Five Things You Need to Know: Conspiracy of Fools
Kevin Depew's Five Things You Need to Know to stay ahead of the pack on Wall Street:
1. Conspiracy of Fools
From a New York Times analysis of the components of the proposed economic stimulus package:
"Saving, or paying off debt, might make sense for individual households, but what the economy needs most is for people to spend money, helping stores to sell more, factories to produce more and employers to avoid cutting additional jobs."
Sorry, but this is completely incorrect. By this logic, all we would really need to do to "fix the economy" is burn down a million houses a month, destroy our cars and throw away our clothes after wearing them (sorry dry cleaning industry!).
No wonder so many people believe in conspiracy theories. When these types of demonstrably false assertions are repeated over and over again it could lead one to believe there really is a coordinated effort between Washington politicians, the Federal Reserve and mainstream news organizations to make people dumber, presumably so they can take their money.
The reality is that printing money, which is precisely what is going to take place under this $888 billion "economic stimulus" package, cannot create real savings or wealth, it can only redistribute it.
2. Oops!
According to Time Magazine (via Barry Ritholtz), since October, the government has deposited $165 billion into the accounts of the nation's eight largest banks, which are now worth $418 billion less than they were four months ago. Also, the Congressional Budget Office estimates that the government's preferred shares are showing a $20 billion loss, the magazine reports.
"All told, the government's annualized rate of return on its investment in the nation's largest banks is -1,096%."
I was immediately reminded of this: The Paulson Plan Will Make Money For Taxpayers.
"My analysis suggests that Treasury Secretary Henry Paulson (a former investment banker, no less, not a trader) may pull off the mother of all trades, which could net a trillion dollars and maybe as much as $2.2 trillion -- yes, with a "t" -- for the United States Treasury," former hedge fund manager Andy Kessler wrote in the Wall Street Journal in September.
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Three options of what to do with your $500.
1) You buy some foreign-made good, online from a discount retailer. Out of that $500, maybe 10-15% goes back to the retailer, 3% goes to FedEx, 15-20% goes to the US arm of the foreign corporation or the distributor of the product, and the rest goes to the foreign corporation and the factory where it was built. So you're looking at 28-38% of that original $500 going back into American's pockets, and the rest goes overseas.
2) You pay off your Capital One card. This puts you in a spot where you might spend money later, it reduces your debt load, and most importantly recapitalizes Capital One, who takes your money and lends it to someone else.
3) You stash it in your savings account at your local bank/credit union. Again, this is recapitalizing the banking system, which now has additional capital to lend out to others for mortgages, car loans, or hell, pay back the loans they got from the US Gov't (hey, I can dream, can't I?)...
Looking at it that way, how can the economists keep claiming that it's EVIL to save money?? You're recapitalizing the financial system, paying down debt, or possibly investing in today's beaten-down stocks/bonds.
The obvious exception is the govt - they can't keep secrets either but they do make the rules, so it is all legal and even mandatory.
Then too, they promise the loot to people who vote for them -- and if things go wrong just blame it on the other party, greedy businessmen, or the legacy mess.
Perhaps this should be called the Circle of Fools.
I'll bet-ya-a-buck that most of the current insider scum are going to make out like bandits. THEY'LL be the ones with the (additional) nice summer homes in Tuscany in 5 years. The rest of the rubes are - well - the typical rubes that complain about "how thing SHOULD work".
Edward R. Murrow is long dead, the media is a large part of the problem and not the solution.
I mean, that fat pompous POS algore still has the bully pulpit, pushing man-made global warming, when its clear to anyone with a second grade education its all BS.
We as a society, in the aggragate, have chosen, CHOSEN ignorance. We can educate ourselves on any topic instantaneously, with a myriad of viewpoints and frames of reference. Here at Minyanville and thousands of other sites.
But we choose ignorance. We can spew sports trivia, who the new frontrunner is for this years Idol, who Britney is humping; oh my look, Jessica has put on the pounds.
We choose to have our towns to be the same, with McD, BK, Taco Bell, et all. This is us- we are rubes, and we are getting exactly what we deserve, because we have chosen ignorance.
Are we being played for punks by the sharpies? Of course, and I despise what is happening, but if we just rose up, each of us, and chose to educate ourselves, we have the power to change things literally overnight. Imagine if everyone gave a dam, and used the power of the internet to contact their representatives, the media, companies directly and told them "NO MORE', we're awake and we're watching.
But of course that won't happen until much more pain; besides, its Super Bowl week!!!
Typical clueless peasants… They hear their "trickle down" leader say they're going to get "trickled on" and then fantasized the MOST optimist results. Well, there's other stuff that goes downhill beside "trickle".
And Americans wonder why their country is in the shape it's in.
it is the sheep following the sheep but the new sheep think they know where the greener grass is
Index futures.......baahhh
i promise $3,000 to every man, woman and child physically within the border of this nation!
and *voila* i just *saved* everyone about 500 billion dollars <by government accounting.... 700 tarp + 870bill bailout vs my 1 trillion dollar plan>
i wonder if any economic models out there, even if essentially toys, might be able to extrapolate possible outcomes from such a move?
say, 3000 lump-sum vs 300/month for 10 months?
---
could it *really* be any worse???
<caveat: i'm giving the guy a chance but i'm not sure he has any real options anyway...>
It is this simple John; either you have business investment or your economy stagnates and eventually dies. Most of us who understand this, of course, save our money, don't invest with fast talking strangers, and avoid excessive debt. The philosophy of the rest of the population is obviously different.
Not too many peasants "appreciate" the contributions their taxes make to the scum at the top with taxpayer funded programs benefiting politically connected corporate scum via their lobbyists. Socialize the risk, privatize the gains. Scammin' the peasants is the name of game.
And Cash4gold is getting cheap gold with the physical so tight.
Many of those at the bottom have taken their economy underground, much like those at the top, but for different reasons. (Greed vs. survival)
1) People are desperate.
2) Gold is a hot commodity., in demand by
3) These guys can scam the 1's and sell at high prices to the 2's.
Now this would imply that excessive buying IS in fact a disease and that said excessive level is set very low.
I agree with that but Kevin seems not to, right from the start of thing #3
PS: wasn't it "A Conspiracy of Duncees"? Landmark of American Literature...
Excellent. This is precisely what I was talking about: BS needs to be called on the mainstream media and government whenever they spout such self-serving idiocy. As some of the previous posters mentioned, most have been dumbed down sufficiently to accept that the teevee as gospel. We need more qualified experts to use their "pulpit" to tell the truth, as unprofitable as it might be.
