RE OVERSTREET

Apr. 24, 2014 8:52 AM ET  |  Includes: CRUD, DIA, DJP, GLD, GSG, IEF, OIL, QQQ, RJA, SPY, USO, UST

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)

Summary

• This market has all the characteristics of a strong bull: weak commodities, a wide yield curve spread, disinflation, P/E expansion, and counter-cyclical stock behavior.
• This market and the crisis that preceded it is often compared to the Depression, but a far better comparison is the Roaring Twenties and the 1921 crisis.
• That leaves us with three difficult questions to answer: when will this bull market end, what will the aftermath look like (Depression? Stagflation?), and do we have any policy alternatives?
• The market will probably grow for a few more years, and the aftermath will probably be pretty grim, as our understanding of market forces has barely progressed since 1929.

I HAVE ANSWERS FOR HIS QUESTIONS:
When will this bull market end?

1. Sooner than you think.

What will the aftermath look like (Depression? Stagflation?)
2. Both.

Do we have any policy alternatives?
3. No.

WEAK ECONOMIES ALL WEAK ALL NEED FOREIGN AID APPEASEMENT ALL AT ONCE

Term search: fragile, game over.

President reaffirms alliance with Japan amid longstanding and growing appeasements everywhere

Quick pay up for claim for cargo ship, seized in the 1930s, just another signal of appeasements now gearing up heavily.

In appeasement inflation, whose side should one be on?

RE JAPAN CHINA CARGO SHIP PRE WWII

Might as well now require all WWII combatants to reimburse each other for all losses on all sides.

US GIVES JAPAN BI LATERAL ASSURANCES RE SOUTH CHINA SEA ISLANDS

ALTHOUGH CHINA IS BIGGEST US PHYSICAL PLANT AND CREDITOR

If I were Japan, or China,  I would trust neither military assurances to Japan, nor trade commitments to China.

RE THE DOOMSDAY DISCIPLINE FOR WESTERN CIVILIZATION

http://bozonbloggon.blogspot.com/2012/05/re-chalmers-johnson-paul-krugman-and.html

audience today so far

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COLLINS ON JESUS THE ANTI FREE TRADE JEW

"One text gives a tell-tale detail: Immediately after entering Jerusalem in the palm-waving crowd, Jesus went into the temple courts.  He looked around at everything, but since it was already late, he went out to the nearby village of Bethany with the Twelve. (Mark 11: 11)  Jesus clearly intends to make a big scene; he is going to do it at the height of the business day, not in the slack time of late afternoon when the stalls are almost empty. Jesus always shows strategic sense.....

Why are the animals and the money changers in the temple in the first place? Because of ritualism; the animals are there to be bought as burnt sacrifices, and the money changers are to facilitate the crowd of distant visitors. But also it was the case, throughout the ancient world and in the medieval as well, that temples and churches were primary places of business, open spaces for crowds, idlers, speculators, merchants of all sorts. In Babylon and elsewhere the temples themselves acted as merchants and bankers (and may have originated such enterprises); in Phoenicia and the coastal cities of sin anathema to the Old Testament prophets, temples rented out prostitutes to travelers; Greek temples collected treasure in the form of bronze offerings and subsequently became stores of gold. Jesus no doubt had all this in mind when he set out to cleanse the temple of secular transactions corrupting its pure religious purpose." 

RE PRINCETON KRUGMAN SPECIALTIES

My daughter got the brochure.

He specializes only in free trade and globalization.

Say no more.

REUTERS RE EURO DEFLATION LOOMING

Flat tire globalist economies everywhere.

http://bozonbloggon.blogspot.com/2013/05/an-old-2010-post-inflation-deflation.html

CLSSIC POST ECONOMIST OFFSHORING

http://bozonbloggon.blogspot.com/2010/08/re-this-is-not-recovery.html

RE DUSTY IN NEVADA

Not to defend Dusty, but when the federal government owns, and has long owned, 87% of the land in a particular state, as for instance, in Nevada, that sort of sets up an inherent problem.

The theory of national lands, as against state or local lands, is not inherently more problematic than any other federal type problem; i. e. merely rather problematic. 

But, in states where the federal government owns the lion's share of all land, the problems stick out much more.

SOME FUN REFERRING SITES

Referring Sites

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NYT QUOTE SIMILAR TO FATEFUL ALLIANCE APPROACH OF GERMANY TO RUSSIA REAL SMART

If you just stand there, be confident and raise the cost gradually and increasingly to Russia, that doesn't solve your Crimea problem and it probably doesn't solve your eastern Ukraine problem. But it may solve your Russia problem."

IVO H. DAALDER, a former American ambassador to NATO, on one potential approach President Obama could take with President Vladimir V. Putin.

This was how the Germans quote 

' solved  ' their Russia problem, in the later 19th early 20th Century. Economic sanctions were a big part of it...

This aspect, of the development of international relations, is one of those where, it seems to me, that Kennan's accounts, if not quite omitting it, at the very least vastly understate its significance for diplomatic decision making. 

He does talk about it at certain points,  for example regarding finance and investments between Germany and Russia, as noted, and at times even bemoans the disconnect between imperial ministries of finance, trade, and war. 

COLLINS ON JESUS

"One text gives a tell-tale detail: Immediately after entering Jerusalem in the palm-waving crowd, Jesus went into the temple courts.  He looked around at everything, but since it was already late, he went out to the nearby village of Bethany with the Twelve. (Mark 11: 11)  Jesus clearly intends to make a big scene; he is going to do it at the height of the business day, not in the slack time of late afternoon when the stalls are almost empty. Jesus always shows strategic sense.....

Why are the animals and the money changers in the temple in the first place? Because of ritualism; the animals are there to be bought as burnt sacrifices, and the money changers are to facilitate the crowd of distant visitors. But also it was the case, throughout the ancient world and in the medieval as well, that temples and churches were primary places of business, open spaces for crowds, idlers, speculators, merchants of all sorts. In Babylon and elsewhere the temples themselves acted as merchants and bankers (and may have originated such enterprises); in Phoenicia and the coastal cities of sin anathema to the Old Testament prophets, temples rented out prostitutes to travelers; Greek temples collected treasure in the form of bronze offerings and subsequently became stores of gold. Jesus no doubt had all this in mind when he set out to cleanse the temple of secular transactions corrupting its pure religious purpose." 

re DK POST YEATS

'The best lack all conviction, 
while the worst are full of passionate intensity.'

How, when the worst are full of passionate intensity, could the best accomplish anything, without any conviction?

I guess that is, perhaps, the point.

KENNAN REPUBLICANS WON THE COLD WAR? ESSAY

His views, coming home to roost, really.

audience now

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United States	8

A FEW HYPOTHESES FOLLOWING HUNTINGTON LOOSELY

Let's hypothesize, for instance, that civilizations themselves, whatever you think civilizations means,  are, inherently, hostile to all other, not just each other, civilization(s).

We have seen this repeatedly throughout history, but it might not be right, after all. 

I am willing to be corrected on this, believe me.

muttrin vendetta

http://bozonbloggon.blogspot.com/2013/07/stagecoach-italian-vendetta-cartoon.html

DK ' DUSTY ' STORY

"The second episode is truly astonishing, and potentially even more serious.  In Nevada, a rancher, Cliven Bundy, who has been illegally grazing cattle on federal land and refusing to pay fines for about twenty years, forced the Bureau of Land Management to stop rounding up his cattle with the help of armed militiamen from all over the West.  Fox News covered the story in detail, cheering Bundy on for defying the federal government. "

Terms search: Dusty, muttrin

GREAT PASSAGE GREAT QUESTIONS

"...In 2010, Warren met with President Obama in the Oval Office, and he informed her that he could not make her the head of the the Consumer Financial Protection Bureau, which she had just designed, because of objections from Senate Republicans and bankers. “You make them very nervous,” he told her.  In a second meeting, he browbeat her into doing additional work on the design of the agency anyway.

"Now there are two questions that immediately occur to me, questions that I would like to pose to President Obama.  First of all, can you name one instance in which George W. Bush, Dick Cheney, Karl Rove and the rest of the Bush II White House decided not to do anything because it would make Democrats in Congress and labor unions nervous?.... But the second question is more fundamental.  How on earth can we fix our financial woes without making Wall Street nervous?  Does the President really not understand that the crash came, and the next one will come, precisely because our financial institutions have much too much power and much too much money?...."  

THEY LOVE ME TODAY IN UKRAINE

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RE RE DK POST AND MORTGAGE BACKED SECURITIES LEGALITIES WIKIPEDIA

"One critical component of the securitization system in the US market is the Mortgage Electronic Registration Systems (MERS) created in 1990s, which created a private system wherein underlying mortgages were assigned and reassigned outside of the traditional county-level recording process. The legitimacy and overall accuracy of this alternative recording system have faced serious challenges with the onset of the mortgage crisis: as the US courts flood with foreclosure cases, the inadequacies of the MERS model are being exposed, and both local and federal governments have begun to take action through suits of their own and the refusal (in some jurisdictions) of the courts to recognize the legal authority of MERS assignments.^[53] The assignment of mortgage (deed of trust) and note (obligation to pay the debt) paperwork outside of the traditional US county courts (and without recordation fee payment) is subject to legal challenge. Legal inconsistencies in MERS originally appeared trivial, but they may reflect dysfunctionality in the entire US mortgage securitization industry."

"....Legal inconsistencies in MERS originally appeared trivial, but they may reflect dysfunctionality in the entire US mortgage securitization industry."

For whom could such matters ever have originally appeared trivial? 

For whom could use of MERS ever have appeared legal in any state?

It is hard to believe that these matters might ever have appeared trivial to knowledgeable real estate or business transactions lawyers, in any state. 

Who advised Wall Street banks regarding MBS' legality ?
I suspect the advice was "Don't do it," but of course lawyers do not run these, or most any, companies.

Reference from an old post found on Krugman's blog in 2010:

http://rortybomb.wordpress.com/2010/10/08/foreclosure-fraud-for-dummies-1-the-chains-and-the-stakes/

POP LYRICS AND A CERTAIN VIEW OF GOD RANDALL COLLINS

' “What does not kill me, makes me stronger,” Nietzsche was to write. Ironically: for all his attacks on the moral revolution of Christianity, this is a Christian discovery he is citing. Religious techniques set precedents for modern secular politics. Protest movements win by attracting widespread sympathy for their public sufferings, turning the moral tables on those who use superior force against them. This too is world-changing. It is little exaggeration to say that the moral forces of the modern world were first visible in the Jesus movement.'

US CHINA RUSSIA JAPAN NIXON SHOCK

RATHER LIKE THE FRANCO RUSSIAN ALLIANCE BEFORE WWI WHAT

But which 'alliance' is fateful, w China after Nixon shock, or w Japan since WWII and now?

http://bozonbloggon.blogspot.com/2010/07/blog-post.html

RE UNIVERSAL WARMING FOUND ALREADY UNDER WAY 2007 EG MARS

Googling terms universal warming, they have long already jumped to this idea apparently. Confirming, or at least not confuting the Hot Butt Hypothesis.

There are already a number of scientists ready to jump on board.

Here is a blog, great name, discussing this phenomenon:

http://gustofhotair.blogspot.com/2007/04/universal-warming.html

"Skeptics over global warming have jumped on news 

that Mars is heating up to back their skepticism that 

humans are causing global warming on Earth. 

The research, coming from U.S. planetary scientists, suggests that Mars warmed by about 0.65C from the 1970s to the 1990s. This is similar to Earth’s 0.6C average temperature rise during the 20th century. 

'It could be coincidental or it might be the needle in the haystack,' said climatologist William Kininmonth, former head of the National Climate Centre in Melbourne, Australia. 

Kininmonth said that the research, which was published 

in the journal Nature, showed that there was enough 

natural climate variability to explain global warming on 

Earth."

http://www.bishop-hill.net/blog/2011/11/4/australian-temperatures.html

audience today so far

United States	23
Poland	8
China	2
Slovakia	2
Germany	1