Posts filed under “Really, really bad calls”
On the last day of the year, I like to think back about the truths I learned this year. Some were revealed accidentally, others were the work of challenging data analysis. We happened upon some Truths during deep contemplation, and occasionally stumbled across them accidentally.
And of course, there was Wikileaks.
Regardless of your method, with a little digging, truth seekers were regularly rewarded. When you find it, often, it is not pretty; the Truth will destroy long held, cherished myths. But if you are an investor, you must go through this process on a regular basis.
If you can identify where the masses’ subjective view of reality is wrong, and then time when they begin to realize this, there are good investment returns to be had. A bonus of this process is some small measure of personal enlightenment.
In 2009 and 2010, I learned that Corporate America took over the political process via their exhaustive lobbying efforts. What was once a Democracy is now a Corporatocracy. Just because I personally despised this result did not prevent me from profiting from it. Hardware, software, and research all cost money. I can promise you it is much easier to fight the powers that be when you have an unlimited Amex card — and cold hard dollars fiat printed Fed money — to help you.
Exactly how far has the takeover gone? The corrupt US Supreme Court provided a sympathetic venue for the creation of corporate rights never envisioned by the Founding Fathers; Congress has become a wholly owned subsidiary of America, Inc. The White House talks a good game of smack, but genuflects in order to beg for job creation.
Politicians do the bidding not for the people, but for the corporate establishment. Those people who want to blame the barking, snarling government for all the woes of the world do not want you to look further up the leash to see who is giving the commands. These corporate apologists pretend to be philosophers, but in reality they are mere Fellatrix, bought and paid for by their lords and masters.
Fearing a corporate takeover of the nation isn’t nearly as radical as it sounds. Thomas Jefferson reviled the idea of big corporations: “I hope we shall…crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and to bid defiance to the laws of our country.” Jefferson knew the influence bankers could have on a nation’s soul, and he was horrified by it.
No less a figure than Dwight D. Eisenhower — five-star Army general, Supreme Commander of the Allied forces in Europe during World War II, responsible for planning and supervising the successful invasion of France and Germany, who then became the 34th President of the United States from 1953 until 1961 — warned that “we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.” He knew it was not just the military, but the entire existing corporate structure that sought to take advantage of their influence in order to thwart legitimate competition, skew Federal contracts, and exempt themselves from taxation and regulation.
What might Eisenhower have said about the bailouts, and enormous decrease in banking competition?
The surprising thing about this anomaly is that there are enormous incentives to find the objective truth. Often, it seems like the reality gets buried under a mountain of conflicting interests, with power and money and influence on one side and We, the people on the other.
However, the credit crisis and collapse has taught us one very important lesson: If you continually search for that nugget of reality, if you are willing to roll up your sleeves and sift through the vast mounds of horse shit that Wall Street and Washington regularly serve up, there is indeed, a pony somewhere in there.
That is your job in 2011: Go find the pony . . .
The Left Right Paradigm is Over: Its You vs. Corporations (September 27th, 2010)
Seeking the Truth — Or Obscuring It? (August 20th, 2010)
Matt Taibbi’s new book, Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America, was reviewed this weekend in the Sunday New York Times Book Review. The review was rather positive, with some quibbles towards the end. If you find Taibbi’s writing entertaining — and I do — then you should read…Read More
The WSJ reports today that nearly 100 U.S. banks that got TARP funds from the federal government in Q4 2008 are in danger of going bankrupt. So far, 7 bailout recipients have failed, resulting in more than $2.7 billion in lost TARP funds. The balance of the remaining potential failures relatively small banks — the…Read More
I wonder if you could go to a Bank CEO’s home, break into his house, and throw out all of his personal possessions — family heirlooms, photos, awards — then claim a paperwork error. That is the excuse they have been using: “In an era when millions of homes have received foreclosure notices nationwide, lawsuits…Read More
I never want to make excuses for the excesses of Wall Street or the horrific judgment exercised by iBank management — you cannot, its inexcusable — but it long past time we begin holding the Street’s grand enabler’s responsible for their actions. Which brings me to the accountants. The New York attorney general may be…Read More
Here we are beginning the final 2 weeks of the year. The economy continues to limp along, improving, albeit rather slowly. “Recession fatigue” is likely to make this holiday consumption spree appreciably better than the past 2 years. Markets have looked a bit tired — and yet — every opportunity to see big whackage has…Read More
In tday’s NYT, Joe Nocera calls out FCIC member and long time AEI analyst Peter Wallison, and his inconsistent narrative about Fannie and Freddie: “As he wrote in 2004, “Study after study have shown that Fannie Mae and Freddie Mac, despite full-throated claims about trillion-dollar commitments and the like, have failed to lead the private…Read More
All last year, I kept getting emails from people asking me: “Why do you keep hammering on these issues? Why do you beat up on the eejits who push the Fannie Freddie CRA meme? Its dead, everyone knows its nonsense.” Except, not so much. That 4 members of the FCIC could push such as discredited…Read More
I never wanted to write Bailout Nation. That only came about after Bear Stearns collapsed. McGraw Hill approached Bill Fleckenstein to do a follow up to his successful Greenspan’s Bubbles: The Age of Ignorance at the Federal Reserve, about the end of Bear. Fleck turned them down. When the publisher asked him who else was…Read More
Back in October, I mentioned the website that gone viral: “Where’s the Note.com.” It allowed homeowners to easily request to see a copy of their mortgage note. Yesterday, I noted that at least one Homeowner had made a “wheresthenote.com” Mortgage Note request, only to see Bank of America report the request as a dispute to…Read More