The Room

This insightful blog provides a unique perspective on the world that you just won't find anywhere else. The Room is an eclectic mix of geopolitical and market commentary with a personal story thrown in here and there. Never willing to take any subject too seriously, David Galland delivers a "great read" that informs and entertains.

  • The Room – 07/10/2009

    In the June edition of The Casey Report, and again in the edition that was put to bed July 2, we warned that the U.S. equities markets were on the edge of the next leg down in the slow-motion crisis now unfolding.

    While there is no such thing as a sure thing, the idea that the worst could be behind the economy is almost unimaginable, given the deep structural flaws and governments doing what Doug Casey correctly calls the 'exact opposite' of what they should be doing.

    Namely trying to solve a debt crisis by adding more debt.

    Of course, as turmoil returns to the broader stock market, investors will again scramble for "safe harbor" investments, and that spells trouble for commodities and commodity-related equities, which are viewed by many as 'recovery' investments....
  • The Room – 06/19/2009

    Yesterday marked the end of Obama’s first 150 days at the helm of the U.S. of A. None of us doubted that Obama was a savvy and ambitious politician, but even we are impressed by the sheer number of new initiatives the president has undertaken. In less than five months, there are very few campaign promises he has failed to tackle.

    One has to wonder, however, whether Obama may be failing to deliver on the biggest of his campaign promises – that of bringing change to Washington. Weren’t we supposed to see the end of politics as usual and of government waste and pork? Instead, we’ve gotten more of the same, with Ben Bernanke, Larry Summers, and their ilk still in charge and Geithner replacing Paulson. The doors continue to revolve between Wall Street and K Street, with the same cabal influencing policy....
  • The Room – 06/12/2009

    Again this week, I was admonished by one of your fellow dear readers, who recommended that I keep my political comments to myself. And furthermore that I, and the entire Casey team, should focus solely on finding the next great investment.

    While I can’t and won’t argue with the latter part of his advice -- that is, after all, our overarching mandate, and a mandate we take seriously - I suspect the real issue is that the political views we occasionally express run contrary to those of the author of this rebuke.

    Even so, if you give the matter any thought at all, you will almost have to conclude that the business of America is now hugely dependent on the business of government.

    As a refresher, the following – compliments of the Encyclopedia of Business – describes the two major foundations economies have typically been built on in modern times: central planning and capitalism....
  • 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 – 05/22/2009

    A dose of sanity returned to the markets this week, starting with cracks beginning to show in the U.S. dollar. Consequently gold, the not-so-barbaric relic, seems to be attracting an awful lot of attention. Instead of falling, as so many pundits have been predicting it should, it has begun to string together a number of impressive up days. Another run at $1,000 in the weeks just ahead is not out of the question.

    Also this week, the U.S. stock market hit a pothole on the road to Happy Days Again, helped along, apparently, by massive selling by corporate insiders......
  • The Room – 05/15/2009

    After a week of engaging in all manner of healthful activity, I am ready once again to tilt my lance against the armies of absurdity that assault the senses more or less constantly these days.

    This week, for instance, Alan Greenspan opined that the economy has bottomed, and the stock market actually rallied in response! It’s akin to Bernard Madoff announcing he is opening a new money management service from the secure facility where he now resides, and having investors rush all over themselves to hand him their money.

    Or how about these headlines......
  • The Room – 05/01/2009

    I am writing you in some haste this morning, fueled both by what may be an overdose of espresso and a general lack of sleep due to fulfilling my responsibilities as the managing editor of The Casey Report, the final copy deadline for which is inconveniently today.

    In the interest of not being discovered face down on my desk, a spilled cup of coffee dripping onto the floor, I'm going to take a few shortcuts in preparing this week’s edition of The Room. Namely, relying on other members of the Casey team, as well as our impressive ranks of correspondents, to fill in some holes. I think you'll be happy with the result.

    First, however, a quick word or two is in order about the Chrysler bankruptcy. In last week's edition of this somewhat manic missive, I opined that Chrysler’s bankruptcy was now both inevitable and imminent. Further, I wrote about the proceedings, which have the U.S. Treasury deeply involved in structuring the bankruptcy......
  • The Room – 04/17/2009

    Being new to a profession is always a challenge. The neophyte wants to impress his superiors, but lacking experience, is left to rely upon what natural skills he possesses. And, often, will try to make up for any shortcomings in specific skills by displaying a double dose of enthusiasm and energy.

    Our new president, for example, has a great many skills related to successful politicking, but none at all specifically related to the task of being president of the world's most powerful country. This is not a job that one can prepare for.

    And so We the People, his new bosses, are left to observe Obama leaning heavily on his considerable political skills – and his obvious energy – in an attempt to impress.

    He is trying to do so through a constant stream of new pronouncements emanating from the White House, or wherever Mr. Obama happens to be standing at the moment. On one day he wishes to put an end to nuclear weapons, on the next to reach an accommodation with the Iranians. While he’s at it, he'll be (maybe) pulling the troops out of Iraq, but redeploying them into Afghanistan and maybe even Pakistan....
  • The Room – 04/10/2009

    A quick comment is in order on the recent stock rally. While I could provide that comment, few people do the "dose of reality" thing better than my globetrotting partner and friend of many years, Doug Casey.

    Begging the forgiveness of our paying subscribers to The Casey Report, I would like to quote Doug from the current edition, just published...

    Just a few words about where we're in this ongoing crisis. While many in the media are now saying that things are looking up, and that the worst may now be over, I think it's just begun. For several reasons...

    For starters, stocks are cheap relative to where they've been over the last five years, but they're not cheap relative to historic bottoms (e.g., 1 times book, around 6-8 times earnings – after big earnings cuts - and 6-10% dividend yields). Treasuries are in a bubble. And, as hard as it has fallen, residential property has not yet bottomed.

    But the worst is yet to come. And I'm not talking about student loans, car loans, and credit card debt. Or Social Security, Medicare, and Medicaid. Or the looming bankruptcy of most states and many municipalities. The real crisis will be in pension funds, commercial real estate, and life insurance companies. The life insurers own mostly commercial real estate, mortgages, and bonds; many will be totally busted, even before people start cashing in their whole life policies. You don't even hear about these three things in the press yet....
  • 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 – 03/27/2009

    For this edition of The Room, I'm going to try to tell a story, but using snippets from other sources with, perhaps, a side comment thrown in now and again.

    I am taking this approach because, frankly, since hopping on the plane to Las Vegas last week, the sheer volume of proposed new regulations, legislation, and plain idiocy have outstripped my processing abilities. It seems that every hour or two over the past week, there has been a breaking story that has me saying out loud, 'What, are you kidding?' Or, 'Wow... we're really in trouble now!'

    It came to me as I started writing to you this morning, that these many stories – rather than just random spatters of inanity – together form a distinct pattern. And the pattern seems to point to a new paradigm now materializing here in the U.S. and, by extension, the world.

    As I think the following stories demonstrate, the new paradigm is not one any thinking person will embrace....
  • The Room – 03/20/2009

    I worry I shall disappoint you today. After all, how can mere words, pecked out awkwardly on a shaky airplane table, adequately communicate all that has occurred this week?

    As regular readers may guess, the plane I am on is taking me to Las Vegas for our sold-out Crisis & Opportunity Summit. While the event was deliberately scheduled to give the Obama administration an opportunity to reveal its cards after having been handed Bush's busted hand, the timing has turned out to be especially propitious, coming as it is at the end of a week that seems to be of some historic significance.

    Of course, we wish you were joining us here in Las Vegas -- if you aren't -- but as your correspondent, I will certainly include notes from the event in next week's missive. But that is then, and this is now.

    And now, everything is going to hell....
  • The Room – 03/16/2009

    This week I tripped over an old musical favorite, I'm Your Captain, by Grand Funk Railroad, which is what I'm listening to as I begin this weekly missive. While the song has a little rust on it, for those of you who haven't taken a ride on Grand Funk Railroad of late, it's a nice enough trip. Now, on to what seems important this week. This week Vikram Pandit, the CEO of Citigroup, a bank that has managed to lose $38 billion over the last five quarters, sent around an internal memorandum in which he said he was "encouraged" by the company's performance so far in 2009....
  • The Room – 03/06/2009

    Of late, it seems as though I have gotten sideways with the technology deities. First, as reported recently, was my accidental deletion of an hour-and-a-half recorded interview with trading gurus Dave Hightower and Terry Roggensack. Then, yesterday, while waiting to put in a phone appearance on the U.S. Global Funds Webinar that many of you sat in on, I carefully put my speaker phone on mute (you can tell it's on because the button lights up) and set about trying to wolf down a chicken salad sandwich before it became my turn to talk. This led to being reminded of several of life's little lessons. Including....
  • The Room – 02/27/2009

    This morning, as I was looking over dispatches from correspondents around the world -- from Ed in Alberta… Sadia in the UK… Baldy in Indonesia… the 'General' in Portugal...and Nitin in Katmandu -- I began to appreciate what it must have been like to be on the news desk during World War II. I am trying not to be overly pessimistic, but there’s no denying the mass of bad news coming to us from all fronts: the forces of collectivism are using the cover of the crisis they largely created, aided and abetted by capitalism’s quislings, to roll over the individual. Even so, contained within the dire reportage is also some very good news for you personally, and I’ll touch on that as well in today’s missive....

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