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The world' global positioning system (GPS) is in trouble. The US government accountability office (GAO) has published a worrysome report on the situation. The GPS satellites are wearing down and, if no new investments are made, the accuracy of the positioning system will be reduced. Eventually, the whole system may cease functioning. What's happening here? The GPS system is a pinnacle of modern technology, a demonstration that the thing we call "progress" exists. If you have a car navigator, the idea of going back to clumsy printed maps just seems impossible. And that is just one of the many uses of the GPS system. How come that we left such an important system degrade? How can it be that someone forgot that satellites need to be replaced after a while? The degradation of the GPS system may be attributed to mistakes, incompetence, bureaucracy or even conspiracies. But the problem may lie at a much deeper level. It may be a symptom of the degradation of the whole economy. But why is this happening? People mention evil banking practices, speculation, subprimes, terrorism, and what you have. But, with so many things going on at the same time, what is really the origin of the problems and what is just a consequence of other factors? To find an answer, you need to understand how the world's economic system works. One of the first attempts to do that in a comprehensive way was the 1972 report to the Club of Rome known as "The Limits to Growth" (LTG).
An investigation by the inspector general of the Securities and Exchange Commission into how the SEC missed Bernie Madoff’s $65 billion ponzi scheme has reached deep into the agency, a new report shows.
Kotz wrote that after the Madoff scheme became public in December, his office received an anonymous tip on its hotline alleging that “since 2004, a large bank has been involved in a Ponzi scheme through its broker-dealer.” The caller complained that a “senior official” at an SEC regional office had instructed his staff to look into the matter only after the disclosure of the Madoff scandal
The Federal Reserve appears to be increasingly nervous about the long term bond market. This is serious. How panicked are they? After leaking a story on Friday, they are back at it on Sunday. The Federal Reserve leaked to CNBC's Steve Liesman on Friday that they weren't targeting long rates. Why such a leak? Probably because the Fed did not want to appear impotent in controlling the long rate. So they put out the word through Liesman that they weren't targetting the long rate. Can you imagine what would happen to the markets if it sensed long rates were beyond the control of the Fed?
The nine biggest participants in the derivatives market — including JPMorgan Chase, Goldman Sachs, Citigroup and Bank of America — created a lobbying organization, the CDS Dealers Consortium, on Nov. 13, a month after five of its members accepted federal bailout money. To oversee the consortium’s push, lobbying records show, the banks hired a longtime Washington power broker who previously helped fend off derivatives regulation: Edward J. Rosen, a partner at the law firm Cleary Gottlieb Steen & Hamilton. A confidential memo Mr. Rosen drafted and shared with the Treasury Department and leaders on Capitol Hill has, politicians and market participants say, played a pivotal role in shaping the debate over derivatives regulation. Today, just as the bankers anticipated, a battle over derivatives has been joined, in what promises to be a replay of a confrontation in Washington that Wall Street won a decade ago. Since then, derivatives trading has become one of the most profitable businesses for the nation’s big banks.
“The banks want to go back to business as usual — and then some. And they have a lot of audacity now that everyone has bailed them out,” said Yra Harris, an independent commodities trader who was involved in an effort to regulate derivatives nine years ago. “But we have to begin with the premise that Wall Street doesn’t want transparency, because more transparency means less immediate profits.”
We believe that while there is massive panic on the downside as the market tanks, there is equal panic to the upside. Those who miss the initial ramp up begin to panic that they are missing the major move. Then, as the move becomes even more substantial, underperformance angst begins to sit in. If you are a fund manager and you are underperforming the markets, you begin to panic. That same panic you felt when the market plunged 40% is now resurfacing as the market rips 30% higher right in your face. It then becomes very tempting to join the herd. Long time readers will know what we think about the herd mentality. You are either with the pack, or against the pack. Buy or die.
I smell a rat. Stevie the Rat, to be precise. Steven Rattner, Barack Obama's 'Car Czar' - the man who essentially ordered GM into bankruptcy this morning.
When a company goes bankrupt, everyone takes a hit: fair or not, workers lose some contract wages, stockholders get wiped out and creditors get fragments of what's left. That's the law. What workers don't lose are their pensions (including old-age health funds) already taken from their wages and held in their name. But not this time. Stevie the Rat has a different plan for GM: grab the pension funds to pay off Morgan and Citi.
Discussion of the 50% Retracement Rule,
potential future price levels, time studies, key dates, Fibonacci, Gann, Astro numbers, Robert Rhea's Great Depression analysis.
The American system of bankruptcy is quite efficient at handling the disappointment of parties to whom much is owed and little may be coming. The bankruptcy code sets up a hierarchy of the unpaid in which any sums of cash given to those highest on the ladder mean less money for those on the bottom rungs. Frequently, stockholders are simply wiped out, and the value they once held goes to creditors.
But not all bankruptcies are efficient, short, and sweet. When the proceedings are contentious, or if there's a lot of financial and industrial spaghetti to be untangled, the proceedings can go on for many months, even years, in which case the system grows somewhat less efficient. The creditors and debtors are joined by a third set of wily players—the suits, lawyers, accountants, and financing wizards required to fix, defend, wind down, and restructure a failed company.
How do you feel about the economy today? A little worse, maybe, than you did two weeks ago? But a lot better than you did in March? Things feel better to me too, but I can’t explain exactly why. It might be because for most of last fall, I walked around in an apocalyptic trance, and you can’t keep that up forever. I was bewildered by the breadth and intensity of the financial crisis. Among other odd behavior, I convinced myself that if I learned everything there is to know about things like credit-default swaps and “Pick a Pay” Option ARMS, I could defend myself against a dysfunctional future. ”
Then, suddenly, in late March, the clouds began to part. The stock market was up, spring was in the air, and I wasn’t overhearing quite as many of those anxious conversations in restaurants about the end times. Even my favorite doomsayers lightened up a bit. Roubini modified his most-dire predictions, calling the chances of a global depression slim. At a conference in Abu Dhabi, Krugman endorsed the new consensus that “the worst is behind us.” Though it’s been subjected to ample rebuttal, as well as ridicule, Federal Reserve chairman Benjamin Bernanke’s declaration in March that he detected “green shoots” of growth in the economy did help turn the tide of negativity. Now observers skim the good news off the surface of the bad: “smaller minus signs,” a “not-so-awful report,” jobless claims showing a “decelerating pace of decline,” corporate earnings “exceeding reduced expectations,” a real-estate market exhibiting “a lessening of adverse adjustment in value,” a world economy at “an inflection point.” The stock-market trough in March became enshrined as “the buying opportunity of a lifetime.” On CNBC, Larry Kudlow put it in terms his viewers could understand: “I’m just an outright bullish humanoid.”
If you have any info that would help, please contact me at my private email address: bailout@michaelmoore.com
