Jan 31, 2010
~ Congressman Ron Paul, "We've Been Neo-Conned," LewRockwell.com, July 10, 2003
Jan 29, 2010
Why didn't it happen?
It didn't happen because the chairman of the Fed, along with the Treasury secretaries, both Paulson and Geithner, stepped in and did some really original things. And sure, they pushed the envelope, but if they hadn't pushed the envelope the disaster which would've occured would've been cataclysmic for us as an economy, and for Main Street specifically.
The way I describe it is this: it's like you're driving over a bridge and the bridge is about to collapse, and there's no way it's not going to collapse, except that a guy comes along and fixes it before you drive over it. You keep going, you don't even know the bridge got fixed. That's what happened here. Ben Bernanke came in, with the Fed, put significant resources into the economy and basically the financial structure, and stabilized the bridge so that the economy continued on.
Granted, we've still had a recession, but I think you have to give him a lot of credit for doing a very great job in really an extraordinarily difficult time.
CNBC: Well, I know you've heard the metaphor, 'The arsonist puts out the fire...'
Gregg: Well, he's not the arsonist.
~ Sen. Judd Gregg, Banking Committee Member, CNBC.com Video, "Late Rally for Bernanke", Mon. Jan 25th, 2009, 7:43AM ET
~ Kevin Duffy, Bearing Asset Management, January 29, 2010
Jan 27, 2010
In 2006, [Frederic] Mishkin co-authored a report called "Financial Stability in Iceland". The report maintained that Iceland's economic fundamentals were strong. The report was commissioned by the Icelandic Chamber of Commerce in response to critical coverage of the Icelandic economy and certain Icelandic companies in the international business media.
Iceland subsequently experienced a spectacular collapse within a year of Mishkin's good report.
- Bernanke, Ben (2006-, Republican, appointed by George W. Bush, 1953-, profile)
- Greenspan, Alan (1987-2006, Republican, appointed by Ronald Reagan, Trilateral Commission, 1926-, profile)
~ Frederic S. Mishkin, a former member of the Fed’s board of governors, economist at Columbia University, and close friend of Mr. Bernanke, "Bernanke’s Bid for a Second Term at the Fed Hits Resistance," The New York Times, January 22, 2010, by Sewell Chan and David Herszenhorn
~ Treasury Secretary Timothy Geithner, testifying about AIG bailout, January 27, 2010
Jan 25, 2010
~ Bill Fleckenstein, interviewed on King World News, January 23rd, 2010
TheStreet.com on Goldman Sachs: "as close to capitalism incarnate as any financial institution out there"
The much-repeated metaphor about Goldman from Rolling Stone magazine, that bank is "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money," is actually right in a sense. Goldman may be as close to capitalism incarnate as any financial institution out there.
~ Dan Freed, "Goldman's Culture Sets It Apart," TheStreet.com, January 25, 2010
Almost nobody in Washington, and precious few elsewhere, has been willing to question the greatest single government intervention in the economy, and the institution whose fingerprints are all over our current mess: America's central bank, the Federal Reserve system. The Fed is hardly ever mentioned in connection with the crisis, except perhaps as our savior. Major newspapers, magazines, and websites purport to dissect the crisis and identify its causes without mentioning the Fed at all. That's nothing new: there has been no serious discussion of the Federal Reserve in public life for the nearly one hundred years since its creation. The Fed is a wonderful thing, and that's that.
... The Fed is the elephant in the living room that everyone pretends not to notice. Even many of those who blame government for the current mess leave the Fed out of the picture altogether. The free market, meanwhile, takes the blame for the destructive consequences of what it does. This charade has gone on long enough. It's time to consider the possibility that maybe the elephant, and not little Johnny, is the one breaking all the furniture.
~ Thomas E. Woods Jr., Meltdown, pp. 2-3, p. 9
Meanwhile, look at what the state gives us. The department of motor vehicles. The post office. Spying on our emails and phone calls. Full-body scans at the airport. Restrictions on water use. The court system. Wars. Taxes. Inflation. Business regulations. Public schools. Social Security. The CIA. And another ten thousand failed programs and bureaucracies, the reputation of which is no good no matter who you talk to.
~ Lew Rockwell, "The Misesian Vision," LewRockwell.com, January 25, 2010
Jan 21, 2010
Jan 20, 2010
~Anthony C. Sutton, author, Wall Street and FDR, "FDR and the Corporate Socialists", Chapter 9
~Herbert Hoover, The Memoirs of Herbert Hoover: The Great Depression 1929-1941 (New York: Macmillan, 1952), p. 420
~ Herbert Hoover, The Memoirs of Herbert Hoover: The Cabinet and the Presidency 1920-1923 (London: Hollis and Carter, 1952), p. 300
Jan 19, 2010
~ President Franklin Roosevelt, November 21, 1933
Yet the biggest winner in JAL's collapse may be Japan's domestic travelers. The recession felled the biggest tree in the forest and is giving sapling discount carriers their first real chance to crack the comfortable JAL-ANA duopoly that has kept airfares high for decades. It can cost more to fly between Japanese cities than to fly from Japan to New York. That JAL couldn't survive even with a cushy home market is testament to the sloppy management of an airline stuck in an era of high-cost elegant travel that disappeared most everywhere else years ago. A myriad of militant pilot and cabin attendant unions ready to strike at any hint of cost cutting helped keep that air castle afloat.
~ Tim Kelly, "The Joy In JAL's Nightmare," Forbes.com, January 17, 2010
Jan 16, 2010
Cohen: We see a range of 1250 to 1300, and the market might not be at the high end at the end of the year if economic growth starts to slow in the second half. We might not see multiple expansion. Instead, stocks will move higher on the basis of profit and revenue improvement. We're forecasting S&P 500 earnings of $75 to $76 this year, and $90 next year. But it is too soon to be paying for 2011 earnings. Importantly, revenue will increase this year, by about 10% to 12%. Another thing that will distinguish 2010 is a decline in volatility.
~ Abby Cohen, "New Strategies for a New Era," Barron's, January 18, 2010
China is in a dangerous situation. Credit growth is the one factor that all the bubbles that burst had in common. Because China isn't an open economy, the bubble there can probably keep inflating longer than it otherwise would have. But the Chinese can't escape the laws of economics. If China's bubble bursts, it would cause a second hit to the world economy, and that would be terrible...
Where would China be without the huge fiscal programs its government put in place? The numbers already are beginning to come down. Export statistics show diminished growth. China's net exports -- exports minus imports -- are at 8% of GDP. But gross exports are one-third of GDP, so the dependence on exports is much higher than economists say. You can keep the engine running for a while, if you have the finances. If you can't sell the products, you fill up inventories. But that is not a policy for the long term.
~ Felix Zulauf, "New Strategies for a New Era," Barron's, January 18, 2010
Jan 15, 2010
But now I have a hazy memory of the Clinton years as a sort of Golden Age. Government spending was growing only slowly, the bad ideas were mostly small and we bombed a lot of countries but didn’t put American troops at risk.
~ David Boaz, "Save America — Bring back Bill," Financial Post, January 12, 2010
Jan 13, 2010
~ Lloyd Blankfein, CEO, Goldman Sachs, "The Bank Job," Vanity Fair, January 2010, by Bethany McLean
Jan 12, 2010
~Shaun Rein, Harvard graduate and founder and managing director of China Market Research Group, "Jim Chanos Is Wrong: There Is No China Bubble," Forbes.com, January 11, 2010
Jan 10, 2010
Most experts on the left believe the economy won't expand without more commands and more controls and more borrowed stimulus money from Washington. Most experts on the right say the command, controls and stimuli are so overwhelming that they have made business leaders afraid to take risks.
Both are wrong. The U.S. economy is still a powerful engine of productivity. Growth will come despite the heavy burdens of health care, climate control and regulation.
Business has survived vigorous enforcement of old antitrust rules, old securities regulations, old labor laws and old restraints on banking. It can survive the creation of new ones. Indeed, entrepreneurs can invent around the subsidies and penalties imposed by those who claim to know exactly what we need to build a new era.
~ Thomas G. Donlan, "All Gone for Nought?," Barron's, January 11, 2010
We built our case for a growth spurt in hiring and GDP on the long-established tendency for strong recoveries to issue from deep recessions and weak recoveries to follow mild ones. In this country, the business-cycle record of the postwar era, and, indeed, of the past 100 years, seems to admit no exception to this rule (if rule it be). No matter what the nature of the economy, no matter how big or intrusive the government, no matter the level of real interest rates prevailing at cyclical low ebb or how high the top marginal tax rate, a steep decline in business activity has presaged a sharp rebound, while a shallow decline has foretold weakness.
~ Jim Grant, "The case of the reluctant recovery," Grant's Interest Rate Observer, December 11, 2009
Laggner: A client sent me an e-mail the other day in which the tea-party demonstrators are getting a higher approval rating than the Democrats or Republicans. There is a backlash building, and that's a very good thing. But it's a process. As the arrogance level of central bankers or the money-center banks continues to grow, 2010 and the mid-term elections will be very exciting.
Duffy: Last year, 70% of the people were opposed to the bailout. And so far, through these massive interventions, government has been able to stabilize the financial system. But you have this divergence between the real economy and the political economy. People are still hurting. Consumer confidence has not rebounded like investor confidence has. If we are right, and we are heading for the next leg down, that's when I think all bets are off. If the political economy and some of those who got bailed out are back asking for another bailout, that's when the backlash really starts to heat up.
~ Bill Laggner and Kevin Duffy, "Shorting the Economic Recovery," Barron's, December 28, 2009, by Robin Blumenthal
Any healthy system needs a way to correct error and remove waste. Nature has extinction, the economy has loss, bankruptcy, liquidation. Interfering in this process lengthens feedback loops. Error and waste are allowed to accumulate, and you ultimately get a massive collapse.
Capitalism is primarily attacked by two groups: utopians who wish to impose a more "compassionate" system, and political capitalists who want to enjoy the fruits of success without bearing the pain of failure. They use the coercion of the state to gain privileges, at the expense of everyone else.
As a country we've become less tolerant of economic failure. The result has been a series of interventions, such as meddling in the credit markets, promoting homeownership and creating a variety of safety nets for investors. Each crisis leads to an even greater crisis. The solution is always greater doses of intervention. So the system becomes increasingly unstable. The interventionists never see the bust coming, then blame it on "capitalism."
~ Kevin Duffy, "Shorting the Economic Recovery," Barron's, December 28, 2009, by Robin Blumenthal
Any smoker who gives up cigarettes for snuff is clearly doing his or her body a favor. That’s because most of the danger from tobacco actually comes from setting it afire and inhaling the smoke. Omitting that step makes a huge difference. A 2002 report by Britain’s Royal College of Physicians found that “the consumption of non-combustible tobacco is of the order of 10-1,000 times less hazardous than smoking, depending on the product.” The American Council on Science and Health puts the overall health risk at about 2 percent of that from sucking on a cancer stick.
~ Steve Chapman, "Tobacco Truth Gets Smoke," Townhall.com, January 10, 2010
Jan 7, 2010
~ Marc Faber, "Marc Faber: Gold Is Cheap at $1100 Per Ounce," LewRockwell.com, January 7, 2009
Cuban: Gold is a religion; it's not an asset class. It is always a bubble, so I am a sell.
~ Mark Cuban, "Billionaire Predictions 2010," Forbes, January 4, 2010, by Keren Blankfield
Jan 3, 2010
~ Mike Shedlock, "Case Against the Fed and Fractional Reserve Lending," LewRockwell.com, May 7, 2009