Wednesday, January 27, 2010

Vomitous*

That adjective perfectly fits the Davos World Economic Forum. I'm listening to interviews of some of its participants on Blabberg this morning. Such blather ! These certified members of the ruling classes [aka the rich & powerful] don't know anything about fields beyond their own expertise or nor anything about the lives and difficulties of the common man, yet pontificate about how the world should be run and how the lives of the common man should be ruled. By who ? Them.

They blab about bubbles. What is the one bubble rarely mentioned ? The huge flow of money from the rich to hedge funds that play trading games and disturb real economic funds flows. Do they discuss how to burst that bubble ? Nope. Why ? Because most of the participants invest in hedge funds. Or run hedge funds. Or their pals runs hedge funds.

What is the single biggest risk in the world financial markets ? Credit default swaps. ["CDS"] Those "weapons of mass destruction" permit hedge funds to speculate cheaply in the credit of many, many corporations and nations. Those also create dangerous interconnections among financial institutions that can drag the entire system down if a single large institution messes up. Who is talking about banning those ? Few. There's moi [me] and David Einhorn, the fellow who correctly analysed and anticipated the Lehman debacle. Maybe Warrren Buffet. Why ? The ruling classes like the turmoil and their hedge fund investments make money for them. AIG was a credit default swap blow-up. That should be enough to make one realize those instruments should be banned. (I'd settle for requiring 100% cash collateral for anyone writing a CDS).

Turmoil gives the ruling classes power. That's how many aristocracies were created in medieval times. The common man was forced to become a serf to buy "protection" from armed, wealthy tribal chiefs because of fear of raids and assaults. Over time, those aristocracies then gained more and more powerful from the central government and eventually destroyed the nations.

Today the lobbyists of the ruling classes are working hard in DC and the capitals of Europe to get more power over our lives and perpetuate their positions. Davos is one place they coordinate ideas and tactics. That place should be seeing huge demonstrations from the angry public. Instead, the press fawns over their access to the bosses. It's sickening and I annually, publicly rant about how I despise that forum.

Davos is strictly for the vomitorium.

Lending

Blabberg says banks aren't lending. True. But those airheads don't think why. Banks prefer to speculate or own in securities. That's where the money is going. Why ? Because their trading desks can make money AND because the regulatory rules favor securities. If a bank had to put up more Tier 1 capital to own securities - which would help underwrite the huge market value risks in them - they would shift assets towards loans they can manage better.

Of course, governments like banks to buy their debt .. as securities. Sheesh, soooo much of public comment is sheer propaganda, it's infuriating at times.

Bernanke

I support his confirmation. Battleship Ben was one crucial force in preventing a global depression. True, he was a bit slow, as readers of this blog know. But like big, slow battleships, once his salvos got going, he crushed the forces of darkness.

Besides, since he's been doing what I write for about 2.5 years, how can I complain ? He's obviously a loyal reader now ;-)

Markets

Back to my old, seven language state:
Je ne fais rien.
Ich machte nichts.
Nic nie robiÄ™.
Estoy haciendo nada.
Non faccio nulla.
Nihil facio.
I am doing nothing.

Word of the Day

"Vomitous" - adjective [$100]
Vomitous means 1. of, pertaining to, or causing vomiting; 2. (informal) repugnant, disgusting, nauseating [e. g. vomitous business methods].
Sentence: Annually viewers of the financial media are subjected to vomitous reports from Davos, as the fawning press propagates the propaganda of the ruling classes as they seek more power over the common man.

47 comments:

Bud said...

good morning Bman !!!!!!


excellent post ..............one of your finest efforts in awhile

Bud said...

i can't watch the business channels this morning................davos makin me puke.............prety funny how the media thinks ti's such abig deal


i been watching imus and mike and mike this morning

Bud said...

i want Ben to stay...............but the Fed has been severely compromised


is Ben going to have to get Congress's permission to buy office supplies now?????

Bunkerman said...

yup, I switched off Davos bs too.

Bud said...

and Geithner i support too..............i fear obama will replace him with a university of chicago lenisist economics professor

Bud said...

oregon passes tax hikes................congrats frosty


why the heck are you livin in that state ??

Bunkerman said...

It troubles me that so many R's are complete idiots about Ben.

They are the ones who defeated TARP I and cause the ensuing panic round 2.

Bunkerman said...

Oregon has California-itis.

Too many California nuts moved north.

New Hampshire has a mild case of the east coast version.

Vermont has is bigtime.

Bud said...

finished watchin the rest of the M16 show last night...................Bman were you awatre the M16 was jamming up in vietnam??


and they had issued no cleaning supplies for it..........since they thought the gas would self-clean the chamber.............a colossal mistake that caused GIs lives

maverick said...

Bman.....what % of your investment capital is in equities?

mfl59 said...

David Einhorn is a beefer sir...are you siding with the opinion of a beefer?

Bunkerman said...

yes, I know all about that, Bud.

The Pentagon disregarded the specs of the inventor and changed the powder formulation to one which was easier to manufacture ammo, but caused a lot more fouling.

It wasn't the rifle.

All that was fixed long ago.

Bunkerman said...

yes, once in a blue moon, a beefer can be correct about policy matters.

Frosty said...

"why the heck are you livin in that state ??"...uh because it is as far from u flaazzholes I can get without going five-o...I should "knock your teeth out".

Bunkerman said...

Krypto Fund target specs (most of my capital) are 25% US stocsk, 20% foreign (1/3 each pacific, europe and emerging), 15% reat estate (2/3 TIAA real estate, 1/3 vanguard REITS, 5% gold (about 1/3 is Vanguard precsious metal sfunds, the rest bullion or gold+silver ETFs), 12.5% TIPs, 22.5% fixed income (mostly defered annuity type) like TIAA or whole life).

I am 55 years old; a few years ago I had a bit more stocks and real estate. I have some income real estate on the side not included in Krypto Fund.

Bunkerman said...

1-2-3 Fund is NOT included in thsoe numbers; but Fido Fund and Sky Fund are.

Bunkerman said...

right now, Krypto Fund has a good bit of cash awaiting better prices on TIPs. TIPs is underweight.

The rest are close to the norms.

Spin-em said...

I hope that answers ur question mav

mfl59 said...

Bunkerman I hear John Meriwhether is opening another hedge fund...perhaps you should allocate some of your risk capital there...isnt he good friends with your Harvard buddy Myron Scholes?

Bunkerman said...

I had the class with Fischer Black, not Myron Scholes. Have never seen nor spoken to Myron Scholes. For disclosure, I did have a class with Robert Merton who was involved in the LTCM debacle.

re my investing in a hedge fund, Mrs. B has orders to have me committed if I ever did that.

Frosty said...

Bunky...you never did answer Ace yesterday...have you ever been in a brawl...nono ring with pillowhands...nono bitchslap in the halls of pakiprep Salstyle...locked up with a real man with bad intentions.

Bunkerman said...

I was in fights as a boy.

Not as adult.

Bunkerman said...

lolol ring with pillow hands.

it didn't feel like a pillow taking a hard right hand .. or even a stiff jab.

Frosty said...

Bunky...are you anticipating anything investor freindly to come from your commander and chief tonight.

Frosty said...

just one follow up question...as a boy, when a kid would tap out, would you provide him a couple extra statement shots to emphasize your dominance, send a message.

Bunkerman said...

re "investor friendly", nope.

the best investors can hope for is to be forgotten.

Frosty said...

Bunky...hearing the cool thing to do is have the new iPad for ever room of your house...being a slave to trends I assume you are down.

mfl59 said...

Bunkerman are you a bull on China?

Or am I the only believer?

Bud said...

i am a huge bull on china..............actually ............i'm a huge bull on the spx too

Bunkerman said...

I am interested in the iPad as something to carry around the house easily to do minor computer things like check email, instead of going to my office.

Bunkerman said...

re China, what do you mean, being a bull on it ?

I expcet it to grow rapidity for awhile, then have trouble due to the dictatorship running it.

I also expect soon a confrontation over its currency, which will come from both Europe and the US.

Bud said...

around the house ?? are you f'ng kidding me ??


what was that word we had for a common man with simple tastes ??


my ass

Bunkerman said...

I suspect they are building much that is worthless and wasteful and stupid.

China will have its up & downs in an uptrend.

That dictatorship is the big unknown.

Its use of cyber attacks, etc.

very dangerous they will miscalculate.

maverick said...

5 bills bman...order 2

Bud said...

just remebered


'epicurean' my ass



PS.........what common man walks around his house with an I-pad ?? you gonna put that in a man-purse Bman ?

mfl59 said...

Bunkerman would you buys Chinese equities today for a 3yr hold?

mfl59 said...

Bud me and you baby....chinlee!!!!!

Bunkerman said...

actually, I would put it on the bar in my "Sword Room" to check things insted of walking to my office.

Also, I think Mrs. B might want one to read with & do email when watching a movie with me - she seems able to do two things at once, unlike me.

Yup, mav, will buy two.

Bunkerman said...

I would not buy China stocks except as part of an asset allocation.

I see no reason to overweight them.

mfl59 said...

What are the odds Dennis Kucinich can do 1 pull up?

Bunkerman said...

a common man with a few extravagent/elegant tastes is an epicurean.

Like a common man who splurges on sushi twice a week ... and drinks $500/bottle scotch

Bunkerman said...

Dennis ... 1000:1

mfl59 said...

a common man with a few extravagent/elegant tastes is an epicurean.

Like a common man who splurges on sushi twice a week ... and drinks $500/bottle scotch


"vomitous" indeed.....

oh man thats a grand slam sir...

Bunkerman said...

I never said I was an ascetic, just an epicurean.

I still sweep out my own garage, etc. Bought and cooked myself a roasting chicken for $1.49/lb.

make my own scones, cornbread muffins, etc.

Even fry my own eggs on the weekend.

And still like peanut butter & jelly sandwiches.

Bud said...

vomitous lmaoooooooooooooooooooooo


that is a f'ng grand slam!!!!!!!..............Bman you got taken over the green monster

Spin-em said...

bunk ...can you juggle??

Frosty said...

uh Sal...don't you have a Prowler to polish.