Posted on 02/07/2010 8:02:38 PM PST by blam
Capitalism Reigns, Stocks Bull Market In Self-Delusion
Stock-Markets / Stocks Bear Market
Feb 07, 2010 - 06:48 PM
By: Charlie Tarango
The Obvious
Jesse Livermore is one of the Greatest Legends on Wall Street. Rightfully so.
From him and from experience I am have learned one of the most important things a Participant can ever learn in Markets:
The Big Money is never made and kept on the “Obvious”.
David Copperfield
If you’ve ever seen David Copperfield or any other Talent in his League, ask yourself what is critical to “The Performance” ?
Your Perception.
This Ambit of Perception and Performance exquisitely illustrates how Economic and Political Power is exercised in the real World.
The Right Questions
To get on the road to finding the “Right Answers” you have to start with the Right “Questions”. So let me ask you this first:
If it was clear that Stocks, Bonds, Commodities, Real Estate and Cash ( in anything other than the Dollar ) were all going to have a substantial loss of value going forward, who would be “Buy” side of anything ?
Now ask you self this, if the President said to Corporate America – and to all the multi- nationals doing business in the US :
“I want you to Lower your Prices across the board to help the average Consumer and stimulate growth long term for the US”, do you think they would ?
And if the President also said to the Public,
“Anyone whose wealth has grown in the 100‘s of percentage points, I want you to send that extra wealth back to the Government to pay for all the Debt Obligations we are incurring”, do you think they would ?
The Wisdom of the Four Way Crossing
Have you ever been in the Big City at a four way light that has gone out ?
If so, you understand why there is indeed amongst the “Elite” as loosely defined, a Collective of Power. And thank God.
Without them, Civilization fails. I don’t know who they are – and I don’t need to.
I know this: America’s long History demonstrates they are there in every Generation – and what must be done, will be done – like it not, no matter who pays.
Now just what is that ? The “Answers” are found in Mathematics.
Intellectually Honest Mathematics
Like questions, Mathematical Answers are derived from the right Metrics of Measuring a given factor. In fairness to Participants, there are a million statistics, numbers and data points generally.
But the pieces of the puzzle can be reduced to just a few large ones – and they are as clear as can be.
For the United States the greatest threat to the Fiscal House lay not in “Unfunded Liabilities” or the National Debt per se, but rather in two aspects:
Interest on the Debt and Demographics.
What are US Government sponsored Debt Obligations in reality ? They are claims on the future productivity of the United States – and without any question, these obligations are Long Term – not Short Term.
And as in any transaction, past performance is relevant to the question of future performance on any obligation. So let’s look at Past Performance – not Opinion – and a 20 % tax rate on GDP, to get a view on the ability of the United States to meet its Long Term Debt Obligations.
Let’s look at GDP over the last Century in the US at the following marker points:
That’s only assuming the low-end of 30 year growth in the US Economy, and assuming a sub-par Depressionary/ Deflationary Period in 2010-2020, just as in the 1930’s.
We see a lot of numbers thrown out focusing on the “Unfunded Liabilities” and other “scary” numbers of US Government Debt Obligations all of which are based on past growth of those Obligations – but we have yet to see any numbers on the other side likewise showing the same as to US Growth potential based on past growth.
Based on this it is reasonable to suggest that by 2040 the US Government will be taking in yearly is today the entire US Debt, and by 2070, the US Government will take in yearly 1/3 of the “Unfunded Liabilities of $ 100 Trillion” that some are projecting by that time.
When you apply this Intellectually Honest Math – based on valid and demonstrable Past Performance - an entirely different picture of the US future emerges – one far from what the Doomsayers would have everyone believe.
America is truly a great Nation – it should be no surprise that it has great problems as well. America’s past performance – Politically and Economically has given every reason to have Confidence in it’s future, no matter how things appear to some today.
[snip]
Author either drinking or naturally flaky. I’m sorry, the rambling glazed my eyes over 3/4 of the way down.
It’s a long damned time between now and 2040, and I’m really not interested in theoretical projections of what the markets might be like on the other side of the impending implosion in the US Economy.
We’re talking about 30 frickin’ years from now, and a lot will change between now, and then.
Why?
Does every sentence.
Get its own paragraph?
;-)
Cant read the external link. But seems to me he is relying on inflation to eat up the debt. This would work if people didn’t mind losing value in there investments, but who is going to keep putting money in a losing investment. Plus all those people who are counting on their retirement from this will want more and more as inflation eats up the value of the money. Most of the retirement plans from the government are index for inflation. Doesn’t work in my opinion.
Yup...I'll be dead.
Stream-of-consciousness or gonzo stream-of-semi-consciousness ... I gave up trying to determine.
Does every sentence.
Get its own paragraph?
That is newswire or press release style.
It's written for easy editing.
In particular, deleting material to shorten the piece.
To fit.
Does every sentence.
Get its own paragraph?
I
don't
know.
The
BBC
often
does
this
too.
Is the guy on drugs?
Livermore died BROKE.
Why did you choose to waste all FReepers' time with this twaddle, blam? Usually, your posts are of exceptional value.
Me too my friend, and that means neither one of us will care....
Cheers!
Prior to April 15th 1912, the Titanic was a great ship.
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