09/12/08
Are the markets finally coming to their senses this morning?
Maybe it's the fact that word of the latest Friday Night Rescue by the Fed and the Treasury leaked on a Thursday. But for once, the reaction is not euphoria. The dollar is actually down a bit. Gold is actually rebounding and Marketwatch has a story that suggests gold has hit bottom. Among the analysts quoted are our own Ed Bugos:
The government's move [to rescue Fannie and Freddie] is bearish to gold in the short term but bullish in the long term, said Ed Bugos, editor of Gold & Options Trader, a newsletter published by Agora Financial."In the short term it reduces the dollar's risk premium and boosts the debt markets," said Bugos. "In the long term, it confirms the arguments gold bugs have been making about a government that creates crises through intervention then adds more regulation and intervention in the next crisis."
Ed's thesis that intervention begets intervention is borne out by a front-page piece in the Wall Street Journal that flails about trying to make sense of the nonsensical.
The Federal Reserve has already slashed interest rates to counteract a deepening credit freeze and instituted its broadest expansion of lending facilities since the Great Depression to keep financial markets functioning. Over the weekend, the nation's two main mortgage finance firms — Fannie Mae and Freddie Mac — were placed under government control.
Federal officials and market players are struggling with the same issues: Why haven't the steps taken so far calmed the system? What can policy makers do next? Should the U.S. government let a big institution fail rather than stage another potentially costly bailout?
Hardly the sort of zeitgeist that drove up the Dow 300 points Monday after the Fannie/Freddie takeover.
And yet, the rout in energy and precious metals might not be over. The Saudi Arabians are bucking OPEC production targets, at least for now, in what looks like a parting gift to Team Bush aimed at keeping oil hovering around $100 through Election Day. Really, if this were a couple of months ago, and Hurricane Ike were bearing down on Houston, we'd see oil spiking $10. As it is, $1.50.
Dave Gonigam
Treading a fine line between contrarian thinking and conspiracy theory, Dave Gonigam explores the nexus of finance, politics, and the media for Agora Financial's 5 Minute Forecast. He joined kindred spirits at Agora Financial in 2007 after a 20-year career as an Emmy award-winning writer, producer, and manager in local TV newsrooms nationwide.
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This is why we need more government management of the economy and redistributionist tax policies. Obama’s new socialism should resolve many of these market aberrations and unfairness toward poor people who really need tax redistribution now.
I hope you realize that you are such an idiot, and that your “argument” does not connect with this story in any way, that your trolling is pretty much being disregarded by all who read your comments. This is my last post regarding this. Ignoring the ignorant is my new hobby. Go away you leftist moron troll.
Figuring that the total FDI and borrowing to finance the 750B$ net import bill will discontinue, we are going to have to cut the Federal Budget by a third, after inflation.
We could do this by abolishing welfare for poor people about five times…or by abolishing welfare for poor people once, and welfare for rich people once, and cover the rest by abolishing some of the welfare for middle class people.
Anybody see an alternative? Not a political alternative, a mathematical alternative.
Cut the federal budget by a third? You’re kidding right? You would be scoring a huge victory if you could just reduce the year-on-year increase by a third. A real honest budget cut won’t come until there is no other choice when our profligate spending is no longer supported by the dollars being recycled into our country by the likes of OPEC, China, Japan, and Russia. That time may come sooner than most people realize and is sure to be a surprise to most Americans whose standard of living depends largely upon this largesse.
I think Brother would really get a woody if somebody used a racial epithet against him. I think that’s what he really wants. That way he can feel justified in his beliefs and behavior.
justabrothers and/or JustAnotherMarxist useful idiot… Soon all must decide to fight or flee this growing Marxist evil philosophy of government that has caused so much misery and cost so many lives in the 20th Century….
I’m taking up subsistence farming, quilting, hunting for survival and a well stocked fish pond. You will too if you want to not starve. Oh! And have a space big enough to accomodate your returning offsprungs. Who knows, maybe these dumbass neocons had it figured all along–family values!
Hey guys lighten up! I took Justabrother’s posting as pure PARODY. It reminds me of an email I got where the writer claimed to have quit her job to work full time for Obama because after he is elected we will all be taken care of. Nobody is that dumb, especially persons reading this column. Duh. I think you’ve all been had.
By the way, the more financial news I read the more convinced I become that the Mugambo Guru really is a genius. Yeah gold is down, way down. In fact it’s down so much my rate of return is only a little under 2x. His motto: “We are freaking doomed” could be printed as the banner on the finance section of the news each day.
As another commentator points out there is still no constituency, right or left, for massive budget cutting. Obama want’s to raise taxes, but that’s to pay more more, new and bigger social programs, not the ones that are already bankrupting us.
The Financial Times has a two great aticles in it: one is “Through derivatives Wonderland” the compares the unwinding to Alice’s famous trip, and the other how the dismal finanaces of the USA are not being substantively addressed by either major candidate.
tcs
I didn’t say cutting the federal budget by a third was politically possible, I said that it was mathematically going to happen.
We could do it by inflation and by disregarding inflation adjustments. That would work for nonmarket situations. Like upper level employees. The lower level employees that actually do the work will quit and get jobs.
I will be available in January 2009, am willing to relocate.
RESUME
GEORGE W. BUSH (friend of John McCain!)
1600 Pennsylvania Avenue
Washington, DC 20520
EDUCATION AND EXPERIENCE:
Law Enforcement:
I was arrested in Kennebunkport, Maine, in 1976 for driving under the
influence of alcohol.. I pled guilty, paid a fine, and had my driver’s
license suspended for 30 days. My Texas driving record has been
‘lost’
and is not available.
Military:
I joined the Texas Air National Guard and went AWOL. I refused to take a
drug test or answer any questions about my drug use. By joining the Texas
Air National Guard, I was able to avoid combat duty in Viet nam .
College:
I graduated from Yale University with a low C average. I was a
cheerleader.
PAST WORK EXPERIENCE:
I ran for U.S. Congress and lost.
I began my career in the oil business in Midland, Texas, in 1975. I bought
an oil company, but couldn’t find any oil in Texas. The company
went
bankrupt shortly after I sold all my stock.
I bought the Texas Rangers baseball team in a sweetheart deal that took
land using taxpayer money.
With the help of my father and our friends in the oil industry (including
Enron CEO Ken Lay), I was elected governor of Texas .
ACCOMPLISHMENTS AS GOVERNOR OF TEXAS :
I changed Texas pollution laws to favor power and oil companies, making
Texas the most polluted state in the Union . During my tenure, Houston
replaced Los Angeles as the most smog-ridden city in America .
I cut taxes and bankrupted the Texas treasury to the tune of billions
in borrowed money.
I set the record for the most executions by any governor in American
history.
With the help of my brother, the governor of Florida, and my father’s
appointments to the Supreme Court, I became President of the United
States, after losing by over 500,000 votes.
ACCOMPLISHMENTS AS PRESIDENT:
I am the first President in U.S. history to enter office with a criminal
record.
I invaded and occupied two countries at a continuing cost of over one
billion dollars per week.
I spent the U.S. surplus and effectively bankrupted the U.S.Treasury.
I shattered the record for the largest annual deficit in U.S. history..
I set an economic record for most private bankruptcies filed in any
12-month period.
I set the all-time record for most foreclosures in a 12-month period.
I set the all-time record for the biggest drop in the history of the U.S.
stock market.
In my first year in office, over 2 million Americans lost their jobs and
that trend continues.
I am proud that the members of my cabinet are the richest of any
administration in U.S. history. My ‘poorest millionaire, ‘
Condoleezza
Rice, has a Chevron oil tanker named after her.
I set the record for most campaign fund-raising trips by a U.S. President.
I am the all-time U.S. and world record-holder for receiving the most
corporate campaign donations.
My largest lifetime campaign contributor, and one of my best friends,
Kenneth Lay, presided over the largest corporate bankruptcy fraud in U.S.
history, Enron.
My political party used Enron private jets and corporate attorneys to
assure my success with the U.S. Supreme Court during my election
decision.
I have protected my friends at Enron and Halliburton against investigation
or prosecution. More time and money was spent investigating the Monica
Lewinsky affair than has been spent investigating one of the biggest
corporate rip-offs in history. I presided over the biggest energy crisis
in U.S. history and refused to intervene when corruption involving the
oil industry was revealed.
I presided over the highest gasoline prices in U.S. history.
I changed the U.S. policy to allow convicted criminals to be awarded
government contracts, and
I appointed more convicted criminals to my administration than any
President in U.S. history.
I created the Ministry of Homeland Security, the largest bureaucracy in
the history of the United States Government.
I have broken more international treaties than any President in
U.S.history.
I am the first President in U.S. history to have the United Nations remove
the U.S. from the Human Rights Commission.
I withdrew the U.S. from the World Court of Law.
I refused to allow inspector’s access to U.S. ‘prisoners of
war’
detainees and thereby have refused to abide by the Geneva Convention.
I am the first President in history to refuse United Nations election
inspectors (during the 2002 US election)
I set the record for fewest numbers of press conferences of any President
since the advent of television.
I set the all-time record for most days on vacation in any one-year
period. After taking off the entire month of August, I presided over the
worst security failure in U.S. history
I garnered the most sympathy ever for the U.S. after the&nb sp;
WorldTrade Center attacks and less than a year later made the U.S. the
most hated country in the world, the largest failure of diplomacy in world
history.
I have set the all-time record for most people worldwide to simultaneously
protest me in public venues (15 million people), shattering the record for
protests against any person in the history of mankind
I am the first President in U.S. history to order an unprovoked,
preemptive attack and the military occupation of a sovereign nation. I did
so against the will of the United Nations, the majority of U.S. Citizens
and the world community.
I have cut health care benefits for war veterans and support a cut in duty
benefits for active duty troops and their families in wartime.
In my State of the Union Address, I lied about our reasons for attacking
Iraq and then blamed the lies on our British friends.
I am the first President in history to have a majority of Europeans (71%)
view my presidency as the biggest threat to world peace and security.
I am supporting development of a nuclear ‘Tactical Bunker Buster,’ a
WMD.
I have so far failed to fulfill my pledge to bring Osama Bin Laden to
justice..
RECORDS AND REFERENCES:
All records of my tenure as governor of Texas are now in my
father’s
library, sealed and unavailable for public view.
All records of SEC investigations into my insider trading and my bankrupt
companies are sealed in secrecy and unavailable for public view.
All records or minutes from meetings that I, or my Vice-President,
attended regarding public energy policy are sealed in secrecy and
unavailable for public review. I specified that my sealed documents will
not be available for 50 years.
PLEASE SEND THIS TO EVERY VOTER YOU KNOW!