The committee to destroy the USA - Eric Janszen

[Down Under]

Re: The committee to destroy the USA - Eric Janszen

The answer is, I don't know, but I am convinced that the second bounce will end lower than the first, the third lower than the second, and so on until we, as a country, get our act together.

The S&P 500 is now higher than it was in April 2010. Presumably, it shouldn't go much higher from here, if your prediction is too hold.

Not trying to have a go here, or anything, but would be interested in any feedback regarding the state of play.

[Slimprofits]

Re: The committee to destroy the USA - Eric Janszen

If home values are permitted to decline another 20% to pre-bubble levels, and mortgages are written down to pre-bubble levels, US households will have approximately $1 trillion dollars more to spend annually.

Seen this?

via The Big Picture

http://www.politico.com/static/PPM17...6_amherst.html

Amherst Securities Group
Amherst Mortgage Insight

October 1, 2010
MBS Strategy Group
Laurie Goodman / lgoodman@asglp.com / 212.593.6026
Roger Ashworth / rashworth@asglp.com / 212.593.6095
Brian Landy, CFA / blandy@asglp.com / 212.593.6094
Lidan Yang, CFA / lyang@asglp.com / 212.593.6093

The Housing Crisis—Sizing the Problem,
Proposing Solutions

This article summarizes the size and scope of the housing crisis, making the point that if governmental policy does not change, one borrower out of every 5 is in danger of losing his/her home. A crisis of this order of magnitude requires both supply and demand side measures. On the supply side, a successful modification is critical. This will require principal reductions to re-equify the borrower. The moral hazard (strategic default) issues must be addressed by first recognizing that this is an economic issue, not a moral one. Second liens must also be addressed. As supply side measures alone are likely to prove insufficient to address a crisis of this size, we discuss demand side measures to increase the buyer base.

[..]

Our take—we believe the government needs a mandatory program that forgives principal on the 1st lien and substantially eliminates the 2nd lien. Voluntary programs won't work. The idea of earning the reduction over time is appealing. We like the PRA in which principal is initially forborne, then forgiven over a 3-year period, with 1/3 of the amount forgiven each year. We would make it a mandatory first step in any modification, rather than part of a voluntary program.

[Chris Coles]

Re: The committee to destroy the USA - Eric Janszen

Nothing has replaced Gold throughout the entire history of the planet. At every juncture, Gold comes out as the one asset everyone can rely upon; everyone accepts; never refused. Gold is the one asset, when you have to go there; no one will ever refuse to accept as fair exchange for what ever you need. Spartacus needs to read The PostCatastrophe Economy.

[EJ]

Re: The committee to destroy the USA - Eric Janszen

Great piece, EJ!

I don't think you need "single well reasoned critique for being in Gold". Gold is the default asset, what you have when you don't have reasons for being in other things. Or when you have reasons not to be in other things.

Think about it. What if stocks are overvalued and the economic outlook is cloudy. And what if bonds are even more overvalued? (e.g. 1.x% on five year notes and 2.x% on ten year notes, from an issuer that is effectively broke). And what if the Fed is printing money like the dickens trying to devalue your cash and punish savers? Currencies are in competitive devaluation. And what if on top of all that, commodity futures are in deep contango (i.e. overvalued).

In short, the outlook for every liquid investment asset class stinks? That's what you have gold for. There's no reliable way to value it; you don't have dividend yields, book values, PE ratios, etc. to go by. Instead you value everything else, and if everything else out there looks high, then by the process of elimination you have gold.

It's everything else you need an affirmative investment rationale for. If you can't find one, go for gold.

Gold is home for capital.

“Home is the place where, when you have to go there, they have to take you in.”
— Robert Frost

[Finster]

Re: The committee to destroy the USA - Eric Janszen

Great piece, EJ!

Even as we get into record nominal prices, in the last couple of months I have heard not a single well reasoned critique for being in Gold.

Not one.

It's all ad-hominem ("all you gold bugs expect an apocalypse; you're all bloody vicious thugs")

or sloganeering ("you can't eat Gold")

or tired old reasons that are being proved wrong or inconsequential ("Gold pays no dividend") (but my dividends and/or my dividend paying investments are all down over the last couple of years)

I don't think you need "single well reasoned critique for being in Gold". Gold is the default asset, what you have when you don't have reasons for being in other things. Or when you have reasons not to be in other things.

Think about it. What if stocks are overvalued and the economic outlook is cloudy. And what if bonds are even more overvalued? (e.g. 1.x% on five year notes and 2.x% on ten year notes, from an issuer that is effectively broke). And what if the Fed is printing money like the dickens trying to devalue your cash and punish savers? Currencies are in competitive devaluation. And what if on top of all that, commodity futures are in deep contango (i.e. overvalued).

In short, the outlook for every liquid investment asset class stinks? That's what you have gold for. There's no reliable way to value it; you don't have dividend yields, book values, PE ratios, etc. to go by. Instead you value everything else, and if everything else out there looks high, then by the process of elimination you have gold.

It's everything else you need an affirmative investment rationale for. If you can't find one, go for gold.

[touchring]

Re: The committee to destroy the USA - Eric Janszen

Your post may be one of the most prescient posts of the week, touchring.

Japan is America's dog - has been since 1945. China knows this. China is not an erratic novice making foolish moves it can not or will not follow through on.

I do not see how this can end well for Pax Americana.

Japan is the weakest link right now in the coalition. China does buy Japanese exports so Japan is heavily reliant on the Chinese market.

[bill]

Re: The committee to destroy the USA - Eric Janszen

Japan is America's dog - has been since 1945.

Off the leash. “click”
http://www.itulip.com/forums/showthr...10027#poststop

[BigBagel]

Re: The committee to destroy the USA - Eric Janszen

http://www.ft.com/cms/s/0/4b148650-c...44feab49a.html

"gold has gained traction for a simple reason that has afforded it a central place as a store of value for more than 2,000 years: it is nobody’s liability"

Key quote from a Financial Times article on central bank gold buying.

[ThePythonicCow]

Re: The committee to destroy the USA - Eric Janszen

That show is actually not for Japan. There's a Chinese saying, before you hit the dog, you must know who the owner is.

Your post may be one of the most prescient posts of the week, touchring.

Japan is America's dog - has been since 1945. China knows this. China is not an erratic novice making foolish moves it can not or will not follow through on.

I do not see how this can end well for Pax Americana.

[BigBagel]

Re: The committee to destroy the USA - Eric Janszen

That show is actually not for Japan. There's a Chinese saying, before you hit the dog, you must know who the owner is.

Your right. I took it as payback for old animosities. Shame on me for looking at things in such a superficial way.

[touchring]

Re: The committee to destroy the USA - Eric Janszen

They gave Japan a nice bitch slapping this week.

That show is actually not for Japan. There's a Chinese saying, before you hit the dog, you must know who the owner is.

[BigBagel]

Re: The committee to destroy the USA - Eric Janszen

China will be busy building weapons and preparing for war to take back Asia.

They gave Japan a nice bitch slapping this week.

[ST]

Re: The committee to destroy the USA - Eric Janszen

in other words... we're f*cked?

Long dated puts on the SP500 - lose a little if wrong, make a lot if right. Only those who don't protect themselves are f*cked.

I'm a little confused about the Debt Cut Plan - wouldn't this level of write off ($1 trillion annually) solicit bank runs on several large ones in short order?

[jpatter666]

Re: The committee to destroy the USA - Eric Janszen

I bought mine a week ago. The costco sale is good. I appreciate it.

Some thoughts:

- This $800 dollar "investment" has already given me a peace of mind that will more than make up for the soy damage.
- I hope I never have to eat this crap anyway, but if it gets to that point, TVP will be of little concern.
- As with most Americans, my main food store is around my waist. I estimate I have at least a 90 day supply. This should not be underestimated. With a can of tuna and multi-vitamin a few times a week, I suspect I could live for at least 6 months at a reasonable level of activity.

Exactly. We had the (ever depreciating) cash, winter is coming and well, we figured better safe than sorry. As an emergency store over ten years, it's $80/year for very cheap insurance.

Times grow more and more uncertain. We've have our PMs (some electronic, some physical) and just trying to cover as many bases as we can.

[aaron]

Re: The committee to destroy the USA - Eric Janszen

I bought mine a week ago. The costco sale is good. I appreciate it.

Some thoughts:

- This $800 dollar "investment" has already given me a peace of mind that will more than make up for the soy damage.
- I hope I never have to eat this crap anyway, but if it gets to that point, TVP will be of little concern.
- As with most Americans, my main food store is around my waist. I estimate I have at least a 90 day supply. This should not be underestimated. With a can of tuna and multi-vitamin a few times a week, I suspect I could live for at least 6 months at a reasonable level of activity.