Financial topics

[aedens]

http://www.prudentbear.com/index.php/co ... lebulletin

The central bank said the funding will promote bilateral trade and direct investment by allowing one country to pay for imports in another nation’s currency… The central bank has entered swap agreements with Indonesia, Malaysia, South Korea, Hong Kong, Belarus and Argentina, broadening access to the yuan, which isn’t freely convertible. They also underscore China’s efforts to expand the country’s economic reach in activities that don’t involve the U.S. dollar.”\
http://www.prudentbear.com/index.php/co ... commentary

The point is there plan working and our asset's are based on what premise to long term grouth i.e 10 year's plus? They are a stabilizing market "micro" and we have enabled asset prices based on a merit to claim "macro" ? I will take micro considerations only given proper time management. Geocorporate has already pragmatically penitrated there market's under parameters of contract. As a taxpayer I got no contract or claim to obvious conclusions. This capital the fed per se has enabled is a claim on assets to preserve we do not have or could say cannot give now to capitalized properly to sustain proper GNP organic growth, simply the soil is barren to produce on fixed cost basis in the States. Economic gravity apply's in all cases. The context is simple, They are expanding intra markets and we are malinvesting resources leveraged to impossible claims on future labor claims that are not there. There math apply's and ours is pumping another bubble. And we have watched it since the 80's culminate to our fixated closure still unfolding. Why are these low-caliber men in office? Simply because too many Voters themselves are of this caliber-they do as well as they know how to do. The dominators in office merely echo those in the population who believe their interests are best served by living at the expense of others. Ireland is fighting back and it willl be painfull and i wish them well to stabilize there culture. The free market or the Government there is no third choice.

[JLak]

JLak,
Your whole last post doesn't make any sense whatsoever. The monetary base makes up for a tiny fraction of the overall market for money and credit. An increase in the monetary base of 250% is dwarfed by even a 10% decrease in the market value of all credit outstanding.

...and yet the Fed tracks monetary base for a reason. Correct me if I'm wrong, but I assume that reason is that all loans are backed by monetary base components in reserve such that the maximum possible value of all loans outstanding is equal to exactly the product of the monetary base and the inverse reserve ratio. The other reason is that it's nearly impossible to calculate all forms of credit. I realize that we're not all monetarists here, but even Keynsians should find it hard to ignore the fact that the major indices have always returned to the same level as the monetary base for as long as we have data. The credit contraction is definitely huge and mostly unknown, so I can't say anything about the next few years. After that, however, the indices will quickly run back up, maybe with different companies in the index, but basically back up to the monetary base line. Also remember that Bernanke is an expert on the great depression. His contention is that the fed did not act soon enough. When they did act, they brought the base up to lift the market and all of a sudden the old boom time numbers started showing up on balance sheets and the problem was declared solved. This time we're clearly acting sooner and I can't make any predictions, but I do allow for some faith in the experts. I don't think that they can stop the wealth destruction, but I do think that they can use the tools that they have (inflation) to make the numbers look good. At this point the money has been authorized, but distribution is still a problem. WWII was the previous solution to the distribution problem and soon (months or years maybe) we will have another way to get the money out of the banks so that everybody will be in the top income tax bracket driving $100k Ford minivans to their million dollar condos. I don't buy the argument that government officials are clueless even though they may not be telling you all the clues. Bernanke, at least, was clearly born smarter than 99.99% of the population and I personally feel confident that he will get the result that he is looking for. If he has a nemesis it is the law of unintended consequences.

[aedens]

Mainstream paradox
Globalization and the integration and rise of the world's developing economies have been taking place at a breakneck pace. Who would have believed 20 years ago that China would become the world's third-largest economy in 2008? Or that so many jobs and, in some cases, whole industries would essentially be shipped from the developed world to countries with low labor costs?

Gao Xiqing, an adviser to then-Chinese Premier Zhu Rongji, said in 2000 "that if you look at every one of these (derivative) products, they make sense. But in aggregate, they are bull----. They are crap. They serve to cheat people."


http://www.nber.org/releases/

http://www2.census.gov/wholesale/pdf/mw ... entwhl.pdf

http://climaterealists.com/attachments/ ... 563143.pdf
Probability is data so warn our brothers and sisters to findings.

"The G2O economic way forward is now a two-legged stool. The two legs of stable financial markets and free trade are being sold along with the third - broken leg - of climate change hype which is not actually about defending the world public but about the creation of new bubble of false value around carbon trading, carbon taxes, carbon fixing and phony jobs; and controlling the world energy supply and third world development through the very financial system which has just failed.

Fr. Martin sternly warned of this systemic misnomer which was published in 1984 for the Geopolitcal resource extraction. My talks with Dr. Aldrich of Rutgers formalized my thought processes on this topical discussion and oxygen depletion zones we where addressing in the Atlantic at the time for water treatment tech we launched. These researches did lead me to Georgetown University to Mr. Clinton’s academic foreign trade proclivities to known realities of predicated investments.

"One can only admire the dexterity with which the oil companies - who stand to make $trillions from carbon fixing, carbon trading and carbon taxes - have positioned themselves both as the 'enemy' to be paraded against by 'green' campaigns while at the same time arranging themselves to be the principle beneficiaries of the most extreme climate change hype which is used to prepare for massive mad carbon fixing schemes and energy price hikes from which they would profit and increase asset values."
http://author.heritage.org/Press/ALACha ... 663=312158
Emptor

[aedens]

http://www.mellon.org/about_foundation/ ... w-w-mellon
History will bear that they worked for this man and that includes the Presidents
whom they quote "the presidents worked for" in the context of the monetary issues of the day.
The key focus IMO is the attributes of the period and its expansionary realities to put shoes on feet and
roof's over the heads of citizens. Mistakes, sure but overall more people benefitted under free market
and policy's adapted to issues over the pond to what we know happened which is John's expansive commentary.

JLak,
If he has a nemesis it is the law of unintended consequences.

http://www.theatlantic.com/doc/200905/imf-advice

http://www.washingtonexaminer.com/polit ... l#comments

In his appearance before Congress, Bernanke revealed with a single word who really runs the United States:
Senator Sanders: "Will you tell the American people to whom you lent $2.2 trillion of their dollars?"
Bernanke: "No"
No?
Indeed, Bernanke and Treasury refuse to provide this information even confidentially and off-the-record to Congress. And the official overseer of the TARP bailout program can't even get the information of where all the bailout money is going. With his single word "no", Bernanke revealed that Congress is impotent and out of the loop. In other words, Congress doesn't really run the country in the core area of business, finance and the economy. The financial giants and their servants at the Fed and Treasury do.

"Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible government, to befoul the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day."
- Theodore Roosevelt

"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted."
- Dwight D. Eisenhower

Acountabilty, and this is not about $600.00 dollar hammers anymore. Checks and balances must prevail for reason to prevail.
Gates is focused to needs and not wish lists and this is the common good for our men and women in service to us.
The Congress is not focused enough and we know what they need to do or the growing setiment will be on there doorstep.

[freddyv]

P/E Valuations Skyrocket; Market Shrugs

Excellent article that I would recommend the typical investor read in order to become more circumspect in dealing with financial reporting that is often incompetent and even fraudulent.

I know it seems like nobody is listening when you make this point (that the earnings being reported are not accurate) but we need to keep making it because the most important thing now is not to get the market to go up but to get it to where it should be and to get our financial community back to where we are dealing with the truth rather than what we want the truth to be.

--Fred

[aedens]

P/E Valuations Skyrocket; Market Shrugs

Excellent article that I would recommend the typical investor read in order to become more circumspect in dealing with financial reporting that is often incompetent and even fraudulent.

I know it seems like nobody is listening when you make this point (that the earnings being reported are not accurate) but we need to keep making it because the most important thing now is not to get the market to go up but to get it to where it should be and to get our financial community back to where we are dealing with the truth rather than what we want the truth to be.

--Fred

EBIT will prevail. Nothing else matter's.

[freddyv]

P/E Valuations Skyrocket; Market Shrugs

Just wanted to quote what you wrote in the above referenced article because it is one of the best, simplest summaries of (part of) what is wrong with the stock market I have read in a long time.

For decades, companies had been writing up the values of their plant & property, goodwill assets, and their inventory. They used these write-ups to pad earnings quarter after quarter, year after year. Now, as the value of their office buildings and factories are declining, they have to write them back down. But to simply ignore the damage that declining asset values are having as "anomalous" is not only unprofessional but potentially fraudulent on behalf of the analysts and the firms that choose to do so.

What is amazing about this situation is that investors themselves don't seem to want to know the truth. The vast majority that I come across become defensive and often angry when told the truth.

In my opinion, we are embarking on a period where those companies with low enough debt levels are separated from those with too much. The total equity of an index like the S&P 500 could indeed fall 80% from current levels in order to reflect the complete elimination of equity in many component companies. I don't know how long this would take to transpire, but could imagine that once a few precedents are set (such as GM), stockholders would be quick to realize their place in line. A panic out of common stock and into senior debt could ensue.

I can even envision a period of "predatory bankruptcies." A scenario where creditors see an opportunity in exercising their legal rights to accelerate bankruptcy in order to take control of the entire company, restructure it under private management, and issue shares to the public again once the economy has rebounded. Large profits could be had if the timing was right - and in most circumstances this would be perfectly legal.

An important insight and it would fit right in with the scenario we now see unfolding where the average Joe (taxpayer) gets to take it on the chin again and again in order to "keep the system going for the good of all."

--Fred

[freddyv]

P/E Valuations Skyrocket; Market Shrugs

Excellent article that I would recommend the typical investor read in order to become more circumspect in dealing with financial reporting that is often incompetent and even fraudulent.

I know it seems like nobody is listening when you make this point (that the earnings being reported are not accurate) but we need to keep making it because the most important thing now is not to get the market to go up but to get it to where it should be and to get our financial community back to where we are dealing with the truth rather than what we want the truth to be.

--Fred

EBIT will prevail. Nothing else matter's.

Read what Standard & Poor's has to say about that at
http://www2.standardandpoors.com/spf/pd ... asures.pdf

As Reported Earnings: Earnings including all charges except for
discontinued operations and extraordinary items, as defined by
GAAP. This is the broadest measure of corporate performance of the
three considered here. It is also the traditional measure with a long
history. It has been used for the S&P 500 and for company analyses
for decades.

Operating Earnings: This measure focuses on the earnings from a
company’s operations. It is usually defined by As Reported Earnings
with certain charges reversed to exclude certain corporate or onetime
expenses. The major drawback is the lack of a generally
accepted definition. The use of Operating Earnings seems to come
from internal management controls used when a business unit
manager is not responsible for managing corporate-level costs.

To reiterate, "This is the broadest measure of corporate performance of the
three considered here. It is also the traditional measure with a long
history. It has been used for the S&P 500 and for company analyses
for decades."

YOU CAN'T COMPARE OPERATING EARNINGS OF TODAY TO HISTORICAL EARNINGS DATA. To do so is to compare apples with oranges.

Only "As Reported" earnings have any historical significance.

I suggest to you that ten years from now anyone trying to play the game with operating earnings will be looked at like someone from another era.

--Fred

[aedens]

EBIT will prevail. Nothing else matter's.
Net working capital as a percent of total assets
is the seed money to projects underway. CFO's
are under intense pressure to get the sheet in order
in peer review to even get a contract to customer's
order's.
================================================
OK sounds good
Read what Standard & Poor's has to say about that at
http://www2.standardandpoors.com/spf/pd ... asures.pdf

In the current weak market and economic slowdown, a consistent definition
for earnings is doubly important – it can help provide credibility to investment
analyses and recommendations. By supporting this definition with data on its
indices and through the COMPUSTAT database, Standard & Poor's believes all
members of the investment community can contribute to more reliable investment
information and advice.

http://finance.yahoo.com/news/THE-INFLU ... 88073.html

Meanwhile we can see where dividends are going. Good luck on
sorting out seen and unseen acounting in the areana of truth
since the taxpayer are serf's as Hayek warned.
======================================================
Only "As Reported" earnings have any historical significance.

I suggest to you that ten years from now anyone trying to play the game with operating earnings will be looked at like someone from another era.



--Fred

[MarshAviator]

Stocks Sure Surge (Again).

http://money.cnn.com/2009/04/09/news/co ... /index.htm


http://money.cnn.com/2009/04/09/markets ... /index.htm

More pseudo good news again.
After tweaking the accounting rules (or using non-GAAP rules) banks advertise profitability.
The street buys it or at least thinks there is a buck to be made.

And this from CNBC:
http://www.cnbc.com/id/30111906

Suddenly, a small but growing group of private-sector economists is disputing the idea that the recession will drag on for months and that the rebound will be as weak as those following the the 1991 and 2001 downturns.

Being that journalist in general and financial journalist in particular are such students of history, I wonder if any of them
considered that the 1929 peak was not reached again until 1950 depending on inflation adjustment.
Now this one is over?

Curious that even with all this good news the DOW appears to still be testing the 8000 level. I wonder what is the significance of 8000?
Given the present earnings and subsequent asymptotic climb in P/E, why use this stale ceiling?
Looks like a lot of investors are drinking the cool aid, accepting old 3Q of 2008 earnings (or earlier).

Meanwhile, back on main street, people are getting both angry and worried. Our business order book is empty or nearly so, credit still largely unavailable for projects (energy), now we are also seeing a tax revolt budding, and people are beginning to question basic assumptions about capitalism and growth.
if people believe that bankers are now healthy (and profitable) but personal experience is one of misery, this is going to create quite a backlash.
The president is being poorly advised, by insiders and will bear the brunt of blame if the economy tanks.

I propose that bankers adopt the pirates creed: "Take what you can, give nothing back".
It would be the first honest thing they have done in years.