Unfortunately, we have an extremely serious economic problem that is a massive ball and chain on the ankle of American commerce. In addition, President Obama not only knows this and is not informing you, but he is complicit in orchestrating it.
The markets are currently rigged, with the politicians in charge, most notably President Obama and Massachusetts Senatorial candidate Elizabeth Warren and advocate for the creation of Consumer Financial Protection Bureau, running at the mouth about how we need further market regulation.
Of course, under Obama's crony capitalism, we are not enforcing current laws when it comes to the financial markets and are allowing thieves to abscond with billions. See former New Jersey Governor, and Democratic bundler for Obama, Jon Corzine, of MF Global.
Although they say they are not, the FED is monetizing the debt, punishing savers. Banks are flush in cash, and are not lending. They sense something bad coming, and do not want risk extended in the upcoming environment.
Doug Dachille of First Principles Capital Management joins Joe Kernan on CNBC's Squawk Box to discuss QE3, the mortgage market and price distortion. Take a listen:
The FED should raise rates immediately and effort to strengthen the dollar, and quit pushing a string of failing central planning programs. As Reagan said, government is not the solution to the problem; government is the problem.
With a Romney victory, the FED will promptly effort to pull back the extension of capital within the market, puncturing the propped up market averages.
At this point, real value will be learned, improper market manipulation by The FED should cease with Bernake being fired and risk can be measured adequately.
We might have DOW 8000, but it will be real and we will have a solid basis to operate from. This will be much better than the crony capitalism and market manipulation we are currently dealing with.
Showing posts with label Doug Dachille. Show all posts
Showing posts with label Doug Dachille. Show all posts
Monday, September 10, 2012
Monday, July 16, 2012
Market Mayhem
Investors should be treading very carefully these days in the capital markets. This is not a time for Aunt Mary and Uncle Bob and unemployed day traders.
Former FED Chair Alan Greenspan said today that the market may be juiced some 50% due to FED stimulus. While the effectiveness of the stimulus can be argued, the FED cannot operate quantitative easing forever, and at some point, the stimulus will need to be retracted.
Forecasting the extraction of FED injected stimulus is one task, but navigating a market without integrity and rule of law signals a retreat to the sideline. Regrettably, in my estimation, we sadly have reached this point. MF Global is fresh on our minds, and last I saw, Jon Corzine was two fisted with his favorite cocktail cranking around the Hamptons. Meanwhile, his investors remain fighting to retrieve small portions of the investments placed with his frim feared lost.
The events surrounding the MF debacle should have been a major warning sign. In the aftermath, Ann Barnhardt shut down her brokerage firm Barnhardt Capital Management due to lack of confidence in the governance of the cattle futures market. Barnhardt warned of future issues to come, and this week we were greeted with the bizarre goings on at PFG Best. Score one for Ann.
Rick Santelli of CNBC further explains:
It seems clear we have issues at the CFTC and/or NFA, and all capital markets, for that matter. The FED seems to be in bed with the Obama administration, rather than operating with impartial market driven guidance. We have news the LIBOR rate has been manipulated, with Barclays among the first of potentially many banks to be signaled out. JP Morgan, with problems turning up everywhere these days, reportedly played a role. LIBORgate will become a major financial mess, potentially blowing up every HP12C on the planet as the lawsuits get going. As it turns out, approximately 1 million mortgages were based off this rate, and that could be a huge problem.
We ran a blog post a few months back discussing market mayhem, eloquently described First Principles Capital Managements Doug Dachille, which we will present again below.
These market manipulations are quite complex difficult to get your arms around. However, when you couple the imminent implosion of the European Union with market manipulation and The FED gaming the system it becomes exponentially difficult to properly measure risk. In addition, the rewards of potential gains versus the risk exposure within tainted and manipulated markets seem not worth the effort. Although seemingly safe in large big caps positions, investors should keep a very tight leash on any investments.
Do you know who is running the casino? Are their friends being rewarded at your expense? Corruption is everywhere! There is market mayhem, being controlled by those who are not ashamed to be helping you lose your money. Trust and rule of law are absent. It is most unfortunate it has come to this, but in my view it clearly has.
Caveat Emptor!
Forecasting the extraction of FED injected stimulus is one task, but navigating a market without integrity and rule of law signals a retreat to the sideline. Regrettably, in my estimation, we sadly have reached this point. MF Global is fresh on our minds, and last I saw, Jon Corzine was two fisted with his favorite cocktail cranking around the Hamptons. Meanwhile, his investors remain fighting to retrieve small portions of the investments placed with his frim feared lost.
The events surrounding the MF debacle should have been a major warning sign. In the aftermath, Ann Barnhardt shut down her brokerage firm Barnhardt Capital Management due to lack of confidence in the governance of the cattle futures market. Barnhardt warned of future issues to come, and this week we were greeted with the bizarre goings on at PFG Best. Score one for Ann.
Rick Santelli of CNBC further explains:
It seems clear we have issues at the CFTC and/or NFA, and all capital markets, for that matter. The FED seems to be in bed with the Obama administration, rather than operating with impartial market driven guidance. We have news the LIBOR rate has been manipulated, with Barclays among the first of potentially many banks to be signaled out. JP Morgan, with problems turning up everywhere these days, reportedly played a role. LIBORgate will become a major financial mess, potentially blowing up every HP12C on the planet as the lawsuits get going. As it turns out, approximately 1 million mortgages were based off this rate, and that could be a huge problem.
We ran a blog post a few months back discussing market mayhem, eloquently described First Principles Capital Managements Doug Dachille, which we will present again below.
These market manipulations are quite complex difficult to get your arms around. However, when you couple the imminent implosion of the European Union with market manipulation and The FED gaming the system it becomes exponentially difficult to properly measure risk. In addition, the rewards of potential gains versus the risk exposure within tainted and manipulated markets seem not worth the effort. Although seemingly safe in large big caps positions, investors should keep a very tight leash on any investments.
Do you know who is running the casino? Are their friends being rewarded at your expense? Corruption is everywhere! There is market mayhem, being controlled by those who are not ashamed to be helping you lose your money. Trust and rule of law are absent. It is most unfortunate it has come to this, but in my view it clearly has.
Caveat Emptor!
Thursday, January 19, 2012
Traders Handcuffed By Regulators
Governmental regulation, much of it coming from the horrendous Dodd-Frank bill, is an unwelcome participant in the marketplace, making it much harder for investors and traders to make money.
Forecast are increasingly difficult, as random governmental interaction and artificial interference curtails investment opportunities. Risk is central to an efficient market, and regulations to eliminate risk cause inefficiencies and reduce potential profits for those who can accurately measure risk.
Doug Dachille, CEO of First Principles Capital Management, was the guest host on Squawk Box last week and explains the difficulty traders are facing:
Forecast are increasingly difficult, as random governmental interaction and artificial interference curtails investment opportunities. Risk is central to an efficient market, and regulations to eliminate risk cause inefficiencies and reduce potential profits for those who can accurately measure risk.
Doug Dachille, CEO of First Principles Capital Management, was the guest host on Squawk Box last week and explains the difficulty traders are facing:
Monday, January 16, 2012
Future Financial Mayhem
You may not recognize it, but you are being lied to.
For an example, which is a full assault on your wallet, look no further than the monetization of the debt, which Fed Chairman Ben Bernanke said would not happen. Well, Investors Business Daily reports that the FED is readying for more stimulus. Perplexing for sure, given the failed results of previous quantitative easing, QE1 and QE2. Printing money decreases asset value, which surely will not be of assistance the millions of homeowners underwater.
Media outlets report that the economy is growing and jobs are being created, as evidenced by the unemployment number presented by the federal government. If that is true, it would not be necessary for the FED to engage in QE3.
Speaking of the FED, something has gone terribly wrong over the last few years. The FED is the lender of last resort and is charged with conducting monetary policy. Historically, Presidents have had little power over the FED, with the FED operating outside of executive branch influence, the exception being appointments to the boards and appointing the Charmian, if necessary.
Although the FED is by far the most powerful governmental agency, there is little regulatory oversight over its activities. Somewhere recently, particularly under President Obama, The FED seems to be carrying water for the administration and assisting in the implementation of policy. This is very troubling, particularly when the leader of the executive branch is not a free market capitalist.
Recent actions by the FED, seeming to begin with TARP, have broken tendencies and are raising concerns on both sides of the aisle. The creation of the conditions that allowed MF Global to take place is a recent example of the now problematic status of the FED, and how you are being lied to.
For a brilliant explanation, please see First Principles Capital Management CEO Doug Dachille at the Yale School of Management last December:
The government, using the FED through regulatory influence and intervention, is now choosing winners and losers. Although Fannie and Freddie are still in operation, it is the FED behind the curtain who is crowding banks out of the mortgage origination market and setting unreasonable credit requirements. As Dachille points, out, life insurance companies are being squeezed, and Sallie Mae has been taken over and private lending has been crowded out.
With MF Global, customer accounts were not protected. They were stolen to pay major players. Again, as Dachille discusses, with the suffocating Dodd-Frank bill, you might think customer accounts might be protected. If the regulators are charged with one thing, it would be to protect the integrity of the system, the trust that customer accounts not participating in risk taking activity are not hypothecated and can be made whole in a timely fashion.
This did not happen at MF Global, and due to the lack of trust in the markets sure to emerge because of this, bad things are on the horizon. If this can happen at MF Global, it can happen at any firm housing investments. A customer obviously has no control over hypothecation by these firms and therefore cannot be guaranteed a return of the investment should the firm be severely compromised or fail.
Beginning with the shafting of the bondholders of the automakers, the rule of law and trust of the marketplace, integral for the survival of a free market capitalist system, has been violated. You are being lied when government officials and the media inform you that everything is fine.
Until the rule of law is reestablished, the government becomes a bystander and the FED resumes normal open market operations, the market place is compromised and for you to be participatory in it, Caveat Emptor.
For an example, which is a full assault on your wallet, look no further than the monetization of the debt, which Fed Chairman Ben Bernanke said would not happen. Well, Investors Business Daily reports that the FED is readying for more stimulus. Perplexing for sure, given the failed results of previous quantitative easing, QE1 and QE2. Printing money decreases asset value, which surely will not be of assistance the millions of homeowners underwater.
Media outlets report that the economy is growing and jobs are being created, as evidenced by the unemployment number presented by the federal government. If that is true, it would not be necessary for the FED to engage in QE3.
Speaking of the FED, something has gone terribly wrong over the last few years. The FED is the lender of last resort and is charged with conducting monetary policy. Historically, Presidents have had little power over the FED, with the FED operating outside of executive branch influence, the exception being appointments to the boards and appointing the Charmian, if necessary.
Although the FED is by far the most powerful governmental agency, there is little regulatory oversight over its activities. Somewhere recently, particularly under President Obama, The FED seems to be carrying water for the administration and assisting in the implementation of policy. This is very troubling, particularly when the leader of the executive branch is not a free market capitalist.
Recent actions by the FED, seeming to begin with TARP, have broken tendencies and are raising concerns on both sides of the aisle. The creation of the conditions that allowed MF Global to take place is a recent example of the now problematic status of the FED, and how you are being lied to.
For a brilliant explanation, please see First Principles Capital Management CEO Doug Dachille at the Yale School of Management last December:
The government, using the FED through regulatory influence and intervention, is now choosing winners and losers. Although Fannie and Freddie are still in operation, it is the FED behind the curtain who is crowding banks out of the mortgage origination market and setting unreasonable credit requirements. As Dachille points, out, life insurance companies are being squeezed, and Sallie Mae has been taken over and private lending has been crowded out.
With MF Global, customer accounts were not protected. They were stolen to pay major players. Again, as Dachille discusses, with the suffocating Dodd-Frank bill, you might think customer accounts might be protected. If the regulators are charged with one thing, it would be to protect the integrity of the system, the trust that customer accounts not participating in risk taking activity are not hypothecated and can be made whole in a timely fashion.
This did not happen at MF Global, and due to the lack of trust in the markets sure to emerge because of this, bad things are on the horizon. If this can happen at MF Global, it can happen at any firm housing investments. A customer obviously has no control over hypothecation by these firms and therefore cannot be guaranteed a return of the investment should the firm be severely compromised or fail.
Beginning with the shafting of the bondholders of the automakers, the rule of law and trust of the marketplace, integral for the survival of a free market capitalist system, has been violated. You are being lied when government officials and the media inform you that everything is fine.
Until the rule of law is reestablished, the government becomes a bystander and the FED resumes normal open market operations, the market place is compromised and for you to be participatory in it, Caveat Emptor.
Subscribe to:
Posts (Atom)
