Monday, August 13, 2007

Random Thoughts

I wanted to touch on the central banks and their liquidity injections. Here we sit with markets that are, in general, down approximately 8-10%. Yet we have central bankers who feel the need to inject, make available, call it what you want 200 billion. Is this panic on their part, my gut tells me yes. I could envision them pulling these tricks with a market 25-40% down but only 10%. Maybe I am immune to he nuances ignorant to the alchemy of international high finance. The type that turned shit (toxic sub prime, Alt-A and prime crap) into shinola (AAA rated paper) and was sold to arrogant hubristic smart money dupes(hedge funds) here and abroad.

Goldman Sachs is pumping 3 billion margin call (remember what I said about meeting those) into their hedge fund. Bet the ranch they spin it as an investment that everything is okay, hey we're Goldman. How many announcements that everything is okay only a week later to hear about significant deterioration blah blah blah do you need to hear before you catch on ? Hellooo McFly !! This problem as I have repeated over and over is not going away. Just like the tech bubble before each slide down will pause, bounce and catch its breath. The pundits will pound the table, proclaim the bottom is and you should buy. This is the furthest thing from the truth, as the lows will break and another slide will ensue and the process will feed on itself, till the problem is completely cleansed from the system. I wish injecting 200 or 400 billion was the answer but it is not. It will only delay the inevitable even more painful outcome. Alan Greenspan WILL go down as the WORST CENTRAL BANKER IN HISTORY EVER, supplanting Mellon for the title. Where is Paul Volker, who wasn't perfect but he had some spine, when you need him.

I caught candidate Ron Paul on Larry Kudlow's show the other night and I have to say that Kudlow is an embarrassing piece of work. I sat there flabbergasted at Kudlow's question of whether Ron Paul was an optimist on America and the economy. Since when did it make you a pessimist to state the facts which the symptoms of which are unfolding before our very eyes. Why are painful choices for long term survival pessimistic and short term, band aid, disease accelerating quick fixes optimistic? Is Kudlow that ignorant? Is he that blind? I'll give him this, he will be correct when he says this is the greatest story never told. He just needs to quit using it on the economy and apply it to the credit, housing, CDO mess. That fraud laden, deceit driven. corruption saturated mess will surprise even the most cynical and pessimistic among us. Our grandchildren will be reading about this tragedy and laughing at how gullible and brainless we could be. No different than current generations ridiculing the Tulip Bulb mania or the South Sea bubble.

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