Survival is the New Normal

"...the solution to this international mess is going to take years and the result will be a lower standard of living in the U.S. The idea of making money under our capitalistic system will change. The new focus will be how to avoid losing money. The new normal will be living on a survival scale. It will be slow and costly.” Richard Russell, financial market veteran

Rosenberg: A Modern-Day Depression

 "It's Time To Start Calling This For What It Is: A Modern Day Depression"-- David Rosenberg

Bernanke: Calamity This Way Comes

"the finances of the federal government will spiral out of control in coming decades, risking severe economic and financial damage" -- Ben Bernanke, Chairman, Federal Reserve Bank

Here is the market response. It appears the financial markets weren't very enthusiastic about his comments!

Headed for Hyperinflationary Depression?

"The world is now staring into the abyss and we are most likely entering the Dark Years which I wrote about two years ago. The consequences will almost certainly be unlimited money printing and a hyperinflationary depression." -- Egon Von Greyerz

Ron Paul Speaks Plain Truth About Debt Downgrade!

“We were downgraded because of years of reckless spending, not because concerned Americans demanded we get our finances in order. The Washington establishment has spent us into near default and now a downgrade, and here they are again trying to escape responsibility for their negligence in handling the economy.” -- Congressman Ron Paul

Mish Shedlock: Go Figure!

Europe is now in austerity-mode, US cities and states are cutting back, the odds of more fiscal stimulus in the US are roughly zero, the US might (and should) lose its AAA rating, Australia is a basket case on the bursting of its property bubble, Canada has the second or third largest property bubble next to China and Australia, the bond market is targeting Italy and Spain, Brazilian defaults are soaring, China is overheating and needs to slow, yet the average economist is looking for a robust second-half. Go figure. -- Mish Shedlock, Global Economic Trend blog

Market Doubles Good News, Ignores Bad News

"Who cares about headfakes: the market is back in its mania phase when good news are doubly accentuated, and bad news are immediately ignored." Tyler Durden, Zero Hedge

“For the stock market nothing seems to matter until, suddenly, it does.” --Charlie Minter, Comstock Partners

"What worries you, masters you!" - John Locke

Wealth Creation

Wealth is created when you move assets from lower to higher valued uses. Every plan from the left does the opposite. -- Jonah Goldberg

"Total Catastrophe" This Way Comes

“There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” -- Ludwig von Mises

"We are the Music Makers"

I've always loved the first verse of this poem. I don't even remember where I first heard it.

We are the Music Makers

WE are the music-makers,
And we are the dreamers of dreams,
Wandering by lone sea-breakers,
And sitting by desolate streams;
World-losers and world-forsakers,
On whom the pale moon gleams:
Yet we are the movers and shakers
Of the world for ever, it seems.

Arthur O'Shaughnessy

"Only at the Fed is there no inflation." -- Marc Faber

Budget Symbols, Not Substance!

Today’s quote du jour comes courtesy of Don Boudreaux, author of the Cafe Hayek blog.

“Suppose that in a mere three years your family’s spending – spending, mind you, not income – jumps from $80,000 to $101,600. You’re now understandably worried about the debt you’re piling up as a result of this 27 percent hike in spending.

“So mom and dad, with much drama and angst and finger-pointing about each other’s irresponsibility and insensitivity, stage marathon sessions of dinner-table talks to solve the problem. They finally agree to reduce the family’s annual spending from $101,600 to $100,584.

“For this 1 percent cut in their spending, mom and dad congratulate each other. And to emphasize that this spending cut shows that they are responsible stewards of the family’s assets, they approvingly quote Sen. Harry Reid, who was party to similar negotiations that concluded last night on Capitol Hill – negotiations in which Congress agreed to cut 1 percent from a budget that rose 27 percent in just the past three years. Said Sen. Reid: ‘Both sides have had to make tough choices. But tough choices is what this job’s all about.’

“What a joke.”

Source: Don Boudreaux, Cafe Hayek, April 9, 2011.

“People only accept change in necessity and see necessity only in crisis” (Jean Monnet)

Fed's Money Creation to Have Terrible Consequences

This printing money is going to lead to huge trouble. It’s going to lead to higher interest rates. It’s going to lead to more inflation and at some point there is going to be a train wreck in the currency and the bond market." Market commentator and money manager Bill Fleckenstein

Economists Are the Worst Prognosticators

"Attempting to invest on the back of economic forecasts is an exercise in extreme folly, even in normal times. Economists are probably the one group who make astrologers look like professionals when it comes to telling the future." -- James Montier, GMO

Greater Fools

Remember, the market is designed to fool most of the people most of the time.  ~ Jesse Livermoore

We have seen the current pattern of behaviour before. We saw it in 2005-2007 and in 1999-2000. In both cases easy money conditions led to asset bubbles and reckless investor behaviour. Now we are seeing it again even more blatantly, egged on openly by the Fed. Without wanting to sound as over-confident as Ben Bernanke, I do not really have one scintilla of doubt that this will all end in tears - again. -- Albert Edwards, strategist, Societe Generale

Fed Manipulating the Stock Market

"The Fed has spent the last 15, 20 years manipulating the stock market. I think they know what they do has no direct impact on the economy, the only weapon they have is the so-called wealth effect: if you can drive the market up 50%, people feel richer, they feel a little more confident, and the academics reckon they spend about 3% of that. The problem is they know very well how to stimulate the market, but they step away when the market gathers steam, and resign any responsibility for moderating a bull market that may get out of control, and I fear that the market will continue to rise, it will be continuously speculative. As a consequence you get a boom and bust... I think the Fed should settle for just controlling the money supply, not controlling the economy." -- Jeremy Grantham, Chairman of the Board of Grantham Mayo Van Otterloo (GMO).