expect to wait years and accrue many costs including patent attorney fees, a patent fee and maintenance fees as you wait and wait for approval...

Its hard to implement new products into the marketplace when an inventor has to wait years simply to receive the legal protections against intellectual or physical piracy, much less begin to turn a profit on such invention.

And of course, getting a patent to be honored internationally is a whole different bowl of headaches...
People like to ask, in retrospect what made America great?

Was it the Constitution?  Freedom... Liberty?  etc..

All important and valuable things definitely... but that isn't it..

It was people.. specifically the spirit of the Individual.  That's what made the US grow from a fledgling group of newly freed colonies to the large, prosperous nation we are today.

What exactly do we mean?  Aren't we still great?

Well.. let's compare/contrast a little bit...

The stifling of individual invention and creativity via the long drawn-out patent process today vs in the past is one example.  Here's another:  There was a time in this country, if one looked for work and there were jobs to be had, he/she simply inquired, was told the salary and if agreed, was virtually hired on the spot.
~ "Yeah, I know.. spinning plates has nothing to do with the job I am applying for but my possible boss wanted to see if I could do this before he'd look at my resume.."

In today's society it rarely ever occurs.  Even lowly positions like waitress, custodian or waste pick-up require long applications to be filled with background checks, drug testing and every other stall & delay tactic an employer can think of so to make their subservient job seem important to keep.

In other words, there used to be greater mobility and freedom for the Individual.  He/she didn't like their job.. just quit and a new job was relatively easy to acquire.

Today, its set up where its so difficult to get hired even when jobs were aplenty, that the only way to have any semblance of mobility is to get hired for the new job first, then leave the wretched job you really wanted to quit months prior...

We've become a regulated society..everything from individual movement to the ability to create new ideas and businesses..   everything regulated but the one thing that desperately needs it.. Wall St.

As we've written before, history is an amazing thing... Often the events we think are important, end up forgotten and the 'insignificant' end up developing a future relevancy, even if for no other reason than to reflect how good things were compared to the present.

Monday, July 30, 2012

Buy on Rumor; Sell on Truth

So we look at the Dow today.. its pretty much in a holding pattern --  down -2 pts and still at over 13,000... yawnn~

All the greedy and soulless waiting to see what big announcements will be coming from the Fed and/or ECB about more stimulus, etc...  old, tiring news we know..

This all would be so comical and not worthy of any attention paid if not for the fact that these financial elites-- from central bankers to investors affect and impact the daily economy of rest of the world (usually for the worst).

For instance, many people naively think the 'Arab Spring' of 2011 was based on people wanting freedom from oppression. Freedom was at most a by-product.  It was more a result of food prices jumping 200-300% by early Spring in some regions of the world within a couple months of Bernanke starting up QE2.

As the dollar weakened (which is all these Fed policies do), more money was required by US farmers to sell their food to make up the shortfall in value, and through the process of distribution, everyone takes their proverbial two pounds of flesh.

Remember-- everything economically is inter-connected..

So by the time the wheat, corn, etc hit markets in places like Egypt, Algeria, etc, it became too expensive for many people in that region of the world to afford.  The average Egyptian makes equivalent to $2 US dollars/day..  So what's a person to do-- quietly starve?
So as we said, the sludge of the earth- Investors are waiting for the results of the meetings during the latter part of the week.   And unless the news (or declarative lie) is phenomenal, expect a big selloff.

If this behavior sounds confusing to you, simply think about a child... a little boy or girl with a yet undeveloped mind who can't wait for Christmas morning because he/she believes and expects a new bright red bike to be under the tree with a fun bell attached to one of the handle bars...

Then the child awakes, runs down the stairs and finds.... no bike.   It was just something the parents teased and pretended they were going to buy (even though parents knew they couldn't afford a bike) so the child would stop screaming at top of lungs every time they had to eat vegetables with dinner.

In other words, the investors are the spoiled, horrid children and central planners like Bernanke and Draghi, are the deviant liar parents who  will do/say Anything to shut the demanding brats up with no concern about what happens once they are found out to be untrustworthy.

But in the real world, Investors, as evil as they are, well they're not stupid.  They know these people are untrustworthy and duplicit, and Investors know repeatedly they are being played.

So why be a part of such a game?

1) The saying 'Nothing personal, its just business' firmly applies-- what do Investors care if eventually they are securing daily profit from the rumors.. better there be some market activity on rumor than none based on truth.

2)  They know these central bankers will have to do something ultimately..  its the nature of the beast.  To sit idly by and outwardly impotent is not something men (and women) of great power and ego take too kindly to.
It made us think of Napoleon..

Two hundred years ago this late July, Napoleon was sitting in the little town of Vitebsk, in what is now Belarus.  He had just pushed the Russian Army out of the town and decided to camp there for the autumn-winter and continue his invasion of Russia in the spring.

But after just a few days in this sleepy hamlet, he grew bored.  One of his aides, Philippe-Paul de Segur, later wrote that Napoleon’s fateful decision to immediately advance onto Moscow came from this logic:

    “How can I bear the boredom of seven months of winter in this place?  Am I to be reduced to defending myself – I who have always attacked?  Such a role is unworthy of me…  I am not used to playing it…  It is not in keeping with my genius.”

The rest, as they say, is history.

And advance he did.  With his army of 600,000 men under arms, reaching Moscow on September 14, 1812.  The Russians never gave him the decisive battle he desired, preferring to burn their capital to the ground and move further east.

Winter, famine and disease did the rest, and the Grand Armee left Russian later that year with less than 120,000 soldiers..  80% of Napoleon's Grand Army-- gone in one winter.

It was the greatest military defeat until the Nazis replicated the effort in World War II, happily to a similarly disastrous effect.
So Bernanke, Draghi, etc.. they'll do something..

Even though the Law of Diminishing Returns is in place (each QE produces less of a market bump then the one before)..  Even though the Investor vultures will quickly turn around and demand more..  Even though they know they are coming upon the 'Wall' where any can that is kicked gets bounced back...

Ultimately they'll do something.

Friday, July 27, 2012

Three-Card Monti Draghi follow-up

~ 'Ants sure are stupid little creatures..working.. toiling all day..  I'm a grasshopper.. I'm better than them.. I invest...'

As of 2p, the Dow is up +204pts at 13,092...

Its the third day of triple point gains.. why?

More continual rumor and playing up Investor hopes that all the problems of the EU will finally be solved (to the banks favor, of course)

And the 'exciting' life-altering news that has caused Investors' finely pressed slacks to show noticeable bulges of delight?

Draghi Said to Hold Talks With Weidmann on ECB Bond Purchases -- Bloomberg

'Weidmann' is Jans Weidmann, President of the Bundesbank in Germany.

Big deal!  They talk to each other all the time...  it is usual practice and nothing special that Draghi meets or talks with the members of the Governing Council.

Yet the markets are spiking over this?

We told you in our last post.. if the market could have figured a way to spike 100-300 pts based on Colorado's tragedy, it would have and lost no sleep afterward..

Its the nature of the beast...

~ 'Keep working there, ya stupid common ant.. Hee Hee..

So...

Will anything happen at this 'important' meeting on Aug 2nd?  No

Has anything in the world of reality changed?  No

Just a perfect set up for a very big drop on Monday which CNBC & other financial media will refer to as mere profit-taking.

Its actually very funny... quite comical..  Imagining bottom-feeders dressed in expensive suits and 24k gold tie-clips & cufflinks playing 'Follow the Leader' on every rumor, hunch or innuendo for fear of missing out on the big bull market rally...

We wish there was a way that photographs could be taken of each and every one of their faces when the market crashes this autumn like 2008 and they lose 20-60% of their total net worth...

We'd love to relax to that photo album while sipping some oolong tea
In some versions of 'The Ants and the Grasshopper', when winter comes, the grasshopper, a most pathetic sight, 'knocks' on the 'door' to where the ants are happily nestled, asks to come in from the cold and hunger, and the ants kindly oblige.

We prefer the other versions-- where the ants look at this once-proud grasshopper, now lowly and humbled, and then converge upon to devour the grasshopper till there's nothing left.

Shame Aesop never wrote 'The Ants and the Investor"
~ 'Mmmm, this grasshopper is Delicious... Yummmy!

"Three Card" Monti's game of lies

Yesterday the Dow rose +211 pts...

Why?  Oh nothing really.. just another promise from a soulless banker that those of pure evil who maintain positions of supreme financial power would do everything humanly possible to maintain and preserve the status quo, so Investors can relax and rejoice.

Now ECB President Mario Draghi (and former Goldman Sachs-ite) didn't say those words exactly...

But he might as well ought to have.

Of course this game has been played and replayed numerous times by bankers and political leaders in Europe and the US; a nice, easy non-commitment way of starting faux market rallies that peter out within a couple days.

Promise something.. anything..   No one will hold feet to the fire.. Just say what ya gotta say to get that precious stock market moving upwards..

The Investor filth certainly don't care if the pronouncements are true or not..  If they could have financially profited off the horrific killings in Colorado last week during a midnight screening of Batman, they would have... and done so without any guilt.

And if you think we're exaggerating, you really do not understand these people.

You forgot how excited Investors were last spring over the opportunities for investing in a tsunami-devastated Japan... "A Great Buying Opportunity" it was called at the time by CNBC's Lawrence Kudlow.
~ "'The human toll here looks to be much worse than the economic toll, and we can be grateful for that... The human toll is a tragedy; we know that. But these markets, all these markets - stocks, commodities, oil, gold - there is no major breakout or breakdown." - Kudlow on CNBC (3/14/11)

Ohh so many teases.. so many promises of action..

Thursday 7/27, the Dow ended at 12,887 ...

Want to know what it was 10 weeks ago?

Thursday 5/10, the Dow ended at 12,855

In 10 weeks, the Dow has risen a 'whopping' 32 points...

And what about 5 1/2 months ago?

On 2/8/11, the Dow closed at 12,883

So in a span of five and a half months, the market rose 4 pts...
Think about that...  All the ups and downs; the rallies and pullbacks.. the promises by central bankers and governments that problems were fixed; solutions were at hand... and the evil stock market went up 4 teeny-weeny, measly points in 5 1/2 months!

Now the pro-market loyalists will argue that the Dow is 640 pts higher today than it was last year at this time (7/28/11), so 'Ha!' to us...

Okayy... Well we'd respond, if the market is so strong now vs then, why the desperation by so many soulless profit-driven people for the Fed to inject more stimulus?  We thought you implied a 640pt year to year rise was impressive... Shouldn't that be enough to keep tooting that horrible 'recovery' horn?

Ultimately the market is meaningless... it goes up, it goes down..

Problem is that too many people believe the stock market is an accurate barometer of the health of the US economy, so a rising market is like a large rug one can use to sweep a lot of debris and filth under to hide from others..

And quite frankly we at A&G don't want that..

'Ignorance' is not 'Bliss' and no change in financial policy or public groundswell for action will ever occur in a world of individual or populous complacency.

Thursday, July 26, 2012

This Day in History: July 26th

As loyal readers know, we here at A&G like to occasionally break up the monotony of stock market & global finance talk by delving back into history to find special or important events which most people may not aware of and have relevance in the present.

Today, July 26 seems to be one of those special days just chock full of relevant & important events, especially if you are American.

For instance, back in 1775, the US Postal Service is established by the Second Continental Congress, with the institution pre-dating the Constitutional Convention (1787), the end of hostilities with Britain (1781) and even the Declaration of Independence (1776).

Especially in the modern age of instant emails, texts and tweets, it is easy to lose sight how important the Post Office has been to the unification and advancement of the nation over the last 220+ years.

More recent events occurring on this date which people can appreciate were President George H. W. Bush signing the 'Americans with Disabilities Act' in 1990 to end discrimination in the workplace, and 42 years prior in 1948, President Truman ended racial segregation of the US Military.

All those events have importance but the one historical occurrence which struck us most interesting, once again involved Harry Truman and took place the year prior when Truman signs into law the National Security Act of 1947.
This Act created the Central Intelligence Agency (CIA), United States Department of Defense, United States Air Force, Joint Chiefs of Staff, and the United States National Security Council.

All agencies have been in existence for 65 years now..

Did you know:  Since the National Security Act of '47 was implemented, the US military has been engaged in numerous wars and conflicts, and have yet to truly win any of them...

Let's go down the list chronologically...

1950-52:  Korean War  -- ends in a stalemate with establishment of 51st Parallel dividing North & South Korea, a demarcation still in existence to this day

1963 -1973:  Vietnam Conflict -- 11 years and 60,000 US deaths later, we left Vietnam on the losing side.  Ho Chi Mihn eventually took over and united all of Vietnam shortly after.

1983:  Grenada --  Pres Reagan orders the small Caribbean island to be invaded to free some medical students held hostage amid fears it was being taken over by the Communists.  The mission was a success, but how could it have not been:  Grenada's main island geographically is 17 miles long from north to south and possesses a total population of 110,000 people (1/20th the pop. of Houston, TX).
1991:  Operation Desert Storm --  Multinational forces pretty much led by the US liberated Kuwait but stopped right at the border of Iraq then dispersed the Army because it feared a prolonged war with Saddam Hussein.  With 20/20 hindsight, it turned out to be the sensible decision but as a military operation, it was what is referred to in Blackjack as a 'push', not a victory.

2002: Invasion of Afghanistan --  It should and would have been a great victory especially since it was in response to 9/11 and Americans were solidly behind it...  But it dragged on..and on..and on..  and the mission goals and purpose got more convoluted.. Hard to call that a victory.

2003: Invasion of Iraq -- Putting aside the pretenses; the whole finding 'weapons of mass destruction' nonsense, the invasion itself was quick.. it was thorough..  it was easy..  Shame our leaders had no idea what the next steps would be.  So many. many years later we're still there and no one really knows why we went in the first place beyond cynical, jaded reasons (Was it oil?  Was it George W Bush seeking revenge for Hussein trying to kill his father, Bush 41?)

Did we miss anything?

There's a bit of sad irony that the institutions put in place by Truman in 1947 to fight the Cold War and protect America, has ended up causing anger and hatred by others in so many various regions of the world.

It was not Truman's intent-- The goal of all those agencies was to protect Americans & American interests abroad.
But its just how powerful all-encompassing bureaucracies work-- the need for continually expanding budgets which means the need to show just cause for such expenditures.  And if that means creating chaos or carnage to justify reasons for being in existence, so be it...

And in the ongoing War on Terror, those agencies have more responsibility and power than ever before

History is a funny thing..  its not so much that it repeats..  Its just often events that one may think insignificant at the time, become so important into the future... and events we consider so important today, become mere forgotten footnotes tomorrow.

Tuesday, July 24, 2012

Shilling for the Fed

Question: How does a large entity, say the Federal Reserve communicate with Investors, bankers and the rest of the financial elite without actually directly speaking to these entities?

In other words, how does the Fed spread gossip, rumor and/or float 'balloons' to see how receptive the market will be to new policy without outright openly admitting it is doing so?

Answer:  It uses the media.

But not just any media... it uses a specific newspaper, or rather we should say, the Fed uses a specific reporter who works for a very influential newspaper to provide inside 'scoops' and special access in exchange that the information is reported without analysis and the Fed is always given a faux positive spin as if the private bank (The Fed is as government run as Fed-Ex) cares about more than preserving its self-interests

The writer's name is Jon Hilsenrath who works for the Wall St Journal.

We only mention because if you ever see anything written by him, you can be able to know who the shill is by name.  And though nothing illegal occurs.. no money exchanged, etc.., to all who are among the inner-circles of the financial elite, this is common knowledge...

Want to read a heads-up on the latest mood of the Fed while seeing them portrayed as saviors wearing the 'white hat'?  Go to that source..

So we want to take a few moments in this post to show how propagandistic journalism works in a free-market, free-speech society..
~ 1914 $10 Federal Reserve Note; Pres. Andrew Jackson pictured (he's currently on $20 bills)

Hilsenrath's latest article for WSJ is entitled, "Fed Sees Action if Growth Doesn't Pick Up Soon".. It's a long article and we're not going to analyze it paragraph by paragraph... instead, here are some 'gems' (in blue font)..

"Federal Reserve officials, impatient with the economy's sluggish growth and high unemployment, are moving closer to taking new steps to spur activity and hiring."

Two lies in that opening sentence..

1)  The Fed does not care about high employment..  It cares that the stock market is dropping

2) The inference to 'taking new steps to spur activity and hiring' is Quantitative Easing 3, which in a way should be called QE5 since we've had 2 official 'QE' and 2 unofficial 'Operation Twists' and unemployment is still in the gutter.

No surprise though... those policies were meant to buy up toxic mortgages from banks' balance sheets and pump liquidity into the market so the Dow would artificially rise and encourage investment.

Continuing...

"Fed Chairman Ben Bernanke, in testimony to Congress last week, listed several options under consideration, including a new program of buying mortgage-backed or Treasury securities, new commitments to keep short-term interest rates near zero beyond 2014 or an effort to push already-low benchmark short-term interest rates even lower."

Once again, this is portrayed as a good thing; a positive.  It is not...
~ 1914 $20 Federal Reserve Note; Pres. Grover Cleveland pictured

When the Fed buys the toxic debt, it does so by creating new debt i.e. public debt.  In other words, every penny the Fed spends is created from thin air and thus is added to the overall US National Debt which currently is somewhere around $16 trillion.

Also keeping interests super-low only encourages indebtedness and market speculation while Killing savers, especially retirees who are desperate to get enough interest to live on.  Its done intentional though-- the Fed doesn't want savers, they want more mom & pop investors...

"In the Fed's first round of QE in 2009 and early 2010, it bought $1.25 trillion worth of mortgage-backed securities and $300 billion of Treasury securities and debt issued by Fannie Mae and Freddie Mac. In its second round in 2010 and 2011, the Fed bought $600 billion of Treasury securities. A third round could involve similarly substantial sums. "

So let's see, if you add the $267B being spent on this current 'Operation Twist' with QE 1 & 2, the Fed has pissed away $2.417 Trillion dollars (which is added to the National Debt) to inflate Wall St's value and bail out banks.

The reason its the Fed doing this and not Congress allocating the money is that after seeing how controversial and politically disastrous it was for sitting Congresspeople during the initial $700B TARP allocation in late 2008, a law was passed on Dec 31st while everyone's attention was focused elsewhere, passing off responsibility to the Fed to be the decider of re-capitalization.
~ 1914 $100 Federal Reserve Note; Ben Franklin pictured

Did you know, if you took the $2.417 Trillion spent thus far by the Fed, which has done virtually nothing, and divided equally to 150 million of the poorest Americans, each individual would receive a check for $16,113.33?

Wouldn't That have stimulated the real economy better/quicker?

Continuing..

"Since January the Fed has been saying it doesn't expect to raise short-term interest rates until late 2014. The Fed could change its policy statement in September to move that date into 2015"

If you think that is good, you are delusional..

"A new round of bond-buying would be politically controversial so close to the November presidential election. During Mr. Bernanke's testimony last week, Democrats made clear they wanted the Fed to act and Republicans said it should proceed cautiously. The Fed chief has said repeatedly that the central bank will seek to do what is best for the economy, regardless of political pressure."

Written like a true spokesperson for the Fed..  What utter nonsense! The Fed is as politicized as any other institution:  Bernanke is a registered Republican originally appointed by George W Bush.   Former Republican Presidential candidate Herman Cain was once head of the Kansas City branch of the Fed..

Every member of the Fed has allegiance to one party or another, and the current President is desperate to win; desperate to show a rising stock market in late October-early Nov... And the Fed Chair appears every month before Congress... so to say the Fed isn't politicized, is foolish.

~ 1914 $10,000 Federal Reserve Note; Salmon Chase, Treasury Sec under Lincoln pictured

BTW, do you know how Fed Chairs are selected?  You'd think the President complies a list and makes the best choice based on qualifications, background, etc...    No.. the President is handed a list by the Fed--  They make up the list and the President picks a nominee from it...

This is why so many Fed Chairs have served under Presidents of both parties..  Because ultimately what does it matter?  The Fed picks who it wants and the rest is a formality..

The main point of this posting wasn't to demonize a specific person.  Sure Hilsenrath basically sells his soul daily to do the Fed Reserve's bidding in exchange for being their #1 go-to guy, but people in the profession of finance really don't look at it as 'bad'... Many actually believe the Fed's intentions are noble and many corporate media writers sincerely believe the tall-tales they spin will help the economy...

But we know better and out goals are pure and non-deceptive:  We simply want people to wake up and think for themselves... Nothing more, nothing less.

Kicking Greece out of Eurozone by September

We found this interesting report over the weekend from the German publication 'Der Spiegel' concerning Greece-- it seemed only to be printed in its German version and not the International version (which is translated to English) ,so here is both German and English translation (English version in blue font)

**  All pics are from us, not Speigel..

IWF will Griechenland-Hilfen stoppen (IMF wants to stop Greek help)

Griechenland könnte schon im September pleitegehen. Der Internationale Währungsfonds hat nach Informationen des SPIEGEL der Brüsseler EU-Spitze signalisiert, dass er sich nicht an weiteren Hilfen für das Land beteiligen werde.

"Greece could go bankrupt as early as September. Spiegel has obtained information that the IMF told the Brussels leadership it would not make more money available for help to Greece. [..]

Derzeit untersucht die Troika aus EU-Kommission, Europäischer Zentralbank (EZB) und Internationalem Währungsfonds (IWF), wie weit das Land seinen Reformverpflichtungen nachkommt. So viel steht schon jetzt fest: Die Regierung in Athen kann den Schuldenstand des Landes nicht wie vereinbart bis zum Jahr 2020 auf rund 120 Prozent der Jahreswirtschaftsleistung drücken.

At the moment the EC, ECB and IMF troika is investigating to what extent the country lives up to its reform obligations. This much is already certain: the government in Athens will not be able to bring down its debt load to about 120% of GDP by 2020.

Erhält das Land mehr Zeit, seine Ziele zu erfüllen, würde das nach Schätzungen der Troika zusätzliche Hilfen zwischen zehn und 50 Milliarden Euro erfordern. Viele Regierungen der Euro-Zone sind jedoch nicht mehr bereit, neue Griechenland-Lasten zu schultern. Zudem haben Länder wie die Niederlande und Finnland ihre Hilfen daran gekoppelt, dass sich der IWF beteiligt.

The troika estimates that giving Greece more time to achieve its goals would cost an additional €10 billion-€50 billion. Many eurozone governments, however, are no longer prepared to shoulder new Greek burdens. Moreover, countries like Holland and Finland have made their help contingent on IMF participation.

Das Risiko eines Austritts Griechenlands aus der Währungsunion wird mittlerweile in den Ländern der Euro-Zone für beherrschbar gehalten. Um die Ansteckungsgefahr für andere Länder zu begrenzen, wollen die Regierungen den Start des neuen Rettungsschirms ESM abwarten. Dieser kann jedoch nicht vor dem Urteil des Bundesverfassungsgerichts am 12. September in Kraft treten.

Meanwhile, a Greek departure from the eurozone is seen as manageable in eurozone countries. In order to limit the risk of contagion, governments want to wait for the new ESM emergency fund to start. Which can't happen before the German constitutional court delivers its verdict on September 12.

Um Griechenland über den Monat August zu helfen, könnte ein letztes Mal die EZB einspringen. Eigentlich müsste Athen am 20. August 3,8 Milliarden Euro an die Zentralbank zurückzahlen. Die Lösung könnte eine Art Kreislaufgeschäft sein, bei dem die Euro-Notenbanken selbst die Kreditablösung übernehmen: Der griechische Staat könnte neue kurzfristige Staatsanleihen herausgeben - sogenannte T-Bills - und sie an die griechischen Banken verkaufen. Diese wiederum reichen die Papiere bei der griechischen Notenbank ein - als Sicherheit für neue Nothilfen.

To help Greece survive the month of August, the ECB could jump in one last time. Athens must pay back €3.8 billion by August 20. The solution could be a kind of circular deal, in which eurozone central banks take over credit payments. Greece could issue new short-term bonds and sell them to Greek banks. They could then submit them to the Greek central bank as collateral for new emergency help."


~  Expect to hear IMF and European deny over and over.. until it happens...

September.. October.. early-mid 2013.. the 'when' isn't so important..  Eventually it Will occur & hopefully with it, the beginning of the end of the Banker created experiment known as the Eurozone

Monday, July 23, 2012

Chasing Tails

As we were listening earlier today to the punishments being handed down by NCAA President Mark Emmert against Penn State for covering up repeated child abuse by the football program over the span of over a decade -- $60mil fine, no Bowl games for 4 years, dramatic reductions in scholarships to be offered, 14 years of former coach Joe Paterno's wins vacated, i.e. to disappear, etc..-- one thought immediately popped into our collective heads...

We wish this guy had been Attorney General during the last four years...

Then again, maybe it wouldn't have mattered who was in charge...

Maybe it was President Obama specifically who directed Atty Gen. Eric Holder to not arrest and charge a single banker or financial bigwig for their role in the ongoing economic crisis which has caused great economic suffering globally...

Its never smart to incarcerate those you seek political donations from.

The System..  Dem.. Rep.. such a Club!

And unfortunately, more economic pain is to come..
AP's headline today reads, Global Economy in Worst Shape Since 2009 -- "Six of the 17 countries that use the euro currency are in recession. The U.S. economy is struggling again. And the economic superstars of the developing world — China, India and Brazil — are in no position to come to the rescue. They're slowing, too."

All those trillions upon trillions of collective dollars, euros, yen, renminbi (China's currency) poured.. rather, Dumped into the Evil, Criminal, Corrupt banking system and global stock markets to prop up a dying quail, while fixing nothing or punishing the original culprits...

Should any rational minded person have expected any better?

And every article that tells the truth of how bad things are-- you know, they always seem to end with the same piece of shit optimism -- QE3

Here's how a Yahoo! Financial article on investing strategies ended:  "While you do hide out from the turmoil, take solace in the fact that you're not alone and that, if nothing else, the Fed stands ready to act."

We're thinking the Fed is more and more reminding us of the Maginot Line more than anything that a profit-minded, Kool Aid drinking investor would believe in.

(The Maginot Line was France's supposed impregnable lines of defense established pre-WWII in case Germany ever tried to invade again..  it failed miserably with Paris occupied in the spring of 1940, only six months after WWII's official start in Sept. 1939)
So you have a combination of "The Boy Who Cried Wolf" situation mixed with 'animal chasing its tail'

And if you turn on CNBC or Bloomberg or such, you will always see and hear a non-stop cackle of ignorant geese telling you where to invest your money-- bonds, treasuries, commodities, currencies, this stock or that stock..   Every piece of advice except the one you Should be doing--  Selling.

Dow ended -101 pts today.. "There is no better time to invest than NOW!"   Right?

Of course ultimately who cares about how the corporations are doing?  They Deserve to suffer a deep, massive financial bloodletting for the economic misery they caused the globe, including the US.

But life isn't always a two-way street-- many Americans do seem to care and want corporations to be strong and profitable.  The corps certainly don't give a fig about you... If they did, they'd hire you..and not as temps...

From AP:

"The ranks of America's poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net...

The Associated Press surveyed more than a dozen economists, think tanks and academics, both nonpartisan and those with known liberal or conservative leanings, and found a broad consensus: The official poverty rate will rise from 15.1 percent in 2010, climbing as high as 15.7 percent... (this) would put poverty at the highest level since 1965."
Its rough out there... trying to find work.  It doesn't make things any easier when corporations do the kind of financial belt tightening that JC Penney's announced over the weekend:

From KDKA-TV Pittsburgh:

JCPenney’s To Eliminate Check-Out Clerks -- "Penney’s CEO Ron Johnson says the store will switch the traditional bar codes on price tags to RFID’s – or radio frequency identification chips – and use self-service checkout machines found in many grocery stores."

Don't worry folks, these permanent job eliminations won't occur until way, way into the future... 2014.   Would have been sooner but it takes time to place special bar code tags on every piece of crap which Penney's sells...

"In an email, a Penny’s spokesman would not say how many jobs would be lost, saying instead this new check-out would actually free employees to help customers in other ways."

Oh sure.. why talk on job losses.. who wants to focus on such a downer.  Besides employees will now have more time to make sure you don't steal merchandise by altering bar codes or removing them altogether..

Hmm, how does that famous Bing Crosby song go:

Sings: "You gotta accentuate the positive.... Eliminate the negative...  Latch on to the affirmative.. Don't Mess with Mr. In-Between... ~
~ Oops, we meant to post photo of A tiger chasing His Tail..  our boo-boo

So basically you have a situation where everyone wants and hopes things to get better but those with the power and means to do so, refuse to.

And governments, which theoretically are supposed to help its people, do little to nothing because those in power are so dependent on these Evil entities to retain and maintain it...

So things are bad and in spite of all that talk of 'green chutes', 'blips' and 'recovery'; the stench of lies expunged from the breath of every politician, financier and media operative...  Everyone should know by now we're in a total malaise...

But on the bright side, the Fed will rescue us and everything will be peachy..

Right?

Friday, July 20, 2012

This Day in History: July 20th

We were going to write another posting on Spain and the stock market dropping triple digits and how everyone who makes a living on Wall St are complete, utter Idiots...

We just will assume you know all this already..

From time to time, we enjoy perusing though the 'This Day in History' listings to see what events of importance occurred and July 20th is actually a more special and interesting day than most.

It was 43 years ago today that the first human being, Neil Armstrong, ever placed his footstep upon the Moon.  In the US, its celebrated in a patriotic way since the first astronaut to do it was an American, but really it was a celebration for all..

"One small step for man.. One giant leap for mankind"

And as magical it must have been to see this on one's TV set from the comfort of their living rooms, just think how long its been since Any person has stepped on the moon afterwards.

40 years actually..

Eugene (Gene) Cernan became the last man to walk on the surface of the Moon during the 1972 Apollo 17 mission which took place in December of that year.
~ Photo of Cernan taken on Moon; Dec. 1972

Not only has it been 40 years since we stepped on the moon, it doesn't look like it will be occurring again for quite a while.

The US space program is a mess-- we scrapped the space shuttle program for budgetary reasons and with both the US & global economies getting worse, its hard to imagine people living today witnessing another magical moment of human exploration as those alive in 1969 experienced.

1969 was a turbulent year, particularly in the US.  Many movies and documentaries made on it.  But in life nothing is 100% bad or good, and it would be simpleminded to reflect upon that time as being suffocated by doom and gloom.

2012 in many ways has been a year of tension for people.  We think the best way to describe it would be to term 2012 "The Year People Waited for the Other Shoe To Drop".  Maybe it will.. Maybe it won't.

If proverbial 'cans' can be 'kicked' far enough, then perhaps 2013 will become 'That' year.. or 2014.. and life post-Lehman will be one long, continuous blur.

Before we close this post, there were two other incidents which occurred on this day in history which we found fascinating and not in a good way; both occurring in the US during the Great Depression.
In 1932, in Washington, D.C., police fire tear gas on World War I veterans, part of the Bonus Expeditionary Force, who attempt to march to the White House.

In 1934, during the West Coast waterfront strike, in Seattle, WA, police fire tear gas on and club 2,000 striking longshoremen. The governor of Oregon also calls out the National Guard to crush the strikers.

Two incidents where the government-- one incident Federal, the other state and local, use their physical might to attack and hurt their own people for daring to express their redresses.

In eight months of fighting (WWI began in 1914 but the US entered late in the war) 116,516 soldiers lost their lives with another 204,002 wounded.

By the time of the Great Depression many of the veterans, like most Americans were out of work and struggling terribly.  The World War Adjusted Compensation Act of 1924 had awarded them bonuses in the form of certificates-- it bore a face value equal to the soldier's promised payment plus compound interest.

The certificates could not be redeemed until 1945, and the principal demand of the Bonus Army was the immediate cash payment of their certificates.

So instead of complying,  President Hoover directed the military to shoot gas canisters at the veterans and drove them out from their protest site using military tanks.  Two veterans died from gunshot wounds.
~ US troops driving out the "Bonus Army"

The situation in 1934 was similar... people struggling to survive and in this case, wanting a fairer wage. But government then, as in the present, doesn't care about its people's needs-- certainly doesn't care about individual's needs.

So local authorities acted then as they would do today-- with force.

Back then as in today, anything one may need or desire to make a better life for themselves and their families is to be fought for.  No one in positions of power or wealth will give up an inch... or a penny.

In life, over time technologies may change.. hairstyles and clothing, etc..  but some things- just remain the same for each generation to experience and repeat until the following generation forgets.

Thursday, July 19, 2012

Successfully combating paying online sales tax

This article is for all those not fortunate enough to live in or very close to the wonderful tax-free shopping state of Delaware.

Recently it was announced that Amazon.com would start expanding the number of states in which it collects sales tax.  Currently it collects in 6 states (KS, KY, NY, ND, TX and WA) but will be expanding to 8 more starting with California & Pennsylvania this coming September followed by 6 more in the next couple years (NJ- July '13, VA- Sept '13, IN, NV & TN - Jan '14, SC - Jan '16).

We admit we were Deeply aggravated by this announcement...

Maybe its the smug, cocky way the news was announced by the intentionally out-of-touch shit corporate media..

Or maybe its thinking how happy those politician slimeballs are that they can begin taxing products acquired online which the individual states had absolutely no involvement in the creation, development, quality-control, packaging or transport of...

Or maybe its the way Amazon backed off its no sales-tax pledge because it was more important for them to expand their distribution centers and receive those enormous tax breaks by the various state governors which offset their 'don't tax the consumer' principle...
No matter the rhyme or reason, it made us feel bitter toward Amazon.com

We at 'A&G' do not believe in nor support anyone paying sales tax.

Now we do believe in & support the concept and implementation of tax collection including its proper place in the maintenance of a society but unlike most means of acceptable tax collection i.e. income tax, property tax, corporate tax, etc, sales tax is taxation on the poor; it is a tax based on one's need to survive rather than one's wealth i.e. ability to pay.

You are free to disagree but that is our stance...

So back to Amazon..  the one big advantage they had over competitors was not collecting the sales tax.  Their overall prices are not that dramatically better than bricks n' mortar stores like Best Buy or Wal-Mart.  It was the sales tax differential that made it worth waiting 2-3 business days to receive a package vs a spontaneous in-store purchase.

Sales tax expense may not matter to most when it comes to buying a CD or movie or book, but it adds up when buying a camera, computer or HDTV.

For instance, if you purchase a laptop computer for $500 where sales tax is collected and the normal tax rate is 6%, that's an extra $30 out of pocket... for nothing!

If your tax rate is 7%, you'd shell out $35 extra;  8% would be $40...
We wanted to do an experiment to see if Amazon's prices would still be the lowest once these sales-tax collection policies go into effect.

We compared certain items like movies and music on Amazon.com to that of GoHastings.com which only charges sales tax in the South and parts of Midwest, and DeepDiscount.com which only charges sales tax in IL and CA.

* For this experiment, we use 6% as the sales-tax rate and we did not count Amazon Prime's 2 day free shipping since that requires an annual $79 purchase.

Item #1:  'Rio'- Blu Ray/DVD combo & Digital Copy

Amazon:  $14.69 + $0.88 (sales tax) + $1.99 S/H = $17.56

DeepDiscount:  $14.99 + $0.99 S/H = $15.98

GoHastings:  $12.99 + $0.96 S/H = $13.95
~ * ~    ~ * ~    ~ * ~    ~ * ~    ~ * ~    ~ * ~    ~ * ~    ~ * ~ 

Item #2:  Adele - '21' CD

Amazon:  $11.82 + $0.71 (sales tax) + $1.99 S/H = $14.52

DeepDiscount:  $10.52 + $0.99 S/H = $11.51

GoHastings:  $10.99 + $0.96 S/H = $11.95

It sure seems like Amazon needs to be saving its consumers every penny it can, not increasing expenses via a needless sales tax collection.  And let's say you did have Amazon Prime which would take away the $1.99 shipping cost, Amazon still ends up being a little more expensive than the lowest competitor...

Why?   Yep.. that bullshit sales tax collection...
To be fair, Amazon is less than the competition when it comes to prices of many items even when that sales tax is added.  Its just that Amazon no longer becomes that automatic place one turns to when shopping online.  Based on cost of item and whether a competitor does not charge sales tax in your state, your cost can really vary...

And this is really another example of 'Ant' v 'Grasshopper'..  The 'ant' is very fastidious and practical' while the 'grasshopper' has an laissez-faire attitude of 'Whatever!'..

Only fools thoughtlessly spend more than they have to, especially those who can't really afford to do so.  Do the research-- check the sales tax policies of online retailers who sell the products you are seeking to buy, and give your hard-earned $$ only to whoever gives you the overall lowest price including shipping.

A good trick to middle-finger the politicians of your state is to find established bricks n mortar businesses who have an online presence but not located in your state.

For instance there is a department store along the lines of Kohl's and JCPenneys called Boscov's... its physical presence is only in MD, PA and NJ so it is only required to collect sales tax there.. but if you live elsewhere, you pay zero tax.
If you don't know how to research this on your own, talk to friends/family who live in other parts of the country and ask them if they have localized dept stores or retailers and then check out their websites to be sure no physical presence is located in your state

Amazon's decision to collect sales tax just shows how absolutely silly it is for a person to show loyalty to a faceless corporation.  Amazon certainly showed no loyalty toward us.

Wednesday, July 18, 2012

How to spend $20 million...

~ LeBron James & his 'local errands' car...

People love to be entertained which means among other pursuits toward that goal, people love sports.

And beyond joy of watching the action on the field (or pitch, court, rink, etc..), to many there is entertainment value in following the business side of sports.

Will 'Player X' be signed to a new contract at $20m/yr or $22m? Or maybe Player X will wait until he gets $22.5m because that extra $500k is the deal breaker.  Will it be a five year deal or six?  Or seven?

In a way you have to credit (or blame) ESPN for turning something that should be utterly offensive to average fans eking out a living, into something interesting and exciting to follow; a sports version of a daily soap opera.

Right now in professional sports, it is not uncommon to see a star player receive a contract valued at $20mil, and when it is announced, and pen is put to paper to make the deal official, all the peons i.e. good people who wear their local team loyalties on their hearts, sleeves and heads, excitedly celebrate it.
~ One of Kobe Bryant's mansions (actual photo)

Sometimes you'd think the fans were getting the $$, much like you'd think they were all going to get Super Bowl or other 'World Champions' rings after the ultimate 'Big Game'...

So when you get beyond all the endless, empty sports-talk radio debates of whether someone is worth X or Y or Z or even the question of whether that's acceptable in a society where most people make at least 1/200th that amount annually, the real question is how does that $20m break down?

*  400 people could be employed based on $50k/yr salary

*  666 people could be employed based on $30k/yr salary

* 1,326 people could be employed based on $7.25/hr min wage

* 3,846 people could eat for a yr based on $100/wk food budget

* 5,555 people could have their electric bill paid for yr based on $300/mo

* 6,666 people could have health coverage for yr based on $3k premium
~ Derek Jeter's $7.7m Florida mansion (actual photo)

--  Let's see in what other ways $20m can be spent...

4 private jets based on $5m per jet

* 9 small yachts based on $2.2m per yacht

* 26 homes based on $750k per home

* 200 Rolex watches based on $100k per watch

333 automobiles based on $60k per vehicle

10,000 52" 3D HDTVs based on $2k/ea

~ Boxing Champ Evander Holyfield and the mansion he had to foreclose upon

* 25,000 iPads based on the 64GB model for $800/ea

* 33,333 laptop computers based on $600/ea

* 100,000 Amazon Kindles based on $200/ea
---------------------
$20million dollars...

That's a lot of $$, and all going to one person because he was blessed with a specific skill that unlike say, intelligence, could be transformed into entertainment for masses actively seeking escape from their cash-strapped daily existences.

And not since the Dark Ages have those of such wealth and prominence been admired and revered so greatly by those of the lower peon caste.

The moral of the story is just because the wealthy look down on you (and they truly do) it does not mean you must always look up toward them..

Tuesday, July 17, 2012

The Fed-Wall St relationship in Layperson terms

We have written extensively over the Fed's artificial manipulation of the stock market for the sole purpose of creating a new asset bubble to replace and expand upon the still-deflating real estate bubble (which was manipulated back in the early 2000's to replace the Dot-com bubble of the late 1990s)

When trying to explain something as complex as this, its really best to take a step back and go the opposite route-- to simplify into an easy, understandable picture for anyone to grasp.

Visualize a casino..  All the hustle n' bustle of people betting (and mostly losing) their money.. the 'ding ding ding' of constant 25-cent slot machines going off..  the thick cigarette smoke permeating the air forcing elderly to breathe even harder into their oxygen masks via wheeled oxygen tanks as they hope for one big video poker payday...

Now visualize a casino hemorrhaging money due to crookery and outright evil of those at the top.  And as a result of such greed,  people don't wish to enter the casino's doors and part with every last cent to their existence on games of chance as before.  The situation is getting more dire..

From this point, steps into the forefront one of the casino's silent owners.   And he has a grandiose plan how to get everyone to go back to the casino...
First:  Free lines of credit for the major players-- every bigwig gets a super-large stack of chips to play with.  And this isn't just a one-time thing...  The bigwigs will receive this $$ monthly for doing absolutely nothing but being 'important'.

And once the promotion stops, if the heavy players start to get antsy, have new liquidity promotions of flooding the casino with free chips will be ready to be implemented even though there's not enough cash to cover the value of all the chips being circulated within the casino to cover bets.

Second:  A new casino policy--  What the bigwigs keep, is theirs.  What the bigwigs lose, the casino will cover.  This ensures the heavy gamblers never lose a penny and continue coming back...   The bigwig can not Ever leave with a loss..

Everything at the casino will be tailored to the bigwigs needs..   Do they need special accommodations,  perhaps a lovely lady for the evening (or for 10min)...  done.   No request/demand is too unethical.

Third:  A strategy to buy out all the other entertainment venues in the area so people wanting some 'fun' are Steered like cattle into pens, to come to the casino.  It is the losses from the average, everyday people which will cover casino losses from backing the bigwigs.

And with a nice balance of constant in-house promotions and friendly reminders that there's no where else to go, this should keep people in the casino longer than common sense would allow.
Fourth: Constant advertising in the press that the casino is 'Stronger than ever'!  Spend so much in advertising that the papers dare not allow one of its reporters to do real investigations for fear of losing the ad revenue.  If that doesn't work, make the newspaper a minority owner so they are fully vested in the casino's survival.

Fifth:  Promote an outright Lie as "Truth" via the controlled press that the ultimate purpose of the casino is to help the economy.  'The casino creates jobs... it generates tax revenue.. blah.. blah...'   Whatever needs to be said or done to pacify the ignorant so that the casino can continue to run in this manner without any outside 3rd party questioning it.
___________________________
Some will argue this was a bit over-simplistic.   That is what life is ultimately-- simplicity.   Take any intricate economic, political or social problem in the world and when one gets beyond the saber-rattling and/or complex phraseology, at its core, is simplicity.

The Fed's direct involvement in Wall St is to assist a very select few individuals at the expense of the rest of the nation, both in the present and the future.   It runs on a very impractical and quite dangerous 'business model' which is not sustainable.
And if you are invested in or seek to invest in the stock market, you need to understand your place in the 'casino' hierarchy...  you would be the peon. (We wonder if the word originates from the words pee-on?)  You are the one with no protections--  you are Not 'too big to fail'.

Money is precious... Your money is precious.

Whatever you do with it is your concern, not ours...  But if you insist on staying in the market, understand there will be a point in time where the professional Investors will see Bernanke's so-called 'tool chest' is depleted, it will be a furiously mad dash out of the market, and the peons always gets trampled

Monday, July 16, 2012

Becoming more n' more a Dollar Store world

Well its Monday.. time to see what Wall St is doing..  let's see...

-45pts as of 3:30p

Wasn't it over 200pts on Friday based on China's collapsing economy and hopes for more of their form of QE in the near future?

Oh, these silly markets.. Up.. Down.. Up.. Down

Like a head bent over bobbing for um.. apples...

So what is the supposed reason its down today?   June's retail sales numbers compared to May were down 0.5% which may not sound like a big deal, it really is.

US consumer confidence, which is basically a Consumer Board polling everyday people at random on how they feel about the economy, also dropped to 72 from 73.2 previously.
Actually, we would have thought that would have caused another 200pt spike.  Sure seems like every time there's something bad which affects or hurts average people, Wall St celebrates it.

Almost gives the impression the top 1% snobbily look down on the rest in a 'Let them eat Cake!' posture...   Nahh.. we're Americans, right?  We're all equal.

We wanted to post a very good video that explains how bad things are for US consumers but this site is run by Google and they make it super-difficult to post videos which come from competitors like Yahoo! so instead we'll post the link.. its 5min and worth a look...  (yes we know, its a Longgg link)

http://finance.yahoo.com/blogs/daily-ticker/retail-sales-drop-0-5-june-u-consumer-165255503.html;_ylt=AhPBI6uQ1dSlBasVIzdNZ7OiuYdG;_ylu=X3oDMTNyaG1odnNwBG1pdANGUCBUb3AgU3RvcnkgTGVmdARwa2cDYjExNDAxNWEtNzBhNC0zODczLThmMmQtNjBiNzA1NGYyYzk0BHBvcwMyBHNlYwN0b3Bfc3RvcnkEdmVyA2IxZmU0MzcwLWNmNjYtMTFlMS05YmI1LTkyMDY1NGU1MGY4Yg--;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3

However, we can post this very informative 4min, 40sec video on how bad things really are with the US economy and stock market.

The speaker, Charles Biderman of TrimTabs speaks of how bad things are, the "Bernanke Put" and how ultimately Investors' desire to chase the 'holy grail' of more QE will end up much like a dog chasing its own tail...

The info can get detailed.. lots of numbers & such.. Focus on the bigger message..

** To turn music off, go to very bottom left of page and click the pause button