Tag Archives: Economy

Why the Crisis of 2008 is Bound To Happen Again

1. The so-called Volcker Rule has yet to see the light of day.

 

2. The banks’ balance sheets are better than they were five years ago. The banks have raised lots of capital and written off many bad loans. (Their risk-weighted capital ratio is now about 60 percent higher than before the crisis.) …. But they’re back to too many of their old habits.

 

3. Millions of Americans are still suffering the consequences of the Street’s excesses. Yet the Street’s top guns and fat cats are still treating the economy as their own private casino, and raking in even more than before.

 

The fact is, the giant Wall Street banks are ungovernable – too big to fail, too big to jail, too big to curtail. They should be split up, and their size capped. There’s no need to wait for Congress to do it; the nation’s antitrust laws are adequate to the job. There is ample precedent. In 1911 we split up Standard Oil. In 1982 we split up Ma Bell. The Federal Reserve has authority to do it on its own in any event. (Would Larry Summers take such an initiative? Highly doubt it….besides the guy is always asleep)

 

Legislation is needed to resurrect the Glass-Steagall Act that once separated commercial banking from casino capitalism….. But don’t hold your breath.

For More: http://ziadabdelnour.net/why-the-crisis-of-2008-is-bound-to-happen-again

 

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Secular Bear Market Is Not Over History

Secular bear markets refer to economic conditions where stocks, real estate, commodities and the general economy are extremely volatile with a downward bias. This is caused by underlying fundamental forces of excesses that were created for long periods of time in the previous growth cycle. Secular bear markets differ from cyclical bear markets due to the fact that they have a long-running (15 to 22 year range) and well established fundamental and cycle driven downward trajectory in markets.

 

They result in a change of behavior and perception among society towards investments and the financial system.

 

This article will examine the last two secular bear markets that have occurred in the modern/post industrialized world economy.

 

ForMore:http://www.financialpolicycouncil.org/fpcnew/articledetails.aspx?id=44/Current-Secular-Bear-Market-Is-Not-Over-History-Should-Be-Our-Guide

 

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Will President Obama’s stimulus Package Work?

The haggling between Democrats and Republicans is over, as President Barack Obama and House Speaker Nancy Pelosi’s nearly $800 billion “stimulus” program becomes law, and the cash works its way into the economy. But the burning question is, will it work? Will this “stimulus” bill stimulate the economy?

 
We have heard endlessly from pundits on both sides of the aisle, from folks who call themselves economists, and from politicians of every stripe about the efficacy of this package. But what do business leaders think? What do people in the capital business think? And most important, what do the markets think?

 
As a person who deals with capital every day, who works with and funds entrepreneurs for a living, and who knows the nuts and bolts of job and wealth creation, I believe this program is nothing less than a rip-off of US taxpayers, and will not work. Indeed, it looks like 25 years of government expansion jammed into one bill and sold as stimulus.

 
This stimulus package is short on incentives to get consumers spending again and long on social goals that won’t stimulate economic activity. It is totally unfocused and spreads a lot of money around on nickel-and-dime programs that will have little lasting impact on our economy.

 

For More:  Will President Obama’s stimulus Package Work?

Failure to Hike Debt limit means global catastrophe?

One week has already passed since the Oct. 1 federal government shutdown forcing massive furloughs of workers and suspension of services not excepted by the Anti-Deficiency Act.

 
Because Congress did not enact regular appropriations or a continuing resolution for the 2014 fiscal year, appropriations have lapsed, and about 800,000 federal employees were indefinitely furloughed without pay, while another 1.3 million “excepted” employees were required to report to work for some indefinite period without pay until an appropriations bill is passed or their function is no longer excepted.

 

 

For More: http://www.wnd.com/2013/10/failure-to-hike-debt-limit-means-global-catastrophe/

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Getting Off the Employee Treadmill

In this third installment of an ongoing series, I explore what people face if they don’t consider going off and starting their own business.

 
As the stick is a far more effective (if less desired) teacher than the carrot, I’ll cut to the chase. You need to realize how limited, and likely how miserable, your entire life will be if you don’t consider this option.

 
Of course, most people don’t cross this bridge, and many people have no business trying. The economy needs employees, followers, loyal consumers. I’m just saying that the opinion leaders, the movers and shakers, turned their backs on the path followed by most everyone else. It depends on what you want.

 
If you want to control your life, to be able to decide what to do, when to do it and with whom to do it, you have to be some sort of entrepreneur. That does not mean being fabulously wealthy, unless you define wealth in a non-monetary sense, that being measured simply as the freedom from control by someone else.

 
But here is the sticking point. To become and remain an employee, you must always be willing to be controlled. And as control requires dependence, because dependence enhances control, you will quickly end up in a quicksand where your life is Groundhog Day.

 

For More: Getting Off the Employee Treadmill

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Challenges and Opportunities in India

The good news is that unlike China, which faces structural change as it shifts from an export-driven to a consumer-driven economy, India’s growth has long been dependent on domestic demand, even as exports have risen. However, its major weakness remains infrastructure, with basic transportation, power grid and irrigation systems lagging behind those of China. In a welcome move, the government plans to increase infrastructure spending by INR1.74 trillion ($38 billion) this year and that is always welcome.

 
The better news is that unlike China and Brazil, which have witnessed an increase in acquisitions by local private equity firms, India attracts a greater proportion of foreign private equity firms. The country’s legal and governance systems have indeed long attracted private equity investors from around the world which bodes very well for us at Blackhawk.

 
Further, and since the opening of the economy in 1991, the country has seen huge improvements in both capital markets regulation and in corporate governance.

 

For more:  Challenges and Opportunities in India

A Serious Problem with Hillary as President

I have a serious problem with Hillary as President.

 

Why?

 

Well I am afraid she has absolutely no clue of how our economy functions and I blame her too for backing the disastrous monetary policy which has wound up being the greatest redistribution of wealth in human history. On all counts, Clinton’s generation of politicians – Democrat and “Republican” alike – have taken the greatest country in the history of human civilization and, in the space of less than a quarter century, set it down the path toward an inevitable, inexorable collapse.

 
Hillary apparently believes Obama’s delusions, too. In fact, Obama lives in his own little world of denial, saying the economy is better than ever, and apparently Clinton thinks so, too.
In previous decades, the average recovery period took about two years. Seven years into Obama’s presidency, we’re still struggling in a so-so recovery.

 

 

So if anyone thinks Hillary Clinton knows how to lift the underperforming U.S. economy out of its lethargy, they’d better think again. Her knowledge of economics is close to zero.

 

For More: A Serious Problem with Hillary as President

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Hillary for President?

Why?

 
Well I am afraid she has absolutely no clue of how our economy functions and I blame her too for backing the disastrous monetary policy which has wound up being the greatest redistribution of wealth in human history. On all counts, Clinton’s generation of politicians – Democrat and “Republican” alike – have taken the greatest country in the history of human civilization and, in the space of less than a quarter century, set it down the path toward an inevitable, inexorable collapse.

 
Hillary apparently believes Obama’s delusions, too. In fact, Obama lives in his own little world of denial, saying the economy is better than ever, and apparently Clinton thinks so, too.

 

For More: Hillary for President?

 

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The Federal Reserve’s True Agenda and how to deal with it

Following up on my blog of July 15, 2010 entitled “Why Reshaping the Federal Reserve is today an Absolute Must”  I thought I’d share these thoughts with you, demonstrating the Federal Reserve’s true agenda in the economy today, and why reshaping the Fed is again needed more than ever at this juncture of our country’s economic history.

 

In fact, contrary to popular belief, I frankly believe that the Fed has spent the last two decades creating the illusory “wealth effect” in people’s minds; knowing very well that what they do has no direct effect on the economy. If you can drive the market up 50 percent, people feel richer…and happier.

 

The Fed basically wants us to go out there and buy stocks, which are overpriced because bonds they have manipulated into being even less attractive. So, we’re being forced to choose between two overpriced assets. Plain and simple.

For More: The Federal Reserve’s True Agenda and how to deal with it

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