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  • The Room – 06/05/2009

    In this week's edition... Unemployment Falls!...Housing Market Bottoms!... introducing the Special Master for Compensation... Gold Can't Be Beaten... Debt Collapse and Inflation.... Big Banks Buy a Smelly Swamp...do you need Adult Supervision?... Saving Private Brown.... and even more!

    All in this week's edition of The Room... read it now....
  • The Room – 04/03/2009

    In the March 6, 2009 edition of this missive/blog/column/whatever you want to call it, I listed three 'Desperate Measures' the U.S. government might turn to next in its futile attempt to rearrange the ruined economy into something more resembling a perfect world.

    Suspend 'mark to market' rules. At the time of my initial write-up (which you can read here), highly placed sources within the financial services industry that I spoke to were of the opinion that no significant changes would be made, for the simple reason that to do otherwise would risk destroying what little credibility was left for the financial sector.

    As you now know, the government has strong-armed the FASB into modifying the rules, essentially allowing companies to 'mark to model.' Which simply means that the same financial wizards who helped create the models so pivotal to causing the mess in the first place are now free to dust those models off, give them a little tweak, and use them to fabricate more attractive values for the toxic waste than the market was willing to assign. Some might term these rule changes outrageous, fraud even... I call it business as usual.

    Bad bank. The government has moved forward with this initiative as well, essentially rigging up a system that literally guarantees that a very small handful of firms -- likely just four or five -- will receive the sweetheart deal of the century, at the same time that the U.S. taxpayer gets the short end of the stick... right up the side of the head.

    Fed buys long-term Treasuries. This, too, has now come to pass and is likely to accelerate. While there are many ways that one could describe this latest initiative, I find it best to keep these things simple... it's called inflation....
  • The Room - 10/03/2008

    We're no longer in Kansas, Dorothy. At this point, the world's financial markets are in the firm grasp of a massive tornado. Our vision is blurred with fast-moving images of abandoned houses, crumbling banks, pontificating politicians, alien-looking Treasury secretaries on one knee, and suicide stock and commodities charts. When the whole mess crashes back on terra firma, the landscape will look considerably different. But, what? We remain convinced that the result, with the unavoidable time lag, will be inflation on an epic, global scale. But if history provides one lesson in rich abundance, it is that the future is unpredictable. Who is to say that the government of these United States -- and of similarly indebted and in-trouble countries "over there" -- aren't too late to the game? Or that even $700 billion, or a trillion... or...?... will not prove to be too little, too late?...
  • The Room 8/22/08

    Summer weather, at least that of the preferable sort, has finally returned to the corner of the globe where your correspondent sits listening, too loudly, to Michael Franti's Yell Fire!. For those of you unfamiliar with Franti and his band Spearhead, his genre is what might be termed "Revolution Rock"... as in taking it to "the man." While I don't agree with many of his lyrics, which skew far left, I do like the music and his thematic focus on peace and, paradoxically, burning things down. Regrettably, in his view the rebuilding would be of a socialist paradise. It is, of course, deeply ingrained in human nature to want everything wrapped up in a nice utopian package. Problems arise, however, because one person's idea of utopia is another's idea of hell. And, inevitably, even utopia's champions awaken one morning in full agreement that their vision was hell... just ask Robespierre or Trotsky. In the end, no one gets their utopia because the entire notion is merely a dangerous fiction that, in the attempt, leads only to the disenfranchisement of one group or groups in favor of another. And, in time, of everyone....
  • Where Is the Economy Going in the Next Six Months?

    As investors, the question we have to focus most of our attention on just now is what impact the credit crisis, the bursting housing bubble and the actions of the U.S. government will have on the economy and investment markets in the next six months. We have seen the Fed and the federal government move to panic mode as they try to keep the system afloat. As expected, they have cut rates, as well as having given away checks and rearranged the Federal Reserve's entire balance sheet. The underlying problems have not been fixed with this massive bailout. There are still many credit pot holes out there and new lending remains highly constrained. Even the government tax rebate checks, rather than boosting the domestic economy, were largely absorbed by higher oil prices. The resulting cut-back in consumer spending, coupled with ongoing constrictions in lending, will cause a severe slowing of the economy....
  • The Room 4/22/08

    Written: April 18 2008 Dear Readers, I am running quite late this sunny New England morning. But I have a good excuse: my wife has left me. Well, it's not all that dramatic... it is just that she has hived off for Europe for a ten-day gallivant with...
  • The Room 4/14/08

    Written: April 11, 2008 Dear Readers, No question about it, we humans like to keep things simple. And no wonder; if the world is anything, it is chaotic. And so we look for our philosophy in un-taxing nuggets, the sort, perhaps, that might grace the back...
  • The Room 4/7/08

    Dear Readers, This week finds me writing from Room 2218 of the infamous Jekyll Island Club. The hotel's adjective comes from a secret meeting held here in 1910 involving some of America's most powerful men. Here's an official history of that...
  • The Room 3/31/08

    Dear Reader , I am writing to you in the pre-dawn from a soft chair in a Starbucks in Scottsdale, a vast improvement over the small desk in the cluttered toy room that I usually write you from on Fridays. 16 inches from my left hand is a "vente"...
  • The Room 3/24/08

    Dear Reader , It used to be of no little pride in the small New England town where Casey Research is headquartered that school went forward, no matter the weather. Hail, 8-foot-high snow drifts, ice rain and, should they have occurred hereabouts (which...
  • The Room 3/17/08

    Dear Reader , You don't need me to tell you, but the $1,000 mark is the latest to fall beneath gold's mighty rise. Even so, as a benchmark, the number $1,000 is meaningless. It represents no new high in the inflation-adjusted prices that count...
  • The Room 3/10/08

    Dear Fellow Global Adventurers , This past week I came across worthy comments from Dr. Marc Faber of the Gloom, Boom & Doom Report in which he comments that, by continuing to cut interest rates, Bernanke will eventually "destroy the U.S. dollar...
  • The Room 3/3/08

    Dear Readers, It's getting to the point where even the most determined optimist is having a hard time finding a good reason to roll out of bed. Among just the smattering of news that crossed the lens this week... Producer prices rose 7.4 percent in...
  • The Room 2/18/08

    Dear Reader, Foolishly, I now realize, I closed last week's column by announcing that I would endeavor to write today's entire missive without a single mention of... okay, well, just this once... government. Some readers have suggested that I...