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Thursday, March 31, 2011

Libya: Senator Obama vs Pres. Obama

It is not often but on occasion an article from a news source is so well written and/or accurate to the points it is trying to convey that to edit it would do injustice.. so here's an article from which captures the inconsistency of the President on Libya quite well...  

(Anything underlined or in bold, is from A&G, not the original author, and comments, if any, by A&G will be in blue font. Otherwise, the article below is credited in its entirety to the source, --

Obama in 2002: Toppling Brutal Dictator a ‘Dumb War’

"President Barack Obama, as an Illinois state senator in 2002, said that using military force to topple a murderous dictator amounted to a “dumb war” and should be opposed.

The “dumb war” Obama was criticizing was the planned invasion of Iraq and the murderous dictator was its leader, Saddam Hussein. Obama, speaking at an anti-war rally in Chicago on Oct. 2, 2002 said that while Saddam was a brutal tyrant, that was not enough to justify using military force to remove him from power.

“Now, let me be clear – I suffer no illusions about Saddam Hussein,” said Obama in his speech. “He is a brutal man. A ruthless man. A man who butchers his own people to secure his own power. He has repeatedly defied U.N. resolutions, thwarted U.N. inspection teams, developed chemical and biological weapons, and coveted nuclear capacity. He's a bad guy. The world, and the Iraqi people, would be better off without him.”

"... After September 11th, after witnessing the carnage and destruction, the dust and the tears, I supported this administration's pledge to hunt down and root out those who would slaughter innocents in the name of intolerance, and I would willingly take up arms myself to prevent such tragedy from happening again," said Obama. "I don't oppose all wars.  ... What I am opposed to is a dumb war. What I am opposed to is a rash war. What I am opposed to is the cynical attempt by Richard Perle and Paul Wolfowitz and other armchair, weekend warriors in this administration to shove their own ideological agendas down our throats, irrespective of the costs in lives lost and in hardships borne."

Obama argued that deposing Saddam militarily was not necessary, because Iraq posed no “direct threat” to the United States. Obama also cited Iraq’s weakened economy and the fact that it was still possible to contain Saddam’s aggression, repudiating the Bush administration’s rationale that Saddam posed too great a threat to American interests and his own people to be left in power.

“But I also know that Saddam poses no imminent and direct threat to the United States, or to his neighbors, that the Iraqi economy is in shambles, that the Iraqi military is a fraction of its former strength, and that in concert with the international community he can be contained until, in the way of all petty dictators, he falls away into the dustbin of history,” said Sen. Obama.

However, as president of the United States, Obama has discounted those same arguments he once made against using military force against brutal dictators.

In his March 28, 2011 speech justifying his decision to attack the government of Libyan leader Moammar Gadhafi, Obama cited Gadhafi’s record of brutality, saying that allowing Gadhafi to continue his brutality was not an option.

“Qaddafi declared he would show ‘no mercy’ to his own people,” said President Obama.  “He compared them to rats, and threatened to go door to door to inflict punishment. In the past, we have seen him hang civilians in the streets, and kill over a thousand people in a single day.

“Now we saw regime forces on the outskirts of the city,” Obama said. “We knew that if we waited, if we waited one more day, Benghazi, a city nearly the size of Charlotte, could suffer a massacre that would have reverberated across the region and stained the conscience of the world.”

Gadhafi, apparently unlike Saddam, needed to be stopped because he would kill his own people to maintain his own power, an act that this time posed a threat to America’s “interests and values,” Obama said.

“But when our interests and values are at stake, we have a responsibility to act,” said Obama. “That’s what happened in Libya over the course of these last six weeks.”

Obama, in his 2002 speech, said that instead of deposing Saddam through force, America should “fight” for democratic reforms in countries such as Saudi Arabia and Egypt, stronger international nuclear safeguards, and energy independence.

“Those are the battles that we need to fight,” Obama said in 2002. “Those are the battles that we willingly join – the battles against ignorance and intolerance, corruption and greed. Poverty and despair.”

By 2011, however, Obama had come to endorse the use of military power to enforce America’s “responsibility as a [global] leader” arguing that the United States was “different” and therefore had no other choice but to attack Libya.

“To brush aside America’s responsibility as a leader and, more profoundly, our responsibilities to our fellow human beings under such circumstances would have been a betrayal of who we are,” he said. “Some nations may be able to turn a blind eye to atrocities in other countries. The United States of America is different.” "

~ Amazing.   With the exception of some social and 'hot button' issues such as abortion and the gay marriage debate, there has been little to no difference between Presidents Obama and Bush-- from continuing the wars in Afghanistan & Iraq, to Guatanamo remaining open, to bailing out banks to the tune of trillians and extending tax cuts for the wealthiest..  Absolutely No difference between the two-  both are pro-business, pro-Wall St, and pro- New World Order politicians.

And if you believe there is a sincere, distinct difference in economic and foreign policy between the two presidents, you haven't been paying attention to the news since the 2008 Elections.

Wednesday, March 30, 2011

How stock markets rationalize in order to rise

Do you ever wonder how the markets go up when economic data is bad?

 I mean besides the fact the market doesn't give a damn about the economic realities facing the bottom 98% of the nation..  how does the market justify going up when everything else is going down?

Simple- it rationalizes.

You and I play this manipulative mind game all the time.. it goes like this:

"It might be 20deg outside but at least it is not snowing..."

"The price of gas went up today 10cents but I expected it to rise by 15."

"My thermometer says my fever is 101.8 but I expected it to be 102.5..."

That is what the evil stock market does- it takes all economic data and twists into a positive by creating exaggerative lower expectations ahead of time knowing the data will never be That low, then treats the difference as a Positive to give justification for the Dow to go up and investors & traders to increase their profit.

Let's look at today's news as an example...

Home price declines deepen in major US markets (AP) - "Damage from the housing bust is spreading to areas once thought to be immune. In at least 14 major U.S. metro areas, prices have fallen to 2003 levels -- when the housing bubble was just starting to inflate. Prices will likely drop further this year, making many people reluctant to buy or sell. That would push down sales and prices more"

Inflation worries push consumer confidence lower (AP) - "Rising prices at the gas pump and in grocery aisles are starting to crimp shoppers' outlook. The Conference Board's Consumer Confidence Index fell sharply from a three-year high in February, reversing five straight months of improvement. The decline raises questions about Americans' ability and willingness to spend in coming months. The index fell more than expected to 63.4 from a revised 72.0 in February. Economists expected 65.4 ...

~ Yet Tuesday the evil investors and traders helped push the market up 81 pts to close at 12,279--  why?  What was the nugget of good economic news that became the catalyst to push the Dow up??

This bit of nothing..

"Stocks finished broadly higher Tuesday after consumer confidence fell less than some analysts had feared...Goldman Sachs had forecast a drop to 60" (AP)

It is important to understand the bullshit which is the US stock market--   The Consumer Confidence index dropped to 63.4, OK...  Economists expected 65.4, thus making the drop WORSE than expected, not better... Yet.. The market wanted a reason to go up; some justification... So...  it chose to look at Goldman Sachs' purposely pessimistic prediction of 60 as the basis point.   Why?  Because anything above that number is 'better than expected' and justification to keep the 'recovery' lie going.

Did you know:  The Consumer Confidence board surveys only 5,000 families each month...  That's all- 5,000.  There are currently 112 Million families in the US.

So based on four-one hundred thousandths of 1 percent (0.0004%) of US families, the Consumer Confidence board comes up with a stat that thousands upon thousands of media outlets report as the end-all  be-all of the nation's economic mood, and when combined with outright statistical manipulation, can cause a corrupted stock market to rise for no real reason.

Also, currently consumer confidence is 63.4... Healthy confidence is 90 & up...

This point should be understood by anyone who reads A&G- the stock market does not represent the true American economy.   Things overall are very bad and not getting any better.

So why then is the stock market growing?

Simply put-- The Federal Reserve is intentionally creating a stock market bubble to replace the deflated housing bubble which caused the current recession.  The Fed is pumping over $2billion dollars A DAY into the market so it will expand and attract everyday people to put every last penny of their savings into it.    By denying people a savings rate of return, the Fed is 'steering' people to the risky, volatile stock market.  

This is not free money- it is new debt which will need to be paid back with interest through higher taxes and harsh austerity to this generation and the next... all because investors are not allowed to take a financial haircut on their risky derivative investments from the 2000's.

And now you know

Tuesday, March 29, 2011

What can you buy with $600 million?

I ran across this headline tonight...

Cost of Libya Intervention $600 Million for First Week, Pentagon Says- ABC News

It made me think- what things could the US government do with $600 million if it focused its energies inward on bettering this country and helping its citizenry, instead of starting a third Middle East war... Hmm..

15,000 new police officers, fire fighters and/or teachers based on ($40k/yr)


$250 standard of living increase check for 2.4 Million elderly and disabled people on Social Security who got no cost of living increase for 2010 or 2011


$275/mo is the average food stamps for family of four-- $600 million would feed about 2.2 Million families of four for a month (8.8 Million people)


$100 tax credit for 6 million workers


30 Million books for public libraries across nation based on $20/book

Instead, the money went to this...

"U.S. ships and submarines in the Mediterranean have unleashed at least 191 Tomahawk cruise missiles from their arsenals to the tune of $268.8 million... U.S. warplanes have dropped 455 precision guided bombs, costing tens of thousands of dollars each.  A downed Air Force F-15E fighter jet will cost more than $60 million to replace. And operation of the war craft, guzzling ever-expensive fuel to maintain their positions off the Libyan coast and in the skies above, could reach millions of dollars a week, experts say."  (ABC News)

Airline price increases & pack mentality

I watching a nature documentary about lions and in the video, this one lion was being bothered by a hyena who was much smaller and weaker.  So eventually the lion attacked the scared hyena but just enough to slightly wound.  The hyena was pretty angered by this but left since it was no match for the size and strength of the lion.  But by evening, the hyena returned with the rest of his/her pack- a dozen or so.. and through infrared cameras, you can see the pack of hyenas converge upon that lion and collectively devour him to pieces.

I thought of this when I read the following article--

Latest airfare increase fails over weekend  (AP) -- "The airlines' latest effort to broadly raise U.S. fares by $10 per round trip has crumbled as discount carriers like Southwest decided not to raise their prices. After several successful price increases from December through February, two efforts to raise fares this month have died, raising questions about how much consumers are willing to pay for travel."

"United and Continental started the push for another fare increase last week and were joined by Delta, American and US Airways. But low-cost airlines never went along... The price hike began to unravel when Delta and American rolled back the increase on some routes... United and Continental then gave up and canceled the increases on Saturday."

"Domestic price increases will be harder to push through unless they are supported by low-cost airlines -- Southwest, JetBlue, AirTran and Frontier.  Southwest, which carries the most U.S. passengers and plays a key role in setting fares for the industry, might just be biding its time until Easter... Southwest often prefers to raise fares over 3-day weekends to limit press coverage."

~ Airlines want to raise prices of tickets in the worst way..  They want to say its due to higher gas prices or higher this or that..  truth is, they just want to raise ticket prices because they wish to.

But the trick is, in order for the price increase to work, it must be done in unison.

The goal is to 'attack' the customer like a pack of hyenas so anyone who wishes to fly has no choice but to pay higher fares since ALL are doing it...  Without the power of the 'pack', the airlines don't have the courage to raise prices and risk customer backlash.

When you get past happy sappy TV commercials, remember one thing-- businesses pretty much hate the consumer.

Monday, March 28, 2011

The Most Evil company in the world...

* Radiation burns, Japan 1945

So many reasons Goldman Sachs is the most Evil company in the world..

And its the company US presidents love bailing out more than any other.

It is the corporate equivalent of an immoral grifter.

But while its no secret by its business practices that it doesn't give a Bleep about people generally, it also doesn't seem to give a Bleep about its employees either...

Goldman Sachs Employees Told Not to Leave Japan (CNBC) -  "At least four Goldman Sachs executives flew into Japan last week to speak with nervous ex-pat employees about radiation fears... They also conveyed another message: don't leave Japan and don't leave Tokyo."

"Employees at the investment bank's Japan offices are worried about radiation levels affecting their families, the person said. Many were asking if they could temporarily relocate out of the country or perhaps move to a location in southern Japan, farther away from troubled nuclear power plants. The were told that they should not leave Tokyo, according to the person.

"The message was clear: no one is to leave. If you do leave, you can't come back and expect to still work for Goldman"

~ Expose yourself to radiation or find another job --    the GoldmanSach motto

Hmm.. Maybe it could re-hire 'Mad Money's' Jim Cramer to oversee Tokyo...

Sunday, March 27, 2011

Media Misuse of the term 'blasts'

Droopy Dog: "I'm sleepy..  Sorry but I had to blast that"

The corporate mainstream media is simply Horrid.

No other way to put it..  Horrid.

Not just in how it covers politics and finance, but in its coverage of all facets of news including sports and entertainment.

There are many reasons to list, but amongst the top is that 21st cent. news gatherers are deeply lazy people- they don't take time to fact check, the sources they go to for quotes are often shills with biases such as seeking comment from the National Assoc. of Realtors for stories on real estate, and amongst the most galling-- the lack of originality in headlines to convey the body of the story.

For instance, the media love to use the word 'blasts' to mean verbal criticism even if there is little to no actual attack going on in the story. "Blasts" sounds good and grabs the lazy reader...

Some examples...

Consumer group blasts insurance agents and brokers  (TheHill) - "A consumer advocacy group, pushing back strong against insurance brokers’ and agents’ request for relief from a healthcare reform provision, published documents on Friday showing they are paid as much as 20 percent of a customer’s insurance premium."

~ That is not 'blasting'...   and neither is the following...

Wisconsin GOP Blasts "Concerted Effort to Intimidate" Over Request for Professor's E-mails (Slate) - "The Wisconsin GOP responds to today's questions about the request for UW Prof. William Cronon's e-mail with a statement from party executive director Mark Jefferson... "Like anyone else who makes an open records request in Wisconsin, the Republican Party of Wisconsin does not have to give a reason for doing so."

~ Shakes head... this isn't 'blasting' either...

Sprint CEO Blasts AT&T Deal (WSJ) - "In his first public comments on the deal, Sprint Chief Executive Dan Hesse said he fears the deal would overly concentrate the market and hurt consumers.  "I do have concerns that it would stifle innovation, and too much power would be in the hands of two,""


A 'Blast' is a pointed attack- it has Anger.. Vitriol.. its Passionate...

The following would be accurate examples of a 'Blast'....

Blogsite blasts mainstream media - "Influential blogsite, 'Ants and Grasshoppers' recently blast mainstream media (MSM) as "a group of corrupt, disingenuous liars who work as propagandists for the corporations and are both too cheap and lazy to cover news in a manner that is informative to others"  The blogsite went on to blast MSM for being apathetic to the economic suffering of the bottom 98% by a continuous barrage of 'recovery' touting based on the success of Wall St.,  "MSM has never cared about everyday people", the site commented.. "and recently has made no secret of it.  The corporate media thinks most people are idiots and treats them accordingly. ""

"A&G" blasts The Fed; Investors over Japan -  "'A&G' has spared no words for the Fed, blasting them for agreeing to help the Bank of Japan manipulate and deflate the Yen.  Stating that the move helps Japanese banks and businesses at the expense of the everyday Japanese people who will need to rebuild their lives; 'A&G' points out that any weakened currency means its cheaper to export products abroad but for the people who live in a particular nation and use that currency to buy goods and services, it means increased costs and rising inflation...  'A&G' also called out international Investors as "evil, heartless, soulless bastards without a shred of decency and morality for seeking to financially profit off the Japan tragedy" "

Blogsite blasts US Govt over Libya - "'Ants & Grasshoppers' has blasted the US govt harshly for its bombing of Libya.  The site said "It is amazing how this corrupt and inept US government, in its sudden desire to remove Gaddafi after tolerating him in power for decades, is so desperate Now to remove the leader for US control of the oil fields, that its willing to side with Al Qaeda to do it."   Both parties are supporting the Libyan rebels.  'A&G' also stated "It also shows once again that the government does not give a F**k about its people, spending a billion dollars a week on bombings of Libya while telling the populace it does not have the financial means to assist the elderly, disabled, poor and jobless"

See, Those are Blasts!!

Saturday, March 26, 2011

Practical Logic, NATO & Libya

In college, I took a course called Practical Logic and one of the first things taught was referred to as logic equations. Here is an example...

             If All chocolate is pleasant, 
And-     All pleasant things taste good,
Then-    All chocolate tastes good.

The structure goes- if All A is B, and All B is C, then All A is C..

An illogical equation might look something like this:

           If All cats are brown only
Yet-    Some cats are white only
Then-  All cats are brown or white.

The logic contradicts-  it is an illogical equation.

Hope I didn't lose anyone..  ok, the point...  

Does this logic equation make sense to you?

           If the western world is fighting Al Qaeda
And-   The western world is on side of Libyan rebels fighting Gaddafi
Yet -    'Libyan rebels fighting Gaddafi are linked to Al Qaeda' (Telegraph.UK)


Friday, March 25, 2011

Photos: Gaddafi & world leaders

~ July 10, 2009-- Italian Prime Minister Silvio Berlusconi, French President Nicolas Sarkozy, Russian President Dmitri Medvedev, US President Barack Obama, UN Secretary General Ban ki Moon and Muammar Gaddafi pose for a 'family photo' on the third day of the G8 summit in L'Aquila, Italy. The leaders discussed climate change, global security and the global recession.

Right now, a bunch of leaders in the western world are suddenly angry with Gaddafi- enough to use military force against him and bomb Libya into oblivion in the process.  Oddly, just a couple weeks ago, they weren't.

Politicians say a lot of things- most lies.  But as the adage goes, a picture speaks 1000 words..  so to save me some extra typing, here are some photos...

~ President Obama

Sec of State Clinton w Gaddafi's son, Mutassim

~ Condeleeza Rice, former Sec. of State under George W. Bush

~ French President Nicolas Sarkozy

~ Former British PM, Tony Blair

~ Former British PM Gordon Brown

~ Current Italian PM, Silvio Berlusconi

* Looks like many need some hand sanitizer... Including Gaddafi

Photos: 1930s & 40s Libya

With the recent NATO (~psst.. US) bombings of Libya this past week led by NATO forces (psst.. Obama), I thought it would be interesting to show a different view of Libya- how the nation looked in the 1930s & 40s when instead of the people fighting each other and NATO (~psst.. I mean the US) the Libyans were fighting Fascist Italy when Mussolini took over the country in the mid 1930s...

 ~ Grand Hotel, Tripoli

 ~ Benghazi Municipality Square, Tripoli

 ~ Girgaresh Train Station, Tripoli

 ~ Tripoli

 ~ Royal Palace, Tripoli- 1930s

~ 1939 Tripoli Grand Prix

  Libyan family- 1930s

 ~ Libyan girls boarding school- 1930s

 ~ Tripoli Central Railway Station

The great emotional disconnect

A&G keeps belaboring this point because absolutely no one else in mainstream news or the financial blogosphere is expressing the Japan disaster-Investor dynamic in the correct context...

In many western societies, particularly in the US, the extreme wealthy are looked upon with respect and awe.  You do not have to create anything- a product or service; anything to benefit human kind... You simply have to acquire massive amounts of wealth through investing or taking advantage of weakness, and you are treated as an Oracle or deity.

For example, Warren Buffett, an 80yr old man with a net fortune of over $50 billion who still invests because he has nothing else productive going on in his life.  Normally an obsessive-complusive with zero interests outside of making money would be looked upon as a sad, pathetic creature.  But in the 21st century world of finance, the same man is given international respect and an open door access to many world leaders.

Here are two headlines from yesterday..

Japan disaster: over 27,000 dead or missing - NHK World

Asia shares rise amid better US jobs data, profits - AP

The business community will rationalize, justify and self-excuse.. and perhaps a select few will acknowledge the human component of Japan's suffering albeit as a quick aside, but few to none in finance look into the proverbial 'mirror' and admit the truth--

It is morally and ethically wrong to profit off human suffering.

It is wrong to seek advantage from tragedy and despair.

This is what vultures do... and maggots...

How is the role of an investor or stock trader any different amid Japan's devastation, than a common man taking money or food from a dying man's hand?  Are not both seeking advantage off the suffering of another?

One gets arrested and one gets interviewed on CNBC or Bloomberg

And if this world is ever to become a better place for ourselves and our children, it has to start with a change in how we look at life; our value systems.   What constitutes a 'hero'...   What qualities are to be emulated and what are to be scorned..  Is a bad man in a good suit any less a bad man?

For some, it is perfectly acceptable to financially profit off suffering; to detach the human dynamic from the business of business.  The global financial media's existence is based on the maxim of 'kill or be killed'

"I'm an Investor with many interests... 'Oh Garfield, such a sly cat you are'"

An investor has no loyalty to anyone or anything- not country nor community

And yet all nations cater financial conditions to the Investor's benefit.

It frollicks where it can profit- stocks, bonds, commodities, currencies, treasuries...  and hopscotches to something else the moment a better opportunity shows itself.   It cares nothing for people or nations...

Investors are parasites..  like a tick or a leech.  It sucks financial 'blood' from nations and markets then moves on to another juicier buying opportunity.

The global financial crisis which started in 2008 was caused by Investors.

And all the economic misery is a result of them not taking any financial losses; being protected 100 cents on the dollar by all the major global economies. It is why nations impose austerity upon its people.. why taxes go up while wages and social programs go down.. Why prices of food and oil rise causing riots and revolutions in some nations..  And it is you & I who are to suffer and will continue to suffer as a result.

And that is the inconvenient truth the media doesn't desire you to know.

Thursday, March 24, 2011

The economic parasites of global finance

Investors/stock traders are parasites.

A&G didn't want to provide any ambiguities on this...

Some people look at the tragedy of Japan with sadness- they've donated money to Red Cross, prayed for the people of Japan in whatever faith they believe and overall have acted like normal human beings with souls.

A small percentage of people have basically moved on- their attention spans have had their fill of Japan and tsunamis and nuclear reactors and now are focused on the next hot-topic of the week.

And an even smaller percentage never moved on emotionally because there was never any emotional investment in Japan's pain in the first place.  And they look at the calamity as nothing more than a great 'opportunity' to invest; to grow their portfolios and balance sheets-- to profit off suffering.

These are investors and traders...  these are parasites.

For curiosity, we went on Google news and keyworded 'Japan', investment' and 'opportunity'-  we found 486  news articles within the last week..  here is a sampling:

U.S. Investors Place Record Wager on Japanese Funds (NY Times) 3/23/11 - "Some investors may be already shrugging off Japan’s crisis. Even as the aftershocks from the earthquake pushed financial markets sharply lower last week, American investors poured $1.2 billion into Japanese equity exchange-traded funds, or E.T.F.’s., according to new data. It was the biggest weekly inflow on record, a trend suggesting that some investors are already betting that the crisis may be just an interruption to a market rally. "

~ An earthquake, tsunami and nuclear scare resulting in thousands of lives lost is "just an interruption to a market rally" to investors...  

Six Portfolio Strategies Following the Japanese Disaster (GuruFocus)  3/21/11 - "Are you a long term investor or short term trader? In the long term you are hard pressed to cite any natural disaster that didn't prove to be a buying opportunity, or at least in hindsight not a reason to sell..."

* Such a cute child- Investors can not wait to profit off her...

The Japan Buying Opportunity (EnergyandCapital)  3/22/11 - "Do we ban air travel after a plane crashes? Better yet, do we even have a debate about it?...  Did we ban coal mining after 29 miners died last year in West Virginia? The answer to all those questions — in case you didn't know — is No.  Similarly, the world will not abandon nuclear energy because of the recent disaster in Japan...  The bird's-eye brutal truth is that, save for those in the immediate area, these events quickly fade into history..."

~ Based on that reasoning, I wonder how many investors made money in 1945 off Hiroshima and Nagasaki?

Looking for opportunities in Japan (MarketWatch) 3/23/11 - "Still, while acknowledging the risks, other strategists and money managers argue that those bearish on Japan are making a mistake: Many of these Japanese companies are now attractively valued and, barring worst-case scenarios, offer significant upside potential."

* Investors and stock traders feel your pain.. its called 'cha-ching!'

Buffett is not scared of the Japanese market. (MotleyFool)  3/21/11 - "Investing legend Warren Buffett has declared the Japanese market a 'buying opportunity', following the devastating earthquake and tsunami that struck the country on 11 March.  "Frequently something out of the blue like this, an extraordinary event, really creates a buying opportunity. I've seen that happen in the United States, I've seen that happen around the world, and I don't think Japan will be an exception.""

~Warren Buffett is 80 years old and worth over $50 Billion dollars, so God knows he needs even More opportunities to expand his wealth before he passes away...

Bullish On Japan: Rosenberg Joins Buffett In Calling Crisis An Opportunity (Forbes)  3/21/11 - "Warren Buffett isn’t the only one calling the Japanese tsunami-nuclear crisis a “buying opportunity.”  Generally bearish Dave Rosenberg wrote in his daily newsletter that the battered Nikkei 225, which plunged 12% last week, “may well be the most inexpensive market in the world,” suggesting that investors could find value in Japanese equities."

*  So much tragedy... so much $$ to be made~

And on and on and on...

Imagine in a split second, the life you've lived is gone.  Caused by an earthquake, a tsunami, a hurricane, a swath of tornadoes...  and you have no home.. and no possessions.. and your town.. your community is pretty much gone.   Devastation in all directions.  And the things you take for granted- electricity, heat, drinkable water, food, etc..  no where to be found.

And then imagine that someone on the trading floor of the NYSE stock exchange, or some wealthy piece of garbage in an expensive suit is sitting at his/her desk and devising every means humanly possible to financially profit off your misery.  Using calculators and spreadsheets and cost-analysis charts- deciphering how to invest off destruction for maximum personal profit to put into off-shore accounts to avoid paying taxes on.

Remember, investors and traders do not create or build anything- they do not provide anything tangible or Real that improves the quality of life in any way for anyone.  They simply play markets and profit as they go up, then withdraw their holdings before they drop down.   That's it.

Nothing in this world will ever change until people begin to develop a healthy hatred for the trader/investor and understand that every leader of every nation from Obama to Sarkozy to Putin basically caters its sovereign economic policies for the Investor and trader's benefit.

Magic 8-Ball predicts the future

So many things going on in the news, I thought I'd consult my trusty Magic 8 Ball to delve deep into the mysteries of the universe and give clarity in a world seemingly getting worse by the week.

So as many of you know, the way the magic 8 ball works is this- you ask a Yes/No question and shake the ball--  then turn and one of 20 various responses appear..

Current events:

Will the US involvement in Libya be long term? - "You may rely on it"

Will US involvement be very expensive? -  "Yes- definitely"

Is the US involved in Libya primarily for oil? - "Outlook Good"

Will NATO be successful in goal to remove Gaddafi?-  "Reply hazy, Try again"

Will bankers and investors profit from Japan? - "Signs point to yes"

Will Portugal go to IMF and beg for a loan soon? - "Yes"

Will the global markets rise for no logical reason? - "Most likely"

Is there anything everyday people can do to stop it? - "My reply is no"

America -

Is America a good nation?-  "Better not tell you now"

Are the American people good? - "Outlook Good"

Are America's leaders' good? - "Ask again later"

Does America's leaders care about its people? - "Don't count on it"

Are Americans a caring people? - "Most likely"

Are American investors caring people? - "My sources say No"

Are Americans moral, ethical people?  - "Yes"

Are America's leaders moral and ethical? - "Very doubtful"

Are America's finance community moral & ethical?  "Don't count on it"


Is Obama a good president?  -  "Better not tell you now"

Is Obama a good leader?  -  "Reply Hazy, try again"

Does Obama care about people? - "Ask again later"

Does Obama deserve his Nobel Peace Prize? - "My reply is no"

Will Obama give the prize back? -  "Don't count on it"

Current Recession:

Is the recession the fault of America's people?  - "My sources say no"

Is the recession the fault of Europe's people? - "My reply is no"

Is it the fault of Asian or Latin American people? - "My reply is no"

Is it the fault of Africans or Australians? - "Very doubtful"

Is a specific ethnicity or religion responsible? - "Very doubtful"

Are greedy banks and traders/investors responsible?-  "As I see it, yes"

So, is it American traders/investors alone? -  "Very doubtful"

So global bankers, traders and investors caused the recession? -  "Yes"

Do bankers have souls? -  "Reply hazy, try again"

(Again) Do bankers have souls? - "My sources say no"

~ The Magic 8 ball needs its rest

Wednesday, March 23, 2011

What Exactly happens when a nation defaults?

I was reading about Portugal as they brace for government collapse over the impending debt vote.  In brief, the government wants to force more austerity upon its people so it has the fiscal means to keep paying its debts to its loan sharks such as the ECB and IMF while their Parliament is ready to vote against such a proposal.

The rocky downslope Portugal is facing, is no different than Greece or Ireland, nor will Spain be able to avoid the same fate in the near to mid future.   In the case of both Greece and Ireland, they've sold their national sovereignty to the banks.  Ireland's economy is in a depression and Greece is in a more precarious state.

So the question of defaulting needs to be raised- specifically what happens when a nation defaults and why hasn't any country done so since the start of this global financial crisis?

There used to be a time when a nation defaulted, it meant military invasion to force repayment, usually though the robbing of a nation's natural resources.  An example of this was in the 1860s when Mexico defaulted on its debts to France so in 1864, its leader, Napoleon III invaded, toppled the Mexican govt, then put in a puppet leader named Maximillian to rule until he was eventually overthrown by Benito Juarez and the Mexican people, and killed in 1867.

Now in present times, the debtor nation's leaders meet with bank executives and work out a new repayment plan.  It is true that when a nation defaults, it effectively can not borrow for years, and then when eventually able, it will do so at high interest rates.  But overall, it is not the nation or its populace that takes the hard hit in a default--  its the creditors and bond holders.

Most sovereign assets held outside a sovereign debtor’s own jurisdiction are protected by sovereign immunity or other legislation. Protected assets include: Diplomatic missions such as embassies, Payments to and from multilateral organisations such as the IMF, Central bank reserves and Military assets.  And although debt holders may obtain favorable court rulings to collect money owed by a sovereign, actually trying to enforce the ruling to gain assets through litigation ends up being a fruitless and time wasting enterprise.

So it is the creditor and bond holder who gets hurt most in a default.  Currently as nations near default do everything humanly possible to avoid it, it is the populace of those nations who get hurt with the poorest feeling the most dramatic and sustained affects.  Meanwhile, creditors and bond holders, continue receiving 100 cents on the dollar in repayment on debts.

So, why do nations like Greece and Ireland sell their national souls instead of default?

As mentioned earlier, its very hard to get loans and the interest rates will be higher than what they're paying now.  In addition, neither nation has a robust, self-sustaining economy.  Ireland is almost 100% dependent on imports and its exports are very minimal in comparison.  The same holds true with Greece-  both are heavily dependent on trade.

Argentina is a good comparison-  it was going through a bad recession and economic crisis starting in 1999.  By 2002, it decided to default on its debt because it was impossible to maintain payments to the IMF and other creditors/bondholders.  The state had no spare money and the Central Bank's foreign currency reserves were almost depleted.

After the default, for four years, Argentina was a pariah, effectively shut out of the international financial markets.  Even as the economic situation improved, thanks in part to its resources and exporting capabilities,  the amount of the debt was still the largest defaulted debt in history (about $93bill USD), and Argentina was in no position to pay without sacrificing essential parts of its budget.  The government was eventually able to force the creditors to take stiff 'haircuts' on their debts by remaining strong in the face of global banking threats.   Banks eventually started re-lending to Argentina in 2010.

~ Yes, the US should be contemplating 'defaulting' as well...

A national default is no different than a personal bankruptcy-- life is certainly more difficult in the near-term but there's a certain point when debts simply can't be repaid without incredible financial hardships that can lead to nations politically and socially fracturing. And in the long term, with sound leadership (if there is such a thing), the economic health and vitality of the nation (like that of the individual) improves.

Tuesday, March 22, 2011

$10mil or penny doubled 30 days- Which is more?

When I was younger, to demonstrate value of money and lack of understanding most have about it, I was posed a situation--  I took a job for 31 days and the boss offered me two choices how I would be paid.  First choice is to take a lump sum payment of $10 million dollars after 31 days.  The second choice is to accept 1 penny for the first day of work, but the salary would continuously double each subsequent day and I would get paid the total amount at the end of the work period  (2 cents paid on day 2;  4 cents paid on day 3, etc)?

Most people would take the $10 million.  After all, it averages $333k/day.

But would that be the most financially sound choice?

Here's a day by day breakdown of wages doubled daily starting at a penny:

Day  1 -    0.01       a penny
Day  2 -    0.02       3 cents total
Day  3 -    0.04       7 cents earned in 3 days
Day  4 -    0.08       15 cents total
Day  5 -    0.16       31 cents earned after 5 days
Day  6 -    0.32       63 cents total
Day  7 -    0.64       $1.27 earned after 1 full week

~  Looks pretty bad- $10mill looks good..  Let's resume..

Day   8 -    1.28        $2.55 total
Day   9 -    2.56        $5.11 total
Day 10 -    5.12        $10.23 earned after 10 days
Day 11 -  10.24        $20.47 total
Day 12 -  20.48        $40.95 total
Day 13 -  40.96        $81.91 total
Day 14 -  81.92        $163.83 earned after 2 full weeks

~  That's better than after 1 week but nowhere near $10mill, hmm...

Day 15 -    163.84     $327.67 total  (halfway there)
Day 16 -    327.68     $655.35 total
Day 17 -    655.36     $1310.71 earned in 17 days
Day 18 -  1310.72     $2621.43 total
Day 19 -  2621.44     $5242.87 total
Day 20 -  5242.88     $10,485.75  total
Day 21 - 10,485.76   $20,971.51 earned in 21 days

~ This isn't looking too good.. gulp~  10 days to go

Day 22 -      20,971.52           $41,943.03  total
Day 23 -      41,943.04           $83,886.07  total
Day 24 -      83,886.08          $167,772.15 earned in 24 days
Day 25 -    167,772.16          $335,544.31 total
Day 26 -    335,544.32          $671,088.63 total
Day 27 -    671,088.64         $1,342,177.27 total
Day 28 -    1,342,177.28      $2,684,354.55 earned in 28 days

~  3 work days left.. looks promising...

Day 29 -   2,684,354.56       $5,368,709.11  total
Day 30 -   5,368,709.12     $10,737,418.23  total  (1 day left)
Day 31 -  10,737,418.24    $21,474,836.47

A penny, doubled each day for 31 days =  $21,474,836.47

AT&T + T-Mobile merger- NY Times' take

~ "Like, oh my god!  I was like 'No Wayy' and she was like 'Uh-Huhh'  and I'm just like 'No time for this drama cuz I'm 11 and I'm Too busy, ya know?"

I addressed what the AT&T and T-Mobile merger would mean and little to none of it good for consumers.  But its always nice when mainstream media agrees, so below, is the NY Times' take on the merger...

For Consumers, Little to Cheer in AT&T Deal

"The $39 billion proposed merger of AT&T and T-Mobile could save the companies a lot of money. For everyone else, it could cost a lot of money. No sooner did the two companies announce a $39 billion merger on Sunday than industry analysts began assessing the impact on the biggest potential losers in the deal: consumers.

"If approved by regulators, the merger would leave just three major cellular carriers in the United States, a development that consumer advocates warn could eventually lead to higher prices for a wide variety of services. For this reason the deal is likely to attract close scrutiny in Washington."

"Competition is likely to suffer, leading to higher prices and less innovation. That is because the deal would leave just AT&T, Verizon Wireless and the much smaller Sprint to divide up the voracious smartphone market"

"One burning question raised by the potential of a merger with AT&T is what will happen to the wide range of inventive T-Mobile data plans, which are some of the lowest in the country, and have helped keep pressure on competitors... AT&T is expected to honor contracts through their expirations, but it is unclear what will happen once those contracts expire."

~  Perhaps its a good time to start time to learn morse code?

Priorities, Priorities...

Do you remember back in December when Congress would not pass a bill providing a $250 COLA (Cost Of Living Allowance) to Senior Citizens and the disabled because it would cost about a billion dollars and supposedly there wasn't money in the budget, (yet enough to extend the Bush Tax Cuts to Everyone including the very wealthy)?

Cost of Libya Operation already piling up (Natonal Journal) -- "With U.N. coalition forces bombarding Libyan leader Muammar el-Qaddafi from the sea and air, the United States’ part in the operation could ultimately hit several billion dollars -- and require the Pentagon to request emergency funding from Congress to pay for it. The first day of Operation Odyssey Dawn had a price tag that was well over $100 million for the U.S. in missiles alone. And the U.S. military, which remains in the lead now in its third day, has pumped millions more into air- and sea-launched strikes targeting air-defense sites and ground-force positions along Libya’s coastline."

There seems to be basic economic maxims...

An individual, no matter how financially broke, always has enough $ for a pack of smokes and a beer.  And the US government, no matter how financially broke, always has enough for war.