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starbucks4ever (95.14)

September 2009



Something is happening to that 12.1 trillion debt cap, and it is very non-obvious

September 28, 2009 – Comments (4)

Up till now, the general consensus was that we'd hit the 12.1 trillion limit in mid-October. That was the common view in July and the media kept repeating it as early as this September: Indeed, the debt has been rising steadily for the most part of this year. However, about 1.5 months ago something started to change. It's been a month now that this debt clock is showing virtually unchanged levels of debts, standing at about 11.8 trillion. About once a week the clock shows a small increase, then the numbers begin to get smaller, and before the week is over, the debt returns to its original level. Moreover, for the past couple of weeks, I believe the clock showed an overall DECLINE. Anyway, with only 3 weeks to go before the mid-October deadline, it is highly unlikely that we can go from 11.8 trillion to 12.1 trillion at that rate. So some 300 billion dollars of projected debt got lost somewhere, and I can't see how this little miracle could happen. Banks returning TARP money would be one obvious candidate, but there is no way they could return 300 billion. No budget cuts have been announced, and I don't see the tax revenue beating projections by this amount. Even if they monetized this debt, it would be a radical revision of the approved budget parameters (even if a pleasant kind of change as far as Geitner is concerned), so there is no way it could go unreported. Something strange is going on... Some stealthy monetization program bypassing the common accounting procedures?    [more]



Can gold rise to $20,000 an ounce as DWI predicts?

September 18, 2009 – Comments (26)

Yes, it can. But not in this century. And not to $20,000. And not per ounce. And not gold. And not rise.



The health care reform in a nutshell

September 18, 2009 – Comments (4)

...little Johnny comes back from school hungry and crying because the school bully just confiscated his $5 of cafeteria money. The next day the father gives Johnny a $10 bill with the instruction: "if you meet that bully again, give him the bill and ask for $5 change". Sure enough, Johnny comes back from school crying and hungry and empty-pocketed. So the next day the father gives him a $20 bill with the instruction: "since that bully is now charging you $10, you will handle him a $20 bill, get $10 in change, spend $5 in the cafeteria and bring $5 back home." Predictably, little Johnny comes back home crying and hungry and brings the news that the bully's premium is now $20. The father, who is also the chairman of Capone Middle School parent committee, summons an emergency meeting, declares that "we must provide cafeteria services for all students", and demands that all parents must chip in $25 a day to help pay for the increased cost of services. Then he adds that in order to succeed, his proposal must be made mandatory. After the meeting, the bully's father comes up to little Johnny's father and gives him $1000 for the chairman's election next year.  [more]



Time to reduce long exposure

September 16, 2009 – Comments (2)

This will appear to be an unlikely statement after I turned bullish 9.5 months ago, but now is really the time to take some chips off the table. We've been rallying non-stop for the past 2 weeks, and this is already beginning to look like the mirror reflection of the 3 weeks preceding Mar 9. I'm not not saying we'll start correcting tomorrow (although tomorrow looks like a very likely date), but the signs of bear capitulation all around us, and when people capitulate, they usually do so at the worst possible moment. I still think we're going to 14000, but we don't get from here to there along a parabolic line.   [more]



Deflation fearmongering is again raising its ugly head

September 15, 2009 – Comments (11)

Certain things just need to be repeated over and over again. The deflation fear has no ground in reality for a very simple reason: nobody has ever demonstrated that consumers tend to postpone any major or minor purchase because of expectation that price may drop 1% or 2% a year from now. Nor is it shown that such behavior would even be rational. After all, given the fact that the useful lifetime of the item from the consumer's standpoint cannot in any event exceed the consumer's remaining life expectancy, which is 40-50 years for the average consumer, a 1-year delay automatically subtracts at least 2% of the item's value, possibly much more for items whose utility is seen as likely to diminish over the time. As long as deflation does not exceed 2-3% a year, expecting consumers to choose delayed gratification is impractical, even if you happen to think that consumers are rational.  [more]



The magic number 57.5% is reached

September 14, 2009 – Comments (8)

57.5% was the largest nominal loss for the bulls on March 9. This figure discounts dividends and assumes that you bought S&P at the peak and sold it at the trough. Today's 1050 on S&P represents a 57.5% nominal loss for the hypothetical short trader who sold S&P at 667 and covered today (again, discounting dividends). A silent tragedy unfolding stealthily before our eyes, without drawing a slighest attention from the media. So many people ignored the danger of shorting, it couldn't end well.  [more]



Sorry, BHO, you're not FDR

September 13, 2009 – Comments (6)

I've seen some comments drawing parallels between the current "reform" and those by FDR and LBJ.  [more]



Ah, that sweet word "mandatory"!

September 10, 2009 – Comments (8)

Bushama on why mandatory Starbucks attendance is necessary, and even beneficial to society:  [more]



Lies from obama continue

September 09, 2009 – Comments (50)

Yet another lie:  "individuals will be required to carry basic health insurance — just as most states require you to carry auto insurance."  [more]



And just yesterday they were telling us to vote Democrat!

September 08, 2009 – Comments (15)

"Thrift, thrift, Horatio! The funeral-baked meats | did coldly furnish forth the marriage tables".  [more]

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