It seems like the smart money is taking their chips off of the table, heading over to the cashier and going back up to their room to watch CNN. Here's a piece in the Financial Times today, which went on to note that 4 of 5 CEOs expect business conditions to deteriorate next year.
Looks like the leaders are seeing the storm clouds and are getting ready. Even though the masses are still out driving their leased convertibles with the top down. That's a lot of metaphors, but you get the point... Get to the basement, quick.
Investors' liquid dreams will not stave off crisis
Companies, pension funds, banks and private equity investors are certainly flush with cash. But it is unclear why they should keep lending it at cut-price rates or spending it on ever more expensive assets.
Every period of financial distress, from the Dutch tulip mania in 1637 to the Asian crisis 360 years later, has been marked by the kind of financial speculation and expansion in credit we are witnessing now.
Admittedly, the shock even that triggered previous liquidity crunches - lean harvests, wars, corporate scandals - has yet to materialise.
But the recent history of hurricanes, killer diseases and terrorism shows that there is no shortage of candidates. Investors should bear in mind that liquidity is a fickle friend and will disappear faster than they can say "bear market".
August 21, 2006
It's not just bubblesitters paying off any debt and going into cash. Investors and corporations are doing it too.
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A recent study concluded that recessions are generally preceeded by a new house sales decline exceeding 20%.
Whether or not a general houseing 'crash' is now inevitable, is still subject to question, especially as to degree, but it seems clear that a decline in new house construction sale prices is almost a certainty.
It is now clear to me that there are three types of Republicans. “Type A” Republicans are upper-middle class and rich people who are tired of paying the overwhelming share of taxes and watching as their tax dollars (along with a fiscally irresponsible level of debt) go for subsidizing the growing welfare state. These Republicans are for hard work and flat taxes. The present wave of immigrants scares them because it threatens to explodes the welfare burden and drain social services like police and jails. Their vision for America is one of social Darwinism where only the fittest survive. These Republicans have money, brains and an education but lack compassion. Their model president is Herbert Hoover, although they say it is Ronald Regan.
“Type B” Republicans are middle class and lower-middle class heartlanders who oppose things such as sex and violence in the media, abortion, step cell research, euthanasia and secularism. These Republicans fear immigrants because they are a different religion, a different color and speak a different language. Their vision for America is a Taliban style Christian state where bible is taught in the classroom as if it were science. These Republicans have compassion but lack wisdom. Their model president is Pat Robertson, although they say it is Ronald Regan.
“Type C” Republicans subscribe to the pro-business lobby. Although their numbers are few, they have managed to become the most influential group of Republicans because they tell the other two groups above what they want to hear. These Republicans are for cheap labor, corporate deregulation, pork barrel tax cuts and other subsidies. These Republicans love illegal immigrants because they are a never ending source of cheap labor and they can easily be exploited. However, because they rely on the support of the above groups, what they say and what they do are inconsistent. These Republicans love oil and war (because it is good for business) and low interest rates. Their vision for America is a country where the people cannot bring lawsuits to enforce their rights, environmental regulations are removed, and anticompetitive behavior is overlooked. Their model president is Kenneth Lay, although they say it is Ronald Regan.
For all of you “Type A” Republicans out there, it is time to wake up and see that your are being fooled out of your vote by the Type C’s. Oh why did you elect George W. Bush? Don’t you see all of the trouble he has caused? You vote for a candidate based on his rhetoric but you must follow the money for he who pays the piper calls the tune. All politicians are bought; you must look into who owns your candidate before you vote for him. Here is a slogan that should help you out in the next election: “When you vote for a candidate you are also voting for everyone he is in bed with.”
God bless America! No new taxes! Thinker for President!
Strange. I oppose all the sex and violence in the mainstream entertainment venues, but I am not a Christian nor do I support a Taliban style state. You don't have to be Christian or Muslim to want a decent society.
I am not rich, nor do I fear non-whites. I am a non-white immigrant myself who came here legally and worked my way up the ladder. I oppose illegal immigration and welfare.
I support capitalism as long as it is fair. Deregulation of the banking system along with the FDIC is not fair.
I cannot vote for the Democrats because they support race quotas, welfare, criminal rights and a mish-mash of other loony ideas that goes against hard work and decency. Not all Democrats are that way, but the far-left loonies are in charge of the Democrats and the business lobby is in charge of the Republicans.
The "Welfare" state isn't "just" for the poor, but for the Corporations and rich. The real fact is, the "Welfare state" for the poor hasn't grown nearly as much as the "Welfare State" for the rich, but you don't have that printed in media, but it is true. The Republicans spout Free Market lines, but are actually a oligarchy of the rich, much as the FED is.
Actually, if you want "true" Far Left wacko's, they would destroy the Welfare state, the Federal Reserve and the financial systems in its fullness. What we call "left" and what actually has been historically been called "left" are two different things now that have gotten confused.
Thinker, that is a perfect synopsis. I've never seen it laid out better. Bravo.
The only thing I would add is to Group C, who also see the need for more immigrants because if our businesses can't export stuff anymore, the easiest solution is to just bring more potential consumers into this country who will buy stuff here at home. Can't export? Just import some buyers instead.
Thinker,
I like your breakdown. It is fairly accurate imo. Read John Dean's "Conservatives Without Conscience", it will open your eyes to what is the dynamics withing the ranks of republicans.
Dean actually breaks it down by the attraction to authoritarianism. Your type 'A's are Social Dominants and can verge on sociopaths. Your type 'B's are right Wing Authoritarians. They will believe anything the type A or type c tell them. It is funny you chose those three people as there model. Dean describes them as Social Dominants which basically means they are nuts, and without consciences.
NeoCons Are Busy Covering Their Asse(t)s
EXERPT
By Shelter from the Storm
08/21/06 "SFTS" -- -- Israeli press reports about the Israeli Defense Force's Chief of Staff dumping stocks just before war broke out served as a reminder that the very leaders who demand that citizens trust them to do what is best for the country are often busy covering their asse(t)s in case their policies don't work out so well. In the case of Dan Halutz, the man in charge of Israel's war against Hezbollah and Lebanon, the Israeli general was so confident in his own war plans that he felt it prudent to dump his entire portfolio of stocks as his colleagues were meeting to give the go ahead for war.
There's a long tradition of tyrants and despots who stashed money and bought villas outside the borders of the country they were terrorizing. Ferdinand and Imelda Marcos, who looted and strong-armed the Philippines for decades, had their Hawaii getaway. Idi Amin, the butcher of Uganda, was never tried and imprisoned for his crimes against his people, but instead spent 20 years living luxuriously in Saudi Arabia. Jean-Claude ("Baby Doc") Duvalier hasn't gone to prison yet either, though his wealthy playboy lifestyle in French Cote d'Azur seems to have been ended by a rancorous and expensive divorce.
But the United States is no banana republic. Surely its leaders, especially those who send other Americans off to war, would never contemplate profiting personally from their decisions or evading responsiblity for their mistakes. Well, think again. America's neocon leaders have been busy covering their asse(t)s in case their policies of endless war and raping the American economy produce too much blowback.
Learn who's doing what after the break.
NeoCon Continental
For all the contempt that the NeoCons shower upon "Old Europe," they sure seem to find it a good place to invest and even live. Vice-President Cheney likes to tout how great the American economy is, but he and his wife Lynne don't have much confidence in the dollar. Kiplinger Reports took a close look at the Cheney's financial disclosure report recently, and found that the Second Couple is betting against the U. S. economy. The biggest chunk of their estimated $96 million in change is bet on a fund that specializes in predominately European bonds and had only 6% of its assets in dollar-based investments when Kiplinger took a look. (Warren Buffett , no NeoCon, but known for his financial acumen, is doing the same.)
How nice for them. If the Vice-President's relentless push for a new war against Iran succeeds, and oil prices skyrocket to two or three times the previous record, with a resulting collapse of the dollar, it won't be the Cheneys who suffer.
NeoCon Al Dente
Joining Cheney in his push for yet another war is charter NeoConner Michael Ledeen. He's co-founder of the "Coalition for Democracy in Iran" that lobbies for regime change in Tehran, and he has joined fellow NeoCon Bill Kristol in criticizing the Bush Administration recently for not attacking Iran and Syria.
Ledeen is a real man of the world. He's reputed to have served often as a liaison between the Israelis and the U. S., but his first love seems to be Italy. He's been fascinated by Italian fascism, and reports connect him with neo-fascist movements in Italy like P2, though he denies it. He lived in Italy as a reporter for The New Republic in the 70s, and has continued to go there for extended stays ever since, most recently to research a book he's writing about Naples. Many have suggested that he was the American connection in the Niger uranium disinformation campaign because of his relationship with Italian intelligence, the original source of the forged documents.
Ledeen, considered to be the most radical of the NeoCons, is most notorious for his advocacy of "creative destruction" of which Iraq serves as a "shining" example. What if that "creative destruction" spreads out of control to the United States? Don't worry yourself about Ledeen. He speaks fluent Italian and has a villa in the hills near Rome .
NeoCon KosherStyle
He was called the Deputy Secretary of Defense for Fiascos when he was at the Pentagon because of the way everything he touched turned to--well, you know. He's been involved in everything from the infamous Office of Special Plans to Abu Ghraib to the Franklin spy scandal. Tommy Franks called him, "the fucking stupidest guy on the face of the earth."
Things may not work out so well for the public interest when Feith is in charge, but he's not so dumb when it comes to taking care of himself and his friends. After leaving the employ of the Defense Department where he had worked under Richard Perle during the Reagan administration, Feith formed a law partnership with Marc Zell with a focus on representing companies in the military-industrial complex who wanted to do more business with Washington. Feith & Zell weren't content with limiting their practice to the U. S. They merged with an Israeli firm to form FANDZ, an enterprise that touted its access to Defense Department officials after Bush II appointed Feith as third in command at the Pentagon. Shortly thereafter, FANDZ hooked up with Salem Chalabi, son of long-time Feith friend, Ahmed Chalabi.
If justice ever came visiting in Washington, Feith might have reason to worry because of pal Chalabi's double-agenting, subordinate Larry Franklin's spying or Feith's own intelligence cooking in the runup to Iraq, but in the unlikely event that there's ever the threat of an indictment, Feith has it covered. He took good care of his friends at his old law firm FANDZ, and they are able to offer him lots of options when it comes to locations outside the U. S.:
Since 9/11, Zell, Goldberg has become a leader in the newly emerging field of international security and anti-terrorism law, in conjunction with its Washington, D.C. office, and through its affiliate company FIST (Federal Israel Security Technologies LLC).
Through its Moscow office and its Israel-based Russia-CIS practice group, the firm has gained extensive experience in what is becoming one of the world’s most promising regional markets.
Zell, Goldberg maintains a comprehensive network of correspondent relationships with quality business and tax law firms throughout the world with special emphasis on Europe (Germany, France, the United Kingdom, Eastern Europe and the CIS) and the Far East (China, Japan and South Korea).
NeoCon à la Mode
The NeoCon's "Prince of Darkness " is Richard Perle. He's been a key member of both the Committee on the Present Danger and the Project for a New American Century. As chariman of the Defense Policy Board, he was one of the most influential backers of the Iraq war.
Perle has no fear when it comes to attacking opponents of the policies he advocates. When the French were skeptical about the need for an immediate assault on Saddam in 2003, Perle was furious at one of America's oldest allies:
France is no longer an ally of the United States and the NATO alliance "must develop a strategy to contain our erstwhile ally or we will not be talking about a NATO alliance" the head of the Pentagon's top advisory board said in Washington Tuesday.
What a way to talk about your neighbors! It turns out that not only peaceniks like Alec Baldwin and George Clooney seek refuge in France, but also NeoCons like Richard Perle who feel it's prudent to cover their asse(t)s by buying a villa in Provence .
What's Cookin'?
When you see the president of the bank headed out the door with one hand holding a satchel full of cash and the other his family pictures, it might be time to make a withdrawal yourself. If you hear your town's mayor has put his house up for sale, it may be time to unload your place as well.
The NeoCons claim their policies of endless war and huge deficits are going to preserve the "American way of life," but their personal actions must make anyone wonder whether they believe what they're telling the American people. If their policies sink the U. S., don't expect them to go down with the ship. They'll be enjoying the safety and stability of Europe where they're now stashing money and buying houses.
...
meanwhile, this thread was to be about bubblesitters and others sitting on cash
threadjacking sucks!
Since when has this blog been about bubbles and housing?
This blog is about resolving global conflict and avoiding national catastrophe.
The bubble is just the symptom, we are talking about the disease.
As long as we're threadjacking here, if there were to be any constitutional amendment I would support, it would be one that mandated the President be from the minority party in congress. This country seems to operate alot better with a divided government. Have the primaries open for both parties and no presidential election. If Republicans win control of congress in the general quadrennial general election, the presidency goes to the winner of the Democratic primary. If the Dems win congress, the presidnecy goes to the winner of the Republican primary. Save us all alot of pointless wasted campaign money, too.
It might not be such a bad idea to stand aside. Yield curve inversion does not fortell a happy economy. I am debt free, and I have some some money stuffed in the mattress.
The US government has redistributed the nations wealth, and when there was no more to redistribute, started to borrow money and make it possible for people to consume by borrowing against their houses. As interest rates rise, I see the default situation becoming much worse. There isn't a happy ending for this one, folks.
If there was an alternative to the Republicans, then I would gladly vote for that group. Sadly the Democrats are crazed Socialists with no workable or rational ideas. Many of them still cling to Marxist ideas in the belief that Communism has never really been tried before. I suggest they move to an island and try it on themselves before subjecting the rest of us to their nutty authoritarian pipe dreams.
The truth is starting to come out mainstream... http://www.realestatejournal.com/buysell/markettrends/20060808-whitehouse.html
Democrats don't cling to Marxism you idiot. Democrats have LONG been a populist party of progressive capitalism. Either get that, or get out of the country jackass. Considering the Democrats have made a bunch of money, they would be denounced by Marxists as slaves of the money system.
While I can say they cling to what is called "cultural marxism", that axiom is nothing more than a corn on the foot. It can be chopped off.
Not only are their alternatives to the Republican party, there is a thing known as Eugenics. Something that if used, would have made your existance, impossible.
You left-wing morons borrow every term from the Communists, just like "progressive" and you claim that you are not Communists. Try Eugenics on your own inbred family to make this a better world.
That last exchange is an example of what I consider messed up in this county's politics.. Everyone assuming the person of the opposite politicial persuasion having it in for them and the country, if nothing else by being moronically misguided.. Jeez folks.. GET A FRICKIN CLUE!!
I have not talked to anyone of either side of the asile that is delusional or truely wants to wipe out this country. You are deluding yourself to think that a few wingnuts out to the extreme edges represent the whole of that side. This is why they call them "wedge issues", they divide people and make them act in a knee-jerk reactionary manner.
Dems need to realize that, despite the right wing talk show blather, most Republican's are cautious "character" conservatives that want stability, self-determination, balanced/moderate sized budgets where they get what they pay for with their tax dollars and a pragmatic/minimalistic/realistic government. They aren't, for the most part, social conservative radicals that want to change the country into a theocracy or irresponsibly cut taxes while ballooning the deficit (they want to cut taxes, because they believe they are too high and that with more cash on hand politician's tend to spend like drunken frat boys, not balance the budget). Those are just the vocal few who think they are in charge and have "been given a mandate".
Republican's, on the other hand, need to realize that, unlike what they've been fed in the talk shows, Dems are NOT communists, NOT ACTUALLY fiscal spendthrifts, or REALLY irresponsibly soft on defending this country. Most of them just would like a little thought used to see if there are more "carrot" alternatives, so we don't end up inadvertently creating more enemies, before we resort to an eye for an eye "stick" tactics. On the fiscal side of things Republicans also need to realize that most Dems are in favor of a balanced budgets and less taxes. Criminy, who wouldn't be? But one of their central tenents is also FDR/New Deal progressivism, which as I understand it is simply a nuturing view towards the nation's economy and welfare as a whole; a belief that we as a nation have chosen to have a certain minimal standards of economy and lifestyle and that, moderate, governmental and private actions can help ensure those standards (roads, schools, etc.). At the very least the Repubs need to realize a central wisdom of the Dem's view, if you don't take care of the poor neighborhoods and make sure people have hope, the poor neighborhoods come visit you.
--Andrew
Everyone now going into cash? I thought many here thought cash was fiat money and that gold and silver were where they should be?
I thought people here thought there was too much cash out there inflating the cost of everything? Now we are to believe we should sit on cash?
"Now we are to believe we should sit on cash?"
It'll take a worldwide sell off, on the USD, to turn it into toilet paper. For now, all the world's central banks are in concurrence to keep the game going. And in order to keep it going, housing's got to come down and Bernanke will choose the dollar over the home.
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