http://www.realclearmarkets.com/ is an excellent site reposting the day’s headlines relevant to global markets from a variety of media outlets. From time to time, I will repost articles I believe to be particularly relevant, impactful and/or ridiculous with my own commentary. Here are a few:
- Richard Salsman’s dog and pony show for a return to the gold standard: http://www.forbes.com/sites/richardsalsman/2011/08/16/gold-reagan-and-the-reds-from-degraded-dollar-to-downgraded-debt/3/. Life is immitating art: remember the movie “Lord of War,” where the African dictator asks the arms dealer character played by Nicholas Cage for a solid gold machine gun? The 007 series also comes to mind with a shadowy New World Order set to control the globe’s currencies and natural resources. I say ask the Treasury Department to hold endangered species as collateral for currency. I think the dollar is worth its weight in black rhinos, giant pandas, and beluga sturgeons. Caviar is the new black gold.
- http://www.realclearmarkets.com/articles/2011/08/17/gov_rick_perrys_red-hot_bernanke_slam_99198.html. A blurry picture is forming of the 2012 competition for leader of the free world. Governor Perry says “Printing more money to play politics at this particular time in American history is almost treacherous, or treasonous, in my opinion.” Mr. Perry is certainly no economist. And Mitt Romney reminds me of John Kerry with a more obscure religious profile. Doesn’t look like Barak and Michelle need to worry about packing up just yet. Whether you approve of the President’s performance or not, Mr. Obama is more camera shy than he was during his first year. What has he accomplished so far? I recall something about healthcare reform and a promise to pull back from global conflicts; and oh yeah, he said he would fix the economy and create jobs.
- http://www.nytimes.com/2011/08/17/opinion/why-we-should-end-homeownership-subsidies.html?_r=2&ref=opinion. The NYT proposes we kill GSEs Fannie and Freddie currently financing the vast majority of US home purchases at a time when private investors want to sit on the sidelines. Let’s assume these are good ideas. Unfortunately, stories like this are used by nasty politicians to argue for crazy notions like removing mortgage interest as a tax deduction. This article says GSEs cost $700 billion in lost revenue over five years, whatever that statistical mumbo jumbo means. That is the tiniest of fractions in relation to our aggregate spending on the military industrial complex. Where would you rather cut?
- http://www.nakedcapitalism.com/2011/08/bank-of-america-death-watch-unloading-non-core-assets-aggressively.html. This story would not be worth discussing were it not for what transpired in the US financial sector over 2008 and 2009. Words sometimes equate to Chinese water torture. Each word holds little weight, but add them up over time and Bank of America could end up in the hands of a competitor for pennies on the dollar. There are only seven and a half dollars left as of this writing, so caveat emptor. This is not some gloom and doom prediction, but confidence is key to market stability. Just remember that Wall Street is even better at spreading rumors and manipulating feelings than making money and political contributions.