Posts Tagged ‘David Stockman’

Federally Funded Friday

 

I feel like I’m driving in a gasoline truck at a 100 mph and towards an brick wall, says Brian Kelly. And Ben Bernanke just lit a match. I can’t help but worry that this ends badly.  - Fast Money's Brian Kelly

I also remain skeptical, adds Steve Cortes. The unanimous opinion sees to be the market can not go lower and I find it reminiscent of the rhetoric we heard right before the tech bubble burst.I want to know what the Fed sees that’s so dire that it’s required them to take drastic steps, muses Guy Adami. I guess it doesn’t matter because the market just wants to go higher. But the market action has the feeling to me of a blow-off top. I don’t know when it ends, but I suspect it ends extraordinarily badly.

[Pic (left), credit: Elaine Supkis Culture of Life News]

David Stockman sums things up very nicely, saying:

Today the Fed is scared to death that the boys and girls and robots on Wall Street are going to have a hissy fit. And therefore these programs, one after another, are simply designed to somehow pacify the stock market, and hoping to keep the stock indexes going up, and that somehow that will fool the people into thinking they are wealthier and they will spend money. 

The people aren't buying that. Main Street is not stupid enough to believe that engineered rallies as a result of QE2 stimulus are making them wealthier and so they should go out and buy another Coach bag. This is really crazy stuff that I can't say enough negative about…The Fed is telling a lot of lies to the market… it is telling all the politicians on Capitol Hill you can issue unlimited debt cause it doesn't cost anything.

We have $9 trillion of marketable debt. Upwards of 70% of that has maturities of 5 years or less down to 90 days. All of those maturities are 1% down to 10 basis points. So from the point of view of Congress, the cost of carrying the debt is essentially free. When you tell politicians they can issue $100 billion of debt a month for free, how do you expect them to do the right


continue reading


Tags: , , , , , , , , ,




The Big Interview with David Stockman

The Big Interview with David Stockman

"In some ways Herbert Hoover got a bad rap," says David Stockman in an interview with WSJ’s Alan Murray. The Former Reagan Administration budget director lays out a plan for economic recovery by cutting spending, raising taxes, and allowing for years of austerity. ….WSJ


Tags: , , , , ,




How Pimco Is Holding American Homeowners Hostage

How Pimco Is Holding American Homeowners Hostage

Courtesy of DAVID STOCKMAN, courtesy of Minyanville

Some raids on the US Treasury by America’s crony capitalists are so egregious as to provoke a rant — even if you aren’t Rick Santelli. One such rant-worthy provocation is Pimco’s latest scheme to loot Uncle Sam’s depleted exchequer.

According to Bill Gross, who heads what appears to be the firm’s squad of public policy front runners, the American economy can be saved only through “full nationalization” of the mortgage finance system and a massive “jubilee” of debt forgiveness for millions of underwater homeowners. If nothing else, these blatantly self-serving recommendations demonstrate that Matt Taibbi was slightly off the mark in his famed Rolling Stone diatribe. It turns out that the real vampire squid wrapped around the face of the American taxpayer isn’t Goldman Sachs (GS) after all. Instead, it’s surely the Pacific Investment Management Co.

As overlord of the fixed-income finance market, the latter generates billions annually in effort-free profits from its trove of essentially riskless US Treasury securities and federally guaranteed housing paper. Now Pimco wants to swell Uncle Sam’s supply of this no-brainer paper even further — adding upward of $2 trillion per year of what would be “government-issue” mortgages on top of the existing $1.5 trillion in general fund deficits.

This final transformation of American taxpayers into indentured servants of HIDC (the Housing Investment & Debt Complex) has been underway for a long time, and is now unstoppable because all principled political opposition to Pimco-style crony capitalism has been extinguished. Indeed, the magnitude of the burden already created is staggering. Before Richard Nixon initiated the era of Republican “me-too” Big Government in the early 1970s — including his massive expansion of subsidized housing programs — there was about $475 billion of real estate mortgage debt outstanding, representing a little more than 47% of GDP.

Had sound risk management and financial rectitude, as it had come to be defined under the relatively relaxed standards of post-war America, remained in tact, mortgage debt today would be about $7 trillion at the pre-Nixon GDP ratio. In fact, at $14 trillion or 100% of GDP the current figure is double that, implying that American real estate owners have been induced to shoulder an incremental mortgage burden that amounts to nearly half the nation’s current economic output.

There’s no mystery as to how America got hooked on this…
continue reading


Tags: , , , , , , , , , , , , , ,




The Ecstasy of Empire

The Ecstasy of Empire

Courtesy of PAUL CRAIG ROBERTS writing at CounterPunch

Clock Striking 12 O'clock

The United States is running out of time to get its budget and trade deficits under control. Despite the urgency of the situation, 2010 has been wasted in hype about a non-existent recovery. As recently as August 2 Treasury Secretary Timothy F. Geithner penned a New York Times column, “Welcome to the Recovery.”

As John Williams (shadowstats.com) has made clear on many occasions, an appearance of recovery was created by over-counting employment and undercounting inflation. Warnings by Williams, Gerald Celente, and myself have gone unheeded, but our warnings recently had echoes from Boston University professor Laurence Kotlikoff and from David Stockman, who excoriated the Republican Party for becoming big-spending Democrats.

It is encouraging to see some realization that, this time, Washington cannot spend the economy out of recession. The deficits are already too large for the dollar to survive as reserve currency, and deficit spending cannot put Americans back to work in jobs that have been moved offshore. 

However, the solutions offered by those who are beginning to recognize that there is a problem are discouraging. Kotlikoff thinks the solution is savage Social Security and Medicare cuts or equally savage tax increases or hyperinflation to destroy the vast debts. 

Perhaps economists lack imagination, or perhaps they don’t want to be cut off from Wall Street and corporate subsidies, but Social Security and Medicare are insufficient at their present levels, especially considering the erosion of private pensions by the dot com, derivative and real estate bubbles. Cuts in Social Security and Medicare, for which people have paid 15 per cent of their earnings all their lives, would result in starvation and deaths from curable diseases. 

Tax increases make even less sense. It is widely acknowledged that the majority of households cannot survive on one job. Both husband and wife work and often one of the partners has two jobs in order to make ends meet. Raising taxes makes it harder to make ends meet--thus more foreclosures, more food stamps, more homelessness. What kind of economist or humane person thinks this is a solution?

Tax forms with money

Ah, but we will tax the rich. The rich have enough money. They will simply stop earning.

Let’s get real.  Here is what the government is likely to do.  Once Washington realizes that the dollar is…
continue reading


Tags: , , , , , , , , , , , , , , , , , , , ,




DAVID STOCKMAN EXPLAINS THE NEED FOR HIGHER TAXES

DAVID STOCKMAN EXPLAINS THE NEED FOR HIGHER TAXES

Courtesy of The Pragmatic Capitalist 

David Stockman, former Reagan budget director explains why the budget needs to be cut and why we need an effective tax hike via the expiration of the Bush tax cuts.


Tags: , , ,




‘The Single Most Drastic Error in Policy in Modern History’

‘The Single Most Drastic Error in Policy in Modern History’

Courtesy of Michael Panzner at Financial Armageddon

PBS Newshour has posted a brief but fascinating interview with David Stockman, Director of the Office of Management & Budget during the Reagan era. Despite — or, perhaps, because of — his political and financial industry background, he pulls few punches in his remarks about the financial crisis and its aftermath. Here are a few excerpts:

On the relationship between Wall Street and Washington --

DAVID STOCKMAN: …we have gotten into this syndrome, I think, over the last 20 years, where policy of the Treasury and of the Fed has been dictated by Wall Street, that, if Wall Street threatens to have a hissy fit, or the stock market is going to go down, the Fed has basically capitulated and is creating a very unstable and dangerous financial system in our economy.

On the AIG bailout --

DAVID STOCKMAN: The fact is, the heart of the bailout was AIG. That was $80 billion worth of CDS that was going to go sour.

[PBS Newshour business and economics correspondent] PAUL SOLMAN: CDS meaning?

DAVID STOCKMAN: Credit default swaps, OK? And we weren’t bailing out AIG. We were bailing out the banks, because the banks had bought a lot of low-caliber or subprime loans, wrapped some insurance around it from AIG, and said, presto, we have a AAA, a security on our balance sheet.

They didn’t. They had garbage on their balance sheet. And the bailout was to make sure that they didn’t suffer multi $10 billion write-downs on that AIG-supported loan.

PAUL SOLMAN: So, if you had been in the administration after Lehman Brothers, you wouldn’t have supported bailing out AIG?

DAVID STOCKMAN: No, absolutely not. It was the single most, you know, drastic error in policy in modern history, going back to the 1930s. This was exactly the wrong thing to do.

It’s destroyed any basis for fiscal discipline in the United States. I was a member of Congress, and I know how they think. And they think by analogy. If you did it for John, you have got to do it for Bob. There is no way that any congressman is ever going to vote against farm subsidies or ethanol subsidies or housing subsidies or anything else, refrigerator subsidies, once we have made this


continue reading


Tags: , , , ,




 
 
 

Zero Hedge

Mystery Trader Shocks Market With Giant VIX Put Trades

Courtesy of ZeroHedge View original post here.

While everyone is familiar with the exploits of the notorious vol trader Ruffer LLP, better known in the market as "50 cent" for his penchant for buying deep OTM VIX calls which while usually expiring worthless, occasionally make a killing, such as the $2.6 billion the fund made during the March crash when VIX soared, a new and heretofore unknown player has emerged in the vol space. And because this particular trader's bet appear to be on a reduction in volatility Perhaps we can call him minus 50 cent?

According to Bloomberg, which first reported the mystery trader's exploits, so large w...



more from Tyler

ValueWalk

COVID-19 Shocks Will Continue to Shape Future FX Market Structure

By Jacob Wolinsky. Originally published at ValueWalk.

COVID-19 Shocks Will Continue to Shape Future FX Market Structure – A New Premium on Sell-Side Relationships and Algos

Q3 2020 hedge fund letters, conferences and more

Tuesday, October 20, 2020 | Stamford, CT USA — Although day-to-day aspects of the foreign exchange (FX) market have largely returned to normal, disruptions caused by the COVID-19 pandemic will have a lasting impact on market structure and functionality.

COVID-19 Crisis Continue...

more from ValueWalk

Phil's Favorites

Buy stocks now or after the election?

 

Buy stocks now or after the election?

Courtesy of 

 

On an all-new episode of What Are Your Thoughts, Josh Brown and Michael Batnick take on the biggest topics on Wall Street this week, including:

*The “pressure cooker of uncertainty” has many investors waiting with cash for the election to be over.
*Amazon is actually losing market share to the old category killers like Best Buy and Walmart, who are getting good at ecommerce.
*YOU ASKED: What should my strategy be, investing or trading?
*Which would produce the biggest rally, a vaccine approval or a signed stimulus bill?...



more from Ilene

Chart School

Dow Gann Angle Update

Courtesy of Read the Ticker

Time to see what happens to the Dow post US elections.

The Dow Gann Angle Target 3 (from 2007 top) is on the table, and what a ride that will be. The FED went BRRRRR is all the fundamental news you need to know. Gann angles are very good tool to see how the masses are pushing price.


Click for popup. Clear your browser cache if image is not showing.



The last two US elections saw Bitcoin and the DOW rally well for 6 months, due to stimulus. The most bearish 2020 US Election case for the markets is a Biden win with the Senate and Congress controlled by the Democrats, somehow this blog feels that is very unlikely. So what could go wrong!


...

more from Chart School

Kimble Charting Solutions

Will 2020 Mark Historic Low For Interest Rates?

Courtesy of Chris Kimble

US treasury bond yields have been trending lower for over 3 decades. Could the latest drop mark a significant low for bond yields and interest rates?

In today’s chart, we can see that interest rates have had several spike lows and highs, but that each low is lower and each high is lower. That’s the definition of a downtrend. BUT, each of these spike lows has resulted in big rallies within the downtrend channel. And each of these lows and subsequent rallies have been marked by significant momentum lows (see each green line and shaded box).

So is it time for short-term yields to rally?

Looking at the current set-up, we can see that yiel...



more from Kimble C.S.

Biotech/COVID-19

Coronavirus reinfection cases: what we know so far - and the vital missing clues

 

Coronavirus reinfection cases: what we know so far – and the vital missing clues

By Sheena Cruickshank, University of Manchester

As President Trump claims that he is immune to COVID-19 and isolated reports emerge of reinfection, what is the truth about immunity to COVID-19?

To date, there have been six published ...



more from Biotech/COVID-19

Politics

Dan's Covid Charts: Blue States vs. Red States Over Time

 

The trend of lower Covid-19 case numbers per capita in blue states compared to red states isn't itself surprising, but the magnitude of the differences may be. You can visualize the evolving differences in case loads by watching the infection's progression, as measured by cases per capita, at Dan's website.

[Visit Dan’s COVID Charts to see these amazing animated charts and more. Fortunately, Dan broke his Twitter hiatus to share his work.]

People say I should break my 12-year Twitter hiatus to share my latest animated COVID chart. It compares state cases factoring in partisanship since June 1, when science had proven methodology as to how to stop the spread after the initial sucker punch. ...



more from Politics

Digital Currencies

Bitcoin: the UK and US are clamping down on crypto trading - here's why it's not yet a big deal

 

Bitcoin: the UK and US are clamping down on crypto trading – here's why it's not yet a big deal

Where there’s a bit there’s a writ. Novikov Aleksey

Courtesy of Gavin Brown, University of Liverpool

The sale and promotion of derivatives of bitcoin and other cryptocurrencies to amateur investors is being banned in the UK by the financial regulator, the Financial Conduct Authority (FCA). It is a...



more from Bitcoin

Mapping The Market

COVID-19 Forces More Than Half of Asset Management Firms to Accelerate Adoption of Digital Marketing Technology

By Jacob Wolinsky. Originally published at ValueWalk.

There is no doubt that the use of technology to support client engagement initiatives brings both opportunities and threats but this has been brought into sharp focus this year with the COVID-19 pandemic.

The crisis has brought to the fore the need for firms to enable flexibility in client engagement – the expectation that providers will communicate to clients on their terms, at their speed and frequency and on their preferred channels, is now a given. This is even more critical when clients are experiencing unparalleled anxiety from both market conditions and their own personal circumstances.

...

more from M.T.M.

The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



more from Tech. Traders

Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



more from Lee

Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

http://www.insidercow.com/ more from Insider

Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

more from Promotions





About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.