Reading at 3:15 Thursday Morning

Submitted by Roanman on Fri, 04/16/2010 - 07:08

 

Stratfor Global Intelligence is in my opinion among the better international news sites.

At about $30 a month, it's probably not worth it to most folks.

They have a one week trial deal.

I like it.

From an article titled,

"Mexico a Struggle for Balance"

 

“…Mexico was nearing the status of a failed state.

A failed state is one in which the central government has lost control over significant areas of the country and the state is unable to function.

In revisiting this issue, it seems to us that the Mexican government has lost control of the northern tier of Mexico to drug-smuggling organizations, which have significantly greater power in that region than government forces.

Moreover, the ability of the central government to assert its will against these organizations has weakened to the point that decisions made by the state against the cartels are not being implemented or are being implemented in a way that would guarantee failure…

“…The United States consumes vast amounts of narcotics, which, while illegal there, make their way in abundance.

Narcotics derive from low-cost agricultural products that become consumable with minimal processing.

With its long, shared border with the United States, Mexico has become a major grower, processor and exporter of narcotics.

Because the drugs are illegal and thus outside normal market processes, their price is determined by their illegality rather than by the cost of production.

This means extraordinary profits can be made by moving narcotics from the Mexican side of the border to markets on the other side…

“…each smuggling organization has an attached paramilitary organization designed to protect its own supply chain and to seize its competitors' supply chains.

The result is ongoing warfare between competing organizations…

Membership in such paramilitary groups offers impoverished young men extraordinary opportunities for making money, far greater than would be available to them in legitimate activities…

“Indeed, what the wars are being fought over in some ways benefits Mexico.

The amount of money pouring into Mexico annually is stunning. It is estimated to be about $35 billion to $40 billion each year…

From Mexico's point of view, interrupting the flow of drugs to the United States is not clearly in the national interest or in that of the economic elite…

 

To quote Richard Russell, once again

Submitted by Roanman on Tue, 04/13/2010 - 19:20

Reading on a Sunday Morning

Submitted by Roanman on Tue, 04/13/2010 - 06:42

 

I have no idea if the following is true, as I have been unable to find any corroboration.

China Daily makes the following claim in an article titled,

"Life Span of Buildings Creates Huge Waste"

Compared to the less than 30-year average life expectancy of China’s buildings, the average life span of a building in Britain is 132 years and in the United States it is 74 years.

 

$200 Million per

Submitted by Roanman on Sat, 04/10/2010 - 12:05

Reading on a Saturday Morning

Submitted by Roanman on Sat, 04/10/2010 - 11:22

 

As far as I'm concerned, Peggy Noonan is one of the finest writers in America.

I make my son read her editorials in the Wall Street Journal (he hates it) ... (I don't care).

Here's her analysis of what went wrong with the mortgage market.

Click anywhere below to get the entire piece.

 

You, for political reasons, both Republicans and Democrats, finagled the mortgage system so that people who make, like, zero dollars a year were given mortgages for $600,000 houses.

You got to run around and crow about how under your watch everyone became a homeowner.

You shook down the taxpayer and hoped for the best. 

"Democrats did it because they thought it would make everyone Democrats:

'Look what I give you!'

Republicans did it because they thought it would make everyone Republicans:

'I'm a homeowner, I've got a stake, don't raise my property taxes, get off my lawn!'

And Wall Street?

We went to town, baby.

We bundled the mortgages and sold them to fools, or we held them, called them assets, and made believe everyone would pay their mortgage.

As if we cared.

We invented financial instruments so complicated no one, even the people who sold them, understood what they were.

"You're finaglers and we're finaglers.

I play for dollars, you play for votes.

In our own ways we're all thieves.

We would be called desperadoes if we weren't so boring, so utterly banal in our soft-jawed, full-jowled selfishness.

If there were any justice, we'd be forced to duel, with the peasants of America holding our cloaks.

Only we'd both make sure we missed, wouldn't we?"

 

I think that just about covers it.

 

Reading on a Saturday Morning

Submitted by Roanman on Sat, 04/10/2010 - 10:07

 

Richard Maybury publishes The Early Warning Report and Chaosistan.com

Friends have forwarded the occasional copy or link for a while now.

Membership went on sale recently so I signed up.

As yet, I have no opinion.

The quote below links to the signup page. 

“What Obama and his toadies have repeatedly demonstrated themselves to be is fascist.

Fascism is the most simple-minded of all political philosophies, it boils down to just 16 words:

Power holders should do whatever appears necessary, no exceptions, no limits, and no definition of necessary…

We have no way to know what Obama, Bernanke, Geithner or any of the other kingpins will think is necessary, so there is no way to know what they will do to the economy or investment markets.

They are all loose cannons…

Fascism has no plan, it is 100% pragmatic, a fire fighting mentality, not an agenda mentality.

Its only answer to any problem is, more government...

Let me emphasize, the government’s top people are not constrained by ideology…the comment by the Director of National Intelligence, that US officials have the right to kill — without a trial — American citizens they suspect of terrorism.

If these people will do that, they will do anything. They are already across the final line.

 

“We should expect them to inflate the money supply to whatever extent they believe necessary, no limits.

This is why I believe that before the Great Monetary Calamity ends, somewhere between three and ten years from now, we will see gold at $10,000, silver at $100 and platinum at $10,000...

Remember, however, that I am not saying the precious metals will rise this much, I’m saying the dollar will fall this much.”

 Richard Maybury, 04-10

 

 

The Shiller P/E Ratio

Submitted by Roanman on Thu, 04/08/2010 - 15:30

 

Professor Robert Shiller (Yale) is probably best known for his book "Irrational Exuberance" and the "Case-Shiller US Home Price Index he developed with Professor Karl Case (Wellesley) .

In his spare time, he came up with the Shiller P/E ratio.

The Shiller P/E ratio is calculated as follows: divide the S&P 500 by the average inflation-adjusted earnings from the previous 10 years.

Got that?

Don't worry about it.

Up is good if you're selling stocks.

Down is good when you're buying.

The chart below was taken from an article at The Daily Reckoning written by Dan Amoss having to do with a speech given March 24, 2010 by Russell Napier of CLSA (no clue) at the CFA Society (Certified Financial Analyst).

Excerpts from this most quotable speech, one of which I've posted below, are all over the place.

Recommended. 

The following chart from The Seeker Blog shows the same chart with it's historic average in red.

 

 

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