How are you invested ??

Just because it’s a bull for three months doesn’t mean it’s not an irrational bull.

A bear only needs to be right once a decade to make money. 2000 and 2008 make us two for last eight. If we can batt .300 by getting 2009 in the win column, to paraphrase David Winfield; baseball, and being a bear, is the only job where you can fail 7 out of 10 times and still make million

What perma bull made money from 1998 to 2008 with a buy and hold strategy ?? NONE.

Bears don’t make 50% in six months like the S&P, but they don’t lose 40% in that time either. Any math with tell you that losing 40% (S&P actually lost 57%) leave a million dollars down to $600,000 so followed by a gain of 50% (S&P currently up 55% from low), leaves you at $900,000 down $100,000.

Not so for a realistic and hedged bear over the last 12-16 months.  For the prudent bear the returns are much better, say  down 10% then up 20% (rather -40% than +50%). This takes the million down to $900,000 then back up to $108,000. Sure you only made $8,000 (8%) but that crushes the loss perma-bulls endured.

Look at any long term S&P charts and the evidence is clear.

Bulls should acknowledge and apologize for the last, going on eleven, years of BEAR market fact. The same people who were shouting bull were shooting bull. And they still are.

Politics Payoff – The Hierarchy of America

1. Military Contractors- Ten of Trillions     

2. Wall St. – Trillions     

3a. Automakers – Tens of Billions     

3b. Red Necks with old Chevys – 3 Billion     

4a. Insurance Cos – Hundreds of Billions    pending

4b. Pharma –  Hundreds of Billions   pending

4c.  Doctors – Tens of Billions    pending

4d. Patients – a better feeling   pending

I must be missing some but you get the gist.

Arizona Loves Them Some Banks

Not content to take just your house, Arizona is now letting banks go after former homeowners for money, even after the foreclosure is sold to a third party.

The way it used to be in Arizona: buy house for $80,000 grand, borrow $100,000, default and you lose the house.

The way it now is in Arizona: Buy house for $80,000 grand, borrow $100,000, default, bank takes house, sells house to real estate vulture for $40,000, bank can now chase former homeowner for $60,000, for the rest of their lives.

And we all know the banks and the vultures are probably the same people.

Old Test:  ”If you lend money to any of My people who are poor among you, you shall not be like a moneylender to him; you shall not charge him interest.”

New New Test:  ”If you lend money to people who are poor, make sure the law and the fed are on your side.”

A Good Time for Stereotypes

Catagory: “It’s funny because it’s true”

Now might be a good time for some Jewish cheapness. It might help Goldman’s image if they got a little cheap in the way they compensate their employees. Of course their only mission seems to be profits and pay so it’s not likely.

The recent arrests in NJ may be bad for the orthodox community’s image, but to have Goldman as the poster child for Wall Street excess while Main St. suffers hurts all Jews.

Can One Man Stop Goldman?

Matt Taibbi with the help of Rolling Stone:

On giving-Goldman a Chance

The Billy Mays of Wall Street

In honor of Bill Mays, the first “Billy Mays, Salesman of the Year”

2008 – Jim Cramer

Billy Mays never sold a product with a $700 billion commission, plus trailers.

Begs the question, is it a good thing that Wall St is based on PT Barnum’s motto on the minute?

Highly Illogical

A)  American’s don’t want a public healthcare plan.

B)  A public health care plan will force out private insurers.

So we don’t want a public option but if it’s offered we’ll all select it??

A)  American’s want their big SUV’s and not fuel-efficient econoboxes.

B)  GM went out of business because it was making cars American’s didn’t want.

So American’s want big SUV’s that GM made but won’t anymore.

A)  Bank of America is Too Big to Fail

B) Bank of America is forced to buy the biggest mortgage lender, Countrywide, and the biggest retail broker, Merrill Lynch.

So stress tests now prove that new bigger Bank of America will no longer fail nor need to be disassembled.

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”  (guess the speaker)

Truth can be Violent, Vulgar and makes good Video

There is never vulgarity in a whole truth, however commonplace. It may be unimportant or painful. It cannot be vulgar. Vulgarity is only in concealment of truth, or in affectation.
John Ruskin

WARNING: While full of truth and sorta funny, the following video does have some offensive language.   Please avoid if you don’t want to here some bad words or the truth about our “Green Shoots”

Ok, a lot of bad words  ;-)

Unions – The New Victims of Bigotry

The question by NY Times reporter Andrew Ross Sorkin at the end of this clip says it all: “”Name a Successful Unionized Company!”

I guess they all forget UPS, GE, all six major movie studios, AT&T, and many many others.   Like most in my generation, his job depends on his being uninformed, or appearing as such, about his area of expertise.

So much for the Times being a Liberal Rag

Here’s the email I sent to the Public Editor of the NY Times, Clark Hoyt:

Dear Mr. Hoyt,

One of your BUSINESS reporters, Andrew Ross Sorkin, while appearing on MSNBC as a New York Times representative, stated that he could not name one successful corporation with unionized employees.

Can your newspaper really be successful if it has reporters who lack such basic knowledge about their area of expertise?  His statement is so egregiously incorrect, I was surprised the unionized employees at the immensely successful General Electric, who were filming his segment on “Morning Joe”, didn’t just turn off the camera’s and lights.

I have yet to hear a correction from either Mr. Sorkin or the New York Times.

Hopefully the correction will be as prominent as Mr Sorkin’s asinine comment.

Sincerely,

Thomas Bergman
tbapple@yahoo.com

The Paradox of Deflation with Inflation

One of the primary economic arguments today is whether we will have deflation caused by the bad economy or inflation caused by the response to the bad economy.

I believe we will see deflation in many assets but inflation in staples like food and water.

It’s my opinion that we will continue to see a huge inflation in Cash prices but offsetting deflation in Credit prices. Think of the CPI as averaging the two product baskets, hence the disinformation of current low inflation being reported.

For example, bread is typically purchased with cash while TV’s are typically purchased with Credit.

We all know the distortions of the current CPI dating back to the Clinton years. To really understand the problem just simplify the basket to two goods; one a necessity and one a luxury.

2006 – Bread – $1 per loaf, 30″ Flat Screen TV – $1000
2009 – Bread – $2 per loaf, 30″ Flat Screen TV – $500

In 2006, $3000 would buy 1000 loaves of Bread and two 30″ Flat Screens

In 2009, $3000 would buy 1000 loaves of Bread and two 30″ Flat Screens

Hence no inflation, as long as you can eat a Flat Screen TV.

If you would like to learn more just Wiki “Gresham’s Law”