Moon Kil Woong

More AIG Controversy: Maiden Lane III

This is crooked and we all want to know who really benefitted. That is who insured Goldman and others on their AIG contracts and got premium witout having to pay a cent. The fact no one will tell is telling itself. Full disclosure is what we all want.

The Great Egression: What's Next for the Fed?

You are 100% correct that what will the Fed do next is the trillion dollar question. I doubt that anyone is willing to act on any reasonable assumption. That simply is not ever in the cards. Assume they will do the worst possible action and you will be right more often than not.

Why The Market's Set to Move Lower For the Rest of the Month

I think chartist thinking doesn't really work at this point ihn time. The real driver and real concern is how much government/Fed money will be dumped on the market. If the answer is less or if the fed reverses QE the market tanks. If the answer is a lot more the market stays bouant. It's all about dollar depreciation these days. How sad.

Market Volume: Still an Unanswered Question

Personally the low volume is the biggest indicator as to why I feel it's not worth taking any big positions in the market right now. It is true the lower the volume the faster you can blow up the bubble. But that is not a bullish sign long term, it is a bearish one.

The SEC Surrenders to the Oil Industry

Felix is 100% right the SEC is a captured institution. The sad fact is it's not captured by the owners of companies. Those are the ones that own stock. It's captured by the executives who put their own interest above investors time and time and again. The best protection to owners aka investors is full disclosure so they know what they are buying and how actually the business is performing.

The reason financial compamies fail is based mainly on the fact that the owners of the bank are not allowed to see the risk that the management is building up in order to pad their own salaries and short term gains. It is unconscionable.

The Miller-Moore Amendment's Not That Bad!

Well nowadays everyone expects for the government to eat all losses. To them they feel this way: Who cares about the government losing. After all, it's only the taxpayer. If too big to fails got covered 100% why not everyone?

The Fed is reportedly scrutinizing the biggest banks to ensure they have enough capital to withstand a sudden reversal in asset prices. Supervisors want to know what banks know about the strength of their counterparties, and whether risk managers have any say in bank policies.

The Fed should review their own account to see if they can survive marking their assets down. At assets to capital exceeding 40 to 1 I seriously doubt it.They currently don't mark their assets down even when it's obvious they have declined in value. I guess that's why Congress has to audit them. Honesty and correct accounting is obviously not their strong point.

Risk Indicators Suggest That Risk Taking Is Alive and Well

It may be the Fed's fault there is too much liquidity, but as the Fed and moralists point out, it is our fault for believing them and acting on our fear of no interest in the face of a devaluating currency. Indeed, the Federal reserve has put us in a no win situation with a lose lose scenario. I think Star Trek calls this a kobiyashmaru.

Dr. Copper Spots a Monster Crash

Perhaps China can mint all their coins in pure copper. If they can convince the US to use pur copper for pennies again, even though after the deflated dollar they will lose $ on every penny they make, I'm sure they can clear out that inventory in a flash.

Comparing Debt-to-GDP Ratios with Presidential Terms

I find that forecasted government GDP growth as well as spending controls are always overly optimistic. When they are correct, the government always finds even more ways to spend the upside. Thus, I seriously doubt the subdued growth of debt to GDP shown in this forcast. The truth is the out of control spending spikes are getting bigger and more astounding, not the reverse.

Tech: Is Its Run Over for Now?

Given that tech is the only sector that constantly delivers better quality of life at lower costs helping keep down inflation, this is bad news. When tech suffers the world suffers.

It usually means less cap-ex spending, less value added product being sold, and less high end, high salary college grad level employment. Slower tech means slower innovation and often signals that if the economy is recovering it is not a healthy recovery. More than likely assets are not going to efficient or growth oriented sectors of the econimy but to commodity or asset speculation that drive inflation.

That is why stock market leadership not dominated by tech and medical sectors are a strong signal a real recovery is not underway. Remain skeptical of those pushing green shoots as the cause of this recovery. If the tech sector melts down you can kiss recovery goodbye.

The Jobless Rate-Interest Rate Conundrum

All and all it shows that we have some of the worst Fed chiefs at the helm in history and yet some call the geniuses. They are genius at grovelling to fellow bankers and politicians. That's about all.

Economy Watch: Is There a (Second) Downturn on the Horizon?

If there is a second downturn like in the Great Depression it will be a doosey. The government and the Fed can do no more than they already have, if not less. You can't go lower than 0 fed funds rate, QE is already in place, the Federal Reserve is backstopping bonds which is just a form of unreported redivatives, and the government is already bushing the barrier on US Treasury bonds they can float.

The Unbearable Pain of 0.01%

He is not making 0.01% on his money. He is making -14% taking into account currency depreciation. Ouch...

The Weak Dollar Crowd Is Too Confident

My bet is the Fed won't allow a massive dollar slide at the beginning of the new year. They probably means draining a little out of the QE quagmire giggly giggle (see Family Guy). If that happens dollar shorters will have to rethink their plans even if it is only temporary.

I do hope long term the US government gets fiscally prudent and doesn't past another round of stimulus and the Fed does attempt to normalize interest rates and quash the abnormal liquidity in the market. However, I think this is but a dream.

In the end the Federal Reserve is like a politician. It likes dispensing apparently free money to it's constituents (the banks) at the cost to the rest of Americans. That is how it derives its power. To assume it will opt to weaken its power is like asking the Federal government to pass a balanced budget. It may only happen once in a lifetime. And we know we already saw that when Volker was in power.