Keep Your Eyes On the Warren Buffett Table

On ABC's Good Morning America Warren Buffett assured us of a recovery on the way.
http://www.abcnews.go.com/Business/Economy/story?id=7495356&page=1

He has been claiming around the circuit these days that the actions taken so far have navigated us past the Pearl Harbor phase of the recession. On deck are the Bank Stress Tests which have been held back another week. The world is uneasy and the state of the American Banks is a big reason why. We are going into a pivotal phase in the economic and political maelstrom. It is amazing we even listen to a figure like him considering he got taken for a ride along with everyone else. The only difference is he can afford to shave off a few billion dollars in cash.

One can only wonder if this is all false optimism or if the likes of Reinhardt are on to something. He pegs May 11th as the big day.

Remember to take the path of the rhino, keep your eyes on now, and check back later for another update on whats going on.

Money Can't Make You Live Forever

The human urge for immortality is seen in the creation of monuments strewn among our planet. By taking the physical materials of brick and mortar the Eternalist fashions their record of existence for the generations to come. Fame, I want to live forever is how the movie said it, and so goes it with the names of philanthropists, saints and scholars that have paraded through history. Ernest Becker in Escape from Evil, his sequel to Denial of Death asserts that Money has taken over as the new God. As our cultures adapted from its primitive forms the loss of ritual became replaced from the power of churches out into the hands of the secular via coinage. As royalty developed out of these early cultures the common men began to imitate the Kingly desire to collect:

silks, courtesans, fine swords, horses, and monuments, city palaces, and country estates - all the things that can be bought with gold.

Not only do we pass on our life's work through our children but also through the things we leave behind and this is how money has replaced religion. As money filled the vacuum of the lost rituals of early man churches began to harness the power of money as churches became the first banks, priests the first bankers, and Juno Moneta in Rome the first mint. This flow of power justified with God-like powers held sway over the secular world as counterfeiting became a sin equal with sacrilege.

The temple's became clearinghouses for all the materials that can be bought by gold, and now backed by the apparent Divine authority of the Church you can now carry God with you home, thus secularizing society. Money set a trend where the material world becomes king and the invisible world is denied. What you can't see doesn't exist and there lies the great repression. This is the concept of sin, as the arising of guilt from the separation from the power and protection of the Gods, and the creeping in of uncertainty and doubt.

The failures of any system such as Religion, or Economic structures as the end all solution to the predicament of the human condition to bind time and satisfy our actual experience blows up in our face as we attempt to fashion a meaningful role in the passage of our life.

Global Currency

Although the Russian and Chinese proposals are devastating to the American's as they look at moving away from the US Dollar as the reserve currency one must see the logic here. People on CNN kept saying that they don't see the change happening but I wonder if that is just wishful thinking and being caught in not being able to see a shifting future. The changes that are happening are sweeping and many of the talking heads either can't grasp it or are not allowed to express their true feelings. Approaching my middle age I have been telling people for years that we are going to see big things in our lifetime (and I don't mean good things). Now that everything is coming on us so quick I must admit developments have arisen at an alarming rate. I wonder about all of the people who are relying solely on mainstream media to make their analyses. I am thankful for poeple such as VisonVictory for bringing angles not seen on the Boob Tube.

Market Ticker First Quarter Wrap-up

I ran through this entry and found it valuable in light of the times. Basically Denninger is saying we need to lower our debt or perish, and that the current policies are not allowing this to happen. We could have helped ourselves last time the economy contracted back a few years ago but instead pumped it up with hot air setting the timer to the present calamity. Now the games being played hold more dire consequences as the balloon has expanded in a way that could pop into quite a nasty little mess. When we were children didn't anyone tell these people not to play with fire. I think it was Denninger who compared the Bureaucrats to arsonists watching their fire and rather than dousing the flames with water have brought in more oil to their infernal party of demise. Of course those are in my words but carry his message. As a matter of fact directly check his report out here:

http://market-ticker.denninger.net/archives/911-Three-Month-Wrap-Up-1Q-2009.html

Obama Woos Investors

The eagerly awaited new plan from the US to save the economy and find a way to clear some of the bad assets off the balance sheets of their biggest banks is unveiled today. Wall Street initially reacted positively with the S&P up 7%. This plan is getting a better initial reaction than past plans. The idea is to get private investors in on the game and begin the task of setting prices on these toxic assets. Several of the organizations that would be asked to participate are showing early receptivity as seen by the comments from representatives of Blackrock out of NY, and PIMCO. The plan comes at a tumultuous time when not only is the fundamentals of the economy in dire jeopardy but public sentiment is boiling over regarding the AIG executive bonus fiasco. Now the very same people who the American taxpayer is so livid over for their pocketing of bailout funds are to be wooed into this latest concocted solution with the lure of double digit profits. Is it any wonder why Wall Street is reacting so well to this plan. The new plan looks to line the coffers of the very same people that got us into this tsunami in the first place.

Besides how positive can we be at this point when we see the mishandling in the past. The earlier plan called the Super SIV failed to garner private investment interest back in October of 2007. Then the TARP plan that came out late 2008 also failed. Now as we leave the gate on this one reactions seem to be more upbeat. They have finally made an attractive offer to investors as they court insurance companies, as well as hedge and pension funds. Of course the verdict is not out yet since we are just getting rolling. With so much at stake and so many snags abound it makes one wary of any new grand solutions. Mind you this is all supposed to unclog the economy and get things moving again. Even if it does that we have a lot more hurdles to overcome. In his typical fashion Obama tempered enthusiasm although he assured us we are "moving in the right direction." Wall Street certainly thought so with three firms that stand to benefit from the plan all rising, Blackrock Inc up 18%, Blackstone up 24%, and Fortress Investment Group up 37%.

Lets hope we are because in the wake of public sentiment over AIG and the clamoring in Congress things will have to look really promising if they are going to dole out anymore money if this plan expands. The price tag not unlike the Iraq War seems to keep going up like the debt itself. The other variable is what is the plan to coax the toxic assets from the banks at a severe loss. There are no guarantees the banks will give up their assets. Richard King of Invesco said banks may not "sell securities at below current marks."

It becomes a fools game when the US Government continues to have to go to same people that got us into trouble and ask then to help us. Maybe this is the way the game has to be played but it sure hurts and I have half a mind to think there was a better way. We've handed and continue to hand over the store to the honchos who've raided our cookie jar. What is going to stop them from doing it all over again? The firms that are excited about the plan stand to make some money, the banks can fight another day, and the taxpayers continue to hold on to a shred of hope as the rug keeps getting pulled out from under them. One view that fell from the pack today that I thought was interesting was from Kenneth Windheim of Strategic Fixed Income who said it would be cheaper to nationalize the banks, bring in new management, and sell off the assets. That may be a simplified way of looking at it, and I know Nationalizing banks is a big scary step but in the predicament we are in it sounds like it m ay end up happening anyway even after all of this tinkering.

Link to Reuters Article
http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52M6YV20090323

Link to Bloomberg Article

http://www.bloomberg.com/apps/news?pid=20601103&sid=a6o1E0WQ5jPM&refer=news