Thu 2010-01-07 19:54 EST

Conversation with John Rubino <<; Phil's Favorites -- By Ilene

John Rubino is the co-author, with GoldMoney's James Turk, of The Collapse of the Dollar and How to Profit From It (Doubleday, 2007), and author of Clean Money: Picking Winners in the Green-Tech Boom (Wiley, 2008), How to Profit from the Coming Real Estate Bust (Rodale, 2003) and Main Street, Not Wall Street (Morrow, 1998)...``This is the end of a long era and the beginning of another that is not going to be nearly as nice.''...go to a coin dealer and buy some gold and silver coins and then store them in a safe place. And gold and silver mining stocks will go up if the dollar goes down...Clean tech is interesting...which of the twenty different possible clean tech sectors do you want to focus on first? ...The best of them is called smart grid....

conversations; Ilene; John Rubino; Phil's Favorites.

Thu 2010-01-07 19:31 EST

Capital City | Mother Jones

Kevin Drum

A year after the biggest bailout in US history, Wall Street lobbyists don't just have influence in Washington. They own it lock, stock, and barrel...This is a story about politics. It's about how Congress and the president and the Federal Reserve were persuaded to let all this happen in the first place. In other words, it's about the finance lobby--the people who, as Sen. Dick Durbin [5] (D-Ill.) put it [6] last April, even after nearly destroying the world are "still the most powerful lobby on Capitol Hill. And they frankly own the place."...It's about the way that lobby--with the eager support of a resurgent conservative movement and a handful of powerful backers--was able to fundamentally change the way we think about the world. Call it a virus. Call it a meme. Call it the power of a big idea. Whatever you call it, for three decades they had us convinced that the success of the financial sector should be measured not by how well it provides financial services to actual consumers and corporations, but by how effectively financial firms make money for themselves. It sounds crazy when you put it that way, but stripped to its bones, that's what they pulled off.

capital city; Mother Jones.

zero hedge Sun 2010-01-03 16:28 EST

TrimTabs Asks: Who Is Responsible For The Non-Stop Market Rally Since March; Gives Some Suggestions

TrimTabs&apos; Charles Biderman

If the money to boost stock prices did not come from the traditional players, it had to have come from somewhere else. We do not know where all the money has come from. What we do know is that the U.S. government has spent hundreds of billions of dollars to support the auto industry, the housing market, and the banks and brokers. Why not support the stock market as well?

gives; March; Non-Stop Market Rally; response; suggesting; TrimTabs Asks; Zero Hedge.

Jesse's Café Américain Mon 2009-12-28 18:59 EST

The US Bull Market in Smoke, Mirrors and Gullible Investors

Jesse

We have given quite a bit of coverage to the somewhat 'thin' veneer of recovery being spun by misleading government econmic statistics in the US. And we have certainly noted the almost blatant manipulation in many US markets, including stocks and commodities where the banks and hedge funds have been pushing prices around, sometimes with the help of the government, in a disgraceful repudiation of any notion of reform. Thanks to the Tylers at ZeroHedge we have two very nice charts to present the case that the recent continuation of the US stock market rally is attributable to price manipulation largely in the after hours markets when trading is thin.

Bull Markets; gullible investors; Jesse's Café Américain; mirror; Smoke.

zero hedge Mon 2009-12-28 15:12 EST

Quantitative Easing Has Been A Monetary Failure; Persistent Deflation Means More Fed Intervention Coming Soon

As more and more pundits discuss the spectre of inflation, with gold flying to all time highs which many explain as an inflation hedge, not to mention stock price performance which is extrapolating virtual hyperinflation, the market "truth" as determined by Fed Fund futures and options is, and continues to be, diametrically opposite...Bernanke is very likely about to unleash Quantitative Easing 2: If the $1.7 trillion already thrown at the problem has not fixed it, you can bet that the Chairman will not stop here. Furthermore, as the Fed has the best perspective on the economy, which is certainly far worse than is represented, the Fed has to act fast before things escalate even more out of control. Which is why Zero Hedge is willing to wager that not only will the agency/MBS program not expire in March as it is supposed to, but that a parallel QE process will likely begin very shortly. The end result of all these actions, of course, is that the value of the dollar is about to plummet: when Bernanke announces that not only will he not end QE but that he will launch another version of the program, expect the dollar to take off on its one way path to $2 = €1. And when that happens, look for global trade to cease completely. In its quest to continue bailing out the banking system and rolling the trillions of toxic loans it refuses to accept are worthless (for if it did, equity values in the banking system would go, to zero immediately), the Fed will promptly resume destroying not only the US middle class, but the entire system of global trade built through many years of globalization. Look for America to end up in an insulated liquidity bubble in a few short years, trading exclusively with its vassal master: the People's Republic of China.

Fed Intervention Coming; Monetary Failure; Persistent Deflation Means; Quantitative Easing; Zero Hedge.

Jesse's Café Américain Thu 2009-12-17 09:56 EST

Treasury Cancels Plans to Sell Citi Stake After Failed Equity Offering Stings Shareholders

Jesse

The shareholders of Citigroup should be furious at the greedy and reckless actions of Citi's management in diluting their shares in order to obtain a freer hand in granting themselves fat bonuses. Tonight's equity offering failed to bring in a sufficient price, serving up a significant 20% discount to existing holders of the stock...Technically, Citi can pay back the TARP money from the proceeds. I wonder if they have the gall to do that and pay themselves bonuses this year to boot, which is the basis for this exercise in dilution in the first place. This shows the farce that the Obama financial reforms really are. Nothing has changed except that big bank losses were transferred to the public debt.

Failed Equity Offering Stings Shareholders; Jesse's Café Américain; Sell Citi Stake; Treasury cancels plans.

Tue 2009-12-01 22:52 EST

Harvard ignored warnings about investments - The Boston Globe

It happened at least once a year, every year. In a roomful of a dozen Harvard University financial officials, Jack Meyer, the hugely successful head of Harvard's endowment, and Lawrence Summers, then the school's president, would face off in a heated debate. The topic: cash and how the university was managing - or mismanaging - its basic operating funds. Through the first half of this decade, Meyer repeatedly warned Summers and other Harvard officials that the school was being too aggressive with billions of dollars in cash, according to people present for the discussions, investing almost all of it with the endowment's risky mix of stocks, bonds, hedge funds, and private equity. Meyer's successor, Mohamed El-Erian, would later sound the same warnings to Summers, and to Harvard financial staff and board members. ... But the warnings fell on deaf ears, under Summers's regime and beyond. And when the market crashed in the fall of 2008, Harvard would pay dearly, as $1.8 billion in cash simply vanished. Indeed, it is still paying, in the form of tighter budgets, deferred expansion plans, and big interest payments on bonds issued to cover the losses.

Boston Globe; Harvard ignored warnings; investment.

naked capitalism Mon 2009-11-30 13:46 EST

Guest Post: One Reason that the Stock Market is Rising While Unemployment is Soaring

George Washington of Washington&apos;s Blog

Daniel Gross points out that part of the reason that the American stock markets are going up even though unemployment is rising and the real economy suffering is because multinational corporations headquartered in the U.S. are experiencing strong sales abroad...

Guest Post; naked capitalism; reasons; rising; Soars; stock market; unemployment.

naked capitalism Thu 2009-11-19 10:43 EST

Roubini Predicts ``Mother of All Carry Trade Unwinds''

Nouriel Roubini has officially left the ``hedging your bets on the economy'' camp. He has declared the markets to be frothy because super low dollar borrowing rates have turned the greenback into the funding currency for the carry trade. Far more important than the peppy rally in the stock market is the resumption of early 2007 style risk taking in the credit markets.

carry trade unwind; mother; naked capitalism; Roubini predicted.

zero hedge Thu 2009-11-19 10:38 EST

An Overview Of The Fed's Intervention In Equity Markets Via The Primary Dealer Credit Facility

the Federal Reserve established and refined a program that permitted banks to pledge virtually any security as collateral, including not just investment grade bonds and higher ranked securities, but also stocks of companies, the riskiest investment possible, and a guaranteed way for taxpayer capital to evaporate in the context of a disintegrating financial system, all with the purpose of bailing out Wall Street's major institutions. On two occasions last year: on March 16, 2008, and subsequently on September 14, 2008, the Federal Reserve first established what is known as the Primary Dealer Credit Facility (PDCF), and subsequently amended it, so that the Fed, in becoming the lender of last resort, would allow any collateral, up to and including stocks, to be funded by the Federal Reserve's credit facility, in order to prevent the $4.5 trillion repo financing system from imploding. By doing so, the Federal Reserve effectively gave a Carte Blanche to primary dealers to purchase any and all equities they so desired, with such purchases immediately being funded by the US taxpayer, via the PDCF. In essence, this was equivalent to the Fed purchasing equities by itself through a Primary Dealer agent.

equity markets; Fed's interventions; overview; Primary Dealers Credit Facility; Zero Hedge.

Mon 2009-10-26 09:13 EDT

Wall Street's Naked Swindle : Rolling Stone

Matt Taibbi

A scheme to flood the market with counterfeit stocks helped kill Bear Stearns and Lehman Brothers -- and the feds have yet to bust the culprits. [naked short selling]

Rolling Stone; Wall Street's Naked Swindle.

Fri 2009-10-23 09:40 EDT

The Extinction of Ethics in Finance and Resulting Fallout

A look into the repercussions of a financial system gone mad. Where trust is an illusion. Ethics merely a word in a forgotten dictionary. The Fed, the government, Wall Street, and even the lowly stock broker or financial advisor -- all a den of thieves.

ethically; extinction; finance; resulting fallout.

Thu 2009-10-22 19:53 EDT

Interview with Jesse at the Café Américain | Phil's Stock World

"The easiest road to corruption is through self-delusion." - Jesse Interview with Jesse at the Caf>> Am>>ricain By (economy,interview with jesse at the café américain,stock market)

Café Américain; interview; Jesse; Phil's Stock World.

zero hedge Wed 2009-10-14 12:12 EDT

Why Did U.S. SDR Holdings Increase Five Fold In The Last Week Of August?

...The big question mark at the end of August is when the U.S. International Reserve Position increased by almost 50%. The reason for this: a near quintupling of S.D.R. holdings on the U.S. balance sheet in the span of one week... By purchasing $40 billion in SDRs virtually overnight, what the Fed has done is to increase the value of the entire basket pro-rata, while in the process reducing the actual value of the dollar (which is a weighted constituent of the SDR basket). This was an operation to reduce the dollar's value: pure and simple. In many ways it explains why the DXY has continued its straight one way decline since the beginning of September, when many pundits assumed the market was finally going to tank on profit taking after Labor day. By performing this dollar adverse transaction, the Fed sent a loud and clear signal what the Fed was going to do going forward vis-a-vis the i) dollar and ii) its derivative, the stock market.

August; Folding; U.S. SDR Holdings Increase; weekly; Zero Hedge.

The Big Picture Wed 2009-10-14 11:36 EDT

Andy Xie: Here We Go Again

Former Morgan Stanley Analyst Andy Xie explains why China is a potential bubble: [Consider] the US Savings and Loans crisis of the late 1980s and early 1990s. The US Federal Reserve kept monetary policy loose to help the banking system. The dollar went into a prolonged bear market. During the descent, Asian economies that pegged their currencies to the dollar could increase money supply and lending without worrying about devaluation, but the money couldn't leave home due to the dollar's poor outlook, so it went into asset markets. When the dollar began to rebound in 1996, Asian economies came under tightening pressure that burst their asset bubbles. The collapsing asset prices triggered capital outflows that reinforced asset deflation. Asset deflation destroyed their banking systems. In short, the US banking crisis created the environment for a credit boom in Asia. When US banks recovered, Asian banks collapsed. Is China heading down the same path? There are many anecdotes to support the comparison. Property prices in Southeast Asia became higher than those in the US, but ``experts'' and government officials had stories to explain it, even though their per capita income was one-tenth that of the US. Their banks also commanded huge market capitalizations, as financial markets extended their growth ad infinitum. The same thing is happening in China today. When something seems too good to be true, it is. World trade -- the engine of global growth -- has collapsed. Employment is still contracting throughout the world. There are no realistic scenarios for the global economy to regain high and sustainable growth. China is an export-driven economy. Bank lending can support the economy for a short time, however, stocks are as expensive as during the heydays of the last bubble. Like all previous bubbles, this one, too, will burst.

Andy Xie; Big Picture; Go.

zero hedge Mon 2009-10-12 10:05 EDT

How Currency Devaluation Can Be A Bad Thing

Even as the dollar keeps hitting new daily lows, which continues being seen as a positive for the stock market, if not so positive for what little remains of world trade, not much has been said about the efforts by Latvia to do all it can to devalue its currency in the wake of a failed bond auction. The consequences are already metastasizing, as seen by the increasing volatility of related currencies, particularly the Swedish Krona which has been hit hard against the Euro on concerns of the country's exposure in Baltic states.

bad things; Currency Devaluation; Zero Hedge.