The New American Tea Party

Denninger goes off the DEEP END!! Ten Things You Must Do As I have often said, "I don't do specific investment advice."
 
 There are several reasons for this, among them being:
 
 1.I'm not a registered investment advisor. That is, it is actually illegal for me to run someone else's money (other than as a trustee, such as for my daughter.)
 
2.It is flatly impossible for me to calibrate someone's risk appetite and capacity, both physical and mental, to absorb possible loss, over The Internet or, for that matter, without an extensive inventory of someone's income, assets and liabilities. (By the way, most so-called "financial planners" don't do nearly enough in this regard to FULLY understand their clients.) But at turning points in the market - such as prior to 2008 - it was easy to see what was coming - even if timing was somewhat uncertain.
 This is one of those times, and it compels me to publish a list of "10 things you must do now" - that is, if you have your eye on the ball.
 

Last week was also the national deadline for American taxpayers to square what they owed Uncle Sam.  This year’s deadline featured evening news coverage of a decidedly different event than the traditional “long lines at the post office” live shot.  Growing outrage from average Americans over recent hurried, reckless, unapologetic, and historic spending by members of Congress and two Presidents sent hundreds of thousands across the country to the streets to protest. Non-partisan, and largely apolitical, the volunteer coordinated “Tax Day Tea Parties”  gave a voice and venue to frustrated Americans of all walks of life who share a common belief in the Constitution, free-market principals, and less government spending.  At the same time it was a public declaration of their love of God and country.  A celebration of the guaranteed freedoms and individual liberties they derive from both.

U.S. Rep. William Clay says he'll ask the Obama administration to suspend immigration raids over the next year, so illegal immigrants don't worry that sharing accurate information with Census workers could somehow expose them to punishment.  U.S. Rep. William Clay, D-Mo., who chairs a House oversight subcommittee on the Census, said he plans to ask the Obama administration to suspend immigration raids over the next year.
 
IMP IS ANGRY- The only reason Democrats want this is because they want power. They know if illegals are counted, itwill rebalance seats to liberal friendly states and districts. And when they pass their amnesty bill AGAIN they'll have all those Democrat friendly votes. The census is supposed to count the number of AMERICAN CITIZENS. Not the total number of people in the US.
Missourians Beware!

Peter Shiff making too much sense again.....Let's Play Pretend!  When elementary school kids want to escape the confines of their circumstances they pretend to be pirates, princesses, and Jedi knights. Now, with the relaxation of "mark to market" valuation rules announced yesterday by the accounting trade's self-regulatory body, our bankrupt financial institutions can escape their own reality by pretending to be solvent. The unraveling of our fairytale economy over the last few months has not yet convinced us that the time has come to put away childish things. The applause that greeted the news yesterday on Wall Street is a clear sign that we still have some growing up to do.

The imaginative conceit that lies behind the accounting change is that the toxic assets polluting bank balance sheets are not really toxic at all. They are in fact highly valuable assets that for some irrational reason no one wants to buy.
 

BIGGER FOOL THEORY drives today’s investing: IF I BUY IT TODAY, A BIGGER FOOL WILL BUY IT FROM ME TOMORROW AND GIVE ME A PROFIT. THIS IS WHAT BUBBLES ARE MADE OF AND THIS IS WHY THE BEAR MARKET WILL RETURN, IN A FEW WEEKS, WHEN SMART INVESTORS GET OUT BEFORE THE LACK OF FUTURE DIVIDENDS AND GROWTH BECOME EVIDENT TO THE BIGGER FOOLS! If not for the BIGGER FOOL THEORY, why else would people be buying FORD which will NOT pay a dividend for the next 5-7 years and has NO CHANCE of meaningful growth over the same period especially with new competitors from India, etc.? If not for the BIGGER FOOL THEORY, why else would people be buying the large money center banks which will NOT pay a meaningful dividend for the next 3-5 years? Especially when it is clear that the markets that gave them so much growth and profits over the last 10 years, i.e. subprime mortgages, credit cards, intuitional investing, will NO LONGER be their cash cows because of the newfound diligence of the U.S. regulators who will severely restrict their irresponsible behavior that got the banks BIG PROFITS at our expense vies-a-vie BIG BAILOUTS. If not for the BIGGER FOOL THEORY, why else would people be bidding ALCOA up last week, when the world’s largest alum producer in CHINA is closing down plants because of lack of worldwide demand?

What Geithner does not want the public to understand, his ‘dirty little secret’ is that the repeal of Glass-Steagall and the passage of the Commodity Futures Modernization Act in 2000 allowed the creation of a tiny handful of banks that would virtually monopolize key parts of the global ‘off-balance sheet’ or Over-The-Counter derivatives issuance. Today five US banks according to data in the just-released Federal Office of Comptroller of the Currency’s Quarterly Report on Bank Trading and Derivatives Activity, hold 96% of all US bank derivatives positions in terms of nominal values, and an eye-popping 81% of the total net credit risk exposure in event of default. The five are, in declining order of importance: JPMorgan Chase which holds a staggering $88 trillion in derivatives (€66 trillion!). Morgan Chase is followed by Bank of America with $38 trillion in derivatives, and Citibank with $32 trillion. Number four in the derivatives sweepstakes is Goldman Sachs with a ‘mere’ $30 trillion in derivatives. Number five, the merged Wells Fargo-Wachovia Bank, drops dramatically in size to $5 trillion. Number six, Britain’s HSBC Bank USA has $3.7 trillion.