Monthly Archives: December 2008

Goldman Knows Nothing !!

Goldman Oil Forcast was $200 a barrel, now $45

Like a monkey throwing darts

thinkingmonkey

UPDATE: Mar 2, 2009 – With oil right around $45 Goldman’s analysts are statistically closer to flipping a coin than throwing darts.  The latter requiring skill.

Madoff

Madoff

This may be the biggest Ponzi scheme already, but the impact disclosed so far may be the tip of the iceberg.

It seems that outside of Mr. Madoff’s specific firm, a large number of other managers, much like remoras on sharks, attached both their client’s fortunes and their personal livelihood to this fraud.

Because of another aspect of so-called hedge funds that hasn’t been getting much media time, the fraud seems to be mushrooming. The practice is known as Fund of Funds, which is one hedge fund investing in another with each taking their asset based fee.  This deferring of actual investment decision making to another entity not only acts as a multiplier of commission fees but also absolves most supposed advisers of possessing any actual knowledge about investing.

I’ll lay out a simple example:

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Unemployment

High unemployment is not only bad for the newly unemployed. It also forces down salaries for those still working by increasing competition for jobs. Simple supply and demand.

So all those “demanders”, owners and consumers, will now get to pay less for the labor portion of the production equation.

It is important to remember that a large portion of the populace thought the economy leading to the Great Depression era was just great, the gap between rich and poor, like today was approaching a good monarchy. Excepting the anarchy that punctuated the end to their laissez-faire policies, we might have already completely regressed to a serf type employment arrangement. Continue reading