Showing posts with label Ilargi. Show all posts
Showing posts with label Ilargi. Show all posts

8/12/09

Different Stories

punditman says...As promised, Punditman is trying to fill Peacenik's shoes while Peacenik is off in the wilderness at Peacenik's compound learning how to make dandelion tea or wine or whatever he feels will help him in the near-to-medium-to-long-term-to-weird future.

Since Peacenik usually covers the Ilargi front, Punditman offers up this rather bleak picture of the so-called economic recovery. Punditman is not sure what to think, but Punditman tends to think things are going to get weird in America and most places in the not-to-distant future. It is hard to dispute the following figures: 25% of US homeowners will be underwater by 2010, and 30% by 2011 (or, according to the Deutsche Bank, 50% by 2011). Punditman was just reading another article that says tent cities are appearing all over America, full of homeless unemployed. Please let me know if you are reading this on your laptop in your tent, because, while Punditman surely knows about the tent cities, Punditman would not get a reminder of this by turning on Punditman's television, would Punditman? Punditman tries not to turn on his television lately.

Meanwhile the Obama administration is spending $1 billion to build a mega-embassy in Pakistan (not to be out-done by Dubya who did the same in Iraq). At the same time, by Christmas, 1.5 million Americans will have run out of unemployment benefits while unemployment continues to rise. When in doubt, time for some more Pentagon socialism to the tune of a $636 billion defense bill. It is hard to understand how any recovery based on reality can happen amidst all this. Here's Ilargi.


Ilargi: Right. So government spending, as we've of course mentioned before, is going through roofs never dreamt of until recently. The request for a higher government debt ceiling is but one of the many signs of this. One that may be far more important is the roles played by Ginnie Mae and the FHA, roles that both have been stealthily increased by stunning percentages since the present administration took office.

The idea, undoubtedly, is to take all that's bad and suspect on Fannie Mae and Freddie Mac's elusive books, wrap it up in glitzy fancy gift paper, and throw it in a vault somewhere that still has space left on top of or beneath the toxic paper it already holds. And sure, it will look good at the surface. Just propose an opaque bad bank construction for Fannie and Freddie, so you can keep hiding the losses from view, and continue the policies that led to their inevitable demise through other (semi-private) enterprises.

There's something terribly wrong here. And since it threatens to transfer additional trillions of dollars in losses to the taxpayer, that taxpayer had better beware.

Somewhere behind these ideas is the faith that the economy, and hence home prices, will rise again. It's slightly reminiscent of Hank Paulson claiming 11 months ago that the taxpayer would actually make a healthy profit off the TARP rescues. That went well, didn’t it? We’re all much better off.

Keep Reading...

7/7/09

July 6 2009: Inflation, the least of your worries

Yesterday Peacenik felt a flicker of summertime fun. Today Peacenik read Ilargi. Ilargi is talking about the scourge of deflation. Ilargi says it is imminent. Ilargi says everything is coming apart now. Ilargi has freaked Peacenik out. That flicker of summertime fun.....gone. Ilargi says it is time to gather your family. Peacenik will still be heading into the wilderness later this summer. But Peacenik wonders what will greet Peacenik when Peacenik returns.

Ilargi: All I really want to say today is: "Watch out people, the whole thing is falling apart. Assume that it will, and act accordingly. The risk of not doing so is simply too great." I'm not talking about money, or only about money at least. It's time to take a good look around and see where you are. Where is your family, where are your friends? Can you bring them closer to you, can you wake them up? What can you provide for yourself in you present setting? Can you feed yourself, your kids, your parents?

For those of us who follow the economic news it must be clear by now: there are no green shoots. And there never have been, as I've consistently maintained throughout. It was all just make believe from the get-go. The Obama administration never believed their own stories either (they're not that "thick"), they were just playing for time. If the polls tell you that the truth will take away the grip on power you worked so hard to achieve, you steer clear of the truth. It's called politics.

Read on...

6/11/09

Debt

Peacenik has been writing about the black hole of debt for a while. Trillions upon trillions of dollars of debt that has to be dealt with. It can't be forgiven. It can't be forgotten. It can't be ignored. But that's what our leaders are doing. Why are governments and corporations and banks and Wall Street ignoring their debt? Because they have no solution....other than going further into debt. Can you ignore your debt? Peacenik can't ignore Peacenik's.

June 10 2009: One simple four letter word.

Ilargi: You can talk about the economy till you’re blue in the face, make a case for or against a possible recovery, bottoms and tops, green shoots, yellow weeds, whatever tickles your fancy and your preferred belief system. And you're sure to find at least a few handfuls of kindred souls and spirits while you’re at it. After all, with worsening data continuing to spout from the real economy, the one that pays your salary if you still have one, which pays your mortgage if you still have one and so on, while stock markets seem to be going up, there is enough confusion to go around for everyone.

But in the end, when all the convincing sounding arguments have been made in the heated discussions that fill hour after hour of street corners, TV screens, worried kitchen tables, barrooms and bordellos, day after confusing day, it all comes down to one simple four letter word. Debt.

Read on...

3/11/09

March 10 2009: Dinosaurs the size of banks

Ilargi: The US government and the Federal Reserve indicate that they will not let a big bank fail. They also hint that the uptick rule will likely be reinstated, which is great for banks that someone might want to short (many someones want to). Moreover, the drive to change fair value rules (were they ever executed?) gets so strong that blogger Karl Denninger, who's spent months clamoring for fair value and mark-to-market, today does a 180 and argues for a suspension of the all-too-rational principle. Thinking of a career in politics? Any idea of the damage a suspension would do? I think you do, Karl.

To top off today's party cake, Ben Bernanke once more reiterates (I know that’s double) that the recession "might end this year". Now, I watched Jon Stewart dig into Jim Cramer last night. Reading Bernanke's words this morning, my first thought was that I hope The Daily Show will do a similar "timeframe truth test" of Bernanke. Shrinking Ben has made so many ridiculous claims about the economy's health and its upcoming recovery since he took over, it should be a feast for the eyes and ears.

Read on...

It seems that the financial crisis has many in a pensive mood. Mish today is talking about material things, LK is pondering loss and how big 50 trillion dollars is, and Peacenik was contemplating the value of stuff and things and ideas and how things are valued. What would be the value of a chunk of gold on a desert island. What is the value of 50,000 shares of the Royal Bank in an information vacuum. What is the value of a question mark or a can of tuna.

But the markets were up big time yesterday based in small part on the belief that the worst is behind us. Jim Cramer declared a bottom. The CNBC pundits, excoriated by John Stewart just days ago, were giddy. Is this the end of Doom? Is this how a crisis ends? Is this the beginning of a new society, a new economy? Ilargi doesn't think so. Peacenik doesn't think so. Peacenik will remain alert and alarmed.

3/4/09

March 3, 2009: Sometimes I sit up in the darkness

Ilargi: President Obama must be starting to sweat, maybe hyperventilate and perhaps even panic. In a move that is prone to kill a political career if it turns out wrong (and it will), he suggested today that this may be a good time for Americans to buy stocks. Now, I don't care if he really thinks that or not, the fact remains that it's a highly risky and volatile thing for a politician to say. It feels like he's moving ever closer into W territory, it sounds like something that Bush 43 would have said, like when 8 years ago he urged Americans to go out and buy a home. Where's the difference?

President Obama also insisted that he's convinced the economy will rebound. And while there will of course be some kind of bounce somewhere down the road, no matter how small, what exactly will be the good that comes from it when it happens with the Dow at 1000? I know, that's probably not what the president thinks. Or hopes for.

Peacenik contemplated the state of the present on the bus trip to work this morning. It screamed normal. Peacenik went to the Borealis, a new, upscale, southend restaurant, for dinner on Saturday. It was full. The local pub, the Wooly, continues to be busy. Peacenik got tickets to a soldout concert at Folkway Music for Friday. There doesn't seem to be an increase in the number of street people on the streets of Guelph. The grocery store and Canadian Tire seemed busy. BCE showed some confidence in the mall-based economy and bought the Source. The city of Guelph reached a tentative agreement with its outside and library workers. Punditman continues to work hard and play hard. Life seems good.

But. But there are some signs of a disturbance in the state of the present. There are a lot of real estate listings in the Guelph Mercury. The Kitchener employment insurance office is apparently very busy. There are no wait times in the ski lift lines at Chicopee Mountain. There seems to be a paper towel and toilet paper price war going on in the local grocery stores. GM sales were down more than 50%. The median price of a house in Detroit is $7500. Can southwestern Ontario become like upstate Michigan? Can Guelph become Detroit? The Toronto Star this morning front paged a story about 1500 Canadian steelworkers losing their jobs.

Then Peacenik turned Peacenik's thoughts to Ilargi. Ah, Ilargi. The name that strikes fear into sentinent humans. Ilargi, the scary one. If your state of mind is dependent on psychotropic drugs, or if you are in a fragile state of mind, or if you are fearful of tomorrow, do not follow the link. Do not read Ilargil. Life seems good. But after reading Ilargi, Peacenik wonders how much longer life will seem so good.

12/2/08

Debt Rattle, December 2 2008: I'm sorry it's happening

Ilargi: The one and only institution whose official job it is to gauge US recessions and depressions, the NBER , National Bureau of Economic Research, reported yesterday that the US has been in a recession since December 2007. And yes, I do wonder why it took them a year to reach that conclusion, but many other things are more important. For one thing, this report speaks volumes, once more, about the extent to which the US government, which still denied a recession existed as late as last month, cooks its numbers, but it says something else as well. This will be the longest recession in more than 40 years. You're not going to find a single sound soul to predict it will be over by March or April. But many will still maintain that it's just another recession, and we've been through many of those and came out stronger and all that blubber talk. This one will be counted in years, not months.

So let's see, what advantages have the federal lies, cooked books and hedonistic statistics had for the country and the citizens so far? Exactly, none. And I would venture that the NBER knew this well before the election. Its co-director is Christina Romer, who now features prominently on Obama's finance team. Think she didn't tell him back in October? If she did, why was he silent during the campaign? And if he was, what are the chances he'll start being honest now? He's losing me more every day, I for one do remember Hillary's war-mongering rhetoric, and no, she does not belong where she is right now. The world we're entering will be far too volatile for someone so obviously suffering from a severe case of estrogen imbalance.

Read on...

Peacenik read Ilargi and asked Peacenik: Do you want Harper in power in this environment, or the coalition? Neither is a good option. But Peacenik thinks the coalition will care more about the unemployed and homeless and hungry than a Harper government. Yes it would be nice to let Harper totally screw up and reap the voter's anger. But this situation is just too dire. Events, political and economic, are out of control. Peacenik says "hold on."

11/20/08

Debt Rattle, November 19 2008: Full Metal Coffin

Ilargi: Hmmmm. It’s starting to look like we're about to see a harbinger moment of sorts, isn't it? I see no indication that the Motown Big Three will get what they want. Flying in on private jets may well be the last nail in the full metal coffin.

A free hand-out now seems to be entirely off the table, and that would leave only the option of a loan. But what could the Three put up as collateral for that loan? For every million dollars a factory might be worth, and that is a big if once the stones start a-falling and a-rolling, there are many millions more in obligations.

Read on...

Peacenik has never seen so much bad financial news as there is today, November 20. Yesterday the DOW closed below 8000 and now there is talk about it going to 6400. GMAC wants to reclassify itself as a bank so it can get financial aid. The North American auto industry is on the verge of disappearing. Banks and Insurance companies are bankrupt but hiding the information from he public. Consumer confidence is at record lows. The people trying to solve the problem....Bernake, Paulson, Harper etc. are flopping around like fish on a dock. There is no plan. There is no leadership. Peacenik thinks Peacenik needs some escapist entertainment.