Posts Tagged ‘FDR’

Labor Day Insanity from Clinton’s Secretary of Labor

Mish disagrees with Robert Reich’s lessons of Labor Day… – Ilene

Labor Day Insanity from Clinton’s Secretary of Labor

Courtesy of Mish 

BY TONY ROBERT-HENRY. DR. PINEL LIVED FROM 1745-1826. INSANE ASYLUM OUTSIDE PARIS. DR.PHILIPPE PINEL AT SALPETRIERE, INSANE ASYLUM

It’s Labor Day. The markets are closed. Those working for government, banks, schools etc have the day off. All totaled, 17.3 million citizens do not have a job today nor a job they can return to on Tuesday. Another 8.9 million will not work as many hours as they would like, this week, next week, or the week after that.

How NOT to End the Great Recession

In a New York Times Op-Ed, Robert B. Reich, a secretary of labor in the Clinton administration, and professor of public policy at the University of California, Berkeley comes to all the wrong conclusions about where we are, how we got here, and what to do about it.  (Robert Reich’s "The Real Lesson of Labor Day" here.)

Please consider How to End the Great Recession

Reich: THIS promises to be the worst Labor Day in the memory of most Americans. Organized labor is down to about 7 percent of the private work force. Members of non-organized labor — most of the rest of us — are unemployed, underemployed or underwater.

Mish Comment: When organized labor is at 0%, both public and private, we will be on our way to prosperity. Organized labor in conjunction with piss poor management bankrupted GM and countless other manufacturing companies. Now, public unions, in cooperation with corrupt politicians have bankrupted countless cities and states.

Reich: The Labor Department reported on Friday that just 67,000 new private-sector jobs were created in August, while at least 125,000 are needed to keep up with the growth of the potential work force.

The national economy isn’t escaping the gravitational pull of the Great Recession. None of the standard booster rockets are working: near-zero short-term interest rates from the Fed, almost record-low borrowing costs in the bond market, a giant stimulus package and tax credits for small businesses that hire the long-term unemployed have all failed to do enough.

That’s because the real problem has to do with the structure of the economy, not the business cycle. No booster rocket can work unless consumers are able, at some point, to keep the economy moving on their own. But consumers no longer have the purchasing power to buy the goods


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The Case Against Homeownership

The Case Against Homeownership

By Barbara Kiviat, courtesy of TIME 

A home is shown for sale in the Haight Ashbury neighborhood in San Francisco, California, August 24, 2010. Sales of previously owned U.S. homes took a record plunge in July to their slowest pace in 15 years as the wind went out of the housing sector's sails and underlined a struggling economy. REUTERS/Robert Galbraith (UNITED STATES - Tags: BUSINESS)

Homeownership has let us down. For generations, Americans believed that owning a home was an axiomatic good. Our political leaders hammered home the point. Franklin Roosevelt held that a country of homeowners was "unconquerable." Homeownership could even, in the words of George H.W. Bush’s Secretary of Housing and Urban Development (HUD), Jack Kemp, "save babies, save children, save families and save America." A house with a front lawn and a picket fence wasn’t just a nice place to live or a risk-free investment; it was a way to transform a nation. No wonder leaders of all political stripes wanted to spend more than $100 billion a year on subsidies and tax breaks to encourage people to buy.

But the dark side of homeownership is now all too apparent: foreclosures and walkaways, neighborhoods plagued by abandoned properties and plummeting home values, a nation in which families have $6 trillion less in housing wealth than they did just three years ago. Indeed, easy lending stimulated by the cult of homeownership may have triggered the financial crisis and led directly to its biggest bailout, that of Fannie Mae and Freddie Mac. Housing remains a drag on the economy. Existing-home sales in July dropped 27% from the prior month, exacerbating fears of a double-dip. And all that is just the obvious tale of a housing bubble and what happened when it popped. The real story is deeper and darker still. 

For the better part of a century, politics, industry and culture aligned to create a fetish of the idea of buying a house. Homeownership has done plenty of good over the decades; it has provided stability to tens of millions of families and anchored a labor-intensive sector of the economy. Yet by idealizing the act of buying a home, we have ignored the downsides. In the bubble years, lending standards slipped dramatically, allowing many Americans to put far too much of their income into paying for their housing. And we ignored longer-term phenomena too. Homeownership contributed to the hollowing out of cities and kept renters out of the best neighborhoods. It fed America’s overuse of energy and oil. It made it more difficult for those who had lost a job to find another. Perhaps worst of all, it helped us become casually self-deceiving: by telling ourselves that homeownership was…
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How to compound systemic risk—the Obama plan

Discussion on systemic risk, too big too fail institutions, and regulator capture.  Courtesy of Benign Brodwicz (intro) and Simon Johnson at The Baseline Scenario - Ilene

How to compound systemic risk—the Obama plan

Courtesy of Benign Brodwicz at the Animal Spirits Page

The Obama plan is exactly backwards in its approach to systemic risk.  It will increase systemic risk.

As pointed out by one of the leaders of econophysics, Eugene Stanley (here), one of the prime results in the exploding field of network theory is that densely connected networks are chaotic and unstable compared to sparsely connected networks.

This only makes sense.  If every part of a network affects every other part of a network it becomes very easy for large perturbations to propagate through the network, and rebound, and so on. 

The Obama-Summers-Geithner solution to our problem of systemic risk is evidence of an intellectual obtuseness that is breathtaking.

The Fed created or permitted by neglect of its duties the systemic risk that caused this crash, and the Great Depression before it.  Mish got this right. 

The obvious solution given that systemic risk is a characteristic of the structure of the financial system is to change the structure of the system to reduce systemic risk.  Break up investment banks and commercial banks.  Eliminate financial institutions that are big enough to create systemic risk all by themselves (no more “too big to fail”).  Make it impossible for the system to become densely connected by limiting leverage.  The plan does increase capital requirements but not enough.  And it leaves the trading of CDSs, the densely-linked network of derivatives that largely caused the supposed near melt-down of the system last fall, lightly regulated and less than transparent. 

You can’t leave the TBTF institutions in place, or they will capture the regulators again.  Or perhaps it’s better to say they’re not letting them go at this time.

Glass-Steagall and the other laws that the neocons undid over the past thirty years worked.  They kept the system stable for sixty years.

Let’s bring them back. 

Here is Simon Johnson’s take:

Too Big To Fail, Politically

What is the essence of the problem with our financial system – what brought us into deep crisis, what scared us most in September/October of last year, and what was the


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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

World's Negative-Yielding Bond Pile Tops $7 Trillion: Chart (Bloomberg)

More than $7 trillion of government bonds offered yields below zero globally as of Monday, making up about 29 percent of the Bloomberg Global Developed Sovereign Bond Index.

Rates markets, at odds with Fed, seek clarity from Yellen (Business Insider)

While Federal Reserve Chair Janet Yellen is the one tasked with delivering a message over the next two days when she speaks to Congress, financial markets are keen to know if she has absor...



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Zero Hedge

Is The American Dream Dead?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Tom Chatham via ProjectChesapeake.com,

The American dream is not a thing in physical terms but an idea that lives or dies with certain beliefs in society. Can it die? Yes it can if those beliefs are purged from the conscience of society. This is what Jefferson meant by watering the tree of liberty with the blood of patriots from time to time.

Many people bemoan the loss of the high paying jobs and the mansions and swimming pools we all want to have. They look around them and see their dreams of easy living collapsing and the debt piling up about to drown them. They see life becoming harder every day an...



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Phil's Favorites

Deutsche Bank and the Banking Selloff

 

Nattering Naybob here at Phil's Stock World...

On the subject of Deutsche Bank and why are banks getting hammered?  What Phil says is correct, the PPT or ubiquitous "they" don't want a repeat of 2008 and may intercede if necessary. TBD. 

I don't want to lead anyone astray, but its what I've been Nattering about for quite awhile. It's not oil, it's not credit, it's not bank stocks, it's not (FILL IN THE BLANK). Those laments are symptoms of a much greater problem, simply put in ONE WORD:  LIQUIDITY.  

Now ...



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Chart School

Honors Even

Courtesy of Declan.

The gap down had set up for a big bearish move lower, but the collapse never appeared. Instead, lows held as support. On the flip side, an attempt at a rally couldn't get off the ground, but markets were able to do enough to register a close above the open.

The S&P closed with a spinning top below support. Watch for a strong 'sell' signal in the MACD as other technicals remain bearish.  The only positive is the strong relative performance against the Russell 2000.


The Nasdaq experienced a big gap down yesterday, and today offered a brief move to test the gap. Bulls need a gap higher to leave what could be a very good bullish ...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Kimble Charting Solutions

Nasdaq to follow Silver and decline 30%+?

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

When assets reach prior highs, its time to pay attention from a Risk On & Risk Off basis.

The chart on the left is Silver, going back to the mid 1970’s. As you can see it reached $50 in the early 1980’s and then quickly reversed, losing over 90% of its value in the next 14-years. Then it embarked on a rally, starting in the early 1990’s. This rally took Silver back to the $50 level in 2011, which ended up being a “Double Top” nearly 30-years later. After hitting the $50 level again, buyers disappeared and sellers stepped forward....



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OpTrader

Swing trading portfolio - week of February 8th, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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ValueWalk

Why Most Investors Fail in the Stock Market

 

Why Most Investors Fail in the Stock Market

Courtesy of ValueWalk, by  

Throughout the past 30 days of wild volatility, here’s what I didn’t do.

Panic. Worry. Sell.

In fact, the best I did was add to a couple of positions yesterday. The world was already in an uncertain state for the past 3+ years. It’s just that with the market rising, we pushed the issue to the back of our  mind and ignored it.

If you read Howard Marks latest memo, ...



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Digital Currencies

2016 Theme #3: The Rise Of Independent (Non-State) Crypto-Currencies

Courtesy of Charles Hugh-Smith at Of Two Minds

A number of systemic, structural forces are intersecting in 2016. One is the rise of non-state, non-central-bank-issued crypto-currencies.

We all know money is created and distributed by governments and central banks. The reason is simple: control the money and you control everything.

The invention of the blockchain and crypto-currencies such as Bitcoin have opened the door to non-state, non-central-bank currencies--money that is global and independent of any state or central bank, or indeed, any bank, as crypto-currencies are structurally peer-to-peer, meaning they don't require a bank to function: people can exchange crypto-currencies to pay for goods and services without a bank acting as a clearinghouse for all these transactions.

This doesn't just open t...



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Sabrient

Sector Detector: New Year brings new hope after bulls lose traction to close 2015

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Chart via Finviz

Courtesy of Sabrient Systems and Gradient Analytics

Last year, the S&P 500 large caps closed 2015 essentially flat on a total return basis, while the NASDAQ 100 showed a little better performance at +8.3% and the Russell 2000 small caps fell -5.9%. Overall, stocks disappointed even in the face of modest expectations, especially the small caps as market leadership was mostly limited to a handful of large and mega-cap darlings.

Notably, the full year chart for the S&P 500 looks very much like 2011. It got off to a good start, drifted sideways for...



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Promotions

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We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

PhilStockWorld.com features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



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Pharmboy

Baxter's Spinoff

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...



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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 

Since...



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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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