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January 2010



Chinese mercantilism

January 29, 2010 – Comments (8)

The main symptom of the coming crash in China is its foolish accumulation of toxic USD undertaken for no other reason than to keep the yuan low to export even more goods to America to buy even more USD.   [more]



Chinese merchantilism

January 29, 2010 – Comments (0)

The main symptom of the coming crash in China is its foolish accumulation of toxic USD undertaken for no other reason than to keep the yuan low to export even more goods to America to buy even more USD.   [more]



By the way, what happened to the healthcare bill?

January 28, 2010 – Comments (5)

In 1984, an official who fell out of favor would become an "unperson". Ever since the Mass election, the healthcare bill has been an "untopic." All of a sudden, we are at war with Eastasia, sorry, I meant, with the big banks. It's not bad news at all if obamacare is temporarily off the table, but why then is UNH going up? The market is not sufficiently bright to realize that Republicans will introduce the same bill next year under a different name. Health stocks need to pull back now.  [more]



How countries set themselves up for failure

January 27, 2010 – Comments (2)

When someone goes bankrupt and takes to the streets, our first gut reaction is that some unforeseen accident has just happened. Wow, who could have thought it's happen to (---------Dick Fuld, Bernie Madoff, Ken Lay, ............... - select your favorite). A back swan has swum by. But upon a second thought we almost always see how the victim has in fact cooperated with the theory of probability to bring about his own demise. We usually see not one, but a whole string of mistakes culminating in this tragic output. Any such single mistake would be a small deal. What's more, we usually see in retrospect that even a series of mistakes would not be fatal. The man in question could have made two, three, five, seven, or even ten mistakes in a row, and still survived the consequences. But then he makes his final, eleventh mistake, and that settles the outcome. The ultimate irony is that while he was making these mistakes, he must have imagined that he was acting in his own best interests. It must have been with the sense of victory, triumph, and cheerful exuberance that Dick Fuld increased his leverage from 5x to 10x, then to 12x. then to 15x, then to 20x, and finally to 30x, and each increase made him think that he'd just climbed one more step up the ladder. Which he was, only to fall down from a greater height.   [more]



World population clock

January 26, 2010 – Comments (2)

Interestingly, there is a world population clock. It maybe less exciting than the debt clock, but it's still worth a look.    [more]



The very good, sensible, socially conscious, and profitable $372 investment.

January 24, 2010 – Comments (39)

I give this post a 50% chance of getting past the censors. But if it gets deleted, I think it should be deleted together with another related post which I won't mention, but most of you know which post I have in mind.  [more]



Bees against honey

January 22, 2010 – Comments (6)

A brave little Drone rattled the nectar market Thursday after asking the swarm for limits on how large big vegetation can be and to end some of the risky practices large flowers have used in recent quarters to boost their production of Nectar. It's not clear what will come of the proposed changes but insects are selling anyway.  [more]



Hopping from one reform to the next

January 21, 2010 – Comments (3)

Just this little comment: so far I heard the Illinois demagogue talk tough about some "banking reform" but I haven't seen any specific promices, let alone actions. If healthcare is any indication, the mountain will once again labour to give birth to a mouse.



Let them try (and hopefully fail)

January 21, 2010 – Comments (8)

The value of information provided by NYT was measured by a negative number anyway, but now they are trying to monetize it. I don't see how any self-respecting individual can agree to pay for an online newspaper, and will certainly feel few regrets if I'm deprived of the dubious pleasure to read one of the most outspoken propaganda mouthpieces in the newspaper universe. Here's hope that consumers will vote with their feet and get their free information elsewhere.  [more]



Healthcare recs

January 17, 2010 – Comments (15)

Usually it feels fine to see multiple recs for your post. But every once in a while I see some recs that make me quite uncomfortable.   [more]



It pays to wait

January 14, 2010 – Comments (4)

Today I closed my last ultrashort entered before the great crash of 2008. It was SH and I closed it for a 5.4% profit. I am not very good at market timing, to say the least, and my timing couldn't be worse. I red-thumbed SH and a couple of dozens of other ultrashorts just before the bottom fell out and Caps informed me about my mistake by sending my score below negative 2000. Fast-forward to January 2010. All of these trades are now closed at a profit. So, what's the moral of this story? All crap eventually sinks, even though the process may seem painfully long.  [more]



Printing press remains profitable, especially to the people who own it.

January 12, 2010 – Comments (6)

The only thing that I can gain from this article is that when Bernanke entered the market for Treasury and Agency junk, he brought with him so many newly-printed dollars that even investments as crappy as T-bonds went up in nominal value, so he can now pat himself on the shoulder and spin stories, telling us how me made money on that trade. To me it looks like if there was any money made, the word "made" should be taken literally. Another fly in the ointment: there is a general rule that you don't boast about a trade until you close it. Has Bernanke tried to sell any of those securities that show such outstanding unrealized gains? A little voice is telling me that there won't be many buyers. Unless, of course, Bernanke steps in to buy them from himself. 

WASHINGTON (AP) -- The Federal Reserve generated record profits last year, reflecting money made off its extraordinary efforts to rescue the country from the worst economic and financial crisis since the 1930s.  [more]



Debt is now 100% of GDP

January 10, 2010 – Comments (4)

Officially, public debt is something like 85-86% of GDP. However, it is important to remember that the official GDP figure of $14+ trillion is a lie. The fictitious component of GDP is well known and has been discussed in detail many times in Caps and elsewhere. The bottom line is, the actual GDP is roughly 12.2-12.4 trillion, and the current debt level ($12.3 trillion) represents 100% of GDP plus or minus one or two percentage points. It's unfortunate that the point is lost on the financial media. Most people are well aware of this accounting trick, but very few care to make the required correction.  [more]



Contrarian Investor Sees Economic Crash in China

January 09, 2010 – Comments (16)


"James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other highflying companies whose stories were too good to be true.  [more]



Buffet is right about KFT but for the wrong reason

January 05, 2010 – Comments (2) | RELATED TICKERS: KRFT.DL , CBY.DL2

Finally, Buffett made the right thing today by voting against the deal to buy Cadbury. Even better, he expressed his doubts about management by saying he wouldn't give it (i.e. the management) "a blank cheque to change its offer “in any way it wishes”".  That's good news.   [more]



Why is there such a fuss about secondary smoke?

January 04, 2010 – Comments (11)

turdburglar raises the issue of secondary smoke in bars. Why the discussion should go along the "ban or don't ban" lines, is beyond my understanding. There is a very simple and obvious solution. The law should require all bars to elect to be a either a smoking bar or a non-smoking bar, and to display that information on the door in capital letters. When you go to a bar, you will see a plaque on the door informing you of the bar's smoking policy, and decide if it's all right with you. And then, to each his own. Smokers and non-smokers alike will get a broad selection of bars where they can enjoy the atmosphere in both senses of the word.  [more]



Economic glossary for the next decade

January 01, 2010 – Comments (9)

Accounting rules - the principal way of producing corporate earnings (see Earnings).  [more]