Sell Every Rally
Spoke Jimmy Rogers, author and investor, at Singapore, on Sunday 12, and learned that while the credit crisis has overwhelmed the European and American banks, the Chinese banks do have cash and are making loans effectively though cautiously. Jimmy Rogers called the Asian banks of Japan, China, Korea, Singapore and Thailand the creditor nations. The West is out of money; Asia still has money. Jimmy Rogers added the gloomy note that the West will continue to print money and debase the savings and investments of all the taxpayers. The printing presses are whirring now. Caveat emptor. At the same time, Jimmy Rogers did offer an observation of the coming rally in equities following the catastrophic sell-off of the last three weeks. Jimmy Rogers said he covered some shorts on Thursday last week, and perhaps covered them a day early. A bear market rally is steep, powerful and a delightful trap. How long? Days? Weeks? Not long. Jimmy Rogers added that the next leg down could be the Barack Obama assertion that he will raise capital gains back to the pre-Bush era of the same as marginal rates. The real test of the lows of Capitulation Friday 10 October -- when Aaron Task of Yahoo Finance told me on Sunday 12 that big money investors admitted to giving up -- will come then, to see if there is another leg down. In the 1933 market, there was always another leg down. And mention that Amity Schlaes, author of "The Forgotten Man," told me also on Sunday 12 that what prologed the deflation and recession and created the Great Depression was not lack of government action and intervention, but the unpredictabilty and whimsicalness of government intervention, along with raising taxes, protectionism, and blame-shifting. Sounds a deal like an Obama Administration?
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It's difficult to see how printing more paper (money) will help us. Debt is still debt. To underwrite same with greenbacks only dilutes existing greenbacks. How high inflation?
Barack Obama essentially proposes taxing debt. The good news is that nothing times nothing is still nothing. It'll be interesting to see how governments (municipal, county, state, federal) will manage to run on mere fumes. Would they dare to tax our now diminished income more? Would we let them?
The only thing that has ever backed any credit-based economy is confidence. Obama shows plenty of confidence, even poise. It's just that the same confidence Obama continues to demonstrate is purely political and does not translate favorably to market logic. At some point his presses are certain to run out of ink. He’ll send the intern out to buy some more. The intern will return empty handed. And it will have become apparent that printing paper costs more than it’s worth.
"In this talk, I would like to speculate a little, on the development of life in the universe, and in particular, the development of intelligent life. I shall take this to include the human race, even though much of its behaviour through out history, has been pretty stupid, and not calculated to aid the survival of the species." S Hawking
The Federal reserve will not introduce inflation via too much money on the market. Obamanomics might.
Thank goodness the ECB and the Fed are somewhat removed from the political process.
Will our politicians learn their lesson and reduce spending? Lower spending and taxes will make America a great nation once again. Reckless social programs and Medicare will bankrupt the nation.
How wonderful it is. The pursuit of happiness and all good stuff that we believe we need and just have to have. I’ve said myself (and I’m sure most everyone has) that I would make a very good rich man. I would do so much, for so many, and would ease suffering and hunger everywhere it would be possible.
Then comes these few occasions, where the truly wealthy dare to defy. Not by giving their dog millions of dollars or throwing some charitable chump change at the organization of their choosing. No, they give it all away. They give it all away in the face of the inevitable ethereal that awaits them and everyone. They give it all away to those that have never had , to those that look towards making the human experience somehow less miserable, and to those who have learned to do more with less rather than do less with more. Admirable people realizing their blessings and making a statement for all of us to deliberate. What is it that is most important?
The most recent, Andrew Lloyd Weber (you know destiny was at work there, with a name like that), announces he will bequeath his fortune to charities that will be for the benefit of children. Of course, the story was about how his offspring would not be in the will, but, I tend to believe that they are doing alright and can probably get by okay. To me, though, the real story is about the man himself and his determination.
In this day, when the buzz words are about adding zeroes to rescues and bailouts and golden parachutes, I say, that Mr Weber’s $750 Million pledge to try and make a difference in the lives of children, who might be living in cardboard box constructions, sifting through garbage for a morsel, and suffering through unimaginable fear and uncertainty on the periphery, is a wonderful story in this day.
Thanksgiving at it’s most admirable. If we were all capable of it, what would be possible?
PS: I once had a border collie who had been with me for ten years that became very sick and I realized that he was beyond help. I took him to the vet and had gotten there early so that when the vet came to the office he saw and heard me apologizing in guilt for unkept promises and the neglect I had shown to my very good buddy that I knew I was about to lose. The vet told me, “There’s no need for that. He’s had it better than 90% of the people in the world.”
Just a reminder of how blessed we are to have such a great nation to live in.
Wow John. I had so much respect for you. Then I read your highly cynical and unfounded comment on Jim Rogers prediction. How can you blame an Obama administration for an economic effect that is already a certainty due to Bush/Paulson policy? Does Obama beat his children too? I think Sean Hannity discovered that Obama invented AIDS and started the Vietnam War. I am porfoundly shocked to find your logic has fallen as low.
Hmm, Mark, did you really read this post by Mr B or are you confounded as to what was written?
I don't see, by any stretch, that what you have attested to in your comments is true.
Not even remotely true. Not even one sentence!