Rolling Stone, which has almost redeemed itself by paying attention to the economy for a change, had a recent article about the insiders from goldman-sachs taking a large bite out of the future faith and cresit of the government of the usa. sadly enough, as part of its maintaining its perpetual whininess, it describes some evil plot in which people who cannot put “credit default swap” into an intelligible sentence are being picked on by people who can.
my answer to those who complain that they do know what a toxic debenture is? learn or shut up. if people can be bothered to “research” the love lives of stevie nicks and lindsey buckingham, they can learn to keep track of how the economy works.

When the prudent speculator is testing a story stock, it is usually quite useful to look for so-called stock boards, like
http://messages.finance.yahoo.com/mb/BTIM.OB
where the legitimacy of the views being put forth by present holders can be tested.
another might be:
http://moneycentral.msn.com/community/message/topicsandtickers.asp?Symbol=BTIM
o. look. msn doesn’t bother with stocks kicked off the national exchanges and lurking around on bulletin boards.
john f. kennedy once said about lobbyists of varying kinds, “where there is smoke there is a smoke machine.”
on penny stocks there is an entire smoke industry (which oddly enough, does not ave an naics number). a way to hunt down the smoke from the fire is to look in filings for “investment services” being documented with transfers of stock or cash (sometimes both) t create “buzz.” that buzz will first go to preferred suckers on the phone, then to less preferred subscribers to “investment letters” and once that’s in place, then to whatever stock board or chat room somebody can post to.
a clue to such posters is that they generally refer to any discussion of th story or the fundamentals  as “paid bashing” by “evil shorts” etc.
the saddest cases happen when somebody who thinks equities trading is like football fandom becomes a brain dead cheerleader for the story, and continually hhypes about some future price, like..5, or 12..or “when the puppy is on the nasdaq national market” and offers that as the only dd he has. thirty years ago, when penn state et al were starting the snowball rolling, fleetwood mac sang about breaking a chain,  a story believed without due diligence.

Posted under business

Removing all the politics from today’s sense of how to rebuild the economy, it is useful to look around and see what the people who can actually look ahead are seeing.

Is OPEC adding capacity? no. the saudis and kuwaits have both cancelled deals to make better use of future oil, because they can see no sign of demand.  Mexico’s fields are collapsing (which was part of the hyper-spike earlier in the year). China’s major fields are declining, if not collapsing. (even cramer’s people acknowledge that..possibly so his boys can cover shorts) , and yet oil “can’t find” $50 .

Another part of the nonsense about the bright future of petroleum is in the idea of Canadian tar.

Here’s some iconic realities courtesy of another commentator:

…” the energy requirements of the projects planned for tar sands development already exceed the amount of available natural gas from the entire Mackenzie River project. Virtually all estimates for natural gas usage in tar sands operations by 2015, just 10 years hence, exceed the projections for available amounts of natural gas…
“Immense amounts of water are currently being discarded into settlement ponds, in which it may take 200 years for the smallest particles to settle down to the bottom. Meanwhile, the water is toxic, and mixed with exceedingly high levels of heavy metals and other exotic elements that you probably do not want to eat.”

So, how to proceed towards an economy that can actually afford to use the remaining oil resources properly?

Back to the idea of getting inefficient cars off the roads, out of the junkyards, away from the air supply, creating investment oportunities for alternative vehicles to actually make it from the “concept” display at a convention, or a magazine, and into car lots and driveways.”

Posted under business

Can a transparent and choice driven market place prevent Washington from adding to the “czar syndrome”??
the AP reports: “A government “car czar” would oversee any bailout of U.S. automakers under proposed terms being negotiated by the White House and Congress for extending up to $17 billion in emergency loans that mainly aim to spare General Motors Corp and Chrysler LLC from bankruptcy.”
Adam Smith noted centuries ago that the job of government was protecting the process of markets, not markets; not the expansion of its own power, but the use of its power to protect the process of discovery, transport, utilisation.
the “bail out” in the auto indistry needs to be driven from the bottom up. There isno question that the indistry needs help. What is being forgotten is that “industry” is not a corporate flag, but the process of people connecting.
Currently, the “end receptors” are blocked by 2 real facts: at least 18 million households need  as part of the social contracct to replace cars, and those same households cannot afford to do so.
In addition, the neighborhoods and towns where those peole live are suffereing from the systm being clogged with underwater mortgages, job loss, and declining tax base.
While there is definitely a need for rigid oversite in dispensing any federal funds into the vehicle industry, it is a fact that most of the oversite needed is already in place if the right solution is invoked.
Mecnaisms exist for tracking and destroying titles for crushed cars. Mechanisms exist for moving the paper of delivered credits from the receiver of the dead car to a car lot, to a bank, to the corporate accounts back to the treasury. Mechanism exists for collecting an ongoing 10 cent federal fuel tax. All of this can be done
with the least possible additional “Beltway bureaucracy.”
And given when this idea was first laid out here, some of its innate power could have been in time for Christmas.

Posted under business

reuters, commenting on the "bailout" needs of the auto industry offer to america an interesting factoid:

"The companies say 1-in-10 U.S. jobs are directly or indirectly related to their businesses."

does this pass the "too big to fail" test?
probably. more importantly, what is the relationship between assembly line workers, r&d teams and distribution channels to things like the mortage industry, that are outside in "indirect" relationship?
  if the auto industry collapses, what does that do to the mortgage servicing of tertiary beneficiaries like the school districts where those mortages are platted? the rents and mortgages for commerial properties servicing those communities? the environmental and health industries level of burden if cars and trucks continue to turn to smog and rust for inability to replace them?

 reuters goes on to say,"Menendez and other lawmakers have said Alan Mulally of Ford, Rick Wagoner of GM and Bob Nardelli of Chrysler will have to deliver a convincing case about their distress and their prospects for recovery."
 to which i calmly reply, the heck with their distress. this is not about the suits, the corporate logos and brands. this is about the community where high school graduates can earn a reasonable living polishing cam shaft bearings for a toyota factory 100 miles away.

Sen. Arlen Specter of Pennsylvania, said on Tuesday the mood "candidly isn’t supportive" of a bailout.

"There’s a skepticism about their ability to formulate plans to survive."
 and that is more than fair enough, and needs be off the table. the companies that can properly service a market will endure.
 the issue is creation of that market.
 that’s why the "10 cent solution" needs to be a major part of the auto industry recovery: it creates the market, allowing properly transparet and accountible free market principles to go back to work.

"GM said in its appeal for $18 billion in cash and credit that it was prepared to cut jobs, dealers and brands."
  i would offer the american people are not preapred for that. they are prepared for a future with some promise to the coming generations, honest, unbloated pay for execs, and jobs remaining in the cities and towns that depend on that cash flow for survival.

 Want Christmas for 300 or so million americans without rewarding laziness and pride; arrogance and corporate "entitlement"? ten cents a gallon— $18 billion a year with an added primer of $10 -15 billion that will return to the treasury through taxes, to get a few million cars off the road that eed to be off the road, and replaced with a few million cars that geerate meaningful revenue throughout the economy by the act of being made.
  

Posted under business

today gm announced it can see the end of its cash reserves.
conbress has already told gm to go take a hike.
is this a poker game, gm bluffing to see if congress folds?
probably, becuase neithr side wishes to deal with the issues:
the roads are filled with cars that people value, becuase thy have no choice.
while oil is “cheap” and to kep it that way, a 10 cent fuel tax,
with the proceeds to go to buying cars made before 89 off the roads,
cars turned into tuna cans, not “recycled” as cars,
buying the cars at their original retail price with vouchers usable
only for buying cars made after 2002 that meet forward looking cafe goals
would get assembly lines moving again, provide locked base leverage for
extending credit, reduce health care costs, reduce oil dependence.
directing such vouchers back to the car “makers” as tax offsets, or
to be exchanged rirectly for r&d money maintains the forward motion,
and the delivery channels already exist between dealers and makers.
used car lots can use the vouchers as payment for floor plan with banks.
banks can hold the vouchers as capital for loss reserves,
and a clear, fast, utterly trsanparent market can immediately appear
for moving the “cash” value of thse vouchers, in th same way that a dtc
can keep track of “street name” equities.
ten cent a gallon equals about $18 billion dollars.
cars being taken of the road, let’s call it $8000 each,
thereby retiring 2.25 million cars, without “debt”.
invoke debt against tax revenues as a model, and double to 4.5 million cars a year.
let’s pretend there is shrinking dependence on a dead car in the driveway,
and say a demand for an additional 4 million vehicle units a year is created.
is that enough to bail out gm?
ask your congressman why it isn’t being done.
and pass this post along to anyone you know
who pretends to be “looking for solutions.”

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