Thursday, July 28, 2011
CME Group calls tax situation 'untenable;' says it may exit state
Wednesday, July 27, 2011
Is It Time To Trade Pricey Gold Bars For Cheap Houses?
It is getting close. I don't think you can go wrong if you carefully dip your toe in investment real estate for the next five years. Long term trend take a...long time. So be prepared to hold it for a couple of decades. As I have argued before, real estate will be a real winner even if we slowly return back to the 2005-06 highs.
Tuesday, July 26, 2011
The dollar is approaching important lows
S&P 500 looking toppy but hasn't rolled over. U.S. dollar rapidly approaching lows.
The U.S. dollar is falling near its 2008 low. Falling below 70.00 on the chart could precipitate a dollar crisis and you would see a bond and stock market sell off and a huge run up in commodities. I will keep an eye on the dollar and I imagine this will hit the MSM if we take out the May 4th low of 73.25. This might not pan out but it is worth watching.
Monday, July 25, 2011
"I'm just quitting."
My name’s Ronnie Bryant, and I’m a mine operator…. I’ve been issued a [state] permit in the recent past for [waste water] discharge, and after standing in this room today listening to the comments being made by the people…. [pause] Nearly every day without fail — I have a different perspective — men stream to these [mining] operations looking for work in Walker County. They can’t pay their mortgage. They can’t pay their car note. They can’t feed their families. They don’t have health insurance. And as I stand here today, I just … you know … what’s the use? I got a permit to open up an underground coal mine that would employ probably 125 people. They’d be paid wages from $50,000 to $150,000 a year. We would consume probably $50 million to $60 million in consumables a year, putting more men to work. And my only idea today is to go home. What’s the use? I don’t know. I mean, I see these guys — I see them with tears in their eyes — looking for work. And if there’s so much opposition to these guys making a living, I feel like there’s no need in me putting out the effort to provide work for them. So as I stood against the wall here today, basically what I’ve decided is not to open the mine. I’m just quitting. Thank you.
Labels: Atlas Shrugged
Friday, July 22, 2011
Labels: Friday Music
Thursday, July 21, 2011
In lieu of flowers
Monday, July 18, 2011
I think Peart is an interesting writer. He shares his traveling stories on his web site and has written four books.
"In the Pacific Northwest, as in Canada’s British Columbia to the north, logging was a major industry, and thus a source of many jobs. That’s important, no question, and it is one threshold where I part company with organizations like Greenpeace. Speaking with one of their advocates once, I said I would find it hard to shut down any industry, even coal mining, when it would put so many blameless, hard-working people out of a job. The Greenpeace guy said he had no problem with bringing it all down, and he meant it, but . . . I’m a bleeding-heart libertarian.
In any case, it’s hard for me to get too judgmental about lumbering, because I like things made of wood.
Drums, for example.
But I am glad we have those national parks, at least, to protect some of it for the future—and even for the present. Because I enjoy visiting them now, and in the West, they are often reachable on days off."
Friday, July 15, 2011
Cheap Trick- Surrender a/Marriachi
Labels: Friday Music
Thursday, July 14, 2011
Bloodstained velvet, dirty lace...
See them bow their heads to die
as we would bow when they rode by...
Saturday, July 09, 2011
Cuts in government spending will likely trigger economic collapse
The fiscal path the country is on will take us to an unprecedented level of spending and taxation. Why should the Republicans want to facilitate this process any more? It is contrary to pretty much everything the party is supposed to stand for. If anything, the GOP earns a fair share of the blame for this impending disaster because the party didn't do anything about it between 2003 and 2007, when it had full control of the government and knew full well that, thanks to the baby boomers and out-of-control medical costs, our terribly outdated Medicare system was set to blow up the budget. At least now, Republicans are no longer a party to making it worse, by demanding -- at last! -- some fiscal restraint and some sensible reforms.
That means there is only one way to get control of debt-- spending cuts. And that will be a problem for the economy. You see, it has been government spending which has been propping up the economy, preventing deflations full force from being felt. (How's that for alliteration?)
Everything is very fluid, but the headlines in today’s Wall Street Journal suggest a deal on the order of $4 trillion in on the table. I assume it will be back-loaded, but it is a start. But assume that the first year sees real spending cuts of $200 billion. That is a reduction of 1.5% in GDP. It’s that pesky old equation I keep using:
GDP = C (total consumption) + I (Investments) + G (government Spending) + net exports
Now, the literature suggests that the effect on the economy from a reduction in G should be over within about 4 quarters, on average. But then we reduce “G” again the next year. Maybe not by as much overall, but at least by another $50-100 billion. This is going to put a real headwind in the face of economic growth for years, but we simply have to do it or we become Greece.
The economy will already be slowing down. A recession in 2012 is a real possibility if there is any type of shock coming from Europe, and what will happen there is anyone’s guess. I think most European leaders are basing their thinking more on hope than on reality. When Greece defaults there will be a domino effect; you can count on it. And you could actually see a banking crisis before we get actual sovereign defaults.
So any cuts in government spending along with the Federal Reserve ending it's monetizing our debt will hurt in the short term. Everyone in government knows this but they can't say it. Deflation was always going to win. Take a good look at Japan to see a country that tried to borrow its way out of deflation. It didn't work. It won't work here. We just have to take our medicine and that will mean at least a few more years of pain. Also, remember that the stock market rally since 2009 was entirely paid for with stimulus money that will be going away soon.
Monday, July 04, 2011
Joe Biden: not stimulating anything
Joe Biden came to town this weekend to speak at a union meeting, this is a big fourth celebration in Las Vegas, and his visit shut down for two days locale helicopter trips in the area to Grand Canyon etc., resulting in thousands of dollars and jobs lost.