Nov 30, 2010

Former totalitarian expresses the sentiment undoubtedly shared by his compatriots

You know, I know something about totalitarianism. I have been a totalitarian ruler. And I have to admit, it was a great job while it lasted.

~Eduard Shevardnadze, former foreign minister of the USSR, as quoted in a conversation with David Rothkopf in "Superclass: The Global Power Elite and the World They Are Making"

Nov 29, 2010

George W. Bush encouraging consumers to spend after 9/11

Do your business around the country. Fly and enjoy America’s great destination spots. Get down to Disney World in Florida. Take your families and enjoy life, the way we want it to be enjoyed.

~ President George W. Bush, September 22, 2001

Rudy Giuliani encouraging consumers to spend after 9/11

Come here and spend money, just spend a little money. Go to a store, do your Christmas or holiday shopping now, this weekend. … buy your birthday gifts for the next three or four months. We’re the best shoppers in the world.

~ New York City Mayor Rudy Giuliani, September 21, 2001

Nov 28, 2010

Paul Krugman on Milton Friedman's inflationary advice

Mr. Bernanke and his colleagues seem stunned to find themselves in the cross hairs. They thought they were acting in the spirit of none other than Milton Friedman, who blamed the Fed for not acting more forcefully during the Great Depression — and who, in 1998, called on the Bank of Japan to “buy government bonds on the open market,” exactly what the Fed is now doing.

~ Paul Krugman, "Axis of Depression," The Opinion Pages, The New York Times, November 18, 2010

Nov 22, 2010

Adrian Day on the commodity "super-cycle" (2010)

China is at the takeoff phase.

[...]

China being twenty percent of the world’s population is probably going to take longer than the ['super-cycles'] of Japan and Korea, which were both 10 years. The good news for commodity investors is that once China matures and [its] demand for resources plateaus, behind [it] you’ve got India.

[...]

Supply simply cannot keep up with demand.

[...]

I have no doubt that at some point over the next five or ten years we are going to have one or two or three vicious corrections. [citing the nearly $100 oil price plunge in 2008 and 2009 as an example] [But] if you really understand the long-term fundamentals, then you just need to stick with it and ride out those corrections.

~ Adrian Day, "'Just Stick With It': Commodity 'Super-Cycle' Will Last Decades, Day Says," Yahoo! Finance tech/ticker, November 22, 2010

Friedrich Wilhelm Nietzsche on the state and its lies

The state lies in all the tongues of good and evil, and whatever it says is lies, and whatever it has, it has stolen, everything it is, is false, it bites with stolen teeth, and it bites often, it is false down to its bowels.

~ Friedrich Wilhelm Nietzsche, Also Sprach Zarathustra [1896]

Nov 19, 2010

Bruce Charlton on mass media addiction

Americans are addicted to mass media, if they don't get the fix they lose connection, feel dead, will drift without purpose. If people withdraw from it or removed from media they experience rebound effects. Rebound effects are the opposite of stimuli: if the media generate excitement then people who have withdrawn from media will be bored, if the media provide conversation topics then withdrawn people will not have anything to discuss, if the media frame leisure then they will have nothing to do.

Habituation is a basic principle-repeated stimuli cease to command attention. So the media must generate novelty - novelty is imperative. This leads to endemic dishonesty - truth must continually be sacrificed to novelty. This leads to endemic ugliness-beauty must continually be sacrificed to novelty. This leads to moral corruption-virtue must continually be sacrificed to novelty.

It is obvious why society is undergoing progressive corruption and how far we are away from a good society - so far that we have lost the ability (an ability common to all previous societies) of even conceptualising the nature of things, of the human condition.

~ Bruce Charlton, "Mass Media Addiction, Habituation, Tolerance - Here, Now," November 19, 2010

Nov 17, 2010

Joseph Goebbels on propaganda

The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly... it must confine itself to a few points and repeat them over and over.

~ Joseph Goebbels, Reich Minister of Propaganda in Nazi Germany from 1933-1945

Nov 16, 2010

Michael Steinhardt on when to sell GM IPO

As quickly as I can. I don't think one should be a long-term holder in government securities, particularly government equity securities.

"Michael Steinhardt on GM IPO", CNBC, November 16, 2010

Nov 12, 2010

Doug Casey on gold

I have to say again that the fundamentals behind this trend for gold are very, very strong. It's going to continue upwards. And although we're moving towards a Mania Phase, it's nothing near a mania today.

[...]

Consider the alternatives – they're quite unattractive. Another old market rule, since I'm quoting old market rules, is: Don't fight the Fed. And never since the Fed was created has there been a more clear signal from the Fed. People have made fun of Bernanke for saying he would drop hundred-dollar bills from helicopters, but that is in essence what he's doing – but with a lot more hundred-dollar bills than you could fit in a helicopter, or even a squadron of helicopters.

You don't want to fight the Fed: buy gold.

[...]

To use poker jargon, Bernanke has made an all-in bet that's going to be inflationary. So I'm inclined to make an all-in bet myself, on gold and gold stocks.

[...]

Hundreds of billions in new liquidity at the stroke of a pen – of course it will impact the stock market, and you don't want to fight the Fed.

~ Doug Casey, "Doug Casey on Gold’s New High, the Fed, and the Greater Depression,"

Kevin Duffy on the end of QE2

After today’s wild run-ups and reversals in commodities at the tail end of the QE2 bubble, tomorrow could be a bloodbath. With the 30-year T-bond collapsing, commodities flying, and European sovereign debt problems reemerging, the world’s central bankers have lost control. Worse, sentiment measures show frightening levels of bullishness, with QE2 providing the hook for both bulls and bears.

~ Kevin Duffy, Bearing Asset Management, November 9, 2010

Nov 11, 2010

Fred Hickey on short selling in the current market

I learned that you can't make money shorting in this market currently. As stocks careen higher, the gap between fundamentals and valuations will widen, providing opportunities to short in the future. In the meantime, I'll try my best not to get sucked in.

[...]

What is worth mentioning is that this market is currently near-impossible to short.

~ Fred Hickey, "The Smartest Dumb People in the World," The High-Tech Strategist, November 5, 2010

Bethany McLean on the anti-Fed movement

The thought process behind the anger at the Fed isn't uniform. If Dante had nine circles of hell, then the Fed has three circles of doubters. The first circle is critical of the Fed's current policies. The second circle thinks that the Fed has been a menace for a long time. The third circle wants to seriously curtail or even get rid of the Fed.

[...]

Murray Rothbard, the controversial libertarian economist who many consider the intellectual father of the anti-Fed movement, wrote in 1994 ("The Case Against the Fed") that if the Fed were to be abolished, then "the banks would, at last, be on their own, each bank responsible for its own actions. There would be no lender of last resort, no taxpayer bailout [italics mine]."

~ Bethany McLean, "Fed-Bashing Three Ways," Slate.com, November 9, 2010

Ned Riley says he's no permabull

I don't sell into the rally, Larry. You've known me for the last few years, I've been bullish as heck on the market, I continue to be so. The market's moving, I only think it's in the third or fourth inning of this bull market. Lookit, we've had a ten year bear market, the S&P has almost doubled earnings and the market is still down 20%. I think this is the beginning of a big bull market and as long as the skeptics stay out there, I'm very happy.

When people start saying that equities are the best long-term investment for your portfolio, I'm gonna run for the hills.

~ Ned Riley, Riley Asset Management, CNBC's "The Kudlow Report", November 4th, 2010

Ned Riley says the cold housing market is a big problem for the economy

One of the biggest problems we've got is that we can flood the system with money but the banks don't turn around and lend it where it's needed. The housing industry is still on its back. If you try to get a refinancing of a mortgage, it takes you four to six weeks minimum just to get them to look through your applications.

The banks are still parsimonious in handing out any money toward the housing market. A purist, somebody that has high credit ratings and everything else, can't get an equity line of credit for about two months. So, Bernanke's nice to give us all this money, but the banks have pressure, big pressure, because the lending offices aren't giving the money away.

~Ned Riley, Riley Asset Management, CNBC's "The Kudlow Report", November 4th, 2010

Art Hogan on GDP growth in 2011

The great news is we've figured out how to make money in a slow-growth economy, we're going to see that in 2011 as we'll probably see a 3, 3.5% GDP growth rate.

~Art Hogan, director of global equities, Jefferies, CNBC, November 9th, 2010

Ron Insana sees upside surprise in financial markets going into 2011

The market going forward is probably going to surprise people on the upside.

~Ron Insana, CNBC, November 8th, 2010

Tony Dwyer sees strong economic activity throughout 2011

Where macro guys and economists such as myself get it wrong is we've become economically euphoric as rates are going up, but that's the restricter. When rates are coming down that's the stimulant.  From the April high they've gone from 4 to 2.4%, that is hugely stimulative. So, in our view, you're going to have much better than expected economic activity over the course of the next three to four quarters and that's going to further increase earnings growth which will ultimately end up in a stock-friendly way.

~Tony Dwyer, chief equity strategist, Collins Stewart, CNBC "Market Breakdown", November 8th, 2010

Brian Belski on synchronized global growth

If you go back and look at fundamentals and what's driving the growth in the economy over the next five years, we really do believe it's going to be those technology companies, and those industrial companies, that benefit from what we like to call "synchronized global growth" which we're in a global world now.

~Brian Belski, chief investment strategist, Oppenheimer Asset Management, CNBC, November 2nd, 2010

Jim Cramer roots for Ben Bernanke, the earnest underdog

Ben Bernanke is doing a great job. He's not only taking on Washington, he's taking on the world! In the name of trying to get this economy moving again, in the name of trying to get people hired. That's a lot more than anyone else is doing. It's time to applaud the man and castigate those rich people who offer nothing for those who are down and out and just trying to get by. They should all be ashamed!

~Jim Cramer, CNBC's Mad Money with Jim Cramer, November 9th, 2010

Jim Cramer says the market isn't fooled by negative sentiment and neither should you be

I call this whole process "selective negativity." We get a change in employment figures and we're told that Irish bonds are now the thing. We get a prospective bidding war for BJ's and we're told to focus on the currency wars. Yeah! That's the new thing to worry about.

The bottom line, here's what really matters: the market itself isn't focused on the new negatives. It's focused on what's truly important, not faddishly important, which means the employment claims and the buyouts, not the bogus, blown-out-of-proportion, doom-and-gloom stories that the media's addicted to, including now the G20.

The market isn't fooled, which is why it spent the rest of the day rallying from the ugly open. You shouldn't be fooled, either.

~Jim Cramer, CNBC's Mad Money with Jim Cramer, November 10th, 2010

Jim Cramer makes a "contrarian" call for investors to pile into bank stocks

Now can you imagine what would happen if one of the myriad bearish analysts upgrades? You wanna be out of the group then?

Wow, I just said something pretty inconceivable. I said that you should fear missing a move in the banks. Now that's a breath of fresh air!

~Jim Cramer, CNBC's Mad Money with Jim Cramer, November 10th, 2010

Jim Cramer says the fear is all priced in in bank stocks

Can you believe this move in the bank stocks? I think it's totally related to the job creation we're beginning to see. I think we're all mesmerized by mortgage-morass stories, foreclosure stories, now FDIC-fee stories that we're missing the forest for the trees.

Think of it: this morning there was a big story about the shocking FDIC-fees for the big banks, "shocking." There was nothing shocking about it at all. We all know about that, it's been written about forever. Right next to the story though about the FDIC-fees was an article about how the big banks are making tens of millions of dollars trading each day. You know what? That's real money. They can pay the FDIC bill and a lot more.

The mortgage morass? Jobs cure the morass. I'm sick of hearing about weaker pricing and more foreclosures, they're totally in the cards of the banks, the reserves have been taken.

~Jim Cramer, CNBC's Mad Money with Jim Cramer, November 10th, 2010

Kevin Duffy on the world's military expenditures

Official statistics say the U.S. accounts for 42% of the world's military expenditures and these are surely understated. In addition, we are blessed with huge geographical advantages - being buffered by the world's two largest oceans, and a massive nuclear arsenal. We outspend our neighbors to the north on defense by 32 times and those to the south by 121 times.

So why the need to support an empire that bankrupts us financially and morally, requires surrendering our freedoms, and makes us less secure? Threats like Iraq whose military spending is less than Oman's? Or Iran whose military is half the size of Turkey's?

H.L. Mencken got it right, "The whole aim of practical politics is to keep the populace alarmed – and thus clamorous to be led to safety – by menacing it with an endless series of hobgoblins, all of them imaginary."

~ Kevin Duffy, November 11, 2010 (Veteran's Day)

Nov 10, 2010

Frederic Bastiat on intervention

Once we start from this idea, accepted by all our political theorists [that] "The motive force of society is the government"; once men consider themselves as sentient, but passive, incapable of improving themselves morally or materially by their own intelligence and energy, and reduced to expecting everything from the law; in a word, when they admit that their relation to the state is that of a flock of sheep to the shepherd, it is clear that the responsibility of the government is immense. Good and evil, virtue and vice, equality and inequality, wealth and poverty, all proceed from it. It is entrusted with everything, it undertakes everything, it does everything; hence, it is responsible for everything.

Frédéric Bastiat, “The Law”, 1850

Economist sees job recovery in 2011 thanks to QE2

The labor market is what really turns it. We will see a slow and steady improvement in job growth. In the next six to nine months, we won’t be talking about a jobless recovery anymore.

~Joel Naroff, president of Naroff Economic Advisors, Bloomberg.com, November 10th, 2010

Economist sees a brighter future thanks to QE2

The air has been cleared. The impediments to growth, uncertainty about change in Washington and will the Fed go or not, those have gone to the wayside and people’s animal spirits can start to revive.

~Chris Rupkey, chief financial economist at Bank of Tokyo- Mitsubishi UFJ Ltd. in New York, Bloomberg.com, November 10th, 2010

Michael Aronstein on the reality of QE for savers and borrowers

In effect what the Fed is doing is guaranteeing that if you're a saver and desire safe assets you get no return. [Retirees] better have an awful lot of money if they want to live off of interest. So, it's forcing people, worldwide, to take risk, to take all kinds of risks that they're probably not all that comfortable taking and in effect it's a wealth transference from people who are natural creditors, people who have accumulated savings, to people who can use them, people who are natural borrowers.

~Michael Aronstein, president of Marketfield Asset Management, Bloomberg Television's "Surveillance Midday", November 9th, 2010

Robert Albertson on the Fed as the only adult in Washington

I really respect the Fed because they really are the only adult in Washington, trying to do the right thing but, my simple view has always been monetary policy is a great brake; it's not such a good accelerator and fiscal policy is the great accelerator. We haven't done much good with fiscal lately so hopefully the animal spirits of America take over.

~Robert Albertson, head of investment strategy at Sandler O'Neill & Partners LP, Bloomberg Television's "Surveillance Midday", November 9th, 2010

Nov 5, 2010

Billionaire Ken Fisher sees 16% S&P 500 rally after elections

Markets don’t like big sweeping actions. Right now, every politician is chirping and burping and carrying on. It’s been in the interest of the Republicans running for office to talk down the economy. That goes away immediately after the election. Come June, you’ll see how quiet the political landscape will be -- very little legislation and a lot of baby kissing.

~Ken Fisher, Fisher Investments, Bloomberg.com, November 3rd, 2010

Mark Haines on George W. Bush's comment that "TARP saved the economy"

Way to stick up for what you did. Because I believe you were right.

~ Mark Haines, CNBC, 10:55 AM Eastern time, November 5, 2010

Nov 3, 2010

A hedge fund manager describes the incentives of Ben Bernanke as he embarks on QE2

Imagine a large hot-air balloon carrying a bunch of people with a gigantic hole in it.

The person in charge of flying the balloon could:

a) Land, fix the hole, then take off again, or
b) Keep firing the gas cannister thereby keeping the balloon in the air as long as possible before the gas runs out and the balloon suffers a catastrophic crash.

Now imagine the person in charge of the gas cannister:
a) Is responsible for the hole in the balloon and will be found out if the balloon lands.
b) Has a parachute
c) Gets money for every second the balloon stays in the air.

~"CP", hedge fund manager and author of CreditBubbleStocks.com, November 3rd, 2010

Nov 2, 2010

Steve Jobs on "how to live before you die"

Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma, which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important: Have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.

~ Steve Jobs, Commencement speech given at Stanford University, "How to Live Before You Die," June, 2005

Rick Santelli on the 2010 mid-term elections

This election is not a referendum on policy, it's a restraining order.

~ Rick Santelli, as appeared on CNBC discussing Tea Party movement, November 2, 2010