China vs USA: RE Bubble in China?

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Subject:	Re: FWC: Who Gains From The Eurozone Fiasco? China
Date:	Tue, 23 Nov 2010 10:09:22 -0800
From:	Jas Jain

JS: "Jas: I am not sure I buy into your China/capitalism scheme.  For somebody who is so fast to point out the RE bubble in the "dopey" world of the US, you are blind to it in China.  Can communism maintain bubbles better than dopes can??  The prospect of 1 billion people selling everything (including precious metals and all this other "capital" that they are bubbliciously accumulating) to survive without many of the safety net features us dopes have, should prove verrry interestingkkk...:)"

 

Property bubble is the best proof that China is capitalistic! I fully expect a depression in China and the whole world. Depressions are very capitalistic!! Finance capitalism guarantees severe depressions, be it America, or China, or India. China has lot of capital cushion while America and India don't!

As to born-and-bred Americans, their dopiness is moronic (when I label them dopes I am trying to be polite!). What sort of person, except a moron, thinks that Greenspan, GW Bush and Bernanke would serve the interests of the American People and not their own and those who put them in the first place? These three evildoers were responsible for allowing blatant mortgage fraud in order to grow the economy so that Greenspan got reappointed, GW Bush won the 2004 election and Bernanke got appointed when Greenspan could no longer remain Chairman by law. These evildoers would go to any length to keep power as long as they could by law! The proof is in the pudding. No? Does anyone see the vulnerability of the American system?

Only a moron can be made to think that America has a good political system to serve the interests of the populace. History is full of kings and emperors who served the public interest far better. America promotes to power shortsighted and selfish SOBs. It is not your grandfather's America. Political Correctness has destroyed that America decades ago. Under Obama PC has reached its zenith. Within the next 20 years the American political system—System of the Crooks, by the Crooks, and FOR the Crooks—would be thoroughly discredited. Until then the uncertainty would keep increasing.

Jas 

David Rosenberg on Gold and Commodity Currencies

Gold Price and Chart - ETF: GLD Price & Chart

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Subject:	David Rosenberg on Gold and Commodity Currencies
Date:	Mon, 22 Nov 2010 09:00:51 -0800
From:	Jas Jain

Gold and Commodity Currencies...

"Gold and silver continue to look good in this environment of an ever-declining level of faith in the integrity of the global financial system…"

Those who have read my comments since 1997 know that that has been my primary argument in support of owning gold. Gold is an insurance against the collapse of the American-led global financial system, a system that over the past 15 years has been turned into a System of the Crooks. And China is the biggest beneficiary of this.

I am not bullish on silver and commodity currencies because the Greater Depression cannot be pushed farther into the future, with most developed economies artificially supported by debt, for long. What sort of person has faith in govt's (including the Fed) powers to grow the economy for the good of the majority? The endgame is near.

Jas

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David Rosenberg; 11/22/10:

"Gold and silver continue to look good in this environment of an ever-declining level of faith in the integrity of the global financial system (gold is up 24% for the year and silver has gained 65%). At the same time, some of the commodity currencies are taking it on the chin — New Zealand's kiwi was just hit by a downward revision to its credit rating outlook by S&P 500 to "negative" from "stable" and the Canadian loonie has been trading a tad more softly of late, too."

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George Soros and John Paulsen Loaded with Gold

Gold Price and Chart - ETF: GLD Price & Chart

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Subject:	America's Biggest Fraudsters Are Loading On Gold
Date:	Mon, 22 Nov 2010 09:36:43 -0800
From:	Jas Jain

America's Biggest Fraudsters Are Loading On Gold

George Soros and John Paulsen, two of the biggest financial bloodsuckers in America show gold as their biggest holding in their hedge funds! This was just reported on Bloomberg. The American System of the Crooks facilitates financial bloodsucking and hedge funds are the biggest beneficiaries.

Only dopes derive satisfaction from voting for the agents of the Crooks. Every election since 1996 has led to Change for the Worse. This, of course, is with the benefit of hindsight. Dopes have no hindsight to speak of.

Jas

• Gold Price and Chart current Price = $1,357
  
  
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Who Gains From The Eurozone Fiasco? China

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Subject:	FWC: Who Gains From The Eurozone Fiasco? China
Date:	Mon, 22 Nov 2010 07:12:15 -0800
From:	Jas Jain <jas_jain

FWC: Who Gains From The Eurozone Fiasco? China

"There is a much more general or global phenomenon in which powerful people cooperate to build an economic model that provides growth based on a great deal of debt. When the crisis comes, those who control the state try to save their favorite oligarchs, but there aren't enough resources to go around… Here is the present problem: It's not just the Irish elite that is under pressure and struggling to sort out who should be saved. It's also the European bankers who funded them."
 
Democratic govts exist to serve bankers, or Bankrupters and Fraudsters, in particular, and Corporate Crooks, in general. Hence, Democracy = Domination of Money. The primary objective of the govt., then, is to keep 'the people,' i.e., the demos, in line while their real masters do what the Crooks normally do. And what better, or lower cost, way to keep a working and taxpaying dope in line than to give him, or her, a vote?! I mean a useless vote. The Church has nothing over the high priests of democracy in terms of brainwashing the population about the sanctity and efficacy of the institution. Once doped, financial bloodsucking is effortless and without resistance. What a system! The question is: How much longer could such a system survive? Not until 2030. China would make sure of that. Before that the world would have to suffer thru the Greater Depression.
Chinese understand capitalism: Those who have capital get to dictate the terms. Chinese would continue to accumulate capital as long as they are allowed to. The American economy is on life support and part of that is being funded by loans from China. Not counting the life support of debt the US economy has been in depression for more than 13 years. Most democratic govts are on life support. China would win the Economic WW III by soundly defeating America and India. Democratic dopes would get their due. Lot sooner than most imagine (dopes don't think; they hope, wish, imagine, etc.).

Jas

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http://baselinescenario.com/2010/11/19/who-gains-from-the-eurozone-fiasco-china/#more-8292

Who Gains From The Eurozone Fiasco? China

By Simon Johnson

Ireland will get a package of support from the EU and the IMF.  Will the money and the accompanying policy changes be enough to stabilize the situation in Ireland or more broadly around Europe?  Does it prevent Ireland from restructuring its debt – or move the Irish (and other parts of the European periphery) further in that direction?

And who gains from the delay and mismanagement we continue to see at the highest European levels?

This is complicated economic chess within Ireland, across Europe, and at the international level.  In my Bloomberg column this morning, I suggest we look several moves ahead, recognizing the underlying political dynamic:

There is a much more general or global phenomenon in which powerful people cooperate to build an economic model that provides growth based on a great deal of debt. When the crisis comes, those who control the state try to save their favorite oligarchs, but there aren't enough resources to go around

…..

Here is the present problem: It's not just the Irish elite that is under pressure and struggling to sort out who should be saved. It's also the European bankers who funded them.

If the Europeans continue to fight among themselves, regarding who bears what losses – and who has to face what kind of public accountability – which other countries gain on the global stage?

Who has the ready money available to recapitalize the International Monetary Fund, if needed?  And it will be needed if Spain comes under serious pressure.

Who understands the strategic concept that piles of "reserve currency" can give you great political leverage?  It is hard to find such thinking among today's generation of American politicians.

And who is already playing international economic chess at the highest level?

China.

For my full assessment, please follow this link: http://www.bloomberg.com/news/2010-11-19/ireland-crisis-might-give-china-break-it-seeks-simon-johnson.html

 

FDR, Reagan, and Obama by Paul Krugman

Friday, November 19, 2010
ECRI WLI Moves Higher; Growth Revival Ahead Says ECRI

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Subject:	FWC: FDR, Reagan, and Obama by Paul Krugman
Date:	Sun, 21 Nov 2010 12:13:02 -0800
From:	Jas Jain

The leftwing of the Democratic Party, progressives like Krooksman, yearn for FDR and rightwing Republicans like Limbaugh yearn for Reagan as to the kind of economic policies they would like to see. For the past 80 years, FDR and Reagan instituted economic polices that make these two the worst presidents. They enshrined policies—welfare socialism and crooked capitalism—that have proven to be very bad long-term. Both sets of economic policies are now firmly entrenched in American econo-political system and what Americans have gotten is the worst of both.

 

"More and more, it's becoming clear that progressives who had their hearts set on Obama were engaged in a huge act of self-delusion."

Krooksman, obviously, was one of those progressives who were dancing with delight when Obamacare was passed, but he admits to engaging in self-delusion in supporting Obama because self-delusion is one to the 5 top defining characteristics (there are about a thousand total, most of them minor) of born-and-bred American dopes. So, Herr Professor Krugman, don't feel so bad because you were doomed at birth in succumbing to self-delusion and other dopey behavior. Lifelong brainwashing takes it toll, Nobel Prize or no Nobel Prize. The secret of success for the two political parties in America, and their firm grip on power, is breeding dopes! Different strokes for different dopes!! Krooksman and Limbaugh dance to different drums.

Jas

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http://krugman.blogs.nytimes.com/2010/11/21/fdr-reagan-and-obama/

 

November 21, 2010, 2:07 am

FDR, Reagan, and Obama

Paul Krugman

Some readers may recall that back during the Democratic primary Barack Obama shocked many progressives by praising Ronald Reagan as someone who brought America a "sense of dynamism and entrepreneurship that had been missing." I was among those who found this deeply troubling — because the idea that Reagan brought a transfomation in American dynamism is a right-wing myth, not borne out by the facts. (There was a surge in productivity and innovation — but it happened in the 90s, under Clinton, not under Reagan).

All the usual suspects pooh-poohed these concerns; it was ridiculous, they said, to think of Obama as a captive of right-wing mythology.

But are you so sure about that now?

And here's this, from Thomas Ferguson: Obama saying

We didn't actually, I think, do what Franklin Delano Roosevelt did, which was basically wait for six months until the thing had gotten so bad that it became an easier sell politically because we thought that was irresponsible. We had to act quickly.

As Ferguson explains, this is a right-wing smear. What actually happened was that during the interregnum between the 1932 election and the1933 inauguration — which was much longer then, because the inauguration didn't take place until March — Herbert Hoover tried to rope FDR into maintaining his policies, including rigid adherence to the gold standard and fiscal austerity. FDR declined to be part of this.

But Obama buys the right-wing smear.

More and more, it's becoming clear that progressives who had their hearts set on Obama were engaged in a huge act of self-delusion. Once you got past the soaring rhetoric you noticed, if you actually paid attention to what he said, that he largely accepted the conservative storyline, a view of the world, including a mythological history, that bears little resemblance to the facts.

And confronted with a situation utterly at odds with that storyline … he stayed with the myth.

Jeremy Grantham'a Market Outlook - Investments For The Next Asset Bubble

species of parasites, called the banking and financial industry

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-------- Original Message --------

Subject:	Re: Active "investing" is a negative sum gain . . .
Date:	Tue, 2 Nov 2010 06:03:27 -0700
From:	Jas Jain

Nothing says more about America's System of the Crooks more than the fact that financial bloodsuckers, under the dictatorial rule of Greenspan-Bernanke Fed, have death grip on the US economy. Financial speculation is one of their channels for sucking blood. Pushing Debt is another. No one has done more to fan speculation and push debt than evildoers Greenspan and Bernanke. They were chosen for a reason. They have served their masters well. Agents of these bloodsuckers in academia, e.g., Blinder, Krugman, Shiller, Stiglitz, etc., all have solutions to Americas' economic problems that are based on more deficit spending than being currently done!

Jas

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To: Jas_Jain

Subject: Active "investing" is a negative sum gain . . .

Date: Mon, 1 Nov 2010 20:59:50 -0700

 

And this phenomenon is particularly and demonstrably relevant during a secular bear market; however, most "investors" will not discover this unfortunate fact (for them, not necessarily the money "managers" scalping fees from other people's money) until it is much too late to do anything about it. And it is not an unreasonable assumption that many money "managers" are not aware of the reality of "managing" money; otherwise, they would quit and do something more useful with their time and intellect.

 

http://www.er.ethz.ch/fco/Financial_Crisis/Equilibrium

 

I would like to elaborate on an important consequence of this equilibrium accounting identity to understand the root cause of the crisis and how this bears on its resolution. There are so many discussions, works, brain-storming and efforts to find better ways to regulate, to manage, perhaps to diagnose and to control the financial system in order to get out of the problems, have the economy recover and prevent future crises.

I think that they are collectively and fundamentally misleading and misled. As a corollary of the analysis [1], it dawns on me that the core of the problem is us, in a collective sense. The core problem is our belief that active investments provided by pension funds, banks, mutual funds, hedge-funds and all the financial industry have the potential to out-perform naive static boring investments. But if GDP grows at, say, 2% per year after inflation, how can financial investments as a whole provide more return?  Believing that financial investment can give more than the growth of the global portfolio is a gross illusion, which I believe is shared by most of us, either consciously or unconsciously.  This is the illusion of over-optimism. This is the illusion of control. But it violates the fundamental equilibrium accounting identity and the fact that our collective wealth does not grow faster than (good measures of) GDP. As long as we, the people and the future retirees, hope for more return, we will provide the manure for the development of the species of parasites, called the banking and financial industry, that feed on our illusion and never ending hopes of easy gains.

 

http://www.dimensional.com/famafrench/2009/06/why-active-investing-is-a-negative-sum-gain.html

 

In other words, do active investors in aggregate earn a higher expected return than passive investors? The arithmetic of equilibrium accounting says we do not need empirical tests to answer this question. Since we are assuming they all hold the market portfolio, passive investors earn the return on the market minus their fees and expenses. In aggregate, active investors also hold the market portfolio, so they also earn the market return minus their fees and expenses. If the fees and expenses of active investors are higher than those of passive investors, active investors must in aggregate lose to passive investors. This is the unavoidable arithmetic of equilibrium accounting. And notice that this is not a statement about expected returns or about long-term average returns. In aggregate active investors lose to passive investors every instant.

It is, of course, possible that individual active investors add value. But if they do, it's at the expense of other active investors. Again assume that passive investors always hold the cap-weight market portfolio. The arithmetic of equilibrium accounting then implies that the deviations from cap weights in one active investor's portfolio must be absorbed by other active investors who take offsetting positions. In aggregate active investors hold the market portfolio, so if some skilled active investors overweight an undervalued stock, other active investors must underweight it. This means that, before fees and expenses, trading is a zero sum game. Ignoring costs, the gains of the skilled investors are, dollar for dollar, at the expense of other investors. But real investors cannot ignore costs. If some active investors win, others must lose, and they all pay to place their bets. (French 2008 provides dollar estimates of the massive costs borne by active investors in U.S. public equity.)
Another common argument is that active investing is more likely to add value for small stocks than for the market portfolio in which big stocks dominate. Again, however, the arithmetic of equilibrium accounting plays a sobering role. Define a passive investor in small stocks as anyone who holds small stocks in cap-weight proportions, and define an active investor in small stocks as anyone who doesn't hold small stocks in cap-weight proportions. (Both groups can hold big stocks in whatever proportions they see fit.) Since passive investors in small stocks in aggregate hold the cap-weight market portfolio of small stocks, in aggregate active small stock investors must also hold the cap-weight market portfolio of small stocks. This again means that skilled active small stock investors must win at the expense of unskilled active small stock investors. If there are more opportunities for skilled investors to add value in choosing among small stocks, it is because unskilled active investors in small stocks are worse than unskilled active investors in big stocks.
. . . [A]ctive investing in any sector is always a zero sum game - before costs. After costs, active investing is a negative sum game.
 

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