Must-read post at The Baseline Scenario.
See also at ZeroHedge:
Meanwhile, here’s an excellent set of charts on the stock and commodity markets (this is research, not investment advice; you invest at your own risk, unlike the Wall Street banks, who also invest at your risk):
The Looming Financial Holocaust - Is Closer Than We Thought ...
The Obomba market. The failure of appeasement.
Sign the petition from Rep. Alan Grayson!
Next year's budget allocates $159,000,000,000 to "contingency operations," to perpetuate the occupations of Afghanistan and Iraq. That’s enough money to eliminate federal income taxes for the first $35,000 of every American's income each year, and beyond that, leave over $15 billion that would cut the deficit.
So let's do that instead.
I support the 'War is Making You Poor' Act. This bill would eliminate the separate funding for the occupations of Iraq and Afghanistan, and eliminate federal income taxes for everyone's first $35,000 of income (or $70,000 for couples) each year. And it would help pay down our national debt.
I support it. No, actually, I love it. And I call on Congress to pass it.
The machine requires feeding? The torpedo that allegedly sank the South Korean ship was available for sale internationally:
Via: msnbc.com
Torpedo fragments found on the seabed "perfectly match" the schematics of a North Korean-made torpedo Pyongyang has tried to sell abroad, chief investigator Yoon Duk-yong said. A serial number on one piece is consistent with markings from a North Korean torpedo that Seoul obtained years earlier, he said.
"The evidence points overwhelmingly to the conclusion that the torpedo was fired by a North Korean submarine," he said. "There is no other plausible explanation."
Pak, the North Korean military official, dismissed it as faked evidence.
"If there were indications that the sinking was our doing, then the whole thing is an act — theatrics by the South Koreans to implicate us," he said.
Why should I believe the North Koreans did this, when the miserable war of my youth was started on a false pretext that looked just like this?
These last two graphics are linked from Barry Ritholtz’s Big Picture page at www.ritholtz.com. They fit so well into my continuing themes I had to grab them.
It’s funny how reluctant all the “outraged at the current situation” hedgies-who-blog are to talk about how low their marginal tax rates are, especially when you consider the “hedge fund exemption” that enables them to pay lower tax rates than their admins.
Ronnie sold the American people a bill of goods, that “you too can win the lottery,” and greed has reigned since Reagan. I hope we’re approaching “the end of the age” from that point of view.
1. Merkel to The Banks and Hedge Funds: Sprechen Sie Deutsche? Then Droppen Sie Dead - Jesse
Merkel says ban short sales and screw CDSs.
2. Should We Ban Naked CDSs?, by Brad DeLong
Brad says, “I say, narrowly, no--that if we can get proper clearing, transparency, and capital adequacy requirements in place banning naked CDOs would not do any good and would do a little bit of harm. But it is a close call….” [Could you mince a little bit more, Professor?]
Could the lameness of the American economics mainstream be any more transparent?
++++++++++++++++++++
3. Shadow inventory sales for years to come – 1.6 million distress sales in 2010, 1.6 million in 2011, and 1.5 million in 2012. By summer of 2011 REO pipeline will rise to 536,000. – mybudget360.com
Remember that a huge wave of exotic mortgage rate resets hits in second half 2010 and first half 2011 (reference). So even though the yield curve is not inverted and no “recession” is in sight over the next 12 months, growth can be expected to be very slow as the deflationary collapse gains momentum, the tipping point to come in about three years, by my best estimation, when there will be an epochal collapse of confidence in Western democratic systems.
Via: Business Insider Warning: this is research, not investment advice. You invest at your own risk.
Dow Theorist Richard Russell: Sell Everything, You Won't Recognize America By The End Of The Year
Joe Weisenthal | May. 18, 2010, 8:57 AM
WHOA!
Richard Russell, the famous writer of the Dow Theory Letters, has a chilling line in today's note:
Do your friends a favor. Tell them to "batten down the hatches" because there's a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country. They'll retort, "How the dickens does Russell know -- who told him?" Tell them the stock market told him.
That's pretty intense!
Update: By popular demand, here's more on what he sees in the market. The gist is that the markets recent gyrations are telling him that the economy is in trouble:
And I ask myself, "Am I seeing things? The April 26 high for the Dow
was 11205.03. The Dow is selling as write at 10557 down 648 points
from its April high. If business is even better than expected, then
why is the Dow down over 600 points? And why, if there were 674 new
highs on the NYSE on April 26, were there only 20 new highs on Friday,
May 14? And if my PTI was 6133 on April 26, why is it down 17 points
since its April high?The fact is that I've been seeing deterioration in the stock market
ever since early-April, and this in the face of improving business
news. The D-J Industrial Average is composed of 30 internationally
known top-quality blue-chip stocks. These are 30 of "America's biggest
companies." If Barron's is so bullish on the future of America's
biggest companies, then why isn't the Dow advancing to new highs?
Clearly something is wrong. But what could it be? Much as I love
Barron's, I trust the stock market more. If I read the stock market
correctly, it's telling me that there is a surprise ahead. And that
surprise will be a reversal to the downside for the economy, plus a
collection of other troubles ahead.About Dow Theory -- First, we saw the recent April highs in the
Averages. Then we saw a plunge in both Averages to their May 7 lows --
Industrials to 10380.43, Transports to 4298.12, next a short rally. If
ahead, the two Averages turn down and violate their May 7 lows, that
would be the clincher. Such action would signal the certain resumption
of the primary bear market.Just as for years I asked, cajoled, insisted, threatened, demanded,
that my subscribers buy gold, I am now insisting, demanding, begging
my subscribers to get OUT of stocks (including C and BYD, but not
including golds) and get into cash or gold (bullion if possible). If
the two Averages violate their May 7 lows, I see a major crash as the
outcome. Pul - leeze, get out of stocks now, and I don't give a damn
whether you have paper losses or paper profits!
