Thursday, January 21, 2010

Connecting the dots through maze of misdirection

What a tangled web we weave. 

So we have this headline Obama to Propose New Rules on Banks’ Size, Trading and this video Obama Calls for Limiting Size, Risk-Taking of Banks

Barney Frank, Banks Need Time to Divest Under Obama Plan

Big Banks Have Already Figured Out the Loophole In Obama’s New Rules

Scott Garrett, NJ Republican, Market needs certainty and that banks have been consolidating for the last eighteen months.

Mark Sunshine of Sunshine Capital warning 1-2,000 Small, Midsize Banks May `Disappear'  

Mark Calabria from Cato Institute, this is all political grandstanding...misdirection

Goldman Will Benefit From Obama’s Proposal, Rochdale Securities analyst Dick Bove says

Charles Biderman of Trim Tabs market rally logically can only be due to Fed buying

Democrats propose $1.9T increase in debt limit 

White House Embracing Pointless Deficit Commission

FT columnist Gideon Rachman Bankruptcy could be good for America
"with entitlement spending set to surge, there is no credible plan to bring the budget deficit under control over the medium term...Oddly, it might be best if the crisis came sooner rather than later. For a surprising number of countries, running out of money has been the prelude to national renewal."

Porter Stansberry The bankruptcy of the United States is now certain
"Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion. Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP...Currency speculators figured out how to accurately predict when a country would default. Two well-known economists - Alan Greenspan and Pablo Guidotti - published the secret formula in a 1999 academic paper. That's why the formula is called the Greenspan-Guidotti rule. The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world's largest money management firm, PIMCO, explains the rule this way: "The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support.  The principle behind the rule is simple. If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.  So how does America rank on the Greenspan-Guidotti scale? It's a guaranteed default."

On top of all this you have PIIGS, Japan and the Euro falling apart

Garth Turner has another great blogpost up today where he writes:

"Not a day goes by I’m not reminded of the weight of conventional wisdom stacked against me. Bank economists, the real estate cabal, various pump-&-dump media interests, the Bank of Canada, the federal government. Luckily this is normal in my life thus far, so such criticism leaves me unruffled. But how so many people can believe the price of an asset will rise endlessly is hard to understand. How Canadians, by the millions, can be so sure they’re immune from what happened to the south, for the same reasons, in the country which most mirrors ours, mystifies."

That's exactly how I feel.

Identifying Sure Signs Of The Final Economic Plunge 

20 Reasons Why The U.S. Economy Is Dying And Is Simply Not Going To Recover

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