Donald Coxe Commentary

Thanks to Preur du Plessis of Investment Postcards From Capetown:
Donald Coxe's latest recommendations at the link plus a link to read his latest Basic Points issue.

Highly recommended so click on through.

Evidence of the quality of science education at the local level.

Watch this.
http://www.youtube.com/watch?v=w3qFdbUEq5s

 

What it is it about Northern California?

Outrageous : Food Stamps For Family With $80,000 In The Bank

From Pajamas Media:

Subject: Food Stamp Case

One of the workers here just approved an ongoing food stamp case where the family has over $80,000 in the bank, owns a 2001 Toyota and 2006 Mercedes Benz, and a $311,000 home that is paid for. Monthly benefits of over $500 in FS, received over $300 in expedited.

3 household members — husband, wife, and child. Wife recently lost job, husband receives SS benefits.

There’s something badly wrong with this program that allows a family that kind of resources to still get food stamps.

Now doesn't that  just inspire confidence in government run institutions. So go ahead let government run the banks and health care we will be Zimbabwe in time.

Stiglitz: Capitalist Fools

A good history of the financial crisis and its long term causes at Vanity Fair. This is the one I would start with:

No. 2: Tearing Down the Walls
The deregulation philosophy would pay unwelcome dividends for years to come. In
November 1999, Congress repealed the Glass-Steagall Act—the culmination of a
$300 million lobbying effort by the banking and financial-services industries, and
spearheaded in Congress by Senator Phil Gramm. Glass-Steagall had long separated
commercial banks (which lend money) and investment banks (which organize the sale
of bonds and equities); it had been enacted in the aftermath of the Great Depression
and was meant to curb the excesses of that era, including grave conflicts of interest.
For instance, without separation, if a company whose shares had been issued by an
investment bank, with its strong endorsement, got into trouble, wouldn’t its
commercial arm, if it had one, feel pressure to lend it money, perhaps unwisely? An
ensuing spiral of bad judgment is not hard to foresee. I had opposed repeal of Glass-
Steagall. The proponents said, in effect, Trust us: we will create Chinese walls to
make sure that the problems of the past do not recur. As an economist, I certainly
possessed a healthy degree of trust, trust in the power of economic incentives to bend
human behavior toward self- interest—toward short-term self- interest, at any rate,
rather than Tocqueville’s “self interest rightly understood.”
The most important consequence of the repeal of Glass-Steagall was indirect—it lay
in the way repeal changed an entire culture. Commercial banks are not supposed to be
high-risk ventures; they are supposed to manage other people’s money very
conservatively. It is with this understanding that the government agrees to pick up the
tab should they fail. Investment banks, on the other hand, have traditionally managed
rich people’s money—people who can take bigger risks in order to get bigger returns.
When repeal of Glass-Steagall brought investment and commercial banks together,
the investment-bank culture came out on top. There was a demand for the kind of high
returns that could be obtained only through high leverage and big risktaking.

Congress and the Clinton administration undue Glass-Steagall separating commercial from investment banks, a law specifically passed after the great depression to keep banks away from market related risks. Then Congress pushed the GSE home lenders to loosen credit standards and lend to poorly qualified borrowers. That of course is the same group of congressmen who are pointing fingers at bankers for doing what the Congress said they could. What a bunch of schmucks. None of this is to excuse the venality and lack of ethical standards among Wall Street executives.

Thanks to Fullemoney for pointing out this article.

Speaking Truth To Power

Sheila Bair in testimony before Congress as those bloviating bags of flatus once again point fingers and try to close a barn door after the horse has gone.

While I fully support the goal of having an informed, forward looking, proactive and analytically capable regulatory community, looking back, if we are honest in our assessment, it is clear that U.S. regulators already had many broad powers to supervise financial institutions and markets and to limit many of the activities that undermined our financial system. For various reasons, these powers were not used effectively and as a consequence supervision was not sufficiently proactive.

Failure by regulators to use the powers they already have is a big reason the problems we have are so big. Relations between Wall St. and the regulators is far too cozy as people move back and forth between government and private employment.

23% Bounce? Where?

Upon returning from vacation I find a 23% bounce off of the lows in the SPY. can anyone see it? This chart courtesy of CQG.

Back from needed vacation

I forgot to post that I would be away for 2 weeks, so I will announce my return. I cannot remember ever being so worn out and in need of a break as I was in mid March. But a 10 day cruise and i am fresh as a daisy. (well, a 59 year old daisy)

Buddy can you spare a dime? I want to invest in a lanthanide mine.

An investment opportunity for capital to begin looking for resrves in a free country before the Chinese have a total monopoly.
from TimesOnline hat tip to Fullermoney:

China has triumphed in a 15-year quest to become the “ultimate monopolist” in the supply of rare earth metals — a dominance that industry experts say could give Beijing control over the future of consumer electronics and green technology.

Industry sources believe that with China dramatically cutting its annual rare earth export quotas, the time may be rapidly approaching when it will be impossible for any company to produce a wind turbine or hybrid electric car outside the communist country.

Donald Coxe conference call

conference call

Mr. Coxe is an outstanding strategist and this weekly call updates his views of the markets and then he answers questions from others on the call. Worth a listen.

FOX: Flashback: Carville Wanted Bush to Fail

This is despicable behavior by a lying sack of shit, James Carville. The behavior of the press in this instance is also despicable and further demonstrates their complete co optin by the Democratic party.
From Fox

The press never reported that Democratic strategist James Carville said he wanted President Bush to fail before the Sept. 11 terrorist attacks. But a feeding frenzy ensued when radio host Rush Limbaugh recently said he wanted President Obama to fail. 

On the morning of Sept. 11, 2001, just minutes before learning of the terrorist attacks on America, Democratic strategist James Carville was hoping for President Bush to fail, telling a group of Washington reporters: "I certainly hope he doesn't succeed."

Carville was joined by Democratic pollster Stanley Greenberg, who seemed encouraged by a survey he had just completed that revealed public misgivings about the newly minted president.

"We rush into these focus groups with these doubts that people have about him, and I'm wanting them to turn against him," Greenberg admitted.

The pollster added with a chuckle of disbelief: "They don't want him to fail. I mean, they think it matters if the president of the United States fails."

Minutes later, as news of the terrorist attacks reached the hotel conference room where the Democrats were having breakfast with the reporters, Carville announced: "Disregard everything we just said! This changes everything!"

I wish to renew my call to vote all incumbents out of office. All of them , from both parties. After all the Tea parties occur around the nation let's spread the word to vote everyone in Washington at the next election. We need to make it clear we have had enough of the self serving baloney that passes for acceptable behavior in Congress and in the party structures.
Next time I see Rick Santelli down at the exchange i am gong to urge him to make a new rant.

Some Good News And Some Not So Much

from Bloomberg
Good
China’s industrial production grew at a faster pace in February as a 4 trillion yuan ($585 billion) stimulus plan took effect.

Output rose 11 percent from a year earlier, the statistics bureau said today. That compared with a 3.8 percent gain in January and February combined and 5.7 percent in December.

Not so great
Japan’s economy contracted at the fastest pace since 1974 last quarter as exports, output and business spending collapsed.

Gross domestic product shrank an annualized 12.1 percent in the three months ended Dec. 31, less than the 12.7 percent reported last month, the Cabinet Office said today in Tokyo. The median estimate of economists was for a 13.4 percent decline.

Bad
The cost of borrowing in dollars is rising as the global recession deepens and central bank efforts to prop up the financial system fail to prevent a growing number of banks from requiring government bailouts.

Interesting chart comparing bear markets

clusterstock:

Crash Of 2008 Now Worse Than Crash Of 1929

Maybe not after today's rally but still impressiive. Let's hope we are not still declining 17 months from now. click Clusterstock to see chart.

Another "Interesting Video On fannie Mae And Freddie Mac"

More on who was responsible for the subprime crisis at The Moderate Voice.
Hint: It is the same clowns pointing fingers at every one else. This stuff is infuriating.
hat tip to Instapundit.

"Everything's Amazing Nobody 's Happy

Louis CK on Conan in a wonderful rant.

I was not able to embed the video but the link above will take you to the video.
Everything's amazing, nobody's happy

A fun site take a look

Books and Music That Make You Dumb

Barney (not so) Frank

Blarney is out strutting around with righteous indignation again today. Remember he was a huge backer of Fannie and Freddie leveraging up and lowering credit standards to potential borrowers. Oh and incidentally a big beneficiary of political donations from fannie and Freddie and the various overpaid politically appointed CEOs of those companies. VIDEO

Nothing So Clearly Demonstrates How Far The British Have Fallen As This:

Bloomberg: Kennedy to Receive Honorary Knighthood, Brown Tells Congress

Edward Kennedy, one of the longest- serving U.S. senators and a Democratic Party patriarch, will receive an honorary British knighthood, Prime Minister Gordon Brown told a joint session of Congress.

This news makes me want to spew. If I were Elton John I would return my knighthood.

Chicago's incompetent and likely corrupt politicians at it again

Bloomberg:

Hidden Pension Fiasco May Foment Another $1 Trillion Bailout

The Chicago Transit Authority retirement plan had a $1.5 billion hole in its stash of assets in 2007. At the height of a four-year bull market, it didn’t have enough cash on hand to pay its retirees through 2013, meaning it was underfunded to the tune of 62 percent.

The CTA, which manages the second-largest public transit system in the U.S., had to hope for a huge contribution from the Illinois state legislature. That wasn’t going to happen.

Then the authority found an answer.

“We’ve identified the problem and a solution,” said CTA Chairman Carole Brown on April 16, 2007. The agency decided to raise money from a bond sale.

A year later, it asked Illinois Auditor General William Holland to research its plan. The state hired an actuary, did a study and, on July 17, concluded that the sale of bonds would most likely result in a loss of taxpayers’ money.

Thirteen days after that, the CTA ignored the warning and issued $1.9 billion in bonds. Before the year ended, the pension fund was paying out more to bondholders than it was earning on its new influx of money. Instead of closing its funding gap, the CTA was falling further behind.

Please go to the link above and read the entire article. Chicago may be number one but the competition is fierce in the waste of public money contest.