Saturday, April 4, 2009

Ho-hum – The Collapse of the Dollar (Very Serious Business But Can It Happen?)

Robert Reich speaks out on the truth about the Geithner plan's (slick Timmy's) lack of transparency that ensures taxpayer contributions forever to a bailout of the acknowledged (whether they admit it or not) felons.

Meanwhile, the Treasury has been readying yet another big multibillion-dollar payout to AIG on top of the $170 billion already provided the company, because AIG has been hemorrhaging red ink. The company's balance sheets have been deteriorating far more quickly than the Treasury had anticipated. But there's been no clear exit strategy for stopping the flow of taxpayer money. What’s particularly embarrassing for the current administration is that it had promised to undertake the Wall Street bailout far more transparently and effectively than the way the Bush administration went about it. The Obama administration had assured the public that, among other things, taxpayer money would no longer be used to backstop Wall Street bonuses. (It’s worth noting, in this regard, that the related plan put forward by the Obama Treasury to limit executive pay in Wall Street firms that received bailouts turned out to be riddled with holes.) We've also learned that much of the $170 billion has been used by AIG to pay off AIG's putative obligations to other Wall Street banks such as Goldman Sachs. Goldman has maintained that it got no bailout money from the Treasury. But in fact it received some $13 billion through AIG. More troubling is that the original plan to bail out AIG was concocted at a meeting held last fall, run by then Treasury Secretary Hank Paulson who, before becoming treasury secretary, had been CEO of Goldman Sachs. Also attending the meeting was Lloyd Blankenfein, the current CEO of Goldman Sachs. Also at the meeting: Tim Geithner, then head of the New York Fed. None of this would be nearly as awful if the Wall Street bailout were working. But here we are six months after it began and it’s still the case that almost no loans are being made to Main Street.
Like I said before, "It's Time for Him To Go!" (h/t Al Gore) Don't ask me why the following essay appeals to me. It should be obvious. The most interesting part of it is written by one of the grand voices of the ages, the olden times, back when people believed solemnly that the guaranteed democracy inherent in the stock market was a working concept which anyone could use to better themselves by buying stocks as an investment (so that would be at least 30 years ago), or at least that's what they advertised on Wall Street. I hope you enjoy it, and you can take a gander at the Dogs of the DOW here, and what that means, if you are so inclined. This world, by the way, is the one that is kaput now thanks to the greedsters on financial row. Who knows? This might even make you begin to question why your taxes are paying off Goldman Sachs, et al., who made these bad bets on AIG, et al.
A Few Thoughts from Richard Russell . . . well over 400 guests will honor Richard Russell this weekend for 50 years of writing the incomparable Dow Theory Letters. A lot of people ask him how can they succeed as writers. He recently made some comments which I thought I would pass on, because they are so right. Also, he gives us a few fascinating moments, looking back over his career. "I've been in this business a l-o-o-o-n-g time, and I've known a lot of great people, mostly through their subscriptions. Stanley Kubrick, the genius movie producer and director, was a subscriber for many years. Stan was a gold man, and we used to correspond. Stanley would tear off a piece of yellow paper and write notes to me. He invited me to visit his studio, 30 miles outside of London. When I visited England years ago, damn it, I completely forgot to visit him, a mistake I've always regretted. "Marlon Brando's dad was a subscriber for years. I had met his Marlon while he was shooting On the Waterfront. I exchanged services with the great Hamilton Bolton, genius writer for The Bank Credit Analyst. Marty Zweig is a good friend of mine, and when Marty retired I took over his advisory - this was years ago, and I still have many of Marty's subscribers on the books. I knew Garfield Drew, the original interpreter of the odd lots. I also knew E. George Schaefer, who authored his famous Dow Theory Trader advisory during the 1940's through the '70s. . . . "John Magee was a friend of mine. John had a sign posted on his wall. It said, 'Don't tell me what to buy, tell me WHEN to buy it.' Bob Bleiberg, the brilliant editor of Barron's, was my friend and mentor. Bob was responsible for popularizing technical analysis of stock trends. General Marion Cooper was a subscriber. Coop invented the concept of King Kong and he produced the original movie. Coop was also adjutant general to Claire Chennault of the famous Flying Tigers, in Asia. The Tigers, with their outdated P-40s (painted like sharks), played hell with the Japanese off China. "I'm very friendly with that fabulous pair, the gifted Aden sisters. I count Jim Grant (Interest Rate Observer) as a good friend (Jim is probably the best writer in the business). Then there's Robert Prechter of Elliott Wave fame (I originally urged Bob to go into business, and he's built up a wide following since). A few years ago, I took over Julian Snyder's business when Julie wanted to retire. I still talk with my old buddy Joey Granville. Other old-timers I keep in touch with are Jim Dines and Mister International - the one and only Sir Harry Schultz. "I guess my strangest subscriber was a priest who worked in a leper colony in West Africa. I never could figure out why he was interested in the stock market. The Bank of China was a subscriber; I don't know whether they still are. Many Arab organizations are subscribers. I used to say that I was the only Jew who the Arab big-wigs really listened to. Paul Penner, CEO of Agnico-Eagle, was a good friend of mine. Paul devoted his life to that gold mine, which is now one of the leading gold mines in Canada. "The tireless, peripatetic John Mauldin is a good friend, and how John gets it all done (he has a million readers for his famous column) is a mystery to me. "And it goes on and on. I did find that the stock market and finance was a totally democratic business. On Wall Street they don't give a damn who you are or what color or religion you are - they only care about whether you know anything, which I believe is one of the best things about the money business. How to Succeed at Writing "I've been asked a thousand times, 'What's the secret of success in the advisory business?' (1) You've got to be an obsessive nut to start with. (2) You have to be able to write in a way that people understand and like to read. (3) You can't come across as a phony who knows it all. Readers know that nobody knows it all. (4) It helps if you have a long life and don't want to retire. (5) You need a wife who can put up with a husband whose head is full of the markets 24 hours, day and night. (6) Woody Allen said the 90% of success in life is just showing up. If you can show up for the markets 250 days a year, you're ready to start an advisory service (but I wouldn't wish this business on my worst enemy - it's the closest thing to absolute madness. No wonder nobody else has lasted in the business 50 years). (7) This is a lonely business. So be prepared. Need a friend? Get a dog. Need two friends? Get two dogs. (8) One last thing - you must have thick skin, because no matter what you write, some subscriber will send an e-mail calling you a moron or brain-damaged, and the scary thing is, that makes you think, because they may be right."
Joseph Farah says that The Collapse of the Dollar is being met with a "Ho-Hum" response by you. Although you may believe that it's only the old-line Republicans who are questioning the bailout spending and increasing valuelessness of the dollar, you may be surprised at the coalition forming to stop this mindless donation of your future earnings to the greedsters. (Emphasis marks were inserted to highlight the funny (but extremely serious) explication to which you are supposedly not paying attention - Ed.)
April 03, 2009 WorldNetDaily - One of the interesting things about the Internet news business is how you get to see which stories attract interest, attention and readership. Sometimes, you just never know what people will go for until you see the reports with your own eyes. Recently, the news has been rife with reports of the imminent collapse of the dollar. Now, I would have guessed that this story would be of inordinate interest – especially to Americans. What it means, fundamentally, is that their dollars are going to be worth less – or maybe even worthless. Yet, according to the readership reports I see on WND, these stories have been met with a collective yawn. I don't know if that means Americans just aren't taking these warnings seriously or whether they just don't want to read bad news. Maybe Americans believe if they don't read the reports, they won't come true. But this is serious business. Since World War II, the U.S. dollar has been the standard for currency throughout the world. That is changing because of the weakness of the dollar – because of how much debt the U.S. has accumulated and because of how many dollars have been flooded into the system to keep the economy from collapsing. The response by the U.S. government to the imminent collapse of the dollar internationally has been to do more of the same – to vastly increase debt and currency. Very seldom in life is the cure for an affliction higher and faster doses of the poison that caused the affliction. But that is what the Barack Obama administration, the U.S. Congress and the Federal Reserve are trying as a last resort to jumpstart the economy. Arm yourself with information, like a great new book by Jerry Robinson called The Bankruptcy of Our Nation. It's a great primer on the subject – and very current. Unfortunately, even if it works in the short-term, which I sincerely doubt, it will mean even more long-lasting pain later. The current debt-spend economy of the United States is simply not sustainable. And the cure is not more debt and more spending. This formula has been tried many times by empires of the past. It has failed every single time – no exceptions. Do Americans really believe they live such a charmed life that the laws of economics and the laws of the universe do not apply to them? Do Americans really believe their leaders are so much smarter and gifted than the leaders of the past that they can somehow outwit the laws of economics and the laws of the universe? Do Americans really have such blind faith in their government that they are willing to keep their heads in the sand even when they see their economy failing all around them? I hope not. I pray not. In fact, I am very encouraged by the grass-roots "tea-party" rebellion springing up all across America. But will it be enough? Is it too little too late? I believe unless this activity is greatly stepped up in the coming months, government will continue to believe it has license to continue the failed policies of the past – ending all hopes of a reversal and real, long-lasting recovery. Government and the central bank are pushing all the wrong buttons. The death of the dollar is near. If you want to avoid a total catastrophe in this country – one that will affect not only you but your children and grandchildren – it's time to get out in the streets and stop the madness. Yes, participate in those tea parties. Help organize more. And let your elected officials know you are on to them. Tell them, "No more bailouts. No more economic stimulus bills. No more printing money. No more tax increases." Let the free-enterprise system work. Stop the counterproductive and destructive government meddling. We can do this. The time is now!
Or is it? Have a nice weekend. GO TARHEELS GO!* Suzan * The first complete sentence my baby daughter uttered. ____________________________

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